HONORARY TREASURERS REPORT 2021 ANNUAL GENERAL MEETING Kenya

HONORARY TREASURER’S REPORT – 2021 ANNUAL GENERAL MEETING Kenya Railway Golf Club

2020 FINANCIALS OVERVIEW 1. REVENUE AND COST OF SALES 2020 Golf Bar Catering Other Total Kshs '000 Kshs '000 11, 594, 296 15, 831, 026 9, 779, 840 18, 972, 671 56, 177, 833 Cost of Sales (15, 456, 599) (18, 122, 192) (13, 834, 184) - Gross Profit (3, 862, 303) (2, 291, 166) (4, 054, 344) 18, 972, 671 8, 764, 858 -33% -14% -41% 100% 16% Golf Bar Catering Other Total Kshs '000 Kshs '000 16, 625, 409 19, 245, 056 10, 927, 671 20, 519, 597 67, 317, 733 Cost of Sales (18, 942, 939) (16, 034, 417) (10, 982, 588) Gross Profit (2, 317, 530) 3, 210, 639 (54, 917) 20, 519, 597 21, 357, 789 -14% 17% -1% 100% 32% Revenue Gross Margin 2019 Revenue Gross Margin - (47, 412, 974) (45, 959, 944)

There was an overall decline in Revenue for the year 2020 mainly due to the impact of Covid-19 as well as restrictions imposed by the national government. KRGC retained ALL its permanent staff on full pay which had been increased by 10% effective January 2020 save for two months and these costs were included in the direct costs resulting into a gross loss across the Golf, Bar, and catering departments. In 2020 we were able to allocate staff feeding cost of Kshs. 1. 5 Million for both Bar & Catering. This was not factored in 2019 The Golf Section Direct Costs were retained to ensure that the course stays in proper shape

2. OPERATING EXPENSES Administration expenses and overheads Staff Costs Admin & Gen Repairs YEAR Kshs '000 2020 (9, 640, 929) (46, 004, 550) (3, 386, 881) 2019 (11, 245, 688) (20, 972, 699) (5, 728, 952) Increase (Decrease) (1, 604, 759) 25, 031, 851 (2, 342, 071)

During the year 2020 the following amounts were written off from the books of account A. Receivables (Subscriptions Arrears from members amounting to Kshs. 5, 427, 409 as per the Kabiaru resolution. B. VAT Recoverable Kshs. 9, 032, 336 which is not supported by our returns and which the Auditor referred to as fictitious assets and part of the reason accounts for 2019 were qualified. C. Suspense account of Kshs. 9, 705, 425 relating to un-reconciled and unexplained inventories in the year 2019 accounts and which the auditor again referred to as fictitious assets and one of the reasons 2019 accounts were qualified. The three items written off amount to Kshs. 24, 165, 470 and contribute greatly to the deficit as reported.

3. MEMBERSHIP INCOME Subscriptions New Members Total YEAR Kshs '000 2020 16, 657, 750 17, 473, 560 34, 131, 310 2019 18, 263, 805 2, 201, 000 20, 464, 808 The subscriptions income declined by Kes 1, 606, 055 owing to the members struck off in the prior year as per the Kabiaru resolution. The recently concluded membership drive was remarkably successful raking in over Kshs. 17, 473, 560 in 2020.

TRADE AND OTHER RECEIVABLES Total receivables for year 2020 stood at Kes 18, 662, 213 made up of Subscriptions and development levy arrears from members Kes. 13, 760, 404 compared to 2019 of Kshs. 13, 581, 552, an increase of about Kshs. 200, 000. The balance of Kes. 4, 901, 808 is receivables from our billboard tenants Bad debts amounting to Kshs. 5, 427, 409 were written off as per the Kabiaru resolution. This greatly reduced members subscriptions! VAT Recoverable of Kshs. 9, 032, 336 which is not supported by VAT returns as filed with the Kenya Revenue Authority were written off to reflect the actual position.

Kshs INVESTMENT IN PLANT PROPERTY AND EQUIPMENT Club House Extension 4, 067, 080 Tractors and Lawn Mowers 2, 459, 010 Furniture & Fittings 1, 856, 731 Computers 103, 500 8, 486, 321

2021 FINANCIAL OUTLOOK A. COVID-19 RESTRICTIONS The effect on Club Revenues and Sustainability of our operations B. COMPLIANCE Kenya Revenue Authority (PAYE, VAT, INCOME TAX) Tourism Levy Fund C. KABIARU RESOLUTION Review the resolution to address year on year write off for unrecoverable subscriptions D. EXPRESSWAYS/HAILLE SELASSIE AVENUE EFFECT ON RENTAL INCOME Unpredictability of Revenue growth in short term, premium advertising space after the construction is complete. E. LEGAL COSTS Recovery of rent arrears from billboards and leases F. PROJECTS Completion of Current Projects Prioritization of approved and upcoming projects based on need and ROI

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