Annual Report GMMF | Ashfield website

To receive the Reports of the Fund Manager for the year, 2023.
To receive the Reports of the Trustees for the year, 2023.
To receive and adopt the Audited Financial Statements for the year ended December 31, 2023, together with the Reports of the Auditors thereon.
To confirm the Auditor’s remuneration for the year ended December 31, 2023, and to authorise the Directors of Ashfield Investment Managers LTD to fix the remuneration of the Auditors for the ensuing year ending December 31, 2024.

NOTES

Attendance and participation by unitholders or their proxies in the AGM shall be strictly virtual (by online participation).
A unitholder of the Trust, entitled to attend and vote, may appoint a Proxy to attend and vote instead of her or him. A Proxy does not need to be a unitholder. For the Proxy Form to be valid for the purposes of the meeting, it must be completed and deposited at the registered office of the Fund Manager, The Investment House, No. 18 Noi Fetreke Street, West Airport, Accra, Ghana, or sent via mail to hello@ashfieldinvest.com not less than 48 hours before the appointed time of the meeting. The appointment of a proxy will not prevent a unitholder from attending and voting at the Meeting via online participation.
Where a unitholder attends the meeting by online participation, the proxy appointment shall be deemed revoked. An electronic version of the Proxy Form, Unit Trust’s Annual Reports, and Procedure for the Online Meeting will be sent to your
Registered contact address with the Trust or can be found on www.ashfieldinvest.com or www.ashfieldinvestagm.com.

Report of the Fund Manager

INTRODUCTION

We are delighted to welcome you to the Annual General Meeting of AIM Freedom Fixed

Income Trust (AIM-FFIT). On behalf of the Board and Management of the Fund Manager, and

the Trustees, we appreciate your immense support and patronage of the Fund. This report

will touch on the general global and domestic economic landscape within which the Fund

operated. It also provides a comprehensive update on the Fund’s performance for 2023 and

concludes with an outlook and strategy for 2024.

According to the 2023 World Bank Report, the world is facing an unprecedented confluence of crises which included climate change, inflation, conflict, and cost of living crisis with developing countries bearing the brunt of the impact. Following a considerable slowdown in 2022, the global economy experienced a mixed outturn in 2023, improving in the first half of the year but retreated in the second half to a 3 growth rate. The mixed performance of the global economy mirrored the growth in United States, contraction experienced in other developed economies and Euro Area, and rebound seen in emerging markets and

developing economies. The tamed global growth was weighed by lingering manufacturing and supply chain challenges, tight monetary policies, and weak demand. As a result, global efforts across economies were concentrated on recovery from the enduring impacts of the COVID-19 pandemic, devastating natural disasters, far-reaching impacts of Russia’s invasion of Ukraine, weakening investment, and surging debt crisis in many countries.

DOMESTIC ECONOMIC REVIEW

Monetary policy rate

KEY MARKET DEVELOPMENTS

Exchange rate

In 2023, Ghana saw improvements in its economic conditions following the macroeconomic crises of the previous year. This follows fiscal discipline and sustainable domestic debt management occasioned by policy alignment with the requirements under the US$3 billion International Moneytary Fund’s (IMF) Extended Credit Facility (ECF) programme. However, challenges including elevated inflation, subdued growth, and debt unsustainability

remained. Ghana’s economic growth rate declined to 2.9% in 2023 from 3.2% recorded in 2022.

With growth still remaining below potential in 2023, the overall real GDP expanded by an annual rate of 2.0%, driven by growth in the services and agriculture sectors, compared with the 2.7% expansion recorded during the same period in 2022. The year-on-year Non-oil GDP growth contracted to 2.1% from 3.3%.

In 2023, Ghana experienced a significant reduction in inflationary pressures, reflecting some economic stability. The headline inflation rate dropped sharply from 54.1% in December 2022 to 23.2% in December 2023, though it remained above the government's medium-term target of 8±2%. This disinflation was driven by tighter monetary policy, favorable crude oil prices, liquidity sterilization efforts, and exchange rate stability.Food and non-alcoholic beverage inflation decreased from 59.5% to 28.7%, while non-food inflation fell from 49.9% to 18.7%. Core inflation, excluding energy and utility costs, also dropped significantly from 53.2% to 24.2% during the same period. However, key contributors to inflation in 2023 included alcoholic beverages (38.2%), personal care (31.1%), hotels and restaurants (28%), and household equipment (26.9%).

The Fund Report

The Trust recorded 3.25% growth in Assets Under Management from GHS 1.43 million in 2022 to GHS 1.47 million in 2023 onthe back of challenging fixed income market occasioned by the lingering effects of Government of Ghana’s Domestic Debt Exchange programme. The register of unitholders increased from 433 holders in December 2022 to 450 for the ear under review. The Trust ended the year 2023 with net assets value per unit at GHS 0.4703 from GHS 0.4014 in the year 2022 corresponding to 17.18% return to investors

Investment Policy

Fund Performance

The AIM Freedom Fixed Income Trust operates as an open-ended unit trust with an unlimited duration. The objective of the Fund is to invest in a varied array of domestic and international fixed-income securities, aiming to offer current income to satisfy the liquidity needs of unitholders whilst attaining sustainable long-term income, and capital preservation. The trust’s portfolio includes government and corporate debt issues, fixed deposits, and other debt instruments from statutory and quasi-governmental entities.

REPORT OF THE BOARD OF DIRECTORS OF THE FUND MANAGER

Portfolio Review

Statement of Director’s Responsibilities

STATEMENT OF NET ASSETS

Incorporation

REPORT OF THE TRUSTEES

In our opinion, according to the information made available to us and the explanations provided, we confirm that in all material respects, the Manager has managed the Scheme during the period covered by these financial statements in accordance with the Trust Deed dated 11th June 2010 and all regulations for the time being in force under the Securities Industry Act, 2016 (`Act 929) and the Unit Trusts and Mutual Funds Regulations, 2001 (LI 1695).

Review of Financial Results and Activities

The Unit Trust was incorporated in Ghana by a Trust Deed on 11th June 2010. The Unit Trust is domiciled in Ghana where it is licensed by the Securities and Exchange Commission, Ghana as a Unit Trust. The address of the registered office is set out on page 4.

Opinion

The Trust Deed requires the Fund Manager to prepare financial statements for each financial period, which gives a true and fair view of the state of affairs of the AIM Freedom Fixed Income Trust. In preparing the financial statements, the Manager is

required to:

1. Select suitable accounting policies and apply them consistently

2. Make judgements and estimates that are responsible and prudent

3. State whether applicable accounting standards have been followed, subject to any material departures, disclosed and explain them in the financial statements and

4. Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Trust will continue in business.

INDEPENDENT AUDITOR’S REPORT

The annual report and financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Securities Industry Act, 2016 (Act 929), and the Unit Trusts and Mutual Funds Regulations, 2001 (L.I. 1695). The accounting policies have been applied consistently compared to the prior year.

Airport, Accra.

General

GLOBAL ECONOMIC REVIEW

Inflation

In 2023, Ghana's foreign exchange market recovered from the volatility of 2022, with the cedi depreciating 38.5% against the U.S. dollar, 31.9% against the pound sterling, and 30.3% against the euro. This improvement followed steep depreciations of 53.8%, 45.5%, and 46.8% in 2022. The stability was supported by the IMF program, conservative monetary policies, increased remittances, and foreign exchange purchases from mining and oil sectors, contributing to a more stable exchange rate environment throughout the year.

With inflation standing at 54.1% at the onset of 2023, the Monetary Policy Committee (MPC) of the Bank of Ghana increased the policy rate (MPR) by 300 basis points to reach 30.0% by December 2023, compared with 27.0% reported in December 2022. The sustained upward adjustment in the MPR, though stable throughout the second half of the year, reflected the MPC’s commitment to tighten monetary policy and curb elevated inflationary pressures within the economy

We have audited the financial statements of AIM Freedom Fixed Income Trust, which comprise the statement of net assets and statement of assets and liabilities as at December 31, 2023, income and distribution statement, statement of accumulated net investment income, statement of movements in net assets, statement of movement in issued units, statement of cash flows for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies as set out on pages 33 to 45.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund as at December 31, 2023, and its financial performance and its cash flows for the year then ended in accordance with

International Financial Reporting Standards (IFRS) and comply with the Securities Industry Act, 2016 (Act 929) and the Unit Trusts and Mutual Funds Regulations, 2001 (L.I 1695).

STATEMENT OF FINANCIAL POSITION

STATEMENT OF INCOME AND DISTRUBUTION ACCOUNT

STATEMENT OF ACCUMULATED NET INVESTMENT INCOME & MOVEMENT IN NET ASSETS

STATEMENT OF CASH FLOWS

EQUITY PORTFOLIO REPORT

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2023

General information

AIM Freedom Fixed Income Trust is authorized to operate as a Unit Trust under the Securities Industry Act, 2016 (Act 929), and the Unit Trusts and Mutual Funds Regulations, 2001 (L.I. 1695) and duly licensed by the Securities and Exchange Commission. The address of its registered office and principal place of business is The Investment House, 18 Noi Fetreke Street, Airport West, Accra.

Summary of significant accounting policies

The significant accounting policies adopted by the Fund in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.