ANNUAL REPORT AND FINANCIAL STATEMENT 2009 Contents Yaliyomo 3-11 Making of the Nation: From birth to maturity 12 Notice of Annual General Meeting 13 Tangazo la Mkutano wa Mwaka 14 Corporate Governance 16-18 Chairman’s Statement 20-22 Taarifa ya Mwenyekiti 24-26 Group Chief Executive’s Report 27-29 Ripoti ya Afisa Mkuu Mtendaji wa Kampuni 30-32 Corporate Social Responsibility 33-34 Human Resources 35 Board of Directors / Halmashauri ya Wakurugenzi 36-37 Board of Directors’ Profiles 38 Directors’ Report 39 Taarifa ya Wakurugenzi 40 Statement of Directors’ responsibilities 42-43 Executive Team Profiles 44 Report of the Independent Auditor 46-51 Financial Statements 46 Consolidated Statement of Comprehensive Income 47 Consolidated Balance Sheet 48-49 Consolidated Statement of Changes in Equity 50 Company Statement of Changes in Equity 51 Consolidated Cash Flow Statement 52-75 Notes to the Financial Statements 76 Five year Financial Summary / Taarifa Fupi ya Kifedha ya Miaka Mitano 77 Principal Shareholders and Distribution of Shareholding 79 Proxy form 80 Fomu ya Uwakilishi 1 ANNUAL REPORT AND FINANCIAL STATEMENT 2009 Making of the Nation: From birth to maturity The Aga Khan reviews printing quality at the Nation’s press during a visit in the mid-seventees. He is flanked by (left) Managing Director Stan Denman and Technical Director Vin Durnan. THE BEGINNING: 1960-1985 By any measure, 1960 was an epoch-defining year. The Cold War between the Kremlin and the West held a fearful world in its grip; blowing through this continent and, whether we like it or not, the growth American spy pilot Gary Powers was shot down over Soviet territory; of national consciousness is a political fact… our national policies must France tested its first atomic bomb; Fidel Castro nationalised industry take account of it.” in Cuba and Nikita Khrushchev angrily pounded his shoe on his desk at the United Nations. Africa’s restlessness was mirrored in the United States, where Afro- American students began a series of sit-ins at lunch counters, Africa was in ferment. The Sharpeville massacre in South Africa demanding an end to segregation and recognition of blacks’ civil rights. brought demands for national independence to boiling point all over But two young Americans hinted at a new era ahead. At the Rome the continent and in French West Africa, colony after colony demanded Olympics, Muhammad Ali, then Cassius Clay, won a boxing gold medal, and secured its sovereignty. British Prime Minister Harold Macmillan and presidential candidate John F. Kennedy first suggested a Peace signalled that the same course must follow in Anglophone Africa when Corps be formed to help the less-favoured nations, an idea that bore he declared, first in Accra, then in Cape Town: “The wind of change is fruit after his election the following year. 2 3 ANNUAL REPORT AND FINANCIAL STATEMENT 2009 NMG’s expansion as seen through the eyes of shareholders UK 12 Tushauri UK 6 HOW OSAMA REPAID KENYA’S HOSPITALITY Radar Screen Ideas & Debate Life Mapepo BID TO SET UP LOCAL TRIBUNAL LIKELY TO FAIL POLICE LINK 2 MORE MURDERS TO ‘SERIAL KILLER’ Uchumi revival How banks generate Networking eases Years before the 1998 terrorist attack, he often visited the country for game hunting - PAGES 4 & 5 vijana wetu MPs shun debate on crucial Bill that could see violence suspects put on trial Vigilance House admits that two more prostitute killings in Thika are related brings company huge profits access to sacco loans yalinisumbua BACK PAGE PAGE 10 law into focus < AGENT PROVOCATEUR FEBRUARY 15-21, 2010 KENYAN EXCEPTIONALISM > Page 3 Page 13 Page 28 wasiangamie Victoire Ingabire has made her John Githongo argues that the theeastafrican.co.ke nikiwa mwanafunzi intentions known to run against country has always been violent, President Kagame Page 6 corrupt and elitist Page 19 A NATION MEDIA GROUP PUBLICATION Shindano la Insha A NATION MEDIA GROUP PUBLICATION Matukio muhimu KENYA SH60 TANZANIA SH1000 RWANDA RWF650 UGANDA SH1500 NO. 798 ∆ No. 16245 Mkoa wetu Uk 5 ∆ No. 16361 ∆ ∆ No. 16439 Vijana wataka washukiwa ya mwaka 2009 www.nation.co.ke NAIROBI, AUGUST 9, 2009 KSh40/00 (TSh800/00 : USh1,500/00) www.nation.co.ke KSh35/00 (TSh800/00 : USh1,500/00) www.nation.co.ke NAIROBI, FEBRUARY 20, 2010 KSh40/00 (TSh800/00 : USh1,500/00) NAIROBI, THURSDAY, DECEMBER 3, 2009 For now, Amisom NO. 745 MONDAY, FEBRUARY 15, 2010 WWW.BDAFRICA.COM KSH 50/- | TZ SH 1,000 | UGSH 1,400 Uk 10 waende Hague UK 2 Uk 4,5,7 na 9 NATIONAL usiguswe, Wabunge KENYA VISIT Inside the hostile BRIEFING OBAMA AUNT FIGHTS POLITICS CRISIS TALKS will not fi ght RESTRUCTURING MICHAEL OMONDI Jumatano, Juni 10, 2009 • KSh25 • TSh450 • USh950 No. 16622 Government Ketepa goes Jumapili, Januari 3, 2010 • KSh25 • TSh450 • USh950 TwoNo. 16838 decades of ambitious expansionAl Shabaab... as seen through NMG share price fo≥ a piece of loses out on takeover of RVR Mawaziri kukutana kuhusu fidia ya Sh8.7 bilioni Sh610 million RULES OF ENGAGEMENT: KCB’s new g≥owth plan Sh12b bottled Uingereza tayari kufichua majina walioiba mamilioni ya pesa PRIVATISATION FIASCO: Private equity fi rms African Union rejects Secrets of Clinton’s Indian investors have reduced What Raila will demand wate≥ ma≥ket their offer for a stake in the Kenya You are free to plea for hybrid mission step up battle for control of railway concession Petroleum Refineries amid dilly- Internet use hits demand dallying by powerful people be- By JAINDI KISERO threatening a costly lawsuit at the London By MICHAEL WAKABI for printers in Kenya BY ZEDDY SAMBU Economics Editor Court of International Arbitration, which The EastAfrican leaves 1,000 jobless lieved to be angling for a deal with New data from Synovate reveals all the other shareholders do not want. Tea processor, Ketepa, has jumped Libyans. Full story on page 8-9 that increased use of Internet his has been the week of sour shareholder The Egyptians also forced another move frican Union peacekeeping troops in into the crowded bottled water mar- relations in the battle for Rift Valley that could see RVR vice chairman Charles Mogadishu will continue to play a related technologies could spell T A Bank to send home 25 per cent of its workforce after acquisition of ket with the launch of its own brand, Railways (RVR), the troubled concession to Mbire, a Ugandan granted the chance to defensive role despite increasingly daring doom for players in the printing private meetings quit, Raila dares manage Kenya, Uganda railway system. buy 15 per cent of the fi rm’s shares and attacks by insurgents. Maisha, aiming to open a new rev- at meeting with Kibaki business. KENYA TO In a series of events that could easily have further diluting Transcentury. The 15-member African Union Peace technology that has centralised its large back office operations enue stream that will enable it to ANGLO LEASING: Page 8» MALIPO YA MAUNa MURITHI MUTIGA Balozi Macaire: PURSUE played out of the famous book and movie, Transcentury has written to the Kenyan and Security Council has shelved Uganda’s withstand rising turbulence in the Nchi yake imeahidi BARAZA la Mawaziri linatarajiwa Power to suspend Cabinet ministers, beginning with Ruto and Ongeri, top of agenda, says PM’s aide Barbarians at the Gates, Citadel Capital, the government to kick out Mr. Roy Pu� et, RVR’s request for change of the forces’ mandate. global commodities market. kusaidia Kenya kujadili pendekezo la kuwalipa mabil- AGOA Egypt based private equity fi rm fi red the lead investor out of the new vehicle that will Uganda contributes the bulk of the African Airlines mull strategy to The company, which processes kupata stakabadhi ioni wamiliki wa mashamba makubwa By NATION TEAM major focus of his talks with Presi- “It is no longer enough to say that ment that he had suspended Mr In separate interviews with mul- fi rst salvo by calling in the fi rst $10 million manage the restructured concession. This Union Mission in Somalia (Amisom). tackle fuel hedging needs and packs nearly 75 per cent of za washukiwa wakii katika Msitu wa Mau. DREAM dent Kibaki next week. Mr Salim we want to fight corruption; top civil Ruto, a one-time ally turned political tiple sources in the President’s and of capital call. could be a huge blow to Citadel. It wants changes to the rules of engagement Asia-Pacific airlines, stung by Kenya’s branded black teas, said it wa Anglo Leasing. Hatua hii imedokezwa hata ingawaje wiki rime Minister Raila Odinga Lone, the PM’s communications ad- servants have been suspended and rival, and Prof Ongeri and President PM’s camp, the Saturday Nation Another $10 million is expected in early It has also teemed up with Helios, a to allow the troops to defend themselves billions of dollars in losses and intended to use its vast tea distribu- mbili zilizopita Waziri wa Fedha, Bw Uhuru Cabinet rebels plans to make corruption and visor vowed that Mr Odinga will not we can’t stop there if we are serious,” Kibaki’s reversal of the order, that learnt that the two principals had March. Transcentury, the Kenyan rival London based private equity fi rm and a more e� ectively against attacks by militants, Kenyatta na mwenzake wa Misitu, Dkt Noah Proposed export the fate of Cabinet ministers falter in his push to have Mr Ongeri he said. prompted ODM to declare a crisis in Japan Airlines’ bankruptcy, face the tion network to deliver the product P rushed to Mauritius to block the capital call, Brazilian railway management fi rm to say diplomatic sources.