ANNUAL R E P O RT

AND FI N A N C I A L
STATE M E N T S

2015
OUR
VISION
To be the Media of
Africa for Africa
OUR
To create value for our stakeholders
and to positively influence society

MISSION.
by providing media that informs,
educates and entertains.
 FUTURE
We show pride,
enthusiasm and
dedication in
everything that
we do. We are
committed to
selling and
delivering high
quality products
and services.
THE
The Nation Media Group is the largest independent 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.

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Our Brands
Commissioning of the Printing Press by His Highness the Aga Khan on March 17th, 2016 in the presence of Cabinet Secretary of
ICT Mr. Joe Mucheru, Governor of Machakos County, Dr. Alfred Mutua, Chairman Dr. Kiboro and GCEO, Joe Muganda.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 3
Content
Highlights Business Review

Notice of Annual Corporate Social

PG 05 General Meeting PG 24 Responsibility
IIani ya Mkutano
Mkuu wa Mwaka PG 06 Human Resources PG 30
Corporate Board of
PG 08 Governance PG 34 Directors
Chairman’s Halmashauri ya
Statement PG 10 Wakurugenzi PG 34
Taarifa ya Board of
PG 14 Mwenyekiti PG 38 Directors’ Profiles
Group Chief Directors’ Report
Executive PG 18 PG 42
Officer’s Report Ripoti ya
Ripoti ya PG 43 Wakurugenzi Wakuu
PG 21 Afisa Mkuu Mtendaji
Executive Team PG 44
Statement of
PG 46 Directors’
Responsibilities

Financial Statements

Report of the
PG 47 Independent
Auditor

Financial Statements PG 48
Notes to Financial
PG 54 Statements
Five Year
Financial Summary PG 85
Principal Shareholders
and Distribution of
PG 86 Shareholding 31
December 2015
Proxy Form PG 87
PG 88 Fomu ya Uwakilishi

4 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notice of Annual General Meeting

Notice is hereby given that the Fifty-

Third Annual General Meeting of the
Shareholders of Nation Media Group
Limited will be held in the Amphitheatre
at the Kenyatta International
Convention Centre, Nairobi on Friday
24 June 2016 at 2.00 p.m. for the
following purposes:

Ordinary Business (4) Ms. N. Karago retires and does not offer herself for
re-election.
1. To receive the financial statements for the year
ended 31st December 2015, and the chairman’s, Special Business
directors’ and auditor’s reports thereon.
To consider and, if thought fit, to pass the following
2. To confirm the payment of the interim dividend resolutions as Special Resolutions.
of Shs.2.50 per share (100%) and to approve
the payment of the final dividend of Shs.7.50 per 5. “That Dr. W. Kiboro, a director who retires in
share (300%) on the ordinary share capital in accordance with Article 101 of the Company’s
respect of the year ended 31 December 2015. Articles of Association and who is over the age
of 70 years, shall notwithstanding that fact, be
3. To confirm that PricewaterhouseCoopers continue re-elected as a director of the Company for a
in office as the Company’s Auditors in accordance period of one year.”
with Section 723(b) of the Companies Act 2015
Laws of Kenya and to authorize the directors to fix 6. “That Prof. L. Huebner, a director who retires in
their remuneration. accordance with Article 101 of the Company’s
Articles of Association and who is over the age
4. To elect and re-elect the following directors: of 70 years, shall not withstanding that fact, be
re-elected as a director of the Company for a
(1) In accordance with Article 96 of the Company’s period of one year.”
Articles of Association, Mr. J. Muganda, a director
appointed on 1st July 2015, retires and being 7. “That Mr. G. Wilkinson, a director who retires in
eligible offers himself for election. accordance with Article 101 of the Company’s
Articles of Association and who is over the age
(2) In accordance with Article 110 of the Company’s of 70 years, shall not withstanding that fact, be
Articles of Association, Mr. D.Aluanga, re-elected as a director of the Company for a
Dr. S. Kagugube and Mr. S. Gitagama, retire by period of one year.”
rotation and being eligible, offer themselves for
re-election.
By order of the Board
(3) In accordance with the provisions of Section J C Kinyua
760 of the Companies Act 2015, the following Secretary
Directors being members of the Board Finance
and Audit Committee be elected to continue to 18 March 2016
serve as members of the said Committee:
i. Mr. Dennis Aluanga Note:
ii. Mr. Anwar Poonawala A member entitled to attend and vote may appoint a
iii. Dr. Simon Kagugube proxy to attend and vote on his behalf. Such proxy
iv. Mr. Leonard Mususa need not be a member of the Company. To be valid,
proxy forms must be deposited at the Company’s
registered office not less than 48 hours before the
appointed time of the meeting.
NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 5
Illani Ya Mkutano Mkuu Wa Mwaka
Ilani inatolewa hapa kwamba Mkutano
Mkuu wa Kila Mwaka wa Hamsini na
Tatu wa Wenyehisa wa Nation Media
Group Limited utafanyika kwenye
Ukumbi wa Ampitheatre ndani ya
Jumba la Mikutano ya Kimataifa la
KICC, Nairobi mnamo Ijumaa, Juni 24,
2016 saa nane mchana kwa
ajenda zifuatazo:

Shughuli za Kawaida (4) Bi. N. Karago anastaafu na hajajitokeza kutaka

kuchaguliwa tena.
1. Kupokea taarifa za kifedha za mwaka uliomalizikia
Desemba 31, 2015, na baadaye ripoti za Shughuli Maalum
mwenyekiti, wakurugenzi na mkaguzi wa fedha.
Kuzingatia na ikionekana kufaa, wenyehisa
2. Kuthibitisha kulipwa kwa mgao wa muda wa wapitishe maazimio yafuatayo kama Maazimio
Shs.2.50 kwa kila hisa (100%) na kuidhinisha Maalum.
kulipwa kwa mgao wa mwisho wa Sh7.50 kwa
kila hisa (300%) kwa mtaji wa kila hisa kwa 5. “Kwamba Dkt. W. Kiboro, mkurugenzi
mwaka uliomalizikia Desemba 31, 2015. anayestaafu kwa mujibu wa Kifungu cha 101
cha Ushirika wa Kampuni, na aliye na umri
3. Kuthibitisha kwamba kampuni ya wa zaidi ya miaka 70, bila kuzingatia hayo,
PricewaterhouseCoopers itaendelea achaguliwe tena kama Mkurugenzi wa Kampuni
kuhudumu kama wakaguzi wa fedha za Kampuni kwa kipindi cha mwaka mmoja.”
kwa mujibu wa Sehemu ya 723(b) cha Sheria za
Kampuni 2015, Sheria za Kenya na kuwaidhinisha 6. “Kwamba Prof. L Huebner, mkurugenzi
Wakurugenzi kutenga malipo yao. anayestaafu kwa mujibu wa Kifungu cha 101
cha Ushirika wa Kampuni, na aliye na umri
4. Kuchagua na kuwachagua tena wakurugenzi wa zaidi ya miaka 70, bila kuzingatia hayo,
wafuatao: achaguliwe tena kama Mkurugenzi wa Kampuni
kwa kipindi cha mwaka mmoja.”
(1) Kwa mujibu wa kifungu cha 96 cha Ushirika wa
Kampuni, Bw. J. Muganda, ambaye ni mkurugenzi 7. “Kwamba Bw. G. Wilkinson, ambaye ni
aliyeteuliwa mnamo Julai 1, 2015, anastaafu na mkurugenzi anayestaafu kwa mujibu wa
kwa kuwa anastahili kuwania, anajitokeza Kifungu cha 101 cha Ushirika wa Kampuni,
ili achaguliwe. na aliye na umri wa zaidi ya miaka 70, bila
kuzingatia hayo, achaguliwe tena kama
(2) Kwa mujibu wa kifungu cha 110 cha Ushirika Mkurugenzi wa Kampuni kwa kipindi cha
wa Kampuni, Bw. D.Aluanga, Dkt. S. Kagugube mwaka mmoja.”
na Bw. S. Gitagama, wanastaafu kwa mzunguko
na kwa vile wanaruhusiwa kuwania tena, Kwa Amri ya Bodi
wanajitokeza ili wachaguliwe tena. J C Kinyua
Katibu
(3) Kwa mujibu wa kanuni za Sehemu ya 760 ya
Sheria ya Kampuni ya 2015, katika sheria 18 Machi 2016
za Kenya. Wakurugenzi wafuatao, wakiwa
wanachama wa Bodi ya Fedha na Kamati ya Fahamu:
Ukaguzi wa fedha, wachaguliwe ili kuendelea Mwanachama anayeruhusiwa kuhudhuria na kupiga
kuhudumu kama wanachama wa kamati hiyo. kura anaweza kumteua mtu wa kumuwakilisha na
i. Bw. Dennis Aluanga kupiga kura kwa niaba yake. Mwakilishi huyo si
ii. Bw. Anwar Poonawala lazima awe mwanachama wa Kampuni. Hata hivyo,
iii. Dkt. Simon Kagugube ili kutambuliwa, ni sharti mwakilishi huyo ajaze
iv. Bw. Leonard Mususa fomu na kuziwasilisha kwenye Afisi zinazotambulika
za Kampuni, kwa kipindi kisichopungua saa 48
kabla ya muda kamili wa mkutano.

6 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
www.nation.co.ke
www.theeastfrican.com
www.businessdailyafrica.com
www.swahilihub.com
www.mwanaspoti.co.tz
www.nairobinews.co.ke
www.jobs.n-soko.com
www.monitor.co.ug
www.thecitizen.co.tz
www.mwananchi.co.tz
www.ntv.co.ke

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 7
Corporate Governance

The Company is committed to

upholding the best international
standards of good corporate
governance.

The role of the Board is to determine the Company’s Dr. Y. Jetha, Mr. R. Dowden, Mr. J. Muganda,
policies and strategies, to monitor the attainment Mr. S. Gitagama, Ms. N. Karago and Mr. J.
of the business objectives and to ensure that the Montgomery as members.
Company meets its obligations to the shareholders.
The directors are also responsible for overseeing the 4. Editorial Committee, which considers
Group’s internal control systems. These controls are and advises on the Group’s editorial policy,
designed both to safeguard the Group’s assets and the journalistic code of ethics and addresses
to ensure the reliability of the financial information legal responsibilities and which meets quarterly
used within the business. in each year or as often as necessary.
Mr. F. O. Okello chairs the committee which
The Board has the following standing Board has Mr. D. Aluanga, Prof. O. Mugenda,
Committees: Mr. R. Dowden, Mr. J. Muganda and
Mr. T. Mshindi as members.
1. Nominations Committee, which is responsible
for executive and non-executive board 5. Human Resources and Remuneration
appointments and which meets twice a year. Committee, whose primary objective is
Mr. G. M. Wilkinson chairs the committee to assist the Group to achieve its goal
which has Dr. W. D. Kiboro, of adhering to the best practices of Corporate
Mr. A. Poonawala, Prof. L. Huebner and Governance relating to Human Resources
Mr. J. Muganda as members. The members Management and Development. The Committee
of the Committee with the exception of the meets quarterly in each year. Dr. Y Jetha chairs
Group Chief Executive Officer are independent the committee, which has Mr. A. Poonawala,
and non-executive directors. Prof. O. Mugenda and Mr. L. Mususa as
members. The members of the committee are
2. Finance and Audit Committee, whose independent and non-executive directors.
responsibility is to ensure that the systems of
internal controls are effectively administered, The Chairman of the Board is an independent and
to define the responsibilities of the internal non-executive director and is elected by the board
auditors, liaise with the external auditors and of directors to hold office after every three years.
to review the annual capital and revenue
budgets, the interim results and the full There is a clearly defined organisational structure
year financial statements and which meets within which individual responsibilities and authority
quarterly in each year. Mr. D. Aluanga chairs limits are identified in relation to internal financial
the committee which has Mr. A. Poonawala, Dr. controls. The structure is complemented by
S. Kagugube and Mr. L. Mususa as members. policies and management operates the business in
The members of the committee are independent compliance with these policies.
and non-executive directors.
The Group Chief Executive Officer chairs the
3. Strategic Planning Committee, which reviews Executive Team, which comprises the executive
the Group’s medium and long term directors and the senior executives of the Group.
strategic aims and direction and which meets The team deals with operational matters and
quarterly in each year. Prof. L Huebner chairs co-ordinates activities across the Group’s various
the committee which has Mr. G. M. Wilkinson, subsidiary companies and divisions.

8 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
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NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 9
Chairman’s
Statement

“The Group has over the

years maintained its editorial
objectivity and our various
media platforms are a
reputable source for credible
news and information.”

Dr. Wilfred D. Kiboro

Chairman

10 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Performance Highlights
Turnover (Shs m) Shareholder’s Funds (Shs m)
16,000 10,000

9,000
14,000
8,000
12,000
7,000
8,905
10,000 6,000
8,714
13,374 13,351 8,182
12,347 12,340
8,000 11,246 5,000 7,251

6,053
4,000
6,000
3,000
4,000
2,000

2,000
1,000

0 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Capital Expenditure (Shs m) Dividends Per Share (Shs)

1,800

1,600

1,400 12.0

1,200
10.0
1,526
1,000
8.0
800 10.0 10.0 10.0 10.0
1,004
6.0
8.0
600

628 4.0
400 468
457 404
2.0
200

0 0.0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Profit Before Tax (Shs m) Earnings Per Share (Shs)

4,000 16.0

3,500

3,000
12.0

3,587 3,624
2,500 3,505
13.3 13.4
12.7 13.1
2,000 2,810 2,823 11.8
8.0

1,500

1,000 4.0

500

0 0.0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 11
Chairman’s Statement Report
Ladies and Gentlemen, it is my the Shs 3.6 billion recorded in platforms, without payment of any
pleasure to update you on the 2014. royalties under “the must carry
performance of the Group and to rule”.
review the economic, business, Dividends
regulatory and competitive This significantly adversely
environment that we experienced The directors have recommended affected the performance of the
in respect of the year ended 31st for shareholders’ approval, the television business as following
December 2015. payment of a final dividend for the transition from analogue
the year of Shs 7.50 (300%) per to digital broadcasting, many
Economic and Political share on the issued share capital viewers were unable to watch
Environment as at 31st December 2015, which, television unless they had access
together with the interim dividend to set top boxes. This invariably
Kenya’s economy in 2015 of Shs 2.50 (100%) per share resulted in reduced advertising
remained fairly stable growing paid out on 30th September 2015, on television, as advertisers are
marginally at 5.6%, compared to makes a total dividend payout of attracted by a stations viewership
5.3% in 2014. The growth was Shs 10.00 per share (400%) for to promote their goods and
mainly supported by expansions the year ended 31st December services. I am pleased to inform
in agricultural production, 2015. The proposed dividend you that we have successfully
construction, financial and payout has been maintained at transitioned all our Free-To-
insurance, wholesale and retail the same level as that of the Air stations to digital television
trade, and transport and storage. previous year. broadcasting and the NTV and
A key challenge to Kenya’s growth QTV television stations are
was, however, the insecurity Share Price and Market available countrywide.
following several terrorist attacks Capitalisation
against innocent civilians, I am also pleased to inform you
resulting in the loss of lives and The NMG share price was that The EastAfrican newspaper,
destruction of property. adversely affected by the which was banned in 2015 in
downturn in the demand for Tanzania, during which time
As you are aware, 18 public equities at the Nairobi Securities we were unable to generate
listed companies - but not the Exchange, with many investors any circulation and advertising
Nation Media Group - issued opting for the money markets and revenues, is now back on sale in
profit warnings as a result of the investing in government securities the country.
particularly difficult business and corporate bonds. As at 31st
environment. NMG was adversely December 2015, NMG shares Copy sales of the Group’s
affected by the reduction in were trading at Shs 191 per share, newspapers were boosted by the
advertising revenue and the which is a market capitalisation of elections coverage in Tanzania
depreciation of the Kenya Shs 36.0 billion. and Uganda and the publications
Shilling against the major world were recognised by local and
currencies, which resulted in Business Environment international monitoring bodies for
increased costs of the imported the balanced, fair and accurate
materials used for newspaper In 2015 we faced a major reporting of the presidential,
production and the cost of foreign challenge during the digital parliamentary and civic
television programs. In addition, migration from analogue to digital candidates. The Group has over
the significant outstanding debt television broadcasting in Kenya, the years maintained its editorial
owed to the Group by advertisers as a result of which we switched objectivity and our various media
was also a major factor, since it is off our television stations for a platforms are a reputable source
our policy to provide for all debts period of three weeks. This was for credible news and information.
that are over 90 days. We are as we challenged the regulator in
focused on collecting the debts the courts to award the leading The method of consumption
owed to us. independent media houses a of news, information and
digital signal transmission license entertainment has changed, as
Financial Performance to enable us to transmit our individuals move away from the
own television signals. We were traditional newspapers, radio and
The Group revenue in 2015 at Shs particularly unhappy with the television to the digital platforms
12.3 billion was a 7.6% reduction decision by the Communications from which they are able to obtain
in comparison to the Shs 13.4 Authority of Kenya to permit the news and information in real time
billion realised in 2014. The 2015 licensed digital signal transmitters and which are mainly accessed
profit before tax at Shs 2.8 billion to carry all the local free to through mobile phones, laptops
was a reduction of 22% against air television stations on their and tablets which are connected

12 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Chairman’s Statement Report continued...

to the internet. This disruption to additional station capacity. The Chief Executive Officer with the
the traditional business model company has established 15 appointment of Mr. Joe Muganda,
has presented both challenges transmission sites and by the end following the retirement of Mr.
and opportunities. NMG has of this year, these will have been Linus Gitahi after nine years at the
responded to these technological expanded to 35 sites around helm of the Company. We are very
changes and our various websites the country, which is a positive grateful to Mr. Gitahi for steering
are among the most frequented development for us as we shall the company during his tenure
sites on the African continent, have a countrywide and we welcome
where the Daily Nation website infrastructure network. Mr. Muganda, who joined the
has the highest number of page Group after a distinguished
views and unique readers. We are Challenges career with various multinational
very optimistic that the Group will companies.
benefit from the global audiences We continue to operate in an
and the revenue opportunities unpredictable and challenging Our People
presented by the digital platforms. regulatory environment across
the region. We face very serious NMG’s businesses are managed
Investments challenges in respect of freedom and operated by our 1,800
of the media through potentially employees around the region. The
NMG, despite the changing media penal government sponsored Group has invested substantially
consumption patterns globally, legislation. We will continue in training of the staff and we are
believes that the print medium in engaging with the governments collaborating with the Aga Khan
Africa is still an important source and the regulators to ensure that Graduate Media School in training
of news and information and NMG the media industry is consulted our journalists. I would like to
invested a sum of US$20 million before formulation of any thank the management and staff
(Shs. 2 billion) in a new state regulations to achieve meaningful for their dedication and hard work
of the art printing press, which and balanced legislation that during the year. We endeavor
was officially commissioned on protects our rights to publish and to create an environment that
17th March 2016 by the founder to broadcast and for the public challenges and encourages our
of the Group, His Highness the to freely receive information. The people to be innovative, bringing
Aga Khan. The printing press is media is the conscience of society out the best in them while staying
the most modern in Africa and and we will continue playing our true to our values, ethics and
enables us to print 80 pages in full rightful role to highlight issues professional standards.
colour in a straight run and which adversely affecting societies and
has several additional features also to promote development I want to sincerely thank my
that are attractive to advertisers. initiatives and good governance. fellow directors, as well as our
This has greatly improved not only customers and business partners,
the printing quality and increased Editorial Policy and Guidelines for their continued support and
the colour capacity but has also contribution towards the
significantly contributed to our NMG has a well documented Group’s success.
early market arrival times around editorial policy and guidelines,
the country. which set out in great detail the Looking Ahead
way that our journalists should
NMG in collaboration with other gather information and conduct The year 2016 began with the
media houses formed a joint themselves and more particularly continuing tough business
venture company - Africa Digital in the dissemination to ensure environment and our key focus
Network Limited, which was objectivity, fairness and accuracy for the year is to tap into the
licensed for digital television in the articles that are published or new business opportunities
signal transmission following the news features that are broadcast. for generating revenues whilst
digital broadcasting migration in The Group ensures adherence implementing efficiencies and
February 2015. The reason for to the policy and stern action is cost cutting measures.
insisting on our own transmission taken against those that breach
capacity is to ensure that there the policy.
is no interference with our
broadcasts. The digital transmitter Board Changes
enables for 21 television stations
on the platform and we are In the period under review, NMG Dr. W.D. Kiboro
reviewing how to utilise the transitioned to a new Group Group Chairman

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 13
Taarifa ya Mwenyekiti

Dkt. W. D. Kiboro
Mwenyekiti

“Kwa miaka mingi sasa, Shirika hili limeshikilia

usukani katika uhariri unaotazama masuala halisi
kwenye uandishi na utangazaji wetu, na kadhalika
tunatambulika kwa kuwapa wasomaji, wasikizaji na
watazamaji habari sahihi na za kuaminika..”

Taarifa Ya Mwenyekiti na kushuka kwa thamani ya Soko la Hisa kufikia Desemba 31,
Shilingi ya Kenya dhidi ya sarafu 2015, ambayo kwa pamoja na
Mabibi na Mabwana, ni furaha za kimataifa. Hali hii, ilisababisha mgao wa muda wa Shilingi 2.50
yangu kuwafahamisha kuhusu kuongezeka kwa gharama ya (100%) kwa kila hisa uliolipwa
matokeo ya Kampuni hii na kuagiza bidhaa za karatasi za mnamo Septemba 30, 2015,
pia kuitathmini hali halisi ya kuchapishia magazeti na gharama inafanya jumla ya mgao unaolipwa
kiuchumi, kibiashara, kisheria na ya kununua vipindi vya kigeni vya kuwa Shilingi 10.00 kwa hisa
mazingira ya jumla ya ushindani Televisheni. Hata hivyo, kiwango (400%) kwa mwaka uliomalizikia
tuliyokumbana nayo katika mwaka kikubwa cha pesa ambazo Desemba 31, 2015. Mgao wa
uliomalizikia Desemba 31, 2015. Shirika hili linadai makampuni na faida unaopendekezwa umebakia
watangazaji wake wa biashara katika kiwango cha mgao
Mazingira ya Kiuchumi na pia kilichangia pakubwa. Katika uliolipwa mwaka uliotangulia.
Kisiasa shirika la NMG, pana sera maalum
ya kuyashughulikia na kuyathibiti Bei ya Hisa na Mtaji wa Soko
Kwa kiwango fulani, uchumi wa madeni yote yanayozidi kiwango
Kenya katika mwaka 2015 ulikuwa cha siku 90. Hali kadhalika, Thamani ya hisa za Shirika la
shwari na kuweza kukua kwa tunalenga kukusanya madeni yote NMG iliathirika vibaya katika Soko
5.6%, ikilinganishwa na 5.3% tunayodai kutoka kwa wadeni la Hisa kutokana na kupungua
mnamo mwaka wa 2014. Ukuaji wetu. kwa watu walionunua hisa, huku
huo ulitokana na kupanuka kwa wawekezaji wengi wakiamua
uzalishaji katika sekta ya kilimo, Matokeo ya Kifedha kujishughulisha na ununuzi wa
ujenzi, fedha na bima, biashara fedha na kuwekeza katika hisa za
za rejareja na jumla pamoja na Mapato ya Shirika katika mwaka Serikali na mashirika ya umma.
uchukuzi na uhifadhi. Hata hivyo, 2015 yalikuwa Shilingi bilioni 12.3 Kufikia Desemba 31, 2015, hisa
changamoto kubwa ya kukukua ambacho ni kiwango pungufu cha za NMG zilikuwa zikiuzwa kwa
kwa Kenya, ilichangiwa pakubwa 7.6% ikilinganishwa na Shilingi Shilingi 191 kwa kila hisa, huo
na ukosefu wa usalama kufuatia bilioni 13.4 zilizopatikana mwaka ukiwa ni mtaji wa thamani ya soko
mashambulizi kadhaa ya kigaidi wa 2014. Faida ya mwaka 2015 wa Shilingi bilioni 36.
dhidi ya wananchi wasio na hatia, kabla ya kutozwa ushuru, ambayo
na hali kadhalika kusababisha ilikuwa Shilingi bilioni 2.8 ikiwa Mazingira ya Biashara
kupotea kwa maisha ya watu na ni kiwango pungufu cha 22%
uharibifu wa mali. ikilinganishwa na faida ya Shilingi Mnamo mwaka wa 2015,
bilioni 3.6 zilizopatikana mwaka tulikumbwa na changamoto
Kama mnavyofahamu, kampuni wa 2014. kubwa wakati wa mzozo wa
18 zilizosajiliwa kwenye Soko la kuhama kutoka mfumo wa analogi
Hisa – lakini sio Shirika la Nation Mgao hadi kwenda katika mfumo wa
Media Group – zilitangaza onyo dijitali kwenye utangazaji wa
la kuwa hazitapata faida kutokana Wakurugenzi wamependekeza runinga hapa nchini Kenya.
na mazingira magumu ya kwa wenyehisa kuidhinishwa kwa, Kwa sababu hiyo, vituo vyetu
kufanyia biashara. Shirika la NMG malipo ya mwisho ya mgao wa vya runinga vilizimwa kwa muda
liliathiriwa vibaya na kupungua faida ya mwaka wa Shilingi 7.50 wa wiki tatu mfululizo. Hali hii
kwa mapato yanayotokana na (300%) kwa kila hisa kati ya hisa iliendelea huku tukipambana
matangazo ya biashara pamoja zilizokuwa zimewasilishwa katika kortini na halmashauri ya

14 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Taarifa ya Mwenyekiti inaendelea...

Mapato ya Jumia (Shs m) Hazina ya Wenye Hisa (Shs m)

16,000 10,000

9,000
14,000
8,000
12,000
7,000
8,905
10,000 6,000
8,714
13,374 13,351 8,182
12,347 12,340
8,000 11,246 5,000 7,251

6,053
4,000
6,000
3,000
4,000
2,000

2,000
1,000

0 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Matumizi ya Mtaji (Shs m) Mgao Kwa Kila Hisa (Shs)

1,800

1,600

1,400 12.0

1,200
10.0
1,526
1,000
8.0
800 10.0 10.0 10.0 10.0
1,004
6.0
8.0
600

628 4.0
400 468
457 404
2.0
200

0 0.0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Faida Kabla ya Kutozwa Ushuru (Shs m) Mapato Kwa Hisa (Shs)

4,000 16.0

3,500

3,000
12.0

3,587 3,624
2,500 3,505
13.3 13.4
12.7 13.1
2,000 2,810 2,823 11.8
8.0

1,500

1,000 4.0

500

0 0.0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 15
Taarifa ya Mwenyekiti inaendelea...

wa mawasiliano nchini, ili vyombo kuhusu uchaguzi wa urais, kurasa 80 za rangi kwa mkupuo.
huru vikuu vya habari vipewe ubunge na ule wa madiwani. Hali kadhalika, mtambo huo una
kasi-mawimbi ya kusambazia Kwa miaka mingi sasa, Shirika vivutio vingine vinavyowawezesha
matangazo kidijitali. Ukweli ni hili limeshikilia usukani katika wafanyibiashara kutangaza
kwamba, hatukufurahishwa uhariri unaotazama masuala halisi bidhaa zao kwa mfumo faafu.
na uamuzi wa Halmashauri kwenye uandishi na utangazaji Hatua hii imeimarisha ubora wa
ya Mawasiliano ya Kenya wetu, na kadhalika tunatambulika uchapishaji na kuongeza uthabiti
kuyapatia leseni za kusambaza kwa kuwapa wasomaji, wasikizaji na uzuri wa rangi na kadhalika
vipindi vinavyotengezwa humu na watazamaji habari sahihi na imechangia kufika katika masoko
nchini mashirika ambayo tayari za kuaminika. yetu mapema kote nchini.
wanalipisha watazamaji, bila ya
kutulipa sisi mrabaha kwa vipindi Njia za kupata habari, maelezo Kwa ushirikiano na kampuni
hivyo chini ya mfumo wa “the must na burudani zimebadilika. Sasa nyingine za utangazaji, shirika
carry rule”. mtu si lazima asome gazeti, la NMG liliingia ubia na kuunda
asikize redio au atazame runinga. kampuni ya pamoja - Africa Digital
Kimsingi, hali hii iliathiri pakubwa Anaweza kupata hayo yote Network Limited, ambayo ilipewa
utendakazi na mapato ya kwenye mitandao, kwa wakati leseni ya kusambaza matangazo
biashara yetu ya runinga, hasa unaofaa na pia anaweza kupata kidijitali, kufuatia kuzinduliwa kwa
katika harakati za kuhama kutoka hayo kupitia kwenye simu yake matangazo ya kidijitali mnamo
katika mfumo wa analogi hadi ya rununu au kipakatalishi ama mwezi Februari 2015. Sababu
ule mfumo wa dijitali, kufuatia hata kwenye tableti alimradi tu ya kusisitiza tuwe na uwezo wa
hali hii watazamani wengi viwe vimeunganishwa kwenye kusambaza matangazo yetu
hawakuweza kutazama runinga mitandao. Hali hii ya watu kuhamia wenyewe, ni kuhakikisha kwamba
bila ya kununua visimbuzi vya mitandaoni imeleta changamoto matangazo yetu hayavurugwi.
kurushia mawimbi. Matukio na pia fursa. Shirika hili la NMG Mitambo hiyo ya kupeperushia
haya, yalisababisha kupungua limezikabili changamoto hizo na matangazo kidijitali inatuwezesha
kwa mapato ya matangazo ya mitandao yetu ni miongoni mwa kufikia vituo 21 na kufikia mwisho
runinga, kwa vile wanaotangaza mitandao inayotembelewa zaidi wa mwaka huu, tutapanua na
biashara zao huvutiwa na na watu barani Afrika. Wavuti wa kufikia vituo 35 kote nchini, hatua
idadi ya wanaotazama runinga Daily Nation una idadi kubwa ambayo ni nzuri kwetu kwa vile
husika, ili kutangaza biashara au zaidi ya watu wanaoutazama na tutakuwa na miundo-msingi ya
huduma wanazotoa. Ninafurahi pia wasomaji wa kipekee. Tuna kutuwezesha kufikisha matangazo
kuwafahamisha kwamba matumaini makubwa kwamba yetu katika pembe zote za nchi.
tumefanikiwa kuhamisha shirika hili litanufaika kutokana na
matangazo kutoka katika mfumo watu wanaotembelea mitandao Changamoto
wa analogi hadi mfumo wa dijitali yetu kote ulimwenguni, na nafasi
na sasa runinga zetu za NTV na ya mapato inayojitokeza kutokana Ukweli ni kwamba, tunaendelea
QTV zinapatikana kote nchini. na mifumo hii mipya ya kidijitali. kufanya biashara katika mazingira
na changamoto zisizotabirika kote
Hali kadhalika, nafurahi Uwekezaji katika ukanda huu. Tunakumbana
kuwafahamisha kwamba gazeti na changamoto kuu kuhusiana
letu la The EastAfrican, lililokuwa Licha ya kuwepo kwa mabadiliko na uhuru wa vyombo vya habari
limepigwa marufuku nchini mengi ya kilimwengu katika kupitia sheria zinazopendekezwa
Tanzania mwaka 2015, wakati mbinu za utoaji wa habari, na serikali husika. Tutaendelea
ambapo hatukuweza kupata Shirika la NMG linaamini kwamba kushirikiana na serikali hizo
mapato ya mauzo ya gazeti hilo uchapishaji wa habari barani pamoja na taasisi zinazosimamia
wala kupata mapato kutokana na Afrika bado ni njia muhimu. Kwani masuala ya habari na
matangazo, sasa linauzwa kimakusudi tu NMG imewekeza mawasiliano, ili kuhakikisha kuwa
nchini humo. Dola za Marekani Milioni Ishirini sekta ya uanahabari inashauriwa
(US$20M) sawa na Shilingi kabla ya kuundwa kwa sheria
Mauzo ya nakala za magazeti bilioni 2 katika mtambo wa zinazothibiti sekta hiyo, na
nayayochapishwa na shirika kisasa wa kuchapisha magazeti, kupata sheria nzuri zinazoangalia
letu yalipigwa jeki na uchaguzi uliozinduliwa rasmi Machi 17, pande zote na kulinda haki za
mkuu nchini Tanzania na Uganda 2015 na mwanzilishi wa shirika uchapishaji, kutangaza na hali
na yalitambuliwa na mashirika hili, Muadhama Aga Khan. kadhalika uhuru wa wananchi
ya nchi hizo na hata kimataifa, Mashini hiyo ya kuchapishia kupata habari bila pingamizi.
kwa kuripoti habari ambazo ni mojawapo ya mitambo ya Vyombo vya habari vinatekeleza
hazikuegemea upande mmoja kisasa zaidi humu barani Afrika
na zilizokuwa na ukweli mtupu na inatuwezesha kuchapisha

16 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Taarifa ya Mwenyekiti inaendelea...

wajibu muhimu kwa jamii na kustaafu kwa Bw. Linus Gitahi bora yatakayotoa changamoto na
tutaendelea kutekeleza jukumu baada ya kuongoza kampuni kuwapa moyo wafanyikazi wetu
letu ili kuangazia masuala kwa miaka tisa. Tunamshukuru ili kuwafanya kuwa wabunifu, na
yanayozikabili jamii na pia kukuza sana Bw. Gitahi kwa kuiongoza kuwaimarisha zaidi huku tukiilinda
uwajibikaji na uongozi mzuri. kampuni hii kufikia kilele cha hadhi na maadili yetu pamoja
ufanisi. Na sasa tunamkaribisha na kuzingatia viwango vyetu vya
Miongozo na Sera ya Uhariri Bw. Muganda, aliyejiunga na ubora wa kitaalamu.
Shirika hili baada ya kufanya kazi
Shirika la NMG lina sera bora nzuri na kampuni nyingi Ningependa kuwashukuru kwa
na muongozo mzuri wa uhariri za kimataifa. dhati wakurugenzi wenzangu,
uliochapishwa na ambao unaeleza wakiwepo wateja wetu na
kwa mapana jinsi wanahabari Wafanyikazi Wetu wale wote tunaoshirikiana nao
wetu wanavyopaswa kukusanya kibiashara, kwa kuendelea
habari na kuonekana, hasa katika Biashara za NMG zinasimamiwa kutuunga mkono pamoja na
utoaji habari kwa kuzingatia na kuendeshwa na wafanyikazi mchango wao uliofanikisha
masuala halisi, usawa na usahihi wetu 1,800 walio katika ukanda pakubwa shirika hili.
wa habari wanazochapisha au wote wa Afrika Mashariki. Shirika
makala yanayotangazwa. Shirika hili limewekeza vilivyo katika Mipango ya Baadaye
hili huhakikisha kwamba miongozo kuwapa mafunzo wafanyikazi
na sera hizo zinafuatwa na wale wetu na pia tunashirikiana na Mwaka huu wa 2016 ulianza kwa
wanaozivunja huchukuliwa chuo kikuu cha mafunzo cha Aga hali ile ile ngumu ya kibiashara
hatua kali. Khan Graduate Media School na mpango wetu mkubwa kwa
ili kuwapa mafunzo wanahabari mwaka huu ni kuwekeza katika
Mabadiliko ya Bodi Kuu wetu. Ningependa kuwashukuru nafasi mpya za kibiashara ili
wasimamizi na wafanyikazi wote kujipatia mapato mazuri, huku
Katika kipindi ambacho wa Shirika letu kwa kujitolea tukitekeleza mikakati bora na ya
tunashughulikia, Shirika la NMG kwao na kufanya kazi kwa bidii kupunguza gharama ya biashara.
lilibadili uongozi na kupata Afisa ya mchwa kwenye kipindi cha
Mkuu Mtendaji mpya kwa kumteua mwaka huo. Ninatoa hakikisho Dr. W.D. Kiboro
Bw. Joe Muganda, kufuatia kwamba tutaweka mazingira Mwenyekiti wa Shirika

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 17
Group Chief
Executive
Officer’s
Report

“Given the consumer

changing trends, we are
reorganising ourselves
with the objective of
transforming the Group
from a legacy newspaper
publisher, into a modern
digital content company. ”

Joe Muganda
Chief Executive Officer

18 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Group Chief Executive Officer’s Report
I am pleased to present the on the performance was mitigated press offers a richer menu of
Group’s audited financial by higher interest income and cost exclusive print advertising formats
results for the year ended 31st management measures. for diverse advertising targets.
December 2015. The local This in addition to enhanced
business environment is dynamic, The Group’s turnover declined by newspaper pagination increased
experiencing adverse macro- 7.6% to Shs.12.3 billion, while the colour capacity and an improved
economic factors, global fiscal net earnings at Shs 2.1billion was print quality will help in improving
pressures having a knock-on 14% lower than the prior year. advertising revenues and deliver
effect and an unpredictable a better reader’s experience of
regulatory environment. All these Nation Carriers Division our products. Our competitive
bring new challenges every day. performance significantly edge will also improve given our
This was certainly the case in improved with revenue growing by improved ability to produce region
2015, which was a difficult year of 10.3% while operating profit grew specific editions and deliver the
transition for our business, during by 1.6%. newspapers to the markets
which we experienced a tough on time.
operating environment with the Business Daily and Nation Digital
advent of the digital migration recorded a 1.1% and 7.4% Marketing
and marginal economic growth. increment in revenue respectively.
Nonetheless, the NMG family Daily Nation focused its efforts
came together and emerged Monitor Publications Limited in strengthening and supporting
stronger, more united and ready registered an impressive the circulation and distribution
to transform our business in line performance with revenues in the channels through various
with our vision to be the Media Monitor newspaper, Radio (KFM activities, including a vendor
of Africa for Africa. A lot has and Dembe) and NTV Uganda branding initiative and a vendor
been done and our focus in growing by 9.2%, 16.6% and incentive programme aimed at
2016 is about implementation of 10.7% respectively. rewarding loyalty by the vendors
the new strategic direction that and the distributors, with the
captures the new age of media Mwananchi Communications objective of increasing the
consumption. The strategy is Limited recorded a 6.6% newspaper copy sales.
premised on protecting our increment in its revenue, while
current sources of revenues and Nation Holdings Rwanda Limited The Business Daily expanded the
positioning the organisation to win performance improved by 2.9%. Top 100 SME survey to include a
in the future. This will encompass county edition. Other successful
convergence of the back office initiatives included The Next
to ensure efficient and effective New Printing Press Big Thing and Top 40 under 40
operations, while continuing to men and women. This series of
invest in our digital capability. This We are confident that print activities that recognises the top
will ensure we remain competitive media, which remains the core business and individual achievers
and grow the shareholder value of of our business, will continue to in the country continue to embed
the Group. play a significant role for many its position as the only business
years to come. It is against newspaper publication in the
Financial Performance this background that we made country.
a significant Shs. 2 billion
The Group’s profit after tax investment in the purchase of a The EastAfrican focused on
declined compared with the new state-of-the-art printing press. celebrating its 20 years in the
previous year. The adverse We are proud that this project region by launching a campaign
performance was mainly attributed was delivered on time and within marking the brand milestones
to a shortfall in revenue with the budget and went into production and its role in promoting regional
broadcasting division adversely on 7th December, 2015. It was integration and cohesion.
affected by the disruptions of the officially commissioned on 17th
television signal transmission, March 2016 by His Highness The Monitor in Uganda launched
following the switch from analogue the Aga Khan accompanied by a thematic campaign “Go Further”
to digital broadcasting early in Mr Joe Mucheru, the Cabinet whose objective was to reposition
the year. Profitability was also Secretary, Ministry of Information, the paper as an independent,
adversely affected by the foreign Communications and Technology balanced and accurate source of
exchange losses. However, the and Dr Alfred Mutua, the Governor information. The campaign
impact of the adverse environment of Machakos County. The new

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 19
Group Chief Executive Officer’s Report continued...

feedback was positive and management. The investment in Our intention is to retain a free
resulted in readership growth of the new press, not only reflects press that enhances democratic
more than 5%. our long-term commitment to print gains and provides an impetus
media, but is also expected to for the growth of the economies
NTV-U launched a new television yield gains from efficiencies. We in the region. To achieve this, we
station, Spark TV, in December will protect our current revenue will play our part, working with
2015, which targets females aged streams while positioning the the governments and all relevant
between 20 and 29 years. The business for the digital era. stakeholders to ensure that we
TV channel broadcasts both in have a vibrant free press.
Luganda and English and has Following the digital migration
been well received by viewers. In in 2015, we entered into a joint We uphold the principles of good
a bid to reinforce its position and venture to set up a company journalism, producing great
create an emotional connection under the name Africa Digital content that is appealing to our
with its audience, NTV-U launched Network Limited (ADNL). The readers, viewers and advertisers.
a thematic campaign #I Move company is licensed as a Producing content that educates,
Uganda. The campaign was self-provisioning digital signal informs and entertains will remain
received positively and drove a lot transmitter and it has established at the core of what we do. Our
of interaction on social media. transmission sites in the major investment in technology, the
towns and continues to roll out Media Lab, and our partnership
Strategic Priorities to other areas, with the goal of with the Aga Khan University
boosting the signal reach to Graduate School of Media Studies
Given the changing consumer cover over 90% of the population. to train our journalists affirms that
trends we are reorganising Our broadcasting strategy is to commitment.
ourselves with the objective of improve our programming menu
transforming the Group from a with appealing programs that I, sincerely thank the Board
legacy newspaper publisher, into attract audiences to our stations. of Directors, the Management
a modern digital content company. and Staff, as well as all our
This will entail embracing a digital/ This year will mark the advent of shareholders and stakeholders for
mobile first business model; using an electioneering period in Kenya your unwavering support. We are
appropriate technology to support extending into 2017 when the excited about the opportunities
this model, offering the consumer general elections will be held. This ahead and look forward to
a 360-degree communication always presents a challenging your support and cooperation
solution for obtaining real time environment. We intend to ensure in achieving our performance
information. This will allow us to that we go through it with minimum objectives in the year ahead.
maintain our leading position in disruption to our operations, while
both digital and traditional media delivering accurate, objective and
in the region. balanced reporting.

We will leverage our synergies We are cognisant of the fact that J Muganda
across the Group to ensure we operate in an unpredictable Group Chief Executive Officer
that we operate efficiently in and challenging regulatory
areas such as cost and debt environment across the region.

20 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Ripoti Ya Afisa Mkuu Mtendaji

J Muganda
Afisa Mkuu Mtendaji

“Kutokana na kubadilika kwa wateja wanaotumia

bidhaa zetu, tunajipanga upya kwa lengo la kuligeuza
Shirika hili kutoka kwa wachapishaji wa magazeti
pekee, hadi katika Kampuni ya kisasa inayoaminika
kwa habari za kidijitali kupitia mitandao”.

Nina furaha kuwawasilishia na ulio sahihi, huku tukiendelea Business Daily na Nation Digital
matokeo ya kifedha ya Shirika kuwekeza katika mfumo mpya zilipata ukuaji wa 1.1% na 7.4%
yaliyokaguliwa ya mwaka wa dijitali. Njii hii itahakikishia mtawalia.
uliomalizikia Desemba 31, 2015. kwamba tunaendelea kutoa
Mazingira ya kibiashara humu ushindani bora na kukuza mapato Monitor Publications Limited
nchini yamebadilika, hali hii ikiwa kwa wenyehisa wa Shirika letu. ilifanikiwa kupata matokeo
ni pamoja na mabadiliko ya mazuri mno hasa katika gazeti la
kuchumi, huku mifumko ya kifedha Matokeo ya Kifedha The Monitor, Redio za (KFM na
ya kilimwengu ikishinikiza athari Dembe) pamoja na NTV Uganda
zisizotabirika na hali kadhalika Faida ya Shirika baada ya kutozwa ikiimarika na ikikua kwa 9.2%,
mazingira tete ya kiusimamizi. ushuru ilipungua ikilinganishwa 16.6% na 10.7% mtawalia.
Matukio haya yote huleta na mwaka uliotangulia. Hali
changamoto za kila siku. hiyo ilitokana na kupungua kwa Mwananchi Communications
Hali hii ndiyo iliyokuwepo mnamo mapato ya Idara ya Televisheni Limited ilikuwa na ongezeko la
mwaka 2015, mwaka wa mpito na Radio kufuatia kukatizwa 6.6% ya mapato, huku Nation
uliokuwa na magumu mengi katika kwa masafa ya matangazo ya Holdings Rwanda Limited ikikua
biashara zetu, kipindi ambacho Televisheni, baada ya kuzimwa kwa 2.9% katika mapato yake.
tulikumbana na kanuni mpya za kwa matangazo ya mfumo wa
kuhama kutoka katika mfumo analogi na kuhamia mfumo wa Mashini Mpya ya Kuchapishia
wa analogi hadi mfumo dijitali dijitali mwanzoni mwa mwaka.
huku pakiwa na ukuaji finyu wa Hali kadhalika, faida iliathirika na Tunaamini kwamba, sekta ya
kiuchumi. pakawa na hasara iliyotokana na uchapishaji ambayo ndiyo uti
Hata hivyo, idara mbali mbali ubadilishanaji wa fedha za kigeni. wa mgongo wa biashara yetu,
za Shirika la NMG zilishirikiana Hata hivyo, kwa kiasi kikubwa itaendelea kutekeleza wajibu
na kuimarika zaidi, kuwa na athari hizi zilikabiliwa na mazingira muhimu katika miaka mingi ijayo.
mtagusano kabambe pamoja na ya matokeo mazuri ya mapato ya Ni kufuatia imani hiyo, ambapo
kuwa tayari kubadilisha biashara riba pamoja na mikakati bora ya tuliamua kuwekeza katika
yetu kuambatana na kauli kupunguza gharama ya matumizi. biashara yetu ya uchapishaji
mbiu yetu ya kuwa Kampuni ya kwa kutumia Shilingi bilioni 2
Habari ya Afrika kwa Waafrika. Mapato ya Shirika yalipungua na kununua mashini ya kisasa
Mengi yamefanyika na sasa kwa 7.6% hadi Shilingi Bilioni kabisa ya kuchapisha magazeti.
malengo yetu mwaka huu wa 12.3, huku faida halisi ya Tunajivunia kwamba mradi
2016, ni kutekeleza mikakati shilingi bilioni 2.1 ikipungua kwa huo ulitekelezwa kwa wakati
yetu mipya ambayo inaangazia 14% ikilinganishwa na mwaka uliofaa na pia kwa kutumia
uhalisia mpya ya jinsi watu uliotangulia. bajeti iliyokadiriwa. Mtambo huo
wanavyopokea habari. Mikakati mpya ulianza kazi rasmi mnamo
hiyo inazingatia kulinda njia zetu Matokeo ya Idara ya Nation Desemba 7, 2015. Kisha mtambo
za sasa za kuingiza mapato na Carrier yaliimarika pakubwa na huo ukazinduliwa mnamo Machi
pia kuliweka shirika hili katika hali hata mapato yake kukua kwa 17, 2016 na Muadhama Aga Khan
ya kufanikisha maazimio yake ya asilimia kumi nukta tatu (10.3%) akiandamana na Waziri wa Habari,
siku za usoni. Hali hii itahusisha huku faida yake ikikua kwa Mawasiliano na Teknolojia, Mhesh.
kushirikisha vitengo vyetu vyote, asilimia moja nukta sita (1.6%). Joe Mucheru pamoja na Gavana
kuhakikisha utendakazi mzuri wa Machakos Dkt. Mhesh. Alfred

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 21
Ripoti Ya Afisa Mkuu Mtendaji inaendelea...

Mutua. Mashini hiyo mpya inatoa The Monitor nchini Uganda na watu tulio nao ili kuhakikisha
nakala nzuri kwa wateja wetu sio lilizindua kampeni iliyokuwa kwamba tunatoa huduma bora
tu kwa magazeti bali hata kwa na kauli mbiu ya “Go Further” katika usimamizi kabambe wa
matangazo ya mauzo, kuweka iliyokuwa na lengo la kulifanya kudhibiti gharama na kudhibiti
kurasa katika mfumo bora, gazeti hili lionekane na kufahamika madeni. Uwekezaji katika mtambo
kuongeza rangi, na hii husaidia kuwa huru, linaoangazia kila mpya wa kuchapisha, ni dhihirisho
katika uimarishaji wa mapato ya upande na chanzo cha habari tosha la uwajibikaji wetu wa siku
mauzo na pia kutoa mtazamo sahihi na za ukweli. Kampeni hii nyingi katika uchapishaji, na
mzuri kwa wasomaji wetu. Bilas ilipokelewa vyema na kufanya hata pia unatarajiwa kutupatia
haka, mtambo huu utaimarisha idadi ya wasomaji wa gazeti hilo faida kwa kubana matumizi ya
kiwango cha ushindani wetu kuongezeka kwa zaidi ya 5%. karatasi nyingi.Tutalinda njia zetu
katika soko na kuboresha baadhi NTV-Uganda ilizindua kituo cha za sasa za kuleta mapato, huku
ya majarida yetu ya kikanda Televisheni, Spark TV, mnamo tukijiimarisha katika biashara ya
na hali kadhalika kutuwezesha Desemba 2015, ambacho enzi ya dijitali.
kufikisha magazeti sokoni kwa kinawalenga watazamaji
wakati. wanawake walio na umri wa kati Kufuatia uhamiaji kutoka mfumo
ya miaka 20 na 29. Kituo hicho wa analogi hadi mfumo wa dijitali
Masoko cha runinga kinatangaza kwa mnamo mwaka 2015, tuliingia ubia
lugha za Kiingereza na Kiluganda na vyombo vingine vya habari
Gazeti la Daily Nation liliangazia na kimepokelewa vyema na na kuunda kampuni kwa jina la
zaidi juhudi zake kwa kuimarisha watazamaji wote. Katika juhudi Africa Digital Network Limited
na kuboresha usambazaji wa za kuendeleza nafasi yake na (ADNL). Kampuni hii ilipewa
magazeti kwa kutumia mikakati kuimarisha uhusiano wake na leseni ya kusambaza matangazo
mbali mbali, ikiwemo kampeni ya watazamaji, NTV Uganda ilizindua ya kidijitali na imebuni maeneo
kulitangaza mbinu za usambazaji kampeni iliyokuwa na kauli mbiu ya kusambazia matangazo
wa magazeti na kadhalika ya #I Move Uganda. Kampeni hiyo hayo katika miji mikubwa na
mpango wa kuwatuza wauzaji- ilipokelewa vyema na watazamaji inaendeleza usambazaji huo
magazeti ili kuwapatia motisha na ikavutia mawasiliano ya karibu kwenye maeneo mengine. Lengo
pamoja na wanaoyasambaza kwenye mitandao ya kijamii. ni kufikia zaidi ya asilimia tisini
magazeti, haya yote yakiwa ni (90%) ya watazamaji. Mikakati
kwa lengo la kuongeza nakala Mikakati Maalum yetu ya Redio na runinga
wanazouza. ni kuimarisha vipindi vyetu
Kutokana na kubadilika kwa ili kuwavutia watazamaji na
Gazeti la Business Daily lilipanua wateja wanaotumia bidhaa zetu, wasikiliza zaidi kwa vituo vyetu.
utafiti wake wa Wafanyibiashara tunajipanga upya kwa lengo
wadowadogo mia moja bora, la kuligeuza Shirika hili kutoka Mwaka huu utaalika maandalizi
almaarufu kama Top 100 SME kwa wachapishaji wa magazeti na matayarisho ya Uchaguzi
survey, na kujumuisha kaunti, pekee, hadi katika Kampuni ya Mkuu nchini Kenya hali
utafiti ambao pia kwa mara ya kisasa inayoaminika kwa habari itakayoendelea hadi 2017 ambapo
kwanza ulihusisha magatuzi za kidijitali kupitia mitandao. uchaguzi mkuu utakapofanyika.
mbali mbali. Harakati nyinginezo Hali hii itahusisha kuzingatia Uchaguzi Mkuu siku zote huleta
zilizofaulu ilikuwa ni pamoja na utoaji wa habari kwanza kupitia changamoto, lakini tunapanga
kampeini ya The Next Big Thing, mitandao na vile vile ujumbe kuhakikisha kwamba tunapita
Top 40 under 40, ikiwa ni ile ya kwenye jumbe katika simu za katika kipindi hicho bila
waume kwa wanawake. Yote rununu; kutumia teknolojia sahihi kuathiriwa kwa shughuli zetu,
ikiwa kwa lengo la kuwatambua kuwezesha mfumo na mbinu hii huku tukiendelea kupeana habari
Wakenya waliofanikiwa na kufaulu, na pia kuwa na mfumo sahihi, bora na zisizoegemea
kuafaulu vyema kibiashara na utakaovishughulisha vitengo vyote upande wowote wa kisiasa.
ambao walijishirikisha na gazeti la vya mawasiliano; yaani mteja awe
kipekee la biashara humu nchini. anapata suluhisho na huduma Tunatambua kwamba tunafanya
kutoka pande zote. Mfumo huo biashara katika mazingira
Gazeti la The EastAfrican utatufanya tuendelee kushikilia yasiyotabirika hasa kwenye
liliangazia kuadhimisha miaka 20 nafasi yetu kama viongozi kwa upande wa sheria na kanuni
katika eneo la Afrika Mashariki, upande wa mfumo wa utoaji wa za kudhibiti vyombo vya habari
kwa kuzindua kampeni ya habari na pia ule wa kidijitali katika hususan katika sehemu zote
kujitangaza kwa kubadili sura na ukanda wote wa Afrika Mashariki za ukanda wa Afrika Mashariki.
pia jukumu lake la kuendeleza na Kati. Malengo yetu ni kusimamia
utangamano na uwiano katika vyombo huru vya habari, ambavyo
eneo zima. Tutatumia vyema bidhaa zetu vitaendeleza hatua zilizopigwa

22 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Ripoti Ya Afisa Mkuu Mtendaji inaendelea...

kidemokrasia na kutoa nafasi ya itasalia kuwa kazi yetu kuu katika wote kwa kutuunga mkono bila
kukua kwa uchumi katika eneo kila tunalofanya. Tutaendelea kuchoka. Tuna azma ya kutumia
zima. Ili kutimiza hili, tutatekeleza kuwekeza katika teknolojia, fursa zitakazojitokeza siku za
wajibu wetu na kushirikiana na Mafunzo kwa Wanahabari (Media usoni, na tunatazamia kwamba
serikali zote katika eneo hili, ili Lab) na pia kuimarisha ushirikiano mtatuunga mkono na kushirikiana
kuhakikisha tuna uanahabari huru wetu na Aga Khan University nasi ili kuyafikia malengo yetu
na unaoaminika. Graduate School of Media Studies ya utendakazi katika kipindi cha
ili kuwafundisha wanahabari wetu, mwaka ujao.
Tunazingatia sera bora ya na hali hii inathibitisha kujitolea
uanahabari, kutoa habari na kwetu katika kuyafikia malengo
makala yanayowavutia wasomaji, hayo kikamilifu.
watazamaji na wateja wetu J Muganda
wanaotuletea matangazo. Ninawashukuru kwa dhati Afisa Mkuu Mtendaji
Kutoa habari au makala nzuri Wakurugenzi wa Bodi,
zinazopendeza. Hata hivyo, Wasimamizi na Wafanyikazi,
kufahamisha na kuburudisha bado pamoja na wenyehisa na wadau

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 23
 Corporate Social Responsibility

years. Founded in 1978, the school provides

vocational training in craft-making, sewing,
carpentry, animal husbandry and agriculture.
The school’s mission is to provide a caring and
purposeful environment for conducive learning
and offer equal opportunities for all regardless
of their disability.

During a visit to Shimo La Tewa Prison, in

Mombasa County, we saw women prisoners
and donated books to them. We also
distributed clothes for the babies born during
their mothers’ imprisonment.

Kisumu County – NMG team after donating

books at Sondu Miriu Public library
2. Education

N
ation Get on the Bus Excellence and
Mentorship Programme started in
1. Community sponsorship 2010 and provides scholarships to

I
bright learners who excel in primary school
n 2015, our community projects were examinations but are unable to pursue
driven by the employees who proposed secondary education due to financial
projects to support. The Group focused constraints. The students are selected from
on six counties, where employees worked national schools and sponsored for four years.
with communities and offered solutions to We sponsored 80 students in 2015.
various challenges affecting them.
So far, 264 students have benefited from the
In Kisumu County, we donated textbooks programme with 84 in Kenya, 80 in Uganda and
and storybooks to the Sondu Miriu Public 100 in Tanzania under the ‘Paa na Mwananchi’
Library, in Nyakach Constituency. It is scholarship programme.
located a few kilometres from the Kenya
Electricity Generating Company (KENGEN)
power plant. Its objective is to provide
learning resources to those unable to
attend school. It has supported hundreds
of children since it was put up in 2001. In
turn, the beneficiaries also support it. The
books donated by NMG will go a long way
to improve the library’s stock and enable
it meet its objective of enhancing literacy
among children and adults in the area.

We partnered with Ahadi Trust Kenya to

offer jigger treatment, education and shoes
to children at Uaso Narok Primary School
in Nyahururu, in Laikipia County. Ahadi
Kenya Trust is the founder of the anti-jigger
campaign in Kenya. It works in partnership
with the Ministry of Health, Ministry of
Interior and Coordination of National
Government, corporate organisations,
non-governmental organisations, media
and communities.

In Nakuru County, the NMG Staff visited

the Nakuru Hills Special School where
they donated food stuff and beddings.
Nakuru Hills Special School is a public
boarding school for persons with mental
and physical disabilities of ages 6-25
NMG Team in partnership with Ahadi Trust Kenya
at Uaso Narok Primary School Nyahururu

24 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Corporate Social Responsibility continued...

3. Health

T
he key focus on health in 2015 was on
cancer and children.

Cancer cases are on the rise in Kenya. The

government estimates that there are about
25,000 new cancer cases in the country each
year. Kenyatta National Hospital bears the
greatest burden in this region as it is among the
few public hospitals in Africa that has cancer
screening and treatment equipment. Yet the
hospital has not been able to give a facelift to
its facilities for more than 30 years. The Nation
Media Group undertook to rehabilitate the Thyroid
Cancer Ward in 2014 and completed the work in
May, 2015. This new ward will reduce the long
period cancer patients have to wait to secure MCL staff donating blood to Damu Salama
admissions. We have started rehabilitating two
paediatric wards at the hospital, which should
be completed by mid-2016.

In 2015, NMG joined the Beyond Zero Campaign Cash Donations

and sent a team to participate in the First
Lady’s Half Marathon. In 2016, through the
Group Chief Executive Officer, Joe Muganda,
NMG participated in the campaign as a media
partner. It contributed some Shs. 13 million for Project Amount Shs.
Get On the Bus Scholarships 4,649,109
the marathon’s publicity. More than 100 NMG
staff members also participated in the 2016
First Lady’s Half Marathon. The Beyond Zero Refurbishment of KNH Thyroid Cancer Ward 850,000
Foundation is an initiative led by Kenya’s First Lewa Conservancy 800,000
Lady Her Excellency Margaret Kenyatta, which
was formed in 2014, with the aim of rallying Standard Chartered Marathon - Giving to the 200,000
the government and private sector to eliminate Blind
maternal and child mortality. The campaign has Starehe Girls Bursary Fund 200,000
acquired and distributed 36 mobile clinics in 36
counties and assisted more than 30,000 people.
Ghetto Classic Event - The Art of Music 200,000
The clinics continue to address social inequities
Foundation
for essential health services by reaching the
Save the Children 200,000
rural poor and marginalised communities.

TANZANIA (MWANANCHI Nakuru Hills Special School 103,803

COMMUNICATIONS LIMITED) First Lady's Half Marathon - Team Sponsorship 100,000

Nungwe Camp Donation Kitale Diaspora Golf Tournament 100,000

2
Book Donations to Sondu Miriu Library 92,828
8 MCL employees visited Nungwe Camp
and donated Shs. 100,000. Based at Mater Heart Run 58,000
Kigamboni, Dar es Salaam, the camp
Mji Wa Huruma Donation 43,213
hosts people living with leprosy. The aim of the
donation was to assist the individuals to get
Smile Foundation 35,000
into productive engagement so that they do not
depend on others. Kapsabet School for the Deaf 100,000

MCL “Damu Salama” Blood Donation Partnership with Ahadi Trust - Jigger Campain 250,000
Donation Mama Fatumas Children Home 100,000
It is said that blood is the most precious gift
- the gift of life. MCL employees took part Ramadhan Fundraiser Dinner 50,000
in blood donation. A total of 26 pints were
donated. The blood was to help mothers Total 8,131,954
and infants.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 25
Corporate Social Responsibility continued...

UGANDA

S
ince Spark TV’s launch, the
brand has engaged in a number
of community activations. The
most recent was a Spark TV Women’s
Day walk in partnership with the US
embassy and Century Entrepreneurship
Development Agency (CEDA)
International. This was a mentorship walk
where older women mentored younger
ladies aged 18-29. The overall objective
of the 7 km walk was to empower women
and eliminate barriers that stifle their
socio-economic advancement. Among
the issues raised were: inadequate #HelpRosemary Campaign donated a memorial cancer
capital to start business, lack of equal shed and was officially opened by Health Minister Elioda
Tumwesigye in Uganda.
representation in top positions in
government and private sector.

A total of 1,500, girls have been

mentored through CEDA. These have in MONITOR PUBLICATIONS LIMITED
turn mentored the young girls in schools MPL Cancer Awareness Campaign 2015
and universities in Uganda.

T
he campaign was driven by Editorial Department
After the walk, the Spark TV female fans in partnership with International Medical Group
were treated to a fan movie night out and and AAR Health Care, which offered free
many walked away with gifts, including screening and counselling at their different clinics and
clothing, decoders and smartphones. hospitals. The campaign was done countrywide and
ended with a camp at the company premises that
was open to the public. During the awareness period,
NTV #HelpRosemaryCampaign the Daily Monitor was published in pink. This helped

A
to create awareness, especially among rural women
pril 12th, marks the anniversary of who did not know how to examine themselves for
the death of our first female news breast lumps and the need for regular check-ups.
anchor Rosemary Nankabirwa.
Last year, we conducted a funds drive
to save her life using a digital campaign Hope Ward Run 2015

T
called #HelpRosemary, where we raised
Shs. 4,024, 618. This was used to cater he Hope Ward Run is an annual event organised
for her medical and funeral expenses and by International Group Uganda. The proceeds
to construct a cancer shed at the Uganda are donated for complex treatment or surgeries
Cancer Institute in her memory. The for babies born with defects. The run took place
memorial cancer shed was handed over in November 2015 and MPL staff participated. It
on April 12th and was officially opened by raised more than Shs. 606,838. So far one baby has
Health Minister Elioda Tumwesigye. benefitted and 20 more are expected to benefit.

26 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
Is the most prefered newspaper
for advertising in Tanzania

The home of excellence in journalism

NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 27
New Printing Press

28 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 New Printing Press
NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 29
Human Resources

Leadership and Management Development Talent Management

s the Nation Media Group ventures into new MG firmly believes in talent development based

A business opportunities and designs new

products, the need for effective business
leaders and sound management practices remains
N an individual’s performance and potential
for career growth. In the past year, the talent
management process identified the best people
crucial. Ongoing partnerships with established across the Group to retain, develop and grow to be
entities such as the Strathmore Business School the future leaders and business drivers. The process
and the AKU Graduate School of Media and also plays an important part in succession planning,
Communication continue to play a key role in the as well as developing experts in essential areas of
development of business leaders and professional the business.
journalists respectively. To ensure that our journalists
get the best training and exposure, NMG partnered Reward and recognition planning are part and parcel
with international universities such as the IESE of talent management to ensure that NMG maintains
Business School in Barcelona and UCLA for the a competitive employer promise and is able to
Advanced Management programme in media and attract and retain the best people in the region. We
entertainment and with Oxford University for short recognise and are committed to the tenet that people
term scholarships. For the wider management team are our most important business asset.
leadership development programmes that recognise
the changing job demands at different management
levels were implemented to provide an opportunity Organisational Development
for development. These programmes are open to all
employees across the region and are run annually to usinesses are in a constant state of flux and
give new managers and those newly-promoted an
opportunity to hone their management skills. B therefore, each organisation must prepare
for, and embrace change, to survive. In 2015,
the company initiated a process to examine if the
Intercompany talent exchange continues to play a current corporate values and processes can sustain
key role in capacity building for the Group. In 2015, and drive growth. The initiative is a three-to-five
there were 12 employees working away from their years’ journey that will shape the organisation to
home countries and it is anticipated that this number meet future challenges based on well-thought out
will grow as the East Africa Community integration corporate objectives. The existing corporate values
becomes a reality. This is part of the Group’s have delivered immense success over the years but
commitment to enhancing professionalism and time has come for self-examination and reflection
business awareness across the region in line with our to prepare for the future. The media industry, like
vision of becoming the Media of Africa for Africa. many others, is faced with rapid change driven by
technology and changing consumer habits and
preferences. We want to be ready and succeed in the
new world.

Health & Wellness

e firmly believe that prevention is better

W than cure. In partnership with AoN Hewitt,

we organised a session where staff were
taken through various health issues that benefitted
them and their families. The key focus was awareness
and prevention of cancer. The medical experts
emphasised prevention and management of cervical
cancer, breast cancer and prostate cancer. The
wellness programme will continue to sensitise
employees on various topical health matters to ensure
Group Human Resources Director David Kiambi, their wellbeing and that of their families.
awards a certificate to a member of the sales team
after training.

30 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Human Resources
continued...

Editorial team “The Meat Wrappers” during Staff Sport’s Day

Staff Welfare

nter-departmental Sports Competition during which employees are always encouraged to lead a

I balanced life in order to build not only their careers but also their physical well-being and that of their
families. The annual sports day was held in July at the Parklands Sports Club and proved to be more
competitive than in the past. The winner of the full-day event was the Advertising Department, which
edged out the Editorial Department, dubbed ”Meat wrappers”. Similar sports events were held at the
regional centres namely, Mombasa, Nakuru, Kisumu and Eldoret, for field staff.

Group CEO Joe Muganda with the overall winners

of the Staff Sports Day - Advertising Department

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 31
Our team is supportive of one another’s
efforts, loyal to one another and cares
for one another both personally and
professionally.

32 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 NTV & QTV’S
NEWS ANCHORS

We show pride, enthusiasm and

dedication in everything that we do. We
are committed to selling and delivering
high quality products and services.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 33
Board Of Directors
Halmashauri Ya Wakurugenzi
W D Kiboro Chairman (Kenyan) Mwenyekiti (Mkenya)

J Muganda Chief Executive Officer/Managing Director Afisa Mtendaji Mkuu (Mkenya)

(Kenyan) appointed 1 July 2015 Aliteuliwa 1 Julai 2015

D Aluanga (Kenyan) (Mkenya)

R Dowden (British) (Mwingereza)

S Gitagama (Kenyan) (Mkenya)

L Huebner (American) (Muamerikani)

Y Jetha (British) (Mwingereza)

N Karago (Kenyan) (Mkenya)

S Kagugube (Ugandan) (Muganda)

J Montgomery (British) (Mwingereza)

O Mugenda (Kenyan) (Mkenya)

T Mshindi (Alternate Director) (Kenyan) Appointed Mkurugenzi Mbadala (Mkenya)

5 June 2015 Alieteuliwa 5 Juni 2015

L Mususa (Tanzanian) (Mtanzania)

F O Okello (Kenyan) (Mkenya)

A Poonawala (Swiss) (Muswiss)

G M Wilkinson (Irish) (Mu-Irish)

J C Kinyua Secretary Katibu

Nation Centre
Kimathi Street Registered Office Afisi ilioandikishwa
P O Box 49010 00100
Nairobi

Hamilton Harrison & Mathews

Delta Office Suites Advocates Wakili
Waiyaki Way, Nairobi

PricewaterhouseCoopers
PWC Tower, Waiyaki Way/ Auditors Wakaguzi wa Hesabu
Chiromo Road
Westlands, Nairobi

Standard Chartered Bank of

Kenya Limited Bankers Benki
Chiromo No. 48 Westlands
Road, Nairobi

34 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 35
36
Board of Directors

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
STANDING FROM LEFT TO RIGHT: Mr. J. Muganda, Mr. J. Montgomery, Mr. G. Wilkinson, Prof. L. Huebner, Dr. S. Kagugube, Mr. L. Mususa, Mr. R. Dowden,
Mr. T. Mshindi, Mr. F. Okello, Mr. S. Gitagama, Mr. A. Poonawala and Mr. J. Kinyua

SEATED FROM LEFT TO RIGHT: Prof. O. Mugenda, Ms. N. Karago, Dr. W. Kiboro, Mr. D. Aluanga and Dr. Y. Jetha
 NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 37
Board of Directors

DR. WILFRED MR. JOE

KIBORO MUGANDA
Dr. Wilfred Kiboro (71) holds a Bachelor of Mr. Joe Muganda (50) holds an MBA from
Science (Civil Engineering) from the University Leicester University and a Bachelor of Science
of Nairobi. He retired from NMG as the Group (Economics, Accounting and Financial
Chief Executive Officer on 31st October 2006 Management) from the University of Buckingham
after working for the Company for thirteen years. (United Kingdom). He is the Group Chief
He was appointed a non-executive director in Executive Officer and joined the board in
December 2006 and was elected the Chairman July 2015. He has previously worked as the
of the Board in September 2009. Dr. Kiboro Managing Director of Kenya Breweries Limited
was awarded an honorary Doctor of Philosophy and has held senior positions at British America
degree by Kenyatta University in December Tobacco, Unilever and Barclays Bank. He is a
2015. He is a member of the Nominations director of the International Press Institute, the
Committee. Dr. Kiboro is the Chancellor of Riara Africa Media Initiative, the Group’s subsidiary
University and the Chairman of Family Bank companies and PDM Holdings Limited, an
Limited and Wilfay Investments Limited, a family associate Company. Mr. Muganda is a member
owned enterprise. of the Nominations, the Editorial and the
Strategic Planning Committees.

MR. DENNIS ALUANGA MR. RICHARD

DOWDEN
Mr. Dennis Aluanga (48) holds an MBA from
the University of Edinburgh (United Kingdom)
and is a Certified Public Accountant of Kenya. Mr. Richard Dowden (66) holds a Bachelor of
He was appointed to the board in March 2009. Arts (History) from London University (United
He is a Partner at Helios Investment Partners, Kingdom). He began his career in journalism as
an Africa focused private investment firm. He the Editor of the Catholic Herald in 1976, before
was previously the Chief Operating Officer at joining The Times foreign desk in 1980 reporting
Industrial Promotion Services (East Africa) and from the Middle East and Africa. He joined The
has also worked at NMG as the Group Finance Independent in 1986 as the Africa Editor, moving
Director and the Chief Operating Officer. He is to The Economist in 1995 as Africa Director until
also a director of Equity Bank Limited and Vivo 2001, when he resigned to become a freelance
Energy Kenya Limited. Mr. Aluanga chairs the journalist and writer. He was appointed the director
Finance and Audit Committee and is a member of the Royal African Society in 2002. Mr. Dowden
of the Editorial Committee. has produced several television documentaries
on Africa which have been aired on the BBC and
Channel 4 television stations in the UK and is the
author of the book Africa: Altered States, Ordinary
Miracles which was published in 2008. He joined
the board in March 2010 and is a member of the
Editorial and the Strategic Planning Committees.

MR. STEPHEN PROF. LEE HUEBNER

GITAGAMA
Prof. Lee Huebner (75) holds a Ph.D and
an MA from Harvard University and a BA
Mr. Stephen Gitagama (49) holds an MBA and from Northwestern University (USA) and is a
a Bachelor of Commerce (Accounting) from the Professor of the School of Media and Public
University of Nairobi and is a Certified Public Affairs at The George Washington University
Accountant of Kenya. He is the Group Finance in Washington, D.C. (USA). He was formerly a
Director and was appointed to the Board in professor at Northwestern University and has
March 2008. He previously worked as a Finance also served as the Chief Executive Officer of the
Director with East African Breweries Limited. Mr. International Herald Tribune in Paris for fourteen
Gitagama is a director of the Group’s Subsidiary years. He joined the board in December 1995.
Companies and is a member of the Strategic Prof. Huebner is the Chairman of the Strategic
Planning Committee. Planning Committee and is a member of the
Nominations Committee.

38 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Board of Directors

DR. YASMIN JETHA MS. NJERI KARAGO

Dr. Yasmin Jetha (63) holds a Master of Ms. Njeri Karago (55) holds a Masters of Fine
Science in Management Science from Imperial Arts Degree (Theatre, Film and Television) from
College (London) and a Bachelor of Science in the University of California and a Bachelor of Arts
Mathematics from London University (United degree from Kenyatta University. She has over
Kingdom). She is a Fellow of the Chartered 20 years’ experience in professional film making,
Institute of Management Accountants, was with emphasis on development and production,
awarded an honorary Doctor of Laws degree by and is recognised as a leader in the field of film
the University of Leicester (United Kingdom) in production, having produced a number of high
2005 and was made an honorary Fellow of the profile award winning films. She was appointed to
University of Bedfordshire (United Kingdom) the board in March 2013 and is a member of the
in 2011. She was the Chief Information Officer Strategic Planning Committee.
prior to her retirement in 2014 at Bupa, a leading
healthcare company and was previously the
Chief Operating Officer at the Financial Times
(United Kingdom). Dr. Jetha joined the board
in September 2009 and is the Chairman of
the Human Resources and Remuneration
Committee and a member of the Strategic
Planning Committee.

DR. SIMON MR. JAMES

KAGUGUBE MONTGOMERY
Dr. Simon Kagugube (60) holds a Ph.D in Mr. James Montgomery (50) holds a Bachelor
International Humanitarian Law, a Doctor of of Arts in Politics and Philosophy (Hons) from
Science of Law in Immigration, Refugees the University of Durham (UK). He is the director
and Asylum Law and a Masters of Laws in of digital development at BBC News which
Corporation Law, Taxation and International publishes one of the world’s leading English
Trade Systems, all from Yale University (USA) language websites as well as digital news and
and a Bachelor of Laws from Makerere University features in 29 other languages. He previously
(Uganda). He is the Executive Director of worked as an Assistant Editor for the Financial
Centenary Rural Development Bank Limited in Times. Mr. Montgomery joined the Board
Uganda. He joined the Board in September 2011 in September 2012 and is a member of the
and is the Chairman of the Board of Monitor Strategic Planning Committee.
Publications Limited in Uganda. Dr. Kagugube is
a member of the Finance and Audit Committee.

PROF. OLIVE MR. LEONARD

MUGENDA MUSUSA
Prof. Olive Mugenda (61) holds a Ph.D and an Mr. Leonard Mususa (62) is a Fellow of the
M.Sc in Family Studies, Education, Consumer Association of Chartered Certified Accountants
Sciences and Research Methods from Iowa (UK) and a Fellow Certified Public Accountant
State University (USA), an MBA from the Eastern (Tanzania). He was the Country Senior Partner
and Southern Africa Management Institute and of PricewaterhouseCoopers in Tanzania until
a B.Ed from the University of Nairobi. She has his retirement in June 2014. He has served as
been the Vice-Chancellor of Kenyatta University Regional Head of Risk and Quality of the PwC
since 2006 until her retirement in March 2016, Assurance business covering 9 countries, as
where she has also held various senior lecturing well as the Overall Head of Risk and Quality of
positions from 1984. Prof. Mugenda joined the 6 countries comprising the East African Market
board in September 2010 and is a member of area. He was appointed to the NMG board in
the Editorial and the Human Resources and March 2015. He is a member of the Finance
Remuneration Committees. and Audit as well as the Human Resources and
Remuneration Committees and Chairman of
Mwananchi Communications Limited in Tanzania.
He is also a director of ARM Cement Limited and
Chairman of its Tanzanian subsidiaries, a director
of National Microfinance Bank Plc (in Tanzania),
Tanzania Breweries Limited and Reliance
Insurance Company (Tanzania) Limited .

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ANNUAL REPORT & FINANCIAL STATEMENTS 2015 39
Board of Directors
MR. TOM MSHINDI MR. FRANCIS
OKOMO OKELLO
Mr. Tom Mshindi (55) is a graduate of the
University of Nairobi School of Journalism and
has an AMP certificate from Strathmore Business Mr. Francis Okomo Okello (66) holds a
School and another from IESE, New York. He Bachelor of Laws Degree from the University of
worked for the Nation Media Group as a journalist Dar es Salaam, Tanzania and is an Advocate of
rising to the position on Managing Editor of the the High Court of Kenya, an Albert Parvin Fellow
Daily Nation before joining UNICEF as an editor of Princeton University, Woodrow Wilson School
in New York. He served as UNICEF’s chief of of Public and International Affairs (USA) as well
communications in its Nigeria programme. He as a Fellow of the Kenya Institute of Bankers
has worked as the Chief Executive Officer of (FKIB). He joined the board in December
the Standard Media Group before taking up 1995. Mr. Okello is the Chairman of Barclays
appointment as the Managing Director of Monitor Bank of Kenya Limited and an Independent
Publications Limited and subsequently at Nation Non-Executive Director of Barclays Africa Group
Newspapers division. Mr Mshindi was appointed Limited, as well as the Chairman of TPS Eastern
the Editor-In Chief on 5 June 2015 and appointed Africa Limited (Serena Group of hotels and
an Alternate Director. lodges). He is a member of the Advisory Board
of the Strathmore Business School, Strathmore
University and is also a member of the Advisory
Committee of the Aga Khan University, Faculty
of Arts and Sciences- East Africa. He is the
Executive Director in charge of Legal and
Corporate Affairs at Industrial Promotion Services
(East Africa) Group of Companies. Mr. Okello is
the Chairman of the Editorial Committee.

MR. ANWAR MR. GERARD

POONAWALA WILKINSON
Mr. Anwar Poonawala (69) holds a Master of Mr. Gerard Wilkinson (72) holds an MEcon.Sc
Science (Industrial Engineering) and an MBA and an MS and a BA, from Ireland and the United
from the University of Iowa (USA). He joined the States of America. He lectured at the School of
board in June 1989. He has been associated Business University College, Dublin, Ireland. He
with the Aga Khan Development Network for over has served as a senior executive at Independent
thirty years and retired in 2006 as the director Newspapers, in Dublin, the Managing Director,
of Industrial Promotion Services based in Paris, Nation Newspapers in Kenya, Managing Director,
France. Mr. Poonawala is a director of AKFED. ASPACOS, Consorzio Costa Smeralda, Sardinia,
He is a member of the Finance and Audit, the Italy and as the Head of Public Affairs at the Aga
Nominations and the Human Resources and Khan Secretariat in Paris, France. He initially
Remuneration Committees. served on the board from September 1973 until
1980 and rejoined the board in April 1983.
Mr. Wilkinson is the Chairman of the Nominations
Committee and is a member of the Strategic
Planning Committee.

MR. JAMES KINYUA

Mr. James Kinyua (52) (Group Company
Secretary) holds a Bachelor of Laws (Hons.)
from the University of Sheffield (United Kingdom)
and a Bachelor of Arts (Political Science) from
York University (Canada). He is an Advocate of
the High Court of Kenya and is also a Certified
Public Secretary of Kenya (CPS K) and a
member of the Institute of Directors (Kenya).
He is an alumni of the Cambridge University
Advanced Leadership Programme. He was
appointed the Company Secretary in July 1998
and is the head of the Legal and Administration
department. He is a director of the Group’s
subsidiary companies.

40 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
Directors’ Report
The Directors have pleasure in
presenting their report and the
audited financial statements for
the year ended 31 December
2015, which disclose the state
of affairs of Nation Media Group
Limited (the Company) and its
subsidiaries (together
the Group).
Principal Activities
The principal activities of the Group are the Ms. N. Karago retires and does not offer herself
publication, printing and distribution of newspapers for re-election.
and magazines, radio and television broadcasting
and digital online products, in the East African Dr. W. Kiboro, Prof. L. Huebner and Mr. G.
countries of Kenya, Uganda, Rwanda and Tanzania. Wilkinson are directors who retire in accordance
with Article 101 of the Company’s Articles of
Group Results Association and who are over the age of 70 years,
The results of the Group for the year are set out in and shall notwithstanding that fact, be re-elected as
the Group statement of comprehensive income on directors of the Company for a further period of one
page 48. year.

Dividends In accordance with Section 760 of the Companies

The Directors recommend the payment of a Act 2015 Mr. D Aluanga, Mr. A. Poonawala,
final dividend of Shs. 7.50 per share (300%) on Dr. S. Kagugube and Mr. L. Mususa who are
the issued share capital as at 31st December the members of the board Finance and Audit
2015, which together with the interim dividend of Committee are required to be elected to continue to
Shs.2.50 per share (100%) paid on 30th September serve on the committee.
2015, makes a total of Shs.10.00 per share (400%)
in respect of the year ended 31st December 2015 Auditor
(2014: Shs.10.00 per share). The dividend will be The Company’s auditor PricewaterhouseCoopers
paid less withholding tax where applicable on or has expressed willingness to continue in office in
about 29th July 2016 to shareholders registered on accordance with Section 723(b) of the Companies
the register of members at the close of business Act 2015 Laws of Kenya.
on 10th June 2016. The register of members will
be closed from 13th to 17th June 2016, both dates Corporate Governance
inclusive. Nation Media Group Limited is in compliance with
the provisions of the Capital Markets Act - Code
Directors of Corporate Governance Practices For Issuers
The Directors who held office during the year and to of Securities to the Public 2015. Over one third of
the date of this report are set out on page 34. the Board of Directors are independent and non-
executive directors. The membership of the various
Mr. J. Muganda was appointed to the Board on board committees is listed on page 8.
1st July 2015 and in accordance with Article 96 of
the Company’s Articles of Association, he retires By order of the Board
and being eligible offers himself for election.

J C Kinyua
Mr. D. Aluanga, Mr. S. Gitagama and Dr. S. Secretary
Kagugube are directors who retire by rotation 18 March 2016
in accordance with Article 110 of the Company’s
Articles of Association and being eligible, offer
themselves for re-election.

42 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Ripoti ya Wakurugenzi Wakuu
Wakurugenzi wana furaha
kuwasilisha ripoti yao pamoja na
taarifa kuhusu fedha zilizokaguliwa
kwa mwaka uliokamilika Desemba
31, 2015, ambayo inaonyesha
jinsi Nation Media Group Limited
(Kampuni) na matawi yake (pamoja
shirika) ilivyofanya katika
kipindi hicho.
Shughuli Muhimu na kwa mujibu wa Kifungu cha 110 cha Ushirika wa
Shughuli kuu za Shirika la Nation Media Group Kampuni, wanaruhusiwa kuwania tena, kwa hivyo
ni uchapishaji, upigaji chapa na usambazaji wa wanajitokeza ili wachaguliwe tena.
magazeti na majarida, kutangaza kupitia kwenye
redio na televisheni pamoja na huduma nyinginezo Bi. N. Karago anastaafu na hajajitokeza kutaka
za kimtandao katika mataifa ya Afrika Mashariki, kuchaguliwa tena.
ikiwa ni pamoja na Kenya, Uganda, Rwanda
na Tanzania. Dkt. W. Kiboro, Prof. L. Huebner na Bw. G.
Wilkinson ni wakurugenzi wanaostaafu kwa mujibu
Matokeo ya Shirika wa Kifungu cha 101 cha Ushirika wa Kampuni, na
Matokeo ya Shirika kwa mwaka huo wamepitisha umri wa miaka 70, na bila kuzingatia
yameorodheshwa kwenye taarifa kamili ya Mapato hayo, wachaguliwe tena kama wakurugenzi wa
ya Shirika kwenye ukurasa wa 48. Kampuni kwa kipindi kingine cha mwaka mmoja.

Mgao Kwa mujibu wa kanuni za Sehemu ya 760 ya

Wakurugenzi wanapedekeza malipo ya mwisho Sheria za Kampuni 2015, Sheria za Kenya Bw. D.
ya mgao wa Shs.7.50 kwa kila hisa (300%) kwa Aluanga, Bw. A. Poonawala, Dkt. S. Kagugube
mtaji wa hisa zote zilizomilikiwa kufikia Desemba na Bw. L. Mususa ambao ni wanachama wa
31, 2015, ambayo pamoja na mgao wa muda wa Bodi ya Fedha na Kamati ya Ukaguzi wa fedha
Shs.2.50 kwa kila hisa (100%) uliolipwa mnamo wanahitajika kuchaguliwa ili waendelee kuhudumu
Septemba 30, 2015, unafanya jumla ya mgao kama wanachama wa kamati hiyo.
kuwa Sh10.00 kwa kila hisa (400%) kwa mwaka
uliomalizikia Desemba 31, 2015 (2014: Shs.10.00 Mkaguzi wa Kifedha
kwa kila hisa). Mgao huo utalipwa baada ya Mkaguzi wa kifedha wa Kampuni,
kutozwa kodi ya hifadhi ya serikali itakapohitajika PricewaterhouseCoopers ameonyesha nia ya
kufikia au karibu na Julai 29, 2016 kwa wenyehisa kutaka kuendelea kuhudumu kwa mujibu wa
waliosajiliwa kwenye sajili ya wanachama, kufikia Sehemu ya 723(b) ya Sheria za Kampuni 2015,
jioni ya Juni 10, 2016. Sajili ya wanachama Sheria za Kenya.
itafungwa kuanzia Juni 13 hadi 17, 2016, siku zote
mbili zikihesabiwa. Usimamizi Bora
Shirika la Nation Media Group Limited limetimiza
Wakurugenzi masharti ya Sheria ya Masoko ya Mtaji- Kanuni za
Wakurugenzi waliohudumu kwa mwaka huo na Usimamizi Bora kwa wanaotoa Hisa kwa Umma
kufikia siku ya kuundaliwa kwa ripoti hii, maelezo mnamo mwaka wa 2015. Zaidi ya thuluthi moja
hayo yapo kwenye ukurasa wa 34. ya Bodi ya Wakurugenzi wanajitegemea na ni
wakurugenzi wasio na mamlaka. Wanachama wa
Bw. J. Muganda aliteuliwa kwenye Bodi mnamo kamati mbalimbali za bodi umeorodheshwa kwenye
Julai 1, 2015 na kwa mujibu wa Kifungu cha 96 ukurasa wa nane (8).
cha Ushirika wa Kampuni, anastaafu na kwa kuwa
anaruhusiwa kuwania, anajitokeza ili achaguliwe. Kwa Amri ya Bodi

Bw. D. Aluanga, Bw. S. Gitagama na Dkt. S. J C Kinyua

Kagugube ni wakurugenzi wanaostaafu kwa zamu Katibu

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 43
Executive Team

MR. JOE MUGANDA MR. TOM MSHINDI MR. STEPHEN GITAGAMA

GROUP CHIEF EXECUTIVE EDITOR-IN-CHIEF GROUP FINANCE DIRECTOR

MR. JAMES KINYUA MR. DAVID KIAMBI MR. MICHAEL NGUGI

GROUP COMPANY SECRETARY GROUP HUMAN RESOURCES GROUP ADVERTISING DIRECTOR
DIRECTOR

MRS. ROSE LUTTA MR. TIMOTHY ORIEDO MR. JAPHET MUCHEKE

GROUP MARKETING DIRECTOR AG. GENERAL MANAGER, RADIO GROUP FINANCIAL CONTROLLER

MR. GABRIEL CHEGE MR. GIDEON ASWANI MRS. AGNES ASSIMWE-KONDE

GROUP IT DIRECTOR GROUP HEAD OF PRODUCTION MANAGING DIRECTOR, NTV UGANDA
 Executive Team

MRS. CONNIE MWANGEMI MR. CLIFFORD MACHOKA MR. ANTHONY CRAIG

AG. GENERAL MANAGER HEAD OF CORPORATE GLENCROSS
NATION HOLDINGS RWANDA LTD AND REGULATORY MANAGING DIRECTOR,
AFFAIRS MONITOR
PUBLICATIONS LTD

MR. FRANCIS NANAI MRS. ELIZABETH KYENGO MR. LINUS KAIKAI

MANAGING DIRECTOR, MWANANCHI GROUP HEAD OF GENERAL MANAGER
COMMUNICATIONS LIMITED PROCUREMENT TELEVISION

MRS. RASHMI CHUGH MR. MICHAEL WALEKWA MR. GEORGE AMBATTA

HEAD OF DIGITAL GENERAL MANAGER GROUP HEAD
CIRCULATION & OF INTERNAL AUDIT
DISTRIBUTION

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 45
Statement of Directors’ Responsibilities

The Kenyan Companies Act requires the Directors to prepare financial statements for each financial year that
give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial
year and of the Group profit or loss. It also requires the Directors to ensure that the Company keeps proper
accounting records that disclose, with reasonable accuracy, the financial position of the Company. They are
also responsible for safeguarding the assets of the Company.

The Directors accept responsibility for the annual financial statements that are free from material
misstatements whether due to fraud or error. They also accept responsibility for:

i) Designing, implementing and maintaining internal controls as they determine necessary to enable the
preparation of financial statements that are free from material misstatements, whether due to
fraud or error;
ii) Selecting and applying appropriate accounting policies;
iii) Making accounting estimates and judgements that are reasonable in the circumstances.

The directors are of the opinion that the financial statements give a true and fair view of the financial position
of the Company as at 31st December 2015 and of the Group and the Company’s financial performance and
cash flows for the year then ended in accordance with International Financial Reporting Standards and the
requirements of the Kenyan Companies Act.

Nothing has come to the attention of the Directors to indicate that the Company will not remain a going
concern for at least the next twelve months from the date of this statement.

Dr. W. D. Kiboro S. Gitagama

18th March 2016

46 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Report of the Independent Auditor to the
Members of Nation Media Group Limited

Report on the consolidated financial statements to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing
We have audited the accompanying consolidated an opinion on the effectiveness of the entity’s internal
financial statements of Nation Media Group Limited control. An audit also includes evaluating the
(the “Company”) and its subsidiaries (together, the appropriateness of accounting policies used and
“Group”), set out on pages 48 to 84. These financial the reasonableness of accounting estimates made
statements comprise the consolidated statement of by the directors, as well as evaluating the overall
financial position as at 31 December 2015, and the presentation of the financial statements.
consolidated statement of comprehensive income,
consolidated statement of changes in equity and We believe that the audit evidence we have obtained
consolidated statement of cash flows for the year is sufficient and appropriate to provide a basis for our
then ended, together with the statement of financial opinion.
position of the Company standing alone as at 31
December 2015 and the statement of changes in Opinion
equity of the Company for the year then ended, and a
summary of significant accounting policies and other In our opinion the accompanying financial statements
explanatory notes. give a true and fair view of the financial position of the
Group and of the Company as at 31 December 2015
Directors’ responsibility for the and of the financial performance and cash flows of
financial statements the Group for the year then ended in accordance with
International Financial Reporting Standards and the
The directors are responsible for the preparation Kenyan Companies Act.
and fair presentation of these financial statements
in accordance with International Financial Reporting Report on other legal requirements
Standards and with the requirements of the
Companies Act and for such internal control, as As required by the Kenyan Companies Act we report
the directors determine necessary to enable the to you, based on our audit, that:
preparation of financial statements that are free from i) we have obtained all the information
material misstatements, whether due to fraud or error. and explanations which to the best of
our knowledge and belief were necessary for
Auditor’s responsibility the purposes of our audit;
ii) in our opinion proper books of account have
Our responsibility is to express an opinion on been kept by the Company, so far as appears
the financial statements based on our audit. We from our examination of those books; and
conducted our audit in accordance with International iii) the Company’s statement of financial position
Standards on Auditing. Those standards require that and statement of comprehensive income are in
we comply with ethical requirements and plan and agreement with the books of account.
perform our audit to obtain reasonable assurance that
the financial statements are free from The engagement partner responsible for the audit
material misstatement. resulting in this independent auditor’s report is CPA
Peter Ngahu – P/No. 1458.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the financial statements. The procedures selected
depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers Certified Public Accountants
internal control relevant to the entity’s preparation and Nairobi.
fair presentation of the financial statements in order 18 March 2016

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 47
Consolidated Statement of Comprehensive Income
for the year ended 31 December

Note 2015 2014

Revenue 5 12,339.5 13,351.3

Cost of sales
(2,451.5) (2,538.7)

Gross profit 9,888.0 10,812.6

Distribution costs (352.3) (375.2)

Administrative expenses (1,052.1) (1,080.0)

Other expenses (6,101.3) (6,222.4)

Operating profit 6 2,382.3 3,135.0

Finance income 8(a) 324.6 299.0

Finance costs 8(b) (8.3) (11.6)

Share of profit after income tax of associate 18 124.6 201.6

Profit before income tax 2,823.2 3,624.0

Income tax expense 9 (600.5) (1,163.5)

Profit for the year (of which Shs 2,218.3 million has been
2,222.7 2,460.5
dealt within the accounts of the Company)
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss

Currency translation differences (118.8) (53.3)

Other comprehensive income from associate 18 (32.8) 3.0

(151.6) (50.3)

Total comprehensive income for the year 2,071.1 2,410.2

Profit for the year attributable to:

Owners of the parent 2,222.5 2,464.4

Non-controlling interest 0.2 (3.9)

2,222.7 2,460.5

Total comprehensive income attributable to:

2,076.6 2,418.1
Owners of the parent

Non-controlling interest (5.5) (7.9)

2,071.1 2,410.2

Basic and diluted earnings per share (Shs) 10 11.8 13.1

The notes from page 54 to 84 are an integral part of these financial statements

48 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Consolidated Statement of Financial Position
at 31 December
Group Company

Note 2015 2014 2015 2014

Shs m Shs m Shs m Shs m
CAPITAL EMPLOYED
Capital and reserves attributable to
the Company’s equity holders
Share capital 11 471.4 471.4 471.4 471.4
Other reserves 12 (56.4) 63.3 124.7 127.9
Retained earnings 7,076.2 6,765.4 5,821.0 5,485.0
Proposed dividends 26 1,414.1 1,414.1 1,414.1 1,414.1
8,905.3 8,714.2 7,831.2 7,498.4
Non-controlling interest 48.4 53.9 - -
Total equity 8,953.7 8,768.1 7,831.2 7,498.4

Non-current liabilities
Long-term borrowings 13 - 41.0 - -
Deferred income tax 14 151.9 16.9 136.6 -
151.9 57.9 136.6 -
Total equity and non-current liabilities 9,105.6 8,826.0 7,967.8 7,498.4

Non-current assets
Property, plant and equipment 15 3,479.2 2,589.4 2,803.2 1,873.6
Intangible assets 16 305.6 306.5 99.2 88.0
Prepaid operating lease rentals 17 76.1 80.5 45.8 46.6
Investment in associate 18 1,115.4 1,034.6 94.6 94.6
Investment in subsidiaries 19 - - 1,131.4 1,131.4
Deferred income tax 14 93.1 295.6 - 238.2
Long-term deposits 20 102.4 262.7 102.4 262.7
5,171.8 4,569.3 4,276.6 3,735.1

Current assets
Inventories 21 893.8 944.5 538.7 711.6
Receivables and prepayments 22 2,938.5 2,853.9 2,566.6 2,457.1
Cash and cash equivalents 23 3,063.3 3,451.7 2,792.0 3,087.5
Current income tax 629.3 124.9 577.7 46.7
7,524.9 7,375.0 6,475.0 6,302.9

Current liabilities
Payables and accrued expenses 24 3,286.2 2,885.7 2,517.0 2,334.5
Post employment benefit obligation 25 266.8 205.1 266.8 205.1
Borrowings 13 38.1 27.5 - -
3,591.1 3,118.3 2,783.8 2,539.6
Net current assets 3,933.8 4,256.7 3,691.2 3,763.3
Total assets less current liabilities 9,105.6 8,826.0 7,967.8 7,498.4

The notes from page 54 to 84 are an integral part of these finacial statements.

The financial statements from page 48 to 84 have been approved for issue by the board of directors on 18 March 2016 and signed on its behalf by:

Dr. W. D. Kiboro S. Gitagama

Consolidated Statement of Changes in Equity
for the year ended 31 December

Non- Total
Attributable to equity holders of the Company controlling equity
interest

Share Other Retained Proposed

capital reserves Earnings dividends Total
Note Shs m Shs m Shs m Shs m Shs m Shs m Shs m
Year ended 31
December 2014
At start of year 471.4 119.2 6,176.9 1,414.1 8,181.6 61.8 8,243.4
Total comprehensive
income
Profit for the year - - 2,464.4 - 2,464.4 (3.9) 2,460.5
Other comprehensive
income, net of tax
Transfer of excess
- (9.4) 9.4 - - - -
depreciation
Deferred tax transfer - 2.8 (2.8) - - - -
- (6.6) 6.6 - - - -
Currency translation
- (49.3) - - (49.3) (4.0) (53.3)
differences
Share of comprehensive
- - 3.0 - 3.0 - 3.0
income in associate
Total other
comprehensive - (55.9) 9.6 - (46.3) (4.0) (50.3)
income
Total comprehensive
- (55.9) 2,474.0 - 2,418.1 (7.9) 2,410.2
income for the year
Transactions with
owners recognized
directly in equity
Dividends:
- final for 2013 26 - - - (1,414.1) (1,414.1) - (1,414.1)
- interim for 2014 paid 26 - - (471.4) - (471.4) - (471.4)
- Proposed final for 2014 26 - - (1,414.1) 1,414.1 - - -

Total transactions
- - (1,885.5) - (1,885.5) - (1,885.5)
with owners
At end of year 471.4 63.3 6,765.4 1,414.1 8,714.2 53.9 8,768.1

The notes from page 54 to 84 are an integral part of these financial statements.

50 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Consolidated Statement of Changes in Equity
for the year ended 31 December (continued)

Non- Total
Attributable to equity holders of the Company controlling equity
interest

Share Other Retained Proposed

capital reserves Earnings dividends Total
Note Shs m Shs m Shs m Shs m Shs m Shs m Shs m
Year ended 31
December 2015
At start of year 471.4 63.3 6,765.4 1,414.1 8,714.2 53.9 8,768.1
Total comprehensive
income
Profit for the year - - 2,222.5 - 2,222.5 0.2 2,222.7
Other comprehensive
income, net of tax
Transfer of excess
- (9.4) 9.4 - - - -
depreciation
Deferred tax transfer - 2.8 (2.8) - - - -
- (6.6) 6.6 - - - -
Currency translation
- (113.1) - - (113.1) (5.7) (118.8)
differences
Share of comprehensive
- - (32.8) - (32.8) - (32.8)
income in associate
Total other
comprehensive - (119.7) (26.2) - (145.9) (5.7) (151.6)
income
Total comprehensive
- (119.7) 2,196.3 - 2,076.6 (5.5) 2,071.1
income for the year
Transactions with
owners recognised
directly in equity
Dividends:
- final for 2014 - - - (1,414.1) (1,414.1) - (1,414.1)
- interim for 2015 paid 26 - - (471.4) - (471.4) - (471.4)
- Proposed final for 2015 26 - - (1,414.1) 1,414.1 - - -

Total transactions with

- - (1,885.5) - (1,885.5) - (1,885.5)
owners
At end of year 471.4 (56.4) 7,076.2 1,414.1 8,905.3 48.4 8,953.7

The notes from page 54 to 84 are an integral part of these financial statements.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 51
Company Statement of Changes in Equity
for the year ended 31 December

Share Other Retained Proposed

capital reserves earnings dividends Total
Note Shs m Shs m Shs m Shs m Shs m
Year ended 31 December
2014
At start of year 471.4 131.1 5,242.7 1,414.1 7,259.3
Total comprehensive income
Profit for the year - - 2,124.6 - 2,124.6
Other comprehensive
income, net of tax
Transfer of excess depreciation - (4.6) 4.6 - -
Deferred income tax on transfer - 1.4 (1.4) - -
Total other comprehensive
- (3.2) 3.2 - -
income
Total comprehensive income
- (3.2) 2,127.8 - 2,124.6
for the year
Transactions with owners
Dividends:
- final for 2013 paid 26 - - - (1,414.1) (1,414.1)
- interim for 2014 paid 26 - (471.4) - (471.4)
- proposed final for 2014 26 - - (1,414.1) 1,414.1 -
Total transactions with
- - (1,885.5) - (1,885.5)
owners
At end of year 471.4 127.9 5,485.0 1,414.1 7,498.4

Year ended 31 December

2015

At start of year 471.4 127.9 5,485.0 1,414.1 7,498.4

Total comprehensive income
Profit for the year - - 2,218.3 - 2,218.3
Other comprehensive
income, net of tax
Transfer of excess depreciation - (4.6) 4.6 - -
Deferred income tax on transfer - 1.4 (1.4) - -
Total other comprehensive
- (3.2) 3.2 - -
income
Total comprehensive income
- (3.2) 2,221.5 - 2,218.3
for the year
Transactions with owners
Dividends:
- final for 2014 paid 26 - - - (1,414.1) (1,414.1)
- interim for 2015 paid 26 - - (471.4) - (471.4)
- proposed final for 2015 26 - - (1,414.1) 1,414.1 -
Total transactions with
- - (1,885.5) - (1,885.5)
owners
At end of year 471.4 124.7 5,821.0 1,414.1 7,831.2

The notes from page 54 to 84 are an integral part of these financial statements.

52 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Consolidated Statement Of Cash Flows
for the year ended 31 December

Note 2015 2014

Shs m Shs m
Operating activities
Cash generated from operations 28 3,376.6 3,589.1
Interest received 8 (a) 324.6 299.0
Interest paid 8 (b) (8.3) (11.6)
Income tax paid (767.4) (1,331.2)

Net cash from operating activities 2,925.5 2,545.3

Investing activities
Purchase of property, plant and equipment 15 (1,488.0) (962.1)
Purchase of intangible assets 16 (37.9) (41.8)
Proceeds from sale of property, plant and equipment 14.8 12.7
Dividends received from associate 18 11.0 -
Long-term deposit 160.3 25.3

Net cash used in investing activities (1,339.8) (965.9)

Financing activities
Repayment of borrowings (30.4) (24.9)
Dividends paid (1,885.5) (1,885.5)

Net cash used in financing activities (1,915.9) (1,910.4)

Decrease in cash and cash equivalents (330.2) (331.0)

Movement in cash and cash equivalents

At start of year 3,451.7 3,805.7
Decrease in cash and cash equivalents (330.2) (331.0)
Exchange losses on cash and cash equivalents (58.2) (23.0)

At end of year 23 3,063.3 3,451.7

The notes from page 54 to 84 are an integral part of these financial statements.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 53
Notes to the financial statements

1 General information its judgement in the process of (ii) New standards and
Nation Media Group Limited applying the Group’s accounting interpretations that are not yet
(the “Company”) is incorporated policies. The areas involving a effective
in Kenya under the Kenya higher degree of judgement or
Companies Act as a public limited complexity, or where assumptions A number of new standards and
liability Company and is domiciled and estimates are significant amendments to standards and
in Kenya. The address of its to the financial statements, are interpretations are effective for
registered office is: disclosed in Note 3. annual periods beginning after
1 January 2015 and have not
Nation Media Group Limited Changes in accounting policy been applied in preparing these
Nation Centre and disclosures consolidated financial statements.
Kimathi Street None of these is expected to
P.O. Box 49010 00100 (i) New and amended standards have a significant effect on the
Nairobi adopted by the Group consolidated financial statements
of the Group, except the following
The Company’s shares are listed The following standards have set out below:
on the Nairobi, Kampala, Dar been adopted by the group for
es Salaam and Kigali Stock the first time for the financial year IFRS 9 Financial Instruments
Exchanges. beginning on or after 1 January addresses the classification,
2015: measurement and derecognition
For Kenyan Companies Act of financial assets and financial
reporting purposes, the balance • Annual Improvements to IFRSs liabilities and introduces new
sheet is represented by the – 2010-2012 Cycle and 2011 – rules for hedge accounting. In
statement of financial position 2013 Cycle July 2014, the IASB made further
and the profit and loss account by • Defined Benefit changes to the classification
the statement of comprehensive Plans: Employee and measurement rules and also
income, in these financial Contributions – Amendments introduced a new impairment
statements. to IAS 19 model. These latest amendments
now complete the new financial
2 Summary of significant The adoption of the improvements instruments standard. Application
accounting policies made in the 2012-2012 Cycle has of this standard is mandatory for
The principal accounting policies required additional disclosures financial years commencing on or
adopted in the preparation of in our segment note. Other after 1 January 2018. Adoption of
these consolidated financial than that, the adoption of these this standard is not expected to
statements are set out below. amendments did not have any have a significant impact on the
These policies have been impact on the current period or group.
consistently applied to all years any prior period and is not likely to
presented, unless otherwise affect future periods. IFRS 15 Revenue from Contracts
stated. The Group also elected to adopt with Customers - Mandatory for
the following two amendments financial years commencing on
(a) Basis of preparation early: or after 1 January 2018. The
IASB has issued a new standard
The financial statements are • Annual Improvements to IFRSs for the recognition of revenue.
prepared in compliance with 2012-2014 Cycle; and This will replace IAS 18 which
International Financial Reporting • Disclosure Initiative: covers contracts for goods
Standards (IFRS). The financial Amendments to IAS 1. and services and IAS 11 which
statements have been prepared covers construction contracts.
under the historical cost As these amendments only clarify The new standard is based
convention, as modified by the the existing requirement, they do on the principle that revenue
revaluation of buildings. The not affect the Group’s accounting is recognised when control of
financial statements are presented policies or any of the disclosures. a good or service transfers to
in Kenyan Shillings (Shs m), a customer – so the notion of
rounded to the nearest one tenth Other standards, amendments control replaces the existing
of a million. and interpretations which are notion of risks and rewards. The
effective for the financial year standard permits a modified
The preparation of financial beginning on 1 January 2015 are retrospective approach for the
statements in conformity with IFRS not material to the Group. adoption. Under this approach
requires the use of certain critical entities will recognise transitional
accounting estimates. It also adjustments in retained earnings
requires management to exercise on the date of initial application
(eg 1 January 2017), i.e without

54 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)

restating the comparative period. IFRS 16 supersedes IAS 17, Acquisition-related costs are
They will only need to apply the ‘Leases’, IFRIC 4, ‘Determining expensed as incurred.
new rules to contracts that are whether an Arrangement contains
not completed as of the date of a Lease’, SIC 15, ‘Operating If the business combination is
initial application. Management is Leases – Incentives’ and SIC achieved in stages, the acquisition
currently assessing the impact of 27, ‘Evaluating the Substance of date fair value of the acquirer’s
the new rules. Transactions Involving the Legal previously held equity interest
Form of a Lease’. in the acquiree is remeasured
IFRS 16, Leases, Effective date to fair value at the acquisition
- 1 January 2019. After ten years There are no other IFRSs or IFRIC date through profit or loss. Any
of joint drafting by the IASB and interpretations that are not yet contingent consideration to
FASB they decided that lessees effective that would be expected be transferred by the Group is
should be required to recognise to have a material impact on the recognised at fair value at the
assets and liabilities arising from Group. acquisition date. Subsequent
all leases (with limited exceptions) changes to the fair value of the
on the balance sheet. Lessor (b) Consolidation contingent consideration that is
accounting has not substantially deemed to be an asset or liability
changed in the new standard. (i) Subsidiaries is recognised in accordance with
IAS 39 either in profit or loss or as
The model reflects that, at the Subsidiaries are all entities a change to other comprehensive
start of a lease, the lessee (including structured entities) over income. Contingent consideration
obtains the right to use an asset which the group has control. The that is classified as equity is not
for a period of time and has an group controls an entity when remeasured, and its subsequent
obligation to pay for that right. In the group is exposed to, or has settlement is accounted for within
response to concerns expressed rights to,variable returns from its equity.
about the cost and complexity to involvement with the entity and
apply the requirements to large has the ability to affect those The excess of the consideration
volumes of small assets, the IASB returns through its power over transferred, the amount of any
decided not to require a lessee the entity. Subsidiaries are fully non-controlling interest in the
to recognise assets and liabilities consolidated from the date on acquiree and the acquisition-date
for short-term leases (less than which control is transferred to fair value of any previous equity
12 months) and leases for which the group. interest in the acquiree over the
the underlying asset is of low fair value of the identifiable net
value (such as laptops and office The Group uses the acquisition assets acquired is recorded
furniture). method of accounting to account as goodwill. If the total of
for business combinations. The consideration transferred,
A lessee measures lease liabilities consideration transferred for non-controlling interest
at the present value of future lease the acquisition of a subsidiary recognised and previously held
payments. A lessee measures is the fair values of the assets interest measured is less than the
lease assets, initially at the same transferred, the liabilities incurred fair value of the net assets of the
amount as lease liabilities, and and the equity interests issued subsidiary acquired in the case of
also includes costs directly related by the Group. The consideration a bargain purchase, the difference
to entering into the lease. Lease transferred includes the fair value is recognised directly in the
assets are amortised in a similar of any asset or liability resulting income statement.
way to other assets such as from a contingent consideration
property, plant and equipment. arrangement. Identifiable assets Goodwill is initially measured as
This approach will result in a more acquired and liabilities and the excess of the aggregate of
faithful representation of a lessee’s contingent liabilities assumed the consideration transferred and
assets and liabilities and, together in a business combination are the fair value of non-controlling
with enhanced disclosures, will measured initially at their fair interest over the net identifiable
provide greater transparency of values at the acquisition date. assets acquired and liabilities
a lessee’s financial leverage and assumed. If this consideration is
capital employed. The Group recognises any lower than the fair value of the net
non-controlling interest in the assets of the subsidiary acquired,
One of the implications of the acquiree on an acquisition- by- the difference is recognised in
new standard is that there will be acquisition basis, either at fair profit or loss.
a change to key financial ratios value or at the non-controlling
derived from a lessee’s assets and interest’s proportionate share Inter-company transactions,
liabilities (for example, leverage of the recognised amounts of balances and unrealised
and performance ratios). acquiree’s identifiable net assets. gains on transactions between

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 55
Notes to the financial statements (Continued)

Group companies are other comprehensive income are of impairment as the difference
eliminated. Unrealised losses reclassified to profit or loss between the recoverable amount
are also eliminated unless the of the associate and its carrying
transaction provides evidence (ii) Associates value and recognises the amount
of an impairment of the asset adjacent to ‘share of profit/(loss) of
transferred. Accounting policies of Associates are all entities over an associate’ in the statement of
subsidiaries have been changed which the Group has significant comprehensive income.
where necessary to ensure influence but not control, generally
consistency with the policies accompanying a shareholding Profits and losses resulting from
adopted by the Group. of between 20% and 50% of upstream and downstream
the voting rights. Investments transactions between the
Investments in subsidiaries in associates are accounted Group and its associate are
are accounted for at cost less for by the equity method of recognised in the Group’s financial
impairment. Cost is adjusted to accounting. Under the equity statements only to the extent
reflect changes in consideration method, the investments are of unrelated investor’s interests
arising from contingent initially recognised at cost, and in the associates. Unrealised
consideration amendments. Cost the carrying amount is increased losses are eliminated unless the
also includes direct attributable or decreased to recognise the transaction provides evidence
costs of investment. investor’s share of the profit or of an impairment of the asset
loss of the investee after the transferred. Accounting policies
(a) Changes in ownership interests date of acquisition. The Group’s of associates have been changed
in subsidiaries without change investment in associates includes where necessary to ensure
of control goodwill identified on acquisition. consistency with the policies
adopted by the Group.
Transactions with non-controlling If the ownership interest in
interests that do not result in loss an associate is reduced but Dilution gains and losses arising
of control are accounted for as significant influence is retained, from investments in associates are
equity transactions – that is, as only a proportionate share of the recognised in profit or loss.
transactions with the owners in amounts previously recognised
their capacity as owners. The in other comprehensive income (c) Property, plant and equipment
difference between fair value of is reclassified to profit or loss as
any consideration paid and the appropriate. All categories of property, plant
relevant share acquired of the and equipment are initially
carrying value of net assets of the The Group’s share of its recorded at cost. Buildings
subsidiary is recorded in equity. associates’ post-acquisition are subsequently shown
Gains or losses on disposals to profits or losses is recognised at market value, based on
non-controlling interests are also in profit or loss, and its share periodic valuations by external
recorded in equity. of post-acquisition movements independent valuers, less
in other comprehensive subsequent depreciation. All other
(b) Disposal of subsidiaries income is recognised in other property, plant and equipment
comprehensive income, with a is stated at historical cost less
When the Group ceases to have corresponding adjustment to the depreciation.
control, any retained interest in carrying amount of the investment.
the entity is remeasured to its fair When the Group’s share of losses Historical cost includes
value at the date when control is in an associate equals or exceeds expenditure that is directly
lost, with the change in carrying its interest in the associate, attributable to the acquisition of
amount recognised in profit or including any other unsecured the items. Subsequent costs are
loss. The fair value is the initial receivables, the Group does not included in the asset’s carrying
carrying amount for the purposes recognise further losses, unless it amount or recognised as a
of subsequently accounting has incurred legal or constructive separate asset, as appropriate,
for the retained interest as an obligations or made payments on only when it is probable that future
associate, joint venture or financial behalf of the associate. economic benefits associated
asset. In addition, any amounts with the item will flow to the Group
previously recognised in other The Group determines at each and the cost of the item can be
comprehensive income in respect reporting date whether there is measured reliably. All other repairs
of that entity are accounted any objective evidence that the and maintenance are charged to
for as if the Group had directly investment in the associate is profit or loss during the financial
disposed of the related assets impaired. If this is the case, the period in which they are incurred.
or liabilities. This may mean that Group calculates the amount
amounts previously recognised in Increases in the carrying amount
arising on revaluation are

56 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)

credited to a revaluation reserve. (d) Segment reporting recognised in the period

Decreases that offset previous in which the services are
increases of the same asset are Operating segments are reported rendered, by reference
charged against the revaluation in a manner consistent with the to completion of the specific
reserve; all other decreases are internal reporting provided to transaction assessed
charged to profit or loss. Each the chief operating decision- on the basis of the actual
year the difference between maker (CODM). The Executive service provided as a
depreciation based on the Management team, who is proportion of the total services
revalued carrying amount of the responsible for allocating to be provided.
asset (the depreciation charged resources and assessing (iii) Interest income is recognised
to profit or loss and depreciation performance of the operating using the effective interest
based on the asset’s original cost) segments, have been identified as method.
is transferred from the revaluation the executive management team (iv) Dividends are recognised
reserve to retained earnings. that makes strategic decisions. as income in the period
the right to receive payment is
Land is not depreciated. All transactions between business established.
Depreciation on other assets segments are conducted on
is calculated on the straight an arm length basis, with intra- (f) Inventories
line method to write off the cost segment revenue and costs being
of each asset, or the revalued eliminated in head office. Income Inventories are stated at the lower
amounts, to their residual values and expenses associated with of cost and net realisable value.
over their estimated useful life. each segment as included in Cost is determined on a weighted
The annual rates used for this determining business segment average principle. Net realisable
purpose are as follows: performance. value is the estimate of the selling
price in the ordinary course
Buildings 40 years (e) Revenue recognition of business, less the costs of
Plant and completion and selling expenses.
equipment 5 – 15 years Revenue comprises the fair value Goods in transit are stated at cost.
Computers and of the consideration received Provision is made for obsolete,
software 3 – 5 years or receivable for sales of goods slow moving and defective
Motor Vehicles 3 – 5 years and services, and is stated inventories.
net of value-added tax (VAT),
The assets’ residual values and rebates and discounts and after (g) Receivables
useful lives are reviewed, and eliminating sales within the Group.
adjusted if appropriate at each Receivables are recognised
statement of financial position The Group recognises revenue initially at fair value and
date. An asset’s carrying amount when the amount of revenue subsequently measured at
is written down immediately to its can be reliably measured, it is amortised cost using the effective
estimated recoverable amount probable that future economic interest method less provision
if the asset’s carrying amount benefits will flow to the Group for impairment. A provision
is greater than its estimated and when specific criteria have for impairment of receivables
recoverable amount. been met for each of the Group’s is established when there is
activities as described below. objective evidence that the Group
Property, plant and equipment The Group bases its estimates or Company will not be able
are periodically reviewed for on historical results, taking to collect all the amounts due
impairment. Where the carrying into consideration the type of according to the original terms
amount of an asset is greater than customer, the type of transaction of receivables. The amount of
its estimated recoverable amount, and the specifics of each the provision is the difference
it is written down immediately to its arrangement. between the carrying amount and
recoverable amount. Revenue is recognised as follows: the present value of expected
cash flows, discounted at the
Gains and losses on disposal of (i) Sales of goods are recognised effective interest rate. The amount
property, plant and equipment in the period in which the of the provision is recognised in
are determined by comparing Group delivers products to the profit or loss.
proceeds with their carrying customer, the customer has
amounts and are taken into accepted the products and (h) Leases
account in determining the collectability of the related
profit. On disposal of revalued receivables is reasonably Leases in which a significant
assets, amounts in the revaluation assured. portion of the risks and rewards
reserve relating to that asset are (ii) Sales of services are of ownership are retained by the
transferred to retained earnings.
NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 57
Notes to the financial statements (Continued)

(ii) Computer software

lessor are classified as operating Deferred income tax assets are

leases. Payments made under recognised only to the extent that
operating leases are charged it is probable that future taxable Acquired computer software
to profit or loss on a straight-line profits will be available against licences are capitalised on the
basis over the period of the lease. which the temporary differences basis of the costs incurred to
Leases of land that are for a can be utilised. acquire and bring to use the
period of 99 years and below are specific software. The costs are
classified as operating leases. Deferred income tax is provided amortised over their estimated
on temporary differences arising useful lives (three to five years).
(i) Current and deferred income on investments in subsidiaries Costs associated with developing
tax and associates, except where or maintaining computer software
the timing of the reversal of the programmes are recognised
The tax expense for the period temporary difference is controlled as an expense incurred. Costs
comprises current and deferred by the Group and it is probable that are directly associated with
income tax. Tax is recognised in that the temporary difference will the production of identifiable
profit or loss except to the extent not reverse in the foreseeable and unique software products
that it relates to items recognised future. controlled by the Group, and
in other comprehensive income that will probably generate
or directly in equity. In this case, Deferred income tax assets and economic benefits exceeding
the tax is also recognised in other liabilities are offset when there costs beyond one year, are
comprehensive income or directly is a legally enforceable right to recognised as intangible assets.
in equity respectively. offset current tax assets against Direct costs include the software
current tax liabilities and when development employee costs and
The current income tax charge the deferred income taxes assets an appropriate portion of relevant
is calculated on the basis of the and liabilities relate to income overheads. Acquired computer
tax enacted or substantively taxes levied by the same taxation software and computer software
enacted at the reporting date. authority on either the same development costs recognised
Management periodically taxable entity or different taxable as assets are amortised over
evaluates positions taken in tax entities where there is an intention their estimated useful lives (not
returns with respect to situations to settle the balances on a net exceeding three years).
in which applicable tax regulation basis.
is subject to interpretation. It (iii) Transmission frequencies
establishes provisions where (j) Intangible assets
appropriate on the basis of Acquired transmission frequencies
amounts expected to be paid to (i) Goodwill are capitalised on the basis of the
the tax authorities. costs incurred to acquire and to
Goodwill represents the excess bring them to use. Transmision
Deferred income tax is recognised of the cost of an acquisition over frequencies are tested annually
using the liability method, on fair value of the Group’s share of for impairment and carried at cost
temporary differences arising the net identifiable assets of the less accumulated impairment
between the tax bases of assets acquired subsidiary/associate at losses.
and liabilities and their carrying the date of acquisition. Goodwill
values in the financial statements. on acquisition of subsidiaries (k) Employee benefits
However, if the deferred tax is included in intangible
liabilities are not recognised if they assets. Goodwill on acquisition (i) Post employment benefit
arise from the initial recognition of of associates is included in obligations
goodwill; deferred income tax is investment in associates. Goodwill
not accounted for if it arises from is tested annually for impairment The Group operates a defined
initial recognition of an asset or and carried at cost less contribution retirement benefit
liability in a transaction other than accumulated impairment losses. scheme for its employees. For
a business combination that at Goodwill is allocated to cash- defined contribution plans, the
the time of the transaction affects generating units for purposes of group pays contributions to
neither accounting nor taxable impairment testing. The allocation publicly or privately administered
profit or loss. Deferred income is made to those cash generating pension insurance plans on
tax is determined using tax rates units or Groups of cash- a mandatory, contractual or
and laws that have been enacted generating units that are expected voluntary basis. The Group has no
or substantively enacted at the to benefit from the business further payment obligations once
reporting date and are expected combination in which the goodwill the contributions have been paid.
to apply when the related deferred arose is identified according to The contributions are recognised
income tax liability is settled. operating segment. as employee benefit expense

58 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)

when they are due. Prepaid for a restructuring that is within the currencies are recognised in profit
contributions are recognised as scope of IAS 37 and involves the or loss.
an asset to the extent that a cash payment of termination benefits.
refund or a reduction in the future In the case of an offer made to Foreign exchange gains and
payments is available. encourage voluntary redundancy, losses that relate to borrowings
the termination benefits are and cash and cash equivalents
The Company and all its measured based on the number are presented in the income
employees also contribute to the of employees expected to accept statement within finance and
National Social Security Fund, the offer. Benefits falling due income costs. All other foreign
which is a defined contribution more than 12 months after the exchange gains and losses are
scheme. The Company’s end of the reporting period are presented in the profit or loss
contribution to the defined discounted to their present value. within ‘other income’ or ‘other
contribution schemes are charged expenses’ - net.
to profit or loss in the year to (iv) Profit-sharing and bonus
which they relate. The Company plans (iii) Group companies
has no further obligation once the
contributions have been paid. The Group recognises a liability The results and financial position
and an expense for bonuses and of all the Group entities (none
In addition the group operates profit-sharing, based on a formula of which has the currency of
a gratuity scheme where the that takes into consideration a hyperinflationary economy)
group makes contributions to the profit attributable to the that have a functional currency
a special purpose vehicle that company’s shareholders after different from the presentation
is administered independently. certain adjustments. The Group currency are translated into the
The employees are entitled to recognises a provision where presentation currency as follows:
specified benefits as per the contractually obliged or where
scheme’s rules. The gratuity there is a past practice that has (i) assets and liabilities for each
scheme is a defined benefit created a constructive obligation statement of financial position
scheme. The liability or asset presented are translated at the
recognised in the balance sheet (l) Functional currency and closing rate at the end of the
in respect of defined benefit plans translation of foreign currencies reporting period;
is the present value of the defined (ii) income and expenses for each
benefit obligation at the end of the (i) Functional and income statement amount are
reporting period less the fair value presentation currency translated at average exchange
of plan assets. The defined benefit rates (unless this average is not
obligation is calculated every five Items included in the financial a reasonable approximation of
years by independent actuaries. statements of each of the Group’s the cumulative effect of the rates
entities are measured using prevailing on the transaction
(ii) Other entitlements the currency of the primary dates, in which case income and
economic environment in which expenses are translated at the
The estimated monetary the entity operates (‘the functional dates of the transactions); and
liability for employees’ accrued currency’). The consolidated (iii) all resulting exchange
annual leave entitlement at the financial statements are presented differences are recognised in
statement of financial position in Kenyan Shillings (Shs), which other comprehensive income.
date is recognised as an expense is the Company’s functional
accrual. currency. When a foreign operation is
partially disposed off or sold,
(iii) Termination benefits (ii) Transactions and balances exchange differences that are
recorded in equity are recognised
Termination benefits are payable Foreign currency transactions in profit or loss as part of the gain
when employment is terminated are translated into the functional or loss on sale.
by the group before the normal currency using exchange rates
retirement date, or whenever prevailing at the dates of the Goodwill and fair value
an employee accepts voluntary transactions or valuation where adjustments arising on the
redundancy in exchange for these items are re-measured. Foreign acquisition of a foreign entity are
benefits. The group recognises exchange gains and losses treated as assets and liabilities of
termination benefits at the earlier resulting from the settlement of the foreign entity and translated at
of the following dates: (a) when such transactions and from the the closing rate.
the group can no longer withdraw translation at year-end exchange
the offer of those benefits; and (b) rates of monetary assets and
when the entity recognises costs liabilities denominated in foreign

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 59
Notes to the financial statements (Continued)

(m) Impairment of non-financial (r) Borrowings (t) Comparatives

assets

Borrowings are recognised initially Where necessary, comparatives
Assets that have an indefinite at fair value, net of transaction have been adjusted to conform
useful life are not subject to costs incurred. Borrowings are with changes in presentation in
amortisation and are tested subsequently stated at amortised the current year.
annually for impairment. Assets cost using the effective interest
that are subject to amortisation method; any differences between 3 Critical accounting
are reviewed for impairment proceeds (net of transaction estimates and
whenever events or changes costs) and the redemption value judgements
in circumstances indicate that is recognised in profit or loss over
the carrying amount may not be the period of the borrowings. Estimates and judgements are
recoverable. An impairment loss Borrowings are classified as continually evaluated and are
is recognised for the amount by current liabilities unless the Group based on historical experience
which the asset’s carrying amount has an unconditional right to and other factors, including
exceeds its recoverable amount. defer settlement of the liability experience of future events that
The recoverable amount is the for at least 12 months after the are believed to be reasonable
higher of an asset’s fair value less statement of financial position under the circumstances.
costs to sell and value in use. date.
For the purposes of assessing (i) Critical accounting
impairment, assets are grouped (s) Provision for liabilities estimates and assumptions
at the lowest levels for which there
are separately identifiable cash Provisions for legal claims are The Group makes estimates and
flows (cash-generating units). recognized when (1) the Group assumptions concerning the
has a present legal or constructive future. The resulting accounting
(n) Dividends obligation as a result of past estimates will, by definition,
events; (2) it is probable that seldom equal the related
Dividends on ordinary shares are an outflow of resources will be actual results. The estimates
charged to equity in the period required to settle the obligation; and assumptions that have a
in which they are declared. and 3) the amount has been significant risk of causing a
Proposed dividends are shown as reliably estimated. Provisions are material adjustment to the carrying
a separate component of equity not recognised for future operating amounts of assets and liabilities
until declared. losses. within the next financial year are
addressed below.
(o) Payables Where there are a number of
similar obligations, the likelihood Impairment of goodwill
Payables are recognised initially that an outflow will be required
at fair value and subsequently in settlement is determined The Group tests annually
measured at amortised cost using by considering the class of whether goodwill has suffered
the effective interest method. obligations as a whole. A provision any impairment, in accordance
is recognised even if the likelihood with the accounting policy stated
(p) Share capital of an outflow with respect to any in Note 2(j). The recoverable
one item included in the same amounts of cash-generating units
Ordinary shares are classified as class of obligations may be small. have been determined based on
equity. value-in-use calculations. The
Provisions are measured at the carrying amount of the goodwill
(q) Cash and cash equivalents present value of the expenditures and the key assumptions made
expected to be required to settle are set out in Note 16.
Cash and cash equivalents the obligation using a pre-tax
includes cash in hand, deposits rate that reflects current market Useful lives of property, plant
held at call with banks, other short assessments of the time value of and equipment
term highly liquid investments with money and the risks specific to
original maturities of three months the obligation. Any increase in the The Group’s management
or less, and bank overdrafts. provision due to passage of time determines the estimated useful
is recognised as an expense. lives and related depreciation
Bank overdrafts are shown within charges for its property, plant
borrowings in current liabilities on and equipment. This estimate
the statement of financial position. is based on projected product
lifecycles for its assets. It could
change significantly as a result

60 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)

of technical innovations and competitor actions in response to severe industry cycles. Management will increase
the depreciation charge where useful lives are less than previously estimated lives, or it will write-off or write-down
technically obsolete or non-strategic assets that have been abandoned or sold.

Income taxes

The Group is subject to income taxes in various jurisdictions. Significant judgment is required in determining
the Group’s provision for income taxes. There are many transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax
audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.

(ii) Critical judgements in applying the entity’s accounting policies

In the process of applying the Group’s accounting policies, management has made judgements in determining:
• the classification of financial assets and leases; and
• whether assets are impaired.

4 Financial risk management

The Group and the Company’s activity expose it to a variety of financial risks, market risk (including foreign exchange
risks fair value interest rate risk, cash flow interest risk and price risk), credit risk and liquidity risk. The Group’s overall
risk management programme focuses on the unpredictability of financial markets and seeks to minimise adverse
effects on its financial performance within the options available in East Africa to hedge against such risks.

Risk management is carried out by the Finance function under policies approved by the Board of Directors. The
Finance function identifies, evaluates and hedges against financial risks. The Board provides principles for overall risk
management, as well as policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk,
use of derivative financial instruments and investing excess liquidity.

(a) Market risk

(i) Foreign exchange risk

The Group and the Company make significant purchases of raw materials in foreign currency, principally newsprint,
inks and plates used in newspaper production, and TV programming used in broadcasting. This exposes the Group
and the Company to foreign exchange risk arising from various currency exposures, primarily with respect to the US
dollar. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net
investment in foreign operations.

At 31 December 2015 if the shilling had weakened/strengthened against the US dollar and Euro by 10%, with all other
variables held constant, the consolidated post tax profit for the year and equity would have been Kshs 6.7 million for
the US dollar whereas the Euro effect would have been Kshs 23.2 million. (2014: Kshs 18.0 million for the US dollar
and Kshs 0.3 million for the Euro) higher/ lower mainly as a result of foreign exchange gains/losses on translation of
US$ and Euro-denominated trade receivables,trade payables and bank balances.

(ii) Price risk

The Group and the Company do not hold any investments subject to price risk.

(iii) Cashflow and fair value interest rate risk

The Group has borrowings at variable rates. The Group regularly monitors financing options available to ensure
optimum interest rates are obtained. At 31 December 2015 and at 31 December 2014, an increase/decrease of
interest rates would not have resulted in any material increase/decrease in consolidated post tax profits for the year
and equity.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 61
Notes to the financial statements (Continued)

(b) Credit risk

Credit risk arises from cash and cash equivalents as well as trade and other receivables. Neither the Group nor
Company has significant concentrations of credit risk. It has policies in place to ensure that sales are made to
customers with an appropriate credit history. Credit risk is managed on a Group basis. The Group credit controller
assesses the credit quality of each customer, taking into account its financial position, past experience and other
factors.

For banks and financial institutions, only reputable well established financial institutions are accepted. For trade
receivables, the credit controllers assess the credit quality of each customer, taking into account its financial
position, past experience and other factors. The utilisation of credit limits is regularly monitored.

The amounts that represent the Group’s maximum exposure to credit risk is equal to the carrying amount of
financial assets in the statement of financial position. All receivables that are neither past due or impaired are
within their approved credit limits, and no receivables have had their terms renegotiated. All receivables past due
by more than 90 days are considered to be impaired, and are carried at their estimated value.

62 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m

Past due but not impaired
- up to 60 days 905.9 982.3 710.8 775.5
- by 61 to 90 days 948.4 888.7 582.1 574.2

Total past due but not impaired 1,854.3 1,871.0 1,292.9 1,349.7

Impaired 2,501.4 2,012.1 1,645.1 1,263.4

Of the total debt Shs 226.9 million was held as collateral.

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m

Cash and bank balances 3,063.3 3,451.7 2,792.0 3,087.5

Long-term deposits 102.4 262.7 102.4 262.7

(c) Liquidity risk

Prudent liquidity risk management includes maintaining sufficient cash and marketable securities, and the availability of
funding from an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying
businesses, Treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.

The table below analyses the Group and the Company’s financial liabilities that will be settled on a net basis into the
relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual
maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows. Balances due
within 12 months equal their carrying balances, as the impact of the discounting is not significant.

Less than 1 Between 1 Between 2

year and 2 years and 5 years Total
Shs m Shs m Shs m Shs m
Group
At December 2015
Liabilities
- borrowings 38.1 - - 38.1
- payables and accrued expenses 3,286.2 - - 3,286.2
-Post employment benefit obligation 266.8 - - 266.8
Total financial liabilities 3,591.1 - - 3,591.1

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 63
Notes to the financial statements (Continued)
4 Financial risk management (continued)

Less than 1 Between 1 Between 2 Over 5

Year and 2 years and 5 years years Total
Shs m Shs m Shs m Shs m Shs m

Group (continued) Assets

- cash and cash equivalents 3,063.3 - - - 3,063.3

- receivables 2,349.8 - - - 2,349.8
- long-term deposits - - - 121.6 121.6
Total financial assets 5,413.1 - - 121.6 5,534.7

At December 2014 Liabilities

- borrowings 27.5 41.0 - - 68.5
- payables and accrued expenses 2,885.7 - - - 2,885.7
-Post employment benefit obligation 205.1 - - - 205.1
Total financial liabilities 3,118.3 41.0 - - 3,159.3

Assets
- cash and cash equivalents 3,451.7 - - - 3,451.7
- receivables 2,269.7 - - - 2,269.7
- long-term deposits - - - 312.0 312.0
Total financial assets 5,721.4 - - 312.0 6,033.4

Company At December 2015

Liabilities
- payables and accrued expenses 2,517.0 - - - 2,517.0
-Post employment benefit obligation 266.8 - - - 266.8
Total financial liabilities 2,783.8 - - 2,783.8

Assets
- cash and cash equivalents 2,792.0 - - - 2,792.0
- amount due from related parties 337.9 - - - 337.9
- receivables 1,765.1 - - - 1,765.1
- long-term deposits - - - 121.6 121.6
Total financial assets 4,895.0 - - 121.6 5,016.6

At December 2014 Liabilities

- payables and accrued expenses 2,334.5 - - - 2,334.5
-Post employment benefit obligation 205.1 - - - 205.1
Total financial liabilities 2,539.6 - - - 2,539.6
Assets
- cash and cash equivalents 3,087.5 - - - 3,087.5
- amount due from related parties 317.9 - - - 317.9
- receivables 1,676.5 - - - 1,676.5
- long-term deposits - - - 312.0 312.0
Total financial Assets 5,081.9 - - 312.0 5,393.9

64 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)

4 Financial risk management (continued)

(d) Capital risk management

The Group and the Company’s objectives when managing capital are to safeguard the Group and the Company’s
ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group and the Company
may adjust the amount of dividends paid to shareholders, issue new capital or sell assets to reduce debt.

Consistent with others in the industry, the Group and the Company monitors capital on the basis of the gearing ratio.
This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and
cash equivalents. Total capital is calculated as equity plus net debt as shown below:

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Total borrowings 38.1 68.5 - -
Less: cash and cash equivalents (3,063.3) (3,451.7) (2,792.0) (3,087.5)
Net debt - - - -
Total equity 8,953.7 8,768.1 7,831.2 7,498.4
Total capital 8,953.7 8,768.1 7,831.2 7,498.4


As the cash balances held by the Group are in excess of the borrowings, computation of the gearing ratios would be
inappropriate.

(e) Fair value estimation

The Group and the Company do not have any financial assets or financial liabilities subject to fair value estimation.

5 Segmental information

Management has determined the operating segments based on the reports reviewed by the Executive Management
Team that are used to make strategic decisions.

The Group considers the business from a product perspective; Newspapers & Magazines and Broadcasting.

The Executive Management team considers the East African countries in which the Group operates as one
geographical segment because of similarities in the risks and returns in the four countries.

Other Group operations mainly comprise courier and third party printing services and digital operations. Neither of
these constitute a separately reportable segment and have therefore been included as part of Newspapers &
Magazines on the basis that the said operations are closely related and have similar economic characteristics.

There are no significant transactions between the two reportable segments.

Entity-wide information

Breakdown of the revenue from all products and services is as follows:

2015 2014
Shs m Shs m
Advertising revenue 8,130.1 8,979.1
Circulation revenue 3,638.3 3,767.4
Other 571.1 604.8
Total 12,339.5 13,351.3

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 65
Notes to the financial statements (Continued)
5 Segmental information (continued)

Newspapers & Broadcasting Group

Magazines

2015 2014 2015 2014 2015 2014

Shs m Shs m Shs m Shs m Shs m Shs m
Sales 10,462.4 11,087.7 1,877.1 2,263.6 12,339.5 13,351.3
Allocated costs (7,476.3) (7,722.8) (2,002.5) (2,070.8) (9,478.8) (9,793.6)
Segment results 2,986.1 3,364.9 (125.4) 192.8 2,860.7 3,557.7
Unallocated costs (478.4) (422.7)
Operating profit 2,382.3 3,135.0
Net finance income 316.3 287.4
Share of results of associate 124.6 201.6
Profit before income tax 2,823.2 3,624.0


Nation Media Group is domiciled in Kenya. The revenue attributed to local sales was Shs 9,335.8 million (2014:
Shs 10,211.0 million) while the revenues attributed to all foreign countries in total from which the entity derives
revenues was Shs 3,003.7 million (2014: Shs 3,140.3 million). The Group does not derive revenues in excess of 10%
of the total Group’s revenue from any individual customer. Other segments included in the statement of financial
position are as follows:

Included in the statement of comprehensive income are the following expenses:

Newspapers & Broadcasting Group

Magazines

2015 2014 2015 2014 2015 2014

Shs m Shs m Shs m Shs m Shs m Shs m
Depreciation 403.1 368.7 135.2 206.5 538.3 575.2
Amortisation 32.4 54.1 4.2 7.0 36.6 61.1
Provision for impairment of receivables 371.6 170.3 117.7 126.8 489.3 297.1


Segment assets comprise primarily property, plant and equipment, intangible assets, inventories, receivables and
operating cash. They exclude deferred income tax and investments. Segment liabilities comprise operating liabilities.
They exclude tax. Capital expenditure comprises additions to property, plant and equipment and intangible assets.

Newspapers & Broadcasting Group

Magazines

2015 2014 2015 2014 2015 2014

Shs m Shs m Shs m Shs m Shs m Shs m
Segment assets 9,901.4 9,140.1 1,679.9 1,769.6 11,581.3 10,909.7
Investment in associates - - - - 1,115.4 1,034.6
12,696.7 11,944.3
Segment liabilities 1,894.9 1,523.4 1,848.1 1,652.8 3,743.0 3,176.2
Capital expenditure 1,338.2 942.3 187.7 61.6 1,525.9 1,003.9

66 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
6 Expenses by nature

Group

The following items have been charged/(credited) in arriving at operating profit: 2015 2014
Shs m Shs m
Profit on disposal of property, plant and equipment (10.1) (8.4)
Operating lease rentals-office buildings 186.9 178.0
Repairs and maintenance expenditure on property, plant and equipment 12.7 19.4
Auditors’ remuneration : Group 23.6 22.5
: Company 12.1 11.6
Employee benefits expense (Note 7) 3,829.7 4,035.6
Depreciation of property, plant & equipment 416.3 429.2
Accelerated depreciation on old printing press 122.0 122.0
Accelerated depreciation on analogue TV equipment (Kenya & Uganda) - 24.0
Total depreciation of property, plant & equipment (Note15) 538.3 575.2
Analogue transmission written off - 27.2
Amortisation of intangible assets 36.6 33.9
Total Amortisation of intangible assets (Note 16) 36.6 61.1
Operating lease rentals-leasehold land (Note 17) 1.2 1.3
Increase in provision for obsolete spares 80.8 57.0
Trade receivables-provision for impairment (Note 22) 489.3 297.1

7 Employee benefits expense

Salaries and wages 3,598.0 3,775.3
Defined contribution benefit scheme 105.2 113.0
National Social Security Fund 74.1 84.9
Post employment benefit obligation 52.4 62.4
3,829.7 4,035.6

The number of persons employed by the Group at the year end was:
2015 2014
Number Number
Full time 1,416 1,535
Part time 392 394
1,808 1,929

Group
8 (a) Finance income

2015 2014
Shs m Shs m
Interest income 324.6 299.0

(b) Finance costs

Interest expense (8.3) (11.6)

9 Income tax expense

Current income tax 265.7 1,224.9
Deferred income tax (Note 14) 337.5 (180.5)
Underprovision of income tax in prior years (2.7) 119.1

600.5 1,163.5

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 67
Notes to the financial statements (Continued)
9 Income tax expense (continued)

The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the tax rate
of the home country as follows:

Group

2015 2014
Shs m Shs m
Profit before income tax 2,823.2 3,624.0
Tax calculated at the statutory tax rate of 30% (2014:30%) 847.0 1,087.2
Tax effect of:
- income not subject to tax (291.7) (80.0)
- Expenses not deductible for tax purposes 46.3 28.7
Under/(over) provision of deferred tax in prior years 1.6 8.5
Under provision of income tax in prior years (2.7) 119.1
Income tax expense 600.5 1,163.5


10 Earnings per share

Basic earnings per share is calculated by dividing the profit for the year attributable to equity holders of the company
by the weighted average number of ordinary shares in issue during the year.

Group

2015 2014
Net profit attributable to shareholders (Shs million) 2,222.5 2,464.4
Weighted average number of ordinary shares in issue (million) 188.5 188.5
Basic earnings per share (Shs) 11.8 13.1

There were no potentially dilutive ordinary shares outstanding as at 31 December 2015 or 2014. Diluted earnings per
share is therefore the same as basic earnings per share.

Group & Company

Number Ordinary
11 Share capital of shares Shares
(million) Shs m
Authorised (par value of Shs 2.50 per share) 240 600
Issued and fully paid:
31 December 2014 188.5 471.4
31 December 2015 188.5 471.4

68 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
12
Other reserves

Revaluation Transactions with

reserve on Non controlling Currency
buildings Interest translation Total
Shs m Shs m Shs m Shs m
Group
As at 1 January 2014 194.9 (35.4) (40.3) 119.2

Currency translation differences - - (49.3) (49.3)

Transfer of excess depreciation (9.4) - - (9.4)
Deferred tax on transfer of depreciation 2.8 - - 2.8
Balance as at 31 December 2014 188.3 (35.4) (89.6) 63.3
As at 1 January 2015 188.3 (35.4) (89.6) 63.3

Currency translation differences - - (113.1) (113.1)

Transfer of excess depreciation (9.4) - - (9.4)
Deferred tax on transfer of depreciation 2.8 - - 2.8
Balance as at 31 December 2015 181.7 (35.4) (202.7) (56.4)

Revaluation
reserve on
buildings Total
Shs m Shs m
Company
As at 1 January 2014 131.1 131.1
Transfer of excess depreciation (4.6) (4.6)
Deferred tax on transfer of depreciation 1.4 1.4
Balance as at 31 December 2014 127.9 127.9
As at 1 January 2015 127.9 127.9
Transfer of excess depreciation (4.6) (4.6)
Deferred tax on revaluation gains 1.4 1.4
Balance as at 31 December 2015 124.7 124.7

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 69
Notes to the financial statements (Continued)
13
Borrowings

Group

2015 2014
Shs m Shs m
Current
Bank borrowings 38.1 27.5
38.1 27.5
Non current
Bank borrowings - 41.0
Total borrowings 38.1 68.5

In the year 2011 Monitor Publications Ltd obtained a 6 year loan worth Uganda Shillings 5 billion (equivalent to Kenya
Shillings 169.4 million) from Citibank Uganda Ltd that financed the purchase of a new printing press. The bank
borrowings are secured by a 100% comprehensive corporate guarantee from Nation Media Group Limited.

The weighted average effective interest rates at the statement of financial position date were as follows:

Group

2015 2014
Bank loan 17.74% 15.42%


In the opinion of the directors, the carrying amounts of short-term and long-term borrowings approximate to their fair
value. Fair values are based on discounted cashflows using a discount rate based upon the borrowing rate that
directors expect should be available to the Group at the statement of financial position date.

Maturity of non-current borrowings

Group

2015 2014
Shs m Shs m
Between 1 and 2 years - 27.5
Between 2 and 5 years - 13.5
- 41.0

14 Deferred income tax

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
At start of year (278.7) (98.2) (238.2) (70.4)
Charge/ (credit) to the statement of comprehensive
337.5 (180.5) 374.8 (167.8)
income (Note 9)
At end of year 58.8 (278.7) 136.6 (238.2)

Deferred income tax liabilities 151.9 16.9 136.6 -

Deferred income tax assets (93.1) (295.6) - (238.2)

At end of year 58.8 (278.7) 136.6 (238.2)

70 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
14 Deferred income tax (continued)

Deferred income tax assets and liabilities are attributable to the following items:

Charged/
(credited)
1.1.15 to P&L) 31.12.15
Shs m Shs m Shs m
Group
Year ended 31 December 2015
Deferred income tax liabilities
Property, plant and equipment (37.9) 457.8 419.9
Revaluation 80.7 (2.8) 77.9
Unrealised exchange gains 167.8 (109.8) 58.0
210.6 345.2 555.8
Deferred income tax assets
Provisions (275.8) (128.3) (404.1)
Tax losses (21.0) 11.1 (9.9)
Unrealised exchange losses (195.2) 109.3 (85.9)
(492.0) (7.9) (499.9)
Currency Translation Differences 2.7 0.2 2.9

Net deferred income tax (asset)/ liability (278.7) 337.5 58.8

Charged/
(credited)
1.1.14 to P&L) 31.12.14
Shs m Shs m Shs m
Group
Year ended 31 December 2014
Deferred income tax liabilities
Property, plant and equipment 49.9 (87.8) (37.9)
Revaluation 83.5 (2.8) 80.7
Unrealised exchange gains 144.3 23.5 167.8
277.7 (67.1) 210.6
Deferred income tax assets
Provisions (227.8) (48.0) (275.8)
Tax losses - (21.0) (21.0)
Unrealised exchange losses (149.2) (46.0) (195.2)
(377.0) (115.0) (492.0)
Currency Translation Differences 1.1 1.6 2.7

Net deferred income tax asset (98.2) (180.5) (278.7)

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 71
Notes to the financial statements (Continued)
14 Deferred income tax (continued)

Charged/
(credited)
Company 1.1.15 to P&L) 31.12.15
Year ended 31 December 2015 Shs m Shs m Shs m
Deferred income tax liabilities
Property, plant and equipment (93.0) 489.5 396.5
Revaluation 54.8 (1.4) 53.4
Unrealised exchange gains 165.9 (107.2) 58.7
127.7 380.9 508.6
Deferred income tax assets
Provisions (194.4) (115.3) (309.7)
Unrealised exchange losses (171.5) 109.2 (62.3)
(365.9) (6.1) (372.0)

Net deferred income tax (asset)/ liability (238.2) 374.8 136.6

Charged/
(credited)
Company 1.1.14 to P&L) 31.12.14
Year ended 31 December 2014 Shs m Shs m Shs m
Deferred income tax liabilities
Property, plant and equipment (7.4) (85.6) (93.0)
Revaluation 56.2 (1.4) 54.8
Unrealised exchange gains 141.7 24.2 165.9
190.5 (62.8) 127.7
Deferred income tax assets
Provisions (136.7) (57.7) (194.4)
Unrealised exchange losses (124.2) (47.3) (171.5)
(260.9) (105.0) (365.9)

Net deferred income tax asset (70.4) (167.8) (238.2)

72 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
15 Property, plant and equipment

Freehold Plant and

land Buildings equipment Total
Shs m Shs m Shs m Shs m
Group
As at 1 January 2014
Cost or valuation 7.0 581.5 6,061.1 6,649.6
Accumulated depreciation - (86.3) (4,328.7) (4,415.0)
Net book value 7.0 495.2 1,732.4 2,234.6

Year ended 31 December 2014

Opening net book value 7.0 495.2 1,732.4 2,234.6
Additions - 0.1 962.0 962.1
Disposals - - (4.9) (4.9)
Depreciation charge - (20.0) (555.2) (575.2)
Currency translation differences - (6.5) (20.7) (27.2)
Closing net book value 7.0 468.8 2,113.6 2,589.4

Year ended 31 December 2015

Opening net book value 7.0 468.8 2,113.6 2,589.4
Additions - 242.2 1,245.8 1,488.0
Disposals - - (4.7) (4.7)
Depreciation charge - (16.8) (521.5) (538.3)
Currency translation differences - (14.8) (40.4) (55.2)
Closing net book value 7.0 679.4 2,792.8 3,479.2

As at 31 December 2015
Cost or valuation 7.0 802.5 8,198.2 9,007.7
Accumulated depreciation - (123.1) (5,405.4) (5,528.5)
Net book value 7.0 679.4 2,792.8 3,479.2

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 73
Notes to the financial statements (Continued)
15 Property, plant and equipment (continued)

Plant and
Freehold land Buildings equipment Total
Shs m Shs m Shs m Shs m
Company
Year ended 31 December 2014
Opening net book value 7.0 302.6 1,112.8 1,422.4
Additions - - 889.4 889.4
Disposals - - (3.1) (3.1)
Depreciation charge - (13.5) (421.6) (435.1)
Closing net book value 7.0 289.1 1,577.5 1,873.6

As at 31 December 2014
Cost or valuation 7.0 354.0 5,371.4 5,732.4
Accumulated depreciation - (64.9) (3,793.9) (3,858.8)
Net book value 7.0 289.1 1,577.5 1,873.6

Year ended 31 December 2015

Opening net book value 7.0 289.1 1,577.5 1,873.6
Additions - 242.2 1,105.6 1,347.8
Disposals - - (1.2) (1.2)
Depreciation charge - (14.0) (403.0) (417.0)
Closing net book value 7.0 517.3 2,278.9 2,803.2

As at 31 December 2015
Cost or valuation 7.0 596.2 6,475.8 7,079.0
Accumulated depreciation - (78.9) (4,196.9) (4,275.8)
Net book value 7.0 517.3 2,278.9 2,803.2

The Group’s buildings on leasehold land were revalued as at 31 August 2012 by independent professional valuers.
The basis for the valuation was open market value. The book values of the properties were adjusted to the revalued
amounts and the resulting surplus, net of deferred tax, was credited to the revaluation reserve in shareholders’ equity.
The revaluation reserve is not distributable in accordance with the Kenyan Companies Act. If the buildings were stated
on historical cost basis, the amounts would be as follows:

74 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
15 Property, plant and equipment (continued)

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Cost 560.4 318.2 411.0 168.8
Accumulated depreciation (113.1) (96.3) (95.4) (81.4)
Net book value 447.3 221.9 315.6 87.4

16 Intangible assets

Computer Transmission
Goodwill software Frequencies Total
Shs m Shs m Shs m Shs m
Group
As at 1 January 2014
Cost 187.9 433.5 27.2 648.6
Accumulated amortisation - (321.7) - (321.7)
Net book value 187.9 111.8 27.2 326.9

Year ended 31 December 2014

Opening net book value 187.9 111.8 27.2 326.9
Additions - 41.8 - 41.8
Amortisation - (33.9) - (33.9)
Impairment - - (27.2) (27.2)
Currency translation differences - (1.1) - (1.1)
Closing net book value 187.9 118.6 - 306.5

As at 31 December 2014
Cost 187.9 474.2 27.2 689.3
Accumulated amortisation - (355.6) (27.2) (382.8)
Net book value 187.9 118.6 - 306.5

Year ended 31 December 2015

Opening net book value 187.9 118.6 - 306.5
Additions - 37.9 - 37.9
Amortisation - (36.6) - (36.6)
Currency translation differences - (2.2) - (2.2)
Closing net book value 187.9 117.7 - 305.6

As at 31 December 2015
Cost 187.9 509.9 27.2 725.0
Accumulated amortisation - (392.2) (27.2) (419.4)
Net book value 187.9 117.7 - 305.6

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 75
Notes to the financial statements (Continued)
16 Intangible assets (continued)

Impairement tests for goodwill

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the operating segment.

Management has assessed whether the goodwill amounting to Shs 187.9 million that arose on acquisition of various
subsidiaries is impaired.

The recoverable amount of has been determined based on value-in-use calculations. These calculations use pre-tax
cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows
beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not
exceed the long-term average growth rate for the media industry in which the CGU operates.

The key assumptions used for value-in-use calculations for all the goodwill amounts in 2015 are a Weighted Average
Cost of Capital of 23.32% and a Terminal Growth rate of 10%. (2014: Weighted Average Cost of Capital of 25.65%
and a Terminal Growth rate of 10%).

A segment-level summary of the goodwill allocated is presented below:

Operating 2015 2014

Segment Shs m Shs m
Mwananchi Communications Limited Newspapers 128.9 128.9
Monitor Publications Limited Newspapers 23.0 23.0
East Africa Television Network Broadcasting 15.5 15.5
Radio Uhuru Limited Broadcasting 20.5 20.5
187.9 187.9

76 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
16 Intangible assets (continued)

Computer Transmission
software frequencies Total
Shs m Shs m Shs m
Company
As at 1 January 2014
Cost 371.5 27.2 398.7
Accumulated amortisation (301.1) - (301.1)
Net book value 70.4 27.2 97.6

Year ended 31 December 2014

Opening net book value 70.4 27.2 97.6
Additions 40.6 - 40.6
Amortisation (23.0) - (23.0)
Impairment - (27.2) (27.2)
Closing net book value 88.0 - 88.0

As at 31 December 2014
Cost 412.1 27.2 439.3
Accumulated amortisation (324.1) (27.2) (351.3)
Net book value 88.0 - 88.0

Year ended 31 December 2015

Opening net book value 88.0 - 88.0
Additions 37.7 - 37.7
Amortisation (26.5) - (26.5)
Closing net book value 99.2 - 99.2

As at 31 December 2015
Cost 449.8 27.2 477.0
Accumulated amortisation (350.6) (27.2) (377.8)
Net book value 99.2 - 99.2

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 77
Notes to the financial statements (Continued)
17 Prepaid operating lease rentals

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
At start of year 80.5 82.8 46.6 47.3
Amortisation for the year (1.2) (1.3) (0.8) (0.7)
Currency translation differences (3.2) (1.0) - -
At end of year 76.1 80.5 45.8 46.6

18 Investment in associate

Group

2015 2014
Shs m Shs m
At start of year 1,034.6 830.0

Share of profit before income tax 162.4 144.5

Share of income tax expense (37.8) 57.1
124.6 201.6
Dividends received (11.0) -
Share of other comprehensive income (32.8) 3.0
At end of year 1,115.4 1,034.6

Investment in associate is carried in the consolidated statement of financial position at amounts that reflect the Group’s
share of the net assets of the associate and includes goodwill on acquisition.

Key financial information on the associate, which is unlisted, was as follows:

Other
Country of Assets Liabilities Revenues Profit (loss)/ comprehensive
incorporation % interest held Shs’m Shs’m Shs’m Shs’m income Shs’m
Year 2015
Property Development and
Management Limited
Kenya 20% 7,353.7 1,378.2 566.4 623.1 (164.1)
Year 2014
Property Development and
Management Limited
Kenya 20% 6,355.7 809.0 501.2 1,008.2 14.9


There were no changes in the interest held in the associate during the year. The initial investment in associate carried in
the Company statement of financial position is Shs. 94.6 million.

78 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
19 Investment in subsidiaries

Company

2015 2014
Shs m Shs m
At start and end of year 1,131.4 1,131.4
The Group’s interest in its subsidiaries, all of which are unlisted and all of which have the same year end as the Company, were as follows:

Company country Holding % 2015 2014

of incorporation Shs m Shs m
Trading subsidiaries:
Nation Marketing & Publishing Limited Kenya 100.0 0.5 0.5
Monitor Publications Limited Uganda 83.3 75.1 75.1
Mwananchi Communications Limited Tanzania 100.0 569.3 569.3
Nation Holdings Tanzania Limited Tanzania 100.0 150.4 150.4
Africa Broadcasting Uganda Limited Uganda 100.0 347.7 347.7
Nation Holdings Rwanda ltd Rwanda 100.0 8.2 8.2
1,151.2 1,151.2
Non trading subsidiaries:
Nation Carriers Limited Kenya 100.0 3.0 3.0
Nation Infotech Limited Kenya 100.0 1.5 1.5
Africa Broadcasting Limited Kenya 100.0 - -
Nation Newspapers Limited Kenya 100.0 - -
Nation Carriers Uganda Limited Uganda 100.0 - -
Nation Carriers Tanzania Limited Tanzania 100.0 - -
Africa Broadcasting Tanzania Limited Tanzania 100.0 - -
Africa Broadcasting Mauritius Limited Mauritius 100.0 - -
Nation Printers and Publishers Limited Kenya 100.0 - -
Radio Uhuru Limited Tanzania 100.0 20.5 20.5
1,176.2 1,176.2
Provision for impairment (44.8) (44.8)
1,131.4 1,131.4

20 Long-term deposit

Group & Company

2015 2014
Shs m Shs m
Long-term deposits 102.4 262.7

This represents long-term deposits held as back up funds for staff mortgage scheme with Housing Finance.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 79
Notes to the financial statements (Continued)
21 Inventories

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Raw materials 750.8 701.4 457.8 519.3
Engineering spares 177.0 217.7 158.4 200.0
Other stock 164.6 143.7 114.5 103.7
Gross inventory 1,092.4 1,062.8 730.7 823.0
Less provision for obsolete stock (198.6) (118.3) (192.0) (111.4)
893.8 944.5 538.7 711.6

The cost of inventories recognised as an expense and included in the consolidated ‘cost of sales’ amounted to
Shs 1,742.7 million (2014: Shs 1,924.6 million).

22 Receivables and prepayments

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Trade receivables 4,208.3 3,883.1 2,924.7 2,613.1
Less: provision for impairment (2,501.4) (2,012.1) (1,645.1) (1,263.4)
1,706.9 1,871.0 1,279.6 1,349.7
Due from related parties (Note 30) 4.5 5.0 337.9 317.9
Other receivables and prepayments 1,227.1 977.9 949.1 789.5
2,938.5 2,853.9 2,566.6 2,457.1

Movement on the provision for impairment of trade receivables is as follows:

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
At start of year 2,012.1 1,715.0 1,263.4 1,050.2
Provision in the year 489.3 297.1 381.7 213.2
At end of year 2,501.4 2,012.1 1,645.1 1,263.4

The carrying amounts of the above receivables and prepayments approximate their fair values.

23 Cash and cash equivalents

For the purposes of cashflow statements, cash and cash equivalents comprise cash in hand, term deposits held with
banks and investments in money market instruments. The year end cash and cash equivalent comprise the following:
Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Cash and bank balances 493.9 428.5 292.4 279.9
Short term deposits 2,569.4 3,023.2 2,499.6 2,807.6
3,063.3 3,451.7 2,792.0 3,087.5

The short-term deposits include term deposits and short-term note investments with related parties. Refer to note 30 (vii)
for further details. The weighted average effective interest rate on the bank deposits during the year was 12.6%

80
(2014 : 9.5%)
NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Notes to the financial statements (Continued)
24 Payables and accrued expenses

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Trade payables 1,252.0 980.2 786.3 566.8
Due to related parties (Note 30) 13.3 14.6 75.0 173.2
Accrued expenses 1,445.5 1,171.2 1,278.8 1,070.5
Other payables 575.4 719.7 376.9 524.0
3,286.2 2,885.7 2,517.0 2,334.5

The carrying amounts of the above payables and accrued expenses approximate their fair values.

25 Post employment benefit obligation

Group

2015 2014
Shs m Shs m
Opening balance 205.1 139.7
Payments in the year (6.9) (8.2)
Charge to P&L 52.4 62.4
Accrued interest 16.2 11.2
Closing balance 266.8 205.1

The Group maintains a gratuity scheme from 2011 equal to the sum of two weeks basic pay for every year of service
completed.

26 Dividends

During the year, an interim dividend of Shs 2.50 per share, amounting to Shs 471.4 million was paid (2014: Shs 471.4
million). At the annual general meeting to be held on 24th June 2016, a final dividend in respect of the year ended 31
December 2015 of Shs 7.50 per share amounting to Shs 1,414.1 million (2014: Shs 1,414.1 million) will be proposed.
The total dividend for the year is therefore Shs 10.00 per share (2014: Shs 10.00), amounting to Shs 1,885.5 million
(2014: Shs 1,885.5 million). The payment of dividends is subject to withholding tax at the rate of 5% for resident and
10% for non-resident tax payers.

27 Commitments

Capital expenditure

Commitments for capital expenditure at the statement of financial position date are as follows:

Group

2015 2014
Shs m Shs m
Contracted for but not provided for 248.5 1,023.8
Operating leases
The future minimum lease payments under non-cancellable operating leases are as follows: 2015 2014
Shs m Shs m
Not later than 1 year 141.5 136.5
Later than 1 year and not later than 5 years 619.5 534.3
761.0 670.8
NATION MEDIA GROUP
ANNUAL REPORT & FINANCIAL STATEMENTS 2015 81
Notes to the financial statements (Continued)
28 Cash generated from operations
Group
2015 2014
Shs m Shs m
Reconciliation of profit before tax to cash generated from operations
Profit before income tax 2,823.2 3,624.0
Adjustment for:
Depreciation of property, plant and equipment (Note 15) 538.3 575.2
Amortisation of intangible assets (Note 16) 36.6 61.1

Amortisation of prepaid operating lease rentals (Note 17) 1.2 1.3

Profit on sale of property, plant and equipment (10.1) (8.4)

Interest income (Note 8a) (324.6) (299.0)
Interest expense (Note 8b) 8.3 11.6
Share of result after tax of associate (Note 18) (124.6) (201.6)
Changes in working capital:
- inventories 50.7 150.3
- receivables and prepayments (84.6) (326.2)
- payables and accrued expenses 462.2 0.8
Cash generated from operations 3,376.6 3,589.1
Translation of net investment in foreign subsidiaries (58.2) (23.0)

29 Contingent liabilities

The Group has contingent liabilities in respect of legal claims arising in the ordinary cause of business. The directors
have after taking appropriate legal advice, made provisions for contingent liabilities where there is a possible loss to the
Group. In the directors’ opinion, after taking appropriate legal advice, the outcome of these legal claims will not give
rise to any significant loss beyond the amounts provided for as at 31 December 2015.

30 Related parties

Aga Khan Fund for Economic Development, S.A (AKFED) incorporated in Switzerland is the principal shareholder of
the Company. There are various other companies which are related to the Group through common shareholdings and
directorships. Transactions with related parties are carried out at normal commercial terms and conditions. The
following transactions were carried out with related parties.

i) Sale of goods and services

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Subsidiaries:
Monitor Publications Limited - - 16.5 20.8
Mwananchi Communications Limited - - 32.0 26.6
Other related parties:
TPS Eastern Africa Limited 9.6 6.8 2.8 1.4
Jubilee Holdings Limited 9.8 12.8 8.8 8.4
19.4 19.6 60.1 57.2

ii) Purchase of goods and services

Subsidiaries:
Monitor Publications Limited - - 12.4 15.5
Mwananchi Communications Limited - - 42.8 51.0
Other related parties:
TPS Eastern Africa Limited 33.9 26.6 6.1 5.0

82
Jubilee Holdings Limited
NATIONMEDIA GROUP 221.9 211.0 176.6 179.5
ANNUAL REPORT & FINANCIAL STATEMENTS
255.8 2015 237.6 237.9 251.0
 Notes to the financial statements (Continued)
30 Related parties (continued)
iii) Outstanding balances from transactions with related parties

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
Amounts due from related parties
Subsidiaries:
Mwananchi Communications Limited - - 144.3 160.4
Monitor Publications Limited - - 5.9 4.5
Nation Infotech Limited - - 0.9 0.9
Radio Uhuru Limited - - 4.9 4.9
Africa Broadcasting Uganda Limited - - - -
Nation Holdings Rwanda Limited - - 180.3 145.5
Other related parties:
TPS Eastern Africa Limited 4.0 4.6 1.1 1.3
Jubilee Holdings Limited 0.5 0.4 0.5 0.4
4.5 5.0 337.9 317.9
Amounts due to related parties
Subsidiaries:
Africa Broadcasting Uganda Limited - 1.0 58.0
Monitor Publications Limited - - -
Nation Marketing and Publishing Limited - 64.5 104.6
Nation Holdings Tanzania Limited - 4.9 7.3
Other related parties:
Jubilee Insurance 8.0 9.4 2.5 2.6
TPS Eastern Africa Limited 5.3 5.2 2.1 0.7
13.3 14.6 75.0 173.2

iv) Loans to executive directors

Group Company

2015 2014 2015 2014

Shs m Shs m Shs m Shs m
At start of year 9.1 13.3 9.1 13.3
Loans advanced during the year 3.9 1.2 3.9 1.2
Loans repaid during the year (9.5) (5.4) (9.5) (5.4)

At end of year 3.5 9.1 3.5 9.1

Loans to executive directors are on terms similar to those applicable to other employees and are included in
other receivables.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 83
Notes to the financial statements (Continued)
30 Related parties (continued)

v) Key management compensation

Key management includes executive directors. The compensation paid or payable to key management for employee
services is shown below.

Company

2015 2014
Shs m Shs m
Salaries and other short term employment benefits 92.5 74.1

vi) Directors’ remuneration

2015 2014
Shs m Shs m
Fees for services as director 30.3 27.0
Salaries and other short term employment benefits 92.5 74.1
122.8 101.1

vii) Other related party transactions

Included as part of cash and cash equivalents in the Company as at 31 December 2015 are the following balances
with related parties:

Company

2015 2014
Shs m Shs m
Term deposit with Diamond Trust Bank Kenya Limited 690.5 516.6
Short term note investment with Industrial Promotion Services (K) Limited 400.0 400.0
1,090.5 916.6

The terms of the above deposit with Diamond Trust Bank Kenya Limited is at arm’s length, similar to those entered
with other parties by the bank.

The short term note investment with Industrial Promotion Services (K) Limited is for a duration of 3 months each,
attracting interest rate of 19.9% per annum for 2015 and 11.1% per annum for 2014.

84 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Five Year Financial Summary

2015 2014 2013 2012 2011

Shs m Shs m Shs m Shs m Shs m
Results
Revenue 12,339.5 13,351.3 13,373.7 12,346.8 11,245.8

Profit before income tax 2,823.2 3,624.0 3,587.1 3,504.6 2,810.3

Profit attributable to shareholders 2,076.6 2,418.1 2,615.7 2,612.7 1,949.3

Net assets
Non-current assets 5,171.8 4,569.3 3,877.9 3,429.2 2,961.2
Net current assets 3,933.8 4,256.7 4,449.9 4,031.5 3,324.2
Non-current liabilities (151.9) (57.9) (84.4) (137.2) (163.0)
Non-controlling interest (48.4) (53.9) (61.8) (72.4) (69.9)
Shareholders’ funds 8,905.3 8,714.2 8,181.6 7,251.1 6,052.5

Profit before tax as a percentage

22.88 27.14 26.82 28.38 24.99
of turnover (%)
Earnings per share (Shs) 11.79 13.07 13.41 13.28 12.71
Dividends per share (Shs) -
10.00 10.00 10.00 10.00 8.00
Normal
Total dividend per share (Shs) 10.00 10.00 10.00 10.00 8.00
Dividends cover (times) 1.18 1.31 1.34 1.33 1.59

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 85
Principal Shareholders and Distribution of
Shareholding 31 December 2015
No. Name of shareholder No. of shares held %
1 The Aga Khan Fund for Economic Development (AKFED) 84,198,343 44.66
2 Alpine Investments Limited 19,136,566 10.15
3 John Kibunga Kimani 2,961,033 1.57
4 CFC Stanbic Nominees Ltd 2,502,665 1.33
5 Standard Chartered Nominees A/c KE11450 2,283,828 1.21
6 Kenya Commercial Bank Nominees Limited A/c 915B 2,266,033 1.20
7 The Jubilee Insurance Company of Kenya Limited 2,135,648 1.13
8 Standard Chartered Nominees A/c 11401 2,130,717 1.13
9 Kenya Commercial Bank Nominees Limited A/c 915A 1,930,339 1.02
10 Standard Chartered Kenya Nominees A/c KE002257 1,711,014 0.91

Distribution of Shareholding at 31 December 2015

No. of
No. of shares shareholders No. of shares held % of shareholding
1 – 500 4,278 802,290 0.43
501 – 5,000 4,500 9,291,798 4.93
5,001 – 10,000 863 6,459,591 3.43
10,001 – 100,000 950 24,787,821 13.15
100,001 – 1,000,000 100 25,944,600 13.76
Over 1,000,000 10 121,256,186 64.31

Total
10,701 188,542,286 100.00

Directors’ Shareholding

Name No. of shares held % of Shareholding

Yasmin Jetha 11,775 0.0062
Stephen Gitagama 1,296 0.0007
Gerald Wilkinson 960 0.0005
Joe Muganda 72 0.0000

86 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
 Proxy Form

I/We

being a member of

Nation Media Group Limited, hereby appoint

of

and failing him , the Chairman of the meeting as

my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on

the 24th June 2016 and at any adjournment thereof.

As witness my hand this

Signature

IMPORTANT NOTES

1. If you are unable to attend this meeting personally, this form of proxy should be completed and returned

to the Secretary, Nation Media Group Limited, P.O. Box 49010 – 00100 Nairobi, to reach him not later than

48 hours before the time appointed for holding the meeting.

2. A person appointed to act as a proxy need not be a member of the company.

3. If the appointer is a corporation, this form of proxy must be under seal or under the hand of an officer or

attorney duly authorised in writing.

NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015 87
Fomu ya Uwakilishi

Mimi/Sisi

tu/nikiwa mwanachama wa Nation Media Group Limited,

ninamteua wa

na asipokuja Mwenyekiti wa mkutano kama

muwakilishi wangu/wetu kupiga kura kwa niaba yangu/yetu kwenye Mkutano huu Mkuu wa Kila Mwaka wa

Kampuni utakaofanyika mnamo tarehe 24 Juni 2016 na baada ya kukamilisha mkutano, wanachama na

waalikwa kuondoka.

Na kama nilivyoshuhudia

Sahihi

MAELEZO MUHIMU

1. Kama hutaweza kuhudhuria mkutano huu wewe binafsi, fomu hii ya uwakilishi inafaa kujazwa na kutumwa

kwa Katibu, Nation Media Group Limited, S.L.P 49010 – 00100 Nairobi, ili imfikie kwa kipindi kisichozidi saa

48 kabla ya muda wa kufanyika kwa mkutano huo.

2. Mtu yeyote aliyeteuliwa kuwa muwakilishi sio lazima awe mwanachama wa kampuni hilo

3. Kama mteuzi wa uwakilishi huo ni Shirika, basi fomu hii ya uwakilishi lazima ipigwe mhuri ama

ishughulikiwe na afisa au wakili aliyeidhinishwa kwa maandishi.

88 NATION MEDIA GROUP

ANNUAL REPORT & FINANCIAL STATEMENTS 2015
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