Annual Report and Financial Statements ABOUT KTDA
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2018 / 2019 Annual Report and Financial Statements ABOUT KTDA Smallholder 54 tea factory tea farmers companies More than 612,000 Owned by Owned by the smallholder smallholder 54 factory farmers tea farmers companies Hydropower Tea cultivation, KTPC generation payments, processing POWER & marketing Tea blending, Microfinance packaging & services marketing Tea machinery & engineering Tea trading & company warehousing Focus on CSI Insurance & activities brokerage FOUNDATION Vision Mission To be the preferred investment vehicle for the To invest in tea and other related profitable smallholder tea farmers in Eastern Africa ventures for the benefit of shareholders and other stakeholders Quality policy KTDA Management Services Ltd is committed to effective management services to the tea sector for efficient production, processing and marketing of high quality teas for the benefit of shareholders and other stakehold- ers. Our key goal and objective is to meet and exceed our customers’ expectations in providing quality products and associated services. We shall endeavor to continually maintain and improve an efficient and effective Quality Management System meeting both the regulatory and the ISO 9001:2015 requirements. Core values Customer focus Innovation High standards of ethical Equal opportunity practices employer Social responsibilities Team work KTDA AT A GLANCE 69 Number of KTDA 612,000+ managed factories Number of farmers 55 years 1.13 billion Producing best Kilos of green leaf delivered quality teas to factories in 2018/19 94,500 267 million Tonnes of NPK Kilos of made fertilizer procured tea in 2018/19 for farmers 1Million Feet2 2.1 million Area of warehouse Indigenous trees planted built to store farmers’ by KTDA Foundation in tea and other goods tea growing areas 10,000+ 4 million KTDA employees Kenyans supported by KTDA 14 Number of hydropower plants at various stages of implementation 16 Number of tea growing counties 124,000 Ha Tea Growing Counties Acreage of tea under KTDA management CONTENTS Performance Highlights ................................................................................5 Corporate Information ................................................................................ 6 Notice of the Annual General Meeting .......................................................7 Board of Directors’ Profiles ...........................................................................8 Chairman’s Report .......................................................................................12 Chief Executive Officer’s Statement ...........................................................16 Subsidiary Company Heads ........................................................................22 Senior Management ...................................................................................24 Corporate Governance Statement.............................................................25 Corporate Scene..........................................................................................28 Directors’ Report .........................................................................................29 Statement of Directors’ Responsibilities ..................................................31 Report of the Independent Auditor ...........................................................32 Consolidated Statement of Profit or Loss ....................................35 Consolidated Statement of Comprehensive Income .................36 Company Statement of Profit or Loss and Other Comprehensive Income ................................................................37 Consolidated Statement of Financial Position ............................38 Company Statement of Financial Position ..................................39 Consolidated Statement of Changes in Equity ...........................40 Company Statement of Changes in Equity .................................41 FINANCIAL STATEMENTS Consolidated Statement of Cash Flows ......................................42 Company Statement of Cash Flows .............................................43 Notes to the Financial Statements ..................................................... 44 - 86 PERFORMANCE HIGHLIGHTS GROUP INCOME 2013 - 2019 Ksh (M) TOTAL PAYMENT IN BILLION KSH - 2013 - 2018 Ksh (B ) 30,000 27,184 25,369 24,769 25,000 24,046 70 61.91 62.35 60 20,000 57.44 18,266 51.30 50 46.45 15,120 s 43.25 15,000 14,170 h 40 35.50 Ks s 10,000 30 illion B 20 5,000 10 0 0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 GROUP PROFIT BEFORE TAX AFTER EXCEPTIONAL ITEMS 2013 - 2019 Ksh (M) DIVIDENDS PAYOUT 2013 - 2019 Ksh (M) 3000 2,858 691 2,531 700 683 2,500 2,471 623 600 2,084 532 2,018 514 2,000 500 1,602 382 1,500 1,399 400 300 272 1,000 200 500 100 0 0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 GROUP TOTAL ASSETS 2013 - 2019 Ksh (M) GROUP NET WORTH 2013 - 2019 Ksh (M) 40,000 16,000 15,174 15,795 35,683 35,000 34,301 13,686 14,076 14,000 13,426 29,381 29,505 12,035 30,000 12,000 10,086 25,000 22,267 10,000 19,183 20,000 18,010 8,000 15,000 6,000 10,000 4,000 5,000 2,000 0 0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 AVERAGE PERCENTAGE RETURN TO FARMER (7 YEARS) TOTAL INCOME FROM SALE OF TEA - Ksh BILLION (7 YEARS) 90 85.74 80 83.97 80 78.31 76 75 75 75 70 69.2 73 63.53 71 69.77 60 70 52.97 67 s 67 h 50 Ks 65 s 40 60 illion 30 B 20 55 10 50 2013 2014 2015 2016 2017 2018 2019 0 2013 2014 2015 2016 2017 2018 2019 KTDA HOLDINGS LTD ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 | 5 CORPORATE INFORMATION Registered Office KTDA Farmers Building, Moi Avenue/Ronald Ngala Lane Email: [email protected] P.O. Box 30213 GPO 00100, Tel: 3227000, Nairobi Website: www.ktdateas.com Fax: 211240, 210636 Directors Mr. P. T. Kanyago, MBS, EBS Zone 4/Chairman Mr. J. N. Achoki Zone 10 Mr. P. Ngetich OGW,MBS Zone 8/Vice Chairman Mr. B. O. Matonda Zone 11 Eng. J. M. Wakimani Zone 1 Mr. J. M. Mukavale Zone 12 – Retired on 6th Eng. E. Gakuya Zone 2 December 2018 Mr. F.M. Mark Zone 3 Mr. S. K. Mbatia Zone 12 – Appointed on Mr. J. N. Karua Zone 5 – Retired on 6th 6th December 2018 December 2018 M/s. I. Gaha Independent Director Mr. P. M. Migwi Zone 5 – Appointed on Mr. L. S. Tiampati MBS CEO/Managing Director 6th December 2018 Mr. B. K. Ngari Finance & Strategy Director Mr. S. M. Ireri Zone 6 Mr. P. M. Ringera HSC Zone 7 Secretary Mr. S. C. Tonui Zone 9 Dr. J. K. Omanga Management Main Bankers L. S. Tiampati - Chief Executive Officer / Managing Director NCBA Bank Kenya PLC B. K. Ngari - Goup Finance & Strategy Director Mama Ngina Street Branch J. K. Omanga - Group Company Secretary P.O. Box 30437, A. Otochi - Managing Director - Kenya Tea Packers Ltd. Tel: +254 20 2228802 C. Mbui - Managing Director - Chai Trading Company Ltd. Nairobi A. S. Njagi - Operations Director - KTDA Management Services Ltd. Kenya Commercial Bank Limited M. Gitonga (Ms) - General Manager/Director - Majani Insurance Brokers Moi Avenue Branch S. Ng’era - General Manager/Director - Tea Machinery & P.O. Box 30081, Tel: +254 20 2244939 Engineering Co Ltd Nairobi A. Gathuku (Ms) - General Manager/Director - Greenland Fedha Ltd. Family Bank Limited J. Sayi - General Manager/Director - KTDA Power Company Ltd. KTDA Plaza Corporate Branch W. Muthaura - General Manager - Human Resources & Administration P.O Box 74145 -00200 J. Bett - General Manager - Sales and Marketing (MS) Tel: +254 20 241852/+254 20 210088 D. Mbugua - General Manager - ICT Nairobi F. Miano - General Manager - Technical Services S. Gikang’a - General Manager - Chai Trading Company Ltd Barclays Bank of Kenya Ltd Barclays Plaza Branch L. Munyao - General Manager - Group Audit P.O. Box 40984, Tel: +254 20 3267000 S. Rugutt - Financial Controller Nairobi N. Kithae - Group Head Corporate Affairs B. Kanampiu - Group Head of Procurement and Logistics Citi Bank Nairobi Branch W. Karanja - Group Head of Enterprise Risk Management P.O .Box 30711-00100 S. Matara - Manager, KTDA Foundation Tel: +254 20 2718704 Nairobi Stanbic Bank Independent Auditor Chiromo Branch P.O Box 30550-00100 PricewaterhouseCoopers Tel: +254 20 3638113 PwC Towers Nairobi Waiyaki Way/ Chiromo road, Westlands P.O. Box 43963 - 00100, Tel: +254 20 2855000 NAIROBI, KENYA 6 | KTDA HOLDINGS LTD ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 NOTICE OF THE ANNUAL GENERAL MEETING FOR THE YEAR ENDED 30 JUNE 2019 NOTICE IS HEREBY GIVEN THAT THE NINETEENTH (19TH) ANNUAL GENERAL MEETING OF THE SHAREHOLDERS WILL BE HELD AT THE INTERCONTINENTAL HOTEL, (MARA SOUTH ROOM), NAIROBI, ON THURSDAY 5TH DECEMBER 2019, AT 10.30 A.M. TO TRANSACT THE FOLLOWING BUSINESS: - ORDINARY BUSINESS 1. To receive and adopt the financial statements for the year ended 30th June 2019, together with the reports of the Chairman, Directors and Auditors thereon. 2. To consider and if deemed appropriate to declare a final dividend of Kshs. 683,358,000/- @ Kshs 1,352.113 per share payable to members on the Register at the close of business on 30th June 2019. 3. To approve the Directors’ remuneration of Kshs 5,070,000/- for the year ending 30th June 2019. 4. To appoint Messrs PWC as Auditors of the Company by virtue of Section 721 (2) of the Companies Act, 2015 and to authorize the directors to fix the auditors remuneration for the ensuing financial year. (PWC have expressed their willingness to continue as Company Auditors) 5. To appoint Directors representing Zones 2, 4, 7 and 8 following their nomination by directors of their