corporate governance · 2020. 9. 21. · global sugar production 2009/2010 - 2014/2015 (m mt) 153.4...

Corporate Governance

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Vision, Mission, ValuesGlobal Sugar MarketChairman’s StatementCompany Rerview

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Off loading at Apapa port, Lagos

Corporate Governance ReportBoard of DirectorsReport of the Directors

Operational Review

Our OperationOur PeopleOur Approach to SustainabiltyHealth and SafetyFood SafetyOur Approach to Risk ManagementGroup Managing Director's Review

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Growing a Sweet Harvest

D A N G O T E S U G A R R E F I N E R Y P L C A N N U A L R E P O R T 2 0 1 4

Financial Highlights Statement of Director's Responsibilities in Relation to the Financial StatementsStatement of Management's Responsibilities for the Preparation and Approval of the Financial Statements Statement of Directors' Responsibilities for the Preparation and Approval of the Financial Statements Report Of The Audit CommitteeReport of the Independent Auditorsto the Members of Dangote Sugar Refinery Plc Consolidated and Separate Statement of Profit or Loss and other Comprehensive Income Consolidated and Separate Statement of Financial PositionConsolidated Statement of Changes in EquitySeparate Statement of Changes in EquityConsolidated and Separate Statement of Cash FlowsNotes to the Consolidated and Separate Financial Statements Non IFRS Statement- Statement of Value AddedNon IFRS Statement- Financial SummaryNon IFRS Statement Five Year Financial Summary

Notice of Annual General MeetingDirectors And Professional Advisers Corporate Information Share Capitalisation HistoryE-Dividend Mandate FormProxy FormUnclaimed Dividend Position as at 31st December, 2014

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Supplementary Information

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Apapa Refinery, Lagos, Nigeria


Values

Vision, Mission, Values

? Customer Service? Entrepreneurship ? Excellence ? Leadership

To deliver consistently good returns to our shareholders by selling high-quality products at affordable prices, backed by excellent customer service.

To satisfy market demand by producing the very best refined granulated sugar using exceptional resources and processes that comply with international standards and industry best practices

To help Nigeria towards self-sufficiency in sugar production by moving from importation and refining to creating new plantations with their own refining facilities, close to major centres of demand, with a target to produce 1.5 million tonnes of refined sugar by 2024 across more than150,000 hectares of newly planted land.

To provide economic benefits to local communities by way of direct and indirect employment.

To set a good example in areas such as governance, sustainability, health and safety.

Our vision is to be one of the world's leading integrated sugar producers, respected for the quality of our products and the way we conduct our business.

Vision

Mission


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5D A N G O T E S U G A R R E F I N E R Y P L C A N N U A L R E P O R T 2 0 1 4


Sugar is a commodity whose price is determined by the dynamics of global supply and demand. Sugar production is affected by weather and the amount of land under cultivation, while the consumption of sugar is driven by macro-economic factors such as increasing wealth and population growth in the developing world, set against conscious reductions in sugar consumption elsewhere. Although global sugar consumption is rising at present, its growth is being outpaced slightly by the increase in sugar production. Over the last two years, favourable weather conditions and new sugar projects have created surplus stocks that led to a fall in the global price of raw sugar from more than $450 per tonne to less than $350.

Estimates Of World Sugar Production, Consumption And Global Surplus For 2013/2014 (million Tonnes, Raw)

Source Production Consumption SurplusCzarnikow 184.0 181.1 2.9F.O. Licht 181.4 175.2 4.7ISO 182.7 178.8 4.0KINGSMAN 180.3 175.1 5.2USDA 175.7 168.7 1.5

Taking an average of these estimates, sugar consumption has been on a steady increase over the past few years. In 2014, consumption rose by approximately 2.0% to 175.8MT from 172.3MT in 2013.

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1402009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

Global Sugar Production 2009/2010 - 2014/2015 (M MT)

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162.2

172.3

177.6175

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Global Sugar Market in 2014

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To this end, our Board is following a prudent course of action that will support our backward integration projects and enable our Company to sustain a stronger financial footing in the future.

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ChairmanAliko Dangote, GCON

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My colleagues on the Board, invited guests, ladies and gentlemen. It is my pleasure to welcome you all to the 9th Annual General Meeting of our company, Dangote Sugar Refinery Plc, at which I will also present to you the Annual Report and Financial Statements for the year ended 31st December, 2014.

2014 was a year of challenges in our operating environment, particularly in the areas of declining purchasing power and security issues in the North Eastern part of the country. The situation and its impact on our business was a harsh reality, which we had to face and manage to the best of our ability.

Despite challenging circumstances in the past year, the Group posted a turnover of 95 billion in 2014. Profit Before Tax (PBT) stood at

billion, and Profit After Tax (PAT) billion. Earnings per share totaled 97kobo per share an 8% increase over the corresponding period in 2013.

Worthy of mention is the resounding and unprecedented success of the recent presidential elections in Nigeria which gives much cause for optimism and we look forward to a stable future in the country, in which our business will thrive and continue to grow.

2014 DividendsIt remains the Company's policy to return part of its profits as dividends to shareholders at the end of each business year. The dividend paid depends on the Company's financial performance, investment decisions, liquidity levels and banks balances. In view of the significant investments required for our backward integration projects, your company is in need of additional funding. As such, your

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Board has taken the decision to reduce the dividend payment for the year from 60 kobo per share to 40 kobo per share. This is a transitional situation, requiring our short term sacrifices in order to build for the future, and is necessary for us to maintain prudent capital and liquidity levels, to sustain our operations, in tandem with our backward integration projects.

To this end, your Board is following a prudent course of action that will support our backward integration projects and enable our Company to sustain a stronger financial footing in the future.

The Global Sugar MarketConditions in the global sugar market were generally favourable to our refining business in 2014. The consumer demand in emerging markets remains subdued, despite population growth and the seeming gradual recovery in market economies, world sugar prices reflected surplus supply conditions and maintained a downward trend.

From the very late 1990's up until 2014, the Global Sugar Manufacturing industry has had to contend with increasing production and volatile price levels. The increasing diversion of sugar stocks to ethanol production in Brazil did however, limit the buildup of surplus stocks. Raw sugar prices declined during the year, which led to a reduction in the dollar value of our raw sugar imports within the period.

Also, the European Commission confirmed the abolition of sugar quotas from October 2017, and this placed a further cap on world sugar prices. As European sugar producers position themselves for a post-quota market, we will continue to expect more volatility in market prices.

Nigerian Sugar Market in 2014 The Nigerian Sugar Market has seen an increase in investment activity during the year owing to the various initiatives that were prompted by the implementation of the Federal Government's National Sugar Development Plan. This plan has seen the

Chairman’s Statement

“2014 was a year of challenges in our operating environment, particularly in the areas of declining purchasing power and security issues in the north eastern part of the country”

Distinguished shareholders,


existing sugar operators invest in sugar plantations across the country in addition to consolidating their own refining activities.

Despite a sluggish global demand trend, our market remained strong in the year. We had to contend with heightened insecurity in north eastern Nigeria, along with other consumer oriented businesses. Access to our key markets was hampered, while we also had to grapple with reduced consumer purchasing power and the periodic menace of low-priced unlicensed imported sugar. Notwithstanding this, our local sales volumes exceeded 780,000 tonnes in 2014, a slight reduction on the prior year.

Our Strategy Recall that we have already begun the implementation of our sugar development plans. Ten years from now, our target is to produce 1.5 million tonnes of refined sugar from locally grown sugarcane that is processed at our own, onsite facilities in locations close to key Nigerian markets. We will maximise opportunities to benefit from the extended value chain in sugar production, with the production of fuel ethanol and the generation of electricity from our factories. We believe that our expansion project will gene ra te more than 100 ,000 job opportunities in the coming decade.

In 2014, we carried out an evaluation of our projects with the help of our technical partners. As a result of this evaluation, we have adjusted our expansion plans in line with market conditions and will now implement the overall project in stages.

We have begun with the rehabilitation of the Savannah Sugar operations as a model for our plan, which will then be replicated across our other project s i tes . The Savannah rehabilitation will be undertaken in parallel with the greenfield development of a 23,000 hectars project in Taraba State within the next 3-5 years. This will be followed by the development of our other sites to cumulate the project within the 10 year plan.

Oil and Currency Impact in Short-Medium Term The beginning of 2015 has seen a carryover of the challenging business environment with even more impact on our cash resources. The devaluation of the naira amongst other uncertainties cast a shadow on the business environment. Lower oil prices and the naira depreciation had an impact on our raw material costs and we recognise that passing these costs fully to the already liquidity squeezed consumer environment is a major challenge.

The Central Bank of Nigeria closed the RDAS/WDAS Foreign Exchange Window and directed all demand for foreign exchange to the Interbank Foreign Exchange Market. This development together with a general shortage of foreign currency and any further devaluation of the naira, will make the current business year difficult for us, as we consolidate and invest for the future.

However, we have a firm belief in the viability of the Nigerian economy, and maintain a positive outlook for future investment. The Board will continue to guide our Company by employing strategies that will guarantee a sustainable future for our business.


Improvements in Governance and Risk Management We are driven by a desire to contribute positively towards the development of the communities in which we operate, and to society at large. As such, our Environment, Health & Safety, and Social Investment Agendas were enhanced during the year under review across all our operations.

“We are driven by a desire to contribute positively towards the development of the communities in which we operate, and to society at large.”


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The Board is a firm believer that the sustainability of our business is interwoven with the health & safety of our people and a strong attitude of caring for our environment. This is guided by good corporate governance and effective risk management initiatives that are now being implemented within the Group.

Dangote Sugar will continue to implement its sustainability agenda, which is the platform it uses in the delivery of its commitments with focus on environmental awareness, promoting health and safety and minimising the risks within our operations.

Board of Directors Since the last Annual General Meeting, there have been no changes in the Board composition. The Board is currently made up of two (2) Executive Directors, Eight (8) Non–Executive Directors including the Chairman, three (3) of which are Independent. Three (3) Directors will retire by rotation at this meeting and the Directors eligible will present themselves for re-election at this meeting. Details of the members of the Board of Directors are shown on pages 39 to 42 of the annual report.

ChairmanAliko Dangote, GCON


Despite our present economic challenges, the Board remains very confident that our company is positioned strongly to enhance its leadership position and our expansion strategy will deliver business success and long-term value for shareholders.

My sincere appreciation goes to my fellow Directors for their contributions. I also appreciate our esteemed shareholders, customers, suppliers and every stakeholder for their continued support and partnership.

Our employees remain the key to our success, and without their commitment, all the operational improvements we have recorded over the years, would not have been possible. I am confident that we have the right strategy, the people and resources to continuously deliver sustainable growth for the company, and returns to shareholders in the years ahead.

Thank you.

Apapa Refinery Jetty

Ibese, Ogun State, Nigeria

Dangote Sugar Refinery Plc (“Dangote Sugar” or “DSR”) is a household name in the sugar refining sector of the Nigerian Food and Beverage Industry. Our entry into the sugar business dates back to the 1970s with the import and sale of sugar by our parent company, Dangote Industries Limited.

Today, Dangote Sugar is a leading brand that has made a remarkable impact on the Nigerian sugar sector. Our sugar refining facility at Apapa is the largest in Sub-Saharan Africa, with 1.44MT per annum installed capacity. Our core competences include:

? Refining of raw sugar to make high-quality Vitamin A fortified and non-fortified granulated white sugar

? Marketing and distribution of our refined sugar grades in 50kg, 1kg, 500g & 250g packages

? Cultivation and milling of sugar cane to finished sugar from our subsidiary, Savannah Sugar Company Limited

? Development of greenfield projects in

line with our strategy, “Sugar for Nigeria,”

Nigeria's National Sugar Master Plan

In addition, our business provides key value-added support services for our customers i n c l u d i n g l o g i s t i c s , s u p p l y - c h a i n management, credit and risk advice, sales and merchandising.

We operate to international standards of food production, health and safety and have been honoured with numerous awards for our work.

Dangote Sugar Refinery Plc was listed on the main board of the Nigerian Stock Exchange (NSE) on 18th March, 2007. With more than 102,000 shareholders as at 31st December, 2014, the authorized share capital of DSR Plc is ? 6 billion, amounting to 12 billion shares of 50 kobo each. Dangote Industries Limited has a majority shareholding of approximately 67.66% while 32.34% is held by other shareholders.

Company Overview


which in turn is an integral part of

Raw Sugar Shed at Apapa RefineryRaw Sugar Shed at Apapa Refinery

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Dangote Sugar Refinery, ApapaOur flagship refinery complex is located at Apapa Wharf in Lagos, with a dedicated jetty that berths large shipments of raw sugar from Brazil. The facility was commissioned in 2000, with an initial refining capacity of 600,000MTPA. Over the years, the facility has undergone two major upgrades that have turned it into one of the largest sugar refineries in the world with 1.44MTPA refining capacity. The refinery is powered efficiently with gas and/or Low-Pour Fuel Oil (LPFO) with 16MW of in-house generating capability.

Over 2013-14, the facility benefited from further upgrades that now enable it to achieve more efficient sugar yields. We continue to improve its efficiency and are installing a new high-pressure boiler, upgrading automation and improving energy conservation.

The energy-saving project is an advanced engineering intervention to improve the efficient use of energy in our sugar refining process. When completed, the scheme is expected to reduce our cost of production, increase productivity and further improve the quality of our refined sugar. Together, these

initiatives will enhance our competitive position in the Nigerian sugar industry.

Our refining operations are supported by warehouses located strategically across the country and served by more than 400 trucks that take our finished products to market.

Sugar for Nigeria - The Future of our BusinessNigeria has always imported sugar, either raw for refining or in its refined and granulated forms. This dependence on imports is a reflection on the fact that until recently, Nigeria has had no native sugar production industry of any scale and there was little incentive to create one. Yet Nigeria is a country that is blessed with abundant fertile land suitable for planting sugar cane.

Recognising this paradox, the Federal Government drew up the Nigerian Sugar Master Plan, which is an ambitious drive to make Nigeria self-sufficient in this most basic commodity, at the same time reducing outflows of Nigerian cash for imports and creating thousands of jobs in sugar production. This policy of ‘Backward

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Integration’ – achieving self-sufficiency by turning importers into producers has already achieved spectacular success in the Cement industry where, benefiting from favourable tax incentives and the phasing out of imports, our sister company, Dangote Cement Plc, has almost single-handedly made Nigeria self-sufficient in cement.

Dangote Sugar is an integral part of this national plan. In 2012, we committed ourselves to becoming an integrated sugar business, serving local and export markets from integrated plantation and refinery sites that we plan to build across Nigeria. Our goal over the next ten years is to reach a capacity to produce 1.5 million tonnes of refined sugar every year from locally grown sugarcane. At the same time, we will sustain and improve our existing refining operations as necessary. Pursuing this goal will ensure that Dangote

Sugar becomes a global force in sugar production, for the benefit of our shareholders and all Nigeria.

We have set out to achieve this target by the planting and cultivation of sugarcane on new plantations covering more than 150,000 hectares of land across a number of sites in Nigeria. The implementation of our development plan has commenced with the rehabilitation and expansion of Savannah Sugar in Adamawa State, which was acquired in December 2012. As shown in the map below, we plan other integrated sites in locations close to suitable land with good irrigation, close to key markets. We have begun acquiring additional sites and are engaging competent technical partners to plan and develop the necessary agricultural work, factory design and project planning.

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KEYGreen Field Projects

Savannah Sugar Estate

Highlights of Dangote Sugar's Expansion Plan

? Move from port-based refining to fully integrated sugar production within Nigeria, thereby helping Nigeria to achieve self-sufficiency in sugar production

? Develop, in the next 5-10 years, the capacity to produce 1.5 million tonnes of sugar a year from more than150,000 hectares of locally grown cane at existing and new plantations

? Create more than 100,000 new employment opportunities

Anambra

Enugu

AkwaIbom

Adamawa

Abia

Bauchi

Bayelsa

Benue

Borno

CrossRiver

Delta

EbonyiEdo

Ekiti

Gombe

Imo

Jigawa

Kaduna

Kano

Katsina

Kebbi

Kogi

Kwara

Lagos

Nasarawa

Niger

Ogun Ondo

Osun

Oyo

Plateau

Rivers

Sokoto

Taraba

YobeZamfara

AbujaFCT


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Savannah Sugar Company Limited Savannah Sugar Company Limited (SSCL) is an existing cane sugar production operation located on 32,000 hectares of land in Numan, Adamawa State, Nigeria, with a milling capacity of 50,000 tonnes of sugar per annum.

At present, however, SSCL produces refined sugar from just 6,750 hectares of sugar cane cultivated on its sugarcane fields. As part of our growth strategy, SSCL is undergoing rehabilitation and expansion so that much more of its land can be planted and harvested effectively. Investments have already been made and are ongoing in land preparation and development, farm machinery, environmental improvements, employee welfare and manpower training and development.

This expansion project will increase sugar milling capacity to some 260,000 tonnes of sugar per annum, from sugar cane produced on approximately 25,000 hectares of cultivated land. Rehabilitation of the SSCL es ta te has commenced and l and development and planting of new areas to sugarcane will continue over the next two years. The project will include the development of 25,000 hectares of land by 2018, an out-growers scheme and the refurbishment of infrastructure within the estate, as well as a significant upgrade to its existing factory. In addition, a new factory is also under consideration to process the increased cane supply.

SSCL employs 700 full-time staff, and 4800 part-time staff, with seasonal workers during the harvest season.

Our Operations

New Sugarcane plantation at Savannah


Our Operations

Expansion Projects Apart from the rehabilitation of Savannah Sugar’s plantation and factory infrastructure, our growth strategy to farm more than 150,000 hectares of planted sugarcane by 2023 includes the creation of integrated plantation and refinery facilities at the following locations:• Lau/Tau, Taraba State • Hadejia, Jigawa State • Zaria kalakala, Kebbi State• Kpada, Kwara/Kogi States

Integrated sugar mills will be sited at these locations to:• Refine white sugar from locally grown

sugarcane to sell into local markets and where appropriate, to export to other markets across West Africa.

• Generate power from bagasse for own use, with any excess electricity being sold to the national grid.

• Produce Fuel Ethanol (ethyl alcohol).

• Produce Animal feed from molasses and bagasse .

• Produce Bio-Fertilizer from press-m u d / f i l t e r c a k e d u r i n g s u g a r manufacturing.

Expansion Project Phase 1This first phase of the project has begun with pre-project implementation activities including:• New site selection/suitability (soil

Assessmtnt, topography, climate, water and Irrigation potential)

• Project design, detailed studies and development of implementation strategy

• Partnership with technical consultants to conduct feasibility studies and develop appropriate designs

• Investment in farm machinery and equipment

• New sites survey and land development;

industrial development; housing and amenities

This phase also includes the rehabilitation and expansion of Savannah Sugar’s estate, which will be used as a model for the other locations. We have begun with the following activities: • Land development and expansion of cane

production at Savannah.

• Refurbishment/Upgrade of SSCL facilities (factory, housing & amenities).

• Reintroduction of a robust out-growers scheme.

• Char t ing community relat ions & development initiatives guided by consultations and engagements with the local communities in which we will opera te . The in i t i a t i ve wi l l be i m p l e m e n t e d t h r o u g h v a r i o u s environmental, healthcare, educational, skills acquisition and job creation programmes to make a positive impact on the living standards in these communities, aimed towards fostering a sound cordial relationship with them.

Lau/Tau, Taraba State Project The Lau & Tau Sugar Project will be the first of the new sites to be developed over the next three years. The area is located on the south bank of the Benue River in Taraba State, about 30 km Northeast of Jalingo.

The project will be an independent sugar estate, as per the Savannah model, with its own sugarcane plantation and mill. Land acquisition for the site is nearing completion and pre-project development activities have commenced on the site. Soil and topographic surveys of the land have been concluded and verification of irrigation water availability is underway to better determine bulk water supply and the location of abstraction points. An environmental and social impact assessment is also in progress.

Seed cane production; planting; irrigation;


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Initially, 18,000 hectares growing to 23,000 hectares will be planted with room for the development of nearby lands as an out-growers scheme. The project will produce 2.3 million tonnes of sugarcane. Lau/Tau will have a cane milling factory capable of handling 12,000 tonnes/day, and the aim is to produce 250,000 tonnes of refined sugar per annum.

The main source of irrigation for the Lau and Tau project will be the Benue and Lamurde Rivers. To achieve our target for factory

commissioning in 2018, we have started building up our cane supply with the establishment of a sugarcane nursery at Lau & Tau. The seed cane nursery will be used to plant a commercial nursery, and thereafter to fully develop the total area to be planted.

The cane from the nursery will be used to plant sugarcane during the next three years, with a target of 2018 for the first commercial harvest. This will coincide with the commissioning of a new factory at the site.


Hadejia, Jigawa State Project The Jigawa State project site is a 21,449 hectares of land located at Hadejia. An environmental and soil impact assessment is underway. In addition, soil surveys and topographical assessments have been completed. Our technical partner have commenced the agricultural design as part of a detailed feasibil ity study. Factory requirements will be met by the design of a 12,000tonne/day sugarcane milling facility.

Expansion Project Phase 2: Kebbi And Kwara/kogi States Projects, 5-10 Years The second phase of expansion into new sites will cover two further locations in Kebbi and Kwara/Kogi states over the next 5 to 10 years.

These projects will have integrated sugar operations on 60,000ha area in Kebbi State, and 36,000ha at Kwara/Kogi States.

The approvals for the sites have been obtained from the relevant authorities and the soil and topographical surveys concluded. We are now finalising the land acquisition processes. Once concluded, the pre-project activities will commence at these locations to ensure the target deadline is met.

Our Operations

New Sugarcane Nursery at Lau/Tau, Taraba State Project Site


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Our people continue to be the driving force behind our business, therefore, our human resources and manpower development strategies are aligned with our business objectives and aspirations.

During the year under review, we reviewed our organisational development, with talent management, performance management, employee engagement and competitive appraisal systems redesigned to motivate our employees. We are building capability and leadership among our people and attracting some of the best talent in the marketplace. The development of relevant competences remains an impor tant pr ior i ty for management.

During the year, in addition to 'on the job learning', 96% of employees attended in-house training, local and international learning and developmental courses to upgrade their skills for optimal performance.

Our People

The Group has designed and is implementing a performance management system, which will help us to identify gaps in our reward system and address specific training development needs of our employees.

The Company has maintained harmonious industrial relations with employees. With our robust aspirations for the future, our employees are carr ied a long with developments in the company with periodic briefing by our management. We will continue to upgrade the skills and competences of our people to firmly position us as a leading sugar industry business.

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Employee Long Service Award Recipient Employee SAP Super User Award recipientCross section of staff at the SAP Super User Awards

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Our Approach To Sustainability

Our sustainability approach is driven by a desire to contribute and impact positively towards the development of the immediate communities we operate in and society at large.

In 2014, our Environmental, Health and Safety, and Social Investment efforts were enhanced with the consolidation of existing and development of new group-wide policies that will guide our approach to this very important aspect of our businesses. These efforts are coordinated by a central group directorate at our parent company, Dangote Industries, who work with the sustainability team in Dangote Sugar to ensure that policies and standards are implemented to meet the specific requirements of each business.

For Dangote Sugar, this sustainability agenda guides the delivery of our commitments in this area, with focus on promoting Health and safety within our operations, as well as supporting our commitments to the host communities of our projects.

1. Savannah Sugar Staff School Children2. & 3. Presentation of the Patrol Vehicles to NAFDAC

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We are committed to the implementation and maintenance of Occupational Health and Safety Management Systems (OHSMS) that aim at the prevention of occupational injury and ill–health to all people who have access to the organisation's workplace. A strong commitment to continuous improvement is needed for production, sales and delivery of refined granulated white sugar in compliance with relevant legal, statutory and other requirements.

During the year under review, we enhanced our commitment to ensuring zero accidents across our operations, with an improved health and safety strategy, with the objective of building and reinforcing a winning safety culture amongst employees.

Our slogan remains: “Safety First. If it is not safe, don't do it.”

The occupational health & safety policy is documented, monitored and sustained through adequate communicat ion , supervision and awareness creation to all employees, suppliers and all stakeholders in line with the requirements of the OHSAS 18001:2007 safety system.

Health, safety and environmental workshops are organised for all employees with a broad focus on continuous improvement to ensure

Health and Safety

a safe working environment, with minimal risk to their health, as we strive to achieve zero accidents in our operations.

In addition, the Staff Welfare Unit organizes health awareness talks, seminars and programmes with professionals in the health sector on various health issues and diseases such as HIV/AIDS, high blood pressure, personal hygiene, Ebola, Diabetes, and other serious diseases.

1. OH & S Certificate2. Cross section of DSR HSE officers & Fire Marshals

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The Dangote Sugar Refinery Plc food safety policy ensures that our operations in refining, sales and distribution of granulated white sugar meet statutory, regulatory and consumer food safety requirements, using the most appropriate food grade production facilities under hygienic conditions, whilst also maintaining effective communication with stakeholders on food safety issues.

Our food safety policy is supported by measurable objectives that are monitored, maintained and continually reviewed with the objectives: a. To provide wholesome and nutritious

sugar that supports healthy livingb. To achieve 100% compliance with all

relevant customers', statutory and regulatory food safety requirements

c. To ensure that all relevant parties in the food production chain are aware of, and comply with the company's food safety requirement.

Dangote Sugar Refinery Plc is FSMS (Food S a f e t y M a n a g e m e n t Sy s t e m ) I SO 22000:2005, certified, and we are working towards the achievement of the FSSC 22000 (Food Safety System Certification); before the end of the 2015 business year. The FSSC 22000 (Food Safety System Certification) is a Global Food Safety Initiative (GFSI).

This food safety certification and other efforts in the continuous improvement of our product quality and standards has made Dangote Sugar the preferred brand of most multinational corporations in the Nigerian food and beverage sector.

Food Safety

picture to be adviced

“Our food safety policy is supported by measurable objectives that are monitored, maintained and continually reviewed to achieve 100% compliance, with applicable customers, Statutory/regulatory food safety requirements”

1. Employees handling the Retail Sugar Packaging2.

Vee Processor: the Vitamin A Mixer. Vitamin A is added to our sugar for the required 25,000 iu/kg minimum

Dangote Sugar Retail Packaging Plant @ Ikeja3.

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Our Approach To Risk Management

Risk management remains integral to our operational strategy and the achievement of our long-term goals. Given the volatile environment we operate in, our businesses are subject to risks and uncertainties. The Board, therefore, have during the year under review paid particular attention to sharpening our focus on the following key risk areas: credit, market, liquidity, operational and safety risks.

A new approach to risk management was developed, with a robust risk framework piloted by the Audit and Audit/Risk Management Committee of the Board of Directors, in line with internationally accepted standards.

The Board of Directors are advised by its audit and audit/risk management committee where appropriate; they regularly review the significant risks and decisions that could have a material impact on our business. These reviews provide a clear position on the level of risk that we can take in pursuit of our business strategies, and the effectiveness of the management controls in place to mitigate the risk exposures.

The risk management department has been

strengthened by the appointment of professional risk managers to ensure a holistic fit-for-purpose approach, with a robust framework for timely identif ication, measurement, control, reporting and monitoring of risks in the company. This approach has been designed to provide reasonable assurance that our assets are safeguarded, while the risks facing the businesses are assessed on a continuous basis to mitigate any eventualities.

Periodically, the audit and audit/risk committee, through the Group risk team review and assess the internal controls and procedures, approved by the Board of Directors; testing effectiveness and the remedial actions to be taken should the need arise.

As a result, our people are more aware that our success as an organisation does not just depend on our ability to identify and exploit the opportunities that are available in the markets we operate in. In addition, we must adopt a prudent approach to r isk management, which if not well managed could impact on our ability to meet our targets and profitability and could also be detrimental to our reputation.


During 2014, our primary focus was to enhance our operational efficiency, focus on our growth plans, increase sugar production, and to continue to provide for the needs and requirements of our customers, employees and stakeholders generally. Regular communication with our investor community continued via quarterly financial and performance updates designed to give a better understanding of the key drivers of our business, as well as describing our achievements, challenges and aspirations for the future.

Our performance in 2014 was negatively impacted by operational challenges including disruptions to the supply of natural gas (our primary energy source) to the Apapa Refinery, currency depreciation and the challenges of the security situation in North-Eastern Nigeria.

We were, however, able to mitigate the impact of

Group Managing Director's Review

“Our sales and marketing objectives during the year remained the sustenance of our leadership position and enabled us to maintain the largest market share in Nigeria.”

these factors by commissioning an alternative boiler fuel system (using low pour fuel oil), which sustained our operations, whilst also benefitting from lower raw sugar prices during the year.

We were able to increase selling prices to offset cost increases brought about by currency devaluation in the last quarter of 2014. Our sales team worked continuously with our trade customers to sustain their needs in troubled parts of the country and we were also able to improve the supply of high quality refined sugar to our corporate customers.

Group sugar production totaled 838,993 tonnes for the year, compared to 819,996 tonnes produced in 2013. A total of 832,660 tonnes of refined sugar was produced at the Apapa refinery (2013: 814,910 tonnes). At Savannah, sugar production increased to 6,333 tonnes from 5,036 tonnes produced in 2013, reflecting the beginning of our rehabilitation and expansion activities.

Group sugar sales volume was 781,319 tonnes (2013: 804,258 tonnes). Local sales declined by 3%, reflecting the challenges faced in the domestic market. No sugar was exported in the year compared to 15,000 tonnes exported in 2013, this being due to unattractive export prices prevailing during 2014.

Turnover for the year reached ? 95billion, (2013 ? 103billion), and the refinery achieved a gross operating margin of 23% compared to 26% in 2013. Group profit before tax and profit after tax stood at ? 15.3b and ? 11.6billion, respectively, compared to ? 16.3billion and ? 10.8billion achieved in 2013. Group earnings per share increased from 90 to 97 kobo per share. During the year, our cash needs were met from cash generated from our Apapa Refinery operations. Investments made in respect of the various projects we have embarked upon in sugar production and equipment/operational upgrades were funded from these internal resources, as well as our expansion project needs. These investments are the foundation that will support our sustainable growth over time by improving our operational efficiencies, output and returns to shareholders in the years to come.

As part of our operational focus, we continue to implement various projects at the Apapa Refinery geared towards achieving improved operational efficiency and increased output.

Graham ClarkGroup Managing Director


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We are also in the process of upgrading our quality systems, working towards achieving the Food Safety System Certification (FSSC 2200); a Global Food Safety Initiative (GFSI) recognised scheme, before the end of 2015. This certification will further boost our food safety standards and position our product as the preferred brand to companies in the pharmaceutical and food and beverage industries in Nigeria.

Our activities were further enhanced in the year with a strengthened Enterprise Wide Risk Management approach. This will enable us to better manage existing and emerging business risks via a process that effectively identifies, measures and monitors the risk environment in which we operate. The introduction of a capital projects function will also help us to successfully undertake capital projects through planning, project management and formal tracking against our project objectives.

Our sales and marketing objectives during the year remained the sustenance of our leadership position and enabled us to maintain the largest market share in Nigeria. To achieve this, we focused on the upgrading of our sales and marketing strategy by developing and implementing new initiatives to maximise our strengths in the market. Fixed-term supply agreements were negotiated with corporate customers, customer performance incentives were continued and technical and market support was provided where needed. To this end, we established new distributors, enforced rigorous compliance to our trade terms and facilitated customer forums to enable us to work with our customers to maximise their growth potential.

Our sugar development projects continued in the year, with technical evaluation and design activities for our identified opportunities being progressed. The agricultural and factory rehabilitation of Savannah is ongoing, and a total of 1,223 hectares was redeveloped in the year, with plant, equipment and field machinery deployed as necessary. This redevelopment area will increase to a targeted 2,735 hectares in 2015, and accelerate thereafter to fully develop all available land over the next 3 years.

The 2014, sugar production season at Savannah commenced in January 2014 and ended in April 2014. Cane production during the year was negatively impacted by the challenges faced on the estate in the prior year. As a result, cane yields remained low, although higher than the prior season average, and a total of 123,494 tonnes of cane was harvested, compared to 102,181 tonnes of cane harvested in 2013. The 2015 harvest commenced in January 2015, with improved cane yields being recorded to date following new area planted and improved cane husbandry on the estate. The sucrose content in the cane is also much improved and sugar production in the coming season stands to exceed prior-year achievements.

Our additional expansion plans on the identified sites continues to gain momentum, with our goal remaining to achieve 1.5 million tonnes of refined sugar per annum in the next 10 years, from locally grown sugar cane that is produced and processed at the new facilities in Nigeria. We have redrawn our project implementation plans to develop these new projects in two phases.


Retail Sugar Packaging Plant


The first phase will include the ongoing rehabilitation and expansion of Savannah to ultimately produce 260,000 tonnes of refined sugar per annum. In parallel, we will commence the development of the Lau/Tau project in Taraba State and will also mobilise to commence the development of a second new site at Hadejia in Jigawa State. Site evaluation and technical design work is progressing in respect of these two new sites and land acquisition procedures are nearing completion at Lau/Tau and continue at Hadejia. It is anticipated that these projects will span a 5-year horizon, the intention being to produce up to 750,000 tonnes of refined sugar in this first phase.

When the first phase of our development is nearing completion, the second phase of our expansion plan will be to commence development in Kebbi, Kwara and Kogi States. Site evaluation and technical analysis of these sites is underway in order to complete all preliminary work well ahead of the development timetable for these sites.

As an organisation, sustainability and equitable growth remain key drivers of our business operations. During the past year, various


Land preparation activities at Savannah

sustainability initiatives have been progressed to improve our environmental, health and safety and social investment agendas. Ultimately these initiatives will contribute to improved operational efficiency, the reduction of operating costs and better management of operational risk.

The implementation of enhanced health and safety initiatives continues in order to improve the working environment of our employees. Ongoing safety awareness campaigns and the implementation of improved workplace safety procedures is part of our drive to upgrade and heighten workplace safety awareness amongst our workforce, service providers and visitors to our facilities. We will continue to strive towards an accident free environment with health and safety procedures designed to lift the wellbeing and productivity of our workforce.

The outlook for 2015 remains challenging in the face of external factors such as currency devaluation that might have an impact on our business. Attention will be focused to mitigating the potential negative impact of these factors as we strive to sustain our growth during 2015.



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Corporate Governance Report

Dear Shareholder,

Dangote Sugar Refinery Plc. (DSR) is committed to best practice and procedures in Corporate Governance. The Board put in place mechanisms that assist it to review, on a regular basis, the operations of the Company so as to ensure that our business is conducted in accordance with good Corporate Governance and global best practices.

Transparency in Financial Reporting and Internal Control Dangote Sugar Refinery Plc produces a comprehensive annual report and financial statements in compliance with the Company and Allied Matters Act. We put in place adequate internal control procedures and ensure that the documents reveal the business and provide detailed audited financial statements in accordance with the relevant account ing standards and regulations.

E-dividend Consistent with the Dangote Sugar Refinery Plc business strategy, shareholder value Creation and commitment to good Corporate Governance, we are encouraging our shareholders to embrace the e-dividend. This is to enable us to pay the dividend due to shareholders by crediting their bank accounts with dividends immediately after they are

declared. Consequently, we have requested all shareholders to complete the detachable form in the annual report, in order to provide our registrars, Veritas Registrars Limited, with their bank and other details.

Board of DirectorsThe Board currently consists of ten (10) members, the Chairman, Group Managing Director, Deputy Group Managing Director and seven non-executive Directors, three (3) of whom are Independent Directors. The Board has the overall responsibility for ensuring that the Company is appropriately managed towards the achievement of the Company’s strategic objectives. The Board is headed by a non–executive Chairman.

Responsibilities of the Board Of DirectorsThe general responsibilities of the Board include but are not limited to the following:• Defining the vision, goals, objectives and

strategic priorities including recruiting and evaluating the performance of the Officers; reviewing the company’s organisation and remuneration structure; and establishing a succession plan for the GMD and the senior officers.

• Establishing the overall business objectives and s t rateg ies , and through an institutionalised strategic planning process, consider whether they continue to be appropriate in the context of the b u s i n e s s e n v i r o n m e n t , t a k i n g responsibility for issuing the audited financial statements and ensuring the high quality and reasonableness of the accounting and financial management.

• Reviewing the short, medium and long-term strategic, financial and business plans including reviewing the annual budget of the company as well as major risks towhich the company is exposed.

• Providing a broad oversight of the overall activities and affairs of DSR and the effective performance of management and monitoring the deployment of financial and human resources for the achievement of those plans.

Aliko Dangot ONChairman of the Bo

e, GC ard

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• Reviewing and approving all major capital

investments, divestments, mergers and a c q u i s i t i o n s o r o t h e r b u s i n e s s combinations.

• Establishing procedures for the approval of and approving all significant acquisitions and major contracts outside the ordinary course of business.

• Approving the declaration of dividends, stock buy-backs and new issuances of shares, restructure of the capital and share reconstructions including those associated with employee equity or incentive programmes.

• Approving the framework for the delegation of authority to the GMD and Management and defining the powers reserved for the Board.

• Approving the appointment of other directors including their training as may be recommended by the governance committee.

• Ensuring that an effective management team is in place and appointing key officers of the Company, including the GMD, company secretary and internal auditor.

• Approving a competitive compensation structure for the non-executive Directors subject to the Articles of Association and laying the statutory Directors’ fee before the A G M f o r a p p r o v a l u p o n t h e recommendation of the governance committee.

• Approving a mandate or charter for the Board and establishing Board Committees as well as approving their mandates or charters.

• Receiving concise reports from Board Committees at the next Board meeting after the committee meeting and a written report or copies of the minutes.

• Setting performance objectives and

the company and its committees and ensuring the regular evaluation of the effectiveness and performance of and the operations of the Company and associated companies.

• Periodically reviewing the organogram and approving all major changes to the structure of the organisation as well as reviewing the management succession plan and human resources plan.

• Overseeing employee compensation plans to ensure that they are consistent with the sustainable achievement of business objectives, prudent management of operations and consistent with ongoing assessments of the risks to which the company is exposed.

• Approving a risk management framework, setting the risk threshold, monitoring the major risks to the Company and ensuring that management takes actions to mitigate those threats, which may include but are not limited to those pertaining to operations, raw raterials, product or stock availability, quality, price, liquidity, interest and exchange rate changes, capital market dynamics, on-going availability of capital and fash flow to operate the business, profitability, insurance, safety, people and reputation risks.

• Ensuring that an effective and secure Whistle Blowing Policy and adequate structures by which staff and stakeholders can raise concerns about possible or potential improprieties are in place.

• Ensuring there is an appropriate framework of internal controls in place and monitor ongoing reports on the adequacy and continuous improvement in such controls.



expenditure and material projects such as approving key performance indicators for


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• Approving that the appointment, reappointment or removal of the external auditor be put to the Annual General Meeting for approval and recommending to the general meeting, the appointment of the external auditor as determined by the audit committee.

• Approving all policies and revisions thereof, including those pertaining to corporate disclosure and communications, finance and accounting, credit, risk management, operations, IT, l iquidity, funding, profitability and capital management.

• O v e r s e e i n g t h e c o r r e c t n e s s o f communications with shareholders and stakeholders including communities, interim and annual financial statements, shareholder meeting materials, etc.

• Checking that compliance documents are filed correctly and in a timely manner with applicable company, securities and other regulators, including but not limited to, the Securities and Exchange Commission, the Nigerian Stock Exchange the Corporate Affairs Commission, NAFDAC, SON and similar filings with other applicable authorities.

• Approving policies to improve the corporate governance system and ensuring that DSR operates within the laws of the Federal Republic of Nigeria and institutionalising conduct that promotes, maintains and enhances the integrity and reputation of the company; and

• Establishing high standards of business conduct and ethical behaviour for directors, officers and employees including disclosing potential areas of conflict of interest and ensuring that there is an ongoing process for ensuring compliance with those standards.

The Board carries out the above responsibility through the Board Committees whose terms of reference clearly set out their roles, responsibilities, scope of authority and procedures for reporting to the Board. Each committee is chaired by a Non Executive Director to ensure strict compliance with the principles of good corporate governance practice, while a representative of the shareholders chairs the Audit Committee.

The various Committees of the Board assist the Board of Director’s in fulfilling their oversight functions regarding financial reporting, risk management, Internal control, employee welfare etc in line with regulatory and corporate governance pract ice requirements.

Meetings of the Board of DirectorsThe Board of Directors holds at least four (4) meetings a year, to consider important corporate events and actions such as approval of corporate strategy, annual corporate plan, review of internal risk management and control systems, performance review; direct the affairs of the Company, its operations, finances and formulate growth strategies. It may however, convene a meeting whenever the need arises. During the year under review, the Board of Directors and the board committees convened several meetings.

Record of Directors’ MeetingIn line with the provisions of Section 258(2) of the Companies and Allied Matters Act, Cap. C20 Laws of the Federation of Nigeria, 2004, the record of Directors’ attendance at Board meetings is available for inspection at the Annual General Meeting.

Committees of the Board of Directors The Board delegated some of i ts responsibilities to standing committees that consist of Executive and Non – Executive Directors. In compliance with the practices of good corporate governance, the Chairman of the Board of Directors is not a member of any of these committees. The committees are the Governance, Finance and Audit/Risk


• Reviewing IT systems policies and disaster recovery plans; and


Management Committees. The committees report to the Board of Directors on their activities and recommendations, which are ratified by the full Board, at a meeting.

Finance CommitteeThe Committee is comprised of six Directors, with an Independent Director as Chairman.

Members of the Committee are: Ms. Bennedikter Molokwu - Chair Person Mr. Olakunle Alake - Member Alhaji Abdu Dantata - MemberEngr. Abdullahi Sule - Member Mr. Graham Clark - Member Ms. Maryam Bashir - Member

Responsibilities of the Finance Committee• Review and recommend for approval by

the Board, the financial and business plan of the Company as well as its quarterly and annual operating and capital budgets and forecasts as well as revisions thereto proposed by management.

• Ensure the completeness and accuracy of financial statements – quarterly, half year and annual accounts, make reports and recommendations and oversee the proper disclosure of its financial information.

• Review the capital appropriation plans of the Company and provide advice and guidance on the authorization limits established by the Board.

• Review, as it is deemed appropriate, the Company’s financial policies, capital structure, matters affecting the capital like mergers and acquisitions, divestments and acquisitions, loan repayments, guarantees, assumptions of debt, foreign currency transactions and major disposals not in the ordinary course of its business or that of its subsidiaries.

• The Committee shall periodically review

investment and operation performance

the financial, accounting, actuarial and investment policies, practices and guidelines, tax planning and compliance programmes and provide guidance and advisory recommendations.

• Develop alternative strategies to improve funding and ensure a balance between strategic priorities and resource availability.

• Appraise major equity or other investments, any share repurchase plans or disposals of shareholding interests of more than 5% or take-over action, pa r t i c ipa t ion in jo in t ven tu res , partnerships or similar initiatives and make recommendations to the Board.

• Annually review the company’s dividend policy and make recommendations to the

Board on the dividend to be declared.

• In accordance with the Company’s policies and practices for the review of contractual obligations as approved by the Board, the committee shall review summaries prepared by management of certain contractual obligations including certain human resources, business process, outsourcing contracts and certain consulting contracts.

• Periodically review major banking, investment advisors, subsidiaries, customer and competitor activities and relationships and the impact of the company’s actions on those relationships and the short and long term interests.

• Review with management and the governance committee the company’s retirement strategy, gratuity, defined benefit and contributions plans and make recommendations performance and funding of the plan assets.


plans, make recommendations regarding


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Board Governance CommitteeThe Committee comprise of five Directors, with an independent Director as Chairman. Members of the Committee are:

Dr. Konyinsola Ajayi, SAN - ChairmanMr. Uzoma Nwankwo - Member Ms. Maryam Bashir - Member Mr. Graham Clark - Member Engr. Abdullahi Sule - Member

of the Board, experience and other

re-election at the AGM.

Responsibilities of the Board Governance Committee: • Regularly review the Board structure, size

a n d c o m p o s i t i o n a n d p r o v i d e recommendations to the Board with regards to any adjustments deemed necessary.

• Regularly review the required mix of skills

qualities of the Directors in order to assess the effectiveness of the Board as a whole, its Committees and the contribution of each Director.

• Make recommendations to the Board on the appointment of new Executive and non-executive Directors, including alternate Directors, the composition of the Board generally and ensure that a balance exists between executive and non-executive Directors.

• Identify and nominate candidates for the approval of the Board, to fill Board vacancies as and when they arise. Investigate the eligibility of new Director’s for appointment and their backgrounds, along the lines of the approach required for listed companies by the SEC/NSE, prior to their appointment including the determination of the independence or otherwise of a prospective independent Director.

• Recommend Directors who are retiring per the Articles of Association or under the provisions of CAMA to be put forward for

• Establish the general human resources

exit criteria, retirement and termination payments and benefits for executive and Non- executive Directors and Key Officers and review and propose necessary changes of the policies.

• Ensure that a fair and competitive Remuneration Policy which defines the criteria and mechanism for determining levels of remuneration and the frequency for review of such criteria and mechanism is in place. The policy should define a process, if necessary with the assistance of external advisers or professional executive recruitment firms, for the determination of E x e c u t i v e a n d N o n - e x e c u t i v e compensation, as well as providing to

• Conduct periodic reviews of the o rganog ram, s i ze , compos i t ion , effectiveness of the senior management and the human resources policies of the organisation for the Executive Directors and key officers against current industry practice and emplace professional executive recruitment publications for DSR thereby creating a clear understanding of the different methods of recruiting, training, motivating, retaining and remunerating Executive Directors and key officers.

• Determine and recommend the criteria necessary to measure the performance of Directors and the senior executives and the Directors in discharging their functions and responsibilities including setting performance bonuses or incentives.

• Annually evaluate the skills, competences, knowledge and experience required on the Board and all aspects of the Board’s structure, composition, responsibilities, p rocesses and ro les and make

what extent Executive Directors rewardsshould be linked to corporate and individual performance.

recommendations on the performance


policies including the retirement age, the


of individual, committee and Board. This

• The Directors’ fees should be fixed by the Board and approved by the shareholders

• The Committee should put in place in collaboration with the Company Secretary,

party transactions.

be conducted internal ly by the governance committee but at least once in three years by an external consultant.

• Ensure that a duly approved trust deed governs the policy and administration of the employee Shares ownership or Incentive scheme and to recommend acceptable changes to the policy or other developments to the Board.

in an annual general meeting while the Board of Directors would approve the remuneration of each Executive Director, including the GMD, individually taking into consideration direct relevance of skill and experience to the company at the particular time.

induction and continuing education programmes to keep the skills required on the Board at its optimum level and in par t icular ensure that corporate governance training permeates the organisation.

• Provide the policy and framework for compliance with laws, regulations and principles of corporate governance and to provide the mechanisms for periodic assessment of compliance, including compliance by significant vendors and consultants.

• Monitor changes and proposed changes in laws, regulations and rules affecting the organisation and obtain regular updates from the Legal Counsel or Company secretary regarding compliance matters.

• Communicate with the Board regarding the organisation’s policy on ethics, code of conduct and fraud policy as it relates to internal control, financial reporting

• The Committee must put in place a

inspections by regulatory agencies and aud i to r obse rva t ions , i nc lud ing investigations of standards, hazards, compliance, misconduct or fraud are considered and acted upon.

Audit/Risk Management CommitteeThe Committee comprises of seven Directors, the Members of the Committee are:

Mr. Uzoma Nwankwo - Chairman Ms. Bennedikter Molokwu - Member Dr. Konyinsola Ajayi, SAN - Member Mr. Olakunle Alake - Member Ms. Maryam Bashir - Member Mr. Graham Clark - Member Engr. Abdullahi Sule - Member Responsibilities of the Audit/Risk Management Committee Risk assessment and risk management are the responsibility of Dangote Sugar Refinery Plc’s management. The committee has an oversight role and in that capacity will receive reports from management concerning the Company’s risk management principles, policies, processes and practices so that it can review and report to the Board that:• Adequate systems are in place for the

effective identification and assessment of all areas of potential material business risk

• Adequate policies, processes and procedures have been designed and implemented to manage identified material risks and

• Appropriate action is undertaken to bring the identified material risks within the company’s risk tolerance levels.

Actions the committee will undertake to fulfill its duties and responsibilities include the following:• Ensure the design and implementation of

the risk management framework and internal control systems, in conjunction with existing business processes and

material business risk exposures.systems, to manage the Company’s


activities and all disclosures and related

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• Monitor the risk profile of the Company

and risk management framework.

• Ensure the establishment of processes and procedures for the monitoring and evaluation of the Company’s risk

minimizing material risks that may impact adversely on the business objectives of the Company.

• Establish reporting guidelines for management to report to the committee on the effectiveness of the management of the Company’s material business risk exposures.

• Evaluate the adequacy and effectiveness

• Review and make recommendations on the strategic direction, objectives and effectiveness of the Company’s risk management policies.

• Receive reports from management concerning the implications of new and emerging risks, legislative or regulatory initiatives and changes, organizational change and major initiatives, in order to assess and evaluate the potential impact on the strategy and business objectives of the Company.

Audit CommitteeIn addition to the Board standing committees, there is the audit committee, which also plays an important role in the Company. The audit committee is made up 6 (six) members, three members of the Board of Directors and 3 members representing the shareholders.

In compliance with the requirement of Corporate Governance practice, a shareholder chairs the committee. Members of the audit

management systems to assess the effectiveness of those systems in

of the Company’s risk management systems by reviewing the Company’s risk registers.

Committee are elected annually at the general meeting. Members of the committee are :

Mr. Segun Olusanya -Chairman/Shareholder Representative

Hadjia Muheebat Dankaka (OON) -Shareholder Representative

Mallam Dahiru Ado -Shareholder Representative

Ms. Bennedikter Molokwu -Director Mr. Olakunle Alake -Director Dr. Konyinsola Ajayi, SAN -Director

Responsibilities of the Audit CommitteeThe Committee carries out all such other functions as are stipulated by the Companies and Allied Matters Act. Cap C20 Laws of the Federal Republic of Nigeria, 2004; in addition to the responsibilities stated below:

• Evaluate DSR’s interim and annual financial statements for reasonableness, completeness and accuracy and consistency with information known to committee members and appropriate accounting policies and principles prior to issue and approval by the Board and, with the internal and external auditors review the integrity of DSR’s financial reporting process.

• Review significant accounting and reporting issues including complex or unusua l t r ansac t ions , p roposed adjustments and areas of judgement involved in the compilation of the company’s results under accounting standards or IFRS as well as recent p r o f e s s i o n a l a n d r e g u l a t o r y pronouncements especially their impact on financial statements. The Committee can use their own system to assess appropriateness and conformity with IFRS or relevant accounting standards.

• Review with management, the internal auditors and the external auditors the


against the agreed company risk appetite

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results of the audit including resolving any

reporting suggestions proposed by them.

• Review with the general counsel the status of legal matters that may have an effect on the financial statements and ensure the financial statements reflect appropriate accounting principles.

• Review annual and interim financial statements prior to filing with regulators to ensure that statements written by the management ’ s conce rn ing the i r responsibility for the assessment of the effectiveness of the internal control

• The Board retains responsibility for implementing recommendations that may arise from the financial reporting process.

Securities Trading PolicyIn compliance with the provisions of Section 14 of the Amended Listing Rules of the Nigerian Stock Exchange, 2014, the Directors and Employees of the Company, their immediate families, that is spouse, son, daughter, mother or father, and other insiders as defined under Section 315 of Investments and Securities Act, (ISA) and Rule 110 (3) of the SEC Rules and Regulations, are prohibited from buying or selling shares of the Company during the period stated below, in order to avoid occurrence of insider trading of the stocks of the Company, as defined under the Investments and Securities Act, 2007.

Consequently, and in accordance with Section 14.4 of the same Rules, compliance of the Rules by the Employees and Directors of the Company, will be disclosed in the Company's unaudited quarterly Financial Statements and the Audited Financial Statements.

adjustments and assessing any improved

structure and the procedures for financial reporting are correct.

Closed PeriodThe closed period shall be at the time of:a. Declaration of Financial results (quarterly,

half-yearly and annually);b. Declaration of Dividends (interim and

final);c. Issue of Securities by way of Public Offer or

Rights or Bonus, etc.;d. Any major expansion plans or winning of

bid or execution of new projects;e. Amalgamation, mergers, takeovers and

buy-back;f. Disposal of the whole or a substantial part

of the undertaking;g. Any changes in policies, plans or

operations of the Company that are likely; to materially affect the prices of the Securities of the Company;

h. Disruption of operations due to natural calamities;

i. Litigation/dispute with a material impact;j. Any information which, if disclosed, in the

opinion of the person disclosing the same is likely to materially affect the prices of the securities of the Company.

Period of ClosureThe period of closure shall be effective 15 (Fifteen days) prior to the date of any meeting of the Board of Directors proposed to be held to consider any of the matters referred to above or the date of circulation of Agenda papers pertaining to any of the matters referred to above, whichever is earlier, up to 24 hours after the sensitive information is submitted to the Exchange. The trading window shall thereafter be opened.

Employees and Directors should inform the Company Secretary in writing of their dealings with the Company's shares on quarterly basis, on or before two weeks to the end of the quarter; and also confirm that they complied with the Company's Securities Trading Policy.



difficulties that were encountered,


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Board of Directors



Aliko Dangote, GCON (Centre)FR: Ms. Bennedikter Molokwu, Mr. Graham Clark, Ms. Maryam Bashir, Alhaji Sani DangoteBR: Engr. Abdullahi Sule, Mr. Uzoma Nwankwo, Alhaji Abdu Dantata, Mr. Olakunle Alake, Dr. Konyinsola Ajayi, SAN

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Board Of Directors

Aliko Dangote is the f o u n d e r a n d President/CEO, Dangote Group. He is a Business Studies graduate of Al-Azahar University, Cairo, Egypt. For his philanthropy and contributions to the growth of Nigeria’s economy, he was awarded: the ZIK Award for professional leadership (1992), the Sir Ahmadu Bello International Award, the Cross River State Roll of Honour Award (2002), the Thisday Newspapers Award for CEO of the Year (2005). His national awards include OON in 2000, CON in 2005 and currently GCON. He occupies various offices in service to the Federal Government of Nigeria.

Aliko Dangote, GCONChairman (Non Executive)

Mr. Graham Clark is the G r o u p M a n a g i n g Director of Dangote Sugar. Mr. Clark is an Australian, a Certified Chartered Accountant, with over 30 years' experience in the African Sugar Industry. Mr. Clark was the Managing Director of Ilovo Sugar, the largest sugar company in Africa before he joined Dangote Sugar in November 2013. Prior to joining Ilovo sugar, he was the Finance Director of Lonrho Sugar Corporation, with presence in Malawi, Zambia, Swaziland and Mauritius. Mr. Clark is a fellow of the Australian Institute of Chartered Accounts.


Alhaji Sani Dangote joined in 2007. He has been on the Board of several other companies inc luding Nigerian Textile Mills Plc, Nutra Sweet Limited, Gum Arabic Limited, Dangote Textile Mills Limited, Alsan Insurance Brokers, Dan-Hydro Company Limited, Dansa Food Processing Company Limited and Dangote Farms Limited. He has also been Deputy Chairman of African Gum Arabic Producers Association and President of Lagos Polo Club. He was also appointed as Consul-General of the Romanian Embassy in Nigeria. He is member of several Chambers of Commerce, Fellow of the Chartered Institute of Shipping of Nigeria and President of the Fertilizer Producers and Suppliers Association. He is an alumnus of Harvard Business School, Harvard University.

Sani DangoteNon-Executive Director

Engr. Abdullahi Sule has over 30 years’ experience in the Oil & Gas, Steel Production, Machine Shop Operations and Sugar industries both in Nigeria and the US. He was the pioneer MD of Sadiq Petroleum Nig. Ltd, MD/CEO of African Petroleum Plc (now Forte Oil), Director for Business Development (Africa) at Osyka Corporation, Houston, Texas and Country Manager (Nigeria) at Tetra Technologies Inc, Houston, Texas. He was the MD/CEO of Dangote Sugar Refinery Plc (2007-2009) and Country Director of Fairport Process Equipment UK (2008-2011) till he was reappointed MD/CEO of DSR Plc in December 2011. He became Deputy Group MD of Dangote Sugar in November 2013. He holds a BSc. in Mechanical Engineering and MSc. in Industrial Technology from Indiana State University, USA.

Abdullahi SuleDep. Group Managing Director



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Board Of Directors

Alha j i Abdu Garba Dantata serves as a Non-Executive Director of Dangote Sugar Refinery Plc. In addition, he has served as Executive Director, Sales and Marketing at Dangote Group, having responsibility for coordinating the sales and marketing of all products manufactured or imported by the Group. He has been Chairman of Agad Nigeria Limited.

Abdu Dantata Non–Executive Director

Mr. Olakunle Alake is Fellow of the Institute of Chartered Accountants of Nigeria. He started his c a r e e r w i t h Pr iceWaterhouse in September 1984 and joined the Dangote Group in July 1997 as Financial Controller and Head of Strategic Services. He was promoted to the position of Group Strategist/Executive Director in 2001. He received a Bachelor's degree in Civil Engineering from Obafemi Awolowo University, Ile- Ife, in 1983.

Olakunle AlakeNon-Executive Director



M s . B e n n e d i k t e r Molokwu joined in 2007. She is a Fellow of the Institute of Directors and a m e m b e r o f t h e Nigerian Bar Association, International Bar Association, International Federation of Women Lawyers and Chartered Institute of Bankers. She received an LLB degree from the University of Nigeria, Nsukka in 1975 and was called to the Nigerian Bar in 1976. She also received a Master's degree in International and Comparative Law from Vrije Universiteit Brussel, Belgium, in 1978.

Bennedikter MolokwuIndependent Non-Executive Director

Dr. Konyinsola Ajayi, SAN has been a Managing Partner of the law firm of Olaniwun Ajayi & Co., Legal Counsel in Nigeria since 1980 and has over 25 years of legal experience in Energy and Natural Resources, International Business Transactions, Banking, Capital Markets, Construction and Engineering, Privatization as well as Litigation and Arbitration. He is Member of the International Bar Association, London, the Nigerian Bar Association and the Nigerian Economic Summit Group.

Konyinsola Ajayi, SANIndependent Non-Executive Director


Ms. Maryam Bashir was a p p o i n t e d o n 3 1 December 2013. She has 17 years of financial and banking experience. She received a BSc. in Business Administration from Ahmadu Bello University, Zaria in 1983, before obtaining her Master of Business Administration degree in Finance from University of Jos in 1990. She commenced her working career in the banking sector as an Assistant Supervisor in the Operations Department of International Merchant Bank Limited (IMB) and joined the United Bank for Africa Plc (UBA) between 1994 and 2004, where she occupied various positions including the post of an Executive Director.

Maryam BashirIndependent Non-Executive Director

Mr. Uzoma Nwankwo joined in 2007. He held senior posit ions in several international organizations such as Citicorp North America, Citibank Nigeria and First Bank of Nigeria Plc. He was Consultant/Lead Advisor to many companies locally and internationally in the areas of financial management, mergers and acquisitions and business process improvement. He joined Dangote Industries Limited in 2005 as Executive Director, Corporate Finance and Treasury. He holds: M.Sc. in Agricultural Engineering (Michigan State University, USA, 1983), MBA with specialization in Financial and International Business Management (University of Michigan, USA, 1987).

Uzoma NwankwoNon-Executive Director

Board Of Directors


OperationalReview

FinancialStatements

About Us



The Directors are pleased to submit their report together with the audited financial statements of the Company for the year ended 31st December, 2014. The Company’s corporate governance statements forms part of this Director’s Report. In the opinion of the Directors, the state of the Company’s affairs is satisfactory, and the financial statements presented gives a true and fair view of the state of the Company during the financial year under review.

1. Business Review And Results For The Year

The Company’s revenue for the year was 94,855,203The profit for the year after taxation was 11,635,780

Dangote Sugar Refinery Plc’s outlook for 2015 and beyond shows confidently that the company will continue operational existence for the foreseeable future as at the time when the Consolidate Financial Statements were approved. 2. Principal ActivitiesThe Company refines raw sugar into edible sugar and sells refined sugar, at its 1.44million MT/PA Apapa sugar refinery. The company has begun its backward integration project with a 10 year sugar development plan, to produce 1.5 million MT/PA of sugar from locally grown sugarcane. The project has commenced with its acquisition of Savannah Sugar Company Limited (SSCL) at Numan, in Adamawa State and other Green Project sites across Nigeria.

3. Legal FormThe Company was incorporated on the 4th of January, 2005 as a Public Limited Liability Company. DSR shares were listed in the Nigerian Stock Exchange, on the 18th March, 2007, and has since being traded on the NSE.

4. Directors ResponsibilitiesThe Directors are responsible for the preparation of the financial statements, which give a true and fair view of the state of affairs of the Company at the end of each financial year and of the profit or loss for that period, and comply with the provisions of the Companies and Allied Matters Act, C20 Laws of the Federation of Nigeria 2004.

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In doing

corporate governance · 2020. 9. 21. · global sugar production 2009/2010 - 2014/2015 (m mt) 153.4...

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