Report of the Directors

The directors submit their annual report together with the audited financial statements for the year ended 31 December 2019 which show the society’s state of affairs. Incorporation

The society is incorporated in Kenya under the Co-operative Societies Act, Cap. 490 and is domiciled in Kenya. Principal Activity

The principal activity of the society continues to be receiving savings from and provision of loans to its members.

Business Review

The total interest income of the society increased from Shs. 356.7 million to Shs. 392.1 million. The increase is directly attributed to growth in the loan book to members compared to prior year. Surplus before tax increased from Shs. 43.6 million to Shs. 47.7 million compared to prior year. This is attributed to decrease in interest on member deposits and increased provision on loans. As at 31 December 2019, the net asset position of the society was Shs. 530.4 million compared to Shs. 463.7 million as at 31 December 2018. Principal Risks and Uncertainties

The overall business environment continues to remain challenging and this has a resultant effect on overall demand of the society’s products. The society’s strategic focus is to enhance revenue growth whilst maintaining growth margins, the success of which remains dependent on overall market conditions.

In addition to the business risks discussed above, the society’s activities expose it to a number of financial risks including credit risk, cash flow and foreign currency risk and liquidity risk as set-out in Note 20 of the financial statements. Share Capital

The issued and paid up share capital of the society was increased during the year from Shs. 191.7 million to Shs. 238.2 million.

Dividends and Interest

The management committee recommends payments of first and final dividend of 10% (2018: 12%) on weighted share balance. They also recommend 8% (2018: 9%) on weighted members deposit and 7% (2018: 7%) on weighted members special savings. Board of Directors

The directors who held office during the year and to the date of this report are shown on page 1.

Statement as to Disclosure to the Society’s Auditor

With respect to each director at the time this report was approved: a. There is, so far as the person is aware, no relevant audit information of which the society’s auditor is unaware; and b. The person has taken all the steps that the person ought to have taken as a director so as to be aware of any relevant audit information and to establish that the society’s auditor is aware of that information.

Terms of Appointment of the Auditor

The society’s auditor, MAZARS, were appointed in office in accordance with the Co-operative Societies Act, Cap. 490. 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

Signature:_____________________________ Date: _____________2020

Chairman