EAC 2015 Annual Report

 

Embed or link this publication

Description

EAC 2015 Annual Report

Popular Pages


p. 1

1 2015 Annual Report & Financial Statements

[close]

p. 2

2

[close]

p. 3

3 3 Table of Contents Notice of the Annual General Meeting Board of Directors Management Team 04 10 22 31 39 84 06 Corporate Governance Statement 08 5 year Comparative Results Report of the Directors 12 24 21 28 33 Statement of Directors Responsibilities Chairman’s Statement Corporate Social Responsibility Report Report of Independent Auditors Directors, Offices and Statutory Information Financial Statements 32 Notes Notes to the Financial Statements Five Year Financial Record 82 83 Form of Proxy

[close]

p. 4

4 Notice of The Annual General Meeting Notice is hereby given that the fifty first Annual General Meeting of the shareholders will be held at East African Cables Limited premises on Addis Ababa Road, off Enterprise Road, Industrial Area, Nairobi, on Thursday 28th April, 2016 at 11.00 a.m. for the following purposes: ORDINARY BUSINESS 1. To receive and if approved, adopt the Group’s audited financial statements for the year ended 31st December, 2015 together with the Chairman’s, Directors’ and Auditors’ reports thereon. 2. To approve the Directors’ remuneration as provided in the financial statements for the period ended 31st December, 2015. 3. Dividend. The Board of Directors does not recommend payment of a dividend for the year ended 31 December 2015. 4. To elect Directors: (i) In accordance with the Company’s Articles of Association Mr. Dennis Awori and Mr. Peter T. Kanyago retire by rotation and being eligible offer themselves for re-election at the forth coming Annual General Meeting. (ii) Mr. Bruno Thomas who is over the age of 70 years retires as a director of the Company and the Board recommends his re-appointment to the Board. 5. To appoint the auditors for the ensuing year and to authorize the Directors to fix their remuneration. 6. To transact any other business which may be properly transacted at an Annual General Meeting. BY ORDER OF THE BOARD Virginia Ndunge Company Secretary P.O. Box 40111- 00100 GPO Nairobi 29th March 2016 Note: 1. In accordance with S.298(1) of the Companies Act 2015, every member to attend and vote is entitled to appoint a proxy to attend and vote on his/her behalf and such a proxy need not be a member of the Company. To be valid, proxy forms must be deposited at the Registered Office of the Company not less than 48 hours before the appointed time of the meeting. A form of proxy may be obtained from the Company’s website www.eacables.com or from the Registered office of the company. In accordance with Article 146 of the Company’s Articles of Association, a summary of the financial statements and the Auditors report for the year ended 31st December 2015 have been published in two daily newspapers with nationwide circulation. A copy of the entire Annual Report and Accounts may be viewed on and obtained from the company’s website www.eacables.com or from the Registered Office of the Company. 2.

[close]

p. 5

5 Tangazo la Mkutano Mkuu wa kila Mwaka Mnatangaziwa kwamba mkutano mkuu wa hamsini na moja wa mwaka, wa wenye hisa, utafanyika katika majengo ya kiwanda cha East African Cables, yaliyopo Addis Ababa road, eneo la viwandani, Nairobi, Alhamisi, tarehe 28 Aprili 2016 kuanzia saa tano asubuhi, kujadili mambo yafuatayo: SHUGULI ZA KAWAIDA 1. Kupokea, na iwapo itakubaliwa, kuidhinisha ripoti iliyokaguliwa ya kifedha ya kampuni ya kipindi cha matumizi ya pesa kilichokamilika tarehe 31 Disemba 2015, pamoja na ripoti ya Mwenyekiti, ile ya Wakurugenzi na ile ya wakaguzi wa mahesabu, zitakazofuatia. Kuidhinisha ujira wa Wakurugenzi kama ilivyopendekezwa katika mahesabu ya kipindi cha matumizi ya pesa kilichokamilika tarehe 31 Disemba 2015. Gawio. Bodi ya wakurugenzi inapendekeza kutolipwa kwa gawio lolote kwa wenyehisa katika kipindi cha matumizi ya pesa kilichokamilika tarehe 31 Disemba 2015. Kuchagua Wakurugenzi: (i) Kulingana na kanuni za kampuni, Bw. Dennis Awori na Bw. Peter T. Kanyago hustaafu kwa zamu, na kwa kuwa wanaweza kuchaguliwa tena, wamejitolea kuchaguliwa upya katika mkutano huu mkuu wa mwaka. (ii) Bw. Bruno Thomas ambaye ana zaidi ya miaka 70 anastaafu lakini Bodi ya wakurugenzi inapendekeza ateuliwe tena. 5. 6. Kuteua wakaguzi wa mahesabu wa mwakani na kuwapa idhini Wakurugenzi kuweka ujira wao. Kuendesha shughuli nyingine yoyote inayoweza kushughulikiwa katika mkutano mkuu wa mwaka. 2. 3. 4. KWA AMRI YA BODI Virginia Ndunge Katibu P.O Box 40111 - 00100 GPO Nairobi 29 Machi, 2016 Jambo Muhimu: 1. Kwa mujibu wa kanuni za kampuni, sehemu ya 298(1), kila mwanachama mwenye haki ya kuhudhuria mkutano na kupiga kura ana haki vilevile ya kuteua mwakilishi wake ili kuhudhuria mkutano na kupiga kura kwa niaba yake. Si lazima mwakilishi huyo awe mwanachama wa kampuni. Ili mwakilishi ahalalishwe, fomu za uwakilishi lazima ziwasilishwe katika ofisi iliyosajiliwa ya kampuni katika kipindi kisichopungua saa 48 kabla ya muda uliotengwa kwa mkutano. Fomu ya uwakilishi inapatikana kwenye tovuti ya kampuni: www.eacables.com au katika ofisi isiyosajiliwa ya kampuni. Kulingana na kifungu cha 146 cha kanuni za kampuni, muhtasari wa Taarifa za Kifedha pamoja na Ripoti ya Wakaguzi wa mahesabu katika kipindi cha matumizi ya pesa kilichomalizika tarehe 31 Disemba 2015 zimechapishwa katika magazeti mawili ya kila siku na ambayo husambazwa kote nchini. Nakala ya Ripoti nzima ya mwaka pamoja na Taarifa za Kifedha zinaweza kusomwa na/au kupatikana kwenye tovuti ya kampuni: www.eacables.com au katika ofisi iliyosajiliwa ya kampuni. 2.

[close]

p. 6

6 Board of Directors Zephaniah Mbugua Chairman 66 Mr. Mbugua is a graduate of Makerere University with a BSc in Chemistry and Mathematics. He is a successful serial entrepreneur, developing businesses and partnerships across Africa for the last 36 years. He is the founder member and Chief Executive Officer of Abcon Group a Holding company with varied business interests. He is also a director of Proctor & Allan EA Ltd, Real Insurance (Tanzania) and Zeniki Investment Ltd. Peter Arina CEO 52 Peter Arina was appointed Chief Executive Officer in October 2015. He holds a Bachelor of Commerce degree (Business Administration) from the University of Nairobi. He has over 25 years’ experience in Brands/ Marketing/ Sales/ Customer Development and Distribution Management. He previously served as General Manager, Consumer Business and as Chief Commercial Officer at Safaricom Limited. He also served as Customer Development Director at Unilever Kenya. Nganga Njiinu, CFA Ag. CEO, Transcentury 38 Since joining TransCentury Group in 2008, Njiinu has held various roles in corporate finance, portfolio management, business development as well as originating and developing opportunities in the infrastructure space. He is currently heading Corporate Finance and is a member of the Infrastructure Projects development leadership team. Prior to Joining TransCentury, Njiinu worked for Coldwell Banker Residential Brokerage in the USA for 7 years, where he was involved in strategy, financial planning and analysis as well as evaluation and integration of acquisitions. Njiinu has an MBA in Finance and Investment Management from the University of Dallas in Irving, Texas and a Bachelor of Science in International Business from United States International University. Njiinu is also a CFA charter holder. Bruno Thomas 73 Consultant, Bruno Thomas, formerly of the Nexans Group, has a wealth of experience in the energy sector having been, the executive vice president of Nexans Group for the rest of World Area. In addition he was previously President of the Energy Cables Division, President of the board of Alcatel Kabel KG and Director of Industrial strategy.

[close]

p. 7

7 Board of Directors Peter Kanyago MBS, EBS 68 Mr. Kanyago is a fellow of the Institute of Certified Public Accountants of Kenya, member of the Institute of Certified Secretaries of Kenya and holds an MBA in Industrial Management. As an entrepreneur, he holds directorships in companies he has built, including East African Courier Ltd and East Africa Elevator Company (ThyssenKrupp). He is the Chairman of Kenya Tea Development Agency (KTDA) Ltd, and holds directorships at Kenya Tea Packers (KETEPA) and Corporate Insurance Company Ltd. His contribution to the nation has been recognized in his being awarded the Moran of the order of the Burning Spear (MBS) and Elder of the order of the Burning Spear (EBS) of the Republic of Kenya. He is also a fellow of Kenya Institute of Management (KIM). Amb. Dennis Awori 61 Amb. Dennis Awori earned his BSC with Honors degree in Aeronautical Engineering from the University of Manchester in 1977. He began his career with Cooper Motor Corporation Ltd, and later moved to Motor Mart Group (later Lonrho Motors East Africa) where he rose to the position of Managing Director in 1995. He was later appointed the Ambassador of the Republic of Kenya to Japan and during his tenure he spearheaded the establishment of the Kenyan Embassy in Korea, as well as built strong relations between Kenya and the two countries. He currently sits in a number of boards including Toyota Kenya Limited where he is the Chairman, Bank of Africa and Kenya Airways. Amb. Awori is a keen sportsman and has been Chairman of both the Kenya Rugby Football Union and the Uganda Rugby Football Union in consecutive terms between 1990 and 1997. Michael Waweru is a graduate of University of Nairobi where he attained his Bachelor of Commerce Honors Degree. He is also a holder of an MBA degree from the Strathmore Business School. He is a Fellow of the Association of Chartered Accountants (FCCA), Institute of Certified Public Accountants of Kenya (FCPA) and a member of the Institute of Directors and Certified Trainers on Corporate Governance. Mr. Waweru was awarded the Chief of the order of Burning Spear CBS, by H.E The President of Kenya, due to his work in the revenue administration. He was the Commissioner General – Kenya Revenue Authority from 2003 – 2012. Michael G. Waweru 65 Virginia Ndunge 46 Virginia Ndunge is a Certified Public Secretary and a member of the Institute of the Certified Public Secretaries of Kenya (ICPSK). She holds a Bachelor of Commerce degree in Finance and Diploma in Project Management. She has substantial experience in Company Secretarial having worked with Emu Registrars, Certified Public Secretaries for over 12 years. In July 2013, she joined Kaplan and Stratton Advocates where she is head of Company Secretarial Division.

[close]

p. 8

8 Management Team Chief Executive Officer Peter Arina Joseph Kinyua Group Finance Manager Group Technical Manager David Mwangi David Rotich Commercial Manager General Manager, Tanzania Joseph Hunja Phyllis Gachau Group Marketing Manager Group Production Manager Joseph Kamau Gertrude Kagiri Human Resource and Administration Manager

[close]

p. 9

9 SECURING THE FUTURE BY SUPPLYING QUALITY TRANSMISSION AND DISTRIBUTION CONDUCTORS TO CONNECT OUR TOWNS AND CITIES THROUGHOUT THE REGION

[close]

p. 10

10 Report of the Directors for the year ended 31 December 2015 The directors have pleasure in submitting their report together with the audited financial statements for the year ended 31 December 2015, which disclose the state of affairs of the company and the group. 1. Activities The group’s principal activities continue to be the manufacture and sale of electrical cables and conductors. 2. Group results Loss)/profit before taxation Income tax credit/(expense) (Loss)/profit for the year The detailed results for the year are set out on page 33. 3. Dividends 2015 KShs‘000 (1,087,004) 345,800 (741,204) 2014 KShs‘000 507,483 (166,334) 341,149 The directors do not recommend the payment of a dividend (2014 – KShs 1.00 per share amounting to KShs 253,125,000). 4. Directors The directors who served since 1 January 2015 and up to the date of this report are set out on pages 6 and 7. 5. Auditors The auditors, KPMG Kenya, continue in office in accordance with Section 159(2) of the Kenyan Companies Act. 6. Approval of financial statements The financial statements were approved at a meeting of the directors held on 29 March 2016 BY ORDER OF THE BOARD Virginia Ndunge Company Secretary Date: 29th March, 2016

[close]

p. 11

11 Ripoti ya Wakurugenzi ya kipindi cha mwaka kilichokamilika Disemba 2015 Wakurugenzi wana furaha kuwasilisha ripoti yao pamoja na taarifa za ukaguzi wa mahesabu za kipindi cha matumizi ya pesa kilichokamilika tarehe 31 Disemba 2015, ambayo inaweka wazi hali ya mambo katika kampuni, na shirika zima kwa jumla. 1. Shughuli Shughuli kuu za shirika hili bado ni utengenezaji na uuzaji wa nyaya za stima pamoja na vipitisha umeme. 2. Matokeo 2015 KShs’000 (Hasara)/faida kabla ya ushuru Matumizi ya pato la ushuru (Hasara)/faida ya mwaka ( 1,087,004) 345,800 (741,204) 2014 KShs’000 507,483 (166,334) 341,149 Matokeo ya kina ya mwaka yameangaziwa katika ukurasa wa 33. 3. Gawio Wakurugenzi wanapendekeza kutolipwa kwa gawio lolote kwenye kipindi cha matumizi ya pesa kilichokamilika tarehe 31 Disemba 2015. (2014 – Shilingi moja (KShs 1.00) ndiyo ililipwa kwa kila hisa, hii ikiwa ni jumla ya shilingi 253,125,000). 4. Wakurugenzi Wakurugenzi waliohudumu tangu tarehe moja, mwezi Januari mwaka wa 2015 wameangaziwa katika ukurasa wa 6 na 7. 5. Wakaguzi wa Mahesabu Wakaguzi wa mahesabu kutoka KPMG Kenya wataendelea kuhudumu kwa mujibu wa kifungu cha 159(2) cha Sheria za Kampuni za Kenya. 6. Kuidhinishwa kwa Taarifa za Kifedha Taarifa za kifedha ziliidhinishwa katika mkutano wa wakurugenzi uliofanyika tarehe 29 Machi, 2016. KWA AMRI YA BODI Virginia Ndunge Katibu Tarehe: 29 Machi 2016

[close]

p. 12

12 Corporate Governance Statement The board East African Cables Limited recognizes the importance of corporate governance and as such it carries out its mandate with honesty, openness and integrity and is committed to applying and enforcing relevant corporate governance principles, policies and practices within the Group. The board is committed to the principles of accountability, compliance with the law and to the provision of relevant and meaningful reporting to all stakeholders. BOARD OF DIRECTORS The Board consists of the Chairman, Z. G. Mbugua, five non-executive directors and the Managing Director Peter Arina. Mr. Peter Arina joined the Board on 1st October 2015 to replace Mr. George Mwangi who left on 30th September 2015. The directors’ biographies appear on page 6 and 7. All non-executive directors are independent of management and have diverse skills, experience and competencies appropriate for effective management of the company’s business. This board meets on a quarterly basis as scheduled during the year, with additional meetings when necessary. The directors are given appropriate and timely information so that they can maintain full and effective control over strategic, financial, operational and compliance issues. Except for the direction and guidance on general policy, the board has delegated authority for conduct of day-to-day business to the Managing Director. The Board nonetheless retains responsibility in maintaining the company’s overall internal control on financial, operational and compliance issues. All our directors have also attended various corporate governance courses organized by accredited institutions. All non-executive directors are subject to periodic re-appointment in accordance with company’s Articles of Association which requires that one third of the longest serving directors (since their last election) retire by rotation every year and if eligible their names are submitted for re-election at the Annual General meeting. The composition of the board and attendance during the year is as shown below. Member ZG Mbugua G Kiuna PT Kanyago MG Waweru JB Thomas D Awori G Mwangi* P Arina** V Ndunge Attendance 7/7 4/7 5/7 6/7 6/7 4/7 5/7 2/7 7/7 *Left on 30th September 2015 **Joined on 1st October 2015 COMMITTEES OF THE BOARD The following standing committees assist the Board in the discharge of its duties. These committees meet regularly under the terms of reference set by the board. Audit Committee The board has constituted an audit committee which meets quarterly or as required. Its membership is composed of M.G. Waweru and P.T. Kanyago who are non-executive directors. Its responsibilities include review of financial information in particular half year and annual financial statements, compliance with international financial reporting, compliance with listing obligations, liaison with both internal and external auditors, remuneration of auditors and maintaining oversight on internal control systems. Other responsibilities are to receive and review the company’s annual budget, to review the purchasing regulations and to consider recommendations for insurance renewals.

[close]

p. 13

13 Corporate Governance Statement ( CONTINUED ) COMMITTEES OF THE BOARD ( CONTINUED) Audit committee (continued) The committee is guided by a charter from the board which outlines its mandate. The audit committee is comprised of members who are well experienced in financial matters including reporting and risk management. The members of the audit committee, together with a record of their attendance at scheduled meetings during the year are set out in the table below. Member MG Waweru PT Kanyago G Mwangi P Arina V Ndunge Human Resource Committee Attendance 5/5 5/5 4/5 1/5 5/5 This committee is responsible for monitoring and appraising the performance of management, review of all human resources policies and determining the remuneration of senior management. The committee meets quarterly or as required. Its membership and attendance during the year is as shown in the table below. Member PT Kanyago ZG Mbugua G Kiuna G Mwangi P Arina Attendance 2/2 2/2 2/2 1/2 1/2 Strategy Committee Membership of this committee comprises of all the non-executive directors of the company and Mr. G. Njoroge, a non-executive director of East African Cables (Tz) Ltd who was appointed to the committee in order to benefit from his expertise in the electrical business. The main responsibility of the committee is to chart the strategy of the company and to oversee implementation of strategic decisions of the board which include product and or geographical diversification, strategic partnerships and also review proposals involving capital expenditure. The committee met once in the year. Here below is the attendance schedule during the year. Member ZG Mbugua G Kiuna PT Kanyago MG Waweru GM Njoroge JB Thomas D Awori P Arina V Ndunge Attendance 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1

[close]

p. 14

14 Corporate Governance Statement ( CONTINUED ) Commercial Committee The committee is responsible for evaluating the Group’s route to market, customer service and regional diversification. It also evaluates regional market data and advises the board on the overall market strategy. The membership of this committee comprise of three non-executive directors and the managing director while all the senior managers are also invited. Here below is the attendance schedule during the year. Managing Director is a member of all committees while senior managers are invited to the relevant committees. The committees submit their findings and recommendations at the quarterly board meetings. Member ZG Mbugua GM Njoroge D Awori G Mwangi P Arina Attendance 2/2 1/2 1/2 1/2 1/2 COMMUNICATION WITH SHAREHOLDERS The company is committed to ensuring that shareholders and the financial markets are provided with full and timely information about its performance. In the year, the company accomplished this objective through website updates, publication and distribution of its Annual Report and release of notices in the national press. The publications in the local dailies related to interim and year end results and appointment of Peter Arina as the new Managing Director and Chief Exceutive Officer of the Group. The company also holds statutory meetings as required. In this regard, the company complies with the obligations contained in the Nairobi Securities Exchange’s Listing Rules, the Capital Markets Authority Act and the Kenyan Companies Act. DIRECTORS’ LOANS There were no loans made to the directors at any time during the year by virtue of their position in the Group. DIRECTORS’ REMUNERATION The aggregate amount of emoluments paid to the directors for services rendered during the financial year ended 2015 is disclosed on note 24 to the financial statements. Neither at the end of the financial year nor at any time during the year did there exist any arrangement to which the company is a party, whereby directors might acquire benefits by means of the acquisition of the company’s shares. All business transactions with the directors or related parties are carried out at arm’s length. Such transactions have been disclosed on note 24.

[close]

p. 15

15 Corporate Governance Statement ( CONTINUED ) RISK MANAGEMENT AND CONTROLS The board recognizes that managing risk to ensure optimal mix between risk and return is an integral part of achieving corporate goals. The board has put in place processes for identifying, assessing, managing and monitoring risks to ensure that the risk of failure to achieve business objectives is mitigated. The company has defined procedures and financial controls to ensure the reporting of complete and accurate accounting information. These cover systems for obtaining authority for major transactions and for ensuring compliance with the laws and regulations that have significant financial implications. Procedures are also in place to ensure that assets are subject to proper physical controls and that the organization remains structured to ensure appropriate segregation of duties. In reviewing the effectiveness of the systems of internal controls, the board takes into account the results of all the work carried out to audit and review of the activities of the company. A comprehensive management accounting system is in place providing financial and operational performance measurement indicators. Regular senior management meetings are held to monitor performance and to agree on measures for improvement. EMPLOYMENT EQUITY The Group is committed to the creation of an organization that supports equality of all employees and is committed to elimination of any form of discrimination in the work place. Our practice is to comply with all laws prohibiting discrimination. BUSINESS ETHICS The directors attach great importance to the need to conduct the business and operations of the company with integrity and in accordance with good corporate governance practice as set out in the Capital Markets Authority Guidelines for listed companies in Kenya and any other internationally developed principles on good governance. The company adopts the best principles of good corporate culture that requires the directors and all employees to maintain the highest personal and ethical standards and to act in good faith and in the interest of the company. The company has developed and implemented a code of conduct that sets out guidelines and rules, which are based on good governance principles of: • • • • • • • Full compliance with the law Application of best accounting practices Safety of all stakeholders Product quality and customer focus Care of our environment Application of best business practices Fair competition

[close]

Comments

no comments yet