Annual Report and Audited Financial Statements 2011 - The Kenya ...

Annual Report and Audited Financial Statements 2011 


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2 Annual Report and Audited Financial Statements 2011

Table of Contents 

KIM Officials 2 

Notice of the Annual General Meeting 3 

Minutes of the Annual General Meeting, 2010 4 – 9 

Chairman’s Report 10 

CEO’s Report 11 

Corporate Information 12 

Corporate Governance Report 14 – 15 

Corporate Social Responsibility 16 –17 

Report of the Council 18 

Statement of Council's Responsibilities 20 

Independent Auditor’s Report 21 – 22 

Financial Statements: 

Statement of Comprehensive Income 24 

Statement of Financial Position 25 

Statement of Changes in Accumulated Fund 26 

Statement of Cash Flows 27 

Notes to the Financial Statements 29 – 45 

Proxy Form 47 

Notes 48 


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KIM Officials 

Mrs Salome Gitoho 

Vice Chairperson 

Mr. Alfred Lenana 

Chairman of Council 

Mr. David Muturi 

KIM Executive Director / CEO 

Mr Richard Isiaho 

Council Member 

Mr Dan Awendo 

Council Treasurer 

Stella Muendo 

Council Ag. Secretary 

Esther Jowi 


Mr Philip Kisia 


Dr Jonathan Ciano 


Mr Wilson Soy 


Mr Richard Gikuhi 


Alice Owuor 


Prof David TK Serem 



Notice of the Annual General Meeting 

Notice is hereby given that the 46th Annual General Meeting of the Kenya Institute of Management will be held 

on Friday, June 29th 2012 at the Intercontinental Hotel Nairobi at 4.00 p.m to transact the following business 

1. To read the Notice convening the meeting. 

2. To confirm the Minutes of the 45th Annual General Meeting held on May, 27th 2011. 

3. To receive and adopt the Executive Director’s Report for the year ended 31st December 2011. 

4. To receive and adopt the Chairman’s report for the year ended 31st December 2011. 

5. To receive, consider and adopt the Annual Report and Financial Statements for the year ended 31st December 

2011. 

6. To note that P.K.F Kenya Certified Public Accountants Auditors will continue in office as Auditors for the Institute 

by virtue of Section 159 (2) of the Companies Act (Cap. 486 of the Laws of Kenya ) and authorize the Council to 

fix their remuneration. 

7. To receive the Institute’s Strategic Plan 2012 - 2016. 

8. To receive the results of the just concluded National and Branch elections and ratify those elected. 

9. To consider any other business for which due notification will have been received by the Secretary to the Council 

forty eight (48) hours before the Annual General Meeting. 

Dated the 6th day of June 2012 

By Order of the Council 

STELLA K. MUENDO, 

SECRETARY TO THE COUNCIL 


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Minutes of the 45th Annual General Meeting 

MINUTES OF THE 45 TH ANNUAL GENERAL MEETING OF THE KENYA INSTITUTE OF 

MANAGEMENT HELD ON FRIDAY, 27 TH MAY 2011, AT THE INTERCONTINENTAL HOTEL 

STARTING AT 4.00 P.M. 

Present 

Council Members 

Name: 

Registration No. 

1. Dr. Reuben Mutiso 12022 

Chairman 

2. David Muturi 42325 

Chief Executive Officer 

3. Richard Isiaho 42318 

4. Salome Gitoho 33707 

5. Austin Kapere 8750 

6. Constantine Kandie 11202 

7. Jonas Okwaro 22000 

Fellows: 

1. Dr. J J Mageria 31 

Chairman, Board of Fellows 

2. Dr Mwangi Ngumo 08255 

3. Adrian Muteshi 3092 

4. James Foster 611 

5. James Murigu 12940 

6. Peter Kubebea 1267 

7. Alice Owuor 08809 

8. Michael M Karanja 03048 

9. Mwai wa Kihu 1801 

10. Sultan Amri 05753 

11. Nyaboga Morara Anderea 05345 

Members 

1 Eng John Moguche, HSC 5361 

2 Godfrey Makau 43104 

3 Geoffrey Lipale 42924 

4 Duncan Kabiru 11730 

5 Michael Karanja 3048 

6 John Magua Njoroge 42958 

7 Anthony Kariuki 42173 

8 Shadrack Mutunga 29293 

9 Mohammed Katelo 42410 

10 Mary M Ichangi 42875 

11 Joel Mukhanji 42862 

12 Roger Kimuli 42377 

13 Edward Ogolla 28808 

14 Gabriel Juma 42209 

15 Miriti E. M. 11714 

16 Johnson Ireri 28757 

17 Alexander Opicho 42398 

18 Lee Kanyago 23650 

19 Mugo Mungai 00735 

20 Lazaro Kimanga 03865 

21 Nimrod N Kareko 31429 

22 Kizito Omolo 16551 

23 Lucy Onyango 43316 

24 Emygdius Wanyama 42192 

25 Amos Mwangi Maingi 42726 

26 Maxwell Sande 42192 

27 Paul Munene 42667 

28 Dr. Wilson Soy 7570 

29 Francis Oloo 42864 

30 John Wekesa Ndombi 31241 

31 Felix Onyango 29320 

32 Amos Gayo 43111 

33 Bernard Siero 28891 

34 Silas Katam 33815 

35 Julius Barno 12072 

36 George K Rutto 42759 

37 Samuel Maina 32787 

38 Okoth Boniface 42192 

39 Kareko Nimrod 31429 

40 Nikasius M Muverethi 02917 

41 Samuel Ngeno 27988 

42 Aggrey Kivisi 24533 

43 Rev. Charles Orodi 05540 

44 Patrick Mulwa 42741 

45 Mohamed Godana 42410 

46 Kizito Machani 29200 

47 Mbarak Said Twahir 7614 

48 Praxedes Otieno 42639 

49 Charles Murunga 335 

50 Grace Alinyo 42570 

51 Sang’anyi Omambia Joseph 05783 

52 Mwenda Itumbiri 33933 

53 Ndirangu Ngunjiri 42993 

54 Judith Rintari 42613 

55 Ben Osuga 42776 

56 Tom Odongo 42367 

57 Agnetta Nyalita 42525 

58 Leonida M. Mulindi 20686 

59 Joseph Ogutu 42241 

60 Pamela Eng’airo O 43118 

61 Henry Njerenga 22015 

62 Priscah Andwah 33714 



63 Patrick Mwangi 26913 

64 Gordon Otieno Odundo 0350 

65 Henry Kerongo 26895 

66 Gideon Indeche 02532 

67 Osborne Kilasi 42572 

68 Misheck Guandaro 43037 

69 Prof. David Serem 42994 

70 Oscar Waswa 25120 

71 Kiprotich D K 32352 

72 Mutuku Nthuli 42305 

73 Cornel A. Ragen 25965 

74 Stephen Irungu 43237 

75 Esther Jowi 42831 

76 Edwin Agwa 29296 

77 Roger Kimuli 42377 

78 S K Nguturi 42719 

79 Christopher Kipkemei 00044 

80 David Miya 43173 

81 Leonard Sang 23633 

82 David Kinyua 42460 

83 Richard Gikuhi 07064 

In attendance 

1. Koka Koimburi & Tucker 

Auditors 

2. Stella Muendo 

Company Secretary 

3. Nicholas Letting 

Director 

4. David Mwaura Director 

5. Leah Munyao Director 

6. Joseph Ouma 

7. Selina Makokha 

8. Kimathi Muchiri 

9. Caroline Karangi 

10. Eunice Njenga 

11. Judith Wambura 

12. Beatrice Karugo 

13. Ruth Kiilu 

14. Stephen Kamau 

15. Ann Wainaina 

16. John Ambeyi 

17. Naomi Nashipae 

18. Lilian Kamande 

19. Ezbon Mwangi 

20. A Ondeng 

21. Johnson K Soi 

22. Mercy Mbochu 

23. Edwin Murithi 

24. David Gathanju 

25. Paul Machoka 

26. Hillary Migoyi 

Absent with Apologies 

Name: 

Registration No. 

1 . D r. M a r a n g i M b o g h o 0 2 4 1 0 

2 . J a m e s F o s t e r 0 0 6 11 

3. Stephen Kilungya 14224 

4. Mung’athia Fredrick 33892 

5. Esther Jowi 42831 

6. Melvin Asava 42499 

7. Francis Mugo 05135 

8. Susan Addero 32760 

9. P L O Lumumba 42850 

10. Johnstone Muchira 1098 

11. Ibrahim Kibutu 26940 

12. Lumiti Protus Atsali 14194 

13. Dr. V. Yamo 42501 

14. Raiser Resource Group 42102 

The Meeting was called to order by the Chairman of the 

Council of the Institute at 4.30 p.m. and opened with a 

word of prayer by Mr. Nicholas Letting. 

MIN.1 /AGM/2011: READING OF THE NOTICE 

CONVENING THE MEETING 


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The Chairman invited the Secretary to read the Notice convening the 45 th Annual General Meeting of the Institute. 

MIN. 2/AGM/2011: ADOPTION OF THE MINUTES OF THE LAST ANNUAL 

GENERAL MEETING 

The Minutes of the 44 th Annual General Meeting held on Wednesday, the 11 th day of August, 2010, having been 

earlier circulated to all members, were confirmed as a true record of the proceedings and adopted on a proposal by 

Mr. Morara Anderea, and seconded by Mr. Rutto Josiah subject to the correction of the Name of the Chairman to 

read Dr. Arch. Reuben Mutiso. 

MIN. 3/AGM/2011: ADOPTION OF THE CHAIRMAN’S REPORT ENDED 31 ST DECEMBER 2010. 

The Chairman read the Council Report, which was appended to the Annual report and formed part thereof, it had 

the following highlights:- 

(i) 

(ii) 

(iii) 

(iv) 

(v) 

(vi) 

(vii) 

(viii) 

(ix) 

During the year under review, the Institute took management and leadership capacity building services to 

the Gambia, the Democratic Republic of Congo, Southern Sudan, Rwanda and Tanzania thereby achieving 

massive expansion outside Kenya. 

The Organizational Performance Index (OPI), a global excellence tool, was formally launched thus giving a 

new standing to the respected company of the year Awards (COYA) as the new yardstick for the awards. 

The Institute is now geared to take the Organizational performance Index (OPI) to the rest of Africa. To this 

end, partnership with a Tanzanian association has commenced, and dialogue with the Africa Leadership 

Forum (ALF) of Nigeria is in progress. 

The Institute has applied for recognition of Organizational Performance Index as a global excellence model 

by the Global Excellence Model (GEM). 

The first Governance, Leadership and Management Convention was held in Mombasa. There was high 

level participation by business leaders and Government officials, both local and from Ghana, Sudan, 

Uganda and Nigeria. In the month of June, there was remarkable attendance by distinguished leaders, such 

as H.E Chief Olusegun Obasanjo, the former President of the Federal Republic of Nigeria Local leaders, 

such as the Vice President Hon. Kalonzo Musyoka amongst others, were also in attendance. 

The Institute hosted the 2nd Education Conference by the KIM School of Management. There was a good 

regional representation from the Great Lakes Countries. The papers presented have been published to 

form the Journal of the Institute. The journal will enrich thoughts on the linkage between education and 

Industry, while also providing academic and intellectual professional growth and excellence. 

The Institute participated actively in the Constitution making for the Country by organizing and sponsoring 

15 special forums around the country. This was aimed at providing education and help Kenyans understand 

the contents and to make independent decisions in the referendum. The Institute has positioned itself 

strategically to make professional interventions and provide education in the implementation process on the 

basis of its core competences and business focus. 

The Institute has continued to engage with the Commission for Higher Education owing to the impending 

Sponsorship of the Management University. The Letter of Interim Authority is about to be issued, thus 

making the dream of the University a reality. 

The Memorandum and Articles of Association were revised and adopted. Both the Council and Branch 

elections were held on the basis of the revised document. The alignment of the branch structure and 

network, and the harmonization, is also to be done under the new governance structures. 



(x) 

The institute has participated in Corporate Social Responsibility interventions which included book 

donations to schools for the needy, blood donations and environmental conservation exercise. 

The Chairman’s Report was adopted on a proposal by Mrs. Salome Gitoho and seconded by Mr. Mwai wa Kihu. 

MIN 4/AGM/2011: ADOPTION OF THE EXECUTIVE DIRECTORS REPORT 

FOR THE YEAR ENDED 31 ST DECEMBER 2010 

The Executive Director read the Management report as appended to the Annual Report and Audited Financial 

statements for the year 2010. The main highlights of the report and Financial Statements were:- 

(i) 

(ii) 

That as a membership organization, the management has embarked on quality membership service with 

emphasis on Continuous Professional Development ( CPD) and other various activities and events in all 

branches across the Country. 

The Management has continued to identify gaps and to develop so as to provide solutions to customers in the 

core business of governance, leadership and management. 

(iii) The Management has placed emphasis on efficiency and effectiveness in customer care and service. 

(iv) The Management Magazine has been revamped and re-launched to make it the East Africa’s premier business 

(v) 

management and leadership monthly. This has not only served members as a reliable forum for management 

and leadership, but has also raised the Institute's profile and respectability. 

There have been public forums for members across the country. In Nairobi, there were seven (7) public forums, 

an annual dinner and a golf tournament in addition to the other activities, such as the graduation at the school 

of Management, a vibrant conference, the convention, the COYA /gala night, the KABA. The average is one key 

event in Nairobi per month, with several others at the branches. 

(vi) The institute has entered into partnerships and collaborations with like-minded Institutions. The Africa 

Leadership Forum of Nigeria has joined with the Institute to support the convention, and the University of 

South Africa has collaborated with KIM to get into an arrangement to offer Doctorate programs in Business 

Leadership. 

(vii) On the financial platform, the Institute has continued to embrace prudent financial and business management 

practices with a turnover of 20% growth compared to the previous year. The growth is driven by increase in 

student numbers, professional fees from Centre for Enterprise Development and advertisement sales from 

Media Services Unit. The turnover stood at Kshs. 962 Million with a surplus of Kshs.75 Million up from Kshs.66 

Million representing an improvement of 14%. 

(viii) The direct costs increased by 20% from the previous year. This increase is attributable to lecturers fees as a 

result of an increase in student numbers. In terms of costs to turnover, there was therefore a slight increase 

from 35% to 37%. Staff benefits and membership reserves increased by 74% as a result of providing for an 

additional Kshs. 9.6 Million in staff benefits. 

(ix) Accumulated revenue grew by 24% following a Net surplus of Kshs. 75 million achieved. 

On a proposal by Mr. Richard Gikuhi and seconded by Mr. Joseph Nyutu the Report was Adopted. 


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MIN. 5/AGM/2011: ADOPTION OF THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST 

DECEMBER 2010. 

The Financial Statements were presented to Members by the Honorary Treasurer, a Council member, who is the 

chairman of Finance Committee. It had the following highlights:- 

(i) The total revenue increased by 20% owing to increase in student registration, fees earned by the business 

units, consultancies, and members subscriptions. 

(ii) Direct costs increased by 26 %. This was attributed to increase in Lecturers fees, printing and stationery, 

examination costs, advertising and publishing, accommodation, graduation expenses, telephone and 

postage among many others. 

(iii) The Gross profit increased by 18% owing to the Institute's ability to generate income. 

(iv) Administrative expenses increased by 30% due to increased salaries and wages, staff welfare 

development, medical scheme, staff Insurance, and directors' remuneration. 

(v) Surplus for the year had increased with 13% and the same was expected to continue going up since 

turnover has also increased with new businesses and innovations. 

(vi) Other expenses amounted to Kshs. 229,085,500 in 2010 as compared to 219,800,957 in 2009. 

(vii) The Non current assets have increased to 246 Million, up from 208 Million in 2009, whereas current Assets 

have increased from 250 million to 335 million in 2010, making the total assets to be 381 million in 2010. 

(viii) The total current liabilities increased from 143 million to 191 million in 2010. 

(ix) The total accumulated Fund had increased from 315 million to 390 million. 

MIN. 6/AGM/2011: BALANCE SHEET AND ACCOUNTS UPTO 31 ST DECEMBER 2010 

A representative from KOKA KOIMBURI & CO. Certified Public Accountants read the Independent Auditors Report 

and duly confirmed that:- 

(i) The Financial statements of the Institute had been audited in accordance with the International Finance 

Reporting Standards and the Provisions of the Companies Act. 

(ii) The Financial statements gave a true and fair view of the Financial state of affairs of the Institute. 

(iii) The Auditors took the chance to express their gratitude to Management for the opportunity to serve them since 

they were retiring. 

On a proposal by Ms Alice Owour and seconded by Mr Jonas Okwaro, the Audited Accounts for the Institute for 

the year ended 31 st December 2010 as presented by the Auditors were adopted. 

Comments 

(i) The decrease of revenue from the Jitihada project from Kshs.17 million to 1 million was questioned by 

members. It was complained that the Government had delayed in signing the second phase of the contract. 

(ii) The Barclays Bank cash deposit was explained from the perspective of the pending Court case with Kenya 

Re- Insurance, which necessitated a short term deposit with the Bank. 

(iii) The Management was commended for the good financial records and an audit job well done. 



MIN. 7/AGM/2011: NATIONAL AND BRANCH NOMINATION AND ELECTION PROCESS 

The returning officer, Dr. JJ Mageria, the Chairman, Board of Fellows read the report of the concluded National and 

Branch elections. The main highlights were:- 

(i) 

(ii) 

(iii) 

The process was done with great professionalism. 

Online voting was time saving and would be more encouraged in future. 

The process was fair, free and above board with no suspicion at all. 

Pursuant to the provisions of the Article of Association, the names of the successful candidates were presented to 

the Annual General Meeting for ratification. 

On a proposal by Mr Julius Barno and seconded by Mr Sammy Maina the report was adopted. 

MIN. 8/AGM/2011 – APPOINTMENT OF AUDITORS 

The Council sought authority from the members to appoint and fix the remuneration of the new Auditors, the term 

of the current Auditors having expired. On a proposal by Mr Mwai wa Kihiu, seconded by Mr Francis Oloo it was 

adopted and authority granted. 

MIN. 9/AGM/2011 – REPORT ON COUNCIL EXPENSES. 

The management reported that:- 

(i) The Council members were not paid, but only given an allowance for expenses that are incurred in fuel, 

transport and re-imbursement, and on retreats for strategic planning. 

(ii) The council was commended for the professionalism exhibited and the transparency and accountability in 

minding the affairs of the Institute. 

(iii) The extraordinary drive by Council members to attend meetings was commented and the exemplary service 

offered to the Institute recognized. 

There being no other business the meeting ended at 6.00P.M 

CONFIRMED ______________________________________ 

CHAIRMAN 

DATE ____________________________________________ 

Annual Report and Audited Financial Statements 2011 11

Chairman’s Report 

I 

am pleased and privileged to present to you my inaugural 

report for the period that ended 31 December 2011 as 

the Chairman of the governing Council of the Institute. 

Since its inception in 1954, the Institute has continued to 

steer good practices in management and leadership in the 

country and beyond through various platforms. I am happy 

to report that during the period under review, the Institute 

recorded commendable achievements despite the dynamic 

business environment we operated in. 

I report with contentment that the Council is at the 

forefront of championing good corporate governance. The 

Institute enjoys excellent relationships with Members, the 

Council, the Management and other stakeholders. Last year, 

one third of Council members retired and new members 

were nominated and elected. The process was conducted 

on an electronic platform. Elections held both at branch and 

national level were conducted with greater efficiency and 

effectiveness. Further, the Council went through a vigorous 

evaluation process to determine how well it was carrying its 

responsibilities and to identify any gaps and strategies to 

develop areas that needed improvement. 

In the same vein, the Council and the Institute is 

committed to establishing a centre of excellence. The 

centre will provide Members and stakeholders cutting edge 

services that will promote excellent governance, leadership 

and management practices. 

Members, you are informed that our membership 

threshold at the branch level is defined by 150 paid up 

members as provided for in our MAA. With this in mind, there 

is a need for the Institute to consider re-aligning its branches 

to fit into the new dispensation. In all instances, we will be 

guided by the need to create a national access to Institute 

services with special focus on the needs of every county, 

viability of the branch, and demand for Institute services 

from its members. 

Last year, after many years of pursuing the dream of 

establishing a comprehensive management, leadership and 

governance oriented university, the Institute as the sponsor 

witnessed the birth of the Management University of Africa. 

The University was granted the Letter of Interim Authority by 

the Commission for Higher Education on the 2nd September 

2011. This was followed by the installation of the founding 

Chancellor Dr. Arch. Reuben Mutiso, the Vice Chancellor 

Prof. Jude Mathooko and the inauguration of the Board of 

Trustees and Council of the University. 

As the sponsor, the Institute is committed to nurturing the 

new University and supporting it throughout its formative 

years. While the task may appear daunting, it is not impossible. 

I am pleased to report that the Institute bequeathed key 

assets to the University, worth KShs. 360 million. Among the 

fixed assets that were transferred include an ultra modern 

management centre with state of the art classrooms and 

information and communication technology facilities, 

conducive for 

research and 

learning in a world 

class and efficient 

environment. 

In addition, the 

Institute handed 

over some of 

its key staff 

members to see 

the University set 

off. I am delighted 

to report that the 

University took 

off in earnest with 

its first intake in 

January 2012. 

You will recall the Institute launched an annual continental 

forum under the Patronage of H.E Olusegun Obasanjo, 

former President of the Republic of Nigeria. The Second 

Annual Africa Governance, Leadership and Management 

convention was held in Mombasa in August. The forum was 

graced by two former statesmen, H.E Olusegun Obasanjo, 

Former President of the Republic of Nigeria and H.E Thabo 

Mbeki, former President of the Republic of South Africa. As 

was expected, the event was a great success, attended by 

renowned business leaders and government officials across 

Africa. The Third Annual Africa Governance, Leadership and 

Management convention is scheduled this August. Towards 

this front, we have made contacts with the Africa Union 

with the intention of working together to disseminate the 

convention output. 

I am glad to announce the inaugural KIM Annual 

Manager’s Conference. This will be an annual platform 

bringing together managers of various businesses and 

organizations to interrogate global management practices. 

The knowledge shared will help them excel in their 

managerial responsibilities and offer leadership to their 

teams for overall organizational productivity. 

I am pleased to report that the Council commissioned 

the implementation of the Enterprise Resource Planning 

(ERP) to improve service delivery in our Branch network. The 

process is ongoing. We envisage a highly effective Institute 

at the cutting edge of technology once the project is fully 

implemented 

Lastly, I wish to attribute our success in the past year to our 

unwavering commitment to our vision and to the support 

of our Members, the Governing Council, Management and 

Staff. 

Thank you very much and God bless you. 

Alfred Lenana 

Chairman, KIM Council 


I 

am glad to present to you the Institute’s Annual Report. 

This report reaffirms our strategic visionary thrust to 

become a distinguished continental hub of excellence 

in organizational and business management practices. 

As a professional membership organization, we are driven 

by our mission to steer and champion excellence, integrity 

and competitiveness in individuals and organizations 

throughout Africa and beyond. 

I am pleased to report that during the period under review, 

the Institute has registered tremendous growth in revenue 

through prudent use of resources and innovativeness. Our 

membership base has grown incredibly. This has been as 

a result of reinventing our service excellence strategies to 

consolidate our exceptional performance. In the same stride, 

our students’ population continues to grow yearly. This 

growth can be attributed to the efforts made in refurbishing 

and relocating some of our branches to spacious and modern 

premises. In addition, our computer labs have been up-scaled 

and equipped to state of the art facilities countrywide. Last 

year, the Institute achieved Kshs. 1billion turnover. This was 

a 10% growth in turnover against an economic background 

of high inflation, high interest rates and economic crunch. 

In the same year, the Institute was ranked as the top 

business school in the country according to the study 

conducted by Webometrics, a Spanish research firm. 

Webometrics is an independent public research organization 

that aims at promoting the web presence of business 

schools and MBA granting institutions worldwide. Web 

presence measures the activity and visibility of institutions 

and reflects the commitment of institutions to standards 

in dissemination of knowledge. The ranking summarizes 

the global performance of the schools and provides useful 

information for candidate students and scholars. This was 

not a mean achievement. 

Our staff remains dedicated and committed to our vision 

and mission. We have put mechanisms in place to create 

good working environment. Enhanced staff welfare and 

training is a strategy that has enabled us to attract and retain 

some of the best and brightest brains in the industry. 

We continue to seek and build strategic alliances with 

like-minded individuals and organizations in our pursuit 

to positioning the Institute as a hub of excellence. To 

achieve this, we strive to enrich our product offering. We 

have introduced new programmes, including Institutional 

Governance and Leadership Excellence programme, Women 

in Governance, Monitoring and Evaluation, Health and 

Safety, the Six Sigma and Kaizen Programmes which will be 

launched in the current year. 

Our Business Intelligence and Research Unit has played a 

key role in informing new product development and product 

improvement through feasibility studies, new product 

research, market analysis and tracking services. Besides 

this, the Unit has achieved major outstanding milestones 

in the area of research. A number of research activities have 

been carried out and findings published. These include, the 

Tristat report, Perception of Women in Leadership Positions 

CEO’s Report 

in Kenya and KIM 

Alumni traceability 

survey. 

The membership 

services have been 

revamped to include 

the Continuous 

Professional 

Development 

(CPD) activities 

geared towards 

enhancing members’ 

participation and development. These activities include 

trainings, networking and monthly management forums. 

The OPI tool has continued to attract interest among 

Kenyan organizations and in the region. The tool was 

introduced in Rwanda and was well received. The OPI in 

partnership with the German Development Cooperation 

(GIZ) under a Public Private Partnership implemented the 

OPI model in 30 companies in Rwanda. A gala night was held 

in November last year to celebrate the winners. 

I am pleased to report that the Institute was awarded a 

four year contract by KEPSA to train approximately 16,000 

youth on life skills. KEPSA was identified by the World Bank 

to champion Kenya Youth Empowerment Project (KYEP). 

The programme saw youths participate in internships and 

mentorship programmes. In the same vein, the Institute 

signed up the second phase of the JITIHADA project as 

the lead consultants. JITIHADA Business Plan Competition 

is a national initiative of the Micro Small and Medium 

Enterprises (MSME) Competitiveness Project of the Ministry 

of Industrialization. 

We reviewed our strategic plan rolling over for a period of 

five years, 2012-2016. The review process was also informed 

by the Organizational Performance Index report and the risk 

management framework that KIM took part in. The Institute 

underwent an intensive exercise to identify core risks 

exposures that could affect its operations. This is in addition 

to the fact that the Institute is ISO registered in compliance 

with the ISO 9001: 2008 Standards. We further underwent a 

surveillance audit to keep us in check and are now living the 

ISO spirit. 

Our commitment to good corporate governance and 

corporate social responsibility has remained solid. In the 

period under review, we gave back in numerous ways to 

the society. These activities have continued to make visible 

positive impacts on the wellbeing of our Members and 

stakeholders. 

Lastly, I want to recognize the Members, the Council, 

Management and staff of the Institute for their continued 

guidance and support in what has again been another 

successful year, and request that these be sustained. 

David Muturi 

Chief Executive Officer 


Corporate Information 

COUNCIL MEMBERS : Mr. Alfred Lenana - Chairman 

: Dr. Arch Reuben M. Mutiso - Former Chairman (Retired 27th May 2011) 

: Ms. Salome Gitoho - Vice Chairperson 

: Mr. Dan Awendo - Honorary Treasurer 

: Mr. Richard Isiaho - Council Member 

: Mr. Richard K. Gikuhi - Council Member 

: Mr. Philip Kisia - Council Member 

: Ms. Esther Jowi - Council Member 

: Dr. Jonathan Ciano - Council Member 

: Ms. Alice Owour - Council Member 

: Prof. Tuikong D.K. Serem - Council Member 

: Dr. Wilson Soy - Council Member 

: Mr. Richard Ndubai - Council Member (Appointed February 2012) 

: Ms. Rose Bosobori Osoro - Council Member (Appointed February 2012) 

: Mr. David Muturi - Executive Director/CEO 

: Stella Muendo - Company Secretary 

: Eng. Samuel Muchemi - Council Member (Retired 27th May 2011) 

: Eng. Michael S.M. Kamau - Council Member (Retired 27th May 2011) 

: Mr. Peter Kubebea - Council Member (Retired 27th May 2011) 

: Mr. Josiah K. A. Rutto - Council Member (Retired 27th May 2011) 

: Mr. Austin Kapere - Council Member (Retired 27th May 2011) 

: Mr. Jonas Okwaro - Council Member (Retired 27th May 2011) 

: Mr. Henry N. Njerenga - Council Member (Retired 27th May 2011) 

: Mr. Oscar Waswa - Council Member (Retired 27th May 2011) 

: Mr. Julius K. Barno - Council Member (Retired 27th May 2011) 

: Mr. Samuel K. Maina - Council Member (Retired 27th May 2011) 

: Ms. Constantine Kandie - Council Member (Retired 27th May 2011) 

REGISTERED OFFICE 

AUDITORS 

: Management Centre 

: South C, Off Popo Road 

: P.O.Box 43706-00100 

: NAIROBI 

: PKF Kenya 

: Certified Public Accountants 

: P.O. Box 14077, 00800 

: NAIROBI 

INSTITUTE SECRETARY 

: Stella K. Muendo 

: S. K. Muendo and Company Advocates 

: Standard/Wabera Street 

: P.O. Box 14191-00100 

: NAIROBI 

: KENYA 

PRINCIPAL PLACE OF BUSINESS 

: Luther Plaza, 2nd & 3rd floors 

: Uhuru Highway/Nyerere Road Junction 

: P.O.Box 43706-00100 

: NAIROBI 


Corporate Information (Continued) 

PRINCIPAL BANKERS 

: BARCLAYS BANK OF KENYA LIMITED 

Queensway House 

P.O. Box 30011-00100 

NAIROBI 

: COMMERCIAL BANK OF AFRICA LIMITED 

Wabera Street Branch 

P.O. Box 30437-00100 

NAIROBI 

: COOPERATIVE BANK OF KENYA LIMITED 

University Way Branch 

P.O. Box 60800-00200 

NAIROBI 

: ECOBANK 

Ecobank Towers Branch 

P.O. Box 49584-00100 

NAIROBI 

: EQUITY BANK 

Westlands Bank Branch 

P.O. Box 75104-00200 

NAIROBI 

: KCB RWANDA SA 

Avenue DE La Paix 

P.O. Box 5620 

KIGALI 

RWANDA 

: ECO BANK RWANDA SA 

Parcelle No. 314, Ave De La Paix 

BP 3268 

KIGALI 

RWANDA 

ADVOCATES 

: S. K. MUENDO AND COMPANY ADVOCATES 

Standard/Wabera Street 

P.O. Box 14191-00100 

NAIROBI 

KENYA 

NYAKUNDI & COMPANY ADVOCATES 

3rd Floor, College House 

P.O. Box 50913-00100 

NAIROBI 

KENYA 


Corporate Governance Report 

COMMITMENT TO CORPORATE GOVERNANCE 

The Kenya Institute of Management is committed to 

good corporate governance. The Institute pursues 

professional standards and norms in handling its 

business relationships, which are directed towards 

enhancing the performance of its business to the benefit 

of its customers, members, employees, partners and 

other stakeholders. We promote a culture that values 

and recognizes the highest ethical standards as well as 

personal and corporate integrity. The Council members 

and employees are expected to act with integrity in line 

with our mandate of promoting excellence and integrity in 

the practice of management. 

The KIM Council is responsible for the governance 

of the Institute, while the members are responsible 

for the election of the Council through the Annual 

General Meeting. Adherence to corporate governance 

principles is articulated in the Institute’s Memorandum 

and Articles of Association (MAA), which outlines the 

role of management, Council and members in the 

management of the Institute. The Council of the Institute 

seeks to adhere to, and comply with, the Principles for 

Corporate Governance in Kenya and the Sample Code 

of Best Practice for Corporate Governance as otherwise 

modified by global developments. 

The Council meets and conducts business, adjourns or 

regulates their meetings as they deem fit in accordance 

with the MAA with at least one meeting every quarter. 

The following are the key aspects of the Institute’s 

approach to corporate governance: 

MEMBERS’ RESPONSIBILITIES 

The members’ role in governance is to elect the Council, 

appoint external auditors and hold the Council to account 

for the attainment of organizational objectives. Members 

are expected to act jointly and severally uphold good 

conduct and remain committed to the ideals of the 

Institute. 

THE COUNCIL’S RESPONSIBILITIES 

The Council is responsible for the governance of the 

Institute and gives policy guidance in all strategic affairs 

of the Institute on behalf of the members. The Council is 

responsible for conducting such business of the Institute 

with integrity and in accordance with the MAA and 

generally accepted corporate practices, by upholding 

transparency, accountability and responsibility. To 

discharge its mandate effectively, the Council delegates 

its authority to Council committees, which then meet 

quarterly and whenever the need arises. The authority 

of the day-to-day running of the Institute is delegated to 

the Executive Director with the help of three executive 

directors and a management team. 

COMPOSITION OF THE COUNCIL 

The Council shall consist of not less than nine and not 

more than 13 members with the twelve (12) Council 

members elected by or ratified at the Annual General 

Meeting; and the Chief Executive Officer. Out of the 12 

council members, seven (7) are elected by the members 

at a general meeting, while the other five (5) members are 

nominated from the branch level and ratified at the Annual 

General Meeting. In accordance with the Institute’s MAA, 

the Council may co-opt up to three additional members 

at any given time if the Council is of the opinion that such 

co-opted members possess knowledge and skills that 

the Council needs to resource upon. 

TERMS OF SERVICE 

Elected Members of Council shall serve for a term of 

three years and are eligible for re-election for a further 

three-year term. No Member of Council shall serve for 

more than two continuous terms of three years. However, 

they may be eligible for re-election after staying out of 

the Council for one term of three years. At every Annual 

General Meeting of the Institute, a third of the members 

of the Council shall be expected to retire from office. 

SEPARATION AND DISTRIBUTION OF POWERS 

BETWEEN THE COUNCIL AND MANAGEMENT 

The roles of the Council and management are clearly 

defined and separated. The Council has full responsibility 

for the oversight, direction and control of the Institute. 

The responsibility of implementing strategy and day-today 

operations of the Institute is delegated by the Council 

to the Executive Director, and the management team. 

INFORMATION TO THE COUNCIL 

The Council is continuously appraised on the operations 

of the Institute through regular reports from the various 

management and Council committees; reports from the 

Executive Director and other formal events. 

CONFLICT OF INTEREST 

The Institute has put in place elaborate policies and 

frameworks for monitoring transactions with Council 

members and related parties to ensure that any conflict 

of interest is addressed appropriately and any such 

transactions are disclosed in the financial statements 

and at all appropriate levels. 

COMMITTEES OF THE INSTITUTE 

The Council delegates some of its authorities, 

powers, discretion, and duties to committees to ensure 

organizational effectiveness in decision making and 

implementation, but reserves unto itself the primary 

functions and residue powers of final decision. 

COMMITTEES OF THE COUNCIL 

The MAA empowers the Council to set up the following 

standing committees: 


Corporate Governance Report 

The General Purposes Committee, whose function is 

to advise the Council on all policy matters and to ensure 

that there is sufficient co-ordination, harmonization and 

consensus on major strategic issues of the Institute and 

between the various committees and programmes of the 

Institute. The composition of this committee is as follows: 

Chairperson, Vice Chairperson of Council, All chairmen 

of committees, Treasurer, Council Secretary, and the 

Chief Executive Officer/Executive Director. 

The Membership Development Committee, whose key 

responsibilities are the recruitment, admission, grading, 

upgrading, development and discipline of the members. 

The Committee is made up of two co-opted members 

and three members representing the branches. The 

branch representatives organize themselves in clusters 

of three branches, with each cluster appointing one of 

their number as a representative. 

The Finance and Investment Committee: to see to the 

appropriate utilization of Institute’s finances and advise 

the Council on the financial and investment affairs of the 

Institute. 

The Human Resources Development Committee. 

The key responsibilities is to exercise oversight of the 

framework governing the human resource policies 

and to monitor, evaluate, and make recommendations 

to the Council with respect to policies and strategic 

matters related to the human resources and personnel 

issues; and particularly so as to ensure that the Institute 

complies with all relevant regulations, standards and 

codes of practice; occupation and environmental health 

and safety legislation. The mandate of the committee is 

to ensure the proper development and welfare of Institute 

staff to ensure that it attracts, maintains and retains the 

highest quality and calibres of human resources. 

The Audit and Governance Committee: The key 

responsibilities are to exercise oversight on behalf of the 

council and in accordance with powers delegated to it 

by the Council, over the audit compliance, disclosure, 

audit, and governance arrangements of the Institute and 

report thereon to the Council. The committee comprises 

of independent members of the Council, which ensures 

that good governance practices are being followed. The 

officers of the Board – the Chairman, Vice-chairman, 

Secretary and Treasurer- are not be members of the 

Committee. The Chief Executive Officer attends all the 

open sessions of the committee, but may not attend any 

closed sessions if the committee so decides. 

Business Committee: The key responsibilities are 

to advice the Council on all matters relevant to the 

technical business activities of the Institute. The 

Business Committee is charged with the responsibility of 

ensuring harmony, consistency and technical adequacy 

in the planning and implementation of all the business 

activities of the Institute, particularly so as to ensure that 

the activities promote the image and reputation of the 

Institute as a centre of excellence in Management and 

enhance the standards, understanding and knowledge in 

the art, science and practice of management. 

ADVISORY BODIES, AD HOC AND TECHNICAL 

COMMITTEES 

In addition to its standing committees, the Council may at 

any time appoint advisory boards or ad hoc committees 

and technical advisory committees, consisting of such 

persons as the Council may select to consider or report 

on any specific matter or matters. 

The Board of Fellows 

The Board is only comprised of Fellows and shall not 

exceed eleven members in total. The business of the 

Board is to advise Council on all major strategic issues 

of the Institute; Support Council in public relations, fundraising 

and national affairs; and handle any other issues 

requested by the Council and/ or a General Meeting of 

the members. 

Technical Advisory Committees 

Recommends to the Council the establishment of 

technical advisory committees as are deemed relevant to 

the needs of the Institute. 

CONDUCT OF BUSINESS AND PERFORMANCE 

REPORTING 

The institute’s business is conducted in accordance 

with clearly formulated strategy, annual business plans 

and budgets, which set out very clear objectives and 

measurement indicators. Performance against objectives 

is reviewed and discussed monthly and quarterly 

by management team and shared with the various 

committees. In this framework, performance trends and 

projections as well as actual performance against targets 

are closely monitored and evaluated. 

In order to entrench the culture of performance monitoring 

and reporting, the Council of the Institute has put in place 

Council and individual Council member performance 

evaluation on an annual basis. It is expected that this 

process will be cascaded to the branch committees 

during the next financial year. 


Corporate Social 

Responsibility Report 

KIM’s commitment to Corporate Social Responsibility (CSR) is grounded in the values that define our community: humanity, 

humility, integrity and excellence. Using our branch networks, our CSR has strengthened its ability to effectively support the 

communities. 

The Institute's desire is to share its strength for the common good towards building and sustaining strong communities, 

environmental stewardship and global human rights. 

We partner with communities in the following ways: 

Nelly Muluka 

from Redcross 

receives a 

cheque from 

KIM staff 

Students receive book donations from our branch 

networks countrywide 

Football matches 

Ofafa Jericho students celebrate victory after a football 

match during a leadership forum 

Students receive book donations from our branch 

networks countrywide 

Developing 

young leaders 

through career 

talks in high 

schools 

Visitation to the elderly home in Thiogio, Kikuyu 

Mzee Ngina celebrates 100 years 

Embu branch staff spend time with children with HIV 


CSR REPORT 2011 

Corporate Social 

Responsibility Report 

Students from various schools receive book donations from 

our branch networks countrywide 

Tree planting in Naivasha 

Annual charity Manager’s Golf Tournament where 

funds were raised towards pallative treatment 

Staff participating in the Stanchart Marathon 

KIM Alumni spend time with the elderly 

KIM staff serves food they prepared for the elderly 

Staff, lecturers and students donate blood at the annual 

KIM Blood Donation Drive 


Report of the Council 

for the year ended 31 Dec 2011 

The Council submit their report and the audited financial statements for the year ended 31 December 2011. It 

discloses the state of affairs of the Institute. 

PRINCIPAL ACTIVITY 

The Institute deals with the provision of services to members in the areas of management, development through 

training, research and consultancy. 

RESULTS 2011 2010 

Shs 

Shs 

Surplus for the year 70,786,736 84,616,694 

ACCUMULATED FUND 

The accumulated fund balance of the Institute is set out in note 17 of these financial statements. 

COUNCIL 

The members of the council who held office to the date of this report are shown on page 1. In accordance with the 

Institute's Articles of Association, two directors are due for retirement by rotation. 

INDEPENDENT AUDITOR 

PKF Kenya was appointed during the year and continues in accordance with Section 159(2) of the Companies Act 

(Cap. 486). 

BY ORDER OF THE COUNCIL 

DIRECTOR 

NAIROBI 

_______________________ 2012 


ORGANISATIONAL PERFORMANCE INDEX (OPI), OUR INNOVATION 

COMPANY OF THE YEAR AWARDS (COYA), OUR INNOVATION 

KIM ANNUAL BUSINESS AWARDS (KABA), OUR INNOVATION 

Innovating towards driving excellence and global competitiveness in 

African organizations 


Statement of Council’s Responsibilities 


The Companies Act (Cap. 486) requires the Council to prepare financial statements that give a true and fair view of 

the state of affairs of the Institute as at the end of the financial year, and of the results for that year. It also requires 

the Council to ensure that the Institute maintains proper accounting records, which disclose with reasonable 

accuracy the financial position of the Institute. The Council is also responsible for safeguarding the assets of the 

Institute. 

The Council accept the responsibility for the financial statements, which have been prepared using appropriate 

accounting policies supported by reasonable and prudent judgements and estimates, consistent with previous years, 

and in conformity with International Financial Reporting Standards and the requirements of the Companies Act (Cap. 

486). The Council is of the opinion that the financial statements give a true and fair view of the state of the financial 

affairs of the Institute as at 31 December 2011 and of its operating results for the year then ended. The Council 

further confirm the accuracy and completeness of the accounting records maintained by the Institute, which have 

been relied upon in the preparation of the financial statements, as well as on the adequacy of the systems of internal 

financial controls. The financial statements have been prepared on a going concern basis, which is dependent on 

the continued financial support from shareholders and other related parties. 

Approved by the board of Council on 19th April 2012 and signed on its behalf by: 

_____________________ 

COUNCIL MEMBER 

___________________ 



Independent Auditor’s Report 

To the members of Kenya Institute of Management 

Report on the Financial Statements 

We have audited the accompanying financial statements of Kenya Institute of Management set out on pages 7 to 

23 which comprise the statement of financial position as at 31 December 2011, and the statement of comprehensive 

income, the statement of changes in members' funds, and the statement of cash flows for the year then ended. It also 

contains a summary of significant accounting policies and other explanatory information. 

Council's responsibility for the financial statements 

The Council is responsible for the preparation of financial statements that give a true and fair view in accordance 

with International Financial Reporting Standards and the Companies Act, Cap 486, and for such internal control as 

management determines is necessary to enable the preparation of financial statements that are free from material 

misstatement, whether due to fraud or error. 

Auditor’s responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in 

accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements 

and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 

material misstatement. 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 judgment, 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 internal control relevant to the entity’s preparation and fair presentation 

of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes 

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 

management, as well as evaluating the overall presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 

opinion. 

Opinion 

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Kenya 

Institute of Management as at 31 December 2011, and of its financial performance and its cash flows for the year 

then ended in accordance with International Financial Reporting Standards and the requirements of the Kenya 

Companies Act. 


Independent Auditor’s Report 

To the members of Kenya Institute of Management (Continued) 

Report on other legal requirements 

As required by the Companies Act (Cap. 486), we report to you, based on our audit, that: 

(i) 

we have obtained all the information and explanations which to the best of our knowledge and belief were 

necessary for the purposes of our audit; 

(ii) 

in our opinion, proper books of account have been kept by the company, so far as appears from our examination 

of those books; and 

(iii) the company's statement of financial position and statement of comprehensive income and retained earnings are 

in agreement with the books of account. 

Certified Public Accountants 

PIN NO. P051130467R 

NAIROBI 

___________________________2012 

292/12 


OUR BELIEF, A BETTER KENYA 

OUR DREAM, A DEVELOPED AFRICA 

Creating platforms for continental dialogue on the 

African Renaissance 


Statement of Comprehensive Income 

for the year ended 31 Dec 2011 - Continued 

2011 2010 

(Restated) 

Note Shs Shs 

Revenue 1 1,053,767,949 960,746,202 

Direct costs 2 (395,883,511) (352,008,115) 

Gross profit 657,884,438 608,738,087 

Other income 534,960 1,198,161 

658,419,398 609,936,248 

Administrative expenses (395,072,469) (371,713,544) 

Other operating expenses (192,560,193) (153,606,010) 

(587,632,662) (525,319,554) 

Total surplus for the year 70,786,736 84,616,694 

Other comprehensive income: 

Revaluation surplus 248,046,360 - 

Total comprehensive income for the year 318,833,096 84,616,694 

The significant accounting policies on pages 29 to 33 and the notes on pages 34 to 43 form an integral part of the 

financial statements. 

Report of the independent auditor - pages 21 and 22. 


Statement of Financial Position 


As at 31 

December 

Restated 

Note 2011 2010 2009 

RESERVES Shs Shs Shs 

Accumulated surplus 460,945,200 390,158,464 315,149,189 

Special reserves 20,443,899 22,629,619 13,022,200 

Revaluation Reserve 248,046,360 - - 

Members funds 729,435,459 412,788,083 328,171,389 

REPRESENTED BY 

Non-current assets 

Property, plant and equipment 6 498,963,811 220,657,568 197,111,074 

Prepaid operating lease rentals 7 - - - 

Intangible assets 8 4,232,858 4,715,987 4,599,080 

Organizational performance index (OPI) 9 7,149,190 5,949,934 5,850,000 

Investment in MUA 10 82,208,576 14,271,283 - 

592,554,435 245,594,772 207,560,154 

Current assets 

Trade and other receivables 11 320,032,268 265,036,322 174,816,607 

Cash and cash equivalents 12 11,478,794 48,788,734 57,045,776 

331,511,062 313,825,056 231,862,383 

Current liabilities 

Trade and other payables 13 127,592,325 84,140,488 71,784,375 

Provisions and accruals 14 3,743,039 1,774,668 2,831,150 

Bank overdraft 15 63,294,674 60,716,589 36,635,623 

194,630,038 146,631,745 111,251,148 

Net current assets 136,881,024 167,193,311 120,611,235 

729,435,459 412,788,083 328,171,389 

The financial statements on pages 7 to 23 were authorised for issue by the Board of Directors on 

______________________2012 and were signed on its behalf by: 

_____________________ 


___________________ 






Statement of Changes in Accumulated Fund 


Accumulated Special Revaluation 

Surplus Reserves Reserve Total 

As at 31 December 2010 Note Shs Shs Shs Shs 

As previously stated 315,149,189 - - 315,149,189 

Prior year adjustments: 

Provisions reversed 14 13,022,200 - - - 

Special reserves 

- Members service 14 (8,286,578) 8,286,578 - - 

- Staff separation 14 (4,735,622) 4,735,622 - - 

Restated balance 315,149,189 13,022,200 - 328,171,389 

Transfer for the year (9,607,419) 9,607,419 - 

Total comprehensive income 84,616,694 - - 84,616,694 

At end of year 390,158,464 22,629,619 - 412,788,083 

As at 31 December 2011 

At start of year 399,765,883 - - 399,765,883 

Prior year adjustments: 

- Special reserves (9,607,419) 22,629,619 - 13,022,200 

Restated balance 390,158,464 22,629,619 - 412,788,083 

Utilised during the year - (2,185,720) - (2,185,720) 

Total comprehensive income 70,786,736 - 248,046,360 318,833,096 

At end of year 

460,945,200 20,443,899 248,046,360 729,435,459 





Statement of Cash Flows 


Cash flows from operating activities: 


Note Shs Shs 

Cash from operations 16 89,613,371 41,964,550 

Adjustment for: Interest received (214,417) (1,158,737) 

Net cash from operating activities 89,398,954 40,805,813 

Investing activities 

Cash paid for Purchase of property and equipment (66,148,170) (52,756,096) 

Cash paid on Organizational performance index (OPI) (1,199,256) (5,949,934) 

Cash paid as pre-operating expenses-KIM university (59,187,297) (14,271,283) 

Purchase of intangible assets (1,330,953) (2,138,045) 

Proceeds from sale of property, plant and equipment 550,000 812,800 

Net cash used in investing activities (127,315,676) (74,302,558) 

Financing activities 

Interest received 214,417 1,158,737 

Net decrease in cash and cash equivalents (37,702,305) (32,338,008) 

Movement in cash and cash equivalents:- 

Cash and cash equivalents at the beginning of the year (11,927,855) 20,410,153 

Decrease (37,702,305) (32,338,008) 

At end of year 12 (49,630,160) (11,927,855) 





OUR HISTORY, OUR HERITAGE 

OUR HORIZON, OUR POTENTIAL 

Since 1954 and Going Strong 


Notes to the Financial Statements 


SIGNIFICANT ACCOUNTING POLICIES 

The principal accounting policies adopted in the preparation of these financial statements are set out below. These 

policies have been consistently applied to all the years presented, unless otherwise stated. 

a) Basis of preparation 

The financial statements have been prepared under the historical cost convention, except as indicated otherwise 

below, and are in accordance with International Financial Reporting Standards (IFRS). 

(i) New and amended standards adopted by the Institute 

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning 

on or after 1 January 2011 that would be expected to have a material impact on the Institute. 

(ii) New standards, amendments and interpretations issued but not effective for the 

financial year beginning 1 January 2011 and not adopted in advance of the effective date. 

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of 

financial assets and financial liabilities. IFRS 9 requires financial assets to be classified into two principal 

measurement categories: 'those measured as at fair value and those measured at amortised cost. The institute is 

yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than the or after 1 January 2015. 

IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise 

definition of fair value and a single source of fair value measurement and disclosure requirements for use across 

IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair 

value accounting, but provide guidance on how it should be applied where its use is already required or permitted 

by other standards within IFRSs or US GAAP. The institute is yet to assess IFRS13’s full impact and intends to 

adopt IFRS 13 no later than the accounting period beginning on or after 1 January 2012. 

b) Key sources of estimation uncertainty 

The directors have made no assumptions and there are, in their opinion, no other sources of estimation uncertainty 

at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying 

amount of assets and liabilities within the next financial year. 

c) Revenue recognition 

Revenue comprises the fair value of the consideration received or receivable for the provision of services in the 

ordinary course of business and the stated net of rebates and discounts. The Institution recognises revenue when 

it can be reliably measured, it is probable that future economic benefits will flow to the entity and when the specific 

criteria have been met for the Institute's activities. The amount of revenue is not considered to be reliably measured 

until all contingencies relating to the sale have been resolved. The Institute bases its estimates on historical results, 

taking into consideration the type of customer, type of transaction and specifics of each arrangement. 

i) Tuition fees are accounted for over the period to which they relate. 

ii) Grants and donations are credited to profit or loss upon receipt and any unutilised funds are carried forward 

as advance receipts. 




SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

d) Property and equipment 

All property and equipment is initially recorded at cost and thereafter stated at historical cost less depreciation. 

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, 

only when it is probable that future economic benefits associated with the item will flow to the institute and the 

cost can be reliably measured. The carrying amount of the replaced part is derecognised. All other repairs and 

maintenance are charged to the statement of comprehensive income during the financial period in which they are 

incurred. 

Depreciation is calculated on the reducing balance basis to write down the cost of each asset, to its residual value 

over its estimated useful life using the following annual rates: 

Rate% 

Buildings 2.00 

Equipment 12.5 

Furniture, fittings 12.5 

Management films and library books 20.0 

Motor vehicles 25.0 

Computers, copiers and faxes 30.0 

The assets residual values and useful lives are reviewed and adjusted if appropriate, at each statement of financial 

position date. 

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying 

amount and are taken into account in determining operating profit. 

e) Impairment of non-financial assets 

Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually. 

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances 

indicate that the carrying amount may not be recoverable. 

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable 

amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For 

the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately 

identifiable cash flows (cash-generating units). 

Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at each 

reporting date. 

f) Financial instruments 

Financial assets and financial liabilities are recognised when the institute becomes a party to the contractual 

provisions of the instrument. Management determines all classification of financial assets at initial recognition. 

- Financial assets 

Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair 

value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair 

value and transaction costs are expensed in profit or loss. 





f) Financial instruments (continued) 

- Financial assets (continued) 

The institute's financial assets include: 

Loans and receivables: financial assets with fixed or determinable payments that are not quoted in an active 

market. Such assets are classified as current assets where maturities are within 12 months of the reporting date. 

All assets with maturities greater than 12 months after the reporting date are classified as non- current assets. 

Subsequent to initial recognition, they are carried at amortised cost using the effective interest method. Changes in 

the carrying amount are recognised in profit or loss. 

Purchases and sales of financial assets are recognised on the trade date i.e. the date on which the institute 

commits to purchase or sell the asset. 

Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been 

transferred and the institute has transferred substantially all risks and rewards of ownership. 

A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount. Impairment 

of financial assets is recognised in the statement of comprehensive income under administrative expenses when 

there is objective evidence that the institute will not be able to collect all amounts due per the original terms of the 

contract. Significant financial difficulties of the issuer, probability that the issuer will enter bankruptcy or financial 

reorganisation, default in payments and a prolonged decline in fair value of the asset are considered indicators that 

the asset is impaired. 

The amount of the impairment loss is calculated as the difference between the assets carrying amount and the 

present values of expected future cash flows, discounted at the financial instrument's effective interest rate. 

Subsequent recoveries of amounts previously written off/impaired are credited to profit or loss/ other comprehensive 

income in the year in which they occur. 

Gains and losses on disposal of assets whose changes in fair value were initially recognised in profit or loss 

are determined by reference to their carrying amount and are taken into account in determining operating profit/ 

(loss). On disposal of assets whose changes in fair value were initially recognised in equity, the gains/losses are 

recognised in the reserve, where the fair values were initially recognised. Any resultant surplus/deficit after the 

transfer of the gains/losses are transferred to retained earnings. 

- Financial liabilities 

The institute's financial liabilities, which include trade and other payables, provisions, accruals and borrowings fall 

into the following category: 

Other financial liabilities: These are initially measured at fair value and subsequently measured at amortised 

cost, using the effective interest rate method. 

All financial liabilities are classified as current liabilities unless the institute has an unconditional right to defer 

settlement of the liability for at least 12 months after the reporting date. 

Financial liabilities are derecognised when, and only when, the institute's obligations are discharged, cancelled or 

expired. 





g) Cash and cash equivalents 

For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and deposits held 

at call with banks. 

h) Taxation 

The Institute is tax exempt under the provisions of the Income Tax Act. 

i) Accounting for leases 

Leases of property, plant and equipment, where the Institute assumes substantially all the risks and rewards of 

ownership, are classified as finance leases. Finance leases are capitalised at cost. Each lease payment is allocated 

between the liability and finance charges. The interest element is charged to the profit or loss over the lease period. 

Such property, plant and equipment is depreciated over its useful life. 

Leases of assets under which a significant portion of the risks and rewards of ownership are effectively retained by 

the lessor are classified as operating leases. Payments made under operating leases are charged to the profit or 

loss on a straight line basis over the period of the lease. 

The Institute as a lessor 

Assets leased to third parties under operating leases are included in property, plant and equipment in the balance 

sheet. 

Leased assets are recorded at historical cost less depreciation. 

Depreciation is calculated on the straight line basis to write down the cost of leased assets to their residual values 

over their estimated useful life using annual rates consistent with the normal depreciation policies for similar assets 

under property, plant and equipment. 

Gains and losses on disposal of leased assets are determined by reference to their carrying amount and are taken 

into account in determining operating profit. 

j) Translation of foreign currencies 

Transactions in foreign currencies during the year are converted into Kenya Shillings at rates applicable on the 

transaction dates. Assets and liabilities at the balance sheet date which are expressed in foreign currencies are 

translated into Kenya Shillings at the rates of that date. The resulting differences from conversion and translation 

are dealt with in the income statement in the year in which they arise. 

k) Retirement benefit obligations 

Employee entitlements to gratuity and long service awards are recognised when they accrue to employees. A 

provision is made for the estimated liability for such entitlements as a result of services rendered by employees up 

to the reporting date. 

The Institute operates a defined contribution staff retirement benefit scheme for its permanent and pensionable 

employees. The scheme is administered by an insurance company. The Institute's contributions to the defined 

contribution retirement benefit scheme are charged to profit or loss in the year to which they relate. The Institute 

has no further payment obligations once the contributions have been paid. 





l) Special reserves 

Special funds are those held for a designated purpose. The funds are created by transferring the authorised 

amount from the accumulated reserves to special reserves. Subsequently any expenditure related to designated 

activity are debited directly to this fund. Included in the special reserves are the following reserves:- 

i) Staff separation reserves 

Staff separation reserve relates to a general provision of 1% of the gross income made to cater for any likely 

staff severance and retirement benefit. 

ii) Members' service funds 

Members' service funds set aside by the management to cater for the members' training costs. 

m) Comparatives 

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current 

year. 




NOTES (CONTINUED) 


1. Revenue Shs Shs 

Tuition fees 799,117,167 727,687,192 

Executive MBA fees 51,476,453 65,615,759 

Members' subscription 31,729,852 25,350,963 

Professional fees 90,639,160 89,580,099 

OPI and Company of the year award gala night 11,058,268 11,720,616 

Sundry income 9,785,955 4,141,761 

Directory/management journal income 19,635,404 16,662,880 

Graduation income 10,331,378 12,706,033 

Jitihada National Business Plan Competition 6,291,375 1,371,000 

Donations 5,000,000 

Business beyond borders-(Rwanda & Sudan) 18,702,937 5,909,899 

2. Direct costs 

1,053,767,949 960,746,202 

Lectures' fees 166,919,660 166,121,958 

Printing and stationery 28,841,218 29,906,020 

Facilitators fees 39,238,835 32,584,603 

JKUAT facilitation and administration expenses 20,921,410 11,404,300 

Examination cost 11,420,742 17,574,070 

Advertising and publicity 42,748,947 26,834,803 

Management journal expenses 18,591,970 13,735,296 

Course meals and accommodation 37,392,059 30,175,422 

Company of the year award expenses 4,727,691 2,722,709 

Telephone and postage 13,603,200 11,401,018 

Graduation expenses 4,874,441 2,120,998 

Hire of equipment 5,943,566 6,519,589 

Course photographs 490,262 610,929 

Trophies 169,510 296,400 

3. Other operating income 

395,883,511 352,008,115 

Interest income 214,417 1,158,737 

(Loss)/gain on disposal of property, plant and equipment (20,270) 39,424 

Foreign exchange gain 340,813 - 

4. Operating profit 

The following items have been charged in arriving at the 

operating surplus for the year: 

534,960 1,198,161 

Depreciation on property, plant and equipment (Note 6) 35,440,182 28,436,227 

Amortisation of intangible assets (Note 8) 1,814,082 2,138,045 

Auditor's remuneration 1,019,763 460,000 

(Loss)/gain on disposal of property, plant and equipment (20,270) 39,424 

Staff costs (Note 5) 283,485,114 271,696,004 

5. Staff costs 

Salaries and wages 214,691,626 214,797,521 

National Security Social Fund 595,800 567,400 

Staff medical and welfare 27,201,857 21,438,421 

Pension costs-Defined contribution plan 18,952,722 18,191,023 

Other staff costs 22,043,109 16,701,639 

283,485,114 271,696,004 





6. Property and equipment 

Year ended 31 December 2011 

Library 

Furniture, books and 

Freehold Prepaid Motor fixture and management Computer 

land operating lease Building vehicles equipment films hardware Total 

Shs Shs Shs Shs Shs Shs Shs Shs 

Cost at start of year 30,746,569 - 62,065,710 13,864,841 139,016,005 41,985,926 48,697,998 336,377,049 

Reclassified (note 7) - 377,593 - - - - - 377,593 

Additions - - 4,253,266 - 39,683,331 3,325,155 18,886,418 66,148,170 

Disposals - - - (3,200,000) - - - (3,200,000) 

Surplus on revaluation 54,253,431 898,979 182,404,452 - - - - 237,556,862 

At end of year 85,000,000 1,276,572 248,723,428 10,664,841 178,699,336 45,311,081 67,584,416 637,259,674 

Comprising 

Cost 30,746,569 377,593 66,318,976 10,664,841 178,699,336 45,311,081 67,584,416 399,702,812 

Valuation 54,253,431 898,979 - 182,404,452 - - - - 

85,000,000 1,276,572 248,723,428 10,664,841 178,699,336 45,311,081 67,584,416 637,259,674 

Depreciation 

Accumulated at start of year - - 9,547,339 7,124,416 45,352,943 19,493,082 34,370,143 115,887,923 


Eliminated on revaluation - (90,584) (10,398,912) - - - - (10,489,496) 

Disposals - - - (2,630,469) - - - (2,630,469) 

Charge for the year - 6,085 2,095,192 1,542,724 16,668,299 5,163,600 9,964,282 35,440,182 

At end of year - 3,224 1,243,619 6,036,671 62,021,242 24,656,682 44,334,425 138,295,863 

Net book value 85,000,000 1,273,348 247,479,809 4,628,170 116,678,094 20,654,399 23,249,991 498,963,811 

Freehold land, buildings and prepaid operating lease were professionally valued on 12th and 26th September 2011 respectively by Tysons Limited on the basis of 

open market value. 

Revaluation surplus on revalued assets amounting to Shs.248,046,359 have been recognised in the statement of changes in members’ funds. 





6. Property and equipment (continued) 


Library 

Furniture, books and 

Freehold Prepaid Motor fixture and management Computer 

land operating lease Building vehicles equipment films hardware Total 

Shs Shs Shs Shs Shs Shs Shs Shs 

Cost at start of year 29,348,972 - 61,053,930 11,020,980 109,056,289 34,321,709 42,865,572 287,667,452 


Additions 1,397,597 - 1,011,780 6,890,361 29,959,716 7,664,217 5,832,426 52,756,097 

Disposals - - - (4,046,500) - - - (4,046,500) 

At end of year 30,746,569 377,593 62,065,710 13,864,841 139,016,005 41,985,926 48,697,998 336,754,642 

Depreciation 

Accumulated at start of year - - 8,475,535 8,150,732 31,972,506 14,021,656 28,229,633 90,850,062 

Reclassified (note 7) 83,909 

Disposals - - - (3,273,124) - - - (3,273,124) 

Charge for the year - 3,814 1,071,804 2,246,808 13,380,437 5,592,854 6,140,510 28,436,227 

At end of year - 87,723 9,547,339 7,124,416 45,352,943 19,614,510 34,370,143 116,013,165 

Net book value 30,746,569 289,870 52,518,371 6,740,425 93,663,062 22,371,416 14,327,855 220,657,568 






7. Prepaid Operating Lease Shs Shs 

Cost 

At start of year 

Reclassified to property and equipment - 377,593 

- (377,593) 


- - 

Amortisation 

At start of year - 83,909 

Charge for the year - 

Reclassified to property and equipment - (83,909) 

At end of year - - 

Net book value - - 

Prepaid operating lease rental relate to the costs incurred to transfer plot LR 209/11320, which was donated by 

the Government of Kenya to the Institute. It is leased from the Government of Kenya for a period of 99 years 

from 1 March 1987. The use is restricted to Kenya Institute of Management. 

During the year, the pre-paid operating lease was reclassified to property, plant and equipment. As per IAS 17 

Lease, land elements can be classified as a finance lease if significant risks and rewards associated with the 

land during the lease period would have been transferred from the lessor to the lessee despite there being no 

transfer of title. 

8. Intangible assets 


Shs 

Shs 

Cost 

At start of year 12,415,311 10,277,266 

Additions 1,330,953 2,138,045 


13,746,264 12,415,311 

Amortisation 


Charge for the year 1,814,082 2,021,138 

At end of year 9,513,406 7,699,324 

Net book value 4,232,858 4,715,987 

Intangible assets consist of computer software development costs and specific computer software licenses. 

These are amortised on the reducing balance method to write them off over their expected useful lives at the rate 

of 30% p.a. 

9. Organizational Performance Index (OPI) 2011 2010 

Shs 

Shs 

At start of year 5,949,934 - 

Additions 1,199,256 5,949,934 

At end of year 7,149,190 5,949,934 

This relates to expenses incurred in the development of the OPI assessment tool, which has been patented 

by Kenya Institute of Management. OPI is an innovative excellence model to enable the development of world 

class processes and innovation capability. It is a tool that asseses the effectiveness and competitivenes of an 

organisational strategy. It does not have a definite useful life and is continually being developed and refined to 

cope with the changes in business practices. Its useful life is not dependent on the life of other assets of the 

institute. The copyright licence of this asset does not have an expiry date. 




NOTES: (CONTINUED) 

10. Investment-MUA 


Shs 

Shs 

At start of year 14,271,283 - 

Additions 59,187,297 14,271,283 

Transfer of sponsorship of MUA lecturers from other receivables (Note 11) 8,749,996 - 

At end of year 82,208,576 14,271,283 

Investments relates to expenses incurred in the establishment of Management University of Africa (MUA) located 

in South C. This has been recognised at cost. 

The company was incorporated in September 2011 and started operations in January 2012. No financial 

statements have been prepared for the subsidiary. 

The first financial statements will be prepared for the period ending 31 December 2012. Consequently, 

consolidated financial statements have not been prepared for the group as at 31st December 2011. 


11. Trade and other receivables Shs Shs 

Trade receivables 96,311,333 73,211,977 

Less: impairment provisions (21,346,552) (21,346,552) 

74,964,781 51,865,425 

Student fees receivables 190,286,688 167,418,193 

Prepayments and other receivables 48,155,556 33,860,109 

Staff receivables 15,375,239 11,892,595 

Transfer of sponsorship of lecturers to investments (Note 10) (8,749,996) - 

Movement in impairment provisions 

320,032,268 265,036,322 


Additions - 3,086,865 

At end of year 21,346,552 21,346,552 

In the opinion of the council, the carrying amounts of trade and other receivables approximate to their fair value. 

The company's credit risk arises primarily from trade receivables and student debtors. The council are of the 

opinion that the company's exposure is limited because the debt is widely held. 

The carrying amounts of the institute's trade and other receivables are all denominated in Kenya Shilling. 

Trade receivables that are aged past 90 days are considered past due. 

As of 31 December 2011, trade receivables amounting to Shs 49,085,793 were past due but not impaired. These 

relate to a number of independent customers for whom there is no recent history of default. The ageing analysis 

of these trade receivables is as follows: 

Year ended 31 December 2011 1 - 3 month 4 - 12 months Total 

Shs Shs Shs 

Trade receivables - 74,964,781 74,964,781 

Other receivables and prepayments 245,067,487 - 245,067,487 

245,067,487 74,964,781 320,032,268 





11. Trade and other receivables (continued) 

Individually impaired receivables mainly relate to customers, who are in unexpectedly difficult economic 

situations. These have been fully provided for as stated above. 

The other classes within trade and other receivables do not contain impaired assets. 

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned 

above. The institute does not hold any collateral as security. 

12. Cash and cash equivalents 


Shs 

Shs 

Cash at bank and in hand 11,478,794 48,788,734 

For the purposes of cash flow statement, 

cash and cash equivalents comprise the following: 

Cash and bank balances 11,478,794 48,788,734 

Bank overdraft (Note 15) (63,294,674) (60,716,589) 

(51,815,880) (11,927,855) 

The carrying amounts of the institute's cash and cash equivalents are all denominated in Kenya Shilling. 

The institute's cash and bank balances are held with a major Kenyan financial institution and, insofar as the 

directors are able to measure any credit risk to these assets, it is deemed to be limited. 

13 Trade and other payables 


Shs 

Shs 

Trade payables 51,496,797 28,997,281 

Other payables and accruals 76,095,528 55,143,207 

127,592,325 84,140,488 

In the opinion of the council the carrying amount of trade and other payables approximate to their fair value. 

The carrying amounts of the institute's trade and other payables are all denominated in Kenya Shilling. 

The maturity analysis of the institute's trade and other payables is as follows: 


1 to 3 month 4 to 12 months Total 

Shs Shs Shs 

Trade payables - 51,496,797 51,496,797 

Other payables and accruals 76,095,528 - 76,095,528 

76,095,528 51,496,797 127,592,325 




14. Provisions and accruals 

Charge to Restated At 

As previously changes in Balance at start of Charge for Amount end of 

Stated equity reclassified the year the year paid the year 

Shs Shs Shs Shs Shs Shs Shs 

Staff Separation Reserve 14,343,041 (14,343,041) - - - - - 

Provision for doubtful debts 21,346,552 - (21,346,552) - - - - 

Staff leave accrual 1,774,668 - - 1,774,668 1,968,371 - 3,743,039 

Members' service 8,286,578 (8,286,578) - - - - - 

45,750,839 (22,629,619) (21,346,552) 1,774,668 1,968,372 - 3,743,039 

- Staff separation reserve relates to a general provision of 1% of the gross income made to cater for any likely staff severance and retirement benefit. 

- Members' service funds relates to provision made by the management to cater for the members' training costs. 

A prior year adjustment has been for the following:- 

- The self separation reserves and members service provision of Shs 22,629,619 has been reversed and a special reserve created for the same. A liability can only be 

recognised where there is an obligation by the organisation to pay. The payments out of these two funds is soley at the discretion of the management. 

- Provision for doubtful debts has reclassified to trade and receivables. There is no liability as there is no obligation to pay. This is a provision for impairment on trade 

receivables 


15. Borrowings Shs Shs 

Current 

Bank overdraft (Note 12) 

- Cooperative Bank 11,188,264 - 

- Barclays Bank 50,946,068 60,716,589 

- Book overdraft 1,160,342 - 

Total borrowings 63,294,674 60,716,589 





The bank overdraft in the year was secured by the following: 

- A first charge of property L.R. No.KJD/KISAJU/4555 in the name of Kenya Institute of Management Limited in 

favour of Cooperative Bank of Kenya. 

- A first charge of property L.R. No 209/11320 in the name of Kenya Institute of Management Limited 

Registered and stamped to cover KShs 30m in favour of Barclays Bank of Kenya. 

Maturity based on the repayment structure of the borrowings is as follows: 

In the opinion of the council, the carrying amount of the bank overdraft approximate to the fair value. The 

effective interest rate for the year and at the year end was 24%. The facility is subject to review by the bank from 

time to time. 

16. Cash from operations 

Reconciliation of surplus to cash from operations: 


Shs 

Shs 

Surplus for the year 70,786,736 75,009,275 

Adjustments for: 

Depreciation 35,434,097 28,432,412 

Amortization of prepaid operating lease rentals 6,085 3,814 

Amortization of intangible assets 1,814,082 2,021,138 

Profit/(loss) on disposal of property, plant and equipment 20,270 (39,424) 

Cash generated from operations 108,061,270 105,427,215 

Changes in working capital 

Trade and other receivables (54,995,946) (87,456,580) 

Transfer of receivables to MUA investment (8,749,996) - 

Trade and other payables 43,329,672 12,356,113 

Provisions and accruals 

1,968,371 11,637,802 

Cash flow from operating activities 89,613,371 41,964,550 

17. Related party transactions 


Shs 

Shs 

i) Key management compensation 

Salaries and other short term benefit 26,685,000 24,540,000 

A listing of the members of the Council and the executive directors are shown on page 1 of the annual report. 

18. Contingent liabilities 

Kenya Institute of Management is a party to an industrial court case where the former Executive Director is a 

claimant for wrongful termination of employment. In the opinion of the Institute's lawyers, it is unlikely that the 

claim against the Institute will succeed. 





19. Commitments 

Contractual commitments for the acquisition of property, plant and equipment 

At the reporting date, these commitments were as follows: 2011 2010 

Shs 

Shs 

Property, plant and equipment 139,086,000 522,085,300 

Operating lease commitments - as a lessee 

The institute leases various properties under non-cancellable operating lease agreements. 

The lease terms are between 1 and 6 years and these are generally renewable at the end of the tenure of the 

lease. 

The future minimum lease payments payable under non-cancellable operating leases are as follows: 


Shs 

Shs 

Payable within one year 128,568,969 108,156,011 

Payable between second and fifth year 514,275,876 484,538,929 

Payable after five years - 29,460,973 

642,844,845 622,155,913 

20. Risk management objectives and policies 

Financial risk management 

The Institute's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. 

The Institute's overall risk management programme focuses on the unpredictability of financial markets and 

seeks to minimise potential adverse effects on the ’s financial performance. Risk management is carried out 

by the management under policies approved by the Council. Management identifies, evaluates and hedges 

financial risks in close co-operation with various departmental heads. The council provides written principles for 

overall risk management, as well as written policies covering specific areas, such as market risk, credit risk and 

investment of excess liquidity. 

(a) 

Market risk 

- Foreign exchange risk 

The Institute operates wholly within Kenya with an office in Rwanda. Its assets and liabilities are 

reported in the local currency. Although some receivables were held in foreign currency, it held no significant 

foreign currency exposure as at 31 December 2011. 

(b) 

Credit risk 

Credit risk arises from cash and cash equivalents, and deposits with banks and financial institutions, as well 

as credit exposures to customers, including outstanding receivables. 





20. Risk management objectives and policies (continued) 

Financial risk management (continued) 

(b) Credit risk (continued) 

If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, 

management assesses the credit quality of the customer, taking into account their financial position, past 

experience and other factors. 

Individual limits are set based on internal or external information in accordance with limits set by the 

management. The utilisation of credit limits is regularly monitored. 

No credit limits were exceeded during the reporting period, and management does not expect any losses 

from non-performance by these counterparties. 

None of the financial assets that are fully performing has been renegotiated in the last year. 

Exposure to this risk has been quantified in each financial asset note in the financial statements along with 

any concentration of risk. 

(c) Liquidity risk 

Cash flow forecasting is performed by the finance department of the institute by monitoring the institute’s 

liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient 

headroom on its undrawn committed borrowing facilities at all times so that the does not breach borrowing 

limits or covenants (where applicable) on any of its borrowing facilities. 

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the 

availability of funding through an adequate amount of committed credit facilities and the ability to close out 

market positions. Due to the dynamic nature of the underlying businesses, the institute's management 

maintains flexibility in funding by maintaining availability under committed credit lines. 

A disclosure of the undrawn facilities is as per Note 15. This is the institute's liquidity reserve. 

Notes 15 and 13 disclose the maturity analysis of borrowings and trade and other payables respectively. 

21. Capital management 

Internally imposed capital requirements 

The Institute's objectives when managing capital are: 

- to safeguard the entity’s ability to continue as a going concern, so that it can continue to benefit all the 

stakeholders. 

- to maintain a strong asset base to support the development of business. 

- to maintain an optimal capital structure to reduce the cost of capital. 

22. Business segments and centres 

The Institute has branches in Nairobi, Mombasa, Kisumu, Nakuru, Thika, Nyeri, Eldoret, Embu, Kericho, 

Eldama Ravine, Machakos, Kisii, Meru, Nyahururu, Naivasha, Kakamega, Narok, Kapsabet, Chuka, Nyanyuki, 

Kabarnet and Rwanda. The Institute's activities include training in management development, provision of 

membership services, management consultancy services and other sundry activities all aimed at developing good 

management practices. Training accounts for about 90% of the total income of the Institute. 

23. Incorporation 

The Kenya Institute of Management is incorporated in Kenya as a company limited by guarantee and registered 

under the Kenya Companies Act (Cap 486). 

24. Presentation currency 

The financial statements are presented in Kenya Shillings (Kshs). 




SCHEDULE OF OTHER INCOME AND EXPENDITURE 


1. OTHER INCOME Shs Shs 

Interest income 214,417 1,158,737 

(Loss)/gain on disposal of fixed assets (20,270) 39,424 

Foreign exchange gain 340,813 - 

Total other income 534,960 1,198,161 

2. ADMINISTRATIVE EXPENSES 

Employment: 

Salaries and wages 213,791,496 214,797,521 

Medical scheme 22,020,704 18,066,727 

Pension costs-Defined contribution plan 18,952,722 18,191,023 

Nightout allowances 10,932,075 8,550,677 

Casual labour and overtime 7,662,240 4,633,290 

Staff welfare and development 5,181,153 3,371,694 

Staff Insurance 3,448,794 3,517,672 

NSSF 595,800 567,400 

Bonuses 900,130 - 

Total employment costs 283,485,114 271,696,004 

Other administration expenses: 

Directors remunerations 26,685,000 24,540,000 

Traveling expenses 22,643,987 16,482,455 

Provision for doubtful debts - 3,086,865 

Cleaning services 13,201,200 11,256,264 

Postage and telephone 9,046,424 9,470,381 

General office expenses 9,921,749 9,546,097 

Bank charges and interest on overdraft 9,166,763 7,585,521 

Council expenses 7,853,298 7,897,116 

Motor vehicle expenses 2,012,860 2,655,788 

Entertainment 4,966,092 4,349,810 

Subscriptions 1,673,637 464,050 

Legal and secretarial expenses 1,661,246 631,620 

Audit fees 1,019,763 460,000 

Corporate social responsibility 923,866 1,096,522 

Student Welfare & Alumni 811,470 495,051 

Total other administration expenses 111,587,355 100,017,540 

Total administration expenses 395,072,469 371,713,544 

3. OTHER OPERATING EXPENSES 

Establishment: 

Rent and rates 128,568,969 101,048,808 

Depreciation and property, plant and equipment 35,440,181 28,432,412 

Security expenses 10,687,903 9,210,475 

Light and water 6,788,925 5,952,090 

Repairs and maintenance 4,336,276 4,032,070 

Trade license 2,453,785 1,583,597 

Property and general insurance 2,470,072 1,321,606 

Amortization of intangle assets 1,814,082 2,021,138 

Amortization of operating lease rentals - 3,814 

192,560,193 153,606,010 


Total Turnover 2007 - 2011 in Kshs millions 

1200 

1000 

800 

600 

472 

592 

793 

961 

1054 

400 

200 

0 

2007 2008 2009 2010 2011 

Total Reserves 2007-2011 in Kshs millions 

800 

729 

600 

400 

200 

177 

258 

328 

412 

0 

2007 2008 2009 2010 2011 


48 Annual Report and Audited Financial Statements 2011 

Notes

cut here 

Proxy Form 

THE 46th ANNUAL GENERAL MEETING OF THE KENYA INSTITUTE OF MANAGEMENT LIMITED 

FRIDAY JUNE 29TH 2012 

APPOINTMENT OF PROXY 

Proxies must be received by the Institute l Secretary at least 48 hours before the Annual General Meeting. 

I…………………………………………………………………………………………..being a paid up member of the Kenya 

Institute of Management Limited (Member No……………..) and being unable to attend the 46th Annual General 

Meeting in person , hereby appoint Mr./Mrs./Miss……………………………………………………………........................... 

Member number …………………………and failing him/her…………………………………………………………… 

………………………………………………………...........................Member number ………………………. to vote on 

my behalf at the 46th Annual General Meeting to be held on the Friday, June 29th , 2012 at 4.00p.m or at any 

adjournment thereof. 

SIGNED………………………………………………… DATE………………………………………… 

NOTE: 

All persons appointed as proxies must be members of the Institute in good standing and must have paid up 

the current year subscriptions. 

The proxies must be on the original form, photocopies will not be accepted. 

FOR OFFICIAL USE ONLY 

Attendance slip 

46th Annual General Meeting - Kenya Institute Of Management 

Details of Proxy 

Name…………………………………………………………………….Membership No…………………............. 

Signature………………………………………………………………. Date………………………………………… 

cut here 



Notes



KIM Head Office 

Luther Plaza, 2nd and 3rd Floor • Uhuru Highway / Nyerere Road Junction. 

P. O. Box 43706, 00100 Nairobi, Kenya • Tel: (254 020) 2445600, 2445555 

Email: kim@kim.ac.ke • Website: www.kim.ac.ke

Annual Report and Audited Financial Statements 2011 - The Kenya ...

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