CONTENTS 1 What’s inside this report 2-7 50th Anniversary Highlights 8-9 Notice of Annual General Meeting Tangazo la Mkutano Mkuu wa Mwaka 10 Corporate Governance 11 Performance Highlights HIGHLIGHTS 12-18 Chairman’s Statement Taarifa ya Mwenyekiti 20-25 Group Chief Executive’s Report Ripoti ya Afi sa Mkuu Mtendaji wa Kampuni 26-28 Corporate Social Responsibility 29-30 Human Resources 31 Board of Directors Halmashauri ya Wakurugenzi 32-34 Board of Directors’ Profi les 35-36 Directors’ Report Taarifa ya Wakurugenzi 38-39 Executive Team Profi les BUSINESS REVIEW 40 Statement of Directors’ Responsibility 42 Report of the Independent Auditor to Members of Nation Media Group Limited 43 Consolidated Statement of Comprehensive Income 44 Statement of Financial Position – Group and Company 45-46 Consolidated Statement of Changes in Equity 47 Company Statement of Changes in Equity 48 Group Statement of Cash Flows 49-76 Notes to the Financial Statements 77 Five-year Financial Summary FINANCIAL STATEMENTS 78 Principal Shareholders and Distribution of Shareholding 79-80 Proxy Form / Fomu ya Uwakilishi 2 Nation Media Group Annual Report and Financial Statements 2010 50th Anniversary Highlights We commemorated our 50th debated the path to regional integration and spoke out on the continent’s quality of leadership as the curtain rose on Nation Anniversary with pomp and Media Group’s 50th Anniversary celebrations. show and delivered an epic The conference was a great acknowledgment of Nation Media Group’s emergence over the last 50 years as a leading media performance ending the year as company in Africa. The event confi rmed the group’s rise to Kenya’s Company of the Year. prominence in the region and elicited praise from many peer media practitioners in the region. This fi rmly aligns the group’s intention to be the Media of Africa for Africa. The conference achieved the following objectives: • The forum re-examined media gains and reset agendas in the light of new developments in the industry. • Highlighted the industry’s gradual shift towards emerging technologies in news collection, preparation, and dissemination. • Gave Nation Media Group and its products an affi rmation from peers and galvanized the group’s intention to lead in Africa. L W Gitahi Group Chief Executive • The conference proposed solutions on how African policy can be shaped in light of the rapid transitions taking place in PAN AFRICA MEDIA CONFERENCE the industry as it grapples with the eff ects of technological Africa’s economic future and the challenge of uniting people and change. nations drew eminent politicians and scholars to a historic public • Opened the debate about Africa hosting a similar forum debate in Nairobi for the Pan Africa Media Conference 2010. every two years and positioned NMG as a regional media With more than 1,500 delegates drawn from 18 countries, champion with a strong heritage to boot. the conference examined the role of a free press in Africa, PAN AFRICAN MEDIA CONFERENCE 2010 50TH ANNIVERSARY HIGHLIGHTS 3 PAN AFRICAN MEDIA CONFERENCE GALA DINNER 4 Nation Media Group Annual Report and Financial Statements 2010 The African journalism awards for lifetime achievement and inspiration honored fi ve journalists from Western, Eastern, Central, Northern and Southern Africa with life achievement and inspiration awards. PAN AFRICA MEDIA CONFERENCE GALA DINNER Those who received life achievement plaques were Trevor At the Gala dinner, NMG feted some of the continent’s Ncube (Zimbabwe), Mohammed Amin (posthumously, Kenya), most courageous and dedicated journalists over the years as Ray Ekpu (Nigeria), Alexis Sundihije (Burundi), and Mohammed part of its commemoration of its golden jubilee. The African Hussein Haikal (Egypt). journalism awards for lifetime achievement and inspiration honored fi ve journalists from Western, Eastern, Central, PAN AFRICA MEDIA CONFERENCE CULTURAL DINNER Northern and Southern Africa with life achievement and At the closing of the conference, 900 delegates were treated inspiration awards. to a night of African cuisine and music to mark a truly landmark and befi tting media event. It was a delightful evening with the Another fi ve journalists from each of the regions received conference participants getting a chance to mingle and enjoy special mentions for their journalism. The event was well the diversity from across the continent. The cultural dinner was attended with more than 800 guests drawn from the private sponsored by the Coca Cola Company. sector, diplomatic corps and captains of industry who graced the occasion. The gala dinner was sponsored by Diamond Trust Bank. PAN AFRICAN MEDIA CONFERENCE GALA DINNER 50TH ANNIVERSARY HIGHLIGHTS 5 50TH ANNIVERSARY COMMEMORATION Westgate Silver Bird Cinema theatre in the presence of more PUBLICATIONS – BIRTH OF A NATION & GOLDEN than 300 CEOs and company executives. The documentary was YEARS then exhibited to full houses for 3 weeks thereafter. More than Birth of A Nation is probably the most nuanced historical study 400 copies of the DVD have been sold or given as gifts to key of a major media outlet in Eastern Africa. Gerry Loughran the stakeholders. author, narrates the story of the Nation against the background of the politics of ‘transition’ in Kenya following the country’s OWN A PIECE OF HISTORY PHOTO EXHIBITION independence and its subsequent transformation over the As part of the Nation Media Group’s 50th Anniversary intervening years. The book is both a historical text and a critical Commemoration, a special photo exhibition of 124 landmark examination into state–media relations in the country. pictures were displayed at various venues in Kenya. The pictures were limited editions of the most relevant and epic photographs The Golden Years is a souvenir coff ee table publication, since 1960 depicting the journey of the country and provided developed to trace the journey of Nation Media Group from a unique opportunity for participants to own a unique piece of inception to the present. It is a well written book with both history. The pictures now form a permanent exhibition at the pictorial as well as editorial depth that visits the fi ve decades of Kenyatta International Conference Centre in a space provided the Group’s history. for Nation Media Group at the facility. HEADLINES IN HISTORY DOCUMENTARY NMG 50TH ANNIVERSARY GOLF CLASSIC A four-part series, this hour-long documentary, ‘Headlines in TOURNAMENT History’, chronicles post-colonial Kenya by reviewing the stories The NMG 50th Anniversary Golf Classic featured more than that made headlines in the newspapers of the Nation Media 1,400 golfers from Kenya, Uganda and Tanzania. The series was Group. The documentary won several ‘best documentary’ a tour across Kenya and featured two tournaments played in awards in 2010 including Kenya’s premier fi lm and TV Awards Uganda and Tanzania. – The Kalasha Awards. Directed by award-winning producer and director Judy Kibinge, Headlines in History illustrates major The golf classic incorporated events in Arusha, Kampala, stories at NMG from its change from black and white pictures Kisumu, Machakos, Muthaiga, Nanyuki, Thika, Nyali, Royal to acquisition of hi-tech equipment enabling it to publish in Nairobi, Kitale, Nakuru and the fi nals held at Muthaiga. The colour. The documentary was premiered in October 2010 at overall winner got an all expense paid trip to South Africa. 50TH ANNIVERSARY STAFF BREAKFAST 6 Nation Media Group Annual Report and Financial Statements 2010 50TH ANNIVERSARY BOOKS GOLF CLASSIC OWN A PIECE OF HISTORY 50TH ANNIVERSARY HIGHLIGHTS 7 B@98B@8E;I8@C8KF?<CG9IFB<IC8N;<8C 1SJODJQBMTUPIFMQ.1TUPSFBDIDPOTFOTVTPOTUJDLJOHQPJOUTJOESBGUMBX 1"(& ² Gh'*/-// nnn%eXk`fe%Zf%b\ E8@IF9@#=I@;8P#D8I:?(0#)'(' BJ_*,&''KJ_/''&''1LJ_(#,''&'' 8EE@M<IJ8IP M@J@FE=FI8=I@:8 'SPNMFGU 1SJNF.JOJTUFS3BJMB0EJOHB UIF"HB,IBO 1SFTJEFOU,JCBLJ 3XBOEB1SFTJEFOU1BVM,BHBNFBOEGPSNFS5BO[BOJBO1SFTJEFOU#FOKBNJO.LBQBBGUFSUIFPQFOJOHPGUIFGJSTU1BO "GSJDB.FEJB$POGFSFODF BOEUIFUIBOOJWFSTBSZDFMFCSBUJPOTPGUIF/BUJPO.FEJB(SPVQBUUIF,*$$ /BJSPCJ ZFTUFSEBZIahmh(EBSFNMAHGB C\X[\ij[`jZljjZfek`e\ekËjle`kpXe[ifc\f]]i\\d\[`XXkEXk`feËjXee`m\ijXipZ\c\YiXk`fej #Z/"5*0/5FBN bgm^`kZmbhgZg]lihd^hnmhgma^\hgmb& Épab\aa^]^l\kb[^]ZlÊZghma^k_hkf _khfZeeho^kma^phke]%pZlhi^g^][r g^gmÍljnZebmrh_e^Z]^klabiZlma^\nk& h_ma^;^kebgZ`k^^f^gmË' Ik^lb]^gmDb[Zdb' _kb\ZÍl ^\hghfb\ _nmnk^ mZbgkhl^hgma^GZmbhgF^]bZ@khniÍl Ma^khng]mZ[e^h_^fbg^gmi^klhgl :fhg`ma^]b`gbmZkb^lp^k^KpZg& Zg] ma^ \aZee^g`^ h_ .)maZggbo^klZkr\^e^[kZmbhgl' l^mma^lmZ`^_hkma^IZg:_kb\ZF^]bZ ]ZÍl Ik^lb]^gm IZne DZ`Zf^% Ikbf^ ngbmbg` i^hie^ Zg] gZ& : laZki pZkgbg` pZl lhng]^] <hg_^k^g\^%ma^\^gmk^&ib^\^h_ma^GZ& Fbgblm^k KZbeZ H]bg`Z% Fk FdZiZ% mbhgl]k^p^fbg^gmiheb& Z`Zbglm ma^ ]Zg`^kl h_ _hk^b`g Zb] mbhgÍl[bkma]Zr_^lmbobmb^l%^qi^\m^]mh _hkf^k FhsZf[bjn^ Ik^lb]^gm mb\bZglZg]l\aheZklbgmh [r _hkf^k MZgsZgbZgIk^lb]^gm ;^g& eZlmmhma^^g]h_mablfhgma' ChZjnbf<abllZgh%Zg]Gh[^eeZnk^Zm^ Z ablmhkb\ in[eb\ ]^[Zm^ cZfbgFdZiZ%pah\Zf^hnmlmkhg`er PZg`ZkbFZZmaZb' 8bgGZbkh[br^lm^k]Zr' Z`Zbglm Z ikhihl^] _k^^ mkZ]^ Z`k^^& 9`ik_[Xp]\jk`m`k`\j Ma^raZ]Zee[^^gk^\^bo^][rma^ Ma^r^qZfbg^]ma^khe^h_Z_k^^Ik^ll f^gm [^mp^^g >nkhi^ Zg] :_kb\Z É Ma^mph&]Zr\hg_^k^g\^%pab\abl[^bg` bg:_kb\Z%]^[Zm^]ma^iZmamhk^`bhgZe ma^>\hghfb\IZkmg^klabi:`k^^f^gm Zmm^g]^] [r g^Zker *%))) ]^e^`Zm^l $0/5*/6&%0/1"(& E<NJ)$((#*)$*,#98:BsFG@E@FE()$(*sC<KK<IJ(+sNFIC;(.$),s9LJ@E<JJ).$*(sJGFIK-($-. 8 Nation Media Group Annual Report and Financial Statements 2010 In accordance with Article 110 of the Company’s Articles of Notice of Annual Association, Mr F O Okello and Mr J Lee, retire by rotation and General Meeting being eligible, off er themselves for re-election.