Fan Milk : ANNUAL REPORTS AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

FAN MILK PLC

ANNUAL REPORTS AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

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FAN MILK PLC

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REPORT OF THE DIRECTORS

TO THE MEMBERS OF

FAN MILK PLC

The Directors present their annual report together with the audited financial statements for the year ended 31 December 2022, which discloses the state of affairs of Fan Milk Plc (the "Company")

Statement of Directors' responsibilities

The Directors are responsible for the preparation and fair presentation of the financial statements, and other explanatory notes in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Institute of Chartered Accountants Ghana (ICAG) mandated by the ICAG Act, 2020 (Act 1058), and in a manner required by the Companies Act, 2019 (Act 992), and other national regulations where appropriate.

In preparing these financial statements, the Directors confirm that suitable accounting policies have been used and consistently applied; and that judgements and estimates made, are reasonable and prudent and followed International Financial Reporting Standards and complied with the requirements of the Companies Act, 2019 (Act 992).

The Directors are responsible for ensuring that the company keeps accounting records which disclose with reasonable accuracy the financial position of the company. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

The Directors are responsible for ensuring that the company complies with the laws and regulations applicable to its activities and for establishing arrangements designed to prevent any non- compliance with laws and regulations and to detect any that may occur.

The above statements which should be read in accordance with the auditor's report set out on page 9 to 14 are made with a view to distinguishing for shareholders the respective responsibilities of the Directors and the Auditor in relation to these financial statements.

The Directors have made an assessment of the Company's ability to continue as a going concern

and have no reason to believe the business will not be a going concern.

Principal activity

The principal activity of the Company is the manufacture, production and distribution of recombined milk and other dairy products as well as to carry on the business of sellers and dealers in recombined milk and other dairy products and other preserved provisions both wholesale and retail.

Holding Company

Fan Milk International A/S, incorporated in Denmark is the majority shareholder of Fan Milk Plc with 62.11% shareholding. Fan Milk International A/S is a wholly-owned subsidiary of Danone S.A since July 30, 2019 when Danone S.A. directly increased its stake in Fan Milk International A/S from 51% to 100%.

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FAN MILK PLC

ANNUAL REPORTS AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Donations and Charity

In line with the company's stakeholder engagement, we complied with the Danone gift and donation

policy. We distributed company products for the Christmas and New Year season to various stakeholders the company interacted with during the year.

Going Concern

The financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operational existence for the foreseeable future. This means in particular that the statement of profit or loss and other comprehensive income and the statement of financial position assume no intention or necessity to either liquidate the Company or curtail significantly the scale of its operations. It further presumes that funds will be available to finance activities of the Company and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

Events after the Reporting period

The Directors confirm that no events have arisen after 31 December 2022, which affect the financial statements for the year ended on that date.

The company has determined that there is no significant doubt about the entity's ability to continue as a going concern. There is no significant subsequent event. Accordingly, the financial position and results of operations as of and for the year ended 31 December 2022 have not been adjusted to reflect any subsequent event impact.

Dividends

The Directors do not recommend payment of dividend for the year ended 31 December 2022.

Performance on the stock market

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.