FINANCIAL REPORTING COUNCIL OF NIGERIA

(Federal Ministry of Industry, Trade & Investment)

FRC/CG/001: TEMPLATE FOR REPORTING COMPLIANCE WITH THE NIGERIAN
CODE OF CORPORATE GOVERNANCE 2018

Section A: Introduction

Corporate Governance is a key driver of corporate accountability and business prosperity. The Nigerian Code of Co2rporate Governance, 2018 (NCCG 2018) seeks to institutionalize corporate governance best practices in Nigerian companies. It is also aimed at increasing entities' levels of transparency, trust and integrity, and create an environment for sustainable business operations. The Code adopts a principle-based approach in specifying minimum standards of practice that companies should adopt. Where so required, companies are required to adopt the "Apply and Explain" approach in reporting on compliance with the Code. The 'Apply and Explain' approach assumes application of all principles and requires entities to explain how the principles are applied. This requires companies to demonstrate how the specific activities they have undertaken best achieve the outcomes intended by the corporate governance principles specified in the Code. This will help to prevent a 'box ticking' exercise as companies deliberately consider how they have (or have not) achieved the intended outcomes. Although, the Code recommends practices to enable companies apply the principles, it recognises that these practices can be tailored to meet industry or company needs. The Code is thus scalable to suit the type, size and growth phase of each company while still achieving the outcomes envisaged by the principles. This form seeks to assess the company's level of compliance with the principles in the NCCG 2018. Entities should explain how these principles have been applied, specify areas of deviation from the principles and give reasons for these deviations and any alternative practice(s) adopted.

Please read the instructions below carefully before completing this form:

  • Every line item and indicator must be completed.
  • Respond to each question with "Yes" where you have applied the principle, and "No" where you are yet to apply the principle.
  • An explanation on how you are applying the principle, or otherwise should be included as part of your response.
  • Not Applicable (N/A) is not a valid response.

REPORT ON COMPLIANCE WITH THE NIGERIAN CODE OF CORPORATE GOVERNANCE 2018

Section B - General Information

S/No Item Details
i. Company Name HONEYWELL FLOUR MILLS PLC
ii. Date of Incorporation 21/06/1983
iii. RC Number 55495
iv. License Number
v. Company Physical Address NPA premises, 2nd Gate Bye-Pass, Tin Can Island, Apapa, Lagos Plot YABB, Mobolaji Johnson Avenue, Alausa, Ikeja, Lagos Flowergate Scheme, Sagamu, Ogun State
vi. Company Website Address www.honeywellflour.com
vii. Financial Year End 31st March
viii. Is the Company a part of a Group/Holding Company?Yes/No If yes, please state the name of the Group/Holding Company No
ix. Name and Address of Company Secretary Oluwayemisi Busari 6b, Mekunwen road, Ikoyi, Lagos
x. Name and Address of External Auditor(s) BakerTilly Nigeria 376, Ikorodu Road, Lagos
xi. Name and Address of Registrar(s) First Registrars & Investor Services Ltd. 2, Abebe Village Road, Iganmu, Lagos
xii. Investor Relations Contact Person(E-mail and Phone No.) Clementina Amajo camajo@honeywellflour.com; 01-7915870
xiii. Name of the Governance Evaluation Consultant None
xiv. Name of the Board Evaluation Consultant PwC Nigeria

Section C - Details of Board of the Company and Attendance at Meetings

1. Board Details:

S/No Names of Board Members Designation(Chairman, MD, INED, NED, ED) Gender Date First Appointed/ Elected Remark
1. Dr. Oba Otudeko, CFR Chairman Male 19/11/2008
2. Mr. 'Lanre Jaiyeola MD Male 02/10/2013
3. Mr. Obafemi Otudeko NED Male 19/11/2008
4. Mr. Alan Palmer NED Male 16/12/2014
5. Mr. Andrew Smith-Maxwell NED Male 16/12/2014
6. Mr. Nino Ozara Executive Director Manufacturing Male 19/11/2008
7. Mrs. Mrs. Wonuola Adetayo INED Female 16/12/2014
8. Mr. Ranti Sokunbi INED Male 17/10/2011
9. Mr. Raymond Zoukpo INED Male 16/12/2014

REPORT ON COMPLIANCE WITH THE NIGERIAN CODE OF CORPORATE GOVERNANCE 2018

2. Attendance at Board and Committee Meetings:

Names of Board Members No. of Board Meetings Held in the Reporting Year No. of Board Meetings Attended in the Reporting Year Membership of Board Committees Designation (Member or Chairman) Number of Committee Meetings Held in the Reporting Year Number of Committee Meetings Attended in the Reporting Year
1 Mrs. Wonuola Adetayo 4 4 StatutoryAudit member 4 2 (appointed in June 2019)
2 Mr. Ranti Sokunbi 4 4 StatutoryAudit member 4 2 (appointed in June 2019)
Business Development member 4 2 (appointed in June 2019)
Mr. Ranti Sokunbi 4 4 StatutoryAudit member 4 4
Business Development member 4 4
Nominations, Governance & Remuneration member None none
3 Dr. Raymond Zoukpo 4 4 Nominations, Governance & Remuneration member none none
4 Mr. Andrew Smith-Maxwell 4 4 Statutory Audit member 4 3
5 Mr. Alan Palmer 4 4 Business Development Chairman 4 4
6 Dr. Nino Ozara 4 3 Business Development Chairman 4 4
7 Mr. Obafemi Otudeko 4 4 Nominations, Governance & Remuneration Chairman none none
8 Mr. Lanre Jaiyeola 4 4 Business Development Chairman 4 4
9 Dr. Oba Otudeko, CFR 4 4 none none none none

Section D - Details of Senior Management of the Company

1. Senior Management:

S/NO names Position Held Gender
1 Mr. Lanre Jaiyeola Managing Director Male
2 Dr. Nino Ozara Executive Director, Manufacturing Male
3 Mrs. Oluwayemisi Busari Company Secretary Female
4 Mr. Mobolaji Fakayode Finance Director male
5 Mr. Tunde Adebayo Head Operation male
6 Mr. Oluseye Ogunwole Head National sales(B to B) male
7 Mr. Narendra Nagarkar Head National sales(B to B) male
8 Mrs. Bisi Duduyemi Head Human Resources female
9 Mr. Ifeanyi Abadom Manufacturing Director male
10 Mr. Tayo Ilori Supply Chain Director male

Section E - Application

Principles Reporting Questions Explanation on application or deviation
Part A - Board of Directors and Officers of the Board
Principle 1: Role of the Board "A successful Company is headed by an effective Board which is responsible for providing entrepreneurial and strategic leadership as well as promoting ethical culture and responsible corporate citizenship. As a link between stakeholders and the Company, the Board is to exercise oversight and control to ensure that management acts in the best interest of the shareholders and other stakeholders while sustaining the prosperity of the i) Does the Board have an approved Charter which sets out its responsibilities and terms of reference? Yes/No If yes, when was it last reviewed? Yes. 2019
Principle 2: Board Structure and Composition "The effective discharge of the responsibilities of the Board and its committees is assured by an appropriate balance of skills and diversity (including experience and gender) without compromising competence, indep i) What are the qualifications and experiences of the directors? of the directors? The Directors' experience covers these areas: Chartered accountancy, FMCG & marketing, Corporate Finance, Manufacturing, Milling, Economics and Banking
ii) Does the company have a Board-approved diversity policy? Yes/No If yes, to what extent have the diversity targets been achieved? Yes To a large extent. The Board is diverse in experience, qualifications, age, nationalities and gender.
iii) Are there directors holding concurrent directorships? Yes/No If yes, state names of the directors and the companies? Yes To a large extent. The Board is diverse in experience, qualifications, age, nationalities and gender.
iv) Is the MD/CEO or an Executive Director a chair of any Board Committee? Yes/No If yes, provide the names of the Committees. No
Principle 3: Chairman "The Chairman is responsible for providing overall leadership of the Company and the Board, and eliciting the constructive participation of all Directors to facilitate effective direction of the Board i) Is the Chairman a member or chair of any of the Board Committees? Yes/no If yes, list them No
ii) At which Committee meeting(s) was the Chairman in attendance during the period under review ? None
ii) At which Committee meeting(s) was the Chairman in attendance during the periodunder review ? None
iii) Is the Chairman an INED or a NED? NED
iv) Is the Chairman a former MD/CEO or ED ofthe Company? Yes/No If yes, when did his/her tenure as MD end No
v) When was he/she appointed as Chairman? 19/11/2008
vi) Are the roles and responsibilities of the If yes, specify which document Yes Board charter
Principle 4: Managing Director/ Chief Executive Officer "The Managing Director/Chief Executive Officer is the head of management delegated by the Board to run the affairs of the Company to achieve its strategic objectives for sustainable corporate performance" i) Does the MD/CEO have a contract of employment which sets out his authority and relationship with the Board? Yes/No If no, in which documents is it specified? Yes. In addition, these are also contained in the Board charter
ii) Does the MD/CEO declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No All Directors are mandated to inform the Chairman/ Secretary of any conflict of interest on an ongoing basis. A Directors Information Form which contains provisions for 'conflict of interest declarations' has been developed and will be administered annually starting from the current FY.
iii) Which of the Board Committee meetings did the MD/CEO attend during the period under review? Business Development
iv) Is the MD/CEO serving as NED in any other company? Yes/no. If yes, please state the company(ies) No
v) Is the membership of the MD/CEO in these companies in line with the Board-approved policies? Yes/No He does not serve in any other company
Principle 5: Executive Directors Executive Directors support the Managing Director/Chief Executive Officer in the operations and management of the Company i) Do the EDs have contracts of employment? Yes/no Yes
ii) If yes, do the contracts of employment set out the roles and responsibilities of the EDs? Yes/No If no, in which document are the roles and responsibilities specified? Yes. In addition, these are also contained in the Board charter
iii) Do the EDs declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No All Directors are mandated to inform the Chairman/ Secretary of any conflict of interest on an ongoing basis. A Directors Information Form which contains provisions for 'conflict of interest declarations' has been developed and will be administered annually starting from the current FY.
iv) Are there EDs serving as NEDs in any other company? Yes/No If yes, please list No
v) Are their memberships in these companies in line with Board-approved policy? Yes/No They do not serve in any other company
Principle 6: Non-Executive Directors Non-Executive Directors bring to bear their knowledge, expertise and independent judgment on issues of strategy and performance on the Board i) Are the roles and responsibilities of the NEDs clearly defined and documented? Yes/No If yes, where are these documented? yes Their roles/ responsibilities are documented in the Board charter. A new 'Terms of Engagement' document has been developed which also contains same
ii) Do the NEDs have letters of appointment specifying their duties, liabilities and terms of engagement? Yes/No A new 'Terms of Engagement' document which sets out duties/liabilities/ roles/responsibilities has been developed and will be issued to new NEDs going forward
iii) Do the NEDs declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No All Directors are mandated to inform the Chairman/ Secretary of any conflict of interest on an ongoing basis. A Directors Information Form which contains provisions for 'conflict of interest declarations' has been developed and will be administered annually starting from the current FY.
iv) Are NEDs provided with information relating to the management of the company and on all Board matters? Yes/No If yes, when is the information provided to the NEDs Yes. They are provided with very detailed reports on all aspects of the business. On a quarterly basis and more frequently as required
v) What is the process of ensuring completeness and adequacy of the information provided? The information is prepared and reviewed by the Heads of relevant functions, and the Managing Director. Feedback is also taken from members of the Board.
vi) Do NEDs have unfettered access to the EDs, Company Secretary and the Internal Auditor? Yes/No Yes
Principle 7: Independent Non-Executive Directors Independent Non-Executive Directors bring a high degree of objectivity to the Board for sustaining stakeholder trust and confidence" i) Do the INEDs meet the independence criteria prescribed under Section 7.2 of the Code? Yes/No Yes
ii) Are there any exceptions? No
iii) What is the process of selecting INEDs? Vetting by the Nominations, Governance & Remuneration committee in line with the Board Appointment Policy
iv) Do the INEDs have letters of appointment specifying their duties, liabilities and terms of engagement? Yes/No A new 'Terms of Engagement' document which sets out roles/responsibilities has been developed and will be issued going forward
v) Do the INEDs declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No All Directors are mandated to inform the Chairman/ Secretary of any conflict of interest on an ongoing basis. A Directors Information Form which contains provisions for 'conflict of interest declarations' has been developed and will be administered annually starting from the current FY.
vi) Does the Board ascertain and confirm the independence of the INEDs? Yes/No If yes, how often? What is the process? Yes. The requirements of the Corporate Governance codes are used as a checklist to verify the INEDs independence on an ongoing basis.
vii) Is the INED a Shareholder of the Company? Yes/No If yes, what is the percentage shareholding? 2 of the 3 INEDs are shareholders Mrs. Adetayo - 50,000 shares - 0.00063% Mr. Sokunbi - 208,000 shares - 0.0026%
viii) Does the INED have another relationship with the Company apart from directorship and/or shareholding? Yes/No If yes, provide details No
ix) What are the components of INEDs remuneration? Directors fees, Sitting allowances, Benefits in kind (i.e. food products)
Principle 8: Company Secretary "The Company Secretary support the effectiveness of the Board by assisting the Board and management to develop good corporate governance practices and culture within the Company" i) Is the Company Secretary in-house or outsourced? In-house
ii) What is the qualification and experience of the Company Secretary? The Company Secretary is a lawyer, and also possesses an MBA degree. She has over 20 years' experience in Corporate Commercial & Company Secretarial fields of practice.
iii) Where the Company Secretary is an employee of the Company, is the person a member of senior management? Yes.
iv) Who does the Company Secretary report to? To the Board (through the Chairman) and the MD
v) What is the appointment and removal process of the Company Secretary? The CS is appointed/ removed by the Board
vi) Who undertakes and approves the performance appraisal of the Company Secretary? The Board
Principle 9: Access to Independent Advice "Directors are sometimes required to make decisions of a technical and complex nature that may require independent external expertise" i) Does the company have a Board-approved policy that allows directors access to independent professional advice in the discharge of their duties? Yes/No If yes, where is it documented? Yes Board Charter
ii) Who bears the cost for the independent professional advice? The Company
iii) During the period under review, did the Directors obtain any independent professional advice? Yes/No If yes, provide details. No
Principle 10: Meetings of the Board "Meetings are the principal vehicle for conducting the business of the Board and successfully fulfilling the strategic objectives of the Company" i) What is the process for reviewing and approving minutes of Board meetings? Minutes of meetings are reviewed at the subsequent Board meeting, comments/corrections are made and the minutes are adopted upon a motion moved and seconded by 2 different Directors
ii) What are the timelines for sending the minutes to Directors? 3 weeks after meetings
iii) What are the implications for Directors who do not meet the Company policy on meeting attendance? They cannot stand for re-election at the AGM The record of their attendance is disclosed in the Annual Report Attendance is part of the evaluation criteria used in the Board & Director performance evaluation Continuous absence may be a ground for removal from the Board
Principle 11: Board Committees "To ensure efficiency and effectiveness, the Board delegates some of its functions, duties and responsibilities to wellstructured committees, without abdicating its responsibilities" i) Do the Board Committees have Boardapproved Charters which set out their responsibilities and terms of reference? Yes/No Yes
ii) What is the process for reviewing and approving minutes of Board Committee of meetings? Minutes of meetings are reviewed at the subsequent meeting, comments/corrections are made and the minutes are adopted upon a motion moved and seconded by 2 different members
iii) What are the timelines for sending the minutes to the directors? 3 weeks from meetings
iv) Who acts as Secretary to board committees?The Company Secretary
v) What Board Committees are responsible for the following matters? a) Nomination and Governance b) Remuneration c) Audit d) Risk Management a & b. Nominations, Governance & Remuneration Committee c & d. The establishment of a Board Audit & Risk Management Committee is being considered. In the interim, the statutory Audit Committee and the Risk Management function handle this role
vi) What is the process of appointing the chair of each committee ? Nomination by the Board
Committee responsible for Nomination and Governance
vii) What is the proportion of INEDs to NEDs on the Committee responsible for Nomination 2 INEDS, 1 NED
and Governance?
viii) Is the chairman of the Committee a NED or INED ? NED
ix) Does the Company have a succession plan policy? Yes/No If yes, how often is it reviewed? Yes. Every 6 months
x) How often are Board and Committee charters as well as other governance policies reviewed? Every 2 years, or more frequently if required
xi) How does the committee report on its activities to the Board? Minutes of its meetings are submitted to the Board. The Chairman of the Committee gives a report on key issues at each Board meeting
Committee responsible for Remuneration
xii) What is the proportion of INEDs to NEDs on the Committee responsible for Remuneration? Same as above (Nomination, Governance & Remuneration Committee)
xiii) Is the chairman of the Committee a NED or INED ? Same as above
Committee responsible for Audit
xiv) Does the Company have a Board Audit Committee separate from the Statutory Audit Committee? Yes/No No. The establishment of a Board Audit & Risk Management Committee is currently being considered. A proposal and a draft charter have been developed.
xv) Are members of the Committee responsible for Audit financially literate? Yes/No The proposed members are financially literate..
xvi) What are their qualifications and experience? The proposed members have Accounting and Finance backgrounds
xvii) Name the financial expert(s) on the Committee responsible for Audit This is still at the proposal stage
xviii)How often does the Committee responsible for Audit review the internal auditor's reports? The proposal is that this will be done quarterly
xix) Does the Company have a Board approved internal control framework in place? Yes/No Yes
xx) How does the Board monitor compliance with the internal control framework? Through the Statutory Audit Committee
xxi) Does the Committee responsible for Audit review the External Auditors management letter, Key Audit Matters and management response to issues raised? Yes/No Please explain. This is currently done by the statutory Audit Committee.
xxii) Is there a Board-approved policy that clearly specifies the non-audit services that the external auditor shall not provide? Yes/No No
xxiii) How many times did the Audit Committee hold discussions with the head of internal audit function and external auditors without the management during the period under review? The Committee is still at the proposal stage
Committee responsible for Risk Management
xxiv)Is the Chairman of the Risk Committee a NED or an INED? The establishment of a Board Audit & Risk Management Committee is being considered. A proposal and draft charter have been developed
xxv) Is there a Board approved Risk Management framework? Yes/No? If yes, when was it approved? Yes. December 2019
xxvi)How often does the Committee review the adequacy and effectiveness of the Risk Management Controls in place? Date of last review The establishment of a Board Audit & Risk Management Committee is being considered.
xxvii) Does the Company have a Boardapproved IT Data Governance Framework? Yes/No If yes, how often is it reviewed? This is being developed. Timeline for completion is December 2020
xxviii) How often does the Committee receive and review compliance report on the IT Data Governance Framework? The establishment of a Board Audit & Risk Management Committee is being considered
xxix)Is the Chief Risk Officer (CRO) a member of Senior Management and does he have relevant experience for this role? Yes/No The officer is mid-management
xxix)Is the Chief Risk Officer (CRO) a member of Senior Management and does he have relevant experience for this role? Yes/No The officer is mid-management
xxx) How many meetings of the Committee did the CRO attend during the period under review? The establishment of a Board Audit & Risk Management Committee is being considered.
Principle 12: Appointment to the Board "A written, clearly defined, rigorous, formal and transparent procedure serves as a guide for the selection of Directors to ensure the appointment of high-quality individuals to the Board" i) Is there a Board-approved policy for the appointment of Directors? Yes/No Yes
ii) What criteria are considered for their appointment? General criteria: Strong qualifications/professional background, Honesty, Integrity, Strategic capability, Entrepreneurial, Reasonable financial expertise, Independent thinking, People skills, Reasonable network of contacts INED- specific criteria: Free from relationships with the Company, Management or the Board that may hinder their independence Compliance with all the criteria for independence set out in the Corporate Governance codes ED-specific criteria: Requisite knowledge to effectively discharge their duties Cannot be a NED or Chairman of more than 1 other company, which must not be a competitor
iii) What is the Board process for ascertaining that prospective directors are fit and proper persons? Vetting by the Nominations, Governance and Remuneration Committee
iv) Is there a defined tenure for the following: a) The Chairman b) The MD/CEO c) INED d) NED e) EDsNo
v) Please state the tenure
vi) Does the Board have a process to ensure that it is refreshed periodically? Yes/No? Yes. Recommendations are taken from Board performance evaluations. The NGR Committee also reviews Board membership periodically.
Principle 13: Induction and Continuing Education "A formal induction programme on joining the Board as well as regular training assists Directors to effectively discharge their duties to the Company" i) Does the Board have a formal induction programme for new directors? Yes/No Yes. New directors are provided with an induction pack containing relevant information (previous annual reports, minutes of Board meetings, strategic reports etc), they are taken on a tour of the factories, and they meet with key Management staff
ii) During the period under review, were new Directors appointed? Yes/No If yes, provide date of induction. No
iii) Are Directors provided relevant training to enable them effectively discharge their duties? Yes/No If yes, provide training details. Yes. Directors are trained on an annual basis. Ausso Leadership Academy: training on strategic leadership. June 2019
iv)How do you assess the training needs of Directors. Based on recommendations from the Board performance evaluation and from Directors' own feedback
v) Is there a Board-approved training plan? Yes/No. Yes
vi)Has it been budgeted for? Yes/No . Yes
Principle 14: Board Evaluation "Annual Board evaluation assesses how each Director, the committees of the Board and the Board are committed to their roles, work together and continue to contribute effectively to the achievement of the Company's objectives" i) Is there a Board-approved policy for evaluating Board performance? Yes/No Yes
ii) For the period under review, was there any Board Evaluation exercise conducted? Yes/No Yes
iii) If yes, indicate whether internal or external. Provide date of last evaluation. External. Conducted by PwC Nigeria October 2019
iv)Has the Board Evaluation report been presented to the full Board? Yes/No If yes, indicate date of presentation.Yes 10th December 2019
v) Did the Chairman discuss the evaluation report with the individual directors? Yes/No .Yes
vi)Is the result of the evaluation for each Director considered in the re-election process? Yes/No .Yes
vi)Is the result of the evaluation for each Director considered in the re-election process? Yes/No .Yes
Principle 15: Corporate Governance Evaluation "Institutionalizing a system for evaluating the Company's corporate governance practices ensures that its governance standards, practices and processes are adequate and effective" i) For the period under review, has the Company conducted a corporate governance evaluation? Yes/No If yes, provide date of the evaluation. No. This will be conducted in the current year
ii) Is the result of the Corporate Governance Evaluation presented and considered by the Board? Yes/No To be conducted in current year
iii) If yes, please indicate the date of last presentation. To be conducted in current year
iv)Is the summary of the Corporate Governance Evaluation included in the annual reports and Investors portal? Yes/No. To be conducted in current year
Principle 16: Remuneration Governance "The Board ensures that the Company remunerates fairly, responsibly and transparently so as to promote theachievement of strategic objectives and positive outcomes in the short, medium and long term" i) Is there a Board-approved Directors' remuneration policy? Yes/No If yes, how often is it reviewed? Yes Every 2 years. More frequently if required.
ii) Provide details of directors' fees, allowances and all other benefits paid to them during the period under review. N13.25 million
medium and long term" iii) Is the remuneration of NEDS presented to shareholders for approval? Yes/No If yes, when was it approved? . Yes. This is done periodically, in line with CAMA
iv) What portion of the NEDs remuneration is linked to company performance?. NED remuneration is not linked to company performance
v) Is there a Board-approved remuneration policy for Executive and Senior management? Yes/No If yes, to what extent is remuneration linked to company performance? . Yes. Bonuses/profit sharing is based on the attainment of a specified profitability level.
vi)Has the Board set KPIs for Executive Management? Yes/No. Yes.
vii) If yes, was the performance measured against the KPIs? Yes/No Yes.
viii) Do the MD/CEO, EDs and Company Secretary receive a sitting allowance and/or directors fees? Yes/No No.
ix) Which of the following receive sitting allowance and/or fees: a. MD/CEO b. ED c. Company Secretary d. Other Senior management staff None.
x) Is there a Board-approved clawback policy for Executive management? Yes/No If yes, attach the policy. NYes.
x) Is there a Board-approved clawback policy for Executive management? Yes/No If yes, attach the policy. NYes.
Principle 17: Risk Management "A sound framework for managing risk and ensuring an effective internal control system is essential for achieving the strategic objectives of the Company" i) Has the Board defined the company's risk appetite and limit? Yes/No Yes
ii) How often does the company conduct a risk assessment?. Annually, or more frequently if a new risk is identified.
iii) How often does the board receive and review risk management reports? . Quarterly.
Principle 18: Internal Audit "An effective internal audit function provides assurance to the Board on the effectiveness of the governance, risk management and internal control systems" i) Does the company have an Internal Audit function? Yes/No If no, how has the Board obtained adequate assurance on the effectiveness of internal processes and systems? Yes. Internal Audit services are outsourced to a professional audit firm, with support from an internal team.
ii) Does the company have a Board-approved internal audit charter ? Yes/No Yes
iii) Is the head of internal audit a member of senior management? Yes/No Internal audit services are provided by an outsourced firm.
iv) What is the qualification and experience of the head of internal audit? The outsourced firm is one of the 'big 4' audit firms in Nigeria. They possess vast expertise in the field.
v) Does the company have a Board-approved annual risk-based internal audit plan? Yes/No Yes.
vi) Does the head of the internal audit function report at least once every quarter to the committee responsible for audit, on the adequacy and effectiveness of management, governance, risk and control The outsourced firm reports on a quarterly basis to the statutory Audit Committee.
environment; deficiencies observed and management mitigation plans? Yes/No
vii) Is there an external assessment of the effectiveness of the internal audit function at least once every three years by a qualified independent reviewer appointed by the Board? Yes/No If yes, when was the last assessment? The firm was recently appointed in 2017. This will be implemented going forward
viii) Who undertakes and approves the performance evaluation of the Head of Internal Audit? The Managing Director
Principle 19: Whistleblowing "An effective whistle-blowing framework for reporting any illegal or unethical behaviour minimises the Company's exposure and prevents recurrence" i) Does the company have a Board-approved whistleblowing framework? Yes/No If yes, when was the date of last review Yes. June 2019
ii) Does the Board ensure that the whistleblowing mechanism and are process reliable, accessible to all stakeholders, guarantees anonymity and protection of the whistleblower? Yes/No Yes
iii) Is the Audit committee provided with the following reports on a periodic basis? a) Reported cases b) Process and results of Investigated cases Yes. Reports are provided to the Committee when/if cases arise
Principle 20: External Audit "An external auditor is appointed to provide an independent opinion on the true and fair view of the financial statements of the Company to give assurance to stakeholders on the reliability of the financial statements" i) Who makes the recommendations for the appointment, re-appointment or removal of external auditors? The Audit Committee makes recommendations to the Board
ii) Who approves the appointment, reappointment, and removal of External Auditors? The shareholders in general meeting
iii) When was the first date of appointment of the External auditors? 26th September 2019
iv)How often are the audit partners rotated? Maximum of 5 years
Principle 21: General Meetings "General Meetings are important platforms for the Board to engage shareholders to facilitate greater understanding of the Company's business, governance and performance. They provide shareholders with an opportunity to exercise their ownership rights and express their views to the Board on any areas of interest" ) How many days prior to the last general meeting were notices, annual reports and any other relevant information dispatched to Shareholders? 23 clear days
ii) Were the Chairmen of all Board Committees and the Chairman of the Statutory Audit Committee present to respond to Shareholders' enquiries at the last meeting? Yes/No Yes
Principle 22: Shareholder Engagement "The establishment of a system of regular dialogue with shareholders balancetheir needs, interests and expectations with the objectives of the Company i) Is there a Board-approved policy on shareholders' engagement? Yes/No If yes: a) when was it last reviewed? b) Is the policy hosted on the company's website Yes. There is a Stakeholders Management, Engagement & Communication policy. The policy was reviewed in March 2020.
ii) How does the Board engage with Institutional Investors and how often Like all shareholders, institutional investors may engage with the Board through correspondence, general meetings, the Company Secretary, etc as frequently as they desire.
Principle 23: Protection of Shareholder Rights "Equitable treatment of shareholders and the protection of their statutory and general rights, particularly the interest of minority shareholders, promote good governance i) Does the Board ensure that adequate and timely information is provided to the shareholders on the Company's activities? Yes/No Yes. Information is provided in a timely manner through the NSE, press releases, the annual reports, etc.
Principle 24: Business Conduct and Ethics "The establishment of professional business and ethical standards underscore the values for the protection and enhancement of the reputation of the Company while promoting good conduct and investor confidence" i) Does the company have a Board-approved Code of Business Conduct and Ethics (COBE) that guides the professional business and ethical standards? Yes/No If yes: a) Has the COBE been communicated to all internal and external Stakeholders? Yes/No b) Is the COBE applicable to any or all of the following: 1. Board 2. Senior management 3. Other employees 4. Third parties Yes. The code has been communicated to all internal stakeholders. External stakeholders will be notified once the update (detailed below) is completed. The Board has its own Code of Conduct document The Employee COBE covers Senior Management and other employees. Prior to the COVID19 lockdown, the document was being updated with provisions which apply to 3rd parties; this is in the final stages of review.
ii) When was the date of last review of the policy? Board: 2019 Employees: 2018
iii) Has the Board incorporated a process for identifying, monitoring and reporting adherence to the COBE? Yes/No Yes. This is done through Management
ii) When was the date of last review of the policy? Board: 2019 Employees: 2018
iv) What sanctions were imposed for the period under review for non-compliance with the COBE? No reported cases
Principle 25: Ethical Culture "The establishment of policies and mechanisms for monitoring insider trading, related party transactions, conflict of interest and other corrupt activities, mitigates the adverse effects of these abuses on the Company and promotes good ethical conduct and investor confidence" i) Is there a Board- approved policy on insider trading? Yes/No If yes: a) When was the last date of review? b) How does the Board monitor compliance with this policy?Yes 2019 Through the Company's registrars
ii) Does the company have a Board approved policy on related party transactions? Yes/No If yes: a) When was the last date of review? b) How does the Board monitor compliance with this policy? c) Is the policy applicable to any or all of the following: 1. Board 2. Senior management 3. Other employees (Specify) 4. Third parties (Specify)The Company complies with IAS24, the standard on related parties Through Management The Board has a Conflict of Interest & Related Party Transactions Policy
iii) How does the Board ensure adequate disclosure of Related Party Transactions by the responsible partiesThe Board is mandated to disclose such transactions to the Chairman/ Co. Sec For employees- through Management
iv) Does the company have a Boardapproved policy on conflict of interest? Yes/No If yes: a) When was the last date of review? b) How does the Board monitor compliance with this policy? c) Is the policy applicable to any or all of the following: 1. Senior management 2. Other employees (Specify)Yes. October 2018 Through Management Yes Yes
Principle 26: Sustainability "Paying adequate attention to sustainability issues including environment, social, occupational and community health and safety ensures successful long-term business performance and projects the Company as a responsible corporate citizen contributing toi) Is there a Board-approved sustainability policy? Yes/No If yes, when was it last reviewedYes It was developed in June 2020
ii) How does the Board monitor compliance with the policy? Compliance is monitored through Management
iii) How does the Board report compliance with the policy? Compliance is reported in the Annual Report
iv) Is there a Board-approved policy on diversity in the workplace? Yes/No If yes, when was it last reviewed? No
Principle 27: Stakeholder Communication "Communicating and interacting with stakeholders keeps them conversant with the activities of the Company and assists them in making informed decisions" i) Is there a Board-approved policy on stakeholder management and communication? Yes/No Yes. There is a Stakeholder Management, Engagement and Communication policy
ii) Does the Company have an up to date investor relation portal? Yes/No If yes, provide the link. The entire website is being revamped, and the engagement of a digital media agency for this purpose is ongoing
Principle 28: Disclosures "Full and comprehensive disclosure of all matters material to investors and stakeholders, and of matters set out in this Code, ensures proper monitoring of its implementation which engenders good corporate governance pratices i) Does the company's annual report include a summary of the corporate governance report? Yes/No Yes
ii) Has the company been fined by any regulator during the reporting period? Yes/No If yes, provide details of the fines and penalties. No