KAKUZI PLC
ANNUAL REPORT AND AUDITED CONSOLIDATED AND SEPARATE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Kakuzi Plc
Annual Report and Consolidated and separate Financial Statements
For the year ended 31 December 2020
Table of Contents
Company information
Notice of Annual General Meeting
Virtual Annual General Meeting Instructions
Minutes of the Ninety Second Annual General Meeting
Chairman’s Statement
Report of the Directors
Statement of Directors’ Responsibilities
Statement on Corporate Governance
Directors’ Remuneration Report
Independent Auditors’ Report
Financial Statements:
Consolidated and separate statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Separate statement of financial position
Consolidated statement of changes in equity
Separate statement of changes in equity
Consolidated and separate statement of cash flows
Page No
3
4
4(a) – 4(b)
4(c) – 4(e)
5 – 8
9 – 10
11
12 - 21
22
23 – 26
27
28
29
30
31
32
Notes to the consolidated and separate financial statements
33 - 79
Five year record
Major shareholders and distribution schedule
Form of proxy (Annual General Meeting)
80
81
82
2
Kakuzi Plc
Company Information
For the year ended 31 December 2020
COUNTRY OF INCORPORATION
The Company is incorporated in Kenya under the Kenyan Companies Act, 2015.
DIRECTORS
The Directors who held office during the year and at the date of this report were:-
Chairman (Appointed 31 October 2020)
Mr. N Ng’ang’a
Mr. C J Flowers* Managing Director
Mr. G H Mclean* Chairman (Stepped down 31 October 2020)
Mr. K R Shah
Mr. K W Tarplee*
Mr. D M Ndonye
Mr. S N Waruhiu
Mr. A N Njoroge
Dr. J K Kimani
* British
(Appointed 01 November 2020)
(Deceased 13 February 2020)
REGISTERED OFFICE
REGISTRARS
Main Office
Punda Milia Road, Makuyu
P O Box 24
01000 THIKA
Telephone (060) 2033012
E-mail: mail@kakuzi.co.ke
Custody & Registrars Services Limited
Bruce House, 6th Floor
Standard Street
P O Box 8484
00100 NAIROBI
Telephone (020) 2230242
Facsimile (020) 2211773
SUBSIDIARY COMPANIES
AUDITOR
Estates Services Limited
Kaguru EPZ Limited
(100% holding)
(100% holding)
Deloitte & Touche
Deloitte Place
Waiyaki Way, Muthangari
P. O. Box 40092
00100 NAIROBI
SECRETARY
BANKERS
John L G Maonga
Maonga Ndonye Associates
Jadala Place, Ngong Lane, Ngong Road
P. O. Box 73248
00200 NAIROBI
Telephone (020) 2149923
ORDINARY SHARES
KCB Bank Kenya Limited
P O Box 30081
00100 NAIROBI
NCBA Bank Kenya Plc
P O Box 44599
00100 NAIROBI
The Company’s ordinary shares are listed on the Nairobi Securities Exchange and the London Stock
Exchange.
3
Kakuzi Plc
Notice of Annual General Meeting
NOTICE is hereby given that the Ninety Third Annual General Meeting of the Members of the Company
will be held via electronic means on Tuesday, 18th May 2021 at 12.00 noon for the following purposes:-
1. To read the notice convening the meeting.
2. To table the proxies and confirm the presence of a quorum.
3. To approve the minutes of the Ninety Second Annual General Meeting held on 9th June 2020.
4. To receive, consider and adopt the Financial Statements for the year ended 31 December 2020
together with the reports of the Chairman, the Directors and the Independent Auditors thereon.
5. To declare a first and final dividend of Shs. 18.00 per ordinary share (2019: Shs 14.00) for the
Financial Year ended 31 December 2020.
6. To approve the Remuneration Report of the Board as detailed in the Annual Report for the Financial
Year ended 31 December 2020.
7. To re-elect Directors:-
i) Mr Nicholas Ngang’a, a Director who is over seventy years old, retires by rotation in accordance
with Article 27 of the Company’s Articles of Association and being eligible in accordance with
Article 28 of the Company's Articles of Association, offers himself for re-election.
ii) Mr Andrew Ndegwa Njoroge, a Director who retires by rotation in accordance with Article 27 of
the Company’s Articles of Association and being eligible in accordance with Article 28 of the
Company's Articles of Association, offers himself for re-election.
iii) Dr John K Kimani, retires in accordance with Article 26 (5) of the Company’s Articles of
Association and in accordance with the provisions of clause 2.5.1 of the Code of Corporate
Governance Practices for Issuers of Securities to the Public, 2015. Special Notice having been
received proposing for his re-election pursuant to Section 287 of the Companies Act, 2015, he offers
himself for re-election.
8.
In accordance with the provisions of Section 769 of the Kenyan Companies Act, 2015, the following
Directors, being members of the Board Audit & Risk Committee be re-elected to continue to serve as
members of the said Committee:-
a) Mr Daniel M Ndonye
b) Mr Stephen N Waruhiu
c) Mr Andrew N Njoroge
9. To re-appoint Messrs Deloitte & Touche as Auditors of the Company in accordance with the
provisions of Section 721 (2) of the Kenyan Companies Act, 2015 and to authorise the Directors to
fix the Auditors’ remuneration for the ensuing Financial Year in accordance with the provisions of
Section 724 (1) of the Kenyan Companies Act, 2015.
10. To transact any other business of an Annual General Meeting of which due notice has been
received.
BY ORDER OF THE BOARD
J L G MAONGA
COMPANY SECRETARY
18 March 2021
Note:
A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote on his/her behalf
and such proxy need not be a member of the Company.
Shareholders will be able to register to follow the meeting, vote electronically or by proxy and may ask
questions in advance of the Annual General Meeting in the manner detailed hereafter. Registration for the AGM
will open on Friday, 7th May 2021 at 8.00 a.m and will close on Monday, 17th May 2021 at 12.00 noon.
register after Monday, 17th May, 2021 at 12.00 noon.
Shareholders will not be able
to
4
Kakuzi Plc
Virtual Annual General Meeting Instructions
1) Shareholders wishing to participate in the meeting should register for the AGM by dialing USSD
short code number *384*043# or via https://digital.candrgroup.co.ke and following the various
registration prompts. In order to complete the registration process, shareholders will need to have
their ID/Passport Numbers which were used to purchase their shares and their shares account
number or CDSC Account Number at hand. For assistance shareholders should dial the following
helpline number +254 20 7608216 from 8:00 a.m. to 4:00 p.m. from Monday to Friday. Any
shareholder outside Kenya should dial the helpline number to be assisted to register or send an
email to digital@candrgroup.co,ke.
2) Registration for the AGM opens on 7rd May, 2021 at 08:00am and will close on 17
th
May, 2021 at
12.00 Noon.
3) Shareholders wishing to raise any questions or clarifications regarding the AGM may do so by:
a) Sending their written questions by email to digital@candrgroup.co,ke; or
b) Shareholders who will have registered to participate in the meeting shall be able to ask
questions via SMS by dialling the USSD code *384*043# and selecting the option (ask
Question) on the prompts; or
c) Shareholders who will have registered to participate in the meeting shall be able to ask
questions by
visiting https://digital.candrgroup.co.ke platform; Select Attend Event; Select “Kakuzi
Plc AGM”;
Select “Q&A” option tab and submit questions in text box provided; or
d) To the extent possible, physically delivering their written questions by 14th May, 2021 12:00
Noon with a return physical address or email address to the Company Registrars address:
Custody & Registrars, at IKM Place, Tower B, 1st Floor, 5th Ngong Avenue
4) Shareholders wishing to vote may do so by:
a) Accessing Virtual AGM via https://digital.candrgroup.co.ke platform; Select Attend Event;
Select “Kakuzi Plc AGM”; Select “Voting” option tab and vote; or
b) Accessing Virtual AGM via USSD platform*384*043#; use the menu prompts to select
“Kakuzi Plc AGM”; select the menu option for “Voting” and follow the various prompts
regarding the voting process.
5)
In accordance with Section 298(1) of the Companies Act, shareholders entitled to attend and vote
at the AGM are entitled to appoint a proxy to vote on their behalf.
A proxy need not be a member of the Company. If the Proxy appointed is not the
Chairman of the AGM, the appointed proxy will need access to a mobile telephone.
A proxy form is included in this Annual Report and is also available on the Company’s
website via this link: https://www.kakuzi.co.ke/regulatory-news Physical copies of the proxy
form are also available at the Company Registrars address: Custody & Registrars, IKM Place,
Tower B, 1st Floor, 5th Ngong Avenue, Nairobi.
A proxy form must be signed by the appointer or his attorney duly authorized in writing. If the
appointer is a body corporate, the instrument appointing the proxy shall be given under its
common seal or under the hand of an officer or duly authorized attorney of such body
corporate.
A completed form of proxy should be emailed to proxy@candrgroup.co.ke or delivered to
Custody & Registrars, at IKM Place, Tower B, 1st Floor, 5th Ngong Avenue, Nairobi so as to
be received not later than Friday 14th May 2021 at 12.00 Noon. Any person appointed as a
proxy should submit his/her email or mobile telephone number to the Company not later
than Friday 14th May 2021 at 12.00 Noon.
Any proxy registration that is rejected will be communicated to the shareholder concerned not
later than Monday 17th May 2021 to allow time to address any issues.
4(a)
Kakuzi Plc
Virtual Annual General Meeting Instructions (continued)
6) The AGM will be streamed live via a link which shall be provided to all shareholders who will have
registered to participate in the annual general meeting. Duly registered shareholders and proxies
will receive a short message service (SMS) and/or an email prompt on their registered mobile
numbers, 24 hours prior to the AGM acting as a reminder of the AGM. A second SMS and/or an
email prompt shall be sent one hour ahead of the AGM, reminding duly registered shareholders
and proxies that the AGM will begin in an hours’ time and providing a link to the live stream.
7) Duly registered shareholders and proxies may follow the proceedings of the AGM using the live
stream platform and may access the agenda. Duly registered shareholders and proxies may vote
(when prompted by the Chairman) via the USSD *384*043# or via https://digital.candrgroup.co.ke.
8) A poll shall be conducted for all the resolutions put forward in the notice.
9) Results of the AGM shall be published within 24 hours following conclusion of the AGM
10) The preferred method of paying dividends which are below Kshs 140,000.00 is through M-PESA.
Shareholders who wish to receive their dividend through M-PESA and who have not registered
for this mode of payment can opt to receive future dividends by dialling *483*038# or
contacting the Share Registrar, Custody & Registrars Services Limited
11) All present and former shareholders of the Company are hereby notified that pursuant to the
provisions of the Unclaimed Financial Assets Act No 40 of 2011 Parts II and III, dividends and
shares which have not been claimed for a period of three (3) years or more will require to be
delivered to the Unclaimed Financial Assets Authority (‘the Authority) as abandoned assets on the
appointed date.
Therefore, all present and former shareholders with unpaid dividends are requested to
urgently contact the Share Registrar, Custody & Registrars Services Limited at the address
indicated below to claim any unpaid dividends to avert the risk of the dividends being
forwarded to the Authority.
Custody & Registrars Services Limited (C&R Group)
IKM Place, Tower B, 1st Floor
5th Ngong Avenue, Nairobi
Tel: Mobile: +254 20 7608216,
Email: proxy@candrgroup.co.ke
4(b)
MINUTES OF THE NINETY SECOND ANNUAL GENERAL MEETING OF THE COMPANY HELD BY
ELECTRONIC MEANS ON TUESDAY, 09 JUNE 2020 AT 12:00 NOON
KAKUZI PLC
Present:
-
Chairman
Mr Graham H Mclean
Mr Christopher J Flowers - Managing Director
Mr Daniel M Ndonye
Mr Nicholas Ng’ang’a
Mr Stephen Waruhiu
Mr Andrew N Njoroge
Mr Ketan R Shah
Director
Director
Director
Director
Finance Director
-
-
-
-
-
Members -
35 Shareholders were Present in Person or by Proxy –
Representing 16,278,341 of the issued share capital of
the Company
In Attendance: Ms Anne Muraya
Mr John Maonga
-
-
Representing Deloitte and Touché, External Auditors
Company Secretary
The Chairman opened the meeting by welcoming the shareholders to the Ninety Second Annual General
Meeting (AGM) of the Company. He explained that this AGM had been convened and held virtually due
to the COVID-19 situation. He thanked all the members present for attending the first ever AGM of the
Company to be held virtually.
Thereafter, he introduced himself, the Directors, the Company Secretary and the representative of the
External Auditors who were present at this meeting.
1. NOTICE AND CONFIRMATION OF QUORUM
At the request of the Chairman, the Company Secretary read the notice convening this meeting and
confirmed the presence of a quorum to transact the business of this meeting.
The Chairman thereupon declared the meeting properly convened and constituted.
2. CHAIRMAN’S REMARK
The Chairman informed the shareholders’ about the untimely demise of Mr Kenneth W Tarplee, a
former Director of the Company, who passed on in the United Kingdom on 13 February 2020 after a
long battle with cancer. He eulogized Mr Tarplee as being instrumental in developing the Company
into its current state having had his focus on good corporate governance and absolute belief in moral
and principled leadership.
Thereafter, the Chairman updated the shareholders on the operations and activities undertaken by
Management and staff members to support the efforts of the Community and County Government in
tackling the COVID-19 pandemic. He also highlighted the support granted by the National
Government bodies as well as other stakeholders who had ensured that the operations of the
Company, particularly in the production and exportation of products continued unhindered.
The Chairman requested the shareholders to ask question relating to the Financial Statements which
would be answered as the meeting progressed.
The Chairman then explained to the members that all the resolutions that were required to be passed
at this meeting would be read by the Company Secretary and the voting process would commence
immediately after the Company Secretary would conclude reading the resolution until 2.00 p.m. (East
African Time) on 9 June 2020. The results of the polling shall be placed on the Company’s website
within 24 hours after the closure of the voting time.
4(c)
KAKUZI PLC
MINUTES OF THE NINETY SECOND ANNUAL GENERAL MEETING (continued)
The Chairman reported that the minutes of the Ninety First Annual General Meeting of the Company
held on 14 May 2019 had been distributed to the Shareholders and were available on the Company’s
website and he recommended that the minutes be taken as read.
3. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
The Chairman recommended to the shareholders to take the Chairman’s Statement and the Directors
report in the Annual Report for the Financial Year ended 31 December 2019 as read.
He however presented key highlights of his Statement as well as the outlook of the Company for the
year 2020.
At his request, Ms Anne Muraya, the representative of the External Auditors, read the Independent
Auditors’ Report which was on pages 23 to 26 of the Annual Report for the Financial Year ended 31
December 2019.
The Chairman confirmed that the Company had received shareholders’ questions that answers had
been placed on the Company’s Website. The Chairman invited two questions from the shareholders
and explained that the shareholders could still send more questions which would be answered and
the same would be placed at the Company’s Website.
It was reported that there were no questions raised by the shareholders who had attended the
meeting.
The Chairman then guided the shareholders on the online voting procedure in respect of the
resolutions by using either the web or the USSD. He thereafter requested the Company Secretary to
read the resolutions that were to be voted on by the Shareholders.
The Company Secretary read the eight resolutions that were to be voted on and he confirmed that
there was no any other business submitted for discussion for this meeting.
Thereupon, the Chairman declared the voting process open until 2.00 p.m. (East African Time) on 9
June 2020.
4. RESOLUTIONS BASED ON POLLING RESULTS
After the closure of the voting period and based on the analysis and outcome of the polling result of
the 92nd Annual General Meeting, the following resolutions were duly passed:-
a) APPROVAL OF MINUTES
It was resolved that the minutes of the Ninety First Annual General Meeting held on 14 May
2019 be and are hereby approved.
b) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
It was resolved that the Audited Financial Statements of the Company for the year ended 31
December 2019 together with the Chairman’s Statement and the Directors’ and the Independent
Auditors’ Reports thereon be and are hereby adopted.
c) DIVIDEND
It was resolved that the paid first and final Dividend of Kshs. 14.00 per ordinary share in respect
of the Financial Year ended 31 December 2019 be and is hereby ratified.
4(d)
KAKUZI PLC
MINUTES OF THE NINETY SECOND ANNUAL GENERAL MEETING (continued)
d) REMUNERATION POLICY OF THE COMPANY
It was resolved that the Remuneration Policy of the Company on Directors as detailed in the
Annual Report for the Financial Year ended 31 December 2019 be and is hereby is approved.
e) REMUNERATION REPORT OF THE BOARD
It was resolved that the Remuneration Report of the Board as detailed in the Annual Report for
the Financial Year ended 31 December 2019 be and is hereby approved.
f) RE-ELECTION OF A DIRECTORS
i)
It was resolved that in accordance with Article 27 of the Company’s Articles of Association,
the following Directors who retired by rotation and, being eligible in accordance with Article
28 of the Company's Articles of Association and had offered themselves for re-election, be
and are hereby re-elected:-
a) Mr Ketan Rameshchandra Shah
b) Mr Graham Harold Mclean
ii)
It was resolved that Mr Daniel Ndonye, a Director who had attained the age of seventy years
and had retired in accordance with the provisions of clause 2.5 of the Code of Corporate
Governance Practices for Issuers of Securities to the Public, 2015 and, a Special Notice
having been received which proposed his re-election pursuant to Section 287 of the
Companies Act, 2015, and had offered himself for re-election, be and is hereby re-elected.
g) RE-ELECTION OF MEMBERS OF AUDIT AND RISK COMMITTEE
It was resolved that in accordance with the provisions of Section 769 of the Kenyan Companies
Act, 2015, the following Directors, being members of the Board Audit & Risk Committee be and
are hereby re-elected to continue to serve as members of the said Committee:-
a) Mr Daniel M Ndonye
b) Mr Stephen N Waruhiu
c) Mr Andrew N Njoroge
d) Mr Nicholas Ng’ang’a
h) RE-APPOINTMENT OF AUDITORS
It was resolved that Messrs Deloitte & Touche be and are hereby re-appointed as the Auditors of
the Company for the Financial Year ending 31 December 2020 in accordance with the provisions
of Section 721 (2) of the Kenyan Companies Act, 2015 and the Directors were authorized to fix
their remuneration in accordance with the provisions of Section 724 (1) of the Kenyan Companies
Act, 2015.
THERE BEING NO OTHER BUSINESS, THE CHAIRMAN URGED THE MEMBERS TO TAKE CARE
AND BE SAFE DURING THE COVID-19 PANDEMIC AND DECLARED THE MEETING CLOSED AT
12.35 P.M. (EAT) BUT THE VOTING PROCESS CONTINUED AND CLOSED AT 2.00 P.M. (EAT).
Confirmed ____________________________________ Date _______________________________
Chairman
4(e)
Kakuzi Plc
Chairman’s Statement
For the year ended 31 December 2020
RESULTS
The Company achieved robust results for the year, despite the uncertainty in our main sales markets
caused by the COVID-19 Pandemic, with a pre-tax profit of Shs 848 million against Shs 1,014 million last
year.
Both avocado and macadamia export volumes were higher than 2019 but these were not sufficient to
mitigate a significant reduction of 34% in the price of avocados. The market prices in 2019 were at
record levels whilst 2020’s prices were more in line with medium term average. The contribution to the
overall results by macadamia and sales of wood products was encouraging and reflects the benefits of
having a diversified product portfolio. The significant increase in tea production in Kenya (569 million kg v
458 million kg in 2019) has impacted negatively on price levels and consequently the profitability for this
crop.
The results also include the cost of the Company defending itself from a UK law firm who wished to bring
Kakuzi into the jurisdiction of the United Kingdom. As previously announced, Kakuzi was dropped as a
party to the UK proceedings in July 2020.
DIVIDEND
Cash reserves are strong and we remain in a good position to meet our strategic goals. Your Board
recommends an increase in the dividend per share to Shs 18.00, compared to Shs 14.00 in 2019.
OVERVIEW
Notwithstanding the current challenges, our development strategies remain on track, not only to complete
our agricultural expansions but also to continue our sustainability journey. I am proud to have launched
our first ever Environment, Social, Governance Report, titled ‘Our steps towards sustainability and
responsibility.’ This report provides a fantastic insight into our operations and specifically our
commitment to upholding various United Nations Sustainable Development Goals.
Our agricultural operations performed well despite the challenging environment caused by the Pandemic.
The operations were all modified to incorporate social distancing measures, the wearing of face masks
and frequent hand cleaning as well as people working from home wherever possible. Despite these
challenges we were still able to produce, process and deliver our products to the market with little
disruption. For this we are extremely grateful to all our employees for their commitment and dedication
during these difficult times. It is important to also thank the many National and County Government
bodies which worked tirelessly to allow businesses like ours to keep on running, providing employment
and contributing positively to the economy.
We were also able to continue with our economic empowerment commitment to the many small holders
who we purchase fruit from. A total of Ksh 58 million (85% of the net returns) was paid out to farmers in
December 2020.
All markets have been impacted by the Pandemic but given the significant developments in vaccines and
their roll out we hope that 2021 will see a more stable situation develop, however these dynamics are
almost impossible to predict.
OPERATIONS
The Pandemic created significant disruption in our main European markets with the almost complete
closure of the Food Service sector. Despite this, demand for avocados remained resilient through the
retail sector and was able to absorb the very high volumes which arrived in Europe from all origins, albeit
at reduced price levels.
On the back of exceptionally high rainfall our avocado export volumes were 27% up on 2019. Cold chain
logistics also operated well during the season despite the enormous challenges that the Pandemic placed
on these at times.
5
Kakuzi Plc
Chairman’s Statement (continued)
For the year ended 31 December 2020
OPERATIONS (continued)
Macadamia exports continue to grow as the orchards mature and were 30% greater than 2019. Demand
for macadamia was however negatively impacted by the Pandemic with our key markets experiencing a
considerable downturn in sales. It is likely that the impact of this will be felt for a period of time to come
while the international markets absorb the high kernel stocks created by these reduced sales.
Local sales of wood products, blueberries and beef were reasonable in the year. There is a growing
demand for super foods, such as blueberries, within the East African market and we will continue to
explore this opportunity in the coming year.
Another strong performance was recorded by our forestry department. The demand for sustainably
grown timber and poles is high which is encouraging and demonstrates the importance of sustainable
forestry resources for Kenya.
Our arable operations produced a significant amount of quality hay, predominately for local dairy farmers,
with demand out stripping supply. We will continue to expand these plantings to keep up with this
demand. On the downside however, beef and other wood product sales were inevitably disrupted by the
Pandemic as customer numbers for both our butchery and our other sales outlets fell.
Tea prices again were under severe pressure as record volumes were produced and exported from
Kenya.
GOVERNANCE
The allegations which have received wide media coverage over the last 6 months were shocking to us all
and as stated previously, these are not matters which we take lightly.
As stated in October 2020, Kakuzi began the development of an Operational-Level Grievance Mechanism
(OGM) to enhance the timely and sensitive resolution to grievances that any of our employees or
stakeholders may have with Kakuzi. The OGM will be fully compliant with UN Guiding Principles on
Business and Human Rights, and will be a fair, transparent and independent means to resolve any
complaints of personal injuries connected to Kakuzi's operations. The OGM is being developed in
extensive consultation with local communities. An independent, internationally recognized Human Rights
consultancy organization will take the lead on this.
In addition, Kakuzi has engaged independent experts to conduct a comprehensive Human Rights
Impact Assessment of Kakuzi's operations, so that local communities and commercial partners can have
confidence in Kakuzi's commitment to, and attainment of, the highest standards of business and Human
Rights.
The Board is well advanced in establishing a high level Independent Human Rights Advisory Committee
(IHRAC) whose role will be to provide independent advice to the Board on matters relating to Human
Rights and governance structures. We believe the combination of all these measures is a clear
demonstration of our commitment to adopt the highest standards possible in our operations.
CORPORATE SOCIAL INVESTMENT (CSI) AND SUSTAINABILITY
Our commitment to ethical and sustainable production of quality agricultural products continues and we
thank all of our employees, surrounding communities, development partners and all the other
stakeholders for their continued support.
Kakuzi is a signatory to UN Women with a view to supporting the principles of women empowerment. In
addition, we continue to have a mutually beneficial membership to the United Nations Global Compact
(UNGC) whose principles on Human Rights, Environment, Labour relations and Anti-corruption are
reflected in our CSI activities.
As stated in our Environmental Social and Governance (ESG) report our focus is on six of the United
Nations Sustainable Development Goals (SDG’s), to include; Good Health and Wellbeing, Quality
Education, Gender Equality, Clean Water and Sanitation, Decent Work and Economic Growth and on
Climate Action.
6
Kakuzi Plc
Chairman’s Statement (continued)
For the year ended 31 December 2020
CORPORATE SOCIAL INVESTMENT (CSI) AND SUSTAINABILITY (continued)
With respect to the goals regarding Quality Education for all, we have invested in various learning
facilities through the refurbishing of classrooms, constructing sanitation blocks, provision of school desks
and the installation of clean drinking water projects for learners. To assist our employee’s children when
the schools were closed, we purchased radios which allowed them to access education through the
school radio programs broadcasted by The Kenya Institute of Curriculum Development.
In line with our commitment to Gender Equality our programs on the Sexual Harassment Awareness
Reporting and Prevention (SHARP) and our menstrual hygiene program, Tabasamu, have featured
strongly in our training programs for all employees as well as our donation initiatives to community
members. Kakuzi also won the 2020 prestigious international SEDEX Award for the best Health and
Safety programs of all the suppliers world-wide accredited under this scheme.
https://www.sedex.com/winners-of-the-sedex-responsible-business-awards-announced/
Expanding our community linkages is of great importance to our operations. To this end we contracted
three Community Liaison Officers to enhance our communication links between the community and the
Company. We have received positive feedback in this regard.
In keeping with the Company’s principles, we reacted to the COVID-19 Pandemic in various ways from
establishing measures to protect our employees to strengthening our community support strategies. Such
initiatives included providing ICU beds, medical monitors, medical equipment to the County Government
hospital, food donations to the needy, the provision of more school desks to allow for better social
distancing in numerous schools and providing clean water for hand washing in many trading centres. To
protect our employees, the Company instituted a comprehensive daily health screening system as well as
providing sanitisers, hand washing facilities and face masks in all of our work settings. These measures
remain in place.
STRATEGIC GOALS & DEVELOPMENTS
The income diversification strategy is now beginning to show clear results. Avocados, macadamia nuts
and wood products are all strong contributors to the business performance. We hope in time that the
blueberry venture will add a fourth component to this strategy.
During the year we continued with our avocado plantings with an additional 85 ha planted. Irrigation
developments in both macadamia and avocados were undertaken which is a key part of our strategy to
mitigate the risk of adverse weather.
The upgraded avocado pack house was also successfully commissioned which now doubles our
processing capacity and will be sufficient to cope with increasing crop levels for many years to come.
Exploring the use of new technology is also of key importance in our macadamia cracking facility to
ensure the highest standards of products are packed.
We are looking to diversify our livestock operations through a combination of beef cattle and goat
production to answer the demands of many local businesses surrounding our operations. Goat rearing
will be trialled in 2021 and if successful will be expanded.
Our small holder avocado economic empowerment program is yielding good results and this will continue
with the objective of getting greater market access for this fruit. Training and technology transfer is key
and our staff are keenly focused on this task. For Kenya to correctly take its position as a world leader in
avocado production we must continue to train farmers on what the markets demand from them.
STAFF
Our commitment to developing staff at all levels continues. As our operations grow, so does our need for
skilled graduates to manage and provide innovation to our practices. We continue to recruit and develop
our staff to meet the challenges of the complex operations at Kakuzi and as these operations grow they
bring much needed employment opportunities for our surrounding communities. On average last year we
employed 2,600 people per day which amounted to 750,000 employee days in the year.
7
Kakuzi Plc
Chairman’s Statement (continued)
For the year ended 31 December 2020
STAFF (continued)
To assist in protecting our workforce from COVID-19, we employ a team of 13 Public Health Officers who
on a daily basis are tasked to interact with workers, perform health checks, and provide invaluable advice
on the compliance with public health regulations within all the Company’s housing and processing units.
I would like to thank the whole team for their efforts especially in keeping all of our employees as safe as
they could be during this difficult time.
BOARD ANNOUNCMENTS
As announced on the 1st November 2020, Mr Nicholas Ng’ang’a was appointed Chairman of the Board
taking over from Mr Graham Mclean who stepped down from this position after 4 years but will continue
his membership of the Board as a non-executive Director. We would like to thank Mr Mclean sincerely for
his wise and able leadership over the years.
We were also fortunate to welcome Dr John Kimani as a new member of the Board. Dr Kimani brings to
the Board extensive knowledge and experience in the agricultural field and we trust that the Board and
the Company will greatly benefit from his contribution.
LOOKING AHEAD
The continued crisis in the world caused by COVID-19 will have an impact on this coming year but
hopefully not to the same devastating levels as 2020.
Consumer demands are, quite rightly, becoming more focussed on transparency in the supply chain as
are the key issues of sustainability and quality. We not only have to uphold these values but actively
demonstrate that we are achieving them.
In addition, Kakuzi has engaged independent experts to conduct a comprehensive Human Rights
Impact Assessment of Kakuzi's operations, so that local communities and commercial partners can
have confidence in Kakuzi's commitment to, and attainment of, the highest standards of business and
Human Rights.
Our commitment to our custodial philosophy will only be strengthened by the measures we have
implemented as outlined above.
We seek to continuously evolve in all aspects of our operations, from using technology to reduce our
carbon footprint, to the diversity of our crops and equally as importantly in our Community Social
Investment programs.
Commodity prices are impossible to predict and given the complexities of the international markets any
attempt to project results for the year ahead would be futile.
The past year has posed some very significant challenges for the Company and I would like to thank the
Management and all Board Members for the professionalism, leadership and fortitude in which they have
handled this situation.
Kakuzi remains committed to our core values of acting honestly, fairly, with integrity and respect for the
community and all of our other stakeholders.
NICHOLAS NG’ANG’A
CHAIRMAN
18 March 2021
8
Kakuzi Plc
Report of the Directors
For the year ended 31 December 2020
The Directors submit their report together with the audited Financial Statements for the year ended 31
December 2020, which disclose the state of affairs of Kakuzi Plc (the “Group and the Company”). The
annual report and financial statements have been prepared in accordance with the Kenyan Companies
Act, 2015.
PRINCIPAL ACTIVITIES
The principal activities of the Group comprise:
Growing, packing and selling of avocados
Growing, cracking and selling of macadamia nuts
The cultivation and sale of tea green leaf
Forestry development and sale of forestry products
Livestock farming, animal feed and sale of beef
Growing, packing and selling of blueberries
The two subsidiary companies are dormant.
BUSINESS REVIEW
A review of the business of the Group is incorporated within the Chairman’s statement on pages 5 to 8.
PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of possible risks and uncertainties that could impact the Group’s operations. The
Group regularly monitors the risks. The information on the Group’s financial risks is disclosed in Note 4 of
the Financial Statements. The following risks relating to the Group’s principal operations have been
identified:
i)
ii)
iii)
iv)
Climate change: level of rainfall affecting crop yields and in extreme cases, crop viability.
Price volatility: changes in market prices impact profitability each season.
Currency fluctuation: profit volatility arising from sales denominated in foreign currency.
Cost of labour: increased cost of production and lower profitability.
RESULTS AND DIVIDEND
The net profit for the year of Shs 622,034,000 (2019: Shs 713,439,000) has been added to retained
earnings. The Directors recommend the approval of a first and final dividend of Shs 18.00 (2019: Shs
14.00) per ordinary share.
The results for the year are set out on pages 27 to 79 in the attached Financial Statements.
ANNUAL GENERAL MEETING
The Ninety Third Annual General Meeting of the Company will be held via electronic means on Tuesday,
18th May 2021 at 12.00 noon.
9
Kakuzi Plc
Report of the Directors (continued)
For the year ended 31 December 2020
DIRECTORS
The Directors who held office during the year and at the date of this report are set out on page 3.
The Directors’ interests in the share capital of the company are listed below: -
At 31 December 2020
Non-
Beneficial
Ordinary
shares
Beneficial
Ordinary
shares
At 31 December 2019
Non-
beneficial
Ordinary
shares
Beneficial
Ordinary
shares
Mr. K W Tarplee (Deceased 13 February 2020)
Mr. G H Mclean
Mr. C J Flowers
Mr. K R Shah
Mr. N Ng’ang’a
Mr. D M Ndonye
Mr. S N Waruhiu
Mr. A N Njoroge
Dr J K Kimani
-
100
-
200
1,000
-
-
-
6,330,699
75
-
-
-
-
-
-
-
-
-
100
-
200
1,000
-
-
-
6,311,199
75
-
-
-
-
-
-
-
-
Mr Nicholas Ngang’a, a Director who is over seventy years old, retires by rotation in accordance with
Article 27 of the Company’s Articles of Association and being eligible in accordance with Article 28 of the
Company's Articles of Association, offers himself for re-election.
Mr Andrew Ndegwa Njoroge, a Director who retires by rotation in accordance with Article 27 of the
Company’s Articles of Association and being eligible in accordance with Article 28 of the Company's
Articles of Association, offers himself for re-election.
Dr John K Kimani, retires in accordance with Article 26 (5) of the Company’s Articles of Association and in
accordance with the provisions of clause 2.5.1 of the Code of Corporate Governance Practices for Issuers of
Securities to the Public, 2015. Special Notice having been received proposing for his re-election pursuant to
Section 287 of the Companies Act, 2015, he offers himself for re-election.
In accordance with the provisions of Section 769 of the Kenyan Companies Act, 2015, the following
Directors, being members of the Board Audit & Risk Committee be re-elected to continue to serve as
members of the said Committee:-
a) Mr Daniel M Ndonye
b) Mr Stephen N Waruhiu
c) Mr Andrew N Njoroge
DISCLOSURE OF INFORMATION TO AUDITORS
Each Director confirms that, so far as he is aware at the date of approval of this report, there is no
relevant audit information of which the Group’s and Company’s auditor is unaware and that each Director
has taken all the steps that he ought to have taken as a Director to make himself aware of any relevant
audit information and to establish that the Group’s and Company’s auditor is aware of that information.
AUDITORS
Deloitte & Touche, having expressed their willingness, continue in office in accordance with the
provisions of section 721 (2) of the Kenyan Companies Act, 2015. The Directors monitor the
effectiveness, objectivity, and independence of the auditor. The Directors also approve the annual audit
engagement contract, which sets out the terms of the auditor's appointment and the related fees.
BY ORDER OF THE BOARD
K R SHAH
DIRECTOR
18 March 2021
10
Kakuzi Plc
Statement of Directors’ Responsibilities
For the year ended 31 December 2020
The Kenyan Companies Act, 2015 requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the financial position of the Group and of the Company at
the end of the financial year and of their financial performance for the year then ended. It also requires
the directors to ensure that the Company and its subsidiaries maintain proper accounting records that are
sufficient to show and explain the transactions of the Company and its subsidiaries; disclose with
reasonable accuracy the financial position of the Group and the Company; and that enables them to
prepare financial statements of the Group and the Company that comply with prescribed financial
reporting standards and the requirements of the Kenyan Companies Act, 2015. The Directors are also
responsible for safeguarding the assets of the Group and for taking reasonable steps for the prevention
and detection of fraud and error.
The Directors accept responsibility for the preparation and presentation of these Financial Statements in
accordance with International Financial Reporting Standards and in the manner required by the Kenyan
Companies Act, 2015. They also accept responsibility for:
i. Designing, implementing and maintaining such internal control as they determine necessary to
enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error;
ii. Selecting suitable accounting policies and then apply them consistently; and
iii. Making judgements and accounting estimates that are reasonable in the circumstances
In preparing the Financial Statements, the Directors have assessed the Group’s and the Company’s
ability to continue as going concerns and disclosed, as applicable, matters relating to the use of going
concern basis of preparation of the financial statements. Nothing has come to the attention of the
Directors to indicate that the Group and the Company will not remain going concerns for at least the next
twelve months from the date of this statement.
The Directors acknowledge that the independent audit of the Financial Statements does not relieve them
of their responsibilities.
Approved by the Board of Directors on 18 March 2021 and signed on its behalf by:
K R SHAH
DIRECTOR
C J FLOWERS
DIRECTOR
11
Kakuzi Plc
Statement on Corporate Governance
For the year ended 31 December 2020
The Board and Management of the Group recognise that effective corporate governance is central to the
prudent direction and operation of the Group in a manner that ultimately enhances shareholder value and
satisfies the interests of other stakeholders. This statement outlines the Group's approach toward
corporate governance policies and practices.
The Group’s corporate governance practices and policies have been developed under the stewardship of
the Board in response to evolving laws and best practices, including the guidelines issued by The Capital
Markets Authority, The Code of Corporate Governance Practices for Issuers of Securities to The Public
2015 (the Code) and other global best practices.
Following the issuance of the Code, the Board embarked on tracking the implementation of the guidelines
and recommendations therein. The Board, in order to ensure that the Group is compliant, commissions a
Governance Audit to be undertaken by an auditor, accredited by the Institute of Certified Public
Secretaries of Kenya, every two years. The last Governance audit was undertaken for the year 2019. The
next audit is planned for year 2021.
This statement describes how the Group applies the main principles of the Code. The Group
acknowledges and continues to consider the recommendations of the Code carefully and implement as
appropriate. Areas that have yet to be implemented are highlighted in the various sections below. In
implementing the Code, the Directors have taken account of the Group’s size and structure and the fact
that there is a controlling shareholder, Camellia Plc.
Board Size, Composition and Independence
The Group is governed by a Board of Directors each of whom is, with the exception of the Managing
Director, elected by the shareholders.
The Board currently comprises of eight Directors, three of whom are independent non-executive
Directors. Of the remaining Directors, two are executive, and three are non-executive, including a non-
executive Chairman. The independent and other non-executive Directors constitute over two-thirds of the
Board. The Directors' abridged biographies appear on the Group's website, and the names of the
Directors are listed on page 3 of this Annual Report.
The non-executive Directors are independent of management. Their role is to advise, constructively
challenge and monitor the success of management in delivering the agreed strategy within the risk
appetite and control framework that is set by the Board.
Based on the size, complexity and governance needs of the Group, the current Board size is considered
sufficient. The size of the Board has conformed to the applicable legal and regulatory frameworks.
All the Directors, excluding the Managing Director, are subject to retirement by rotation and must seek re-
election by shareholders at least once every three years in accordance with the Articles of Association.
Any Director appointed during the year is required to retire and seek re-election at the next Annual
General Meeting.
A review of the other listed Group Directorships of the Directors indicated that all the Directors have
complied with the Code, which limits the number of Directorships in listed companies a member of the
Board holds at any given time.
12
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Board Responsibilities
Internal controls
Strategy
Acquisitions and disposals
Financial reporting and control
Approval of expenditure above specified limits
Approval of transactions and contracts above specified limits
Responsibilities for corporate governance
Board membership and committees
Approval of changes to capital structure
Debt financing
Board Diversity
The Board is well composed in terms of the range and diversity of skills, experience and technical
knowledge and has an appropriate balance of executive, non - executive and independent Directors. The
Board recognises that opportunities exist to consider diversity upon future retirement of non-executive
Directors as per the governance guidelines.
Director’s Name
Occupation
Appointment Date
Mr Nicholas Ng’ang’a – Chairman – Non-Executive
Director
Mr Christopher Flowers – Managing Director
(Executive Director).
Mr Graham Mclean – Non-Executive Director
Mr Daniel M Ndonye – Independent Director
Mr Stephen Waruhiu –Independent Director
Mr Andrew Ndegwa Njoroge –– Independent Director
Farmer/Businessman
28 November 2002
Engineer
28 March 2013
Agriculturist
Accountant
and Estate
Valuer
Agent
Accountant
01 January 2005
29 November 2012
29 November 2012
2 August 2016
Dr John Kibunga Kimani – Non-Executive Director
Agriculturist
1 November 2020
Mr Ketan Shah – Finance Director (Executive Director).
Accountant
28 August 2007
Separation of powers and duties of the Chairman and the Managing Director
The roles of the Board are separated from that of the Management. The Chairman provides overall
leadership to the Board without limiting the principles of collective responsibility for Board decisions. The
Managing Director is responsible to the Board and takes responsibility for the effective and efficient
running of the Group businesses on a day-to-day basis.
Directors’ Shareholding
Directors interest in the share capital of the Company are listed in the Report of the Directors on page 10
of this Annual report.
Board Policies
The Board is committed to ensuring that the business is run in a professional, transparent, just and
equitable manner to protect and enhance shareholder value and satisfy the interests of other
stakeholders.
13
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Board Policies (continued)
The Board has established several policies and procedures to guide the Board and Management in the
implementation of the roles and responsibilities of the Groups business. A summary of the Board policies
and related governance documents include;
Board Charter - provides the roles and responsibilities of the Board.
Remuneration Policy - provides guidelines and criteria of Board compensation, attraction and
retention.
Code of Conduct and Ethics of Directors - provides guidance to directors to help them recognise and
deal with ethical issues, provide mechanisms to report unethical conduct, and help foster a culture of
honesty and accountability. The staff have a separate Code of Conduct and Ethics policy.
Conflict of Interest - the Code of Conduct and Ethics contains guidance on conflict of interest.
Corporate Social Responsibility (CSR) Policy - includes purpose, strategies, guiding principles,
partnership focus, and reporting by the Group with respect to CSR as well as the roles and
responsibilities of the Board and employees of the Group regarding CSR. The Group has published
some of its CSR activities on its website.
Procurement Policy - includes the principles for the implementation of the policy, clear guidelines and
operating instructions on all matters relating to procurement, and tender contracts within the Group as
well as a comprehensive list of all the suppliers and vendors engaged by the Group.
Whistleblowing Policy – provides guidance for any individual who wants to raise legitimate concerns
Insider Trading - the Code of Business Conduct provides guidelines on trading on insider information.
Information Communication Technology (ICT) Policy - provides guidelines that are aligned to the
strategic objectives of the Group.
These polices and others are available on the Company’s web site, www.kakuzi.co.ke/corporate-
governance
Company Secretary
The Company Secretary, who is a member of the Institute of Certified Secretaries of Kenya and in good
standing, with the assistance of the Finance Director, provides guidance to the Board on its duties and
responsibilities and other matters of governance and monitoring and coordinating their completion.
Board and Directors’ effectiveness
A robust support system enhances board effectiveness in its oversight and leadership role. This is
facilitated through the following:
Board Remuneration
The Director's remuneration policy and report, including details of their compensation, appear on page
22.
Board Meetings
The Board and its Committees meet regularly in accordance with business requirements. The Committee
meetings are scheduled around the Board meetings. The Agenda and supporting papers and other
appropriate information are distributed prior to each meeting to allow the Board and its Committees to
meet its duties. In 2020, four scheduled Board meetings and one ad-hoc Board meeting were held.
The Chairmen of the Board Committees report to each meeting of the Board on the activities of the
Committees since the previous Board meeting. The Board receives regular reports and presentations
from the Managing Director. The Board also monitors matters arising under the Code of Conduct, the
Anti-Bribery and Corruption Policy and the Whistleblowing Policy.
14
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Board Meetings (continued)
The Board met and deliberated on, amongst other issues:
Share transactions and top shareholders
Updates on the strategic plan
Managing Director’s Report which includes review reports on progress against financial objectives,
business developments, investor and external relations, the environment, performance and updates
on the strategic initiatives
Audit and Risk Committee Report
Nomination and Remuneration Committee Report
Corporate Social Responsibility
Anti-Bribery Report (Semi-Annually)
Training Needs report
Litigation matters
Public Relations proposal and Implementation Report
Details of the Board and Board Committee meetings held during the Reporting Period and attendance at
those meetings are set out on page 21.
Directors’ external activities and Conflicts of Interest
Directors have a statutory duty to avoid situations in which they have or may have interests that conflict
with those of the Group. The conflict of interest requirements is embedded in the Code of Conduct and
Ethics policy as well as the Directors’ letters of appointment. The Board and Board Committee meetings
have a standing agenda item on the declaration of interest, where members declare actual, potential or
perceived conflicts of interest. The declared items of interest are part of the minutes and are documented
in a conflict of interest register.
Insider Trading
Internal policy and various laws, regulations and guidelines that regulate the Group’s businesses prohibit
Directors and employees from dealing in the Group's securities when they have price-sensitive
information that is not generally available to the market. Information is considered to be "nonpublic"
unless it has been publicly disclosed, and adequate time has passed for the securities markets to digest
the information. Staff are required to adhere to the Staff Code of Conduct on permissible trading activity.
During the year 2020, there were no known or identified instances of insider trading by the Directors,
management and staff of the Group.
Board Committees
The Board has established Committees to assist it in discharging its responsibilities and obligations. The
Committees assist the Board in carrying out its functions and ensuring that there is independent oversight
of internal controls and risk management. These Committees have terms of reference approved by the
Board, indicating their mandate, authority, duties, composition and leadership. The appointment of the
members to these Committees draws on the skills and experience of individual Directors.
The Board has constituted its Committees in compliance with the Code. The Committees in place are the
Audit & Risk Committee, the Nomination & Remuneration Committee and the Litigation Committee. In
addition to the Board committees, the Group has in place several formally established management
committees that deal with particular sets of ongoing issues. These include the Tender Committee and
Training Committee, among others.
The Board is also in the process of establishing an Independent Human Rights Advisory Committee.
15
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Board Committees (continued)
Management and external service providers and experts attend by invitation as circumstances dictate.
Directors’ attendance of these committees is provided on page 21.
Details of these Committees are given here below:
Nomination & Remuneration Committee
The Nomination & Remuneration Committee is chaired by Mr Stephen Waruhiu, an independent Director.
Its other members are Mr Andrew N Njoroge and Mr Christopher Flowers. The principal responsibilities of
the Nomination & Remuneration Committee are set out below:
Principal responsibilities
Review the balance and composition (including gender and diversity) of the Board, ensuring that they
remain appropriate
Be responsible for overseeing
the Board’s succession planning requirements including the
identification and assessment of potential Board candidates and making recommendations to the
Board for its approval
Keep under review the leadership needs of, and succession planning for, the Group in relation to both
its executive and non-executive Directors and other senior executives
Board performance evaluation and development of Directors
The Committee met thrice during the year, as shown on page 21 and deliberated on, amongst other
issues:
Training needs for the year 2021 noted
Board Membership changes
The need to review succession planning
Audit & Risk Committee
The Audit & Risk Committee is chaired by Mr Daniel Ndonye, an independent Director. The other
members of the Committee are Mr Stephen Waruhiu and Mr Andrew Njoroge. During 2020, the
Committee met twice, as shown below on page 21.
All the members of the Audit & Risk Management Committee have the relevant qualifications and
expertise in audit, financial management and accounting.
Principal responsibilities
To review and monitor the financial statements of the Group and the audit of those statements
To monitor compliance with relevant financial reporting requirements and legislation
To monitor the effectiveness and independence of the external auditor
To review the efficacy of the Group's internal control system - the Committee regularly reviews the
effectiveness of internal audit activities carried out by the Group’s audit function and senior
management
To review significant accounting policies and practices; and,
To review non-audit services provided by the external auditors
During the course of the year, the Committee received, reviewed, monitored, considered, approved and
guided management and made recommendations to the Board on:
Monitoring developments in accounting, financial reporting and taxation relevant to the Group
Reviewing and making recommendations to the Board for the adoption of the Group’s half-year and
annual financial statements
Approval of the scope plan and fees for the 2020 external audit
16
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Audit & Risk Committee (continued)
Reviewing the independence and performance of the external auditor
Reviewing Internal Audit reports and approval of the 2020 Internal Audit plan
Reviewing the External Auditors audit findings report for the year ended 2019
Review of Dividend and Press announcements
Review of the Group’s Risk Map
Litigation Committee
The Litigation Committee is a committee of the Board which serves as a link between the Board and
management to:
oversee the Company’s dispute resolution mechanisms and any resulting claims and legal
proceedings; and
ensure implementation of the Operational-Level Grievance Mechanism (OGM) decisions by the
Board.
The Litigation Committee is chaired by Mr Andrew N Njoroge, an independent Director. Its other member
is Mr Stephen Waruhiu. The Committee shall develop its own procedures which shall be approved by the
Board. During 2020, the Committee met once.
The Committee makes relevant recommendations to the Board for deliberation, adoption and
implementation by management. The Committee has the power to obtain such professional advice as it
may require from time to time in the discharge of its functions.
Independent Human Rights Advisory Committee
The Board is well advanced in establishing an Independent Human Rights Advisory Committee
(IHRAC) whose role will be to provide independent advice to the Board on matters relating to Human
Rights and governance structures.
Board and Directors Evaluation
The Nomination and Remuneration Committee is responsible for determining the process for evaluating
Board performance. In line with the provisions of the Code, the Board undertook an inaugural evaluation
of its performance as an entity in 2019. The evaluation was conducted internally by the Chairman of the
Board through the coordination of the Company Secretary. Each director completed a detailed
questionnaire designed to obtain feedback on the Board’s performance in the following areas:
Strategic objectives
Board composition and structure
Board meetings and preparation
Board interaction and support
Risk management, internal controls and compliance
Performance of governance functions; and
Performance of the Chairman,
The Directors provided consistent and positive feedback on the areas under review in the board
evaluation, and the following matters were highlighted as being in need of improvement or
implementation:
17
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Board and Directors Evaluation (continued)
Gender balance
Formulation of a succession policy
Training program for the Directors
Interaction with senior management
The evaluation outcome found that the Board continues to operate effectively and is well-positioned to
address any challenges faced by the Group.
The next evaluation is scheduled for in 2021. In addition, a formal procedure to conduct the evaluation of
the individual Board members, Company secretary and Board Committees is being considered.
Director Access to Management and Independent Advisors
Directors receive operating and financial reports of the Group and have access to senior management at
Board and Committee meetings. The Board have the authority to retain, terminate and determine the fees
and terms of consultants, legal counsel and other advisors to the Board as the Board may deem
appropriate in its discretion. The Group has employed the expertise of a Public Relations Consultant to
work as an intermediary between the public and the Group; and effectively disseminate and communicate
its mission, policies and goals to the public.
Board Induction and Continuous Skills Development
In 2019, the Board held a training which was conducted by the Institute of Certified Public Secretaries of
Kenya. The topics covered during the training included: Boardroom Behaviours & Procedures and Boards
of the Future: Looking Beyond Numbers and Corporate Culture and Strategy.
The following areas were highlighted for future training, which is scheduled to be carried out in 2021;
Integrated reporting as well as Environment, Social and Governance Reporting
Diversity and inclusion – The legal and corporate implications for Directors
Latest trends in corporate governance policies
Code of Conduct & Ethics
The Group has established a Code of Conduct and Ethics that binds both the Directors and employees.
The Group takes cognizance of the fact that its operations are closely integrated with the local
communities and, because the very nature of agriculture is long-term, it is aware that it can have an
impact on the environment. The Group policy ensures that its activities meet and exceed the social,
economic and environmental expectations of its stakeholders.
The Whistleblowing Policy, which is on the Group’s website, sets out the Board of Directors’,
managements’ and staff members’ commitment to upholding the highest levels of integrity and
observance of the rule of law.
The Anti-Bribery Policy is in place to foster an environment that encourages ethical behaviour and
compliance, while an internal committee is in place that meets quarterly to monitor this. Their report is
tabled in every other Board meeting.
No unethical issues were reported during the course of the year under review.
18
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
Legal Compliance Audit and Reporting
The Group has identified several local and international laws and regulations and performs regular
compliance assessment checks under the various divisions of the Group. A Compliance Register that
identifies the areas of compliance and the level of compliance by the Group is presented to the Board
regularly.
The Board is considering conducting a comprehensive and independent legal audit by an external
consultant in line with the Code’s requirements.
External Auditors
To assess the effectiveness of the external audit process, the external auditor is required to report to the
Audit & Risk Committee and confirm their independence in accordance with ethical standards and that
they had maintained appropriate internal safeguards to ensure their independence and objectivity.
In addition to the steps taken by the Board to safeguard auditor objectivity, the Committee has reviewed
the non-audit services provided by the external auditor and satisfied itself that the scale and nature of
those services were such that the external auditors’ objectivity and independence were safeguarded.
The Committee confirms that the Annual Report and Accounts, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Group’s
performance, business model and strategy.
The External Auditors attended the two meetings of the Audit and Risk Committee, one to present their
2019 Audit findings report and the second one to present their audit service plan for the year ended 31
December 2020.
Internal Control and Risk Management Systems
The Directors acknowledge that they are responsible for maintaining a sound system of internal control.
During the year, the Audit & Risk Committee, on behalf of the Board, reviewed the effectiveness of the
framework of the Group’s system of internal control.
Accountability and delegation of authority are clearly defined with regular communication between the
Board and management.
The Group has an Internal Audit Department, which is an independent function that reports directly to the
Board Audit & Risk Committee and provides independent confirmation on compliance with the Group's
business standards, policies and procedures. Where found necessary, corrective action is recommended.
The performance of each division is continually monitored centrally, including a critical review of annual
budgets, forecasts and monthly sales, profits and cash reports.
Financial results and key business statistics and variances from approved plans are carefully monitored.
The Risk Management Policies, which are reviewed by the Committee, are detailed on Note 4.
Relationship with Shareholders and other Stakeholders
The Group is committed to equitable treatment of its shareholders, including the non-controlling and
foreign shareholders. The Group ensures that all shareholders receive full and timely information about
its performance. This is achieved through the distribution of a half-yearly interim financial report and the
Annual Report and financial statements as well as through compliance with the relevant continuing
obligations under the Capital Markets Authority Act. The Group's results are advertised in the press and
released to the securities exchanges within the prescribed period at each half-year and year-end.
19
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
The published results and related investor information together with all the relevant information relating to
the Group is available on the Group’s website, www.kakuzi.co.ke/investor-relations/regulatory-news.
The Group has engaged the services of a registrar, Custody & Registrar Services, who together with the
Finance Director, regularly address issues raised by the shareholders.
A standalone policy on stakeholder relations is currently under consideration together with stakeholders
mapping in order to enhance the Groups’ relationship with its Stakeholders as per the recommendations
made during the governance audit.
Going Concern
The Board confirms the financial statements are prepared on a going concern basis, and the Directors
are satisfied that the Group has adequate resources to continue in business for the foreseeable future. In
making this assessment, the Directors have considered a wide range of information relating to present
and future conditions, including future projections of profitability, cash flows and capital resources. For
this reason, it continues to adopt the going concern basis when preparing the financial statements.
BY ORDER OF THE BOARD
K R SHAH
18 March 2021
C J FLOWERS
18 March 2021
20
Kakuzi Plc
Statement on Corporate Governance (continued)
For the year ended 31 December 2020
2020 BOARD & BOARD COMMITTEES MEMBERSHIP AND ATTENDANCE
Director
Classification
Designation
Board
Audit &
Risk
Nomination &
Remuneration
Litigation
Mr
Nicholas
Ng’ang’a
Non-Executive Chairman of the
Board
Membership
Upto 31st
Oct 2020
Upto 24th Nov
2020
Attendance
5/5
2/2
Mr
Christopher
Flowers
Mr Graham
Mclean
Executive
Managing
Director
Non-Executive
Mr Daniel
Ndonye
Non-Executive Chairman of the
Audit and Risk
Committee
Mr Stephen
Waruhiu
Non-Executive Chairman of the
&
Nomination
Remuneration
Committee
Membership
Attendance
Membership
Attendance
Membership
Attendance
Membership
Attendance
Mr Andrew
Njoroge
Dr John K
Kimani
Mr Ketan
Shah
Non-Executive Chairman of the
Membership
Non-Executive
Executive
Litigation
Committee
Attendance
Membership
Attendance
Finance Director Membership
2/2
2/2
2/2
2/2
2/2
5/5
5/5
5/5
5/5
5/5
1/1
3/3
3/3
Upto 24th Nov
2020
3/3
Upto 24th Nov
2020
3/3
3/3
3/3
1/1
1/1
Upto 24th Nov
2020
Attendance
5/5
2/2
3/3
Member of the respective committee
Where a Director has missed a Board or Board Committee meeting, an acceptable apology had
been received by the Chairman well in advance of the scheduled meeting.
The Managing Director and Finance Director are not members of the Audit & Risk Committee
but attend by invitation.
21
Kakuzi Plc
Directors’ Remuneration Report
For the year ended 31 December 2020
This report is drawn up in accordance with the Kenyan Companies Act, 2015.
Nomination & Remuneration Committee
Details of the Nomination and Remuneration Committee are set out on page 16.
Policy on Directors Remuneration
The details agreed by the Nomination & Remuneration Committee are as follows:-
To seek to provide remuneration packages that will attract, retain and motivate the right people for
the roles
So far as is practicable, to align the interests of the Executives with those of shareholders
Service Contracts
The Managing Director and the Finance Director are the only Executive Directors of the Company. They
have service contracts with fellow subsidiary companies within the Parent company, Camellia Plc Group,
on rolling service contract basis.
Following the initial appointments, non-executive Directors and the Finance Director may seek re-election
by shareholders on a rotational basis in accordance with the Company’s Articles of Association at Annual
General Meetings. Non-executive Directors do not have service agreements.
Directors’ Remuneration
The following section has been audited:
The Executive Directors’ remuneration (including value of benefits in kind) charged to the Company and
included in the Related Party transactions (Note 27 (ii)) is as follows:-
Managing Director (Mr C J Flowers)
Finance Director (Mr K R Shah)
2020
Shs’000
2019
Shs’000
11,535
17,049
28,584
10,654
15,673
26,327
Directors’ fees are payable after the occurrence of the Board Meetings. The Directors do not receive any
performance based remuneration. No pension contributions are payable on their fees.
Non-Executive
Mr G H Mclean
Mr K W Tarplee
Mr N Ng’ang’a
Mr D M Ndonye
Mr S N Waruhiu
Mr A N Njoroge
Mr J K Kimani
2020
Directors’
Fees
2019
Directors’
Fees
Shs’000 Shs’000
2020
Benefits in
kind
Shs’000
2019
Benefits in
kind
Shs’000
2020
2019
Total
Shs’000
Total
Shs’000
2,068
-
2,767
2,052
2,020
2,353
269
11,529
1,535
1,000
1,680
1,695
1,665
1,665
-
9,240
-
25
89
89
89
89
7
388
-
94
94
93
93
93
-
467
2,068
25
2,856
2,141
2,109
2,442
276
11,917
1,535
1,094
1,774
1,788
1,758
1,758
-
9,707
BY ORDER OF THE BOARD
K R SHAH
18 March 2021
C J FLOWERS
18 March 2021
22
Deloitte●
Independent auditors’ report
To the shareholders of Kakuzi Plc
Deloitte & Touche
Certified Public Accountants (Kenya)
Deloitte Place
Waiyaki Way, Muthangari
P.O. Box 40092 ‐ GPO 00100
Nairobi
Kenya
Tel:
(+254 20) 423 0000
Cell: (+254 20) 0719 039 000
Dropping Zone No. 92
Email: admin@deloitte.co.ke
www.deloitte.com
Report on the audit of the consolidated and separate financial statements
Our Opinion
Our Opinion
We have audited the consolidated and separate financial statements of Kakuzi Plc (“the Group”) set out
on pages 27 to 79, which comprise the consolidated and separate statements of financial position at
31 December 2020 and the consolidated and separate statements of profit or loss and other
comprehensive income, consolidated and separate statements of changes in equity and consolidated
and separate statement of cash flows for the year then ended, and notes, including a summary of
significant accounting policies.
In our opinion, the consolidated and separate financial statements give a true and fair view of financial
position of the Group and the Company as at 31 December 2020 and of their financial performance and
cash flows for the year then ended in accordance with International Financial Reporting Standards and
the requirements of the Kenyan Companies Act, 2015.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for Audit of
the consolidated and separate Financial Statements section of our report.
We are independent of the Group and Company in accordance with the International Ethics Standards
Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with other
ethical requirements that are relevant to our audit of the financial statements in Kenya, and we have
fulfilled our ethical responsibilities in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matter
A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of
the consolidated and separate financial statements of the current period. The matter was addressed in
the context of our audit of the consolidated and separate financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on the matter.
Opinion
Basis for
Partners: D.M. Mbogho A.N. Muraya F.O. Aloo J Nyang’aya B.W. Irungu I.Karim F Okwiri F.O. Omondi F Mitambo P. Seroney D. Waweru C. Luo
Associate of Deloitte Africa, a Member of Deloitte Touche Tohmatsu Limited
23
Independent auditors’ report
To the shareholders of Kakuzi Plc (continued)
Report on the audit of the consolidated and separate financial statements (continued)
Key Audit Matter
Measurement of biological assets (in the
consolidated and separate financial
statements)
The measurement of biological assets at the
end of year involves significant judgements and
estimates by the Directors, which could have
material impact on the financial position and the
results of the Group and the Company.
At the end of year, the carrying value of the
biological assets amounted to Sh 1,092,933,000
(2019: Sh 933,355,000) as disclosed in Note 6
in
financial
statements.
the consolidated and separate
the
As discussed
financial
in Note 6 of
statements, biological assets comprise forestry
plantations, livestock and growing agricultural
produce on bearer plants, which are measured
at fair value less costs to sell. The fair value
models accrue the additional value related to
the biological asset as biological transformation
takes place rather than at the time of harvest.
As disclosed in Note 3 (a) to the consolidated
and separate financial statements, the key
assumptions and estimates include expected
yield, future market prices, costs to sell and the
age and condition of
the assets. The
these assumptions and
determination of
estimates require careful
the
Directors and any uncertainty could lead to
material adjustments to the consolidated and
separate financial statements.
judgment by
Refer to Note 2 (h) for the accounting policy on
biological assets; Note 3 (a) for the significant
estimates used in determining the fair values of
biological assets; and Note 6, for the disclosure
on biological assets.
How Our Audit Addressed the Key Audit Matter
We focused our attention on the significant assumptions,
estimates and key judgments made by Directors and
Group’s management experts by performing
the
following:
We assessed the competence and objectivity of the
Group's management experts with the responsibility of
determining the valuation of the biological assets. In
addition, we discussed the scope of their work and
reviewed the fair valuation models used for consistency
and mathematical accuracy. We confirmed that the
approach and model used has been consistently applied.
We performed an analysis of the significant assumptions
made in the valuation models and tested them against
available market information. We subjected the key
assumptions to sensitivity analysis.
We assessed the reasonableness of the assumptions
used in deriving the expected yield, the future market
prices and cost to sell.
In addition, we tested a selection of data inputs used
against Directors’ financial and operational information
and external sources, to assess the accuracy, reliability
and completeness thereof.
We checked the consistency of application of the fair
value approaches and models over the years.
We evaluated the sufficiency and accuracy of the
disclosures in the notes of the consolidated and separate
financial statements.
We also validated the underlying data in respect of
forestry acreage and age of plantations used by the
valuer
independent
the Directors’ operational
information, including comparison with historical trends.
to
We found that the models used for the valuation of the
biological assets to be appropriate and reasonable. In
addition, the disclosures in the consolidated and separate
financial statements pertaining to the valuation and
measurement of biological assets were found to be
appropriate.
Other information (continued)
Other information
The Directors are responsible for the other information which comprises the Company Information, Notice
of the Annual General Meeting, Chairman’s Statement, Report of the Directors, Statement of Directors’
Responsibilities, Statement on Corporate Governance, Directors’ Remuneration Report, five year record
and major shareholders and distribution schedule which we obtained prior to the date of this auditor’s
report and the Annual Report, which is expected to be made available to us after that date. The other
information does not include the consolidated and separate financial statements, and our auditor’s report
thereon.
Our opinion on the consolidated and separate financial statements does not cover the other information
and we do not express an audit opinion or any form of assurance conclusion thereon.
pages 27 to 80, which comprise the consolidated and separate statements of financial position at 31 De
24
In connection with our audit of the consolidated and separate financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is materially
inconsistent with the consolidated and separate financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the
her information that we obtained prior to the date of this auditor’s report, we conclude that there is a
Independent auditors’ report
To the shareholders of Kakuzi Plc (continued)
Report on the audit of the consolidated and separate financial statements (continued)
In our opinion, the consolidated and separate financial statements give a true and fair view of financial p
Other information (continued)
In connection with our audit of the consolidated and separate financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated and separate financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.IN
DEPE
Responsibilities of the Directors and those charged with governance for the consolidated and
separate financial statements
The Directors are responsible for the preparation and fair presentation of the consolidated and separate
financial statements in accordance with International Financial Reporting Standards and the requirements
of the Kenyan Companies Act, 2015, and for such internal control as the Directors determine are necessary
to enable the preparation of consolidated and separate financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the Directors are responsible for
assessing the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group and/or Company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the Audit of the consolidated and separate financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated and separate financial
statements, whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.
Os
25
Independent auditors’ report
To the shareholders of Kakuzi Plc (continued)
Report on the audit of the consolidated and separate financial statements (continued)
Auditor's Responsibilities for the Audit of the consolidated and separate financial statements
(continued)
Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group and company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the consolidated and separate financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may cause
the Group and/or company to cease to continue as going concerns.
Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures and whether the consolidated and separate financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Board Audit and Risk Committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Board Audit and Risk Committee with a statement that we have complied with the
relevant ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board Audit and Risk Committee, we determine those matters
that were of most significance in the audit of the consolidated and separate financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on other matters prescribed by the Kenya Companies Act, 2015
Report of the Directors
In our opinion the information given in the Report of the Directors on pages 9 to 10 is consistent with the
consolidated and separate financial statements.
Directors’ Remuneration Report
In our opinion the auditable part of the Director’s Remuneration report on page 22 has been prepared in
accordance with the Kenyan Companies Act, 2015.
Certified Public Accountants (Kenya)
Nairobi, Kenya
18 March 2021
FCPA Anne Muraya, Practising certificate No. 1697.
Signing partner responsible for the independent audit
26
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Consolidated and Separate statement of profit or loss and other comprehensive
income
Year ended 31 December
Notes
2020
Shs’000
2019
Shs’000
Sales
Gains arising from changes in fair value less costs to sell of
non-current biological assets
5
3,608,941
2,888,662
6(i)
57,813
83,414
Cost of sales
Gross profit
Other income
Selling and Distribution costs
Operating profit
Interest and other income
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
3,666,754
(2,144,454)
2,972,076
(1,556,400)
1,522,300
1,415,676
7
31,554
(851,348)
20,576
(531,280)
702,506
904,972
145,059
(33)
117,021
(7,516)
847,532
1,014,477
8
8
5
11(a)
(225,498)
(301,038)
622,034
713,439
Items that are not reclassified subsequently to profit or loss:
Remeasurement of post-employment benefit obligations (net of tax)
11(c)
490
11,810
Total comprehensive income for the year
622,524
725,249
Earnings per share (Shs):
Basic and diluted earnings per ordinary share
12
31.74
36.40
The notes on pages 33 to 79 are an integral part of these consolidated and separate financial statements.
27
Kakuzi Plc
Consolidated and Separate Financial Statements
As at 31 December 2020
Consolidated statement of financial position
EQUITY
Share capital
Other reserves
Retained earnings
Proposed dividend
Total equity
Non current liabilities
Deferred income tax
Post employment benefit obligations
Lease obligations
Total equity and non current liabilities
Non current assets
Property, plant and equipment
Biological assets
Right of use assets
Financial assets held at amortised cost
Non current receivables
Current assets
Biological assets – growing agricultural produce
Inventories
Receivables and prepayments
Current tax recoverable
Cash and cash equivalents
Current liabilities
Payables and accrued expenses
Current tax payable
Lease obligations
Post employment benefit obligations
Notes
13
12(ii)
15
16
17
18
6(i)
19
21
23
6(ii)
22
23
11(d)
25
24
11(d)
17
16
31 December
2020
Shs’000
31 December
2019
Shs’000
98,000
31,953
5,083,696
352,800
98,000
31,463
4,814,462
274,400
5,566,449
5,218,325
1,003,743
76,354
373
1,080,470
932,166
74,500
381
1,007,047
6,646,919
6,225,372
3,021,989
728,163
4,335
200,000
35,555
3,990,042
364,770
435,016
427,200
19,664
1,670,124
2,916,774
226,607
-
59
33,231
259,897
2,913,234
715,376
4,781
200,000
34,624
3,868,015
219,979
401,693
275,218
-
1,696,130
2,593,020
181,711
35,355
31
18,566
235,663
Net current assets
2,656,877
2,357,357
6,646,919
6,225,372
The notes on pages 33 to 79 are an integral part of these consolidated and separate financial statements.
The consolidated and separate financial statements on pages 27 to 79 were approved for issue by the
board of Directors on 18 March 2021 and signed on its behalf by:
K R SHAH
DIRECTOR
C J FLOWERS
DIRECTOR
28
Kakuzi Plc
Consolidated and Separate Financial Statements
As at 31 December 2020
Separate statement of financial position
EQUITY
Share capital
Other reserves
Retained earnings
Proposed dividend
Total equity
Non current liabilities
Deferred income tax
Post employment benefit obligations
Lease obligations
Total equity and non current liabilities
Non current assets
Property, plant and equipment
Biological assets
Right of use assets
Investment in subsidiaries
Financial assets held at amortised cost
Non current receivables
Current assets
Biological assets – growing agricultural produce
Inventories
Receivables and prepayments
Current tax recoverable
Cash and cash equivalents
Current liabilities
Payables and accrued expenses
Current tax payable
Lease obligations
Post employment benefit obligations
Notes
13
12(ii)
15
16
17
18
6(i)
19
20
21
23
6(ii)
22
23
11(d)
25
24
11(d)
17
16
31 December
2020
Shs’000
31 December
2019
Shs’000
98,000
31,953
5,079,555
352,800
98,000
31,463
4,810,321
274,400
5,562,308
5,214,184
1,003,743
76,354
373
1,080,470
932,166
74,500
381
1,007,047
6,642,778
6,221,231
3,021,989
728,163
4,335
4,295
200,000
35,555
3,994,337
364,770
435,016
427,200
19,611
1,670,124
2,916,721
234,990
-
59
33,231
268,280
2,913,234
715,376
4,781
4,295
200,000
34,624
3,872,310
219,979
401,693
275,218
-
1,696,130
2,593,020
190,094
35,408
31
18,566
244,099
Net current assets
2,648,441
2,348,921
The notes on pages 33 to 79 are an integral part of these consolidated and separate financial statements.
The consolidated and separate financial statements on pages 27 to 79 were approved for issue by the
board of Directors on 18 March 2021 and signed on its behalf by:
6,642,778
6,221,231
K R SHAH
DIRECTOR
C J FLOWERS
DIRECTOR
29
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Consolidated statement of changes in equity
Year ended 31 December 2020
Share
capital
Shs’000
Other
reserves
Shs’000
Retained
earnings
Shs’000
Proposed
dividend
Shs’000
Total
equity
Shs’000
At start of year
98,000
31,463
4,814,462
274,400
5,218,325
Total comprehensive income for the year:
Profit for the year
Other comprehensive income
Total
Transactions with owners:
Dividends:
- Final for 2019
- Proposed for 2020
Total
At end of year
Year ended 31 December 2019
-
-
-
-
-
-
-
490
490
622,034
-
622,034
-
-
-
622,034
490
622,524
-
-
-
-
(352,800)
(274,400)
352,800
(274,400)
-
(352,800)
78,400
(274,400)
98,000
31,953
5,083,696
352,800
5,566,449
At start of year
98,000
19,653
4,375,423
176,400
4,669,476
Total comprehensive income for the year:
Profit for the year
Other comprehensive income
Total
Transactions with owners:
Dividends:
- Final for 2018
- Proposed for 2019
Total
At end of year
-
-
-
-
-
-
-
11,810
713,439
-
11,810
713,439
-
-
-
713,439
11,810
725,249
-
-
-
-
(274,400)
(176,400)
274,400
(176,400)
-
(274,400)
98,000
(176,400)
98,000
31,463
4,814,462
274,400
5,218,325
The notes on pages 33 to 79 are an integral part of these consolidated and separate financial statements.
Other reserves relate to remeasurement of post-employment benefit obligations arising from experience
adjustments and changes in actuarial assumptions.
30
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Separate statement of changes in equity
Year ended 31 December 2020
Share
capital
Shs’000
Other
reserves
Shs’000
Retained
earnings
Shs’000
Proposed
dividend
Shs’000
Total
equity
Shs’000
At start of year
98,000
31,463
4,810,321
274,400
5,214,184
Total comprehensive income for the
year:
Profit for the year
Other comprehensive income
Total
Transactions with owners:
Dividends:
- Final for 2019
- Proposed for 2020
Total
At end of year
Year ended 31 December 2019
-
-
-
-
-
-
-
490
622,034
-
490
622,034
-
-
-
622,034
490
622,524
-
-
-
-
(352,800)
(274,400)
352,800
(274,400)
-
(352,800)
78,400
(274,400)
98,000
31,953
5,079,555
352,800
5,562,308
At start of year
98,000
19,653
4,371,282
176,400
4,665,335
Total comprehensive income for the
year:
Profit for the year
Other comprehensive income
Total
Transactions with owners:
Dividends:
- Final for 2018
- Proposed for 2019
Total
At end of year
-
-
-
-
-
-
-
11,810
713,439
-
11,810
713,439
-
-
-
713,439
11,810
725,249
-
-
-
-
(274,400)
(176,400)
274,400
(176,400)
-
(274,400)
98,000
(176,400)
98,000
31,463
4,810,321
274,400
5,214,184
The notes on pages 33 to 79 are an integral part of these consolidated and separate financial statements.
Other reserves relate to remeasurement of post-employment benefit obligations arising from experience
adjustments and changes in actuarial assumptions.
31
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Consolidated and separate statement of cash flows
Operating activities
Cash generated from operations
Interest received
Income tax paid
Notes
Year ended 31 December
2019
Shs’000
2020
Shs’000
26
8
11(d)
670,704
79,701
(209,150 )
739,111
117,021
(70,554 )
Net cash generated from operating activities
541,255
785,578
Investing activities
Purchase of property, plant and equipment
Purchase of biological assets and development
Proceeds from disposal of property, plant and equipment
Proceeds from redemption of financial assets held at
amortised cost
18
6(i)
21
(348,979 )
(17,439 )
8,212
(409,466 )
(18,727 )
6,308
-
15,385
Net cash used in investing activities
(358,206 )
(406,500 )
Financing activities
Dividend paid
Lease payments
12(ii)
17
(274,400 )
(13 )
(176,400 )
-
Net cash used in financing activities
(274,413 )
(176,400 )
Net (decrease)/increase in cash and cash equivalents
(91,364 )
202,678
Movement in cash and cash equivalents
At start of year
Net (decrease)/increase in cash and cash equivalents
Effect of exchange rate differences on cash and cash
equivalents
1,696,130
(91,364 )
1,500,935
202,678
8
65,358
)
(7,483
At end of year
25
1,670,124
1,696,130
The notes on pages 33 to 79 are an integral part of these consolidated and separate financial statements.
32
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes to the Consolidated and Separate Financial Statements
1 General information
Kakuzi Plc is incorporated in Kenya under the Kenyan Companies Act, 2015 as a public limited liability
company, and is domiciled in Kenya. The address of its registered office is:
Main Office
Punda Milia Road, Makuyu
P O Box 24
01000 THIKA
Kenya
The Company’s ordinary shares are listed on the Nairobi Securities Exchange and the London Stock
Exchange.
For Kenyan Companies Act, 2015 reporting purposes, the balance sheet is represented by the
statement of financial position and the profit or loss by the statement of profit or loss and other
comprehensive income, in these consolidated and separate financial statements.
Reference to, “the Group,” in the consolidated and separate financial statements covers the separate
Company financial statements as well. The principal activities of the Group comprise:
growing, packing and selling of avocados
growing, cracking and selling of macadamia nuts
the cultivation and sale of Tea green leaf
forestry development & sale of forestry products
Livestock farming, animal feed and sale of beef
Growing, packing and selling of blueberries
2 Accounting policies
The principal accounting policies applied in the preparation of these consolidated and separate
financial statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
(a) Statement of compliance
The consolidated and separate financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The measurement basis applied is the historical
cost basis, except where otherwise stated in the accounting policies below. The consolidated and
separate financial statements are presented in Kenya Shillings (Shs), rounded to the nearest
thousand.
The preparation of the consolidated and separate financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires the Directors to exercise judgement in
the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or where assumptions and estimates are significant to the consolidated and
separate financial statements, are disclosed in Note 3.
(b) Adoption of new and revised International Financial Reporting Standards (IFRS)
(i)
Relevant new standards and amendments to published standards effective for the year
ended 31 December 2020
Several new and revised standards and interpretations became effective during the year. The
Directors have evaluated the impact of their new standards and interpretations and none of
them had a significant impact on the Group’s financial statements.
33
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2
Accounting policies (continued)
(b) Adoption of new and revised International Financial Reporting Standards (IFRS) (continued)
(i) Relevant new standards and amendments to published standards effective for the year
ended 31 December 2020 (continued)
The following revised IFRSs were effective in the current year and the nature and the impact of
the relevant amendments are described below.
Covid-19-Related Rent Concessions Amendment to IFRS 16
In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16)
that provides practical relief to lessees in accounting for rent concessions occurring as a direct
consequence of COVID-19, by introducing a practical expedient to IFRS 16. The practical
expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession
is a lease modification. A lessee that makes this election shall account for any change in lease
payments resulting from the COVID-19-related rent concession the same way it would account
for the change applying IFRS 16 if the change were not a lease modification.
The practical expedient applies only to rent concessions occurring as a direct consequence of
COVID-19 and only if all of the following conditions are met:
a) The change in lease payments results in revised consideration for the lease that is
substantially the same as, or less than, the consideration for the lease immediately
preceding the change;
b)
Any reduction in lease payments affects only payments originally due on or before 30 June
2021 (a rent concession meets this condition if it results in reduced lease payments on or
before 30 June 2021 and increased lease payments that extend beyond 30 June 2021);
and
c)
There is no substantive change to other terms and conditions of the lease
In the current financial year, the Group has not applied the practical expedient included in the
amendment to IFRS 16 (as issued by the IASB in May 2020). There were no Covid-19 related
rent concessions in the current year and therefore the Group has not applied the amendments.
Amendments to References to the Conceptual Framework in IFRS Standards
The Group has adopted the amendments included in Amendments to References to the
Conceptual Framework in IFRS Standards for the first time in the current year. The amendments
include consequential amendments to affected Standards so that they refer to the new
Framework. Not all amendments, however, update those pronouncements with regard to
references to and quotes from the Framework so that they refer to the revised Conceptual
Framework. Some pronouncements are only updated to indicate which version of the
Framework they are referencing to (the IASC Framework adopted by the IASB in 2001, the
IASB Framework of 2010, or the new revised Framework of
2018) or to indicate that definitions in the Standard have not been updated with the new
definitions developed in the revised Conceptual Framework.
The Standards which are amended are IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34,
IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32. The adoption of the
amendments has not had any material impact on the disclosures or on the amounts reported in
these financial statements.
34
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(b) Adoption of new and revised International Financial Reporting Standards (IFRS) (continued)
(i)
Relevant new standards and amendments to published standards effective for the year
ended 31 December 2020 (continued)
Amendments to IAS 1 and IAS 8 Definition of material
The Group has adopted the amendments to IAS 1 and IAS 8 for the first time in the current year.
The amendments make the definition of material in IAS 1 easier to understand and are not
intended to alter the underlying concept of materiality in IFRS Standards. The concept of
'obscuring' material information with immaterial information has been included as part of the new
definition.
The threshold for materiality influencing users has been changed from 'could influence' to 'could
reasonably be expected to influence'. The definition of material in IAS 8 has been replaced by a
reference to the definition of material in IAS 1. In addition, the IASB amended other Standards
and the Conceptual Framework that contain a definition of 'material' or refer to the term ‘material’
to ensure consistency.
The adoption of the amendments has not had any material impact on the disclosures or on the
amounts reported in these financial statements.
(ii)
Impact of new and amended standards and interpretations in issue but not yet effective
At the date of authorization of these financial statements, the Group has not yet applied the
following new and revised IFRS Standards that have been issued but are not yet effective.
IFRS 17
IFRS 10 and IAS 28 (amendments)
Amendments to IAS 1
Amendments to IFRS 3
Amendments to IAS 16
Amendments to IAS 37
Annual Improvements to IFRS Standards
2018 – 2020 Cycle
Insurance Contracts
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
Classification of Liabilities as Current or Non-
current
Reference to Conceptual Framework
Property, Plant and Equipment – Proceeds
before Intended Use
Onerous Contracts – Cost of Fulfilling a Contract
Amendments to IFRS 1 First-time Adoption of
International Financial Reporting
Standards, IFRS 9 Financial Instruments, IFRS
16 Leases, and IAS 41 Agriculture
The directors do not expect that the adoption of the Standards listed above will have a material
impact on the financial statements of the Group in future periods, except as noted below:
Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
The amendments to IFRS 10 and IAS 28 deal with situations where there is a sale or contribution
of assets between an investor and its associate or joint venture. Specifically, the amendments
state that gains or losses resulting from the loss of control of a subsidiary that does not contain a
business in a transaction with an associate or a joint venture that is accounted for using the equity
method, are recognised in the parent’s profit or loss only to the extent of the unrelated investors’
interests in that associate or joint venture. Similarly, gains and losses resulting from the
remeasurement of investments retained in any former subsidiary (that has become an associate
or a joint venture that is accounted for using the equity method) to fair value are recognised in the
former parent’s profit or loss only to the extent of the unrelated investors’ interests in the new
associate or joint venture.
35
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(b) Adoption of new and revised International Financial Reporting Standards (IFRS) (continued)
(ii)
Impact of new and amended standards and interpretations in issue but not yet effective
(continued)
The effective date of the amendments has yet to be set by the Board; however, earlier application
of the amendments is permitted. The directors of the Group anticipate that the application of
these amendments may have an impact on the Group's consolidated financial statements in
future periods should such transactions arise.
Annual Improvements to IFRS Standards 2018–2020
The Annual Improvements include amendments to four Standards.
IFRS 1 First-time Adoption of International Financial Reporting Standards
The amendment provides additional relief to a subsidiary which becomes a first-time adopter later
than its parent in respect of accounting for cumulative translation differences. As a result of the
amendment, a subsidiary that uses the exemption in IFRS 1:D16(a) can now also elect to
measure cumulative translation differences for all foreign operations at the carrying amount that
would be included in the parent’s consolidated financial statements, based on the parent’s date of
transition to IFRS Standards, if no adjustments were made for consolidation procedures and for
the effects of the business combination in which the parent acquired the subsidiary. A similar
election is available to an associate or joint venture that uses the exemption in IFRS 1:D16(a).
The amendment is effective for annual periods beginning on or after 1 January 2022, with early
application permitted.
IFRS 16 Leases
The amendment removes the illustration of the reimbursement of leasehold improvements.
As the amendment to IFRS 16 only regards an illustrative example, no effective date is stated.
IAS 41 Agriculture
The amendment removes the requirement in IAS 41 for entities to exclude cash flows for taxation
when measuring fair value. This aligns the fair value measurement in IAS 41 with the
requirements of IFRS 13 Fair Value Measurement to use internally consistent cash flows and
discount rates and enables preparers to determine whether to use pretax or post-tax cash flows
and discount rates for the most appropriate fair value measurement.
The amendment is applied prospectively, i.e. for fair value measurements on or after the date an
entity initially applies the amendment.
The amendment is effective for annual periods beginning on or after 1 January 2022, with early
application permitted.
(iii) Early adoption of standards
The Group did not early-adopt any new or amended standards in the year ended 31 December
2020.
(c) Consolidation of subsidiaries
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
its subsidiaries. Control is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
36
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(c) Consolidation of subsidiaries
Basis of consolidation
The Company reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power
over the investee when the voting rights are sufficient to give it the practical ability to direct the
relevant activities of the investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s voting rights in an investee are
sufficient to give it power, including:
the size of the Company’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;
rights arising from other contractual arrangements; and
potential voting rights held by the Company, other vote holders or other parties;
any additional facts and circumstances that indicate that the Company has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be made,
including voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Specifically, income and expenses of
a subsidiary acquired or disposed of during the year are included in the consolidated statement
of profit or loss and other comprehensive income from the date the Company gains control until
the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners
of the Company and to the non-controlling interests. Total comprehensive income of
subsidiaries is attributed to the owners of the Company and to the non-controlling interests even
if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
(d) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Directors as the chief operating decision makers, who are responsible for allocating resources and
assessing performance of the operating segments and making strategic decisions.
(e) Revenue recognition
The Group recognises revenue mainly from sale of agricultural produce to the export and local
markets. Revenue is shown net of value added tax (VAT), returns, rebates and discounts.
Revenue is measured based on the consideration to which the Group expects to be entitled in a
contract with a customer and excludes amounts collected on behalf of third parties. The Group
recognises revenue when it transfers control of a product or service to a customer.
37
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(e) Revenue recognition (continued)
For the sale of agricultural produce to the export market, revenue is recognised when control of the
agricultural produce has been transferred to the final customer by selling agents. A receivable is
recognised by the Group upon the agents confirming that the agricultural produce has been
delivered to the final customer as this represents the point at which the right to consideration
becomes unconditional.
For the sale of agricultural produce to the local market, revenue is recognised when control of the
agricultural produce has transferred, being at the point the customer purchases the goods at the
retail outlet or the agricultural produce is delivered to the customer. Payment is due immediately at
the point the customer takes control of the agricultural produce.
Under the Group’s standard contract terms, customers do not have a right to return due to the
nature of the agricultural produce.
Payment with respect to revenue from agricultural produce is typically due upon acceptance of the
products. Contracts with customers do not have a significant financing component and there are
no variable considerations.
(f) Functional currency and translation of foreign currencies
(i) Functional and presentation currency
Items included in the consolidated and separate financial statements are measured using the
currency of the primary economic environment in which the entity operates (‘the functional
currency’). The financial statements are presented in Kenyan Shillings which is the consolidated
and separate functional currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency of the respective entity
using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the statement of profit or loss.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the income statement of comprehensive income within ‘interest and other income
or finance costs’.
(g) Property, plant and equipment
All categories of property, plant and equipment are initially recorded at historical cost and
subsequently stated at cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group or Company and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the income statement within ‘cost of production’ during the financial period
in which they are incurred.
Bearer plants are classified as immature until the produce can be commercially harvested and are
classified as capital work in progress. At that point they are reclassified to bearer plants and
depreciation commences. Immature plantations are measured at accumulated cost.
38
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(g) Property, plant and equipment (continued)
Freehold land is not depreciated. Depreciation on other assets is calculated using the straight line
method to write cost to their residual values over their estimated useful life as follows:
Buildings, dams and improvements
Plant and machinery
Motor vehicles, tractors, trailers & implements
Furniture, fittings and equipment
Bearer plants:
- Avocado trees
- Macadamia trees
- Pineapple crop
- Tea bushes
Capital work in progress is not depreciated
Immature period Estimated useful life
20 – 50 years
10 – 13 years
4 – 10 years
3 – 8 years
4 years
6 years
1 year
4 years
25 years
30 years
2 years
50 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
reporting date.
Property, plant and equipment are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised in the statement of profit or loss for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash-generating units).
Gains and losses on disposal of property, plant and equipment are determined by reference to their
carrying amounts and are taken into account in determining operating profit.
(h) Biological assets
Biological assets comprise forestry, livestock and growing agricultural produce on tea, avocado,
blueberries, and macadamia plantations.
Biological assets are measured on initial recognition at cost and subsequently at fair value less costs
to sell at each reporting date. Any gains or losses arising on initial recognition of biological assets
and from subsequent changes in fair value less costs to sell are recognised in the profit or loss in the
year in which they arise.
The fair value of livestock is determined based on market prices of livestock of similar age, breed
and genetic merit.
The tea bushes, avocado and macadamia trees, and blueberries crops are bearer plants and are
therefore presented and accounted for as property, plant and equipment (see note 2(g)). However,
the produce growing on these trees is accounted for as biological assets until the point of harvest.
Harvested produce is transferred to inventory at fair value less costs to sell.
Management has assessed the fair value of growing agricultural produce on avocado, macadamia,
blueberries and tea plantations using estimated market prices less costs to sell based on the
biological transformation of the produce at the reporting date.
The fair value of timber plantations and livestock is based on market prices as valued by external
independent valuers.
39
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(h) Biological assets (continued)
Purchases and development of biological assets include cost of planting, breeding and upkeep until
they mature, which are recognised as an expense in the profit or loss.
Subsequently all costs of upkeep and maintenance of mature biological assets are recognised as an
expense through profit or loss under cost of sales in the period in which they are incurred.
(i) Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. The
Group recognises a right of use asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets. For these leases, the Group recognises
the lease payments as an operating expense on a straight line basis over the term of the lease
unless another systematic basis is more representative of the time pattern in which the economic
benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be
readily determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprises of fixed lease
payments (including the substance fixed payments), less any lease incentives.
The lease liability is presented as a separate line in the statement of financial position. The lease
liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method and by reducing the carrying amount to reflect the lease
payments made.
The Group re-measures the lease liability (and makes a corresponding adjustment to the related
right-of-use asset) whenever:
the lease term has changed or there is a change in the assessment of exercise of a purchase
option, in which case the lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
the lease payments change due to changes in an index or rate or a change in expected
payment under a guaranteed residual value, in which cases the lease liability is remeasured by
discounting the revised lease payments using the initial discount rate (unless the lease
payments change is due to a change in floating interest rate, in which case a revised discount
rate is used).
a lease contract is modified and the lease modification is not accounted for as a separate lease,
in which case the lease liability is remeasured by discounting the revised lease payments using
a revised discount rate.
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease
payments made at or before the commencement day and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment loses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the
underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-
use asset reflects that the Group expects to exercise a purchase option, the related right-of-use
asset is depreciated over the useful life of the underlying asset. The depreciation starts at the
commencement date of the lease.
The right-of-use assets are presented as a separate line in the statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the ‘Property, plant and equipment’ policy.
40
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(i) Leases (continued)
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right-of-use asset. The related payments are recognised as an expense in the period
in which the event or condition that triggers those payments occurs and are included in the statement
of the profit or loss.
The Group as lessor
The Group enters into lease agreements as a lessor with respect to some of its buildings which comprise
less than 1% of total buildings.
Leases for which the Group is a lessor are classified as operating leases. Whenever the terms of the
lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified
as a finance lease. All other leases are classified as operating leases.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant
lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
(j) Inventories
Inventories are stated at the lower of cost and net realisable value.
Agricultural produce at the point of harvest is measured at fair value less costs to sell. Any changes
arising on initial recognition of agricultural produce at fair value less costs to sell are recognised in the
statement of comprehensive income in the year in which they arise.
The cost of other inventory is determined by the weighted average method. Net realisable value is the
estimate of the selling price in the ordinary course of business, less the costs of completion and selling
expenses.
Provisions for obsolete, damaged and unusable inventories are made based on inventory aged
listings.
(k) Payables
Payables are obligations to pay for goods and services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one
year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-
current liabilities.
Payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
(l) Share capital
Ordinary shares are classified as equity.
(m) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks and other short term
highly liquid investments with original maturities of three months or less.
(n) Financial instruments
Financial assets and financial liabilities are recognised on the consolidated and separate statement of
financial position when the Group becomes a party to the contractual provisions of the instrument.
Treasury and corporate bonds
The treasury and corporate bonds held by the Group are classified at amortised cost when they meet the
following criteria:
the financial asset is held within a business model whose objective is to hold financial assets in order
to collect contractual cash flows; and
41
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2
Accounting policies (continued)
(n) Financial instruments (continued)
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Trade receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. If collection is expected in one year or less (or in the normal operating
cycle of the business if longer), they are a classified as current assets. If not, they are presented as
non-current assets.
Receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method less provision for impairment. A provision for impairment of receivables is
established using an Expected Credit Losses (“ECL”) model in line with the requirements of IFRS 9 as
outlined in the next section below. The amount of the provision is the difference between the carrying
amount and the present value of estimated future cash flows, discounted at the effective interest rate.
The amount of the provision is charged to profit or loss.
Amortised cost and effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest income over the relevant period.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on investments in debt instruments
that are measured at amortised cost or at fair value through other comprehensive Income (“FVTOCI”),
lease receivables, trade receivables and contract assets. The amount of expected credit losses is
updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
financial instrument.
The Group always recognises lifetime ECL for trade receivables, contract assets and lease
receivables. The expected credit losses on these financial assets are estimated using a provision
matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to
the debtors, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a
significant increase in credit risk since initial recognition. However, if the credit risk on the financial
instrument has not increased significantly since initial recognition, the Company measures the loss
allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over
the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime
ECL that is expected to result from default events on a financial instrument that are possible within 12
months after the reporting date.
Impairment of financial assets (continued)
(i) Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial
recognition, the Group compares the risk of a default occurring on the financial instrument at the
reporting date with the risk of a default occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Group considers both quantitative and qualitative
information that is reasonable and supportable, including historical experience and forward‑ looking
information that is available without undue cost or effort.
42
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(n) Financial instruments (continued)
(ii) Definition of default
The Group considers the following as constituting an event of default for internal credit risk
management purposes as historical experience indicates that financial assets that meet either of the
following criteria are generally not recoverable:
when there is a breach of financial covenants by the debtor; or
information developed internally or obtained from external sources indicates that the debtor is
unlikely to pay its creditors, including the Group, in full (without taking into account any collateral
held by the Group).
Irrespective of the above analysis, the Group considers that default has occurred when a financial
asset is more than 90 days past due unless the Group has reasonable and supportable information to
demonstrate that a more lagging default criterion is more appropriate.
The Group write-offs debt only when there is objective evidence that the debt will not be recovered and
after it has exhausted its collection avenues.
(i) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default
(i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the
probability of default and loss given default is based on historical data adjusted by forward‑ looking
information as described above.
As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying
amount at the reporting date.
For financial assets, the expected credit loss is estimated as the difference between all contractual
cash flows that are due to the Group in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at the original effective interest rate.
The Group recognises an impairment gain or loss in profit or loss for all financial instruments with a
corresponding adjustment to their carrying amount through a loss allowance account.
(ii)
Interest income is recognised on a time proportion basis using the effective interest method.
(iii) Dividends are recognised as income in the period in which the right to receive payment is
established.
(o) Employee benefits
(i) Post employment benefits obligations
For unionised employees, the group has an unfunded obligation to pay terminal gratuities under its
Collective Bargaining Agreements with the union. Employees who resign after completing at least ten
years (Nandi Hills employees) or employees who retire and have completed at least five years (Makuyu
employees) of service are entitled to twenty one days pay (Nandi Hills employees) or eighteen days
(Makuyu employees) for each completed year of service respectively.
The liability recognised in the statement of financial position in respect of this defined benefit
scheme is the present value of the defined benefit obligation at the reporting date. The obligation is
estimated annually using the projected unit credit method by independent actuaries. The present
value is determined by discounting the estimated future cash outflows using interest rates of
government bonds. The currency and estimated term of these bonds is consistent with the currency
and estimated term of the post-employment benefit obligation. The obligation relating to employees
who have reached the minimum retirement age and completed the required years of service and
are still in employment are classified as payable within the next twelve months.
43
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(o) Employee benefits (continued)
(i) Post employment benefits obligations (continued)
Remeasurement of post employment benefit obligations arising from experience adjustments and
changes in actuarial assumptions are charged or credited to equity in other comprehensive income in
the period in which they arise.
The Group operates a defined contribution post-employment benefit scheme for management
employees. A defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. The Group has no legal or constructive obligations to pay further
contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to
employee service in the current and prior periods.
The assets of the defined contribution post-employment benefit scheme are held in a separate trustee
administered fund, which is funded by contributions from both the Group and the employees. The
Group and all its employees also contribute to the statutory National Social Security Fund, which is a
defined contribution scheme.
The Group’s contributions to both these defined contribution schemes are charged to the statement of
profit or loss within ‘cost of production’ in the year in which they fall due.
(ii) Other entitlements
The estimated monetary liability for employees’ accrued annual leave entitlement at the reporting
date is recognised as an expense accrual.
(p) Current and deferred income tax
The tax expense for the period comprises current and deferred income tax. Tax is recognised in the
statement of profit or loss except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity respectively.
(i) Current income tax
The current income tax charge is calculated on the basis of the tax enacted or substantively enacted
at the reporting date. Directors periodically evaluate positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
(ii) Deferred income tax
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying values in the financial statements.
Deferred income tax is determined using tax rates and laws that have been enacted or substantively
enacted at the reporting date and are expected to apply when the related deferred income tax liability
is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profits will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except where the timing of the reversal of the temporary difference is controlled by the
Group and it is probable that the temporary difference will not reverse in the foreseeable future.
44
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
2 Accounting policies (continued)
(p) Current and deferred income tax (continued)
(ii) Deferred income tax (continued)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
(q) Dividends
Dividends on ordinary shares are charged to equity in the period in which they are declared. Proposed
dividends are shown as a separate component of equity until declared (i.e. proposed dividend).
3 Critical accounting estimates, judgements and assumptions
The estimates and assumptions that have significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are addressed below:
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including experience of future events that are believed to be reasonable under the
circumstances.
(a) Critical accounting estimates and assumptions
(i) Bearer plants
Critical judgement has been made in determining the useful life and maturity period of the bearer
plants. The useful life of the bearer plant is based on experience and expected productivity of the
plant and the expected replanting schedules.
(ii) Biological assets
Critical assumptions are made by the Directors and the independent valuer in determining the fair
values of biological assets. The key assumptions relate to:
the market prices of livestock of similar age, breed and genetic merit will remain consistent
recent market transaction prices for forestry plantations will remain consistent.
(iii) Growing agricultural produce
Critical judgement has been made in determining the fair value of growing agricultural produce on
bearer plant. The key assumptions made in determination of fair value are:
the biological transformation process of the growing agricultural produce will remain
consistent to prior produce
the market price will remain constant based on estimated future market prices
the actual costs to sell will not change significantly from estimated costs
exchange rate will remain constant based on forecast exchange rate.
(iv) Post-employment benefits obligations
Critical assumptions are made by the actuary in determining the present value of the service
gratuities to non-management employees. The carrying amount of the provision and the key
assumptions made in estimating the provision are set out in Note 16.
45
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
3 Critical accounting estimates, judgements and assumptions (continued)
(b) Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the
reporting period that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are discussed below.
(i) Income taxes
Significant judgement is required in determining the Group’s provision for income taxes. There are
many transactions and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based
on estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the income
tax and deferred tax provisions in the period in which such determination is made.
(ii) Property, plant and equipment
Critical estimates are made by directors in determining the useful lives and residual values to
property, plant and equipment based on the intended use of the assets and the economic lives of
those assets. Subsequent changes in circumstances or prospective utilisation of the assets
concerned could result in the actual useful lives or residual values differing from initial estimates.
(iii) Leases
Judgement is required in determination of the appropriate rate to discount the lease payments and the
assessment of whether a right-of-use asset is impaired.
4
Financial risk management objectives and policies
The Group’s activities expose it to a variety of financial risks, including credit risk, liquidity risk, prices
for its agricultural produce, foreign currency exchange rates and interest rates. The Group’s overall
risk management programme focuses on the unpredictability of financial and agricultural markets and
seeks to minimise potential adverse effects on its financial performance, but the Group does not hedge
any risks.
Financial risk management is carried out by the finance department under policies approved by the
Board of Directors. These policies provide principles for overall risk management, as well as policies
covering specific areas such as foreign exchange risk, interest rate risk and credit risk.
The Group monitors closely the returns it achieves from its crops and considers replacing its biological
assets when yields decline with age or markets change. Further financial risk arises from changes in
market prices of key cost components. Such costs are closely monitored.
Market risk
(i) Foreign exchange risk
The Group and Company operates internationally and is exposed to foreign exchange risk arising
from various currency exposures, primarily with respect to the US dollar and Euro. Foreign
exchange risk arises from future commercial transactions, and recognised assets and liabilities.
The sensitivity analysis below have been determined based on the exposure to exchange rates for
financial assets and liabilities at the reporting date. A 5% increase or decrease is used when
reporting exchange
represents
management’s assessment of the reasonably possible change in exchange rates.
to key management personnel and
internally
rate
risk
46
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
4
Financial risk management objectives and policies (continued)
Market risk (continued)
(i) Foreign exchange risk (continued)
At 31 December 2020, if the Shilling was weaker/stronger by 5% (2019: 5%) against the US dollar with
all other variables held constant, the Group and Company post tax profit would have been Shs
40,569,000 (2019: Shs 15,132,000) higher/lower mainly as a result of US dollar deposits and trade
receivables.
At 31 December 2020 if the Shilling was weaker/stronger by 5% (2019: 5%) against the Euro with all
other variables held constant, the Group and Company post tax profit would have been Shs
27,413,000 higher/lower (2019: Shs 338,000).
At 31 December 2020 if the Shilling was weaker/stronger by 5% (2019: 5%) against the Sterling Pound
with all other variables held constant, the Group and Company post tax profit would have been Shs
1,380,000 higher/lower (2019: Shs 224,000).
At 31 December 2020 if the Shilling was weaker/stronger by 5% (2019: 5%) against the Australian
Dollar with all other variables held constant, the Group and Company post tax profit would have been
Shs 202,000 lower/ higher (2019: Shs 37,000).
There were no financial assets and liabilities denominated in South African Rands as at 31 December
2020. At 31 December 2019, If the Shilling was weaker/stronger by 5% against the South African Rand
with all other variables held constant, the Group and Company post tax profit would have been Shs
99,000 lower/ higher.
Below is a summary of the financial assets and liabilities at their carrying amounts.
USD
EUR
STG
AUD
Closing rate as at 31 Dec 2020
109.20
133.61
149.27
84.27
Cash and bank balances
Trade and other receivables
910,114
191,726
715,880
30,642
36,787
-
Total financial assets
1,101,840
746,522
36,787
-
-
-
Trade and other payables
19,993
15,521
Total financial liabilities
19,993
15,521
-
-
5,395
5,395
Closing rate as at 31 Dec 2019
101.35
113.76
134.26
71.24
USD
EUR
STG
AUD
ZAR
7.43
Total in
Shs’000
-
-
-
-
-
ZAR
7.25
1,662,781
222,368
1,885,149
40,909
40,909
Total in
Shs’000
Cash and bank balances
Trade and other receivables
388,818
51,627
20,116
6,355
46
6,346
Total financial assets
440,445
26,471
6,392
-
-
-
-
-
-
408,980
64,328
473,308
Trade and other payables
8,111
16,801
Total financial liabilities
8,111
16,801
-
-
1,072
2,832
28,816
1,072
2,832
28,816
47
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
4
Financial risk management objectives and policies (continued)
Market risk (continued)
(ii) Price risk
The Group and Company does not hold any financial instruments subject to price risk.
(iii) Interest rate risk
The Group and Company has interest earning deposits that are held at fixed interest rates and is
therefore not exposed to interest rate risk.
(iv) Commodity price risk
Commodity price risk in the Group primarily arises from price fluctuations and the availability of
avocado, tea and macadamia. The Group has not entered into derivative transactions to limit these
risks.
If the commodity prices had been 5% higher/(lower) as of December 2020, profit after tax would have
been Shs 196,803,000 (2019: Shs 155,189,000) higher/(lower).
Credit risk
Credit risk arises from deposits with banks, financial assets held at amortised cost as well as trade and
other receivables. The Group does not have any significant concentrations of credit risk. The Group
and Company has policies in place to ensure that sales are made to customers with an appropriate
credit history.
The amount that best represents the Group and Company’s maximum exposure to credit risk at
31 December 2020 is the carrying value of the financial assets in the statement of financial position.
The Group holds collateral amounting to Shs 34,238,000 (2019: Shs 44,090,000) in respect of staff
loans amounting to Shs 35,264,000 (2019: Shs 41,569,000) included in other receivables. The Group
and Company does not grade the credit quality of receivables. All receivables that are neither past due
or impaired are within their approved credit limits, and no receivables have had their terms
renegotiated.
The Group’s current credit risk grading framework comprises the following categories:
Category
Description
Performing
Doubtful
In default
Write off
The counterparty has a low risk of default and does
not have any past-due amounts
Amount is >30 days past due or there has been a
significant increase in credit risk since initial
recognition
Amount is >90 days past due or there is evidence
indicating the asset is credit-impaired
There is evidence indicating that the debtor is in
severe financial difficulty and the Group has no
realistic prospect of recovery
Basis
for
expected credit losses
recognising
12 – month ECL
Lifetime ECL – not credit
impaired
Lifetime ECL – credit-
impaired
Amount is written off
48
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
4
Financial risk management objectives and policies (continued)
Credit risk (continued)
The tables below detail the credit quality of the Group’s financial assets, as well as the Group’s maximum
exposure to credit risk by credit risk rating grades:
31/12/2020
Note
External
credit
rating
Internal
credit
rating
12-month or
lifetime
ECL
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
Trade
receivables
23
N/A Performing
Staff debtors
23
N/A Performing
Lifetime ECL
(simplified
approach)
Lifetime ECL
(simplified
approach)
Shs’000
Shs’000
Shs’000
251,981
(5,324)
246,657
35,264
-
35,264
Financial
assets held
at amortized
cost
21
B2
N/A
12-month
ECL
200,000
-
200,000
31/12/2019
Note
External
credit
rating
Internal
credit
rating
12-month or
lifetime
ECL
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
Trade
receivables
23
N/A Performing
Staff debtors
23
N/A Performing
Lifetime ECL
(simplified
approach)
Lifetime ECL
(simplified
approach)
Shs’000
Shs’000
Shs’000
29,555
(4,934)
24,621
41,569
-
41,569
Financial
assets held
at amortized
cost
Liquidity risk
21
B2
N/A
12-month
ECL
200,000
-
200,000
Prudent liquidity risk management includes maintaining sufficient cash balances, and the availability of
funding from an adequate amount of committed credit facilities. Due to the dynamic nature of the
underlying businesses, the finance department maintains flexibility in funding by maintaining
availability under committed credit lines.
Directors monitor rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.
49
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
4
Financial risk management objectives and policies (continued)
Liquidity risk (continued)
The table below analyses the Group and Company’s financial liabilities that will be settled on a net
basis into relevant maturity groupings based on the remaining period at the reporting date to the
contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted
cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting
is not significant.
Group
At 31 December 2020:
- Trade and other payables
At 31 December 2019:
- Trade and other payables
Company
At 31 December 2020:
- Trade and other payables
At 31 December 2019:
- Trade and other payables
Capital management
Less than 1
year
Shs’000
Between 1
and 2 years
Shs’000
Between 2
and 5 years
Shs’000
Over 5 years
Shs’000
226,607
181,711
-
-
-
-
-
-
Less than 1
year
Shs’000
Between 1
and 2 years
Shs’000
Between 2
and 5 years
Shs’000
Over 5 years
Shs’000
234,990
190,094
-
-
-
-
-
-
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and to maintain an optimal capital structure
to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may limit the
amount of dividends paid to shareholders.
The Group ensures that funds are available for capital developments by capping the dividends
payable. The dividends paid and proposed are shown in Note 12.
Fair value estimation
IFRS 13 requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
The fair value of financial instruments that are not traded in an active market (for example, over-the-
counter derivatives) is determined by using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
50
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
5 Segmental reporting - Group
Directors have determined the operating segments based on the reports reviewed by the Executive Directors to make strategic decisions.
The Group operates in two geographical areas in Kenya, Makuyu and Nandi Hills, and under several operating segments. The principal operating segments currently
consist of Avocados and Macadamia whose reported sales are greater than 10% of combined sales of all operating segments and Tea and Forestry whose assets are
more than 10% of combined assets of all operating segments. The business activities of livestock, joint projects and blueberries are included under “all other
segments” as they relate to agricultural operations and do not meet any set criteria for individual reportable segments. There is no single customer whose revenue
amounts to 10% or more of the Groups revenue. Intersegmental sales relate to sale of pallets and are transferred at arms-length.
The Group derives all revenues from contracts with customers for the transfer of goods at a point in time.
Segment assets consist primarily of property, plant and equipment, biological assets, inventories, receivables and prepayments. Unallocated assets are cash, financial
assets, property, plant and equipment, and inventories relating to Main Office and Engineering Stores. Segmental liabilities consist primarily of payables and accrued
expenses. Unallocated liabilities are taxes, payables, accrued expenses and non-current liabilities. The segment information for the reportable segments for the year
ended 31 December 2020 and 31 December 2019 is as follows:
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Tea
Avocados
Shs’000
Shs’000
Shs’000
Shs’000
Macadamia
Shs’000
Shs’000
Forestry
All other segments
Shs’000
Shs’000
Shs’000
Shs’000
Consolidated
Shs’000
Shs’000
Sales
Sales to external customers
Intersegmental Sales
245,801
-
202,390
-
2,311,063 1,861,707
-
-
654,791
-
502,423
-
272,975
13,468
204,508
8,983
110,843
-
108,651
-
3,595,473
13,468
2,879,679
8,983
Total Sales
245,801
202,390
2,311,063
1,861707
654,791
502,423
286,443
213,491
110,843
108,651
3,608,941
2,888,662
Comprising
Major external customers sales
All other external customers sales
Intersegmental Sales
Geographical analysis
UK & Continental Europe
Kenya
Others
245,801
-
-
202,390
-
-
2,210,502 1,813,562
48,145
-
100,561
-
629,269
25,522
-
472,472
29,951
-
-
286,443
13,468
-
213,491
8,983
-
110,843
-
-
108,651
-
3,085,572
509,901
13,468
2,488,424
391,255
8,983
245,801
202,390
2,311,063
1,861,707
654,791
502,423
286,443
213,491
110,843
108,651
3,608,941
2,888,662
-
245,801
-
-
202,390
-
2,210,502 1,813,562
48,145
-
100,561
-
-
25,522
629,269
-
29,951
472,472
-
286,443
-
-
213,491
-
-
110,843
-
-
108,651
-
2,210,502
769,170
629,269
1,813,562
602,628
472,472
245,801
202,390
2,311,063 1,861,707
654,791
502,423
286,443
213,491
110,843
108,651
3,608,941
2,888,662
51
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
5 Segmental reporting - Group (continued)
2020
2019
2020
2019
2020
2019
Tea
Avocados
Macadamia
2020
Forestry
2019
2020
2019
2020
2019
All other segments
Consolidated
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Shs’000
Profit/(loss)
Gross profit /(loss) before depreciation
and fair value changes in non-current
biological assets and intersegmental
purchases
Intersegmental purchases
Depreciation charge
Changes in fair value of non-current
biological assets
Gross profit/(loss)
Selling and distribution costs
Segment profit
Other income
Interest and other income
Finance costs
Unallocated admin expenditure
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Assets (all located in Kenya)
Segment assets
Unallocated assets
Liabilities
Segment liabilities
Unallocated liabilities
Additions
Property, plant and equipment
Biological assets
(16,937 )
-
(14,945 )
125,155 1,712,061 1,427,657
(8,983 )
(13,468 )
(73,616 )
(99,003 )
-
(14,590 )
506,788
-
(75,028 )
326,367
-
(65,750 )
77,962
13,468
(4,824 )
66,116
8,983
(4,793 )
(63,341 )
-
(40,170 )
(52,745 )
-
(38,354 )
2,216,533
-
(233,970 )
1,892,550
-
(197,103 )
-
(31,882 )
-
(31,882 )
5,889
-
-
-
(25,993 )
6,915
(19,078 )
-
-
-
110,565 1,599,590 1,345,058
(511,772 )
(831,840 )
833,286
767,750
-
-
-
-
-
-
-
-
833,286
767,750
(247,272 )
(207,811 )
586,014
559,939
-
110,565
5,602
-
-
-
116,167
(34,472 )
81,695
-
431,760
(19,249 )
412,511
-
-
-
-
412,511
(106,334 )
306,177
-
260,617
(19,249 )
241,368
-
-
-
-
241,368
(71,624 )
169,744
22,100
108,706
-
108,706
-
-
-
-
108,706
(28,923 )
79,783
31,161
101,467
-
101,467
-
-
-
-
101,467
(30,110 )
71,357
35,713
(67,798 )
(259 )
(68,057 )
25,665
145,059
(33 )
(518,076 )
(415,442 )
110,655
(304,787 )
52,253
(38,846 )
(259 )
(39,105 )
14,974
117,021
(7,516 )
(363,185 )
(277,811 )
82,440
(195,371 )
57,813
2,040,376
(851,348 )
1,189,028
31,554
145,059
(33 )
(518,076 )
847,532
(225,498 )
622,034
83,414
1,778,861
(531,280 )
1,247,581
20,576
117,021
(7,516 )
(363,185 )
1,014,477
(301,038 )
713,439
966,025
610,131 1,504,886 1,461,554 1,703,236 1,197,630
758,948 1,070,039
567,774
384,585
53,122
19,259
-
-
-
-
-
-
-
167,627
5,500,869
1,405,947
6,906,816
4,723,939
1,737,096
6,461,035
53,122
1,287,245
1,340,367
186,886
1,055,824
1,242,710
7,749
-
7,749
246
-
246
169,353
-
169,353
232,092
-
232,092
98,617
-
98,617
134,637
-
134,637
601
17,439
18,040
1,239
18,727
19,966
72,659
-
72,659
41,252
-
41,252
348,979
17,439
366,418
409,466
18,727
428,193
52
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
5 Segmental reporting - Group (continued)
*Avocados
Smallholder and Outgrowers Hass Avocados
Included in the segment ‘Avocados’ above is trading with smallholders and outgrowers as follows:
Number of cartons exported
Number of cartons sold
Gross Export sales
Selling and distribution costs
Net Export sales
Local sales
Packing expenses
Closing stock
Net return
2020
152,202
154,858
Shs’000
132,709
(55,716)
76,993
9,254
(17,874)
-
68,373
2019
185,534
182,880
Shs’000
189,585
(66,505)
123,080
6,265
(20,806)
1,687
110,226
Paid to smallholders and outgrowers
(85%)
(57,948)
(85%)
(93,548)
Trading profit
Extension services expenses
10,425
(5,071)
16,678
(4,386)
Profit before income tax
5,354
12,292
53
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6 Biological assets – Group and Company
(i) Non current assets
Changes in carrying amounts of non-current biological assets comprise:
Livestock
Shs’000
Plantation
Shs’000
Total
Shs’000
Year ended 31 December 2020
At start of year
Increase due to purchases and development
Gains arising from changes in fair value less costs
to sell due to physical change and price changes
Decrease due to harvest and sales
145,076
-
35,713
(35,125)
570,300
17,439
22,100
(27,340)
715,376
17,439
57,813
(62,465)
At end of year
145,664
582,499
728,163
Year ended 31 December 2019
At start of year
Increase due to purchases and development
Gains arising from changes in fair value less costs
to sell due to physical change and price changes
Decrease due to harvest and sales
128,552
-
52,253
(35,729)
555,650
18,727
31,161
(35,238)
684,202
18,727
83,414
(70,967)
At end of year
145,076
570,300
715,376
There are no biological assets whose title is restricted or pledged as security for liabilities as at 31 December
2020 (2019: Nil).
There were no commitments for development or acquisition of biological assets as at 31 December 2020
(2019: Nil).
(ii) Current assets
Growing agricultural produce on bearer plants as at the reporting date
Avocado – Hass
Avocado - Pinkerton
Total Avocado
Macadamia
Tea
At end of year
54
2020
2019
Shs’000 Shs’000
170,293
96,653
103,567
44,799
266,946
95,852
1,972
148,366
68,932
2,681
364,770
219,979
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6 Biological assets – Group and Company (continued)
Biological assets are carried at fair value less costs to sell at the end of each reporting period.
Plantations comprise forestry. The fair value of forestry is determined by external independent valuation
based on recent market transaction prices.
The fair value of livestock is determined based on market prices of livestock of similar age, breed and
genetic merit.
The fair value of growing agricultural produce is estimated using the market approach. The key
assumptions made in the determination of the fair value are:
climatic conditions will remain the same and hence productivity will be similar to prior years
the biological transformation process of the growing agricultural produce will remain consistent to prior
produce
the market price will remain constant based on estimated future market prices
the actual costs to sell will not change significantly from estimated costs
exchange rate will remain constant based on forecast exchange rate.
The following table presents Group’s biological assets that are measured at fair value:
Level 1
Level 2
Level 3
Total
Valuation
technique
Shs’000
Shs’000
Shs’000
Shs’000
Year ended 31 December
2020
Livestock
Avocado
Tea
Forestry
Macadamia
Market approach
Market approach
Market approach
Market approach
Market approach
Year ended 31 December
2019
Livestock
Avocado
Tea
Forestry
Macadamia
Market approach
Market approach
Market approach
Market approach
Market approach
-
-
-
-
-
-
-
-
-
-
-
-
145,664
-
1,972
582,499
-
-
266,946
-
-
95,852
145,664
266,946
1,972
582,499
95,852
730,135
362,798
1,092,933
145,076
-
2,681
570,300
-
-
148,366
-
-
68,932
145,076
148,366
2,681
570,300
68,932
718,057
217,298
935,355
There were no transfers between any levels during the year.
55
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6 Biological assets – Group and Company (continued)
The following unobservable inputs at the respective year ends were used to measure the Group’s Hass avocado growing agricultural produce classified as
level 3 of fair value hierarchy.
Year ended 31 December 2020
Description
Fair value at
31 December
Valuation
techniques
Unobservable
inputs
Shs’000
Avocado
Produce
170,293 Market approach Yield - Kgs
per Hectare
Range of
unobservable
inputs
Relationship of
unobservable inputs to fair value
15,799 - 16,630 The higher the yield, the higher the value
Net price per
carton
Stage of growth
Exchange rate
€5.69 - €5.99
The higher the market price, the higher the fair value
KShs126.9 - KShs133.6 for
The higher the exchange rate, the higher the fair vale
12% - 15% The higher the stage of growth, the higher the fair value
€1
Year ended 31 December 2019
Description
Fair value at
31 December
Valuation
techniques
Unobservable
inputs
Avocado
Produce
Shs’000
103,567 Market approach Yield - Kgs
per Hectare
Range of
unobservable
inputs
Relationship of
unobservable inputs to fair value
17,157 - 18,060 The higher the yield, the higher the value
Net price per
carton
Stage of growth
Exchange rate
€4.56 - €4.80
The higher the market price, the higher the fair value
12% - 15% The higher the stage of growth, the higher the fair value
The higher the exchange rate, the higher the fair value
KShs108.1 - KShs113.8
for €1
56
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6 Biological assets – Group and Company (continued)
The following unobservable inputs at the respective year ends were used to measure the Group’s Pinkerton avocado growing agricultural produce classified
as level 3 of fair value hierarchy.
Year ended 31 December 2020
Description
Fair value at
31 December
Valuation
techniques
Unobservable
inputs
Shs’000
Avocado
Produce
96,653 Market approach Yield - Kgs
per Hectare
Range of
unobservable
inputs
Relationship of
unobservable inputs to fair value
16,749 - 17,630 The higher the yield, the higher the value
Net price per
carton
Stage of growth
Exchange rate
€4.78 - €5.03
The higher the market price, the higher the fair value
82% - 85% The higher the stage of growth, the higher the fair value
KShs126.9 - KShs133.6
The higher the exchange rate, the higher the fair vale
for €1
Year ended 31 December 2019
Description
Fair value at
31 December
Valuation
techniques
Unobservable
inputs
Shs’000
Avocado
Produce
44,799 Market approach Yield - Kgs
per Hectare
Range of
unobservable
inputs
Relationship of
unobservable inputs to fair value
18,791 - 19,780 The higher the yield, the higher the value
Net price per
carton
Stage of growth
Exchange rate
€4.27 - €4.49
The higher the market price, the higher the fair value
82% - 85% The higher the stage of growth, the higher the fair value
The higher the exchange rate, the higher the fair value
KShs108.1 - KShs113.8
for €1
57
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6
Biological assets – Group and Company (continued)
The following unobservable inputs at the respective year ends were used to measure the macadamia growing agricultural produce classified as level 3 of
fair value hierarchy.
Year ended 31 December 2020
Description
Fair value at
31 December
Valuation
techniques
Unobservable
inputs
Shs’000
95,852
Macadamia
Produce
Range of
unobservable
inputs
Relationship of
unobservable inputs to fair value
Market approach Yield Kgs/Ha
609 - 641 The higher the yield, the higher the value
Net price per kg of
Saleable Kernel
Stage of growth -
Early season crop
Stage of growth -
Late season crop
Exchange rate
USD14.14 - USD14.88 The higher the market price, the higher the fair value
53% - 56% The higher the stage of growth, the higher the fair
value
0% The higher the stage of growth, the higher the fair
KShs103.74 - KShs109.2
for 1 USD
value
The higher the exchange rate, the higher the fair vale
Year ended 31 December 2019
Description
Fair value at
31 December
Valuation
techniques
Unobservable
inputs
Shs’000
68,932
Macadamia
Produce
Range of
unobservable
inputs
Relationship of
unobservable inputs to fair value
Market approach Yield Kgs/Ha
599 - 630 The higher the yield, the higher the value
Net price per kg of
Saleable Kernel
Stage of growth -
Early season crop
Stage of growth -
Late season crop
Exchange rate
USD15.92 - USD16.76 The higher the market price, the higher the fair value
53% - 56% The higher the stage of growth, the higher the fair
value
0% The higher the stage of growth, the higher the fair
KShs96.28 - KShs101.35
for 1 USD
58
value
The higher the exchange rate, the higher the fair value
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6
Biological assets – Group and Company (continued)
Changes in carrying amounts of agricultural produce on bearer plants as at reporting date comprise:
Year ended 31 December 2020
At start of year
Increase due to purchases and development
Decrease due to harvest and sales
Gains/ (losses) arising from changes in fair value less estimated
point-of-sale costs
Group & Company
Avocado
Shs’000
Macadamia
Shs’000
Tea Blueberries
Shs’000
Shs’000
Total
Shs’000
148,366
325,338
(325,338 )
118,581
68,932
202,912
(202,912)
26,919
2,681
261,396
(261,396)
(709)
-
29,944
(29,944)
-
219,979
819,590
(819,590)
144,791
At end of year
266,947
95,851
1,972
-
364,770
Year ended 31 December 2019
At start of year
Increase due to purchases and development
Decrease due to harvest and sales
Gains arising from changes in fair value less estimated
point-of-sale costs
128,644
294,284
(294,284 )
57,708
1 50,024
(150,024)
2,401
185,640
(185,640)
-
25,238
(25,238)
188,753
655,186
(655,186)
19,722
11,224
280
-
31,226
At end of year
148,366
68,932
2,681
-
219,979
Gains/ (losses) arising from changes in fair value less estimated point-of-sale costs of growing agricultural produce have been recognised in the
statement of profit or loss.
59
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6 Biological assets – Group and Company (continued)
Areas planted at the year end:
Forestry plantations
Cattle numbers at the year end
Areas planted with various crops and
output of agricultural produce during the
year:
Tea (green leaf)
Avocado
Blueberries
Macadamia
2020
Hectares
2019
Hectares
1,843
1,834
Head
4,529
Head
4,396
2020
Hectares
2019
Hectares
2020
Metric tonnes
2019
Metric tonnes
510
882
10
1,032
510
797
10
1,032
7,892
10,894
13
1,446
5,590
7,145
4
1,248
Cubic metres
Cubic metres
Timber harvested during the year was:
7,211
7,552
Agricultural produce of tea bushes is the harvested green leaf which is processed soon after harvest in a
factory to made tea. Timber is included under inventory.
60
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
6 Biological assets – Group and Company (continued)
Fair value of the agricultural produce harvested during the year after
deducting costs to sell:
Tea (green leaf)
Avocado
Blueberries
Macadamia
Others
Other agricultural produce relates to forestry and livestock operations.
7 Other income – Group and Company
Net foreign exchange gain other than cash and cash equivalents
Gain on disposal of property, plant and equipment
Rental Income
Sundry
Sundry relates to income from sale of timber and other miscellaneous sales.
8
Interest and other income and finance costs - Group and Company
Interest and other income
Interest income on short term bank deposits
Net exchange gains on foreign currency cash & cash equivalent
Finance costs
Interest on lease liabilities
Net exchange losses on foreign currency cash & cash equivalents
2020
Shs’000
2019
Shs’000
245,801
1,418,201
7,587
645,420
325,587
202,390
1,221,452
2,311
483,543
278,633
2,642,596
2,188,329
2020
Shs’000
2019
Shs’000
7,119
1,958
6,401
16,076
1,232
1,658
3,890
13,796
31,554
20,576
2020
Shs’000
2019
Shs’000
79,701
65,358
117,021
-
145,059
117,021
33
-
33
7,483
33
7,516
Net interest income and finance costs
145,026
109,505
61
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
9 Expenses by nature – Group and Company
The following items have been charged/ (credited) in arriving at profit before income tax:-
Cost of inventories sold
Employee benefits expense (Note 10)
Depreciation on property, plant and equipment (Note 18)
Repairs and maintenance expenditure on property, plant and
equipment
Exceptional legal expenses (Note (a) below)
Directors remuneration
Auditor’s remuneration
Depreciation of right of use assets (Note 19)
Gain on disposal of property plant and equipment
Gains arising from changes in fair value less costs to sell of non-current
biological assets (Note 6 (i))
2020
Shs’000
1,575,535
790,712
233,970
156,566
137,481
11,917
6,554
446
(1,958)
2019
Shs’000
1,256,499
697,437
197,103
83,882
-
9,707
6,395
10
(1,658)
(57,813)
(83,414)
(a) The exceptional legal expenses are legal costs incurred both in Kenya and the UK by the Company
defending itself from legal claims brought against it (together with the Parent Company and certain
fellow UK subsidiaries) by a UK law firm which wanted to bring the Company into the jurisdiction of the
United Kingdom. The Company was dropped as a party to these UK proceedings in July 2020.
10 Employee benefits expense – Group and Company
The following items are included within employee benefits expense:
Salaries and wages
Post employment benefits costs:
- Post employment benefit obligations (Note 16)
- Defined contribution pension scheme
- National Social Security Fund
The average number of employees during the year was as follows:
Management
Permanent unionisable employees
Other unionisable employees
62
2020
Shs’000
2019
Shs’000
756,515
659,443
22,562
4,380
7,255
19,141
6,349
12,504
790,712
697,437
2020
64
1,018
2,678
2019
63
756
2,188
3,760
3,007
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
11
Income tax – Group and Company
(a) Taxation charge
Current tax
Current tax on profit for the year
Deferred income tax
Deferred income tax charge for the year
Prior year under provision
2020
Shs’000
2019
Shs’000
154,131
187,491
71,323
44
113,547
-
Total deferred income tax expense (Note 15)
71,367
113,547
Income tax expense
225,498
301,038
(b) Reconciliation of tax based on accounting profit to tax charge
The tax on the Group’s and Company’s profit before income tax differs from the theoretical amount that
would arise using the statutory income tax rate as follows:
Profit before income tax
Tax calculated at the statutory income tax rate of 25%
(2019: 30%)
Tax effect of:
Income not subject to income tax
Expenses not deductible for income tax purposes
Effect of change in the tax rate
Under provision of deferred tax in prior years
2020
Shs’000
2019
Shs’000
847,532
1,014,477
211,883
304,343
(6,294 )
7,977
11,888
44
(9,305 )
6,000
-
-
Taxation charge
225,498
301,038
On 25 March 2020, the Kenyan government announced tax measures in response to the COVID-19 and
on April 25, 2020, the Income tax Act amended Paragraph 2(a) Head B of the Third Schedule to the
Income Tax Act by reducing the corporate income tax rate to 25% from the previous 30%.
(c) Group and Company tax charge relating to components of other comprehensive income
Remeasurement of post-employment benefit obligations:
Actuarial gain (Note 16)
Charge to other comprehensive income (Note 15)
700
(210 )
16,872
(5,062 )
2020
Shs’000
2019
Shs’000
Net charge to other comprehensive income
490
11,810
63
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
11
Income tax – Group and Company (Continued)
(d) Current tax (recoverable)/payable
Group
Company
2020
Shs’000
2019
Shs’000
2020
Shs’000
2019
Shs’000
At start of year
Taxation charge (Note 11 (a))
Paid during the year
35,355
154,131
(209,150 )
(81,582 )
187,491
(70,554 )
35,408
154,131
(209,150 )
(81,529 )
187,491
(70,554 )
At end of year
(19,664 )
35,355
(19,611 )
35,408
12 Earnings and dividends – Group
i) Basic and diluted earnings per ordinary share
Basic earnings per ordinary share is calculated on the profit attributable to the members of Kakuzi Plc
and on the 19,599,999 ordinary shares in issue at 31 December 2020 and 31 December 2019 as
follows:-
2020
2019
Profit attributable to equity holders of the Group (Shs ‘000)
622,034
713,439
Number of ordinary shares in issue (thousands)
19,600
19,600
Basic and diluted earnings per ordinary share (Shs)
31.74
36.40
The Group had no potentially dilutive ordinary shares outstanding at 31 December 2020 and 31
December 2019.
ii) Dividends per ordinary share
At the annual general meeting to be held on 18 May 2021, the Directors will recommend the payment of
a first and final dividend of 360% (2019: 280%) of par value equivalent to Shs 18.00 per ordinary share
(Shs 352,800,000 in respect of the year ended 31 December 2020 ((2019: Shs 14.00 per ordinary
share) (Shs 274,400,000))((2018: Shs 9.00 per ordinary shares (Shs 176,400,000)).
13 Share capital
Authorised
At 1 January 2019, 31 December 2019 and 31 December 2020
Number of
ordinary
shares
(Thousands)
Ordinary
share capital
Shs ‘000
20,000
100,000
Issued
At 1 January 2019, 31 December 2019 and 31 December 2020
19,600
98,000
The par value of the shares is Shs 5
64
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
14 Borrowing facilities – Group and Company
2020
Shs’000
2019
Shs’000
The Group has the following undrawn committed borrowing facilities:
Floating rate (expiring within one year)
426,300
426,300
The facilities are subject to annual review at various dates during the year 2021.
The undrawn bank facilities of Shs 426,300,000 are secured by an undertaking, at any time if and when
required by the banks, to execute legal or other mortgages and charges including fixed or floating
charges or assigned in favour of the banks.
15 Deferred income tax – Group and Company
Deferred income tax is calculated using the enacted tax rate of 30% (2019: 30%). The net deferred
taxation liability is attributable to the following items:
Property, plant and equipment
Biological assets
Other temporary differences
2020
Shs’000
755,908
284,181
(36,346)
2019
Shs’000
742,482
237,084
(47,400)
Net deferred income tax liability
1,003,743
932,166
The movement on the deferred income tax account is as follows:
At start of year
Charge to profit or loss (Note 11(a))
Charge to other comprehensive income (Note 11(c))
2020
Shs’000
932,166
71,367
210
2019
Shs’000
813,557
113,547
5,062
At end of year
1,003,743
932,166
The following amounts, determined after appropriate offsetting, are shown in the statement of financial
position.
Deferred income tax assets
Deferred income tax liabilities
65
2020
Shs’000
(36,346 )
1,040,089
2019
Shs’000
(47,400 )
979,566
1,003,743
932,166
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
16 Post employment benefit obligations – Group and Company
The amounts recognised in the statement of financial position are determined as follows:
2020
Shs’000
2019
Shs’000
Present value of post employment benefit obligations
109,585
93,066
Split as follows:
Non-current portion
Current portion
76,354
33,231
74,500
18,566
The movement in present value of the post employment benefit obligations is as follows:
At start of year
Net expense recognised in statement of profit or loss and other
comprehensive income
Benefits paid
At end of year
2020
Shs’000
2019
Shs’000
93,066
95,233
21,862
(5,343 )
2,269
(4,436 )
109,585
93,066
The amounts recognised in the statement of profit or loss within ‘cost of sales’ for the year are as
follows:
Current service cost
Past service cost
Interest on obligation
2020
Shs’000
5,537
4,554
12,471
2019
Shs’000
6,230
10
12,901
Total included in employee benefits expenses (Note 10)
22,562
19,141
Actuarial gain recognised in other comprehensive income (Note 11(c))
700
16,872
66
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
16 Post employment benefit obligations Group and Company (continued)
31 December 2020
31 December 2019
Gratuity
(Makuyu)
Shs’000
Gratuity (Nandi
Hills)
Shs’000
Total
Shs’000
Gratuity
(Makuyu)
Shs’000
Gratuity (Nandi
Hills)
Shs’000
Total
Shs’000
At start of year
70,632
22,434
93,066
67,178
28,055
95,233
Current service cost
Past service cost
Interest expense
4,247
4,554
9,548
1,290
-
2,923
5,537
4,554
12,471
4,520
-
9,169
1,710
10
3,732
6,230
10
12,901
18,349
4,213
22,562
13,689
5,452
19,141
Remeasurements:
Losses/(gains) from change in assumptions
Experience (gains)/losses
490
(558 )
(28 )
(604 )
462
(1,162 )
(7,402 )
(506 )
(7,915 )
(1,049 )
(15,317 )
(1,555 )
(68 )
(632 )
(700 )
(7,908 )
(8,964 )
(16,872 )
Benefits paid
At end of year
(2,859 )
(2,484 )
(5,343 )
(2,327 )
(2,109 )
(4,436 )
86,054
23,531
109,585
70,632
22,434
93,066
67
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
16 Post employment benefit obligations Group and Company (continued)
The principal actuarial assumptions used are as follows:
Discount rate (% p.a.)
Future salary increases (% p.a.)
first year
second year
Thereafter
Gratuity (Makuyu)
Gratuity (Nandi Hills)
2020
13.3%
10%
7.5%
7.5%
2019
13%
7.5%
7.5%
7.5%
2020
13.3%
10%
7.5%
7.5%
2019
13%
7.5%
7.5%
7.5%
Mortality (pre-retirement)
A 1949 - 1952
A 1949 - 1952
A 1949 - 1952
A 1949 - 1952
Withdrawals
Ill-Health
At rates consistent with similar
arrangements
At rates consistent with
similar arrangements
At rates consistent with
similar arrangements
At rates consistent with similar
arrangements
At rates consistent with similar
arrangements
At rates consistent with
similar arrangements
At rates consistent with
similar arrangements
At rates consistent with similar
arrangements
Retirement age
55 years
55 years
60 years
60 years
The sensitivity of the defined obligation to changes in the weighted principal assumptions is:
Impact on post employment benefit obligation
Changes in assumption
Increase/Decrease
in assumption
Discount rate
Salary growth rate
by 1%
by 1%
Shs 5,009,000
Not material
68
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
16 Post employment benefit obligations Group and Company (continued)
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and
changes in some of the assumptions may be correlated. When calculating the sensitivity of the post employment benefit obligation to significant actuarial assumptions
the same method (present value of the post employment benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the liability recognised within the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.
Five year summary:
2020
Shs’000
2019
Shs’000
2018
Shs’000
2017
Shs’000
2016
Shs’000
Present value of post employment benefit obligations – Group and Company
109,585
93,066
95,233
85,166
76,492
Net expense/(income) recognised in the statement of profit or loss and other comprehensive
income – Group and Company
- within ‘cost of sales’
- within ‘other comprehensive income/(loss)
22,562
(490 )
19,141
(11,810 )
17,277
(3,046 )
16,065
(1,735 )
15,116
(5,936 )
Characteristics and Risks of the post-employment benefit obligation:
The post-employment benefit obligation is an unfunded obligation to pay terminal gratuities under its Collective Bargaining Agreements with the union. Therefore one
of the main risks relating to the benefits under the Scheme is the rate of salary growth. As the benefits are based on the final salary, any changes in salary that differ
from the salary escalation rate assumed will have a direct bearing on the benefits paid and the present value of the benefit obligation under the scheme. The
Company’s experience with respect to pre-retirement exit experience, actual ages of retirement and mortality will also impact the benefits payable under the Scheme,
when compared with the assumption made.
69
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
17 Lease obligations – Group and Company
The movement in the lease liabilities is as follows:
Balance at 1 January
Interest on lease liabilities
Lease payments
Amounts due for settlement within 12 months
Amounts due for settlement after 12 months
Year 1
Year 2
Year 3
Year 4
Year 5
Onwards
2020
Shs’000
2019
Shs’000
412
33
(13)
379
33
-
432
412
59
373
432
59
26
24
23
21
279
432
31
381
412
31
28
26
24
23
280
412
The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are
monitored within the company’s treasury function. All lease obligations are denominated in Kenya Shillings.
70
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
18 Property, plant and equipment
Group and Company
Year ended 31 December 2020
Cost
At start of year
Transfers
Additions
Disposals
At end of year
Depreciation and impairment
At start of year
Charge for the year
Eliminated on disposals
At end of year
Net book amount
Depreciation and impairment at year end
comprises:
Depreciation
Impairment
Buildings,
freehold land,
dams and
improvements
Shs’000
Plant &
machinery
Shs’000
Bearer plants
Shs’000
Motor
vehicles,
tractors,
trailers and
implements
Shs’000
Furniture,
fittings and
equipment
Shs’000
Capital work
in progress
Shs’000
Total
Shs’000
1,350,977
63,652
-
-
1,639,426
87,606
139,591
(1,366 )
1,414,629
1,865,257
299,298
68,797
-
368,095
579,578
74,026
-
653,604
345,000
11,417
54,661
(123 )
410,955
185,795
53,347
(123 )
239,019
331,760
-
33,238
(12,873 )
352,125
220,049
27,406
(8,043 )
239,412
153,178
-
8,439
(197 )
161,420
92,718
10,394
(139 )
102,973
470,331
(162,675 )
113,050
-
4,290,672
-
348,979
(14,559 )
420,706
4,625,092
-
-
-
-
1,377,438
233,970
(8,305 )
1,603,103
1,046,534
1,211,653
171,936
112,713
58,447
420,706
3,021,989
368,095
-
368,095
653,604
-
653,604
239,019
-
239,019
239,412
-
239,412
102,973
-
102,973
-
-
-
1,603,103
-
1,603,103
Property, plant and equipment stated at cost of Shs 513,347,817 have been fully depreciated. The notional annual depreciation charge in respect of these values
would have been Shs 61,782,521. There were no items of property, plant and equipment whose title were restricted or pledged as security for liabilities as at 31
December 2020 (2019: none).
Based on an impairment review performed by the Directors at 31 December 2020, no indication of further impairment of property, plant and equipment were identified
(2019: none).
Capital work-in-progress largely relates to self-constructed assets that had not been brought into use as at year end and bearer plants that have not yet matured.
71
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
18 Property, plant and equipment (continued)
Group and Company
Year ended 31 December 2019
Cost
At start of year
Transfers
Additions
Disposals
At end of year
Depreciation and impairment
At start of year
Charge for the year
Eliminated on disposals
At end of year
Net book amount
Depreciation and impairment at year end
comprises:
Depreciation
Impairment
Buildings,
freehold land,
dams and
improvements
Shs’000
Plant &
machinery
Shs’000
Bearer plants
Shs’000
1,318,912
100,873
-
(68,808 )
1,356,116
139,450
143,880
(20 )
1,350,977
1,639,426
301,154
66,952
(68,808 )
299,298
518,388
61,210
(20 )
579,578
1,051,679
1,059,848
299,298
-
299,298
573,907
5,671
579,578
292,347
26,156
26,497
-
345,000
160,812
24,983
-
185,795
159,205
185,237
558
185,795
Motor
vehicles,
tractors,
trailers and
implements
Shs’000
308,671
1,589
34,359
(12,859 )
331,760
197,674
30,584
(8,209 )
220,049
Furniture,
fittings and
equipment
Shs’000
Capital work
in progress
Shs’000
Total
Shs’000
111,223
21,880
20,770
(695 )
153,178
80,039
13,374
(695 )
92,718
576,319
(289,948 )
183,960
-
3,963,588
-
409,466
(82,382 )
470,331
4,290,672
-
-
-
-
1,258,067
197,103
(77,732 )
1,377,438
111,711
60,460
470,331
2,913,234
220,049
-
220,049
92,632
86
92,718
-
-
-
1,371,123
6,315
1,377,438
Property, plant and equipment stated at cost of Shs 412,007,183 have been fully depreciated. The notional annual depreciation charge in respect of these values would have been Shs
65,262,957.
Capital work-in-progress largely relates to self-constructed assets that had not been brought into use as at year end and bearer plants that have not yet matured.
72
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
19 Right of use assets – Group and Company
The Group has leased land for its use. Information about the leases in which the Group is a lessee is
presented below:
Cost
At start of year
Recognised on adoption of IFRS 16
Reclassified from prepaid operating lease rentals (Note 19)
At end of year
Depreciation
At start of year
Charge for the year
At end of year
2020
Shs’000
2019
Shs’000
4,791
-
-
4,791
10
446
456
-
412
4,379
4,791
-
10
10
At end of year
4,335
4,781
Amounts recognised in profit and loss
Depreciation expense of right of use assets
Interest expenses on lease liabilities
446
33
479
10
33
43
The Group is not committed to any arrangements that are short term as at year end.
All of the land leases in which the Group is the lessee contain only fixed payments.
There are no restrictions or covenants imposed by lessors and the Group did not enter into any sale and
leaseback transactions during the year (2019: Nil).
73
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
20
Investment in subsidiaries-Company only
The subsidiary companies are all wholly owned, incorporated in Kenya and have the same year end.
Estates Services Limited and Kaguru EPZ Limited are wholly owned and are dormant.
Year ended 31 December 2020
At start of year
At end of year
Year ended 31 December 2019
At start of year
At end of year
Kaguru EPZ
Limited
Shs’000
Estates Services
Limited
Shs’000
1,670
1,670
2,625
2,625
Kaguru EPZ
Limited
Shs’000
Estates Services
Limited
Shs’000
1,670
1,670
2,625
2,625
Total
Shs’000
4,295
4,295
Total
Shs’000
4,295
4,295
There were no restrictions on the Groups ability to access or use assets of the subsidiaries to settle the
Groups liabilities at 31 December 2020 and 31 December 2019.
21 Financial assets held at amortised cost – Group and Company
Financial assets held at amortised cost comprises treasury and corporate bonds carried at amortised cost.
Maturity rate
Average
Interest
Rate
Treasury Infrastructure Bonds
12.50%
Maturity date
18-Nov-24
2020
Shs’000
200,000
2019
Shs’000
200,000
The movement in financial assets held to maturity is as follows:
At start of year
Redeemed in the year
At end of year
Non current portion
Current portion
2020
Shs’000
200,000
-
2019
Shs’000
215,385
(15,385 )
200,000
200,000
200,000
-
200,000
-
200,000
200,000
The Directors consider that the carrying amounts of the financial assets held to maturity in the consolidated
financial statements approximate their fair values.
None of the financial assets had been pledged as collateral for liabilities or contingent liabilities as at 31
December 2020 (2019: Nil).
74
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
22
Inventories – Group and Company
Spare parts and consumable materials
Avocado
Macadamia nuts
Blueberries
Poles & timber
2020
Shs’000
165,466
-
220,638
-
48,912
2019
Shs’000
141,190
108,368
92,556
72
59,507
Total inventories
435,016
401,693
The cost of inventories recognised as an expense and included in cost of sales amounted to Shs
1,575,535,000 (2019: Shs 1,256,499,000). There were no write downs during the year (2019: Nil).
23 Receivables and prepayments – Group and Company
Trade receivables
Loss allowance
Trade receivables - net
Due from related companies (Note 27(v))
Staff debtors
Value Added Tax (VAT) Refunds receivable
Other receivables and prepayments
Less non current portion
Current receivables & prepayments
Non current receivables
2020
Shs’000
251,981
(5,324 )
246,657
49,814
35,264
60,963
70,057
462,755
(35,555 )
2019
Shs’000
29,555
(4,934 )
24,621
37,815
41,569
107,253
98,584
309,842
(34,624 )
427,200
275,218
35,555
34,624
Other receivables comprise trade deposits and a shipping rebate
As at 1 January 2019, trade receivables from contracts with customers amounted to Shs 100,485,000
(net of loss allowance of Shs 4,834,000).
Non current receivables are due within five years from reporting date and are secured and interest free.
None of the amounts were impaired (2019: Nil).
The carrying amounts of the current receivables approximate to their fair value.
Trade Receivables
The Directors of the Company estimate the loss allowance on trade receivables at the end of the
reporting period at an amount equal to lifetime expected credit loss (“ECL”).
The expected credit losses on trade receivables are estimated using a provision matrix by reference to
past default experience of the debtor and an analysis of the debtors current financial position, adjusted
for factors that are specific to the debtors, general economic conditions of the industry in which the
debtors operate and an assessment of both the current as well as the forecast direction of conditions at
the reporting date.
The following table details the risk profile of trade receivables based on the Group’s provision matrix.
31/12/2020 & 31/12/2019
Expected credit loss rate
Trade receivables – days past due
31 - 60
61 - 90
Not past due
Total
Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000
<30
>90
0%
0%
====== ======
0%
======
0%
======
0%
======
0%
======
75
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
23 Receivables and prepayments – Group and Company (continued)
The following table shows the movement in lifetime ECL that has been recognised for trade receivables
in accordance with the simplified approach set out in IFRS 9.
Balance at 1 January 2019
Loss allowance charge for the year 2019
Balance as at 31 December 2019
Loss allowance charge for the year 2020
Balance as at 31 December 2020
24 Payables and accrued expenses
Collectively
assessed
-
-
Individually
assessed
4,834
100
Total
4,834
100
-
-
-
4,934
4,934
390
390
5,324
5,324
Group
Company
2020
Shs’000
2019
Shs’000
2020
Shs’000
2019
Shs’000
Trade payables
Due to related companies (Note 27(v))
Accrued expenses
Leave obligations
Other payables
86,353
-
24,045
34,434
81,775
73,458
8
19,379
23,727
65,139
86,353
8,383
24,045
34,434
81,775
73,458
8,391
19,379
23,727
65,139
226,607
181,711
234,990
190,094
Other payables relate to provisions and sundry payables.
Leave obligations covers the Group’s liability for accrued annual leave. The movement on the leave
obligations for Group and Company is as follows:
At start of year
Charge for the year
Paid during the year
2020
Shs’000
2019
Shs’000
2020
Shs’000
2019
Shs’000
23,727
54,757
(44,050)
24,181
36,418
(36,872)
23,727
54,757
(44,050)
24,181
36,418
(36,872)
At end of year
34,434
23,727
34,434
23,727
The carrying amounts of the payables and accrued expenses approximate to their fair values.
76
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
25 Cash and cash equivalents - Group and Company
For the purposes of the statement of cash flows, cash and cash equivalents comprise the following:-
Cash at bank and in hand
Short term deposits
2020
Shs’000
925,461
744,663
2019
Shs’000
82,892
1,613,238
1,670,124
1,696,130
The short term deposits are denominated in Kenya Shillings (Shs) and United States Dollars (USD) and
have a maturity of three months or less from the date of acquisition or are repayable immediately with no
loss of interest. The effective interest rates on the short term deposits as at 31 December were as shown
below:
Kenya Shillings deposits
United States Dollar deposits
2020
6.94%
3.18%
2019
8.63%
3.63%
The Directors consider that the carrying amounts of cash and cash equivalents in the consolidated
financial statements approximate their fair values.
There were no amounts of cash and cash equivalents held by the Group that were not available for use
by the Group as at 31 December 2020 (2019: Nil).
26 Note to the consolidated and separate statement of cash flows
Reconciliation of profit before income tax to cash generated from operations:
Profit before income tax
Adjustments for:
Net exchange (gains)/losses on foreign currency cash & cash equivalents
(Note 8)
Interest expense on lease liabilities (Note 8)
Interest income (Note 8)
Depreciation (Note 18)
Depreciation of right of use assets (Note 19)
Gain on disposal of property, plant and equipment
Gains arising from changes in fair value less estimated point-sale costs of
biological assets (Note 6 (i))
Decrease in the fair value of biological assets due to sales and harvest and
disposal (Note 6 (i))
Fair value movement in biological assets – growing agricultural produce
(Note 6 (ii))
Changes in working capital:
- Increase in inventories
- (Increase)/decrease in receivables and prepayments
- Increase/(decrease) in payables and accrued expenses and lease
obligations
- Increase in post-employment benefit obligations
2020
Shs’000
2019
Shs’000
847,532
1,014,477
(65,358 )
7,483
33
(79,701 )
233,970
446
(1,958 )
33
(117,021 )
197,103
10
(1,658 )
)
(57,813
)
(83,414
62,465
70,967
)
(144,791
)
(31,226
(33,323 )
(152,913 )
(232,217 )
80,967
44,896
17,219
)
(181,098
14,705
Cash generated from operations
670,704
739,111
77
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
27 Related party transactions – Group and Company
The group is controlled by Camellia Plc, a company incorporated in England. Camellia Plc is the
ultimate parent of the Group. There are other companies that are related to Kakuzi Plc through
common shareholdings or common Directorships. Fellow Subsidiaries within the Camellia Plc Group
act as brokers and managing agents for certain products and operations of the Group.
The following transactions were carried out with related parties:
i) Sale of goods to:
Eastern Produce Kenya Limited
ii) Purchase of goods and services from:
RBDA Kenya Branch
Eastern Produce Kenya Limited
2020
2019
Shs’000
Shs’000
129,366
113,307
125,112
71,759
104,592
65,897
196,871
170,489
The purchase of goods and services includes a charge in relation to the Executive Directors
remuneration (including value of benefits in kind) amounting to Shs 28,584,000 (2019: 26,327,000).
iii) Key management compensation
Salaries and other short-term employment benefits
Post employment benefits
iv) Directors’ remuneration
Fees for services as a Director
Other emoluments
58,767
357
58,377
12
59,124
58,389
11,529
388
9,240
467
11,917
9,707
78
Kakuzi Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2020
Notes (continued)
27 Related party transactions – Group and Company (continued)
v) Outstanding balances arising from sale and purchase of goods and service
Group
2020
2019
Company
2020
2019
Shs’000
Shs’000
Shs’000
Shs’000
34,104
15,710
32,948
4,867
34,104
15,710
32,948
4,867
49,814
37,815
49,814
37,815
-
-
-
-
-
-
8
8
2,570
5,813
-
8,383
2,570
5,813
8
8,391
Due from related Companies
Eastern Produce Kenya Limited
RBDA Kenya Branch
Due to related Companies
Estates Services Limited
Kaguru EPZ Limited
Eastern Produce Estates South Africa (Pty) Ltd
28 Commitments – Group and Company
Capital commitments
Capital expenditure contracted for at the reporting date but not recognised in the financial statements is
as follows:
Property, plant and equipment
29 Contingent liabilities
2020
Shs’000
2019
Shs’000
18,532
38,567
Various claims have been submitted against the Group in relation to different litigations. It is not practical
to estimate the potential effect of these claims but legal advice indicates that it is not probable that a
significant liability will arise. The Directors believe that the ultimate resolution of these legal proceedings
would not have a material effect on the Group’s consolidated and separate financial statements.
30 Subsequent events
There have been no significant events after the reporting date to the date of signing these accounts
which have a material financial statement impact at 31 December 2020.
------------- 000 -------------
79
Kakuzi Plc
Five year record
Turnover
3,608,941
2,888,662
3,152,831
2,823,926
2,651,199
2020
Shs'000
2019
Shs'000
2018
Shs'000
2017
Shs'000
2016
Shs'000
Profit before income tax
Income tax
847,532
(225,498)
1,014,477
(301,038)
684,083
(202,489)
849,123
(257,480)
757,779
(195,354)
Profit after income tax
622,034
713,439
481,594
591,643
562,425
Profit attributable to the members of
Kakuzi Plc
622,034
713,439
481,594
591,643
562,425
Dividends: -
Proposed final dividend - for the year
352,800
274,400
176,400
137,200
117,600
Capital and reserves: -
Called up share capital
Reserves
98,000
5,464,308
98,000
5,116,184
98,000
4,567,335
98,000
4,219,895
98,000
3,748,258
Total equity
5,562,308
5,214,184
4,665,335
4,317,895
3,846,258
Basic earnings per ordinary share (Shs)
31.74
36.40
24.57
30.19
28.70
Dividends per ordinary share (Shs)
18.00
14.00
9.00
7.00
6.00
Dividend cover
1.76
2.60
2.73
4.31
4.78
Total equity per ordinary share (Shs)
283.79
266.03
238.03
220.30
196.24
All amounts are stated in Kenya shillings thousands (shs’000) except where otherwise indicated.
80
Kakuzi Plc
Major shareholders and distribution schedule
MAJOR SHAREHOLDERS
The 10 major shareholders and their holdings at 31 December 2020 were:
Shareholder name
1 John Kibunga Kimani
2 Bordure Limited
3 Lintak Investments Limited
4 Standard Chartered Nominees a/c 9532
5 G.H. Kluge & Sons Limited
6 HSBC Global Custody Nominee (UK) Limited
7 Kakuzi Neighbourhoods Development Foundation
8 Joe B.Wanjui
9 John Okuna Ogango
10 Shah Chandrakant Keshavji & Shah Laxmiben Chandrakant Keshavji
Number of
ordinary
shares
6,330,699
5,107,920
4,828,714
429,134
239,118
200,000
155,500
122,004
107,700
61,698
17,582,487
%
32.30%
26.06%
24.64%
2.19%
1.22%
1.02%
0.79%
0.62%
0.55%
0.31%
89.70%
* Camellia Plc incorporated in England, by virtue of its interests in Bordure Limited incorporated in England
and Lintak Investments Limited incorporated in Kenya, is deemed to be interested in these ordinary shares.
DISTRIBUTION SCHEDULE
The distribution of ordinary shares as at 31 December 2020 was:
Ordinary shares range
Less than 500
501 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 to 1,000,000
Over 1,000,000
Number of
shareholders
Number of
ordinary shares
797
427
46
40
6
3
1,319
123,155
769,738
348,300
838,017
1,253,456
16,267,333
19,599,999
%
0.63%
3.93%
1.78%
4.28%
6.40%
82.98%
100.00%
81
Kakuzi Plc
Form of Proxy (93rd Annual General Meeting)
I/WE _____________________________________________________________________________________
Share Account ____________________Of (Address) ______________________________________________
Telephone Mobile No_______________________________________ being a member of the above Company,
hereby appoint: ____________________________________________________________________________
Of (Address______________________________Telephone Mobile No ________________________________
Email Address ____________________________________________________________________________
or failing him/her ___________________________________________________________________________
Of (Address) Telephone Mobile No _____________________________________________________________
Email Address_____________________________________________________________________________
or failing him/her, the duly appointed Chairman of the Meeting, as my/our proxy, to vote for me/us on my/our
behalf at the Annual General Meeting of the Company to be held on Tuesday, 18th May 2021 at 12.00 noon,
and at any adjournment thereof.
As witness my/our hand this……………………………………day of ………………………………...2021
Signed …………………………………………………………………………………..
Signed …………………………………………………………………………………..
Note:
1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote in his/her stead and a
2.
3.
proxy need not be a member of the Company.
In the case of a member being a limited Company, this form must be completed under its common seal or
under the hand of an officer or attorney duly authorized in writing.
If you are unable to attend this meeting personally, this form should be completed and returned to the to the
Company Registrars, Custody and Registrars Services, IKM Place, Tower B, 1st Floor, 5th Ngong Avenue
Nairobi, P. O. Box 8484-00100 Nairobi or email to proxy@candrgroup.co.ke to reach not less than 48 hours
before the time of holding the meeting.
82
FOLD 2
STAMP
1
D
L
O
F
Kakuzi Plc
P O Box 24
Thika 01000
Kenya
FOLD 3
INSERT FLAP INSIDE