STAYING TRUE TO YOU 2017 ANNUAL REPORT AND FINANCIAL STATEMENTS NEWS ON THE GO Stay up to date on current events with our digital offerings. Top Websites www.nation.co.ke www.businessdailyafrica.com www.theeastafrican.com Total Reach www.swahilihub.com www.nairobinews.co.ke www.mwanaspoti.co.tz www.ntv.com www.monitor.co.ug 32.1 www.thecitizen.co.tz Million users 8.47 www.mwananchi.co.tz Social Media Nation Media Group 17.5k @nationmedia Grp Nation Media Group Apps 23.6 Nation News Daily Nation Business Daily Taifa Leo The East African Dail *367# The Nation Media Group is the largest media house in East and Central Africa with operations in print, broadcast and digital media, which attract and serve unparalleled audiences in Kenya, Uganda, Tanzania and Rwanda. Copyright © 2018 Nation Media Group All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the copyright holder. Nation Centre, Kimathi Street P.O. Box 49010-00100, GPO Nairobi, Kenya Telephone: +254 20 328 8000 www.nationmedia.com Browse, download or print our annual report at http://download.nation.news/2017AnnualReport.pdf View our 2017 results presentation at http://host.nationmedia.com/2017Results-InvestorBriefingPresentation.pdf STAYING TRUE TO YOU NATION MEDIA GROUP Annual Report & Financial Statements 2017 3 COMPANY INFORMATION Nation Centre Kimathi Street, P O Box 49010-00100, Registered Office Afisi ilioandikishwa Nairobi. Hamilton, Harrison & Mathews Delta Suites, Advocates Wakili Waiyaki Way, Nairobi. PricewaterhouseCoopers PwC Tower, Waiyaki Way Chiromo Road, Auditors Wakaguzi wa Hesabu Westlands, Nairobi. Standard Chartered Bank of Kenya Limited, Chiromo, Bankers Benki No. 48 Westlands Road, Nairobi. James Kinyua Nation Centre, Kimathi Street, Company Secretary Katibu P.O. Box 49010-00100, Nairobi. 4 Media of Africa for Africa STAYING TRUE TO YOU TABLE OF CONTENTS 06 07 08 10 14 17 Notice of the Ilani ya Mkutano Corporate Performance Chairman’s Taarifa ya Annual General Mkuu Wa Governance Highlights Statement Mwenyekiti Meeting Mwaka 20 23 28 34 36 40 Group Chief Ripoti ya Kaimu Sustainability Board of Board of Directors’ Executive Afisa Mkuu Report Directors Directors’ Report Officer’s Mtendaji Profiles Statement 43 46 48 50 53 58 Ripoti ya Directors’ Executive Team Statement Independent Financial Wakurugenzi Remuneration Of Directors’ Auditor’s Report Statements Report Responsibilities 94 95 96 Principal Proxy Form Fomu ya Shareholders and Uwakilishi Distribution of Shareholdings STAYINGALWAYS TRUE A STEP TO YOUAHEAD... NATION MEDIA GROUP Annual Report & Financial Statements 2017 5 NOTICE OF THE ANNUAL GENERAL MEETING Notice is hereby given that the Fifty-Fifth Annual General Meeting SPECIAL BUSINESS of the Shareholders of Nation Media Group PLC will be held in the Amphitheatre at the Kenyatta International Convention Centre, To consider and, if thought fit, to pass the following resolutions as Nairobi on Friday 29 June 2018 at 2.00 p.m. for the following Special Resolutions. purposes: 5. “That Dr. W. Kiboro, a director who retires in accordance ORDINARY BUSINESS with Article 101 of the Company’s Articles of Association and who is over the age of 70 years, shall notwithstanding that 1. To receive the financial statements for the year ended 31 fact, be re-elected as a director of the Company for a period December 2017, and the chairman’s, directors’ and auditors’ of one year.” reports thereon. 6. “That Prof. L. Huebner, a director who retires in accordance 2. To confirm the payment of the interim dividend of Shs. 2.50 with Article 101 of the Company’s Articles of Association and per share (100%) and to approve the payment of the final who is over the age of 70 years, shall not withstanding that dividend of Shs.7.50 per share (300%) on the ordinary share fact, be re-elected as a director of the Company for a period capital in respect of the year ended 31 December 2017. of one year.” 3. To confirm that PricewaterhouseCoopers continue in office 7. “That Mr. A. Poonawala , a director who retires in accordance as the Company’s Auditors in accordance with section 721 with Article 101 of the Company’s Articles of Association and of the Kenyan Companies Act 2015 and to authorize the who is over the age of 70 years, shall not withstanding that directors to fix the remuneration of the Auditors. fact, be re-elected as a director of the Company for a period of one year.” 4. To elect and re-elect the following directors: (a) In accordance with Article 96 of the Company’s Articles By order of the Board of Association, Mr. W. Mwangi and Mr. L. Otieno, are directors appointed on 5th July 2017, while Mr S. Dunbar-Johnson was appointed a director on 13th April 2018, who retire and being eligible offer themselves for election. (b) In accordance with Article 110 of the Company’s Articles J. C. Kinyua of Association, Dr. Y. Jetha, Mr. J. Montgomery and Mr. Secretary L. Mususa retire by rotation and being eligible, offer themselves for re-election. 13 April 2018 (c) In accordance with the provisions of section 769(1) of * Note: A member entitled to attend and vote may appoint a proxy the Companies Act 2015, the following directors being to attend and vote on his behalf. Such proxy need not be a member members of the Audit, Risk and Compliance Committee of the company. To be valid, proxy forms must be deposited at be elected to continue to serve as members of the said the company’s registered office not less than 48 hours before the Committee: appointed time of the meeting. (i) Mr. Dennis Aluanga (ii) Mr. Anwar Poonawala (iii) Dr. Simon Kagugube (iv) Mr. Leonard Mususa 6 Media of Africa for Africa STAYING TRUE TO YOU ILANI YA MKUTANO MKUU WA MWAKA Ilani inatolewa hapa kwamba Mkutano Mkuu wa Mwaka wa SHUGHULI MAALUM Hamisini na Tano wa Wenyehisa wa kampuni ya Nation Media Group PLC utafanyika katika ukumbi wa Amphitheatre katika Kuyazingatia na ikipatikana kuwa yanastahili, kupitisha maamuzi Jumba la Kenyatta International Convention Centre (KICC), yafuatayo kama Maamuzi Maalum. Nairobi na utakuwa ni siku ya Ijumaa tarehe 29 Juni 2018 kuanzia saa nane mchana ambapo masuala yafuatayo yatashughulikiwa: 5. “Kwamba Dkt. W. Kiboro, akiwa mkurugenzi mkuu anayestaafu kulingana na Kifungu cha 101 cha Mkataba wa SHUGHULI ZA KAWAIDA Kimashirika wa Kampuni hii na ambaye amepita umri wa miaka 70, bila kuzingatia hali hiyo, anachaguliwa tena kama 1. Kupokea taarifa za kifedha za mwaka uliomalizika tarehe 31 mkurugenzi wa Kampuni hii kwa muda wa mwaka mmoja.” Desemba 2017, pamoja na ripoti za mwenyekiti, wakurugenzi wakuu na wakaguzi wa mahesabu ya kifedha. 6. “Kwamba Prof. L. Huebner, akiwa mkurugenzi mkuu anayestaafu kulingana na Kifungu cha 101 cha Mkataba wa 2. Kuthibitisha malipo ya mgao wa muda wa Shs. 2.50 kwa kila Kimashirika wa Kampuni hii na ambaye amepita umri wa hisa (100%) na kuidhinisha malipo ya mgao wa mwisho wa miaka 70, bila kuzingatia hali hiyo, anachaguliwa tena kama Shs. 7.50 kwa kila hisa (300%) ya kawaida ya mtaji katika mkurugenzi wa Kampuni hii kwa muda wa mwaka mmoja.” mwaka uliomalizika 31 Desemba 2017. 7. “Kwamba Bw. A. Poonawala, akiwa mkurugenzi mkuu 3. Kuthibitisha kuwa kampuni ya PricewaterhouseCoopers anayestaafu kulingana na Kifungu cha 101 cha Mkataba wa itaendelea kuhudumu afisini kama Kampuni ya Ukaguzi wa Kimashirika wa Kampuni hii na ambaye amepita umri wa mahesabu kulingana na sehemu ya 721 ya Sheria ya Kampuni miaka 70, bila kuzingatia hali hiyo, anachaguliwa tena kama za Kenya ya mwaka 2015 na kisha kuidhinisha wakurugenzi mkurugenzi wa Kampuni hii kwa muda wa mwaka mmoja.” kuweka mshahara za Wakaguzi. 4. Kuwachagua na kuwachagua tena wakurugenzi wafuatao: Kwa amri ya Bodi (a) Kulingana na Kifungu cha 96 cha Mkataba wa Kimashirika wa Kampuni hii, Bw. W. Mwangi na Bw. L. Otieno, ambao ni wakurugenzi wakuu walioteuliwa tarehe 5 Julai 2017, huku Bw. S. Dunbar-Johnson aliyeteuliwa kama mkurugenzi mkuu mnamo 13 Aprili 2018, wanastaafu na kwa sababu wanafuzu, wanajitokeza kuchaguliwa. J. C. Kinyua Katibu (b) Kulingana na Kifungu cha 110 cha Mkataba wa Kimashirika wa Kampuni hii, Dkt. Y. Jetha, Bw. J. Tarehe 13 Aprili 2018 Montgomery na Bw. L. Mususa wanastaafu kwa mzunguko na kwa sababu wanafuzu, wanajitokeza ili *Fahamu: Mwanachama yeyote anayestahili kuhudhuria na kuchaguliwa tena. kupiga kura anaweza kumchagua mwakilishi ili ahudhurie na kupiga kura kwa niaba yake. Si lazima mwakilishi huyo (c) Kulingana na sehemu ya 769 (1) ya Sheria ya Kampuni awe mwanachama wa Kampuni hii. Sharti fomu za uwakilishi ya 2015, wakurugenzi wakuu wafuatao, wakiwa zilizojazwa zitumwe kwa afisi iliyosajiliwa ya Kampuni hii katika wanachama wa Kamati ya Ukaguzi, Kukabili na Hatari na muda usiopungua saa 48 kabla ya saa ya mkutano. pia Uzingatiaji wa kanuni, wanachaguliwa ili waendelee kuhudumu kama wanachama wa Kamati hiyo: (i) Bw. Dennis Aluanga (ii) Bw. Anwar Poonawala (iii) Dkt. Simon Kagugube (iv) Bw. Leonard Mususa STAYING TRUE TO YOU NATION MEDIA GROUP Annual Report & Financial Statements 2017 7 CORPORATE GOVERNANCE The Company is committed to upholding the best international of the Group. The team is responsible for implementing the standards of good corporate governance. strategy approved by the board and also deals with operational matters and co-ordinates activities across the Group’s various The role of the Board is to determine the Company’s policies and subsidiary companies and divisions. strategies, to monitor the attainment of the business objectives and to ensure that the Company meets its obligations to the INSIDER DEALINGS shareholders. The directors are also responsible for overseeing The board has a documented policy on insider dealings in the the Group’s internal control systems.