Page 1 KENYA NATIONAL UNION OF TEACHERS GENERAL INFORMATION NATIONAL CHAIRMAN - Mudzo K. Nzili 1 ST VICE CHAIRMAN - Samson M. Kaguma 2 ND VICE CHAIRMAN - Wycliffe E. Omucheyi SECRETARY GENERAL - Wilson Sossion DEPUTY SECRETARY GENERAL - Hesbon O. Agola ASSISTANT SECRETARY GENERAL - Henry O. Oyuu NATIONAL TREASURER - John O. Matiang i DEPUTY NATIONAL TREASURER - James M. Ndiku ASSISTANT NATIONAL TREASURER - Ali A. Hussein NATIONAL WOMEN REPRESENTATIVES 1 ST NATIONAL WOMAN REPRESENTATIVE - Dorothy Muthoni 2 ND NATIONAL WOMAN REPRESENTATIVE - Jacinta Ndegwa REGISTERED OFFICE - L.R. NO. 209/3840 KNUT Headquarters Building Mfangano Street P.O. Box 30407-00100 NAIROBI AUDITORS BANKERS Onyancha & Associates NAS Apartments Milimani Road P.O. Box 51493-00200 NAIROBI Kenya Commercial Bank Ltd Moi Avenue NAIROBI Standard Chartered Bank (K) Ltd Harambee Avenue NAIROBI Equity Bank (K) Ltd Mfangano Street NAIROBI
KENYA NATIONAL UNION OF TEACHERS Page 4 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER 2016 COMPREHENSIVE INCOME NOTES 2016 2015 REVENUE [9] 1,027,004,665 1,219,132,796 LESS: TRANSFERS TO RESERVE FUND - (159,685,500) 1,027,004,665 1,059,447,296 LESS: COMMISSIONS TO BRANCHES (524,466,742) (696,903,308) 502,537,923 362,543,988 OTHER COMPREHENSIVE INCOME RENTAL INCOME [14] 17,555,171 15,189,807 SUNDRY INCOME [9] 6,618,365 3,246,206 INTEREST INCOME - - TOTAL COMPREHENSIVE INCOME 526,711,459 380,980,001 OPERATING EXPENSES Employment expenses [10] 294,102,619 252,424,343 Administrative expenses [11] 206,425,778 79,825,290 Programmes expenses [12] 176,468,820 245,337,928 Rental related expenses [15] 11,480,786 18,020,212 Finance charges [13] 17,721,274 15,949,958 TOTAL OPERATING EXPENSES 706,199,277 611,557,731 SURPLUS/(DEFICIT) FOR THE YEAR (179,487,818) (230,577,730) Report of the auditors page 2 The notes on pages 8 to 12 form part of these financial statements
KENYA NATIONAL UNION OF TEACHERS Page 6 STATEMENT OF CHANGES IN FUND ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2016 Accumulated Reserves - Total Funds Building Fund As at 1st January 2015 (175,727,577) 268,000,000 92,272,423 Surplus/(Deficit) for the year (230,577,730) - (230,577,730) Revaluation surplus - - - At 31 December 2015 (406,305,307) 268,000,000 (138,305,307) As at 1st January 2016 (406,305,307) 268,000,000 (138,305,307) Prior year items (12,672,488) - (12,672,488) Surplus/(Deficit) for the year (179,487,818) - (179,487,818) Revaluation surplus - - - At 31 December 2016 (598,465,613) 268,000,000 (330,465,613)
KENYA NATIONAL UNION OF TEACHERS Page 7 STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31ST DECEMBER 2016 NOTES 2016 2015 Net Surplus/(Deficit) for the year (179,487,818) (230,577,730) Adjustment for: Depreciation 7,357,927 8,321,751 Interest expense 15,997,072 14,796,043 Interest expense - prior years 12,672,488 - Changes in Working Capital (143,460,331) (207,459,936) (Increase)/Decrease in debtors and prepayments 2,521,900 116,708,751 Increase/(Decrease) in creditors 137,156,161 178,429,093 Increase/(Decrease) in taxation - - Net cash generated from operations (3,782,270) 87,677,908 Investing Activities Purchase of fixed assets [4] (200,000) (1,217,857) Proceeds from sale of assets - - Financing Activities (200,000) (1,217,857) Interest paid (28,669,560) (14,796,043) Loans received 132,762,687 - Loans repaid (42,503,789) (33,281,418) 61,589,338 (48,077,461) Net increase/(decrease) in cash and cash equivalents 57,607,068 38,382,590 Movements in cash and cash equivalents Cash and cash equivalents at beginning of year 7,282,808 (31,099,782) Net increase/(decrease) in cash and cash equivalents 57,607,068 38,382,590 64,889,876 7,282,808
KENYA NATIONAL UNION OF TEACHERS Page 8 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016 1 ACCOUNTING POLICIES (a) Basis of Accounting: The Union prepares its financial statements on the basis of historical cost convention as adjusted by the revaluation of its land and buildings. (b) Revenue Revenue comprises subscriptions from teachers and other miscellaneous income. ( c) Depreciation Depreciation of property and equipment is calculated on a reducing balance basis using the following annual rates: Buildings 2% Office equipment 12.50% Office furniture and fittings 12.50% Motor vehicles 25% Computers 30% (d) Taxation Provided on the rental income, bank interest and commissions for the year. The Union is exempt from tax on other income as per Income Tax Act, Chapter 470, Section 21. Taxation is respect of rental income received by branches is incorporated in the respective branch accounts. 2 SURPLUS/(DEFICIT) BEFORE TAXATION This is stated after charging 2016 2015 Auditor's remuneration 900,000 800,000 Depreciation 7,357,927 8,321,751 And after crediting: Rental income 17,555,172 15,189,807 3 TERM LOANS The longterm loan 1 of Kshs 143,000,000 is secured by a charge of Kshs. 158,000,000 over L.R 209/3840 Nairobi in favour of KNUT together with the original grant and board resolution by the borrower and the National Executive Council for Kshs. 143,000,000. Kshs. 2,639,318 repayable in 1 year has been reported under current liabilities. Longterm loan 2 of Kshs. 67,762,689 and loan 3 of Kshs. 65,000,000 respectively are secured by legal charges aggegating to Kshs 165,500,000 over L.R. No. 209/3840 Nairobi together with a legal charge for Kshs. 300,000 over title No. I.R. 27293 in the name of the borrower and a Personal Guarantee and idemnity for Kshs. 3,000,000. Kshs 33,971,439 for loan 2 and Kshs. 35,964,073 for loan 3 respectively repayable in 1 year have been reported under current liabilities. Longterm loan 4 (Equity Bank) of Kshs. 60,000,000 is secured by a second charge of Kshs. 158,000,000 over L.R 209/3840 Nairobi in favour fo KNUT together with the original grant and board resolution by the borrower and the National Executive Council for Kshs 60,000,000. Kshs. 11,274,801 repayable in 1 year has been reported under current liabilities.
KENYA NATIONAL UNION OF TEACHERS Page 9 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 4 PROPERTY, PLANT & EQUIPMENT Land and Office Motor Office furnitures Total Buildings Equipment Vehicle & Fittings Computers COST OR VALUATION At 1 Jan 2016 273,384,409 4,225,344 11,108,004 8,089,879 4,510,235 301,317,871 Additions - - - 200,000-200,000 Disposals - - - - - - At 31 Dec 2016 273,384,409 4,225,344 11,108,004 8,289,879 4,510,235 301,517,871 DEPRECIATION At 1 Jan. 2016 32,963,159 2,948,244 3,818,377 5,576,647 3,441,628 48,748,055 Charge for the year 4,794,576 159,638 1,822,407 314,154 267,152 7,357,927 Charge on disposal - - - - - - At 31 Dec 2016 37,757,735 3,107,882 5,640,784 5,890,801 3,708,780 56,105,982 NET BOOK VALUE At 31 Dec 2016 235,626,674 1,117,462 5,467,220 2,399,078 801,455 245,411,889 At 31 Dec 2015 240,421,250 1,277,100 7,289,627 2,513,232 1,068,607 252,569,816 At 1 Jan 2015 273,384,409 4,055,859 11,108,004 7,647,279 3,904,463 300,100,014 Additions - 169,485-442,600 605,772 1,217,857 Disposals - - - - - - At 31 Dec 2015 273,384,409 4,225,344 11,108,004 8,089,879 4,510,235 301,317,871 DEPRECIATION At 1 Jan. 2015 28,070,735 2,765,801 1,388,501 5,217,614 2,983,653 40,426,304 Charge for the year 4,892,424 182,443 2,429,876 359,033 457,975 8,321,751 Charge on disposal - - - - - - At 31 Dec 2015 32,963,159 2,948,244 3,818,377 5,576,647 3,441,628 48,748,055 NET BOOK VALUE At 31 Dec 2015 240,421,250 1,277,100 7,289,627 2,513,232 1,068,607 252,569,816 At 31 Dec 2014 245,313,674 1,290,058 9,719,503 2,429,665 920,810 259,673,710 5 INVESTMENTS Trade 2016 2015 Unquoted: One share in National Housing Cooperative Union of Kshs. 1,000/= each: 1,000 1,000 Report of the auditors - page 2
KENYA NATIONAL UNION OF TEACHERS Page 10 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016 6 ACCUMULATED FUND ACCOUNT 2016 2015 At 1st January Notes (406,305,307) (175,727,577) Prior year adjustment [18] (12,672,488) - Surplus/(Deficit) for the year (Page 4) (179,487,818) (230,577,730) At 31 December (598,465,613) (406,305,307) 7 RESERVES - BUILDING FUND At 1st January 268,000,000 268,000,000 Revaluation surplus - - 268,000,000 268,000,000 8 CASH AND BANK BALANCES Cash at Bank Savings Account - Standard Chartered (Gratuity) 737,791 4,126,215 Current Account - Standard Chartered - EFA - 2,013,389 Current account - Kenya Commerical Bank 65,019,434 - Current account - Equity Bank 553,017 9,282,076 66,310,242 15,421,680 Cash Balance 401,845 241,137 66,712,087 15,662,817 Bank Overdraft Kenya Commercial Bank - (8,380,009) Standard Chartered - EFA (1,822,211) - (1,822,211) (8,380,009)
KENYA NATIONAL UNION OF TEACHERS Page 11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016 2016 2015 9 INCOME Subscriptions 1,027,004,665 1,219,132,796 Less: Transfers to Reserve Fund - (159,685,500) 1,027,004,665 1,059,447,296 Less: Commissions to Branches (524,466,742) (696,903,308) 502,537,923 362,543,988 OTHER INCOME Sundry receipts 6,618,365 3,246,206 Bank interest - - Gain/(Loss) on sale of asset - - Total Income 509,156,288 365,790,194 10 EMPLOYMENT EXPENSES National Executive Council 15,538,557 12,838,738 Salaries and wages 218,675,414 212,967,322 Terminal benefits and tokens 45,516,997 25,208,809 Gratuity and pensions 14,371,651 1,439,474 Total Employment expenses 294,102,619 252,454,343 11 ADMINISTRATION EXPENSES Telephones and postage 3,491,912 2,726,555 Printing and stationery 4,288,323 7,223,599 Motor vehicle running expenses 1,426,264 1,894,696 Legal and professional fees 105,193,400 35,334,260 Audit and accountancy 900,000 900,000 Depreciation 2,563,351 3,429,327 Replacements (Repairs) and maintenance 870,788 1,044,273 Medical expenses 9,261,335 7,424,722 Registration (Branches) and announcements 8,613,621 17,046,264 Newspapers and periodicals 60,280 82,190 Union elections 39,432,819 339,800 PAYE Principal, penalties and interest 30,323,685 - Insurances - 777,484 Advertising and marketing - 1,602,120 Total Administrative expenses 206,425,778 79,825,290
KENYA NATIONAL UNION OF TEACHERS Page 12 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016 2016 2015 12 PROGRAMMES EXPENSES Annual Delegates Conference 16,759,175 20,866,249 Subsistence and travelling 60,360,667 63,376,949 Overseas activities 12,590,542 32,827,735 Training, seminars and workshops 14,440,778 19,837,686 Affiliation fees to EI/EFA/RAF/TUC/ILO 7,249,008 4,164,128 Development services 13,483,200 15,790,354 Hospitalities and social functions 17,347,574 20,249,134 Consultations, briefings and advocacy 4,051,185 6,770,916 Branch general meetings 7,108,827 13,699,721 Curriculum Development and educational boards 2,845,068 2,202,535 World Teachers Day celebrations 465,000 - Other committees of the Union 14,968,592 19,975,585 Research and Development 806,400 2,857,125 Education International Conference - 21,247,190 Breath of learning 660,000 - Labour Day Celebrations - 976,800 Early Childhood Development Project 2,070,087 495,821 Library upgrading project 762,717 - School Related Gender Based Violence (SRGBV) 500,000 - Total Programmes expenses 176,468,820 245,337,928 13 FINANCE CHARGES Bank charges 546,117 763,870 Interest on loan - Loan 2 4,175,164 1,130,159 Interest on loan - Loan 3 1,535,148 - Interest on loan - Loan 4 6,687,791 9,202,350 Interest on loan - other 60,000 - Interest on ABF loan 651,699 1,392,852 Interest on Bank Overdraft 2,947,270 3,460,727 Loan Negotiation fees 1,118,085 - Total Finance charges 17,721,274 15,186,088 14 RENTAL INCOME 17,555,171 15,189,807 15 RENTAL RELATED EXPENSES Repairs and maintenance 739,343 7,469,356 Water and electricity 2,687,955 1,992,556 Cleaning services 463,539 627,784 Security and alarms 1,427,000 2,823,217 Insurances 251,688 64,875 Rent and rates 743,685 - Lift repairs and maintenance 373,000 150,000 Depreciation 4,794,576 4,892,424 Total rental related expenses 11,480,786 18,020,212 16 CURRENCY These financial statements are prepared in Kenya Shillings. 17 COMPARATIVES Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. 18 PRIOR YEAR ADJUSTMENT The prior year adjustment passed in the accummulated fund account relates to interest on loan charges erroneously charged to loan repayment now being reversed.
PAGE 13 KENYA NATIONAL UNION OF TEACHERS PROPOSED BUDGET FOR 2018 PREAMBLE: K. i) Income from TSC per month 135,000,000.00 Less: - Service Charge by TSC 5,000,000.00 Net Union Dues per month 130,000,000.00 ii) Headquarters 38.75% of income iii) Branches 61.25% of income A. INCOME: K. 1 Union dues at the rate of Kshs.130,000,000 p.m. for 12 months 1,560,000,000.00 2 Recovery of Gratuity from Branches for payment of gratuity for Branch Employees 20,000,000.00 3 Rent from KNUT Headquarters Building 18,197,820.00 1,598,197,820.00
PAGE 14 B. EXPENDITURE (PER ANNUM) KSH. 100 - Commissions to branches at 61.25% of Union Dues 955,500,000.00 200 - Salaries, House Allowance, Monthly Wages and all other monthly allowances 190,000,000.00 300 - National/Provincial Allowances 60,000,000.00 400 - Pensions 12,000,000.00 500 - Research & Development 5,000,000.00 600 - Printing and Stationeries 10,000,000.00 700 - The Kenya Teacher Magazine Newsletter, Calenders, Charts and Brochures, Training Manuals 5,000,000.00 800 - Postal Services/Telecommunications 4,000,000.00 900 - Motor Vehicle Maintenance, Licence, Insurance Renewals, Servicing, Repairs, Fuel etc 3,000,000.00 1000 - Visits, Travelling and Subsistence 35,000,000.00 1100 - Annual Delegates Conference 56,000,000.00 1200 - Furniture and Equipment 1,000,000.00 1300 - National Executive Council 15,000,000.00 1400 - Other Committees of the Union 1401 - Terms and Conditions of Service 800,000.00 1402 - Finance Committee 800,000.00 1403 - Steering Committee 4,000,000.00 1404 - Professional Standards Committee 500,000.00 1405 - Syllabi and Curriculum Committee 500,000.00 1406 - Teachers Service Remuneration Committee 500,000.00 1407 - The Building Committee 500,000.00 1408 - Editorial Board Committee 500,000.00 1409 - Advisory Council 3,000,000.00 1500 - Gratuity 30,000,000.00
PAGE 15 1600 - International Activities, Affiliation to E.I, FEATU and other International engagements 8,000,000.00 1700 - World Teachers Day celebrations 2,500,000.00 1800 - Consultations, Briefing and Advocacy 7,000,000.00 1900 - Building Expenses 8,000,000.00 2000 - Training Seminars and Workshops 10,000,000.00 2100 - Branch General Meetings 20,000,000.00 2200 - Union Elections/ Registration of Officials 2,500,000.00 2300 - Development Project Services 8,000,000.00 2400 - Hospitalities and Humanitarian Assistance 8,000,000.00 2500 - Educational Meetings and Education Boards KEPSHA,KESSHA,KTCPA activities 7,000,000.00 2601 - Legal Services 10,000,000.00 2602 - Bank Loan Repayment and loan Interest 50,000,000.00 2603 - Bank Charges 2,200,000.00 2604 - Audit Fees and Accountancy Services 2,000,000.00 2605 - Medical Expenses 10,000,000.00 2606 - Newspapers, Magazines and Kenya Gazette 300,000.00 2607 - Announcements/Marketing/Advertisements 4,000,000.00 2700 - School campaigns/ Mobilization 3,000,000.00 2800 - Gender activities 3,000,000.00 2900 - Terminal Benefits & Tokens 36,000,000.00 3000 - Contigencies 4,097,820.00 T OT A L 1,598,197,820.00 SUMMARY Income 1,598,197,820.00 Expenditure 1,598,197,820.00