July 16, 2012

The Company has forwarded to The Exchange a summary of explanatory notes relating to its Group and Company’s results for the year ended 31st March, 2012 to assist with better appreciation and understanding of the financial statements.

1.Turnover: Turnover of Flour Mills of Nigeria Plc (FMN) increased by 13% from N161.8 billion to N183.4 billion primarily due to good performance in its core food business whose revenues have increased following the merger of Golden Pasta Company Limited (GPC) with FMN.

Fertilizer sales and margin were lower than the preceding year due to a reduction in demand from Government as a result of old stocks in warehouses.

Cement volume was down due to Government actions.

In addition, input cost of flour increased over prior year due to Naira devaluation, higher wheat costs, increased cassava flour wage and vitamins/additives. However, there was a delay effect regarding flour price increase announced in May 2011.

                                                         2012             2011

N’000            N’000

2. Distribution and selling                        1,342,839      626,643

Includes GPC’s figure of N545.6 million for the year ended 31st March 2012. The comparative figure was separately reported By GPC last year. Furthermore, the company invested heavily on Advertising and campaigns to further strength its brand, the impact of which has started to materialize?

3. Administrative Expenses                      6,064,383      4,853,676

Current year’s figure includes GPC’s administrative Expenses of N430 million. The comparative figure was separately reported by GPC last year.

In addition, there was a modest increase in expenditure relating to Corporate Social Responsibility.

2012             2011

N’000            N’000

4. Interest Payable and Similar Charges 5,570,280          4,853,676

The 21% increase was basically due to interest payment On N37.5 billion FMN Corporate Bond of December, 2010. Interest charged during the year ended 31st March was N3.1 Billion as against N1.4 billion in March 2011.

Investment in sugar and other strategic growth oriented projects Increased interest expenses.

5. Earnings per share 2012 2011 Basic 381 kobo 537 kobo Adjusted 381 kobo 432 kobo

The drop in earnings per share was partly as a result of the increased In share capital (FMN) Rights issue of December 2011) and a reflection Of a drop in the company’s earnings.

6. Dividend per share Basic 160 kobo 200 kobo Adjusted 160 kobo 160 kobo

1. Amount payable N3, 735,643,000 was same as last year. However, due to the increase of capital base as a result of the Rights issue of December, 2011, FMN dividend per share for 2012 Was calculated on the enlarged share capital.

2. In view of the various on-going strategic capital projects to grow the Company’s business, the Board took a prudent decision by recommending A dividend of 160 kobo per ordinary share of 50 kobo each in Order to retain funds and reduce borrowings.

                                                                                                                       2012             2011
                                                                                                                      N’000            N’000

7. Group Accounts

Share of year’s loss in associated company (UNICEM) 2,867,227          4,837,701

The figure was significantly down in March 2012 due to improved performance. This item hopefully, will not feature in 2013 since UNICEM has started posting positive monthly

Result having overcome its teething problems. Lower cost gas is now in use and a new crusher has been installed to improve Capacity utilization.

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