7664

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National Flour Mills Limited

So much more than Flour! 1

National Flour Mills Limited provides services which includes but, not limited to Flour Milling and Packaging,

• Rice Milling and Packaging,

• Animal Feed Production and Packaging,

• Dry Mix Blending and Packaging and Trading.

National Flour Mills Limited provides products namely Lotus, Ibis, good N’ natural, Lion, National, Hibiscus, Winner’s Choice and Command Performance.

Vision & Mission 2

Corporate Information 3

Notice of Forty-First Annual Meeting 4

Board of Directors 6

Chairman’s Review 8

Executive Management 10

Chief Executive Officer’s Review 12

Financial Highlights 15

Directors’ Report 16

Corporate Governance 17

Independent Auditor’s Report 19

Statement of Financial Position 20

Statement of Comprehensive Income 21

Statement of Changes in Equity 22

Statement of Cash Flows 23

Notes to the Financial Statements 24

Management Proxy Circular 49

Proxy Form 50

Table of Contents


Our VisionWe will, in partnership with our stakeholders be the dominant and sustainable manufacturing enterprise, distinguished and distinguishable by our core values and product excellence through constant innovation.

Our MissionTo be the preferred provider of affordable, quality food, feed and services with excellent returns to all stakeholders.

Annual Report 2013

So much more than Flour!

National Flour Mills Limited stands at the forefront of Trinidad and Tobago’s flour milling and feed milling industries.

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Board of DirectorsMr. Mike Bazie - ChairmanMs. Cindy Sadaphal - Deputy ChairmanMr. Ross AlexanderMs. Nadia AbdoolMs. Karen Tom YewMs. Aleena AliMs. Lalita RamrakhaMs. Lynette AbrahamMr. Khalil MohammedMr. Lloyd Mungal

Chief Executive OfficerMr. Kelvin Mahabir

Corporate SecretaryMs. Sati Jagmohan B.Sc; ACIS; MBA; LLB

Registered Office27-29 Wrightson Road,Port of SpainTelephone: (868) 625-2416/7Fax: (868) 625-4389Email: [email protected]

Registrar and Transfer OfficeThe Trinidad and Tobago Central Depository Limited10th FloorNicholas Towers,63-65 Independence SquarePort of SpainTelephone: (868) 625-5107-9Fax: (868) 623-0089Email: [email protected]

AuditorsKPMGTrinre Building69-71 Edward Street,Port of Spain

Principal BankersScotiabank Trinidad and Tobago LimitedScotia CentreCorner Park and Richmond Streets,Port of Spain

Citibank (Trinidad and Tobago) Limited12 Queen’s Park East,Port of Spain

Principal AttorneysAshmead Ali and Company36 Edward Street,Port of Spain

J.D. Sellier & Company129-131 Abercromby Street,Port of Spain

Corporate Information

4 I n c r e a s i n g E c o n o m i c V a l u e A d d e d t h r o u g h t h e u s e o f Te c h n o l o g y a n d I n n o v a t i o n

A n n u a l R e p o r t 2 0 1 3


NOTICE IS HEREBY GIVEN that the Forty-First Annual Meeting of National Flour Mills Limited (NFM) will be held on 18th September, 2014, at NFM’s Sports and Cultural Club located at Nos. 27-29 Wrightson Road, Port of Spain at 8.00 a.m. for the following purposes:

Ordinary Business

1. To receive and adopt the accounts for the financial year ended 31st December 2013 and the reports of the Directors and the Auditors thereon.

2. To approve the payment of a final dividend of 5 cents per share as recommended by the Directors.

3. To re-elect Directors.

4. To appoint Auditors and to authorize the Directors to fix their remuneration.

5. To transact such other business as may properly come before the meeting or any adjournment thereof.

Notes

1. No Service Contracts were entered into between the Company and any of its Directors during the period.

2. A Member of the Company entitled to attend and vote at the above Meeting is entitled to appoint a proxy to attend and vote in his/her stead. Such proxy need not also be a member of the Company.

3. In the event that a Member of the Company wishes to appoint a proxy to vote in his or her stead, such Member is required to complete and sign the appropriate Proxy Form. The signed Proxy Form should be deposited with the Secretary of the Company at the Company’s Registered Office, 27-29 Wrightson Road, Port of Spain not less than forty-eight (48) hours before the time fixed for holding the meeting.

4. The Directors of the Company have fixed the 25th of August 2014 as the Record Date for determining shareholders who are entitled to receive Notice of the Meeting, and have given notice thereof by advertisement in accordance with the Companies Act.

5. Only shareholders at the close of business on 25th of August 2014 will receive Notice of the Meeting.

BY ORDER OF THE BOARD

Sati Jagmohan

Corporate Secretary

Date: 26th of August 2014

Notice of Forty-First Annual Meeting

Although times may change.

Excellence will always remain.


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Board of Directors

Mike Bazie- Chairman

Cindy Sadaphal- Deputy Chairman

Karen Tom Yew- Director

Ross Alexander - Director

Lloy Mungal - Director

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Nadia Abdool - Director

Lynette Abraham - Director

Lalita Ramrakha- Director

Aleena Ali - Director

Khalil Mohammed - Director


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Chairman’s Review

On behalf of the Board of Directors of National Flour Mills Limited (NFM), I am pleased to report to stockholders that the year-end 2013 performance showed a remarkable positive shift from the recent past. It was a very profitable year for the Company with sales of $458M, net after-tax profits of over $18.8M and Total Comprehensive Income of over $21M. Higher sales revenue and lower costs of doing business drove the expansion in profits despite an extremely competitive and turbulent market.

It is reasonable to assume that the 2013 dividend payout may well push investors to form expectations about future earnings and dividends. Thus, it should be emphasised that the 2013 impressive growth in profit for the year over the prior year, 58%, may well prove unsustainable were the Board not to continue its focused drive towards renewed emphasis on measurable efficiencies relating, in the main, to raw materials and utilities consumption, reliable cost accounting data, feed plant refurbishment and, also, the institutionalisation of policies and procedures, company-wide.

The Board holds strongly to the view that the march towards efficiency, in all sectors, cannot be downplayed or postponed and must be treated with a measure of urgency, going forward.

Capital and Corporate StructureOn assuming office in August 2013, the Board, understanding its responsibility to transform NFM into a viable commercial entity which constantly creates value for the customer, identified the need for strategic change as well as the need for organisational redesign in order to align strategy and structure. In this respect, the Board has been decidedly interventionist. As a consequence, specific tasks were placed on a critical path contributing to profitability, in the short-term, and a more market-oriented top management with the capability to drive a culture change throughout the company. Some of these measures included the following:

Mike Bazie

Cultivating the right culture, through overhaul of top management and consolidation of workers’

involvement in the planning and operations process

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Chairman’s Review (continued)

• Bank debt restructuring

• Rationalisation of the feed product lines and the need to innovate in terms of products and processes

• Increased spend on feed plant equipment and refurbishment

• Joint management and union workshops leading to the finalisation of a Strategic and Business Plan which emphasised regional market initiatives

• Activity-based cost accounting processes

• Corporate restructuring

• Selection of a Chief Executive Officer who has an established track record for leadership and enterprise turnaround, particularly in manufacturing operations

Plant and MachineryThe year 2013 also witnessed capital expenditure decisions on significant infrastructural upgrades pertaining particularly to the elevator project and rehabilitation and upgrade of production equipment.

Concluding RemarksThe above represents a snapshot of key themes as the Board proceeded to tackle the critical issues identified and to provide the leadership required for the transformation of the Company. These efforts will continue in 2014 with a view to reducing costs and developing new markets as well as strengthening the governance structure of the Company.

AcknowledgementsOn behalf of the Board of Directors, I wish to extend my sincere thanks and appreciation to the Union, Management and Staff of NFM for their efforts in keeping the Company stable despite the many challenges being faced. I also wish to thank our shareholders and other stakeholders for their support over the last year and ask for continued support as the Company moves forward to fulfill its mandate and increase value added for the shareholders.

I would also like to thank personally each of my fellow Directors for their unwavering support and dedication to NFM’s transformation. Without their support and commitment, NFM would not have been able to rise to the many challenges facing the Company.

Mike BazieChairman


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Executive Management

Cheryl Lee Kong- General Manager

Sales and Marketing

Cheryl Edwards - General Manager

Operations

Robert Subryan- General Manager

Finance

Kelvin Mahabir- Chief Executive

Officer

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So

much more tha

n Flour

NFM purchases quality wheat for the manufacture of flour - no less than US #2 as

set by U.S.D.A Standards for Grain.


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Financial Review and AnalysisFiscal year 2013 has been a good year for NFM with the achievement of both by (i) a significant increase in Net Profit after Tax over the previous year and (ii) an increase in the earnings per share from 10 cents in 2012 to 16 cents in 2013 as well as an improvement in Shareholder’s Return on Equity. This was due primarily to increased sales and lower selling and distribution expenses.

Chief Executive Officer’s Review

As the incoming CEO in the latter half of 2014, the opportunities coming out of the work started

during the fiscal year 2013 with worker and union involvement, and the need to change the culture to one of accountability and high performance will be

fully developed

The changes made by the Board and Management in 2013 have laid the foundation for the performance improvement targeted for 2014. Management has committed to a new era of enhanced customer offerings, better people and asset productivity, and an improved plant environment. This should drive a steadily improving bottom line while continuing our responsibilities as a good corporate citizen.

As the incoming CEO in the latter half of 2014, the opportunities coming out of the work started during the fiscal year 2013 with worker and union involvement, and the need to change the culture to one of accountability and high performance will be fully developed. NFM’s organisation culture has been steeped in the mode of a monopoly organisation creating stagnation with a consequent inability to effectively meet the needs of a changing competitive environment.

In 2013 the organisation was steadied as the impact of the changes to operational practices, market strategy and management worker relations improved.

-5

0

5

10

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2009 2010 2011 2012 2013Restated

2009 9%2010 9%2011 .3%2012 7%2013 10%

Return on Shareholders’ Equity

Earnings Per Share

Kelvin Mahabir

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RevenueTotal sales revenue for 2013 was $458M as compared to $446M in 2012, an increase of $12M or 3%. The increase in sales could be attributed primarily to the development of new product lines which are gaining traction in the marketplace.

Operating ProfitOperating profit increased by $5.3M from $31.4M in 2012 to $36.7M in 2013 primarily due to a 24% reduction in selling and distribution expenses and a 31% increase in Other operating income.

Finance Cost The Company’s cost of borrowing fell by 25% compared to 2012. This was due to better management of liquidity as well as the implementation of new financing arrangements with Citibank for the purchase of grains. The combined effect was a lower overdraft balance and reduced interest rates .

Liquidity and Financial Position The liquidity and financial position improved slightly in relation to 2012 as evidenced by the improvement in the Net Cash and Cash Equivalents balance at the end of the year attributable to better working capital management. The focus has been on providing competitive terms to our customers with improved collections and inventory positions.

OperationsThe current operations of NFM continues to be reviewed to ensure that all products being produced by the Company have positive profit margins. This rationalisation process will continue as the Company seeks to improve its competitive position in the market.

NFM, understanding the importance of satisfying the needs of customers, has consciously made efforts to become more customer focused by developing strategies that enhance product quality and delivery at reduced costs. This has entailed building relationships with suppliers to achieve tighter materials management and enhanced distribution and delivery of its products. In addition, we have commenced reviewing mechanisms for managing receivables, reducing wastage and returned goods as part of our ongoing continuous improvement initiatives.

0

50

100

150

200

250

300

350

400

2009 2010 2011 2012 2013Restated

Operating Profit

2009 2010 2011 2012 20130

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200

300

400

500Revenue

CEO’s Review (continued)


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QualityNFM has already achieved the ISO and HACCP certification. To compete on the basis of quality, NFM must achieve Global Food Safety Certification. The attainment of this certification is a significant investment and will provide the trigger for organisational change since every area of the Company’s operations will be affected. Upon achieving the certification, there will be no quality restrictions on entry of NFM’s products into any markets.

Our PeopleThe transformation that has started at NFM can only be achieved with the support and commitment of all our employees. In 2013, efforts were focused on building a partnership with the workers and a Memorandum of Understanding was executed between the Company and the Seamen and Waterfront Workers Trade Union on the issue of productivity improvement.

A revitalised management team with new corporate objectives made changes to the operations under the guidance of the Board of Directors

Our Corporate ResponsibilityAs a responsible corporate citizen, NFM continues to work with its stakeholders in the achievement of their goals. Over the years, NFM has associated itself with cultural events such as Mastana Bahar and religious festivals such as Eid-ul-Fitr and Divali and will continue to do so in the future. In addition, NFM continues to make sundry donations of its products to schools and deserving community groups throughout the country.

Our Strategy Going ForwardIn going forward, NFM will be focused on increasing the sales of its main product lines in the domestic market as well as in the export market. The rationalisation of product lines will be accelerated as we seek more profitable niches. In an effort to increase performance and to provide the shareholder with value for money, we will continue to redesign our manufacturing strategy to achieve lower costs of production, efficient delivery of our products, flexibility in operations and the attainment of the highest quality standard in the food industry. This will allow NFM to achieve an unparalleled reputation in the marketplace which will be leveraged into increased sales and greater market share.

The culture change to a market driven, high performance organisation based on a committed and accountable workforce will continue throughout 2014 and 2015.

AcknowledgementsThe year 2013 was a challenging one for NFM. A change of Boards in the middle of the year resulted in the reevaluation of the operations of the Company.

Under the leadership of the new Board, it was clear that it was not business as usual and Managers and employees were called upon to escalate their performance in the context of the new vision for the Company.

In 2014, the Company will continue to build on the foundation that was laid in 2013. As we continue on this journey, I wish to take the opportunity to express my sincere thanks and appreciation to the Board of Directors for their unwavering support and guidance and to the Management and Staff for their commitment to the transformation of NFM.

Kelvin MahabirChief Executive Officer

CEO’s Review (continued)

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Financial Highlights

2009 2010 2011 2012 20130

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Restated2009 2010 2011 2012 2013

Restated

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2009 2010 2011 2012 20132009 2010 2011 2012 20130

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RestatedRestated

Total Assets($ millions)

Profit for the year ($ millions)

Share Price($ millions)

Issued Share Capital ($ millions)

Dividend Paymentcents per share

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2009 2010 2011 2012 2013Restated


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The Directors are pleased to present their report to the Shareholders for the year ended 31st December 2013.

Principal Activities

The principal activities of the Company are the production and distribution of food products and animal and poultry feeds.

Financial Performance

$’000Turnover 457,897Profit Before Taxation 26,673Taxation (7,803)Profit for the Year 18,870

Other Comprehensive IncomeNet of tax 2,327Total Comprehensive Income for the year 21,197Retained Earnings brought forward 26,418Retained Earnings carried forward 37,999

Dividends

The Board of Directors recommend a dividend payment of 5 cents per share for the year ended 31st December 2013.

Directors

In accordance with Article 75 of the Company’s Articles of Association, all the Directors will retire from office at the Annual Meeting and being eligible, offer themselves for re-election.

Directors and Substantial Interests

Directors’ Beneficial Interests Shareholding

Ross Alexander 20,017

Substantial Interests as defined by Section 181 (2) (a) of the Companies Act 1995

National Enterprises Limited 61,301,998

Auditors

The Auditors, KPMG will retire at the Annual Meeting, and being eligible, offer themselves for re-appointment.

By Order of the Board

Sati JagmohanCorporate Secretary

Registered Office27-29 Wrightson RoadPort of Spain

Directors’ Report

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National Flour Mills Limited (NFM) is committed to best practices and procedures in corporate governance. Overseen by the Board of Directors, NFM’s corporate governance practices are constantly under review, in line with the dynamics of the environment.

The corporate governance policies adopted by the Board of Directors (BOD) are designed to ensure that the business of the Company is conducted in a fair, honest and transparent manner which conforms to high ethical standards as well as all applicable laws and regulations.

It is the responsibility of the BOD of NFM to:

• Ensure the integrity of the Company’s financial and internal control policies;

• Ensure the accurate, adequate and timely submission of statutory returns and financial reporting to the regulatory authorities and shareholders;

• Review and approve corporate policies, strategic plan and business plan;

• Monitor the implementation of policies and the strategic direction of the Company;

• Set corporate performance objectives, monitor implementation and corporate performance;

• Review and approve all major and capital expenditure of the Company.

• Make decisions regarding the capital structure of the Company.

The Board carries out its responsibilities through Board Committees. The Terms of Reference of the Committees have set out their roles, responsibilities, scope of authority and the fact that they have to report to the Board of Directors.

Corporate Governance

Meetings of the BOD

The BOD meets on a monthly basis to make a determination on matters reserved for the Board (budget, financial performance, review of internal risk management and control system, formulation of growth strategies) and generally, directing the affairs of the Company.

The Audit Committee

The Audit Committee is comprised of the following Directors:Ms. Nadia Abdool - ChairpersonMs. Aleena AliMs. Lynette Abraham

The Committee has guidelines which sets out its responsibilities with respect to the financial statements, internal controls, the internal audit function and the external audit function.

The Internal Auditor

The Internal Auditor is responsible for the Company’s Internal Audit and Risk functions. The Internal Auditor reports administratively to the Chief Executive Officer and functionally to the Board of Directors through the Chairman of the Audit Committee.

External Audit

The Audit Committee has reviewed the findings of the External Auditors and their recommendations on management matters together with management responses. The members have expressed the opinion that the scope and planning of the audit for the year ended 31st December 2013 were adequate to provide the assurance that the financial statements were free from material misstatement and Management’s responses to the findings of the Auditor were acceptable.

So Much More than Flour!

A n n u a l R e p o r t 2 0 1 3



December 31 , 2013

(Expressed in Tr in idad and Tobago Dol lar s)

Report on the Financial Statements

We have audited the accompanying financial statements of National Flour Mills Limited (“the Company”), which comprise the statement of financial position as at December 31, 2013, the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2013, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

Chartered AccountantsMarch 25, 2014Port of SpainTrinidad and Tobago

Independent Auditor’s ReportTo the Shareholders of National Flour Mills Limited

20 I n c r e a s i n g E c o n o m i c V a l u e A d d e d t h r o u g h t h e U s e o f Te c h n o l o g y a n d I n n o v a t i o n

A n n u a l R e p o r t 2 0 1 3

National Flour Mills Limited Year ended December 31 , 2013


Restated Restated Notes 2013 2012 2011 $’000 $’000 $’000ASSETSCurrent AssetsCash and cash equivalents 7 14,994 33,037 12,162Accounts receivable and prepayments 8 79,074 86,994 97,242Inventories 9 87,348 77,243 69,146

181,416 197,274 178,550

Non-Current AssetsInvestments 15 15 15Retirement benefit asset 10 15,193 11,338 16,087Property, plant and equipment 11 141,006 147,666 155,949Trademarks 12 2,997 4,229 5,462

159,211 163,248 177,513

Total assets 340,627 360,522 356,063

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent LiabilitiesBank overdraft 5 28,710 57,086 59,731Accounts payable and accruals 23,637 36,405 39,091Loans and borrowings 13 88,035 79,744 73,845Current portion of finance lease liability 21 546 729 728

140,928 173,964 173,395

Non-Current LiabilitiesLoans and borrowings 13 2,554 7,663 12,771Non-current portion of finance lease liability 21 - 546 1,275Deferred taxation 15 15,911 8,696 5,249

18,465 16,905 19,295

Total liabilities 159,393 190,869 192,690

Shareholders’ Equity Stated capital 16 120,200 120,200 120,200Capital reserve 23,035 23,035 23,035Retained earnings 37,999 26,418 20,138

181,234 169,653 163,373

Total liabilities and shareholders’ equity 340,627 360,522 356,063

The accompanying notes on pages 24 to 48 form an integral part of these financial statements.

Director Director

Statement of Financial Position

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Year ended December 31 , 2013


Restated * Notes 2013 2012 $’000 $’000

Revenue 457,897 446,263 Cost of sales (371,848) (356,039)

Gross profit 86,049 90,224

Selling and distribution expenses (31,513) (41,425)Administration expenses (29,155) (26,051)Other operating income 11,324 8,622

Operating profit 36,705 31,370

Finance cost (10,032) (13,425)

Profit before taxation 17 26,673 17,945

Taxation 18 (7,803) (5,997)

Profit for the year 18,870 11,948

Other comprehensive incomeItems that will never be reclassified to profit or lossRemeasurement of retirement benefit asset 10 3,102 (4,834)Related tax 15 (775) 1,209

Other comprehensive income, net of tax 2,327 (3,625)

Total comprehensive income for the year 21,197 8,323

Earnings per share 19 16¢ 10¢

* See Note 4


Statement of Comprehensive Income


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National Flour Mills Limited Year ended December 31 , 2013


Stated Capital Retained Capital Reserve Earnings Total $’000 $’000 $’000 $’000

Balance as at January 1, 2012, as previously reported 120,200 23,035 53,531 196,766Impact of change in accounting policy (note 4) - - (33,393) (33,393)

Restated balance as at January 1, 2012 120,200 23,035 20,138 163,373

Total comprehensive income (restated)Profit for the year - - 11,948 11,948

Other comprehensive income - - (3,625) (3,625)Transactions with owners of the companyDividends paid - - (2,043) (2,043)

Restated balance as at December 31, 2012 120,200 23,035 26,418 169,653

Total comprehensive incomeProfit for the year - - 18,870 18,870

Other comprehensive income - - 2,327 2,327Transactions with owners of the companyDividends paid - - (9,616) (9,616)

Balance as at December 31, 2013 120,200 23,035 37,999 181,234


Statement of Changes in Equity

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Year ended December 31 , 2013


2013 2012 $’000 $’000

CASH FLOWS FROM OPERATING ACTIVITIESProfit before taxation 26,673 17,945Adjustments for: Depreciation 8,717 10,147 Amortisation of trademarks 1,232 1,232 Interest expense 10,032 13,425

46,654 42,749Changes in working capital: Accounts receivable and prepayments 7,921 10,248 Retirement benefit (753) (85) Inventories (10,105) (8,097) Accounts payable and accruals (14,564) (4,188)

29,153 40,627Interest paid (8,236) (11,923)Taxes paid (1,365) (1,340) Net cash from operating activities 19,552 27,364

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (2,056) (1,864)

Net cash used in investing activities (2,056) (1,864)

CASH FLOWS FROM FINANCING ACTIVITIESRepayment of loans and borrowings (5,109) (5,110)Finance lease liability payments (729) (728)Dividends paid (9,616) (2,043)

Net cash used in financing activities (15,454) (7,881)

Net change in cash and cash equivalents 2,042 17,619

CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR (98,685) (116,304)

CASH AND CASH EQUIVALENTS, END OF THE YEAR (Note 7) (96,643) (98,685)


Statement of Cash Flows


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National Flour Mills Limited December 31 , 2013


1. INCORPORATION AND PRINCIPAL ACTIVITIES

National Flour Mills Limited (“the Company”) is incorporated in the Republic of Trinidad and Tobago, and was continued under the provisions of the Companies Act, 1995 on April 14, 1998. Its principal activities are the production and distribution of food products and animal and poultry feeds.

2. BASIS OF PREPARATION

(a) Statement of complianceThese financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and were authorised for issue by the Directors on March 25, 2014.

(b) Change in accounting policyExcept for the changes below, the Company has consistently applied the accounting policies to all periods presented in these financial statements.

(i) Fair value measurementIFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other IFRSs. It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7.

(ii) Presentation of items of other comprehensive income (OCI) As a result of the amendments to IAS 1, the Company has modified the presentation of items of OCI in its statement of profit or loss and OCI, to present separately items that would be reclassified to profit or loss from those that would never be. Comparative information has been re-presented accordingly.

(iii) Post-employment defined benefit plans As a result of IAS 19 (2011), the Company has changed its accounting policy with respect to the basis for determining the income or expense related to post-employment defined benefit plans (see Note 4 for further details).

(c) Basis of measurementThe financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:• buildings – measured at historical cost or valuation less related accumulated depreciation• retirement benefit asset – recognised as the plan assets less the present value of the defined benefit

obligation.

Notes to the Financial Statements

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December 31 , 2013


Notes to the Financial Statements (continued)

2. BASIS OF PREPARATION (CONTINUED)

(d) Functional and presentation currencyThese financial statements are presented in Trinidad and Tobago dollars, which is the Company’s functional currency. All financial information presented in Trinidad and Tobago dollars has been rounded to the nearest thousand.

(e) Use of estimates and judgmentsThe preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company’s accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenditure during the reporting period. Actual results may differ from these estimates.

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies are described in Note 5.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, except for the change in accounting policy explained in Note 4.

a) Property, plant and equipmentItems of property, plant and equipment are stated at historical cost or valuation less accumulated depreciation. Depreciation is calculated on the straight-line basis at varying rates, which are estimated to be sufficient to write down the cost of the assets to residual value by the expiration of their useful lives.

% per annumThe rates used are as follows:Buildings 1.25 – 2.5Plant and machinery 2.0 – 10.0Forklifts, trucks and loaders 25.0Office equipment and air conditioning 10.0Computer equipment 20.0Motor vehicles 25.0


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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

a) Property, plant and equipment (continued)The assets’ residual values and useful lives are reviewed at each reporting date, and adjusted as appropriate. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Increases in the carrying amount arising on revaluation of land and buildings are credited through other comprehensive income to capital revaluation reserve in equity. Decreases that offset previous increases of the same asset are recognised in other comprehensive income to the extent of any credit balance existing in the capital revaluation reserve; all other decreases are recognised in profit or loss. When re-valued assets are sold, the amounts included in reserves are transferred to retained earnings.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are included in profit or loss in the statement of comprehensive income.

b) Leases Leases of property, plant and equipment under which the Company assumes substantially all the risk and rewards of ownership are classified as finance leases. Assets held under finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments, at the date of inception of the lease. The corresponding leasing commitments, net of finance charges, are included in liabilities. The interest element of the lease payments is charged to profit or loss over the lease period.

Depreciation on assets held under finance leases is charged to profit or loss over the shorter of the lease term and their estimated useful lives.

Leases in which a significant proportion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Rentals paid under operating leases are charged to appropriate expense headings in the statement of comprehensive income on a straight line basis over the period of the lease.

c) TrademarksTrademarks are stated at cost less accumulated amortisation. Amortisation is recognised on a straight-line basis over the estimated useful life of the trademarks, which range from 10 - 14 years.

d) Financial instrumentsFinancial instruments are contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

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December 31 , 2013




d) Financial instruments (continued)

Financial assets

The Company’s financial assets comprise of cash and cash equivalents, trade and other receivables and available-for-sale investments.

The Company recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

Financial assets are derecognised when the contractual rights to receive the cash flows from the asset expire, or where substantially all the risks and rewards of ownership of the financial asset have been transferred.

Trade and other receivables

Trade receivables are measured at cost. Subsequent to initial recognition such receivables are measured at estimated recoverable amount. An allowance for irrecoverable amounts is made, and charged to the statement of comprehensive income, whenever there is objective evidence that a receivable is impaired.

Available-for-sale investments

These investments are intended to be held for an indefinite period of time but may be sold in response to the needs for liquidity or changes in interest rates, exchange rates or equity prices. These are unquoted securities that are measured at cost.

Financial liabilities

The Company’s financial liabilities comprise loans and borrowings, bank overdrafts and trade and other payables.

When financial liabilities are recognised initially, they are measured at fair value plus directly attributable transaction costs. Financial liabilities are subsequently re-measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when they are extinguished that is when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability extinguished and the consideration paid is recognised in the statement of comprehensive income.

Bank loans

Bank loans are recognised initially at fair value, net of transaction costs incurred. Bank loans are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the loan using the effective interest method.


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d) Financial instruments (continued)

Share capital

Ordinary shares are classified as equity and stated at the amounts subscribed by shareholders, less any incremental costs directly attributable to the issue of the shares (net of tax).

e) Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand and short-term commodity import loans, which form an integral part of the Company’s cash management, are included as a component of cash and cash equivalents for the purposes of the statement of cash flows.

f) InventoriesInventories are measured at the lower of cost (on a first in first out basis) and net realisable value. Cost includes expenditure incurred in acquiring the inventories, production costs and other costs incurred in bringing them to their present location and condition. Included in the cost of finished goods is an appropriate share of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

g) TaxationIncome tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in the statement of comprehensive income except to the extent that the tax relates to items recognised directly in equity or in other comprehensive income.

Current tax

Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, plus any adjustments to tax payable in respect of previous years.

Deferred tax

Deferred income tax is provided, using the liability method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

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December 31 , 2013




g) Taxation (continued)

Deferred tax (continued)

Deferred tax assets are recognised for all deductible temporary differences, and the carry-forward of unused tax losses, to the extent that it is probable that taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

h) Retirement benefit planThe Company operates a defined benefit pension plan covering its permanent employees. The funds of the Plan are administered by Trustees.

The Company’s net obligation in respect of the retirement benefit plan is calculated by estimating the amount of future benefit and that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of the plan assets. The calculation of the defined benefit obligation is performed annually by a qualified independent actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds of the Plan or reductions in future contributions to the Plan (after considering any minimum funding requirements).

Remeasurements of the net defined benefit asset, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any), are recognised immediately in other comprehensive income.

Net interest expense (income) on the net defined benefit liability (asset) is determined using the discount rate. Net interest expense and other expenses related to the retirement benefit plan are recognised in profit or loss.

The actuary performs a full actuarial valuation every three years and any surpluses or deficits may be recognised by an adjustment of future contribution rates.

i) Foreign currency Monetary assets and liabilities denominated in foreign currencies are expressed in Trinidad and Tobago dollars at rates of exchange ruling at the reporting date. All revenue and expenditure transactions denominated in foreign currencies are translated at the exchange rates ruling at the date of the transactions. The resulting profits and losses on exchange from these trading activities are recorded in profit or loss.


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j) ProvisionsProvisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be estimated reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

k) Revenue recognitionRevenue from the sale of goods is measured at sale price, net of returns, trade discounts and volume rebates. Revenue is recognised upon delivery of goods to customers.

l) Earnings per shareEarnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

m) Segment reportingSegment reporting is prepared based on the different categories of products sold by the Company.

n) New standards and interpretations not yet adoptedA number of new standards, amendments to standards and interpretations are not yet effective for the period ended December 31, 2013, and have not been applied in preparing these financial statements. Those which may be relevant to the Company are set out below. The Company does not plan to adopt these standards early.

IFRS 9 Financial Instruments (2009 & 2010) – IFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets, whilst IFRS 9 (2010) introduces additional changes relating to financial liabilities. The IASB has been working on an active project to make limited amendments to IFRS 9 and add new requirements on impairment and hedge accounting. The final version of IFRS 9 is not expected to become effective for the Company before 2018, and the Company is assessing the impact the standard may have on its financial statements.

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December 31 , 2013



4. PRIOR YEAR RESTATEMENTS

Statement of Financial Position As previously Exchange As Reported IAS 19 Loss Restated $’000 $’000 $’000 $’000January 1, 2012 Retirement benefit asset 60,611 (44,524) - 16,087Deferred taxation (16,380) 11,131 - (5,249)Retained earnings (53,531) 33,393 - (20,138)

December 31, 2012 Retirement benefit asset 59,884 (48,546) - 11,338Cash and cash equivalents 35,047 - (2,010) 33,037Deferred taxation (20,834) 12,138 - (8,696)Retained earnings (64,836) 36,206 2,010 (28,630)

Statement of Comprehensive Income As previously Exchange As Reported IAS 19 Loss Restated $’000 $’000 $’000 $’000December 31, 2012 Cost of sales (356,851) 812 - (356,039)Administration expenses (24,041) - (2,010) (26,051)Taxation (5,795) (202) - (5,997)Profit for the year 13,348 610 (2,010) 11,948

Under its previous policy, as allowed under the earlier version of IAS 19, the Company had utilised the “corridor approach” to the recognition of periodic actuarial gains and losses. It now recognises all actuarial gains or losses through other comprehensive income. The net annual interest expense or income is now determined by applying the discount rate to the net retirement benefits obligation or asset and not through the use of an expected rate of return to the plan assets, as was allowed under the previous IAS 19. In accordance with IAS 8, this change of accounting policy in respect of the application of IAS 19 (2011) has been applied retrospectively through the restatement of retained earning as at January 1, 2012 and the Statement of Comprehensive Income for 2012


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4. PRIOR YEAR RESTATEMENTS (CONTINUED)

During the year, Management identified an error in misstatement in the statement of comprehensive income for 2012 that resulted from the omission of recording an exchange loss on a foreign currency bank account. In accordance with IAS 8, Management has decided to restate the statement of comprehensive income for 2012 in order to correct the omission. The decision was taken to restate the financial statements in the prior year.

5. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Company has exposure to the following risks from its use of financial instruments:

• credit risk• liquidity risk• currency risk• interest rate risk.

This note presents information about the Company’s exposure to each of the above risks, and its framework for managing these risks. Further quantitative disclosures are included in relevant notes throughout these financial statements.

The Board of Directors has ultimate responsibility for the establishment and oversight of the Company’s risk management framework. The Audit Committee oversees compliance with the Company’s risk management framework and is assisted in its oversight role by the Internal Audit Department.

The Company’s main financial risks relate to the availability of funds to meet business needs, the risk of delayed or non-payment by the Company’s customers, and fluctuations in foreign exchange and interest rates. The risk management policies employed by the Company to manage these risks are discussed below:

a) Credit riskThe Company is exposed to credit risk, which is the potential for loss due to a debtor’s failure to pay amounts when due. The Company manages this by regular analysis of the ability of debtors to settle their outstanding balances. Impairment provisions are established for losses or potential losses that have been incurred at the reporting date.

The Company only trades with credit worthy third parties who are subject to credit verification procedures, which take into account their financial position and past experience. Individual risk limits are set based on internal ratings.

Credit risk on cash and cash equivalents held by the Company are minimised as all cash deposits are held with banks which have acceptable credit ratings.

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December 31 , 2013



5. FINANCIAL RISK MANAGEMENT (CONTINUED)

Financial risk factors (continued)

b) Liquidity riskLiquidity risk is the risk that the Company will face difficulty in meeting its obligations under financial liabilities as they fall due.

The Company manages its liquidity risk by monitoring its projected inflows and outflows from operations. Where possible the Company utilises surplus internal funds to finance its operations. The Company also utilises available credit facilities such as loans and overdrafts.

c) Currency riskCurrency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company’s measurement currency. The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollar. The Company’s management monitors the exchange rate fluctuations on a continuous basis and employs appropriate strategies to mitigate any potential losses.

d) Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

With the exception of bank overdrafts, the Company has no significant variable rate interest bearing assets or liabilities. As a consequence, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

Operational riskOperational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel, technology and infrastructure, and from external factors such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.

Compliance risk Compliance risk is the risk of financial loss, including fines and other penalties, which arise from non-compliance with laws and regulations of the state. The risk is limited to a significant extent due to the supervision applied by the Securities and Exchange Commission of Trinidad and Tobago, as well as by the monitoring controls applied by the Company. The Company has an Internal Audit Department which performs routine reviews on compliance.


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5. FINANCIAL RISK MANAGEMENT (CONTINUED)

Financial risk factors (continued)d) Interest rate risk (continued)

Reputation riskThe risk of loss of reputation arising from the negative publicity relating to the Company’s operations (whether true or false) may result in a reduction of its clientele, reduction in revenue and legal cases against the Company. The Company engages in public social endeavours to engender trust and minimise this risk.

6. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The critical accounting judgments and estimations, which have the most significant effect on the amounts recognised in the financial statements, are as follows: Retirement benefit obligationsThe Company has determined that, in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements (such as minimum funding requirements) of the plan, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined benefit asset is necessary at December 31, 2013.

Principal actuarial assumptions are set out in Note 10.

Impairment of trade receivables

The Company establishes an allowance for impairment that represents its estimate of projected losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures. The loss allowance is determined based on current data of payment statistics for specific circumstances relating to specific transactions.

Impairment of tangible and intangible assets and useful lives

At each reporting date, management reviews the carrying amounts of the Company’s tangible and intangible assets to determine whether there is any indication of impairments. An asset is impaired when the carrying value is greater than its recoverable amount and there is objective evidence of impairment. Recoverable amount is determined based on the value-in-use method, which is the present value of the estimated future cash flows over the estimated useful life of the asset discounted using market rates.

Management exercises judgement in determining whether future economic benefits can be derived from expenditures to be capitalised and in estimating the useful lives and residual values of these assets.

Deferred tax

The Company assesses the impact of estimated tax losses, which is subject to final approval by the Board of Inland Revenue, on deferred tax liability. Any final assessment done by the Board will be incorporated in the year that this assessment is completed and agreed by the Company.

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December 31 , 2013



7. CASH AND CASH EQUIVALENTS

2013 2012 $’000 $’000

Cash in hand and at bank 14,756 31,990Short-term deposits 238 1,047

Cash and cash equivalents in the statement of financial position 14,994 33,037

Short-term cash management facilities:Bank overdrafts (28,711) (57,086)Revolving grain purchase loans (82,926) (74,636)

(111,637) (131,722)

Cash and cash equivalents in the statement of cash flows (96,643) (98,685)

Bank overdraft facilities are provided by Scotiabank Trinidad and Tobago Limited and Citibank (Trinidad & Tobago) Limited. These facilities are secured by a debenture and collateral mortgage, stamped to cover TT$90 million each, comprising of a fixed charge over goodwill, land and buildings located at Wrightson Road, Port-of-Spain and a floating charge over all other assets of the Company. This security ranks pari passu with the security for the loans from First Citizens Bank Limited (see Note 13). An assignment of industrial all risks insurance with coverage of US$57.7 million has also been executed in favour of the banks.

Revolving grain purchase loans have been provided by the following to finance the importation of grain (See Note 13):

2013 2012 US$’000 US$’000

Export Import Bank of Trinidad & Tobago (Eximbank) Ltd 5,893 2,676Gavilon LLC 3,284 2,986Citibank (Trinidad and Tobago) Limited 3,780 6,000

12,957 11,662

$’000 $’000

TTD equivalent 82,926 74,636


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8. ACCOUNTS RECEIVABLE AND PREPAYMENTS

2013 2012 $’000 $’000

Trade receivables 67,386 65,838Prepayments 2,663 7,137Sundry receivables 9,025 14,019

79,074 86,944

Included in accounts receivable and prepayments is $3.6 million due from the Government of the Republic of Trinidad and Tobago (GORTT). This amount is as a result of the Company offering discounts to customers to pass on to the public on specific products in December 2013 at the request of the GORTT.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The credit risk exposure for trade receivables at the reporting date by type of counterparty was: 2013 2012 $’000 $’000

Wholesalers 14,070 16,041Industrial 12,569 13,154Export 3,989 4,520Feed 12,181 11,819Retailers 17,656 18,150Other 6,921 2,154

67,386 65,838

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December 31 , 2013



8. ACCOUNTS RECEIVABLE AND PREPAYMENTS (CONTINUED)

The aging analysis of trade receivables at the reporting date was:

Gross Impairment Gross Impairment 2013 2013 2012 2012 $’000 $’000 $’000 $’000

Not past due 38,616 - 34,408 - Past due:1-2 months 16,977 - 16,711 - 2-3 months 5,261 - 5,276 - 3-6 months 2,955 - 3,554 - over 6 months 24,706 21,129 26,241 20,352

88,515 21,129 86,190 20,352

The movement in the impairment allowance during the year was as follows:

2013 2012 $’000 $’000

Balance at January 1 20,352 14,920Allowance charged to profit for the year 777 5,432

Balance at December 31 21,129 20,352

9. INVENTORIES 2013 2012 $’000 $’000

Raw materials 61,919 55,505Packaging materials 3,791 3,676Finished products 8,788 8,268Maintenance spares 12,850 9,794 87,348 77,243


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10. RETIREMENT BENEFIT ASSET Restated 2013 2012 $’000 $’000

Present value of defined benefit obligation (150,182) (139,207)Fair value of Plan assets 165,375 150,545

Recognised asset for defined benefit obligation 15,193 11,338 a) Change in defined benefit obligations

Defined benefit obligation at start of year (139,207) (121,533)Benefits paid 3,926 5,660Current service cost (5,065) (4,447)Interest cost (6,863) (6,531)Members’ contributions (1,842) (1,344)Remeasurements:- experience adjustments (1,131) (797)- actuarial losses from changes in financial assumptions - (10,215)

Defined benefit obligation at end of year (150,182) (139,207)

b) The defined benefit obligation is allocated between the Plan’s members as follows:

- Active 56%- Deferred members 18%- Pensioners 26%

The weighted average duration of the defined benefit obligation at the year end 15.8 years.

96% of the value of the benefits for active members is vested.

32% of the defined benefit obligation for active members is conditional on future salary increases.

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December 31 , 2013



10. RETIREMENT BENEFIT ASSET (CONTINUED) Restated 2013 2012 $’000 $’000c) Change in plan assets

Plan assets at start of year 150,545 137,620Company contributions 5,430 3,843Members’ contributions 1,842 1,344Benefits paid (3,926) (5,660)Interest Income 7,601 7,547Return on plan assets 4,233 6,178Expense allowance (350) (327)

Plan assets at end of year 165,375 150,545

Actual return on Plan assets 11,834 13,725

d) Asset allocationLocally listed equities 42,865 29,940Overseas equities 10,235 8,425TT$-denominated bonds 76,792 59,918Non-TT$-denominated bonds (mainly US$) 14,330 14,589Mutual funds (short-term securities) 1,679 6,884Cash and cash equivalents 7,171 18,299Other (immediate annuity policies) 12,303 12,490

Fair value of Plan assets at end of year 165,375 150,545

The Plan does not directly hold any assets of the Company. Restated 2013 2012 $’000 $’000e) Expense recognised in profit or loss

Current service costs 5,065 4,447Interest on defined benefit obligation (738) (1,016)Administration expenses 350 327

Net pension cost 4,677 3,758

f) Re-measurements recognised in other comprehensive incomeExperience (gains) losses (3,102) 4,834


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10. RETIREMENT BENEFIT ASSET (CONTINUED) Restated 2013 2012 $’000 $’000

g) Reconciliation of opening and closing statement of financial position entries

Opening defined benefit asset 11,338 16,087Net pension cost (4,677) (3,758)Re-measurements recognised in other comprehensive income 3,102 (4,834)Company contributions paid 5,430 3,843

Closing defined benefit asset 15,193 11,338

h) The Company expects to contribute $4.503 million to its defined benefit pension plan in 2014.

i) Summary of principal assumptions 2013 2012

Discount rate at December 31 5.00% 5.00%Future salary increases 4.75% 4.75%Future pension increases 0.00% 0.00%

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December 31 , 2013



11. PROPERTY, PLANT AND EQUIPMENT

Plant Industrial Machinery Office Furniture, and Office and Equipment and Buildings Equipment Motor Vehicles Total

$’000 $’000 $’000 $’000Year ended December 31, 2013

Cost/ValuationAt January 1, 2013 160,227 326,884 28,942 516,053Additions 122 1,446 488 2,056

At December 31, 2013 160,349 328,330 29,430 518,109

Accumulated depreciationAt January 1, 2013 48,469 292,524 27,394 368,387Charge for the year 1,651 5,821 1,245 8,717

At December 31, 2013 50,119 298,345 28,639 377,104

Year ended December 31, 2012

Cost/ValuationAt January 1, 2012 159,678 326,440 28,071 514,189Additions 549 444 871 1,864

At December 31, 2012 160,227 326,884 28,942 516,053

Accumulated depreciationAt January 1, 2012 47,378 285,006 25,856 358,240Charge for the year 1,091 7,518 1,538 10,147

At December 31, 2012 48,469 292,524 27,394 368,387

Net book valueAt December 31, 2013 110,230 29,985 791 141,006

At December 31, 2012 111,758 34,360 1,548 147,666

The property, plant and equipment are subject to a registered debenture to secure bank borrowings (see Note 12).


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11. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

If buildings and plant and machinery were stated at historical cost, the carrying amounts would be as follows:

2013 2012 $’000 $’000

Industrial and office buildings 100,343 106,659Plant and machinery 29,977 34,361

130,320 141,020

12. TRADEMARKS

CostEnd of year 17,312 17,312

Accumulated amortisationBeginning of year 13,083 11,851Charge for the year 1,232 1,232

End of year 14,315 13,083

Net book value 2,997 4,229

13. LOANS AND BORROWINGS

Interest Maturity 2013 2012 Rate Date $’000 $’000

First Citizens Bank LimitedTranche B 6.18% January 2015 7,663 12,771Other secured advances (see Note 7) 82,926 74,636

Total loans and borrowings 90,589 87,407Less current portion (88,035) (79,744)

Non-current portion 2,554 7,663

The First Citizens Bank Limited loan is secured by a debenture and collateral mortgage, stamped to cover $90 million ranking pari passu with the security for the bank overdraft facilities (see Note 7). It is repayable in semi-annual instalments ending in January 2015.

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December 31 , 2013



14. MATURITY OF FINANCIAL LIABILITIES

The following are the contractual maturities of financial liabilities, including estimated interest payments:

Carrying Contractual 6 Months 6-12 1-2 2-5 Amount Cash Flows or Less Months Years Years

$’000 $’000 $’000 $’000 $’000 $’000

December 31, 2013

Secured bank loans 7,663 8,138 2,793 2,711 2,634 - Other secured advances 82,927 83,685 83,685 - - - Finance lease liability 546 597 400 197 - - Trade and other payables 23,887 23,887 23,887 - - - Bank overdraft 28,710 28,710 28,710 - - -

145,017 139,475 2,908 2,634 -

December 31, 2012

Secured bank loans 12,771 13,957 2,952 2,867 8,138 - Other secured advances 74,636 75,268 75,268 - - - Finance lease liability 1,275 1,405 400 400 605 - Trade and other payables 36,655 36,655 36,655 - - - Bank overdraft 57,086 57,086 57,086 - - -

184,371 172,361 3,267 8,743 -


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15. DEFERRED TAXATION 2013 2012 $’000 $’000Movement in deferred income tax liability:

Balance at beginning of year 8,696 5,249Charge to the income statement 6,440 4,656Recognition in other comprehensive income 775 (1,209)

Balance at end of year 15,911 8,696

Deferred taxation is attributable to the following items:

Tax losses carried forward (17,890) (24,705)Excess of net book value of property, plant and equipment over tax written-down value 30,001 30,631General provision for bad debts - (63)Remeasurement of retirement benefit asset 775 (1,209)Retirement benefit asset 3,025 4,042

15,911 8,696

16. STATED CAPITAL

Authorised Unlimited number of ordinary shares of no par value

Issued and fully paid 120,200,000 ordinary shares of no par value 120,200 120,200

17. PROFIT BEFORE TAXATION 2013 2012 $’000 $’000Profit before taxation is arrived at after charging:

Salaries and wages 57,932 60,549Bank interest and charges 10,013 11,743Depreciation – current year 8,717 10,147Amortisation of trademarks 1,232 1,232Operating lease rentals 1,005 1,150Directors’ fees 707 558 The average number of persons employed by the Company during the year was 355 (2012: 356).

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December 31 , 2013



18. TAXATION 2013 2012 $’000 $’000Deferred tax (see Note 15) 6,438 4,656Business levy 910 894Green Fund levy 455 447

7,803 5,997

The Company’s effective tax rate of 33% (2012: 30%) differs from the statutory tax rate of 25% as follows:

Profit before taxation 26,673 17,945

Tax calculated at 25% 6,668 4,486Non-taxable income (187) (187)Green Fund levy 455 447Business levy 910 894Expenses not deductible for tax purposes 167 669Deferred tax prior year over provision (210) (312)

7,803 5,997

The Company was audited by the Board of Inland Revenue for 2005 Corporation Tax. Based on the assessment it was indicated that an adjustment to reduce the tax losses by $16 million was required. The Company has filed an appeal against this assessment. According to the Company’s tax computation, the Company has tax losses of approximately $72 million available to be carry forward against future taxable profits.

19. EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit attributable to ordinary shareholders of $18,870 thousand (2012: $11,948 thousand) by the weighted average number of ordinary shares outstanding of 120,200,000 (2012: 120,200,000).

Only basic earnings per share are presented as there are no potentially dilutive share options in issue.


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20. RELATED PARTY TRANSACTIONS

A number of transactions are entered into with related parties in the normal course of business. These transactions were carried out on commercial terms at market rates.

a) Balances and transaction with key management personnel during the year were as follows:

2013 2012 $’000 $’000

Key management compensationShort-term benefits 4,067 3,934Post employment benefits 467 448

4,534 4,382

b) National Flour Mills Limited (NFM) has an agreement with the Ministry of Food Production, Land and Marine Resources which allows for NFM to purchase all rice paddy from local rice farmers. The amount paid is reimbursable by the Ministry to NFM. This amount as well as the proceeds for the sale of the processed rice (which is reimbursable by NFM to the Ministry) is recorded in a Consolidated Account.

The following amounts are included in sundry receivables and accounts payable:

Balance outstanding As at 31 December 2013 2012 $’000 $’000

Amount due to NFM 10,434 4,332Balance on Consolidated fund 9,404 9,250

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December 31 , 2013



21. FINANCE AND OPERATING LEASE COMMITMENTS

During 2010, the Company entered into a finance lease agreement to acquire an automatic silo scale with a lease term of four years. The Company has the option to purchase the equipment for a nominal amount at the conclusion of the lease agreement.

Finance leases liabilities are payable as follows:

Present Value Future Minimum Future Minimum Lease Payments Interest Lease Payments 2013 2012 2013 2012 2013 2012

$’000 $’000 $’000 $’000 $’000 $’000

Less than one year 597 801 51 72 546 729Between one and five years - 597 - 51 - 546

597 1,398 51 123 546 1,275

Minimum lease payments under non-cancellable operating leases are as follows:

2013 2012 $’000 $’000

Less than one year 1,064 362Between one and five years 1,660 450

22. CONTINGENT LIABILITIES As at December 31, 2013, the Company had contingent liabilities in respect of pending litigation.

Based on legal advice, the Directors believe that the Company will be successful in these actions. However, if defence against the action(s) is unsuccessful, the potential liability for damages and costs amounts to approximately $330 thousand (2012: $NIL).


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23. OPERATING SEGMENTS The Company has two reportable segments, as described below, which are the Company’s strategic divisions. The strategic divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic divisions, the Company’s Chief Executive Officer (CEO) reviews internal management reports monthly. The following summary describes the operations in each of the Company’s reportable segments:

• Foodstuff. Includes manufacturing and distributing flour, flour by products and rice.• Animal feed. Includes manufacturing and distribution of feed products for animals

Other operations include the purchase and sale of imported dry goods, and grain.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment gross profit, as included in the internal management reports that are reviewed by the Company’s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Financial information regarding assets and liabilities by operating segment is not reported on a regular basis to the Company’s CEO.

Food stuff Animal Feeds Other Total 2013 2012 2013 2012 2013 2012 2013 2012

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

External revenue 312,224 312,423 118,178 103,068 27,496 30,772 457,897 446,263

Depreciation and amortisation 7,310 7,261 2,086 3,305 552 813 9,949 11,379

Gross profit 59,496 66,268 26,056 18,368 497 5,588 86,049 90,224

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December 31 , 2013


Management Proxy Circular

Republic of Trinidad and Tobago

The Companies Act, 1995

(Section 144)

1. Name of Company

2. NATIONAL FLOUR MILLS LIMITED: Company No. N-763 (95)(A)

3. Particulars of Meeting – Forty-First Annual General Meeting of the shareholders of the Company to be held at the Sports Club, National Flour Mills Limited, 27-29 Wrightson Road, Port of Spain on Thursday 18th September 2014 at 8.00 a.m.

4. Solicitation – It is intended to vote the Proxy hereby solicited by the Management of the Company (unless the shareholder directs otherwise) in favour of all resolutions specified in the Proxy Form.

5. Any Director’s statement submitted pursuant to Section 76(2) – No statement has been received from any Director pursuant to Section 76(2) of the Company’s Act, 1995.

6. Any Auditor’s statement submitted pursuant to Section 171(1) – No statement has been received from the Auditors of the Company pursuant to section 171 (1) of the Company’s Act 1995.

7. Any Shareholder’s proposal and/or statement submitted pursuant to Sections 116(1) and 117(2) – No proposals have been received from any shareholder pursuant to Sections 116(1) and 117(2) of the Companies Act, 1995.

Date Name and Title Signature

26th August 2014

Sati Jagmohan

Secretary


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Proxy FormREPUBLIC OF TRINIDAD AND TOBAGO

THE COMPANIES ACT 1995

(Section 143(1)

Form of Proxy

Name of Company

NATIONAL FLOUR MILLS LIMITED Company No. N-763 (95) (A)

Particulars of Meeting

Forty-First Annual General Meeting of the shareholders of the Company to be held at the Sports Club,

National Flour Mills Limited, 27-29 Wrightson Road, Port of Spain on Thursday 18th September 2014 at 8.00

a.m.

I/We…………………………………………………………………………………………………………………………………………………..

of ………………………………………………………………………………………………………………………………………………………

being a member/members of National Flour Mills Limited (“the Company”), hereby appoint the Chairman

of the Meeting or failing him…………………………………………………….of………………………………………………………

…………………………………………………………………. in the same manner, to the same extent and with the same

powers as if I/We was/were present at the said Meeting or such adjournment thereof, and in respect of the

resolutions listed below to vote in accordance with my/our instructions below and overleaf.

Dated this………………………….day of………………………………..,2014.

………………………………………………………………………………………………………………………………………..

Signature(s) of Shareholder(s)

Please indicate with an “X” in the space below and overleaf your instructions on how you wish your vote on

the resolution referred to be cast. Unless otherwise instructed, the proxy may vote or abstain from voting

as he/she thinks fit. Please consider the notes 1 to 5 overleaf for your assistance to complete and deposit

this Proxy Form.

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December 31 , 2013


No. Ordinary Resolution For Against

1. To elect Directors and for such purpose pass the following resolutions:

Be it resolved that the Directors to be re-elected namely Mike Bazie, Cindy Sadaphal, Ross Alexander, Lalita Ramrakha, Karen Tom Yew, Khalil Mohammed, Lynette Abraham, Aleena Ali and Lloyd Mungal, be re-elected en bloc

□

□2 Be it resolved that the Financial Statements for the Company for the year

ended 31st December 2013 and the reports of the Directors and Auditors thereon be adopted. □ □

3. Be it resolved that a final dividend for the year ended 31st December 2013 of 5 cents per ordinary stock unit as recommended by the Directors be declared payable on the 10th October 2014 to shareholders on the Register at the close of business on 25th August 2014. □ □

4. Be it resolved that KPMG be appointed Auditors of the Company for the period ending at the close of the next Annual Meeting and that the Directors be authorized to fix their remuneration and expenses for the ensuing year. □ □

Notes:

1. A Shareholder may appoint a proxy of his/her own choice. If such an appointment is made, delete the

words “the Chairman of the Meeting” from the Proxy Form and insert the name and address of the person

appointed proxy in the space provided and initial the alteration.

2. If the appointee is a Corporation, this Proxy Form must be under common seal or under the hand of an

officer or an attorney duly authorized in that behalf.

3. A Shareholder who is a body corporate may, in lieu of appointing a proxy, authorize an individual by

resolution of its directors or governing body to represent it at this Annual General Meeting.

4. In the case of joint Shareholders, the name of all joint shareholders must be stated on the Proxy Form and

all joint shareholders must sign the Proxy Form.

5. To be valid, the Proxy Form must be completed and deposited at the Registered Office of the Company at

the address below not less than forty-eight (48) hours before the time fixed for holding the Annual General

Meeting or adjourned meeting.

Return to:

The Secretary


27-29 Wrightson Road

Port of Spain

Proxy Form (continued)


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Notes

Design and Layout: Paria Publishing Co. Ltd.Photographer: Michael Bonaparte

Other Photographs: Paria Publishing archive, shutterstock and dreamstime

Printing: Caribbean Printing Technologies Ltd.

Registered Office27-29 Wrightson RoadPort of SpainTelephone: (868) 625-2416/7Fax: (868) 625-4389Email: [email protected]


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