BUDGET NOTES TO THE BUDGET FOR THE YEAR A) Income. 074: Interest from loans to members kshs.339,464,000.

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1 BUDGET NOTES TO THE BUDGET FOR THE YEAR 2008 A) Income 074: Interest from loans to members kshs.339,464,000. Loans to members are expected to increase at the rate of 20% during the year 2008 as compared to Based on this projection the society expects to generate a total of kshs million in revenues from this category. 072: Income from investing activities kshs.21 million. It is the policy of UNSACCO to ensure that member s loan needs are satisfied before funds are invested elsewhere. However, it is also prudent to ensure that excess funds don t remain idle in the current account. The Management Committee intends to invest the excess funds in Treasury bills on portfolios of between 91days and 182 days. It is projected that during the financial year 2008 an average of kshs.350 million will be invested in the money market instruments at interest rates averaging 6%. This will generate a total of kshs.21 million during the year : Members insurance subscriptions kshs.7.2 million. The Society has insured the entire loan portfolio with Co-operative insurance Company. This policy is financed by members insurance subscriptions of kshs.200/= per month. In the year 2008 it is projected that a sum of kshs. 7.2 million Will be generated from a total membership of B) Expenditure 1) Staff expenditure Staff costs are expected to take a total sum of kshs.19, 957,540 for the year 2008 as compared to kshs.18.3 million in the year Salaries and wages item is expected to take the biggest share of kshs.12,638,960.00, Staff provident fund contribution is based on a rate of 25% of the employee s basic pay and during the year 2008 it is expected to take a total sum of kshs.2,776,

2 Other items of expenditure include member s expenditure, operating expenditure and service expenditure and are expected to cost the Society as follows: - YEAR 2008 YEAR STAFF EXPENDITURE KSHS KSHS 131 Salaries and wages 12,638,960 11,497, N.S.S.F 21,600 21, Staff Sub. & traveling. 1,000, , Staff medical fund 2,400,000 2,400, Staff Training & seminars 600, , Staff insurance 520, , Staff Provident fund 2,776,980 2,524,000 19,957,540 18,332, MEMBERS EXPENDITURE KSHS KSHS 181 Committee sitting allowance 1,430,000 1,300, Committee Education 1,200,000 1,200, Committee sub. & traveling 660, , Education to members 520, , Entertainment & AGM expenses 1,031, ,000 4,841,800 4,544, OPERATING EXPENDITURE 147 Repairs & Maintenance 1,500,000 1,500, Printing & stationery 1,000, , Postage & Telephones 300, , Advertising and public relations 360, , Contingencies 720, ,000 3,880,000 3,720,000 2

3 4. SERVICE EXPENDITURE 156 Audit fees 280, , Audit supervision fees for CCD. 28,000 28, Accounts registration charges Value added Tax 45,000 45, Legal fees 180, , Professional services 1,200,000 2,700, Bank charges 800, , CIC-Insurance 9,430,000 7,858,,000 11,963,600 11,951,600 5) CAPITAL EXPENDITURE During the year to 2007 the Society has set aside a sum of kshs.1,290,000 to meet various items of capital expenditure. These include improving the Society s filling system, purchase of a shredding machine and replacement of aging computers. In the year 2008 we have also budgeted a sum of kshs.0.3 million to meet the cost of replacing aging computers and related items. 6) LOANS TO MEMBERS Loans to members item as usual will take the biggest share of the Society's cash flow during the year It is expected that the Society will disburse loans amounting to kshs Billion in 2008 as compared Kshs Billion in ) SHARES REFUNDS Members separating from employment are expected to withdraw their share to the tune of kshs.167,665,000 in the year 2008 as compared to kshs.139,721,000 in the year ) INTEREST ON MEMBERS DEPOSITS AND COMMITTEE HONORARIA Interest on members'deposits (dividends) and Committee Honoraria for the year 2007 will be paid in the first quarter of year It is projected that a total of kshs.310,000,000 will be disbursed as compared to kshs.231,108,000/= in the prior year. 3

4 9) CORPORATION TAX Corporation tax is a Government levy on income from activities other than members. It is expected that with a projected income of kshs.21 million from investing activities the Society will pay taxes in the tune of kshs.3,150,000/= during the year ) LOAN GUARD INSURANCE POLICY This is the policy under which the Society has insured the entire loan portfolio with Cooperative insurance Company. This policy is financed by members insurance subscriptions of kshs.200/= per month. In the year 2008 it is projected that a sum of kshs. 9,430,300 will be incurred on his policy as compared to kshs.7,858,000 in the year ) STAFF SUBSISTANCE & TRAVEL KSH.850, A sum of kshs.850,000 has been set aside to meet traveling costs for staff while on official duties. 12.) STAFF MEDICAL KSH.2,400, Currently the Society has a total of ten employees. A sum of kshs.2.4 million has been budgeted for to meet both in-patient and out-patient expenses for staff during the year year. 13.) STAFF TRAINING & SEMINARS KSH. 520, Staff training and development is an important aspect of any organization. In order to further improve service delivery to the membership the Society has set aside a sum kshs.520,000 to meet the staff training needs through seminars and workshops during the year ) REPAIRS & MAINTENANCE KSH.1,500, The Society is expected to pay for the annual license fees to M/s Temenos the owners of the emerge software and annual maintenance costs for computers to UNON. For the year 2008 a sum of kshs.1.5 million as been budgeted to meet the above costs and other office maintenance costs. 15.) LEASE EXPENSES KSH 500, The Society is considering leasing a photocopying machine from MFI, the company which has been awarded the tender to supply leased equipments by UNON. Leasing is expected to be more cost effective as compared to purchasing a new machine. A sum of kshs.0.5 million has been set aside to meet this cost. 4

5 16.) PROFFESIONAL SERVICES KSH. 1,200, In order to further improve service delivery to the membership and also enhance our profitability, the Society as tendered for professional services to carry out a diagnostic audit to evaluate the Society s processes in the area of information systems, Human recourses and accounting. This assignment is expected to be carried out in the 2 nd quarter of year 2007 and it is expected to cost the Society kshs.2 million. Sometimes in June this year, the Society is also expected to engage professionals to help in the strategic planning and implementation process. This assignment is expected to cost about Kshs. 500, Therefore, the Society has set aside in the supplementary budget for the year 2007 a total of kshs. 2.7 million to meet the costs of the above two assignments and other consultancy assignments which are likely to be undertaken during the current financial year. It is also anticipated that further consultancy costs in the tune of Ksh. 1.2 millon will be incurred in the year ) BANK CHARGES kshs. 800, These are charges which are expected to be incurred in relation to banking services rendered to the society during the year ) EDUCATION TO MEMBERS KSH 1,200, This will cater for the cost of materials, publications and other items which will be used in disseminating information to the members during the year The society is also expected to organize a member s education seminar during the year 2007 and 2008 in order to create more awareness on the Society s activities. 19.) STAFF INSURANCE KSH. 520, The Society has set aside kshs.520,000 to meet costs for staff group life and group accident insurance policies. FOSA NOTES TO THE BUDGET FOR THE YEAR 2008 Income i) Interest from loans: kshs.44.1 million The Projected amount of loans to members during the year 2008 is Kshs.210 million as compared to Kshs.170 million in It is expected that FOSA salary advances will generate Kshs.21,600,000 as compared to kshs.18 million in 2007, while the asset loans will provide an additional kshs.22,500,000 during the year 2008 as compared to Kshs.18 million in

6 ii) Bankers Cheques commission kshs.384,000 It is expected that an average of two banker s cheques books will be sold per month thus generating revenues in the tune of Kshs.384,000 in 2008 as compared to Kshs.192,000 in the year iii) Cash withdrawals commissions:kshs.3.6 million It is assumed that every member will make at least one cash withdrawal per month from the FOSA. Therefore, it is expected that the Society will generate commissions in the tune of Kshs.3.6 million in the year 2008 as compared to kshs.3.3 million in the year iv) Other incomes: kshs.550,000. Income under this item covers dividends processing which is expected to generate kshs.300,000 in 2008 as compared to kshs.276,700 in 2007, while we expect to raise an additional kshs.250,000 in 2008 from standing orders and safe custody as compared to kshs.200,000 for C) Expenditure YEAR 2007 YEAR 2008 STAFF EXPENDITURE KSHS. KSHS Salaries & staff allowances 2,316,087 3,360,401 Provident fund 455, ,369 N.S.S.F 4,800 7,200 Staff Sub & traveling 150, ,000 Staff medical fund 1,000,000 1,350,000 Staff training and seminars 200, ,000 Staff Insurance 150, ,000 Total 4,276,695 6,036,970 FINANCE COSTS Interest on savings 1,500,000 3,000,000 Insurance 500, ,000 Bank Charges 500, ,000 Total 2,500,000 4,000,000 6

7 7 UNITED NATIONS CO-OPERATIVE SAVINGS AND CREDIT SOCIETY LTD OPERATING BUDGET FOR THE YEAR 2008 Year-2008 Year-2007 Year-2007 Year-2006 Year-2006 Jan - Mar April - June July - Sept Oct - Dec Budget Revised Budget Budget Actual Revised Budget INCOME KShs. KShs. KShs. KShs. Kshs. KShs. KShs. KShs. KShs. 074 Interest from loans 84,866,000 84,866,000 84,866,000 84,866, ,464, ,886, ,000, ,884, ,000, Income from investing activities 5,250,000 5,250,000 5,250,000 5,250,000 21,000,000 21,000,000 18,400,000 16,141,931 16,000,000 Members Insurance subscriptions 1,800,000 1,800,000 1,800,000 1,800,000 7,200,000 7,200, ,437,130 0 TOTAL INCOME 91,916,000 91,916,000 91,916,000 91,916, ,664, ,086, ,400, ,464, ,000,000 EXPENDITURE 131 Salaries and wages 3,159,740 3,159,740 3,159,740 3,159,740 12,638,960 11,497,114 11,904,348 11,278,456 11,104, N.S.S.F 5,400 5,400 5,400 5,400 21,600 21,600 19,200 18,480 19, Staff Sub. & traveling 250, , , ,000 1,000, , , , , Staff medical 600, , , ,000 2,400,000 2,400,000 2,520, ,998 2,400, Staff Training & seminars 150, , , , , , , , , Staff insurance 130, , , , , , , , , Staff provident fund 694, , , ,245 2,776,980 2,524,000 2,541,088 2,202,968 2,541, Repairs & Maintenance 375, , , ,000 1,500,000 1,500, , , , Lease of office equipment expenses 125, , , , , , , , Depreciation 700, , , ,000 2,800,000 2,600,000 1,960,000 2,416,459 1,800, Bond amortization 100, , , , , , , , , Audit fees 70,000 70,000 70,000 70, , , , , , Audit supervision fees 7,000 7,000 7,000 7,000 28,000 28,000 28,000 15,840 24, Accounts registration charges Value added Tax 11,250 11,250 11,250 11,250 45,000 45,000 45, , Legal fees 45,000 45,000 45,000 45, , , , , Professional services 300, , , ,000 1,200,000 2,700, ,000 60, , Bank charges 200, , , , , ,000 1,150, ,767 1,100, Committee sitting allowance 357, , , ,500 1,430,000 1,300,000 1,300,000 1,120,064 1,260, Committee Education 320, , , ,000 1,280,000 1,200,000 1,200, ,590 1,200, Committee sub. & traveling 165, , , , , , , , , Education to members 130, , , , , , , , , Entertainment & AGM expenses 257, , , ,950 1,031, , , , , Printing & stationery 250, , , ,000 1,000, , , , , Postage & Telephones 75,000 75,000 75,000 75, , , , , , Advertising & Public relations 90,000 90,000 90,000 90, , , , , , Amortization of operating lease 400, , , ,000 1,600,000 1,600,000 1,600,000 1,277,101 1,600, loan guard insurance policy 2,357,500 2,357,500 2,357,500 2,357,500 9,430,000 7,858,000 6,400,000 5,750,312 5,500, Contingencies 180, , , , , , ,000 13, ,000 TOTAL EXPENDITURE 11,505,735 11,505,735 11,505,735 11,505,735 46,022,940 43,648,314 39,248,236 30,808,815 36,409,206 SURPLUS FOR THE YEAR 80,410,265 80,410,265 80,410,265 80,410, ,641, ,437, ,151, ,655, ,590,794 Prepared by: Approved by: Salesio G. Njeru Mary Githiomi Moses Wasike Martin Okun Pauline Nderi GENERAL MANAGER CHAIRPERSON V/CHAIRMAN TREASURER SECRETARY Date.28/2/2007 Date.28/2/2007 Date.28/2/2007 Date..28/2/2007 Date...28/2/2007

8 8 UNITED NATIONS CO-OPERATIVE SAVINGS AND CREDIT SOCIETY LTD CAPITAL BUDGET REVISED FOR THE YEAR 2008 Year-2008 Year-2007 Revised ITEMS Jan - Mar Apr - June July - Sept. Oct - Dec Budget Budget KShs. KShs. KShs. KShs. KShs. KShs. 1 Shredding Machine 25,000 25,000 25,000 25, ,000 Two computers 50,000 50,000 50,000 50, , ,000 Filing System 250, , , , ,000, , , , , ,000 1,290,000 Prepared by: Approved by: Salesio G. Njeru Mary Githiomi Moses Wasike Martin Okun Pauline Nderi GENERAL MANAGER CHAIRPERSON V/CHAIRMAN TREASURER SECRETARY Date...28/2/2007 Date.28/2/2007 Date...28/2/2007 Date...28/2/2007 Date...28/2/2007

9 9 UNITED NATIONS CO-OPERATIVE SAVINGS AND CREDIT SOCIETY LTD CASH BUDGET FOR THE YEAR 2008 Jan - Mar April - June July -Sept Oct - Dec Year-2008 Year-2007 Year-2006 Budget Revised Budget Budget CASH INFLOW KShs. KShs. KShs. KShs. KShs. KShs. KShs. 074 Loans interest 84,866,000 84,866,000 84,866,000 84,866, ,464, ,886, ,000, Income from investing activities 5,250,000 5,250,000 5,250,000 5,250,000 21,000,000 21,000,000 6,000, Shares contributions 159,874, ,874, ,874, ,874, ,498, ,915, ,000, Members insurance contributions 1,800,000 1,800,000 1,800,000 1,800,000 7,200, ,000,000 9,000, Entrance fees 40,000 40,000 40,000 40, , , , Loan Repayments 523,454, ,454, ,454, ,454,000 2,093,816,000 1,544,000,000 1,200,000, ,284, ,284, ,284, ,284,500 3,101,138,000 3,100,961,000 1,875,160,000 CASH OUTFLOW: 1 Staff expenditure 4,989,385 4,989,385 4,989,385 4,989,385 19,957,540 18,332,714 17,664,636 2 Members expenditure 1,210,450 1,210,450 1,210,450 1,210,450 4,841,800 4,544,000 4,300, Operating expenditure 970, , , ,000 3,880,000 2,860,000 2,540, Service expenditure 2,990,900 2,990,900 2,990,900 2,990,900 11,963,600 8,403,600 2,760, Capital expenditure 75,000 75,000 75,000 75, ,000 1,290, , Loans to members 720,000, ,000, ,000, ,000,000 2,880,000,000 2,415,000,000 1,500,000,000 8 Shares Refunds 41,916,250 41,916,250 41,916,250 41,916, ,665, ,721,000 96,000,000 9 Dividend & Honoraria 0 231,108, ,247, Corporation Tax 787, , , ,500 3,150,000 1,687,500 2,466,485 TOTAL OUTFLOWS 772,939, ,939, ,939, ,939,485 3,091,757,940 2,822,946,814 1,736,834,421 NET INFLOW/(OUTFLOW) 2,345,015 2,345,015 2,345,015 2,345,015 9,380, ,014, ,325,579 BALANCE B/F 634,820, ,165, ,510, ,855, ,200, ,806, ,135,041 BALANCE C/F 637,165, ,510, ,855, ,200, ,580, ,820, ,460,620 Prepared by: Approved by: Salesio G. Njeru Mary Githiomi Moses Wasike Martin Okun Pauline Nderi GENERAL MANAGER CHAIRPERSON V/CHAIRMAN TREASURER SECRETARY Date...28/2/2007 Date..28/2/2007 Date..28/2/2007 Date..28/2/2007 Date...28/2/2007

10 10 UNITED NATIONS CO-OPERATIVE SAVINGS AND CREDIT SOCIETY LTD FOSA BUDGET FOR THE YEAR 2008 Year-2008 Year-2007 Year-2007 Year-2006 Year-2006 Jan - Mar April - June July - Sept Oct - Dec Budget Revised Budget Budget Actual Budget INCOME KShs. KShs. KShs. KShs. KShs. KShs. KShs. KShs. KShs. Interest from loans 11,025,000 11,025,000 11,025,000 11,025,000 44,100,000 36,000,000 7,200,000 7,774,180 2,700,000 Commissions 996, , , ,000 3,984,000 3,512,400 3,620,000 1,563,380 2,520,000 Bridging finance incomes 8,000,000 8,000,000 8,000,000 8,000,000 32,000,000 30,000,000 30,000,000 26,974,515 25,000,000 Other incomes and penalties 137, , , , , , , , ,000 TOTAL INCOME 20,158,500 20,158,500 20,158,500 20,158,500 80,634,000 69,989,100 41,020,000 36,459,775 30,370,000 EXPENDITURE Salaries and wages 840, , , ,100 3,360,400 2,316,087 4,115,324 1,537,971 3,554,438 Interest expense 750, , , ,000 3,000,000 1,500, ,659 - N.S.S.F 1,800 1,800 1,800 1,800 7,200 4,800 7,200 2,520 7,200 Staff medical 337, , , ,500 1,350,000 1,000, , , ,000 Staff Traveling & subsistence 50,000 50,000 50,000 50, , , Staff Training & seminars 75,000 75,000 75,000 75, , , ,000 47, ,000 Staff insurance 37,500 37,500 37,500 37, , , ,000 14,172 96,000 Staff provident fund 167, , , , , , , , ,065 Bank charges 125, , , , , , , ,596 96,000 Other operating exp app 1,352,297 1,352,297 1,352,297 1,352,297 5,409,190 5,409,190 2,042,188 1,213,751 1,526,016 Insurance 125, , , , , , , , ,000 TOTAL EXPENDITURE 3,861,539 3,861,539 3,861,539 3,861,539 15,446,158 12,185,885 8,672,390 4,460,846 7,132,719 SURPLUS FOR THE YEAR 16,296,961 16,296,961 16,296,961 16,296,961 65,187,842 57,803,215 32,347,610 31,998,929 23,237,281 Prepared by: Approved by: Salesio G. Njeru Mary Githiomi Moses Wasike Martin Okun Pauline Nderi GENERAL MANAGER CHAIRPERSON V/CHAIRMAN TREASURER SECRETARY Date...28/2/2007 Date...28/2/2007 Date...28/2/2007 Date...28/2/2007 Date..28/2/2007

11 UNITED NATIONS CO-OPERATIVE SAVINGS AND CREDIT SOCIETY LTD FOSA CASH BUDGET FOR THE YEAR 2008 Jan - Mar April - June July -Sept Oct - Dec Year-2008 Year-2007 Year-2007 Year-2006 Budget Revised Budget Budget Budget CASH INFLOW KShs. KShs. KShs. KShs. KShs. KShs. KShs. KShs. Loans interest 11,025,000 11,025,000 11,025,000 11,025,000 44,100,000 23,700,000 7,200,000 2,700,000 Cash receipts 300,000, ,000, ,000, ,000,000 1,400,000,000 1,200,000, ,000, ,000,000 Bridging finance incomes 8,000,000 8,000,000 8,000,000 8,000,000 32,000,000 30,000,000 30,000,000 25,000,000 Commissions 996, , , ,000 3,984,000 4,920,000 3,620,000 2,520,000 Other incomes 137, , , , , , , , ,158, ,158, ,158, ,158,500 1,480,634,000 1,259,070, ,020, ,370,000 CASH OUTFLOW: Staff expenditure 1,509,242 1,509,242 1,509,242 1,509,242 6,036,968 4,276,695 6,150,202 5,310,703 Finance costs 1,000,000 1,000,000 1,000,000 1,000,000 4,000,000 2,500, , ,000 Other operating exp app 1,352,298 1,352,298 1,352,298 1,352,298 5,409,192 5,409,192 2,042,188 1,526,016 Disbursements 300,000, ,000, ,000, ,000,000 1,400,000,000 1,200,000, ,000, ,000,000 TOTAL OUTFLOWS 303,861, ,861, ,861, ,861,540 1,415,446,160 1,212,185, ,672, ,132,719 NET INFLOW/(OUTFLOW) 16,296,960 16,296,960 16,296,960 16,296,960 65,187,840 46,884,113 32,347,610 23,237,281 BALANCE C/F 70,121,394 86,418, ,715, ,012, ,309,234 23,237,281 23,237,281 - BALANCE C/F 86,418, ,715, ,012, ,309, ,497,074 70,121,394 55,584,891 23,237,281 Prepa Approved by: Salesio G. Njeru Mary Githiomi Moses Wasike Martin Okun Pauline Nderi GENERAL MANAGER CHAIRPERSON V/CHAIRMAN TREASURER SECRETARY Date 28/2/2007 Date...28/2/2007 Date...28/2/2007 Date...28/2/2007 Date...28/2/