Fan Milk Limited (FML) listed on the Ghana Stock Exchange under the Food sector has released it’s 2022 annual report.

According to the report, the total indicative share trading liquidity for Fan Milk Limited (FML.gh) in the past 12 months is US$54.35K (GHS464.41K). An average of US$4.53K (GHS38.7K) per month.

The price of the Company’s shares fell on the Ghana Stock Exchange in 2022. It dropped by 25% from GH¢4.00 in January 2022 to GH¢3.00 per share on 31 December 2022.

The total number of staff employed by the company by the year 31 December 2022 was 355 (2021: 321). The company paid GH¢2.59m for termination and severance during 2022. (2021: GH¢ 14.6m) and made provision of GH¢ 11.38m in respect of termination and severance expenses for the year.

As at 31 December 2022, the Company has a medium-term loan of GH¢70,000,000 with Stanbic Bank. Interest is paid on amounts held by the company (agents’ savings) representing rebates earned by agents.

The Company has chosen to present interest received on financial assets as operating cash flows. Interest paid has been classified under operating cash flows to assist users in determining the ability of an entity to pay interest out of operating cash flows.

The cost of Inventories charged to the statement of comprehensive income during the year ended 31 December 2022 amounts to GH¢308.07m (2021: GH¢241.6m). An amount of GH¢9.937m was charged to profit or loss as expired and damaged inventories during the year ended December 31, 2022 (2021: GH¢3.901m).

The maximum amount of staff indebtedness during the year did not exceed GH¢367,000 (2021 GH¢392,000).

The fair value of amounts due from staff is based on the discounted cash flows using a borrowing rate of 35.33% (2021: 15.89% per rate annum). The Company applied Ghana Reference Rate (GRR) plus an appropriate credit rating from the Company’s key bankers as discount rate. The directors consider the carrying amount of other receivables to approximate their fair value.

Foreign Exchange Risk

Foreign exchange risk arises as a result of cash, accounts receivable and accounts payable balances denominated in foreign currency. The Company seeks to reduce its foreign exchange risk exposure through a policy of matching, as far as possible, assets and liabilities denominated in foreign currencies.

The Company Imports raw materials, spare parts and equipment from overseas and therefore is exposed to foreign exchange risk arising from Euro and United States dollar exposures.

Management is responsible for minimising the effect of the currency exposure by holding bank accounts in foreign currencies. At 31st December, 2022, if the currency had weakened/strengthened by 10% (2021: 10%) against the US dollar with all variables held constant, post tax profit for the year and equity would have been GH¢4,339,135 (2021 GH¢2,944,333) higher/lower, mainly as a result of US dollar denominated trade payables, receivables and cash and bank balances.

At 31st December, 2022, if the currency had weakened/strengthened by 10% (2021: 10%) against the Euro with all variables held constant, post tax profit for the year and equity would have been GH¢2,665,693. (2021 GH¢1,959,154) higher/lower, mainly as a result of Euro denominated trade payables, receivables and cash and bank balances.

Trade and other receivables consist of invoiced amounts from normal trading activities and amount due from related parties. Strict credit control is exercised through monitoring of cash received from customers and other parties and, when necessary, provision is made for specific doubtful accounts.

As at December 31,2022, management was unaware of any significant unprovided credit risk (2021: Nil) the Company manages credit risk relating to cash and cash equivalents by transacting banking business with only financial institutions licensed by the Bank of Ghana.

Agents’ savings amounting to GH¢18.7 million (2021: GH¢14.3 million) are held as collateral against trade receivables.

As part of its corporate social responsibilities, in 2022, Fan Milk PLC aligned with Danone’s commitment to integrating sustainability and performance as key components of its new strategy. This initiative was realized through the Renew Danone strategy, which aimed to re-establish a connection between sustainable profitability and value creation and reframed its sustainability journey around three critical pillars: Health, Nature, and People.

In 2022, the company prioritized a people-centred approach in all of its activities. It recognized the hard work, dedication, and loyalty of its long-serving employees by rewarding their efforts.

Additionally, it engaged in a thought leadership and knowledge-sharing conference, where it imparted career insights and industry experiences to other stakeholders and emerging leaders in its industry and beyond. “These initiatives demonstrate our commitment to fostering growth and developing strong professionals and leaders within our organization.”