Attended KenGen 2018 AGM. My first NSE company AGM. Below are bits and pieces i picked from a part of the Q&A session

The scrip dividend consideration for 2019 mentioned by the Finance Manager caught my attention. I believe in 2019 KenGen will complete Olkaria 5 and get tax rebates for which they can't give dividends lest they get hit with compensating tax .
They will probably offer shareholder a scrip dividend - You take the cash and get hit with compensating tax on your dividends. You re-invest the scrip dividend you don't get hit with compensating tax.

Goodies:
• Early birds got a KenGen branded bag & an umbrella. Lunch box (Aquamist 500ml water, Afia juice 500ml, Soda 500ml, piece of chicken, croissant, piece of cake, delamere 100ml yoghurt, a boiled egg, ham sandwich)
• Later comers missed out on branded bag and umbrella and during Q&A a lot of shareholders complained on missing out on these queried if KenGen knew number of shareholders why did they not provide enough bags & umbrella. The chair explained that the tender was reserved for Women, youth and disabled and it seems the tender(preneur) lacked capacity. With 200,000 shareholders i wonder how much the budget for such freebies eat into companies revenue and if shareholders relate the low dividend to the large freebie expense. Some shareholder asked if there is corruption on tender for ~200K bags& umbrellas and deliver few and pocket difference.
• A shareholder opined that it makes no sense to travel from Meru to Nairobi to get a lunch box worth KES 200/=. She said most shareholders no longer take soda and don't want the soda's (Average Kengen shareholder is very old and most probably suffering from diabetes). Rather than a lunch box the shareholder wants a 1,000/= Tuskys voucher. Lot of Applause for that suggestion. She asked KenGen to stop fooling shareholders with soda & food after a whole year of waiting.




Dividends:
• Lots of shareholders bitter with the 40cts/share dividend.
 One shareholder recommended dividend to be in shillings and not cents. The last time He saw a cent was in colonial times and it was coin with a hole in the middle.
 Another shareholder asked where the board takes all the money and queried why they can't offer bonus & more dividend based on the large amount of retained earnings.
 Chami asked when(what year) EPS will reach KES 2.00/=
• The chair clarified that dividend is not 40cts but 2.6 Billion. The KenGen's board dividend policy is 1/3 of earnings to dividends, 1/3 Tax & 1/3 re-investment.
• Shareholders requesting for ~79B retained earnings to be distributed as bonus & dividends were informed that power generation is capital intensive and for every project relying on loans e.g Olkaria 5 costing 40B Kengen has to put in 15%. The Finance manager said that in 2019 they may consider a scrip dividend



Financials:
• Shareholder asked if there is a risk of KenGen being taken over by lenders over the 100B loan borrowings. The CEO answered KenGen is a responsible borrower, has never defaulted on any of it's loans and all loans are long-term concessional low interest loans. CEO also emphasized KenGen's maintains a 70:30 loan:equity ratio.
• A shareholder sought to know why the amount of Hydro & Wind energy earnings reduced. CEO answered the 2017 drought was only bettered by the 2009 drought hence low hydrology but this was counterbalanced by increased geothermal generation. Wind energy depends on the wind speeds and some wind turbines were off for maintenance.
• A shareholder sought to know why the share price has been dropping. CEO answered that the market is bearish but KenGen's fundamentals are strong.




KPLC:
• Most shareholders worried of health of KenGen based on recent media reports on poor financial state of off-taker KPLC
• P.S Energy gave currently owed amount by KPLC as on 11.12.2018 as 15B and Finance director clarified that of the 15B; 6B is due. KenGen's invoices KPLC ~5B/month. Since June 31 KenGen has paid ~30B


Shareholder Tours:
• Lots of gratitude from shareholders to management for taking them on the generating station tours [Olkaria, Kipevu]
• To qualify to be selected for the Shareholder tours one must attend (register) for the AGM meetings.

VOTING for Director:
• A shareholder sought to know when the common shareholder will be considered for the director positions. They just find names to rubber stamp. Of-course the minority shareholder vote is insignificant and P.S treasury with 70% vote decides.
• A shareholder asked why they are being asked to approve directors fees while the amount has already been paid. Another shareholder complained that directors getting much money and shareholder very little dividend. KenGen chairman said the director fees are a token for the time they take to offer oversight to KenGen's management since most are professionals....i have my doubts on the professional input Millicent Omanga was offering


ROTFL LOL moments
• A shareholder asked everyone to look at Pages 70 - 115 and clap for the board for all the work done on those pages.
• A shareholder wants KenGen to give a tree seedling to each shareholder every year since trees=rain=more energy generated by KenGen.
• Since early morning, a very large majority of shareholders showed up, picked goodie bag & umbrella and quickly LEFTed. As in you traveled from Meru, Laikipia just to pick an Umbrella & Kengen branded bag? The AGM hall was like 1/5th full.

Nice recap. What was on Pages 70 - 115? Blank?

What about those shareholders that hold 100 shares? how do they get their 40bob dividends? EFT ama Cheque