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Annual Report & Financial Statements Fy'07/08 Centum Investment

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Annual Report & Financial Statements Fy'07/08 Centum Investment Centum Investment Company Limited (formerly ICDC Investment Company Limited) Annual Report & Financial Statements fy‘07/08 Highlights Your Company’s Number of Shareholders 38,942 Years of existence 41 Profit before tax KSh 985 M Net Asset Value KSh 8 Bn Market capitalization KSh 14 Bn Contents Part 1 Chairman Statement 2-3 Taarifa ya Mwenyekiti 4-5 Directors Photos 6 Directors Profiles 7 Management Report 8 Ripoti ya Wasimamizi 9 Management Team 10 Business Review 11 Risk Management and Internal Controls 12 Corporate Governance 13-14 Corporate Social Responsibility 15 Part 2 Financial Information 16 Part 3 Shareholders Information 55 page 1 Centum annual report & financial statements for the nine month period ended 31 March 2008 Chairman’s Statement contributed greatly by the improved associate company performance. You will note that the year was a shorter, nine months, following the change of our annual reporting cycle from July-June to April-March. Investments During the year your company made investments totalling KSh 411 million in both quoted (Nairobi Stock Exchange) and unquoted (Private Equity). Of notable mention was the acquisition of a 35% stake in Longhorn Kenya Limited providing further diversification of Centum’s portfolio. Longhorn is a leading educational publisher with a loyal readership and a passionate management team. We believe that Longhorn’s future prospects are bright. Board and Management changes During the year 2008, your company witnessed changes at both the Board and Management levels. In March 2008, Dr. Kate Getao resigned from the board, which was necessitated by her relocation to South Africa. Dr. Getao was a committed member of the Board showed by her membership in various committees Dear Shareholder 2007 being an election year was marked as well as being the chairperson of the am pleased to report another year of by intense campaign activity. We Nomination & Governance and the steady and solid growth in your com- witnessed a sad chapter in our history Knowledge Management committees. pany, Centum. This report marks the where post-election violence severely first report of your company under its affected most parts of the country. Mr. Isaac Awuondo also resigned from the new identity. Coincidentally this also Economic productivity was disrupted Board in September 2008. Mr. Awuondo Imarks the end of our five-year strategy in the bread baskets of the country, had to tend to increased commitments at period. negatively affecting most of our investee Commercial Bank of Africa. Mr. Awuondo businesses. served the board for over 10 years and Achievements at the time of his departure he was the During the strategy period, which ran The interruption of agricultural Chairman of the Investment Committee from 2003 to 2008, we scored several production as well as displacement of the Board. important achievements: of productive workforce resulted in increasing inflationary pressure in the Mr. Peter Mwangi resigned from his • We more than doubled our number first quarter of the year coupled with position as the Managing Director of the of shareholders and made our share increasing energy costs and rising food company in October 2008 after serving more liquid through a share split; prices. All these events had a depressive for 4 years in this executive capacity. Mr. • We more than doubled our earnings effect on the stock market that led most Mwangi joined Centum in the year 2000 over the same period; shares including Centum to lose value in as the Investment Manager and rose • We grew the size of Centum’s the first quarter of the year. through the ranks to become the Chief portfolio by more than 100%. Executive Officer. Financial results Economic Environment Your company recorded a profit before I wish to call upon you shareholders to The economy recorded an impressive tax of KSh. 985M for the period ended join in thanking the lady and gentlemen GDP growth of 7% in 2007 buoyed March 2008. This result shows a robust for the exemplary service they gave to by agriculture, telecommunication and performance driven by the high quality the company. We wish them well in their tourism. Most of our investee business, of investments undertaken by your endeavours. reported impressive growth particularly company. As evidenced from the financial in the finance and the beverage sectors. statements the robust performance was page 2 Centum annual report & financial statements for the nine month period ended 31 March 2008 Chairman’s Statement Through a competitive process your and to look forward to working with Board believes it has found worthy them in building the leading investment replacements in Mr. Kibuga Kariithi, Mr. company in Africa. Imtiaz Khan who join as non executive “We are in directors and in Mr. James Mwirigi Outlook Mworia who joins as the new Managing The global economy has been hardest hit Director and Chief Executive Officer. a unique by the financial crisis that begun in the United States with some of the developed Mr. Kariithi brings a wealth of countries economies going in to recession. experience in the world of finance having position The Kenyan economy is likely to be previously worked as the Chief Executive affected to the extent that the level of Officer of Nairobi Stock Exchange and remittances from abroad dipping and currently holds the position of Executive to be the the level of tourists visiting the country director City Finance Bank Limited. reducing. This financial crisis is also likely to ease the interest that African Mr. Imtiaz Khan is a co-founding Director investment economies have seen from private equity of Cassia Capital Partners Limited. Mr. funds from the developed countries. Imtiaz worked for the International Despite this your Board continues to Finance Corporation (IFC) for 9 years gateway have an optimistic view of the future. covering investments in emerging markets The financial year 2008-2009 marks the across the world. Prior to joining IFC he beginning of another strategy period. worked at the PricewaterhouseCoopers into the The new strategy aims to position your (PWC) London Office as a corporate company as the leading investment finance executive. Mr. Khan holds a company in Africa. Masters in Business Administration East (MBA) with distinction from London The Kenyan economy is attracting a Business School and a Bachelor of lot of interest from professional fund Commerce Degree from the University managers from abroad. We are in a of Nairobi. He is also a Certified Public African unique position to be the investment Accountant of Kenya finalist. We do gateway into the East African region. expect the board to benefit greatly from There is also renewed attention by his strong investments background. region.” local investors to take advantage of the capital markets to advance their financial Mr. Mworia is not a newcomer to Centum ambitions. as this is the company where he begun his career. Mr. Mworia is an investment Dividend management professional with 8 years Your Board recommends a first and final experience in the industry. He began his dividend of Ksh 0.45 per share. It is our career at Centum where he rose to be the believe that this dividend is consistent Investment Manager before leaving to with the company’s performance. Your join TransCentury Limited as the Senior board intends to utilise the retained Investment Officer a position he has earnings to take advantage of available held for 2 years. He has over the years undervalued investment opportunities to accumulated a wealth of experience and grow your wealth as shareholders of the knowledge in all aspects of managing an company. investment company. Appreciation As you will have read from his profile, Finally, I would like to record my sincere Mr. Mworia has earned the CFA Charter gratitude to you shareholders for the and holds a Bachelor of Law Degree continued support, to the directors for from the University of Nairobi. He is their commitment and service to the also a qualified accountant. Your board company and to the management team believes that in him, it has found the right for their dedication and service to the candidate to steer the company to achieve company. its long term objectives. God bless you all. I would like to once more call upon you shareholders to join me in welcoming JAMES N. MUGUIYI these individuals to the Centum family Chairman November 2008 page 3 Centum annual report & financial statements for the nine month period ended 31 March 2008 Taarifa ya Mwenyeketi Mpendwa mwenyehisa, kampuni zilizoorodeshwa (soko la hisa i furaha kwangu kutoa taarifa la Nairobi) na kampuni za kibinafsi. ya mwaka nyingine juu ya “Hi ni Mmojawapo ya kampuni tuliowekeza maendeleo ya kampuni yako, inayostahili kutajwa ni Longhorn Kenya Centum. Hi ni taarifa ya kwanza Limited ambapo Centum inamiliki kutolewa na kampuni ikiwa na aslimimia 35 za hisa. Longhorn Njina mpya. Pia ni kuadimisha mwisho wa taarifa ya ni kampuni inayo ongoza katika mkakati wetu wa miaka mitano iliyopita. uchapishaji wa vitabu vya shule, inayo wateja waaminifu na kusimamiwa kwa Mafanikio kwanza ustadi. Ni imani yetu kuwa matarajio ya Kwenye kipindi hicho cha tangu mwaka siku zijazo ya kampuni hiyo ni mema. wa 2003 hadi mwaka 2008, tuliwahi kutimiza malengo kadhaa muhimu kutolewa Mabadiliko kwenye Halmashauri ya yafuatayo: Wakurugenzi • Wenyehisa waliongezeka mara dufu, Mnamo mwaka wa 2008, kampuni na kuimarika kwa dhamani kupitia ilishuhudia mabadiliko katika mgao wa hisa; na kampuni Halmashauri ya Wakurugenzi, na • Faida kuongezeka mara dufu katika pia kwenye usimamizi. Hapo Machi kipindi hicho; na mwaka wa 2008 Daktari Kate Getao • Tuliwahi kuongeza rasilimali ya ikiwa na alijiuzulu kama mkurugenzi kwa Centum kwa zaidi ya asilimia 100. sababu ya kuhamia nchini Afrika Kusini. Daktari Kate Getao alikuwa Mazingira ya uchumi mwanachama shupavu wa Halmashauri Uchumi ulikuwa kwa asilimia 7 mwaka jina mpya.” ya Wakurugenzi, jambo lililomwezesha wa 2007 kupitia kuimarika kwa sekta za kuhudumu kwenye kamati mbali mbali, kilimo, mawasiliano na utalii.
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