Naspers Ltd Annual Report 2014

Plain-text annual report

Integrated annual report 2014 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n WE LOVE transactions Integrated an Integrated annual report 2014 NASPERS LIMITED 1 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I ABOUT this report (cid:90) SCOPE OF THIS REPORT AND ASSURANCE Our fourth integrated annual report again combines ﬁnancial and non-ﬁnancial Our South African subsidiaries publish separate integrated reports on www.media24.com and www.multichoice.co.za. information for the year from 1 April 2013 to 31 March 2014 for a fuller understanding of Group reporting standards are continually being developed to make our disclosure more our group performance. It was prepared using meaningful and measurable for stakeholders. the guidelines of the Global Reporting Initiative This report excludes ﬁnancial and non-ﬁnancial (GRI G4), recommendations of the King Report targets or forward-looking statements other on Corporate Governance in South Africa than explained below. (King III), requirements of the Companies Act The information extracted from the audited No 71 of 2008, as amended (Companies Act), Naspers Limited consolidated ﬁnancial statements and International Financial Reporting Standards for the year ended 31 March 2014 has been (IFRS). This integrated annual report includes the correctly quoted in this integrated report. Refer to page 121 for PricewaterhouseCoopers Inc.’s ﬁnancial performance of the Naspers group and (PwC) report. South African broad-based black its subsidiaries, joint ventures and associates. The economic empowerment (BBBEE) information scope of reporting on non-ﬁnancial performance was veriﬁed by Empowerlogic (MultiChoice) and is indicated in the detail of the report. AQRate Veriﬁcation Services (Media24). Forward-looking statements This report may contain forward-looking statements as deﬁned in the United States Private Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate“, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. While these forward-looking statements represent our judgements and expectations, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These include factors that could adversely affect our businesses and ﬁnancial performance. We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on any forward- looking statements in this report. 2 NASPERS LIMITED Integrated annual report 2014 ABOUT this report (continued) (cid:90) STATEMENT OF THE BOARD OF DIRECTORS ON THE INTEGRATED ANNUAL REPORT The audit committee and board reviewed the integrated annual report, and the board approved the report. The summarised annual ﬁnancial statements were prepared in accordance with International Financial Reporting Standards (IFRS) and the South African Companies Act No 71 of 2008, as amended, while the integrated annual report was prepared using the guidelines of the Global Reporting Initiative (GRI G4) and recommendations of the King Report on Corporate Governance in South Africa (King III). The integrated annual report and ﬁnancial statements fairly reﬂect, in our opinion, the true ﬁnancial position of the group at 31 March 2014 and its operations during this period as described in the report. On behalf of the board Ton Vosloo Chair Cape Town 20 June 2014 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 3 ABOUT Naspers p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 4 NASPERS LIMITED Integrated annual report 2014 (cid:90) WHAT TYPE OF BUSINESS ARE WE BUILDING? A multinational group of ecommerce and media platforms. (cid:90) WHAT SERVICE DO WE PROVIDE TO OUR USERS? Trading opportunities, entertainment, information, gaming and access to friends wherever they are. (cid:90) WHAT ARE OUR AREAS OF EXPERTISE? Our expertise lies in ecommerce, connecting people, distributing media products, creating media content and encouraging our users to do so, and in selling advertising. ABOUT Naspers (continued) OUR VALUES (cid:90) WE LOVE to innovate (cid:90) WE VALUE cultural diversity (cid:90) WE DO business with integrity and within the law (cid:90) WE LOVE transactions (cid:90) WE AIM to be useful to the communities we serve (cid:90) WE CREATE an environment for entrepreneurs to succeed G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l ABOVE ALL, WE SOLVE PROBLEMS FOR CUSTOMERS I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 5 OUR GLOBAL footprint EUROPE London Bourne End Amsterdam Hoofddorp Paris Zürich Valbonne Madrid Lisbon St Petersburg Tallinn ˉ R ga Vilnius Toru(cid:457) Pozna(cid:457) Długoł(cid:455)ka Warsaw Wroclaw Košice Nitra Budapest Kiev Zhytomyr Vinnitsia Copenhagen (cid:462)erniki Düsseldorf Jena Zlin Prague Bratislava Szentendre Ljubljana Jesenice Zug Milan Giussago Bologna Craiova Ilfov Bucharest Soﬁa NORTH AMERICA Ottawa New York Boston San Francisco Santa Clara Los Angeles Mexico City Praia Nouakchott Dakar Bakau Bissau Conakry Freetown Bogota Monrovia Kumasi Ibadan AFRICA Bamako Niamey Ouagadougou Kano Kaduna Abuja Enugu Lagos Jos Abidjan Takoradi Accra Port Harcourt Malabo Lome Cotonou Sao Tome Yaoundé Douala Bata Libreville SOUTH AMERICA Campina Lima Rio De Janeiro Sao Paulo Curitiba Joinville global GROUP OPERATIONS Buenos Aires Santiago Jamestown Pointe Noire Brazza Kinsh Luanda Lobito Lubango Ongwediva Windhoek Swakopmund G Johann Bloem Cape Town p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I INTERNET PAY TELEVISION PRINT MEDIA TECHNOLOGY We provide services in more than 130 countries. 6 NASPERS LIMITED Integrated annual report 2014 OUR GLOBAL footprint (continued) Moscow Nizhniy Novgorod ASIA Dnipropetrovsk Istanbul Nicosia Limassol Cairo Amman Tel Aviv Kuwait City Dubai Riyadh Khartoum N’Djamena Asmara Djibouti Hargeisa Addis Ababa Bangui Juba é aville hasa Kampala Kigali Bujumbura Nairobi Arusha Mombasa Zanzibar Dar Es Salaam Mahe Kitwe Lusaka Lumbumbashi Tete Lilongwe Blantyre Harare Mutare Bulawayo Maun Francistown Beira Nampula Antananarivo Almaty Tashkent Beijing Seoul Tokyo Chengdu Shanghai New Delhi Kolkata Mumbai Bangalore Changhsa Shenzhen Guangzhou Taipei Hong Kong Bangkok Ho Chi Minh City Kuala Lumpur Manila Singapore Jakarta Gaborone Maseru Pretoria nesburg mfontein George Maputo Mbabane Pietermaritzburg Durban East London Port Elizabeth Port Louis Trianon AUSTRALIA Sydney G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 7 OUR business p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I (cid:90) INTRODUCTION Naspers is a broad-based multinational media group with principal operations in internet services and ecommerce (especially online classifieds, etail and payments), pay television and print media. We operate predominantly in markets with growth potential. These include Africa, China, Latin America, Central and Eastern Europe, Russia, India, Southeast Asia and the Middle East. Most of our businesses are market leaders in their sectors. 8 NASPERS LIMITED Integrated annual report 2014 OUR business (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e Naspers has its primary listing on the Johannesburg Stock Exchange (JSE Limited) in South Africa, where it is part of the Top 10 index. It also has a Level I American Depository Receipt programme (ADR) listing on the London Stock Exchange (LSE) and trades on an over-the-counter (OTC) basis. International investors are therefore able to buy and sell Naspers securities either through the appropriate OTC market, or on the LSE or JSE (details on page 142). Integrated annual report 2014 NASPERS LIMITED 9 i F n a n c a i l I n f o r m a t i o n OUR business (continued) (cid:90) GROUP AT A GLANCE CLASSIFIEDS ETAIL MARKETPLACES ONLINE COMPARISON SHOPPING PAYMENTS GLOBAL EXPANSION C2C B2C E c o m m e r c e I n t e r n e t p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i G L O B A L P L A T F O R M O P E R A T O R *Organogram depicts major brands n o i t a m r o f n I We aim to be a strong player in the ecommerce space. Accordingly, we reorganised these businesses into global units, ie etail, classiﬁeds and payments, under dedicated management. This will increase cohesion in terms of strategy, technology, systems and talent management. Specialisation will lead to expertise and speed, which we believe will promote sustainable advantages. 10 NASPERS LIMITED Integrated annual report 2014 OUR business (continued) ENRICHING LIVES AFRICA DTT DTH L i s t e d P a y t e l e v i s i o n P r i n t G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 11 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I OUR business (continued) (cid:90) INTERNET Our internet assets are spread across Eastern and Central Europe, China, Russia, Latin America, India, Southeast Asia, Africa and the Middle East. We offer a broad range of services, but our focus is on ecommerce. Our activities are segmented within our internet operations as: ▶ Ecommerce platforms • Consumer-to-consumer (C2C) –(cid:3)classiﬁeds • Business-to-consumer (B2C) –(cid:3)etail (general and fashion etail) –(cid:3)marketplaces –(cid:3)online comparison shopping –(cid:3)payments, and –(cid:3)new areas of opportunity such as travel and real estate. ▶ Listed investments • Tencent • Mail.ru. Over recent years we have sharpened our focus and expanded our footprint organically and through acquisitions. We believe ecommerce will be the largest segment of the internet in most global markets in years to come. The growth in ecommerce is supported by wider access to the internet through the proliferation of cheap smartphones. We are expanding across the value chain, increasing the number of products and services we offer customers. Mobile internet helps us increase scale and reach. Smartphone shipments worldwide by economic designation (cid:81) Developed (cid:81) Emerging 2010 2011 2012 2013E* 2014E* 2015E* 2016E* 2017E* Sources: IDC, Arasan and Naspers *Estimated % of smartphone shipments worldwide by price band million 1 600 1 400 1 200 1 000 800 600 400 200 0 % 100 80 60 40 20 0 2009 2010 (cid:81) Low (US$0 – US$199) Sources: ABI Research, CNET and Naspers *Estimated 2011 2012 2013E* (cid:81) Mid (US$200 – US$399) 2014E* 2015E* 2016E* 2017E* 2018E* (cid:81) High (US$400+) 12 NASPERS LIMITED Integrated annual report 2014 OUR business (continued) CLASSIFIEDS ETAIL MARKETPLACES ONLINE COMPARISON SHOPPING PAYMENTS GLOBAL EXPANSION C2C B2C E c o m m e r c e L i s t e d I n t e r n e t (cid:90) ECOMMERCE SECTOR BY CATEGORY are key to driving returns. Revenues from Our ecommerce categories: ▶ Etail: We are building B2C enterprises that help consumers purchase goods and services through online platforms. The business model requires scale. In several markets we hold inventory for sale in our own warehouses and fulﬁlment centres and deliver items to the end consumer via owned or third-party distribution systems. Tight working capital management and good merchandising etail platforms are derived from the sale of products and goods held in inventory, as well as those on consignment. In other markets we facilitate third- party B2C and C2C transactions through proprietary platforms. In these cases we offer sales management tools and trafﬁc generation, but do not hold inventory directly. Revenues from these marketplaces are derived from commission charged on successful transactions, as well as listing and promotional fees. Integrated annual report 2014 NASPERS LIMITED 13 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n OUR business (continued) We also offer online price-comparison through penetration and engagement. The services where consumers can obtain business model requires signiﬁcant upfront information on the speciﬁcations and investment to build market leadership, with pricing of products offered by multiple monetisation only beginning later. vendors. We receive a fee from vendors for leads generated and/or transactions ▶ Payments: Under the PayU brand, we completed. offer solutions that enable safe and easy payment for goods and services bought ▶ Classiﬁeds: We operate online classiﬁeds online. These are available to consumers platforms that list items for sale. We create on our own ecommerce platforms, as well local online exchanges between buyers and as ecommerce platforms operated by third sellers. Revenues from classiﬁeds include parties. We differentiate our payments listing and promotional fees. solutions by offering a broad range of Given the local nature of this service, local payment options to our customers regional teams drive brand awareness, and good conversion of interest to sales product development and customer (moving from online browsing to online interaction. We focus on liquidity purchase) for our merchants. ▶ Global expansion: We invest in emerging opportunities, such as online travel in India, property verticals and mobile-only services such as food delivery, children’s entertainment content and other mobile value-added services. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 14 NASPERS LIMITED Integrated annual report 2014 OUR business (continued) More than 8m pay-television households in 50 African countries (cid:90) PAY TELEVISION We operate pay-television subscriber platforms in sub-Saharan Africa. Our strategy is to deliver quality entertainment “anytime, anywhere and ▶ MWEB: Internet service provider in South Africa. ▶ Irdeto: Global provider of content security management and delivery for on any device”. Various technologies are used pay-media companies. to offer direct-to-home (DTH) satellite, digital terrestrial television (DTT), online and mobile services. We also develop content protection and access-management technologies for internet, pay-television and mobile platforms. (cid:90) PRINT MEDIA This segment comprises online news, magazines, newspapers, printing, distribution and book- publishing businesses in South Africa, plus some minority print media investments in Brazil and Main operations include: ▶ MultiChoice: Leading provider of pay- China. Main operations include: ▶ Media24: Leading media group in Africa: television services, including mobile, online news, newspapers, magazines under the DStv and GOtv brands, serving and digital publishing, as well as printing, over 8m households in 50 African distribution, book publishing and countries. ecommerce. Most of these businesses are ▶ GOtv: Leading provider of DTT pay- market leaders. television services in Africa with operations ▶ 24.com: Leading digital publisher in in eight countries and 92 cities. ▶ M-Net: General channel provider, Africa. ▶ Paarl Media: Leading print and related sourcing content from international services provider, focused on educational content owners and commissioning local and retail markets in Africa. productions. ▶ Book publishing: Market leaders ▶ SuperSport: Premier funder and in some sectors include Via Afrika broadcaster of sporting content across Publishers, Jonathan Ball Publishers and the African continent. NB Publishers. Integrated annual report 2014 NASPERS LIMITED 15 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I Trading profit(1) 2010 2011 2012 2013 2014 Free cash flow WHAT WE achieved in 2014 Revenue(1) 2010 2011 2012 2013 2014 Core HEPS R’m 120 000 100 000 80 000 60 000 40 000 20 000 0 cents 2 300 1 800 1 300 2010 2011 2012 2013 2014 800 2010 2011 2012 2013 (2) 2014 Development spend Dividend per share R’m 10 000 8 000 6 000 4 000 2 000 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 (1)Including associates and joint ventures on a proportionate basis (2) We report a free cash outﬂow in the current year of R349m largely due to capital expenditure in building the DTT network and accelerated development spend. 16 NASPERS LIMITED Integrated annual report 2014 R’m 20 000 15 000 10 000 5 000 0 R’m 5 000 4 000 3 000 2 000 1 000 0 (1 000) cents 500 400 300 200 100 0 (cid:90) USERS AND SERVICES ▶ Mobile internet became a primary battleground in all internet service categories in the past year. ▶ With its Weixin platform, Tencent has OPERATIONAL snapshot ▶ Our news and content businesses are investing in digital, particularly mobile delivery, while managing costs in a challenging environment. given Chinese consumers an innovative, integrated mobile platform to chat, socialise, play, transact and pay. (cid:90) OUR PEOPLE ▶ We reorganised the ecommerce businesses along functional rather than regional lines. ▶ Online games are fast embracing tablets This will streamline operations and enhance and mobile devices; user numbers and speed. engagement are rising rapidly. ▶ We attracted top-quality entrepreneurs and ▶ Etail and classiﬁeds are winning in a rapidly engineers to the group. evolving ecommerce landscape. Customers’ ▶ We reﬁned our remuneration systems to expectations are developing and, with that, reward progress and align stakeholders’ the need to reshape business models. ▶ We continued to invest in our classiﬁed interests. ▶ We invested more in training and people segment and expanded to a number of development. new markets, providing an intuitive mobile platform for consumers to transact. ▶ Flipkart and Souq are developing their product (cid:90) SOCIO-ECONOMIC DEVELOPMENT ▶ We are now the biggest funder of sport offering and services, adapting for local in Africa, supporting sport development market conditions and introducing new users at all levels. We invest in local soccer to online etail in India and the Middle East. leagues, developing the skills of local sport ▶ By consolidating our payment services, administrators and production crews, buyers and sellers will enjoy global payment improving facilities and assisting sport solutions under the PayU brand. federations to obtain sponsors. ▶ We added subscribers in our pay-television ▶ Media24 achieved a level 3 broad-based business in Africa, and are expanding our black economic empowerment (BBBEE) reach by DTT. rating with 137,5% recognition on BEE ▶ Our personal video recorder (PVR) spend, and scored full points on the technology overcomes the challenge of low ownership, socio-economic development bandwidth in Africa while providing access and enterprise development elements. to our video content on tablets, mobile ▶ Allegro’s All For Planet Foundation, together devices and computers. with Pozna(cid:457) residents in Poland, built an ▶ We added 22 new channels for our pay- ECO Christmas tree from thousands of television subscribers and are investing in plastic bottles (made from polyethylene local production and content across several terephthalate or PET) destined for disposal. African markets. Integrated annual report 2014 NASPERS LIMITED 17 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CHAIR’S report Results for the review period conﬁrm the shift in our group’s business mix towards ecommerce, with half our revenue derived from international internet operations. (cid:90)(cid:3)TON VOSLOO (cid:90) OVERVIEW We are pleased to present our integrated developing markets that we believe present above-average opportunities. The results of this annual report for the year to 31 March 2014 to focus are evident in the increased traction in our stakeholders. This report was prepared using the ecommerce activities, which attracted around recommendations of King III, Global Reporting 73% of our R7,7bn development spend. Initiative (GRI G4) guidelines and global best On a 10-year view, the group has grown practice, where appropriate. both segment revenues and trading proﬁts at a Results for the review period conﬁrm the shift compounded annual rate of around 25%. in our group’s business mix towards ecommerce, The internet segment remains our area with half our revenue derived from international of fastest growth. Compared to under R1bn internet operations. Given the early stage of many of these operations and continued a decade ago, segment revenues grew to R57bn, with segment trading proﬁts of R6,6bn. investment in their expansion, our pay-television Segment revenues and trading proﬁt for the businesses still account for the largest part of our internet, which includes our share of Tencent, trading proﬁt. Naspers expanded its businesses Mail.ru, Avito, Flipkart and other internet and geographic coverage during the review associate investments, again exceeded those of period, posting growth in segment revenues* of pay television during the reporting period. 37% and consolidated revenues of 26%. Core headline earnings were marginally up year on year, reﬂecting the fact that we are Margins in pay television were slightly lower due to increased investment in local content and DTT services, plus a volatile rand. Print 18 NASPERS LIMITED Integrated annual report 2014 CHAIR’S report (continued) businesses recorded lower earnings in very the group’s business with integrity, applying difﬁcult trading conditions. appropriate corporate governance policies Looking ahead, we plan to build sustainable and principles. Where Naspers subsidiaries are positions in growing markets. We focus governed by independent boards of directors, on local language and culture, creating an these apply suitable governance practices and entrepreneurial spirit and a quality workforce. their committees are mandated to comply with (cid:90) GOVERNANCE As a multinational group, our risks differ by relevant requirements. Naspers has a legal compliance programme, detailed on page 91. The holding company board is informed jurisdiction as detailed in the risk management of subsidiary activities via a disciplined section of this report. The board conducts reporting structure. Strategies and business Segment revenue* 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *Segment revenue includes our consolidated subsidiaries plus a proportionate consolidation of associated companies and joint ventures. Segment trading profit* 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *Segment trading proﬁt includes our consolidated subsidiaries plus a proportionate consolidation of associated companies and joint ventures. R’m 120 000 100 000 80 000 60 000 40 000 20 000 0 R’m 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 Integrated annual report 2014 NASPERS LIMITED 19 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n CHAIR’S report (continued) plans for ﬁnancial and non-ﬁnancial elements of operations are regularly reviewed. Management’s remuneration is based on performance against targets (ﬁnancial and operational) and linked to strategic objectives. We continually evaluate areas where governance at corporate and subsidiary level can be improved. This is detailed in our application of King III in the governance environment, however, requires sound frameworks of Naspers, MultiChoice and planning and agility. Media24 on page 90. During the review period, the use of (cid:90) ENVIRONMENT IN WHICH WE OPERATE Globally, economic growth was variable internet services continued to expand. Worldwide, the internet population is now around 3bn – almost half the total global population. The growth of mobile devices p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I over the past year, and each country and is an important trend. In some of our business in our portfolio has its own unique businesses, more than 50% of total trafﬁc challenges. However, a beneﬁt of operating in now comes from devices such as cellphones multiple countries and across more than one and tablets. technology is that the aggregate risk proﬁle While internet access in various forms is diminished. Operating in such a dynamic is creating opportunities for our internet 20 NASPERS LIMITED Integrated annual report 2014 CHAIR’S report (continued) ventures, it also requires pay-television businesses to adapt. The greatest long-term (cid:90) MANAGING SUSTAINABILITY Naspers invests signiﬁcantly to provide threat here is from online services. We are useful products and services to customers creating on-demand services, accessible on and a sustainable return to investors. as many devices as possible. PVRs make However, because we clearly understand our on-demand television a reality and, in sub- Saharan Africa, the advent of DTT networks obligations as a corporate citizen, we: ▶ invest in the countries where we operate is addressing a mass market that cannot by providing work for local suppliers, afford satellite pay television. employing people and paying government Ecommerce is taking market share from taxes, levies and related fees bricks-and-mortar shops. New products such as mobile services, mapping, fashion sales, and barcode/product identiﬁcation, mobile payments and services and price comparison are increasing. Over the next decade ecommerce is expected to emerge as the largest section of the internet in most countries around the world. The broader regulatory environment continues to evolve. In Africa, countries are strengthening broadcasting regulation and new competition legislation is being introduced. Elsewhere in the world, internet regulation is also growing. Naspers has the required licences to provide services, subject to conditions that may change over time. Equally, our newspaper and magazine businesses are subject to some regulatory impacts. Naspers’s two main South African units, MultiChoice and Media24, are complying with domestic black economic empowerment requirements. Integrated annual report 2014 NASPERS LIMITED 21 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CHAIR’S report (continued) ▶ aim to follow the rules, and cooperate The Naspers board determines strategy and and interact with regulatory bodies is ultimately responsible for overseeing our ▶ prioritise our people – we want to attract, group’s performance. Management teams train and keep the best across our businesses implement these ▶ understand that we operate in strategies, guided by the group’s code of communities with varying challenges. business ethics and conduct. Each business aims to make a difference Our core competencies and values guide to its community by contributing in our sustainable development framework, line with its strengths. Some of our underpinned by an understanding of the initiatives focus on education, skills concerns of material stakeholders. These tie development, entrepreneurial spirit, into our risk management processes, which community outreach and environmental integrate ﬁnancial and non-ﬁnancial risk sustainability. Most are implemented in identiﬁcation, management and monitoring partnership with government, for the most signiﬁcant subsidiaries. communities or local organisations, and ▶ respect the natural environment in which The board is responsible for the integrity of our integrated reporting. It tasked the we operate and limit our impact as far as audit and risk committees to oversee possible. sustainability issues in the integrated 22 NASPERS LIMITED Integrated annual report 2014 CHAIR’S report (continued) Please see naspers.org, on our website which captures our combined social awareness and projects that address social and environmental issues. annual report and to assist the board in its at the annual general meeting on 29 August review by ensuring information is reliable and 2014, dividends will be payable to comparable to ﬁnancial results. shareholders recorded in the books on Friday By using our expertise, we are addressing 19 September 2014. It will be paid on Monday challenges such as education, skills 22 September 2014. The last date to trade development and environmental sustainability. cum dividend will be Friday 12 September Our aim is to improve the living conditions of our employees, their families and the communities in which we operate, ultimately balancing proﬁt, people and planet. For more details, please see naspers.org, which captures our combined social awareness and projects that address social and environmental issues. In time naspers.org will demonstrate our group’s impact on society. (cid:90) DIVIDEND The board recommends that the annual gross dividend be increased 10% to 425 cents (previously 385 cents) per listed N ordinary share, and 85 cents (previously 77 cents) per unlisted A ordinary share. If the proposal is conﬁrmed by shareholders Integrated annual report 2014 NASPERS LIMITED 23 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CHAIR’S report (continued) Dividend increased by 10% to 425 cents 2014 (shares therefore to trade ex dividend market capitalisation and large overlaps from Monday 15 September 2014). Share developed between the MIH and Naspers certiﬁcates may not be dematerialised or boards. We decided to reconﬁgure the rematerialised between 15 September 2014 Naspers board. As part of this process, after and 19 September 2014, both dates inclusive. many years of excellent service on the board, The dividend will be declared from income Messrs Lourens Jonker and Neil van Heerden reserves. No STC credits are available for and Prof Hein Willemse stepped down this declaration. The dividend will therefore and Messrs Craig Enenstein, Don Eriksson, be subject to the dividend tax rate of 15%, Roberto Oliveira de Lima and Yuanhe Ma were yielding a net dividend of 361,25 cents per appointed independent non-executive directors listed N ordinary share and 72,25 cents per of Naspers, and Mr Cobus Stofberg was unlisted A ordinary share to those shareholders appointed a non-executive director, effective not exempt from paying dividend tax. Such 16 October 2013. On 21 November 2013 dividend tax will amount to 63,75 cents per Mr Lambert Retief (non-executive) stepped listed N ordinary share and 12,75 cents per down from the board. On 22 November 2013 unlisted A ordinary share. The issued ordinary Mr Nolo Letele was appointed a non-executive share capital as at 20 June 2014 was director. 416 812 759 N ordinary shares and On 30 June 2014 Mr Steve Pacak (executive 712 131 A ordinary shares. The company’s director and ﬁnancial director) will retire as income tax reference number is 9550138714. ﬁnancial director, but will remain on the board (cid:90) DIRECTORS During the ﬁnancial year several changes to the as an alternate non-executive director. Mr Basil Sgourdos, presently Naspers’s head of ﬁnance, will succeed him as ﬁnancial director. board were announced. Naspers’s subsidiary Subsequent to the ﬁnancial year end, MIH Holdings Proprietary Limited (MIH) had Mr Mark Sorour, head of mergers and grown to comprise the vast majority of our 24 NASPERS LIMITED Integrated annual report 2014 CHAIR’S report (continued) acquisitions, was appointed as alternate director ecommerce experience in our key growth ﬁeld is to an executive director of Naspers with effect expected to help us become one of the leading from 16 April 2014. global players in this segment. In terms of the company’s memorandum Koos Bekker stood down from the Naspers of incorporation, one third of non-executive board for a year from 1 April 2014 to enable directors retire annually and reappointment is Bob to settle in with both Naspers’s top not automatic. Prof Rachel Jafta, Prof Debra management and the board, which he joined as Meyer and Mr Boetie van Zyl retire by rotation at an executive director on that day. Koos intends the annual general meeting but, being eligible, to travel widely and conduct some research. offer themselves for re-election. In April 2015 I intend to step down as chair of At the annual general meeting the board, when Koos will succeed me as non- shareholders will be asked to conﬁrm these executive chair. appointments and to consider the re-election Balancing capable, experienced management of directors retiring by rotation (notice on with fresh talent has long been a hallmark of page 141). our group and we look forward to a seamless Members of the audit committee are transition to our new management team. Messrs Boetie van Zyl and Ben van der Ross I thank my fellow board members for their and Adv Francine-Ann du Plessis. The board guidance and support in another successful recommends shareholders reappoint them as year. Our board appreciates the commitment of audit committee members and approve that our management teams and employees around Mr Don Eriksson, previously chair of the MIH the world. In particular, we pay tribute to our Holdings Proprietary Limited audit committee, outgoing chief executive, Koos Bekker, for his be appointed as a new member of this exceptional contribution over 29 years. G r o u p P e r f o r m a n c e G o v e r n a n c e committee. In compliance with the Companies Act, shareholders will be asked to consider these proposals at the annual general meeting. The abridged curricula vitae of all directors appear from pages 96 to 99. In February 2014 the board announced that Mr Bob van Dijk, previously Naspers’s most senior ecommerce chief, would succeed Mr Koos Bekker as chief executive of our group. With an MSc in econometrics from Erasmus University Rotterdam, and an MBA from Insead in France, Bob’s extensive international Ton Vosloo Chair 20 June 2014 Integrated annual report 2014 NASPERS LIMITED 25 i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CHIEF executive’s report Bob to be shot Understanding how to identify consumer needs, and develop appropriate solutions, remains central to our growth. (cid:90)(cid:3)BOB VAN DIJK (cid:90) OVERVIEW Our strategy is to maximise the potential of existing businesses and invest in new businesses for the long term, rather than focusing on short-term earnings and cash ﬂows. The beneﬁts of this approach are evident in our internet segment, which a basket of the main currencies in which we operate. The internet segment remains a driver of turnover growth, with pay television also doing well. In the 2013 ﬁnancial year our group reached a milestone when segment revenues from our internet units, including our share in equity-accounted investments, delivered 65% growth in segment revenues. passed those of pay television. In the ﬁnancial Our sustainability rests on our ability to entertain, inform and connect people, provide year 2014, 54% of total segment revenues were derived from internet operations. We ecommerce services, distribute media products invested R7,7bn in developing our ecommerce and sell advertising. Our products and services platforms and rolling out DTT services across improve people’s lives in practical ways. Africa. Understanding how to identify consumer needs and develop appropriate solutions, As a result, core headline earnings per N ordinary share were marginally down therefore remain central to our growth. at R21,81. (cid:90) PERFORMANCE IN CONTEXT The group generated consolidated revenue growth of 26% to R62,7bn. The rand depreciated by 19% over the period against The main developments in our business units are summarised below: ▶ Internet: This segment includes our ecommerce activities and listed investments. Segment revenues grew 26 NASPERS LIMITED Integrated annual report 2014 CHIEF executive’s report (continued) strongly at 65%. Both Tencent and Mail.ru continent increased by a record 1,3m performed well, expanding earnings in households to pass the 8m mark. local currency by 19% and 36% We are concentrating on the roll-out of respectively. Our ecommerce segment DTT services, we branded GOtv, and now recorded a 64% increase in revenue, but operate DTT services in eight countries. a trading loss of R5,3bn, given its early We also made progress in developing stage of development. Organic growth was online pay-television products and local bolstered by acquisitions such as Flipkart, content. Despite higher development redBus and Souq. spend in these ﬁelds, trading margins Over the past 10 years our fastest- were largely stable. Competitive pressures growing segment has added revenues at and regulatory scrutiny continue to 51% per annum (mainly from Allegro, intensify. Buscapé, our etail businesses, Tencent ▶ Print media: Considering the challenges, and Mail.ru). The group aims to capitalise Media24 had a reasonable year with on the shift to mobile devices. ▶ Pay television: Our pay-television good performances from Paarl Media, magazines and schoolbook publishing. business maintained a solid performance Revenues and proﬁts remain under in revenues and trading proﬁts and pressure and cost cuts were required. Abril recorded strong subscription sales. The performed poorly, as revenues declined net subscriber base across the African and restructuring was not fast enough. G r o u p P e r f o r m a n c e G o v e r n a n c e Pay-television households March 2010 March 2011 March 2012 March 2013 March 2014 (cid:81) South Africa (cid:81) Sub-Saharan Africa ‘000 9 000 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 Integrated annual report 2014 NASPERS LIMITED 27 i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CHIEF executive’s report (continued) (cid:90) SIGNIFICANT ACQUISITIONS The group invested R4,4bn during the year on acquisitions in the ecommerce sector and disposed of some smaller businesses. Key transactions included: ▶ 100% in redBus, an Indian online ticketing platform for R1bn (US$102m) ▶ acquiring an additional 8,6% in Flipkart, a leading ecommerce site in India, for R1 376m (US$140m). In May 2014 we invested a further R543m (US$52,5m) in cash in Flipkart. The group now has a fully diluted 17,7% interest in Flipkart ▶ increasing its stake in Souq Group in the Middle East to over 47% for R1 207m (US$116m) During the year we conducted around 300 meetings and teleconference calls with both equity and bond investors. Following the release of results, we conducted non-deal roadshows in South Africa, the UK and ▶ increasing its stake by 28,6% in USA. We also attended a number of conferences. Dubizzle, an online classiﬁeds In July 2013 we issued a new US$1bn platform centred on the UAE, for international bond after successful roadshows in R477m (US$49m) the USA, UK and Asia. ▶ 30,7% in early-stage etailer Esky.ru in Russia for R200m (US$18,6m), and ▶ 26% in SimilarWeb for R155m (US$14,5m). (cid:90) INVESTOR ENGAGEMENT Our aim is to provide timely, transparent and relevant information. This helps the investing public to understand our business, governance, ﬁnancial performance and prospects in a competitive environment. We disseminate information through a broad range of channels, as detailed on page 10. (cid:90) INVESTING FOR GROWTH Naspers has a long history of developing media businesses in growth markets. We innovate and experiment for insight on consumer needs. We then build great consumer products, using the latest technology. Finally, we scale with strong local teams, eventually driving monetisation. Mobile is transforming emerging markets faster than is the case in mature markets. For Naspers this means we are rapidly changing to become a mobile services company. Similarly, 28 NASPERS LIMITED Integrated annual report 2014 CHIEF executive’s report (continued) classiﬁeds and etail are transforming ecommerce and we are investing to meet this demand. Capitalising on shifts in communications, (cid:90) PEOPLE Across the group, skills development secures our competitive edge in an industry that needs Tencent’s WeChat is shaping the way customers rapid adaptation. Equally, in a diverse, global interact with each other and with businesses. In group, management talent is key. Given the our pay-television business, platform shifts occur nature of our business, our sustainability is from DTT and over-the-counter (OTT) services to video-on-demand (VOD). Our top priority is to give customers what they want. underpinned by entrepreneurs. Our aim is to attract and retain the best talent, particularly the young engineers who drive our internet This changing environment offers Naspers operations. In addition, a competitive major opportunities. The combination of our markets (large, rapid growth) and ecommerce, content delivery and communications transformation offers growth potential. At the same time, our large, proﬁtable remuneration mix of ﬁxed salary, short-term bonuses based on speciﬁc objectives, and share-based incentive schemes focus our people on building shareholder value for the long term (detailed on pages 122 to 148 of the businesses have growth upside at strong margins annual ﬁnancial statements). Around the world our people have proven their resolve and innovation. The support and guidance of the Naspers board, as well as the boards of our subsidiaries, associates and joint ventures, are integral to our success. These contributions are deeply appreciated. Bob van Dijk Chief executive 20 June 2014 (Tencent, Mail.ru, direct-to-home (DTH) pay television and marketplaces). We are playing to win and are investing in proven business models that can become strong cash generators: classiﬁeds, etail, DTT and payments. In addition, we invest in new opportunities, such as online travel in India and mobile-only services such as food delivery, children’s entertainment content and other mobile value-added services. This requires that we transform to being an operator and build global scale across all platforms. We are actively pursuing top- and bottom-line efﬁciencies to reinvest in the growth of core models. We believe this strategy is sound – our aim is to deliver value to our shareholders over the medium to longer term and to contribute to the communities in which we operate. Integrated annual report 2014 NASPERS LIMITED 29 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n OUR strategy We are building a multinational group of ecommerce and media platforms to give users trading opportunities, entertainment, information, gaming and access to friends, wherever our users may be. Our expertise lies in ecommerce, connecting people, distributing media products, creating media content ourselves and encouraging our users to do so, plus selling advertising. We like to manage paying subscribers. We also want to be useful in the communities we serve. Expand print media; Online content Use expertise; Benefit local communities Expand pay-TV base; Local approach Increase users; Deepen engagement ACHIEVING OUR GOALS Sustain organic growth; Some investments Attract best talent p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I We are not a creative entity (eg a movie studio or advertising agency), an IT business or a telecommunications company. We develop solutions for the trading, media, entertainment and communication needs of individuals. We understand how to read technology trends, identify consumer needs and develop solutions to their problems, collect fees, sell advertising, write code and partner with entrepreneurs. 30 NASPERS LIMITED Integrated annual report 2014 OUR strategy (continued) We aspire to be strong operators in the ecommerce space. Accordingly, we are reorganising our businesses into global units (eg internet, etail, pay television and print media) under dedicated management. These units in turn invest to increase cohesion in terms of strategy, technology, systems and talent management. Specialisation will lead to expertise, innovation and speed, which we believe will lead to sustainable advantages in the long run. (cid:90) ACHIEVING OUR STRATEGIC GOALS HOW WE DO THIS EXAMPLES OF STRATEGY Sustain organic growth of the business, combined with some investments Focus on markets with higher growth potential, where we can achieve sustainable positions. Over the past year these have been Latin America, Central and Eastern Europe, Africa and the Middle East, India and Southeast Asia. We have made a number of investments in businesses such as Flipkart, Souq and redBus. Increase the number of users accessing our internet products and services, and deepen their engagement with our group We are growing our core internet business and broadening our base by rolling out new services, efﬁcient marketing and giving customers what they want, with an increased focus on mobile. Expand the pay- television subscriber base – maintain a local approach and deploy innovative technology MultiChoice’s African DStv platform now delivers entertainment to 8m households, up 20% year on year. The Compact bouquet (our middle-market product), which targets the emerging market, has grown steadily and our GOtv service is gaining traction. We have increased our investment in own-produced local content. Attract the best talent, including entrepreneurs and engineers, and train and develop employees Bursaries valued at R4,5m were awarded by MultiChoice during the year. With 219 bursaries awarded in 2013, total bursaries since 2008 exceed 780. Introduced the Naspers Academy in 2013 to take people to the next level. We introduced segment speciﬁc conferences and training for our ecommerce segments. Expand the reach of our print media businesses by offering online content and ecommerce services Online content is now available for many of our newspapers and magazines including Die Burger, Beeld, SARIE, SARIE Winkel and City Press. Media24’s efashion business Spree supplemented women’s apparel with new categories such as home décor and a children’s department. Use our expertise and resources to beneﬁt local communities where we operate These are illustrated in case studies in this report and on our sustainability platform naspers.org. Integrated annual report 2014 NASPERS LIMITED 31 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I OUR strategy (continued) We continually seek opportunities to beneﬁt from these insights within the constraints of our expertise and funds. For a fuller understanding of our group in context, we summarise key indicators in our major operating regions below. POPULATION (m) INTERNET USERS (m) 1 407 1 367 212 1 255 822 573 141 408 364 618 95 187 249 268 81 338 % 26 45 45 15 30 47 57 83 Africa and Middle East China Eastern Europe India Southeast Asia Latin America Russia Western Europe MOBILE POPULATION (m) 1 160 1 347 PPP* GDP (US$BN) GDP PER CAPITA (US$) 8 564 6 087 14 625 10 699 % 82 99 286 >100 3 077 14 514 953 616 550 76 75 96 5 425 4 323 4 729 8 253 7 613 13 286 237 >100 2 629 18 645 540 >100 15 285 37 463 *Purchasing power parity. Sources: IMF, BOA Merrill Lynch, CNNIC (cid:90) LOOKING AHEAD Our strategy remains unchanged – to continue to focus on internet (speciﬁcally ecommerce) and pay television (DTT and online) to create value for our shareholders over the medium to longer term. While we plan to expand our business mainly through organic growth, we are also likely to strengthen our position with appropriate acquisitions, subject to strict and robust evaluation processes. 32 NASPERS LIMITED Integrated annual report 2014 OUR strategy (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 33 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I HOW WE manage risk Risk management is integral in the day-to-day operations of our businesses. As a multinational multimedia group with activities in over 130 countries, the group is exposed to a wide range of risks that may have serious consequences. The diversified nature of the group spreads this exposure, although it does add complexity. (cid:90) RISK PHILOSOPHY Naspers identiﬁes and manages risk in line (cid:90) RISK POLICY The group’s risk proﬁle is based on with international best corporate governance a formal and planned approach to practice and applies the relevant rules and risk management. Risk identiﬁcation, regulations. management and reporting are embedded The board is responsible for the governance in business activities and processes. of risk and is satisﬁed with the effectiveness The group risk policy applies to all of the risk management process. Risk operations where Naspers has more than management plans and processes are 50% ownership and management control. presented, discussed and approved at risk The risk policy applies to risks the committee meetings. Registers of signiﬁcant group faces in executing its strategy, risks facing the group are discussed, along operations, reporting and compliance with management actions to control these activities. The policy is reviewed annually. risks within board-approved ranges of Some group companies have speciﬁc tolerance. risk management functions and the The diversiﬁed nature of the group helps Naspers risk committee is responsible spread risk, particularly in terms of global for reviewing these. political and economic instability, market Risk management support advises on, development, regulatory matters and currency formulates, oversees and manages the ﬂuctuations. Identifying risk and developing risk management system and monitors plans to manage risks are part of each unit’s the group’s risk proﬁle, ensuring major business plan. These are assessed annually by risks are identiﬁed and reported at the the board. appropriate level in the group. 34 NASPERS LIMITED Integrated annual report 2014 HOW WE manage risk (continued) (cid:90) RISK FRAMEWORK The Naspers enterprise-wide risk management (ERM) framework is designed to ensure signiﬁcant risks and related incidents are identiﬁed, documented, managed, monitored and reported in a consistent and structured manner across the group. It is modelled on the COSO ERM1 framework, as well as the COBIT2 framework for information technology. E D T R O R E P Strategic and operational M O NIT O R E D Regulatory and compliance Entity level Business unit I D E N T I F I E D Human capital Subsidiary Financial and reporting D E G A N A M Health and safety DOCUMEN T E D G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l 1 COSO ERM: The Committee of the Sponsoring Organisations of the Treadway Commission Framework for Enterprise-wide Risk Management 2 COBIT: Internationally accepted framework for IT governance Integrated annual report 2014 NASPERS LIMITED 35 I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I HOW WE manage risk (continued) (cid:90) MATERIAL ISSUES AND HOW WE MANAGE THESE Certain material risks are outside our control, and other factors, besides those listed, may affect the overall performance of the business. Despite our structured approach to risk identiﬁcation, some risks may currently be unknown and other risks, regarded as immaterial, may become material. At present the following material group risks are evident among a wide range of potential exposures: ISSUE HOW WE MANAGE THE ISSUE Regulatory and compliance issues Our businesses, spread over more A regulatory and legal compliance programme is in than 130 countries, are subject place. to extensive regulations and Regular reviews of the applicable laws and regulations compliance obligations that may are undertaken by in-country legal resources. affect the group’s operations. Experienced regulatory teams participate in and monitor the applicable regulatory landscapes. Communication of regulatory issues to decision-makers. Proactive interaction with government agencies and regulators. Legal or compliance-related risks are managed in consultation with external lawyers and specialist advisers within the speciﬁc legal jurisdictions. Increased scrutiny by the South Experts including local and international lawyers and African Competition Commission. economists have been appointed to assist the group in responding to the commission. The nature of some of our Maintain an adequate system of internal control. operations and the territories Whistle-blower lines are in place. in which they operate, lend Strategic and themselves to a higher fraud and operational corruption risk. issues Print media is a declining business. Convert print products to online offerings. Manage costs. South Africa’s exchange control Naspers complies with the South African Reserve Bank’s regulations require approval for regulations and with conditions under which approval transactions outside the common for transactions outside the common monetary area is monetary area. If approvals are granted. not received, this could hinder our ability to make foreign investments. 36 NASPERS LIMITED Integrated annual report 2014 HOW WE manage risk (continued) ISSUE HOW WE MANAGE THE ISSUE The Naspers group has a A top-down approach to governance ensures policies decentralised operational control are aligned between businesses and subsidiaries where environment, while operating we have management control. in entrepreneurial, international Governance documents and processes are reviewed by businesses. respective boards, company secretaries and Naspers’s internal control oversight forum. Strategic and operational issues (continued) The geographical spread of In exercising the business strategy, we perform regular operations exposes us to a country and business reviews. variety of economic, social and Leading advisers are used for reviewing markets or political risks. Certain countries businesses, including due diligence processes. in which we operate, may face Our broad spread of assets and markets mitigates our difﬁculties due to currency susceptibility to negative movements in a single market ﬂuctuations, ﬂuctuating interest or segment. rates, bankruptcies, stock market declines, terrorist attacks, corruption, political instability, threats and ransom, epidemics and other factors that may materially harm our businesses. Recently, uncertainty has risen due the volatile situation caused by events in Russia/Ukraine. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l We do not exercise control over The group is represented on the boards and audit our minority investments and committees of most of these entities and has a voice in the value of our stake in such material decisions. investments could decrease if The group builds strong relationships with management these businesses adopt strategies and partners. or take actions contrary to our We monitor the performance and operations of these preferred strategies and actions. businesses. I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 37 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I HOW WE manage risk (continued) ISSUE HOW WE MANAGE THE ISSUE Signiﬁcant investments might not Naspers maintains transparent communications with be monetised effectively according investors, aiming to provide insight into our operations, to shareholder expectations. while protecting our competitive advantage and Strategic and operational issues (continued) complying with stock exchange listings requirements. Segmental results enable the investment community to form an opinion of the valuation of individual businesses in the group. Regular impairment tests are performed and reported on in terms of investments. Technology is an integral part of Continued focus on emerging technologies in our own our operations. products and services. We may be caught off-guard by Acquiring companies that have developed new the pace of new technologies technologies and demonstrated relevance in our or start-ups, or deploy new segments and markets. technologies too slowly or Increased central management and controls. ineffectively. Focus on engineering resources and implementing We may not detect social, technical recruitment programmes for the best engineers. or economic shifts in time. The group monitors technology developments and disseminates knowledge to operating companies. DStv is developing on-demand services on various devices. DTT roll-out strategy is addressing the mass market in Africa that cannot afford satellite DTH pay television. Development of segment focus and sharing of technology across segments. Competitors in our markets may First to market with products and services we believe threaten the position of our hold promise. companies, associates and joint Establish complementary businesses, reducing ventures. Competition includes dependency on single elements of the value chain. new or traditional players, as well Regular market reviews including reviews of operational as new technologies and products statistics. and services. Loss of market share Acquiring new players or new technologies that may and scale may place pressure on enhance or increase longevity of our platforms. margins. 38 NASPERS LIMITED Integrated annual report 2014 HOW WE manage risk (continued) ISSUE HOW WE MANAGE THE ISSUE Strategic and operational issues (continued) Failure of systems, software Business continuity plans include back-up, some or infrastructure could disrupt redundancy and recovery measures. continuous service to our customers. We are subject to various cyber Speciﬁc internal control measures are in place to threats, which target sensitive prevent, limit or detect cyber risks. information, integrity and continuity of our services and/or reputation of our businesses. A number of our businesses Regular review and discussion of business plans and require signiﬁcant investment to monitor progress. We disclose in a transparent way to drive growth. In most instances, stakeholders. development spend is made over Restructured the operations along functional lines rather multiple years. There is a risk that than regional, to mitigate risk and improve execution we do not realise the planned capacity. return on these investments. Maintain a strong focus on cost management. Internet usage is rapidly moving Building mobile applications for our products and to mobile devices. If we fail to services. deliver our services and products Measuring and tracking performance of our products adequately on mobile devices, it and services on mobile. will severely impact our long-term Continue to invest in the development of online services prospects. and products. Failure to secure signiﬁcant Review content rights and their economic value content rights could result in loss regularly. of pay-television subscribers. Investment in local content. Rising content prices impact Building own studios. margins signiﬁcantly. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 39 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I HOW WE manage risk (continued) ISSUE HOW WE MANAGE THE ISSUE Our level of debt could affect The group has a conservative approach to its debt our business. Our ability to make proﬁle, based on considering the adequacy of internal payments on our debt depends on free cash ﬂow resources in servicing debt and the level our operating performance, which of investments it makes. in turn is subject to risks that may Debt-bearing capacity is reviewed and approved by the be outside our control. board. Interest rates are almost certain The group has a treasury policy. Financial and related reporting risks to rise globally, but the timing is uncertain. Should ﬁnancial institutions, Naspers has a treasury policy approved by the risk where the group invests its surplus committee that monitors distribution of cash resources cash, experience signiﬁcant (and thus the impact of a loss) and the ratings of ﬁnancial difﬁculty, the group could ﬁnancial institutions. Cash resources are constantly suffer losses. monitored by management. Dislocations in credit and capital Constantly monitor credit markets to determine optimal markets, may make it more time to arrange funding. difﬁcult for us to borrow money or Ensure the group has spare debt capacity to tide it over raise capital to ﬁnance expansion in times of difﬁculty. of our existing businesses or make Signiﬁcant transactions are brought to the board for acquisitions. consideration in accordance with board-approved levels of authority. The group reports in South African The group has a policy to hedge its operational foreign rand and this exchange rate may currency exposures, where possible. vary against other currencies. In addition, in several markets, the group has substantial input costs in foreign currencies. The movements of these currencies could have a negative or positive impact on our income or expenses. Unrealised and realised currency translation gains or losses may distort the group’s ﬁnancial performance and position. 40 NASPERS LIMITED Integrated annual report 2014 HOW WE manage risk (continued) ISSUE HOW WE MANAGE THE ISSUE We rely on the skills of key Succession plans are reviewed annually by the relevant individuals with detailed human resources and remuneration committees. knowledge of our business Introduced the Naspers Academy in 2013 to facilitate Human capital and the markets in which we speciﬁc training of staff. operate. Unanticipated loss of Long-term incentives. these individuals may disrupt the business. Incidents at any of our facilities Comprehensive risk audits are performed annually resulting in death or serious injury to ensure compliance with policies, procedures and while on duty, may also result legislation. in criminal liability, ﬁnes and Naspers has relevant short-term insurance in place. penalties for the company, its directors and/or ofﬁcers. Health and safety G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 41 STAKEHOLDER engagement Industry Employees Communities Participating in industry groups to develop shared practices Employee newsletters, surveys, management briefings and intranet sites Engaging with local communities through corporate citizenship activities Customers Interact with users through user-experience ratings on our ecommerce platforms Regulators Engage with opinion formers and regulators to assist in developing policy Shareholders and investors Communication and engagement through a dedicated investor- relations unit Subscribers Interaction with readers and subscribers using various channels, including feedback through letters to the editor, emails, text messages and social media Suppliers One-on-one meetings with suppliers and business partners. Supplier ratings from customers on our ecommerce platforms communicated to suppliers and opinion formers, shareholders and potential investors p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I We engage with our stakeholders through different channels. 42 NASPERS LIMITED Integrated annual report 2014 STAKEHOLDER engagement (continued) Key issues for our business segments are set out below. (cid:90) STAKEHOLDERS’ ISSUES AND OUR RESPONSE I N T E R N E T STAKEHOLDERS ISSUE AND RESPONSE On the internet side, most of our businesses have adopted the Net Promoter Score (NPS) metric, to measure customer satisfaction trends. For example, NPS for own delivery of products at one site is signiﬁcantly higher than for delivering products through third-party Customers logistics providers due to the latter’s longer delivery times and poorer service quality. The group is fully focused on providing the best experience not only to consumers (end-users), but to merchants as well. On the merchants’ side, we are committed to working closely with upstream and downstream partners to address the relevant concerns for their businesses and focus on growing sales. Allegro is organising an annual conference in Pozna(cid:457), Poland, called ennovation. This includes presentations on ecommerce trends and novelties, discussion groups and a Industry competition for new ideas. Buscapé launched an ecommerce price index, the FIPE/Buscapé Index, based on data gathered from its websites. Retailers, consumers, the press, importers and providers of ﬁnance all beneﬁt from this data on prices charged by online stores. The group engages with legislators through its public policy team in each region, seeking to ensure that its businesses are able to operate in an efﬁcient and positive regulatory environment. Engagement is via traditional communication channels. The group also engages Regulators formally with regulators as part of its compliance activities, and group businesses are members of industry bodies and associations in order to support the development of the applicable industry sectors. Our most important asset is our people. We believe that we need the best people, who are committed to innovate and take risks, who understand our customers, who believe strongly in meritocracy, who are strongly result-oriented and who conduct business ethically. We Employees believe passionately in the ongoing education and training of our employees and have created G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l a Naspers Academy to further this objective. Group companies hold regular meetings with employees during which business results are shared, goals and next steps are discussed, and formal and informal feedback is received from employees, including about what the company could do better as a business and an employer. As a result of these meetings, good ideas have been generated and implemented, reinforcing the relationship between the group and its employees. I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 43 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I STAKEHOLDER engagement (continued) P A Y T E L E V I S I O N STAKEHOLDERS ISSUE AND RESPONSE MultiChoice has a number of ways to engage and interact with customers. These range from traditional interaction such as service centres to non-traditional such as DStv Forum, Twitter and Facebook. Customers MultiChoice also engages customers in product development through the email research panel and its ﬁeld trial panel, which facilitate decoder-software developments. MultiChoice Nigeria runs the annual media workshop for journalists and training for production members of the movie industry in Nigeria. It has a strategic partnership with the local broadcast industry to uplink indigenous free-to-air stations to the DStv platform at no Industry charge to operators. MultiChoice South Africa plays an active and constructive role in its industry. As a member of the National Association of Broadcasters, it has raised pertinent industry issues with the ministry of communications, the regulator (Icasa) and the portfolio committee on communications. MultiChoice is represented on the ministerial information and communications technology (ICT) review panel assessing legislation that governs the ICT sector. In the new ﬁnancial year MultiChoice will be involved in a number of policy formulation processes. MultiChoice Nigeria uses social media to communicate important information and runs retailers/dealers awards, training and workshop programmes. Suppliers MultiChoice Nigeria organises awareness meetings and shares information on piracy in the country. At policy level, it engages with the National Broadcasting Commission and Nigerian Copyright Commission. Regulators MultiChoice South Africa participates in regulatory processes initiated by Icasa. The key aim for these interactions is developing a supportive environment for the growth of the ICT sector. MultiChoice is subject to the Broadcasting Complaints Commission of South Africa (BCCSA), which regulates certain content, and works closely with the BCCSA to ensure that content regulation stays current as it moves from an analogue to digital environment. MultiChoice creates many opportunities to keep its employees abreast of developments. These range from print to electronic platforms, as well as face to face, which allows executives to interact with employees on a more personal level. It has a workplace forum – an employee Employees body that represents employees’ interests and continually interacts with the company on mutually beneﬁcial issues. 44 NASPERS LIMITED Integrated annual report 2014 STAKEHOLDER engagement (continued) P R I N T STAKEHOLDERS ISSUE AND RESPONSE All Media24 divisions are active on social media platforms. Editorial teams use Facebook and Twitter as interactive platforms to engage with audiences on topical issues, share and promote content from their latest print and digital offerings and test new ideas. All business units Customers conduct client satisfaction surveys with, for example, advertising agencies, print customers and their digital audiences. This is done through a variety of channels, including customer service call centres and digital surveys to determine net promoter score ratings. Media24, through its news, magazine and book divisions, is a member of local and international industry bodies. In South Africa these include: Print and Digital Media South I d t Industry Africa (PDMSA), Audit Bureau of Circulations of South Africa (ABC), South African Advertising Research Foundation (Saarf), South African National Editors’ Forum (Sanef), Digital Media and Marketing Association (DMMA) and South African Publishers Association (Pasa). Print media is self-regulated by way of the Press Code and Advertising Standards Authority. Media24 abides by the codes and rulings of these regulatory bodies. Regulators Media24 continues to promote and entrench its core values – courage, integrity, accountability and respect – by investing in leadership development and training, and recognising employees who demonstrate these values. Existing training initiatives – Employees including multimedia training for journalists and Woza Wednesday, a weekly knowledge- sharing initiative on media-related topics – gained further momentum. The Bounce Wellness Programme was introduced last year to boost employee productivity and resilience. Its staff engagement levels are surveyed annually and remained encouragingly high, despite tough economic conditions, further staff cutbacks and even more stringent cost management. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 45 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I BALANCING PROFIT, people and our planet Naspers creates communities, packages content and runs platforms. We connect people, distribute media products and conduct ecommerce. Our products and services play a developmental role in markets where we operate. Naspers is not only a business; as a responsible corporate citizen, we give back to our communities. Through myriad projects (see naspers.org), our group companies touch the lives of thousands of people around the world. Education is one of our most important contributions to the African continent. We help to improve literacy levels through various forms of print and digital media, from newspapers and magazines to school books and digital ventures, including social networking. Extract from group sustainable development policy We aim to maintain Naspers as a sustainable employees, providers of capital and governments business, not only in terms of the environment, and how much it retains for reinvestment. In but also in terms of sustainable proﬁts. We view the past year the group has paid some R10,6bn this process as a journey, not a destination, and we (31% of wealth created) to employees, which endeavour to ensure that our values and philosophy includes salaries, bonuses and beneﬁts, as well on sustainable development demonstrate this. as the cost of training and participation in the The section on non-ﬁnancial performance group share incentive schemes. (page 70) focuses mostly on social and We contributed R9,2bn (or 27% of the environmental projects. More detail is available on wealth created) to local governments where our group site, naspers.org. In time, as our various we have operations, comprising tax on company initiatives evolve and mature, we will demonstrate proﬁts, tax on our employees’ salaries, other the nature and quality of our group’s impact on taxes on companies, skills development society and the planet as a whole. By harnessing levies, etc. our global infrastructure, expertise and ability to To fund our expansion and growth strategy, innovate and adapt in a changing world, we aim we rely on investors and debt providers, who to address challenges such as education, skills in turn are compensated by dividends, share development and environmental sustainability. price appreciation and interest payments. This We have developed this report with the same accounts for 12% of total earnings distributed. themes in mind. We hope to improve the living The remaining 30% has been reinvested to conditions of our employees, their families and ensure we maintain a sustainable group that the communities in which we operate, ultimately enriches people’s lives, provides jobs to over balancing proﬁt, people and planet. 28 000 people (excluding associates and joint The value added statement on page 47 ventures) and contributes to the governments of illustrates how the group distributes its earnings to countries in which we operate. 46 NASPERS LIMITED Integrated annual report 2014 VALUE ADDED statement for the year ended 31 March 2014 31 March 2014 R’m 31 March 2013 R’m 62 728 40 371 22 357 11 796 34 153 10 610 3 992 2 466 1 526 9 219 10 332 3 118 2 966 4 248 34 153 49 869 29 238 20 631 9 624 30 255 8 885 2 786 1 495 1 291 7 605 10 979 2 919 3 402 4 658 30 255 G r o u p P e r f o r m a n c e G o v e r n a n c e Revenue Cost of generating revenue Value added Income from investments Wealth created Wealth distribution: Employees Salaries, wages and beneﬁts Providers of capital Finance cost Dividends paid Governments Total tax paid Reinvested in the group Depreciation and amortisation Other capital items Retained earnings Wealth distributed 36% 2013 Wealth distribution 25% 9% 30% 2014 27% 12% 30% Paid to government Paid to providers of capital Paid to employees Reinvested in the group (cid:144) (cid:144) (cid:144) (cid:144) 31% (cid:144) (cid:144) (cid:144) (cid:144) Paid to government Paid to providers of capital Paid to employees Reinvested in the group Integrated annual report 2014 NASPERS LIMITED 47 i F n a n c a i l I n f o r m a t i o n PERFORMANCE review p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 48 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 49 PERFORMANCE review (continued) (cid:90) FINANCIAL REVIEW Consolidated revenues grew 26% to R62,7bn, boosted largely by growth in our internet businesses. Also inﬂuential was a rand that depreciated by an average of 19% over the period against a basket of our main operating currencies. To expand our ecommerce and DTT businesses, development spend accelerated by 79% to R7,7bn (2013: R4,3bn). Net interest on borrowings increased to R1,261bn (2013: R636m), due to rand depreciation and increased borrowings to fund acquisitions and growth. An impairment charge of R1,6bn has been recognised in other gains/losses and relates mainly to ﬂash-sale fashion businesses in our ecommerce segment, such as FashionDays, Brandsclub and Markafoni. After these failed to achieve targets, we impaired goodwill and other intangibles in the ﬁrst half of the year. In addition, our associate investment in Abril has been fully written down in the current year and is the main item included in impairment of equity-accounted investments. A rather theoretical dilution loss of R852m on our equity-accounted investments was booked, mainly stemming from Tencent buying back its Tencent and Mail.ru reported strong own shares. growth. Our share of equity-accounted For many years we have held our core results includes once-off gains of R2,9bn from headline earnings as the most reliable indicator Mail.ru’s sale of shares in Facebook and Qiwi, of sustainable operating performance. In the as well as gains from Tencent merging some past year, this measure was marginally higher at of its ecommerce businesses with JD.com and R8,6bn – R21,81 per N ordinary share. Free cash sale of its interest in ChinaVision. These non- ﬂow for the period was an outﬂow of R349m – recurring gains have been excluded from core largely due to capex for DTT networks and headline earnings. accelerated development spend. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i Dividend: N shares Compounded annual growth rate over 10 years: 27% n o i t a m r o f n I 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 50 NASPERS LIMITED Integrated annual report 2014 cents 450 400 350 300 250 200 150 100 50 0 Consolidated balance sheet gearing stands at 23%, excluding transponder leases and non- interest-bearing liabilities. Significant acquisitions Details of signiﬁcant acquisitions appear in PERFORMANCE review (continued) Summarised annual financial statements Summarised ﬁnancial statements appear on pages 118 to 139 of this integrated annual report. The full ﬁnancial statements for the year ended 31 March 2014 are available on the summarised annual ﬁnancial statements our website at www.naspers.com. under “Business combinations and other acquisitions”on page 136. Five-year review R’m 2010 2011 2012 2013 2014 Income statement items, including equity-accounted investments on a proportional basis Revenue Trading proﬁt Statement of ﬁnancial position Total assets Total equity Total liabilities Other information 37 251 45 103 56 522 76 776 104 981 8 537 10 546 11 762 14 326 15 613 57 468 69 855 81 278 103 263 128 602 35 634 42 942 49 576 55 853 68 205 21 834 26 913 31 702 47 410 60 397 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l Development spend (R’m) 1 240 1 535 2 823 4 267 7 656 Core headline earnings per share (cents) 1 426 1 612 1 850 2 216 2 181 Dividend per N ordinary share (cents) 235 270 335 385 425 (proposed) Weighted average number of 372 951 374 501 375 653 385 064 395 078 N ordinary shares (’000) I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 51 PERFORMANCE review (continued) (cid:90) OPERATIONAL REVIEW internet Naspers operates platforms that offer customers fast, intuitive and secure environments where they can communicate, participate, entertain and shop. The group’s ecommerce services include marketplaces, general and vertical etail, classifieds, online price- comparison services and specialised services such as travel, real estate and payments. p u o r G e c n a m r o f r e P e c n a n r e v o G Revenue* R’m EBITDA* +65% +16% R’m Trading profit* +8% l i a c n a n F i 60 000 50 000 40 000 30 000 20 000 10 000 0 10 000 8 000 6 000 4 000 2 000 0 2013 2014 2013 2014 R’m 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 n o i t a m r o f n I 2013 2014 *Including associates and joint ventures on a proportional basis 52 NASPERS LIMITED Integrated annual report 2014 Tencent Tencent performed well in a dynamic and competitive Chinese market, under the excellent management of Pony Ma, Martin Lau and the team. A shift in user trafﬁc from PC to mobile devices is driving substantial changes across different sectors PERFORMANCE review (continued) monthly active user accounts and 200m peak concurrent user accounts; Qzone had 644m monthly user accounts; Weixin, known as WeChat internationally, had a combined 396m monthly users and enjoys an excellent market position in China, evolving from a pure communications service into a of the Chinese internet industry, including multifunctional platform. communications, social networking, online In the PC gaming market, Tencent published six of the top 10 games in China, games, media and ecommerce. Market competition intensiﬁed as competitors aligned their strategies with emerging mobile opportunities and made aggressive organic and acquisitive investments across the value chain. Tencent continued to solidify its leading position in communication and games in China, while strengthening its stance in ecommerce. Revenue for the year was RMB60bn, up 38%, while non-GAAP (non- generally accepted accounting practice) proﬁt attributable to shareholders was 19% higher at RMB17,1bn. Core platforms QQ instant messaging (QQ IM), Qzone (the leading social networking service platform in China) and Weixin (a next-generation communications service for smartphones) recorded solid growth. At 31 March 2014, QQ IM had 848m Integrated annual report 2014 NASPERS LIMITED 53 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) while Riot Games’ League of Legends enjoyed growth in international markets. Revenue from online games and social networks also beneﬁted from smartphone mobile games integrated into the mobile QQ and Weixin platforms. Two transactions will augment Tencent’s public offering (IPO) process, Tencent search and ecommerce businesses: ▶ In a strategic partnership with Sohu, acquired a further 5% interest in JD.com in a concurrent private placement for Tencent invested in and merged its US$1,3bn. SoSo search business and certain other Tencent’s online advertising business assets with Sogou in return for a 36,5% beneﬁted from signiﬁcant growth in interest. performance-based social advertising and ▶ In March 2014 Tencent merged online video advertising. The new the Paipai C2C and Wanggou B2C partnership with Sogou should, in time, marketplace businesses into JD.com position the company to grow its share in return for a 15% interest. Under of the PC and mobile search advertising a strategic cooperation agreement, market. Tencent will further support the growth Tencent is listed on the Hong Kong Stock of JD.com. In May 2014 JD.com listed Exchange and further information is available on the Nasdaq. As part of the initial on its website www.tencent.com. 54 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) R20,3bn ecommerce revenues – up 64% Ecommerce Revenues from our ecommerce activities increased 64% to R20,3bn in the review period. Ecommerce is an area of expansion and we incurred development spend of some R5,6bn. As a result, the trading loss for this segment widened to R5,3bn. Mail.ru Mail.ru Group, one of the largest internet companies in the high-growth Russian- speaking market, recorded another good year with growth across all major segments. Revenue for 2013 was RUB27bn, up 30% year on year, while group aggregate net proﬁt rose 36% to RUB11,4bn. Mail.ru expanded contextual advertising revenue as it continued to replace general display ads with targeted advertising. Overall advertising revenues grew 24% in 2013. Online games and internet value-added services (IVAS) performed well. Revenue for massively multiplayer online (MMO) games grew 41% year on year to RUB6,7bn, with Warface gaining traction in users and revenues. IVAS grew 29% year on year to RUB8,7bn. Monthly paying users reached 7,6m. In 2013 numerous products were updated and new products launched, including cloud-based services. In March 2014 Mail.ru increased its stake in VKontakte from 40% to 52%. VKontakte is a leading Russian social network, also known as VK.com. Mail.ru’s depository receipts are listed on the London Stock Exchange. Further information is available at www.corp.mail.ru. Integrated annual report 2014 NASPERS LIMITED 55 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) technology and expertise more easily and effectively. Consumer-to- consumer (C2C) Classiﬁeds The Naspers classiﬁeds group, now structured as a global organisation, owns and operates general online classiﬁeds sites in A number of our ecommerce businesses some 40 countries in Eastern Europe, Asia, are still in the early stage of development. Africa, Latin America and the Middle East. We The Allegro marketplace business and some have leading positions in over 20 markets, classiﬁed and price-comparison businesses collectively serving more than 2bn people delivered improved proﬁtability. Given the different timelines to monetisation of the various ecommerce models, etail (general and fashion) and marketplaces currently generate the bulk of revenues. Substantial investments were made during the period, most notably a signiﬁcantly increased development spend in our etail businesses as we drive growth in Central and Eastern Europe and expand our footprint in Africa, the Middle East and India. We have deliberately shifted away from a geographic model by reorganising our global operations into functional segments. This focus has made us more agile, allowing us to move faster and build scale more rapidly. In addition, the businesses are able to share knowledge, Classifieds sites in 40 countries 56 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) worldwide. These markets range in size and Our organisational model ensures we operate maturity, with many in the early phases of globally as a cohesive unit under a lean development. centralised leadership group. This group In building a global structure, we are provides strategic and operational support to focused on developing our sites and platforms local teams able to work quickly and ﬂexibly, through internal capabilities, and investing in while driving local innovation. We have over three key areas: ▶ technology platforms – especially mobile ▶ local marketing to build and grow market 1 000 staff members with local expertise operating in 40 markets around the world. Our model is also structured to deliver share, and technical efﬁciencies at scale across markets ▶ building the world’s deepest pool of wherever we can, in areas such as business classiﬁeds business talent, augmented by analytics, brand performance measurement, strong local company cultures. and systems and tools. Daily visits* +148% March 2013 March 2014 m 30 20 10 0 Daily page views* m +215% 500 400 300 200 100 0 March 2013 March 2014 * Select criteria as measured for the month of March 2014, not adjusted for acquisitions and disposals, and reﬂecting associates on a proportionate basis. Integrated annual report 2014 NASPERS LIMITED 57 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) counterparts, and are rapidly taking mark counterparts, and are rapidly taking market One of the clearest examples of our local- share in many categories through better pricing, global orientation is the shift from a portfolio selection and, increasingly, convenience. of disparate and local brand names to global Our etail business accelerated its organic brand alignment by transforming OLX into the growth over the past year. We have world’s largest brand for C2C trade. We have concentrated on giving our customers a world- already successfully migrated local brands to class online buying experience using the three OLX in Switzerland, Thailand, the Philippines and main drivers of both etail and ofﬂine retail – Eastern Europe, with more planned for the new strong selection, pricing and convenience. We ﬁnancial year. deliver a wide selection of competitively priced Our classiﬁeds businesses are in different new products from our warehouses to our stages of maturity, and the number of markets customers’ doors. In future, automated pricing where we have the sustained ability to monetise technology, dramatically higher selection (driven is gradually increasing. Business-to-consumer (B2C) B2C combines our activities in etail, by the lack of a costly store network), combined with the convenience of mobile access and efﬁcient delivery, will signiﬁcantly favour etail. Although etail requires us to hold inventory and marketplaces, price-comparison shopping and operate at low margins, it should produce free travel. These businesses are giving customers an cash ﬂows once scaled. We will therefore invest improved experience compared to their ofﬂine further to achieve this scale as fast as possible. 58 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) Marketplaces This business continues to deliver solid proﬁts Payments Payments is a fast-growing segment of across our main markets. They are focused on ecommerce. Our payment solutions are building a B2C model that is robust and has available to consumers on our own ecommerce growth potential. We have seen strong growth platforms and on third-party operated across the board, delivering more new products ecommerce platforms. Over the year we have to our customers with increasing quality in the started to focus on building a trusted global shopping experience. Additional growth-focused consumer-payments brand to drive increased investments are also being made in the search consumer conversion and uptake from business. merchants. In line with this approach we have consolidated all our payments businesses Online comparison shopping under one brand and in one unit – PayU. Our online comparison shopping businesses A new leadership team was appointed. We performed well in terms of revenue growth. All differentiate our payments solution by offering our major businesses outperformed competitors a broad range of local payment options to our and the market. The core businesses have shown customers and good conversion of interest to stable proﬁtability, and we continue to invest in sales for our merchants. the rapid and growing transition to mobile price comparison. New areas of opportunities Travel has primarily been an Indian- focused initiative by the ibibo Group and TravelBoutiqueOnline. The ibibo Group increased market share signiﬁcantly in the Indian online travel agents (OTA) market, and acquired redBus, the leading bus vertical site. On the business-to-business- to-consumer (B2B2C) side, TravelBoutiqueOnline successfully defended its market-leading position in India. Integrated annual report 2014 NASPERS LIMITED 59 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n PERFORMANCE review (continued) pay television With limited broadband infrastructure and almost no cable access in Africa, the group offers digital satellite, digital terrestrial and other pay-television services, such as mobile television. The wide range of products covers all income groups. To meet rising demand emand for mobile applications, we offer apps on tablets, and smart and feature phones that give our subscribers access to the popular DStv Catch Up services, live streaming of sport content, information, communication and self-service functionality (including payments). p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i Revenue R’m EBITDA +20% +16% R’m Trading profit +13% 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 n o i t a m r o f n I 2013 2014 12 000 10 000 8 000 6 000 4 000 2 000 0 2013 2014 60 NASPERS LIMITED Integrated annual report 2014 2013 2014 R’m 10 000 8 000 6 000 4 000 2 000 0 rrrreeevvvieeeewwww (c((( ontinue PERFORMANCE review (continued) PPPPEEEERRRRFFFFOOOORRRRMMMMAAAANNNNCCCCEEEE rrrreeeevvvvieeeewww Total subscriber growth for year 1,3m households Sales The group subscriber base now exceeds 8m DTT network under the GOtv brand, which is now available in eight countries through two households. Subscribers in South Africa grew packages (GOtv and GOtv Plus) offering by 556 000 during the year, taking the group’s 20 to 40 channels. Many countries in Africa base in this country to over 5m homes at have started migrating from analogue to digital year-end. Growth was driven by a combination television, with Rwanda being the second after of aggressive marketing spend and increased Tanzania to switch off analogue signals. viewership, thanks to investing in local content. The new DStv Explora, our next-generation, high-deﬁnition personal video recorder (PVR) was launched during the period and helped push the PVR base up to 953 000. BoxOfﬁce, the video-on-demand service for PVR Premium subscribers in South Africa to view the latest blockbuster movies, continues to grow in popularity, with an average of 529 000 movie rentals per month. Despite a tough economic environment, television’s share of advertising revenue continues to grow. In sub-Saharan Africa (outside South Africa), MultiChoice produced record subscriber growth of 764 000 to end the year at over 3m households. The DStv subscriber base rose by 323 000 while the GOtv base grew by 440 000. The group continued to invest in building its Integrated annual report 2014 NASPERS LIMITED 61 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) Package launches Our customers’ needs mould the reﬁnement of our packages. In South Africa DStv Extra was launched in June 2013, positioned between the Compact and Premium packages. The DStv Select and DStv Lite packages were rebranded to DStv Family and DStv Access with an improved (Mzansi Bioskop, Mzansi Wethu, kykNET selection of channels. Content The focus on providing content that resonates & Kie, Tshwane TV and Cape Town TV) is contributing to this strategy. The production of local content, which ramps up viewership across our channels was further expanded with our viewers continued, with 36 new and included telenovelas such as Isibaya, our channels launched across a number of genres in ﬁrst local drama Rockville, local versions of South Africa. internationally recognised reality formats and Local channels that connect with South some 100 locally produced movies (bubblegum African audiences remain a signiﬁcant driver movies). of the MultiChoice strategy. The launch of ﬁve The story of South Africa’s journey to new local content and community channels democracy was honoured in a documentary, 62 NASPERS LIMITED Integrated annual report 2014 Miracle Rising, aired on the History channel. The father of the South African nation was also honoured in a special tribute channel, the Madiba channel. Outside South Africa, additional channels for the DStv English market included SuperSport Select, Ebony Life, Spice TV, Hip TV, Channel ED, Fox Crime, Telemondo, CBS Drama, CBS Action, JimJam and MGM. New channels from the M-Net stable included M-Net Movies Zone, M-Net Series Showcase, M-Net Series Reality and M-Net Series Zone. ortuguese New channels for DStv Portuguese subscribers included SuperSport Maximo Sport Maximo y Junior, Afro 360, TV Cape Verde, Disney Junior, Afro and Investigation. Music Concerts and Crime and Investigation. ﬁcantly in MultiChoice invests signiﬁcantly in content across productions featuring local content across gramming and Africa. Original African programming and s for our sub- channels remain a key focus for our sub- ecialist local Saharan Africa business. Specialist local productions included Mashariki Mix, Kona, ariki Mix, Kona, oney Drop, Jim Iyke Unscripted, The Money Drop, ara, The Johnsons Tinsel, Star Gist, 53 Extra, Jara, The Johnsons rother Africa. and the ever-popular Big Brother Africa. d SuperSport In Nairobi, Kenya M-Net and SuperSport s to increase have built their own studios to increase These state-of- production of local shows. These state-of- -broadcast the-art studios and outside-broadcast ya vehicles in Nigeria and Kenya rage enable increased local coverage l of sport and additional local productions. PERFORMANCE review (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED Integrated annual report 2014 NASPERS LIMITED 63 63 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i PERFORMANCE review (continued) . d e v r e s e R s t h g i R e g a m I y t t e G E A B N y b o t o h P t n e m n i a t r e t n E A B N 3 1 0 2 s t h g i r y p o C See mSee more g ore games erSpo n Sup now o Sn Sup erSportrtrtrt. erSpo n Sup SerSpo n Sup now o now o thing NBANBANBANBANBA now o thing thing Every hithing EEvery Every Every Sport 99 and Sd Sup SerSpo t HDrt HD. SuperSport before live live one on Super ames thanthan everever befor supersport.com SuperSport remains the biggest funder of local sports on the African continent, funding roughly 70% of all sport in sub-Saharan Africa. It continues to invest in racing, the Australian Open tennis, Indian Premier League (IPL) cricket, National Basketball Association (NBA), Nigeria, Ghana local leagues at all levels by paying broadcast and Angola football leagues, as well as Angola licence fees, upskilling local administrators basketball, were either acquired or renewed on and production crews, improving facilities and all platforms and in all languages throughout our assisting federations to obtain sponsors. broadcast territories. Sports enthusiasts enjoyed the successful production and broadcasts of SUPERUGBY, the Rugby Championships, Premier Soccer League, India and Australian cricket tours of South Africa and local football leagues of Nigeria, New technologies MultiChoice continued to invest in new technology with the launch of its DStv Explora decoder. There are now 18 HD channels on the n o i t a m r o f n I Kenya, Zimbabwe, Zambia and others across the DStv platform. continent. Several online developments have helped The rights to broadcast the UEFA Champions and the Europa League football, the Winter and improve our customers’ experience: ▶ BoxOfﬁce was expanded to 20 titles on Summer Olympic Games, Formula One motor Explora and 68 titles on BoxOfﬁce Online. 64 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) ▶ DStv Catch Up on Explora provides an targeting the mass market with low-cost or free expanded catalogue of content. propositions. The biggest threat to the business ▶ The new DStv Catch Up and SuperSport in the medium term is from new players, local apps for iPhone and iPad offer content for and global, including major telecommunications downloading or streaming. companies that will deliver online video content directly to consumers. Regulatory and competition The legislative and regulatory environment in Africa continues to develop in line with Irdeto Conditional access market revenues continued and, in some cases, more progressively than to mature, and lower average selling prices in most developed countries. MultiChoice’s negated volume increases. Newer areas, such pay-television, communication and network as multiscreen, have boosted service revenues operations all function in regulated industries, compared to conditional access, which remains making government and regulators key predominately product-orientated. Increasingly, stakeholders for the group. One of the most innovation is occurring in these newer areas, signiﬁcant and exciting developments in with 12 patents registered in the review period. broadcasting in our markets is the migration Given a more optimal blend of activities from analogue to digital terrestrial television between mature and growth areas for a better (DTT). cost proﬁle, Irdeto returned to proﬁtability in the Competition from traditional broadcasters will year ended March 2014. continue to intensify in all sub-Saharan regions, primarily on DTH and DTT, with all players G r o u p P e r f o r m a n c e G o v e r n a n c e SUPERSPORT FUNDS ROUGHLY OF ALL SUB-SAHARAN SPORT 70% Integrated annual report 2014 NASPERS LIMITED 65 i F n a n c a i l I n f o r m a t i o n PERFORMANCE review (continued) print media While print media continues to decline in most markets and publishers experiment with alternative revenue models, Media24 – our biggest media investment – is faring relatively well, but Abril continues to struggle. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i Revenue* R’m EBITDA* R’m Trading profit* R’m -2% -8% -18% 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 1 400 1 200 1 000 800 600 400 200 0 800 700 600 500 400 300 200 100 0 2013 2014 2013 2014 n o i t a m r o f n I 2013 2014 *Including associates and joint ventures on a proportional basis 66 NASPERS LIMITED Integrated annual report 2014 Digital magazine editions +120% PERFORMANCE review (continued) and democracy projects in a number of countries. It also acquired a 100% interest in Correll Tissue to diversify into the tissue paper market. News Cost savings were insufﬁcient to offset shortfalls in advertising (as advertisers continue to cut budgets and shift spend to other media) and circulation sales. Circulation has stabilised in recent months and our local newspaper footprint was expanded. Subscriptions are higher year on year and we have established a strong digital offering. Paarl Media Paarl Media has made progress in improving Good progress was made in transforming the business into a 24-hour news service productivity and efﬁciencies in its core across print and digital, and growth in digital operations, while diversifying into new market subscriptions for the mainstream Afrikaans segments. At Paarl Coldset, printing capacity dailies was encouraging. G r o u p P e r f o r m a n c e G o v e r n a n c e was strengthened to cater for extra printing work. The company expanded its African footprint by securing printing work for literacy s s e r P y t i C 1918 - 2013 MADIBA’S FINAL HOURS 0 0 . 3 1 $ N i i : a b m a N ) T A V l c n i ( 0 0 . 3 1 R | 3 1 0 2 r e b m e c e D 8 | a z . o c . s s e r p y t i c . w w w i F n a n c a i l TRIBUTE TO A GIANT OF OUR TIME » INSIDE VOICES In the hours before Nelson Mandela d i e d , h i s fa m i ly f i l e d i n to h i s bedroom in pairs or in threes to bid their emotional farewells. To the final hour, his wife, Graça Machel, was with him – the sad end to her 181-day vigil. FULL STORY, PAGE 3 0 4 9 1 3 MONDLI MAKHANYA TO SWIM AGAINST POWERFUL TIDES 9 771016 396005 || PHOTO: AP I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 67 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) Magazines This unit delivered a solid performance for the year, reﬂecting initiatives to counter the ongoing contraction in both traditional advertising and circulations. We retained the leading print and digital circulation and advertising market share among the top ﬁve publishers. Sales of digital editions grew by over 120% year on year and the division reported strong growth in its digital footprint across web, tablet and mobile platforms, with access via mobile now overtaking desktop/PC. On the Dot Amid declining newspaper and magazine volumes, this distribution business continued to focus on reducing costs and made progress in expanding its warehousing and online fulﬁlment business. 68 NASPERS LIMITED Integrated annual report 2014 Books Publisher Via Afrika Education beneﬁted from the ﬁnal implementation of the South African school curriculum, and was named Seﬁka Educational Publisher of the Year for the third consecutive time. PERFORMANCE review (continued) apparel, several new categories, including home décor and a children’s department, were launched. INET BFA McGregor BFA, our ﬁnancial data services Jonathan Ball Publishers re-established itself as the business, acquired I-Net Bridge in November 2013. market leader, on the back of two new agencies, I-Net’s core products service most asset managers while NB Publishers improved its leading position in South Africa and it leads the market measured in the trade publishing market, again scooping 33 by the number of users. The combined entity – literary prizes. Online or ebook sales are growing branded INET BFA – is well positioned to become and new apps were released for iStore and Play the leading provider of African data to investors Store. and businesses in South Africa and around the world. 24.com 24.com, the leading digital publisher in Africa, grew average daily page views across its network Abril The performance of Abril, the leading magazine by 15% and average daily visits by 16% year on publisher in Brazil in which Naspers has a year. It recorded strong mobile audience growth 30% interest, was hampered by tough trading and now reaches 350 000 daily active users via its conditions as the industry faces advertising tablet and mobile apps. News24 and Careers24 declines for the third consecutive year in a stalled expanded operations in Nigeria. economy. Comprehensive cost-saving measures are being implemented. G r o u p P e r f o r m a n c e G o v e r n a n c e Ecommerce (Spree) Spree established itself as a leading player in South African online fashion, growing volumes since launching in April 2013. In addition to women’s i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 69 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) (cid:90) NON-FINANCIAL REVIEW (cid:90) SUSTAINABLE INVESTMENT We recognise that sustainable development and economic, social and environmental protection are global imperatives that present both opportunities and risks for business. Naspers, as a leading media company, is positioning itself to meet these challenges. As we expand our business, we aim to contribute to the communities in which we operate; develop our own people; contribute to general economic prosperity; and minimise our impact on the environment. In formulating this policy, we analysed areas where the group can make a contribution to sustainable development in the markets in which it operates. Extract from sustainable development policy This report illustrates the group’s collective social awareness, focusing mostly on projects that address our social and environmental issues. Our intention is to demonstrate our standing as a good corporate citizen, entrenching Naspers’s core value of being useful in the communities we serve. For a more detailed review of our various initiatives, please refer to naspers.org. (cid:90) TRANSFORMATION Transformation is important for Naspers to ensure MultiChoice South Africa retained a level 2 BBBEE rating and achieved the following we comply with local legislation and that our notable achievements in important areas of workforces reﬂect local demographics. As a good transformation: corporate citizen, we respect the dignity and Ownership: MultiChoice scored full points human rights of individuals and communities on the ownership element of the BBBEE wherever we operate. We aim to make a positive scorecard. One of the cornerstones of our and enduring contribution to the social and approach to ownership was the creation of economic development of South Africa, and a scheme that provides an accessible and recognise the role we can play by leveraging our far-reaching shareholding opportunity to a resources and the goodwill of our staff. new and vast grouping of South Africans. 70 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) Black South Africans now enjoy a 61,7% and investment by companies across the group economic interest in the MultiChoice South in support of this important issue. Africa group. In December 2011 shares in PN and The MultiChoice Enterprise Development PN2 began trading on an over-the-counter Trust (“the trust”) works to ensure that new platform. At the end of the ﬁnancial year talent and previously disadvantaged businesses ended 31 March 2014, the number of get the opportunity to compete fairly with participants in PN and PN2 was 97 842 and established contributors of content. The 3 042 respectively (2013: 103 092 and 3 128). trust provides ﬁnance to enable emerging The PN and PN2 share schemes were launched production companies to acquire the assets in 2006 and 2007 respectively. To date, and skills needed to supply high-quality these schemes have received over R4bn in productions. Linked with a contract from our dividends, which were used to reduce debt broadcast partners (eg M-Net and SuperSport), and increase the value of PN and PN2. The to purchase the content and to provide total outstanding preference share funding business support where required, we assist at 31 March 2014 was R384m for PN and these production companies to be productive, R145m for PN2. This outstanding debt will be efﬁcient and proﬁtable. repaid in full after payment of the dividend to be tabled for conﬁrmation by shareholders at the September 2014 PN and PN2 annual general meetings. Preferential procurement: Our preferential procurement programme supports the development of small, medium and micro- enterprises (SMMEs). We recognise the effort of our supply chain teams who identify and nurture emerging black-owned (including black women-owned suppliers) and are proud of the extent to which the use of our purchasing power to create opportunities for transformation has been embraced. Enterprise development: Our achievement in enterprise development (ED) – an increase from a score of 0,05 in 2010 to 11 points in 2014, is evidence of the thought, planning Integrated annual report 2014 NASPERS LIMITED 71 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n PERFORMANCE review (continued) In addition, we are constantly innovating to impacts the plight of South Africans in distress. produce content relevant to our audiences. This These organisations provide us with feedback includes an increased focus on local productions of the impact this far-reaching and high-impact that provides opportunities to expose emerging marketing has on their abilities to achieve their ﬁlm-makers to the world of commercial goals of improving the lives of South Africans. television production, learning about budgets, schedules and delivery requirements, while Media24 has made solid progress with its turning their stories and ideas into ﬁlms for our transformation aims in recent years. These are viewers. tracked against a scorecard for the Department In recognition of our ability to enlist the of Trade and Industry’s code of good practice resources of the group to increase access and for broad-based black economic empowerment opportunity, MultiChoice plays a broader role in (BBBEE). In terms of the scorecard prepared by the media and broadcasting environment. Media24’s BEE veriﬁcation agency, Media24 increased its score by 7,88 points to 77,98, A platform to share: We recognise our which takes it to a level 3 rating with 137,5% relatively unique position regarding our recognition on BEE spend, scoring full points on broadcast platforms, and the audiences we the ownership, socio-economic development reach. Understanding how powerful this is in and enterprise development elements. Black getting important social messages across to our ownership in Media24 has risen to 45,22% viewers and communities, we provide airtime (2013: 44,74%) and black female ownership across channels to organisations whose work has risen to 21,60% (2013: 21,22%). p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 72 NASPERS LIMITED Integrated annual report 2014 Welkom Yizani: In 2006 Media24 launched the largest BBBEE share offer in the print media industry, Welkom Yizani, resulting in eligible black people and groups owning some 15% (directly and indirectly) in Media24 Holdings. In December 2009, to mitigate the impact of the recession on the value of these shares, Naspers wrote off R330m of its funding in Welkom Yizani and the scheme was extended by two years to December 2013, providing Welkom Yizani shareholders a better opportunity to proﬁt from their original investment despite the recession. On 9 December 2013 shares in Welkom Yizani began public trading. In September 2013 Welkom Yizani received an ordinary dividend declared by Media24 totalling R20,62m. Black economic empowerment partners Media24, MultiChoice and other group PERFORMANCE review (continued) Media24 increased its BEE scorecard to level 3 rating procurement spend on BEE-compliant companies was 48% in the reporting period. This equates to R7,7bn spent with BEE- compliant companies; 13% of the spend was on exempt micro-enterprises (EMEs) and qualifying small enterprises (QSEs). MultiChoice has a network of more than 1 300 accredited installers across South Africa, companies have combined their buying power which employ some 3 000 people. in South Africa in a centralised bargaining In addition, the group runs multiple company, CommerceZone. Suppliers’ BEE enterprise development initiatives. MultiChoice performance is evaluated against speciﬁc criteria supported SMMEs in the construction sector and they are expected to boost their annual BEE through involvement in the construction rating. of DStv City and the refurbishment of the The MultiChoice preferential procurement Randburg ﬁre station. MultiChoice also programme supports the development supports emerging businesses through early of small, medium and micro-enterprises payment initiatives to improve their cash ﬂows. (SMMEs). In addition, these SMMEs are given The trust has also assisted in the creation opportunities to tackle larger-scale projects, of close to 200 jobs in the 2014 ﬁnancial enabling entrepreneurs to develop their skills year, supporting initiatives for qualifying and capabilities. MultiChoice’s preferential QSEs and EMEs. Integrated annual report 2014 NASPERS LIMITED 73 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I PERFORMANCE review (continued) Naspers group: Total workforce split 42% 2013 58% 43% 2014 57% (cid:144) (cid:144) Male Female (cid:144) (cid:144) Male Female (cid:90) PEOPLE We understand our responsibility to the communities in which we operate. Through a number of initiatives that aim to improve the quality of life in these communities, we promote the well-being of society, our customers and our employees. In our communities: ▶ We support previously disadvantaged businesses in South Africa by actively seeking such suppliers in line with local legislation. For our people: ▶ We invest in the continuous development of our people to retain a competitive ▶ We operate in various countries, therefore advantage. we endeavour to employ local citizens to empower the communities in which we operate. ▶ We contribute to educational programmes to raise awareness of our products, and create much-needed skills. ▶ We conduct business fairly, ethically and with integrity. Our code of ethics and business conduct deﬁnes our culture. ▶ We encourage our employees to contribute to the group’s sustainability and innovation by supporting our community initiatives ﬁnancially or donating their time. ▶ We respect the rights of our employees and their diversity. ▶ We encourage employees to report areas where the group might be failing in its business conduct and values through These and related policies are published on secure channels. www.naspers.com. ▶ We comply with local employment laws. ▶ Worldwide we employed around 28 000 people. 74 NASPERS LIMITED Integrated annual report 2014 The projects below illustrate our commitment to our people and the communities in which we operate. PERFORMANCE review (continued) Giving you space to grow Media24 launched a multimillion rand project to boost selected non-proﬁt organisations and small businesses by supplying advertising space worth R24m, allowing them to market their services and projects in the group’s newspapers, magazines and online titles. This focused initiative combines our media company’s myriad social investments under one umbrella to make a signiﬁcant difference in the visibility of these organisations and contribute to their work, using our inﬂuential titles. Beneﬁciaries interviewed at the end of the project mentioned the credibility it gave their businesses. Examples of opportunities created: ▶ Nobulali Productions contacted by SABC for media partnership. ▶ Themzak Cleaning Chemicals contacted by Department of Trade and Industry (DTI) for funding to branch out in other provinces. ▶ Boletha Medical entered into partnership with a contact in Limpopo province for expansion of sales. ▶ Mathemaniacs was contacted by two corporates for possible CSI sponsorship after appearing in our magazine, TrueLove. ▶ Nobulali Productions combined the Giving you Space to Grow campaign with their own awareness raising activities and increased their client base three to four times. ▶ Boletha Medical has the opportunity to expand into new areas with a contact from Pretoria who wants to support their marketing campaign in reaching doctors and health careers. ▶ Nobulali Productions was contacted by Oprah Schools to provide workshops after they saw the advertisement in Fairlady. Mathemaniacs likewise mentioned the beneﬁts from the brand awareness: “People now know of us and when I go talk to somebody they say: ‘Oh yes, we saw you guys or heard about you guys somewhere’. And that’s been great because it also makes you credible; if people have seen the ad, then they know you are actually doing some real work and doing some good work. So the brand awareness has been great, our name is out there more.” Integrated annual report 2014 NASPERS LIMITED 75 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i PERFORMANCE review (continued) Employment equity In line with local legislation, and our own employment policy, we value diversity in the workplace. It aligns our company with our customer base and encourages a culture of The breakdown of the MultiChoice and Media24 groups’ annual employment equity statistics is shown below. Under Department of Trade and Industry deﬁnitions, black people include black Africans, Coloureds and Indians tolerance and understanding. Just as importantly, who are citizens of the Republic of South Africa it cultivates a vibrant working environment by birth or descent or who became citizens by conducive to new and innovative thinking. naturalisation. MultiChoice: Employment equity 14% 1% 51% 49% 85% (cid:144) (cid:144) Male Female (cid:144) (cid:144) Black White (cid:144) Foreign Media24: Employment equity 47% 59% 53% 41% n o i t a m r o f n I Male (cid:144) Female Black (cid:144) White 76 NASPERS LIMITED Integrated annual report 2014 Employee benefits Retirement beneﬁts Some countries in which we operate have statutory retirement beneﬁt funding. In others, and where appropriate, the group provides retirement beneﬁts for full-time employees, primarily as monthly contributions to deﬁned- contribution pension and provident funds. The assets of these funds are generally held in separate trustee-administered funds. Medical aid beneﬁts Medical aid membership is compulsory in most group operations, with the employer contributing a portion of the monthly premium. Some group companies provide post- retirement healthcare beneﬁts. This is based on an employee remaining in service until retirement age, which is between 60 and 65 in most cases, and completing a minimum service period. These obligations are unfunded. Equity ownership PERFORMANCE review (continued) is low in the group. Where children are used in local productions, strict compliance to their regulated conditions of employment is enforced. SAFETY BEGINS HERE! To retain the skills on which our sustainability depends, most group companies grant share options/share appreciation rights to employees under a number of equity compensation plans. Health and safety ▶ We aim to have an injury-free workplace. ▶ We perform health and safety risk assessments at our facilities, supported by Employee relations The group complies with labour legislation in its operating areas. In South Africa, MultiChoice and Media24 submit statutory reports. In regions where child labour is prevalent, our assessments have found that the risk of child labour and forced or compulsory labour training. ▶ We monitor management actions through operational, internal and external auditing, and reporting processes. ▶ A healthy workforce contributes to business success. Several of our businesses provide medical aid and wellness programmes for their staff. Integrated annual report 2014 NASPERS LIMITED 77 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i PERFORMANCE review (continued) The workplace print business, which owns and manages Maintaining a healthy, safe workplace at our distribution networks and printing facilities, administrative and production facilities is a makes this the area in our group with the priority to achieve the lowest possible harm greatest inherent risk for injuries on duty. rate on duty. Where required, health and safety committees – comprising responsible, Monitoring trained individuals – ensure regulatory compliance. Appropriate medical emergency and disaster-recovery plans have been devised for operating businesses. Annual occupational health and safety risk control audits or reviews are conducted by the larger operational entities across the group and improvements implemented as required. Signiﬁcant matters are reported to and monitored by the Naspers risk committee. The Media24 board’s safety, health and environment committee monitors related issues in that group. Media24 and MultiChoice conduct annual health, safety and environmental compliance audits, as well as building scans. Injuries on duty are stringently monitored. Wellness Several wellness programmes are operated by group subsidiaries in a preventative approach n o i t a m r o f n I Media24’s distribution and printing to employee health. operations use contractors and organisers extensively. Most of these people are from HIV/Aids disadvantaged backgrounds and receive We are acutely aware of the HIV/Aids training from Media24 on executing their pandemic in Africa, and its social and jobs safely and effectively. The nature of the economic implications. Comprehensive 78 NASPERS LIMITED Integrated annual report 2014 programmes in Media24, MultiChoice South and intellectual property to our sustainability in Africa and MultiChoice sub-Saharan Africa a competitive market. PERFORMANCE review (continued) comprise: ▶ information and awareness campaigns ▶ voluntary, free testing ▶ free counselling, and ▶ comprehensive medical treatment programmes. Education and skills development Skills development is a priority for our group, given the strategic importance of technology Our approach has a multiple focus: developing the full potential of our own people, extending this training outside the group to develop talent, and offering learnerships and bursaries to young people with potential across the world, particularly in key ﬁelds such as engineering. NASPERS ACADEMY: Can we crack the survival code with the Naspers Academy? of the day that present us with imminent challenges for survival. The entire portfolio of these master classes will eventually form our unique Naspers programme in adaptive leadership. The Naspers Academy has a second string to its bow. We capture the knowledge from these “It is not the strongest, nor the smartest of the master classes, and make the key learnings species that survive, but those most adaptive to available as zero cost online courses open to all change.” – Charles Darwin. echelons in Naspers. G r o u p P e r f o r m a n c e G o v e r n a n c e On 1 July 2013 Naspers launched the function of chief learning ofﬁcer with the single, laser-sharp mandate to make sure that Naspers as a group, the various companies in the group and the individuals in the group, have the mindset and skills to adapt to change in the disruptive digital economy. For this purpose we established the Naspers Academy, with a series of master classes. In these master classes, world-class experts both educate and collaborate with our top management. Some of the topics address universal survival skills and others the issues i F n a n c a i l if you want to survive, you must learn to adapt! www.naspersacademy.com I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 79 PERFORMANCE review (continued) MultiChoice Resource Centres The ﬁrst Multichoice Resource Centre was established in Nigeria in 2004 as a corporate social investment by MultiChoice Africa, and implemented by SchoolNet Nigeria on a partnership platform. The project aims to improve teaching and learning processes by equipping schools with audiovisual educational equipment through which the MultiChoice education bouquet can be accessed by schools. Since inception MultiChoice Resource Centres have been established in 121 schools in 13 states across Nigeria. Each centre is equipped with a DStv decoder, television set, video/DVD recorder, blank video cassettes/ DVDs, generator, storage cabinet, white board, tables and chairs. The educational objectives of each centre focus on transforming learning in the classroom and improving learner performance by: ▶ equipping educators with the required knowledge and skills to use information and communication technology (ICT) to improve teaching and learning practice ▶ using speciﬁc educational channels provided in the MultiChoice education ▶ developing learners’ ICT skills within the context of lessons being taught ▶ adopting key learning strategies that inﬂuence the use of ICT to support teaching and learning ▶ illustrating the use and beneﬁts of television as an educational tool, and ▶ developing understanding of integrating the education bouquet into teaching and learning. At each centre, infrastructural objectives include: ▶ preparing a secure facility at each site, functional in supporting the infrastructure and conducive as a learning environment ▶ providing adequate training and technical support so that schools can operate and support the facilities, and ▶ maximising the probability that facilities will be functional and sustainable after the project ends by selecting appropriate schools. The services of trained facilitators are deployed to each centre to develop the effective educational use of facilities provided by running both technical and educational training for teachers. They also conduct a monitoring and evaluation process that assesses the qualitative and quantitative impact bouquet to support teaching and learning of the project. in the Nigerian curriculum p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 80 NASPERS LIMITED Integrated annual report 2014 MultiChoice MultiChoice’s learnership programmes combine vocational education and training modules towards qualiﬁcations registered on the National Qualiﬁcations Framework (NQF). Highlights during the year include: ▶ 743 learnerships were offered in skills such as production, broadcast engineering, project management, management, human resource management and customer care. These learnerships create employment while addressing skills shortages in the industry. ▶ Seven people are currently completing their second year in the adult basic education and training (ABET) programme. ▶ 152 internships were offered at M-Net, SuperSport and MultiChoice. ▶ R3,5m was made available for bursaries, with over R313 000 speciﬁcally designated for women. ▶ 235 employees completed management development programmes, including advanced management programmes, introduction to management and executive coaching. PERFORMANCE review (continued) R3,5m for bursaries by MultiChoice scheme for journalism students, introduced a graduates-in-media internship programme and launched an extensive digital media training programme for journalists. For the year Media24 spent R44m on training and development. Across the group, skills development remains important to maintaining our competitive advantage. ▶ 20 IT graduates were employed on our Beneﬁciaries of the academy initiatives graduate programme. ▶ SuperSport and DStv Media Sales have a included: ▶ 21 journalism honours graduates were 100% absorption rate on learnerships and awarded bursaries in 2012 and began internships in the current year. internships in 2013 (61% black and 70% Media24 women). ▶ 21 journalism honours students were In recent years Media24 has steadily increased awarded bursaries in 2013 (52% black its investment in training, extended its bursary and 81% women). Integrated annual report 2014 NASPERS LIMITED 81 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n PERFORMANCE review (continued) ▶ 20 graduates in the graduates in media house through a bespoke training programme. programme (71% black and 88% The programme consists of general classiﬁeds women). modules and of modules for speciﬁc functions and segments. Through these programmes, we Media24 also awarded 197 bursaries to promote knowledge sharing, increase the overall employees for part-time studies in 2013 (71% skill level and harmonise our ways of working. black and 58% women). During 2014/2015 we will organise over a dozen The Paarl Media Academy of Print focuses multi-day training sessions with a large share of on developing the printing skills, as well as our employees participating. leadership and management skills needed to In etail we drive the exchange of ideas, best run a successful print business. Internet In our international businesses, mainly our internet operations, we aim to attract young engineers. Training and development is thus key to our strategy of operating leading internet platforms in emerging markets. Talent with classiﬁeds expertise is notoriously scarce in the markets we operate in. Therefore, we are developing this talent in- practices and identify collaboration opportunities between our portfolio companies. We organise sector-speciﬁc conferences, as well as global benchmarking efforts that signiﬁcantly enhance skill levels. The online comparison shopping team holds physical conferences and runs global functional exchanges to address common challenges and to exchange knowledge in trafﬁc acquisition, product development and business development. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 82 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) (cid:90) ENVIRONMENT Naspers has diverse operations, ranging from printing plants to transactional internet platforms offering entertainment or products. Each type of business has a unique effect on the environment, requiring different responses to limit these impacts. Our gross carbon footprint (scope 1 and 2) is 185 105 (2013: 142 544) tonnes of CO2e. We measured direct (scope 1 and 2) emissions at our locations across South Africa, Poland and Nigeria. Print operations remain the largest contributor (72%) to the group’s total measured carbon emissions. Through improvement and sustainable technological innovation, Naspers strives to create solutions that minimise its impact on the environment. MANAGING IMPACT RESPONSE Risk assessments identify operations where our direct impact on the environment is most signiﬁcant. We use, where possible, advanced technologies to reduce our impact on the environment. Our most direct impact on the environment is from print media (72% of total carbon emissions). The internet businesses inherently have a lower impact on the environment. Through some of their trading activities, they stimulate buying and selling used or recycled goods in a paperless environment, and strive to make a difference, for example Allegro’s All For Planet initiative (page 85). A number of initiatives are reducing our carbon footprint and supporting our sustainability campaign. Energy-efﬁciency initiatives include: ▶ movement-activated lights ▶ energy-efﬁcient air-conditioners ▶ consolidating data centres ▶ power factor correction and load balancing, and ▶ automatic hibernation of PCs. Waste-management initiatives include: ▶ recycling ofﬁce waste more appropriately, for example labelled waste dispensers, and ▶ installing ewaste bins for customers and employees to safely dispose of obsolete electronic devices such as decoders, remote controls and PCs. Integrated annual report 2014 NASPERS LIMITED 83 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n PERFORMANCE review (continued) MANAGING IMPACT RESPONSE Our printing operations Throughout Paarl Media, equipment is in place to collect and recycle apply leading emission- dust particles from the printing process. reduction technology to minimise and responsibly dispose of waste. We monitor environmental Irdeto operates in line with ISO 9001 and 27001, with its implementation of both standards regularly audited by an external compliance standards certiﬁcation body. at our facilities and participate in third-party reviews. We measure and report As disclosed above. on our carbon footprint. Where possible, we Paarl Media was the ﬁrst African printing organisation to receive the Forest Stewardship Council (FSC) chain-of-custody certiﬁcation. This is an independent international veriﬁcation that printed products can be traced back from their point of origin to responsible, well-managed forestry, controlled and recycled sources. use environmentally responsible energy sources, invest in improving energy efﬁciency and design energy-efﬁcient facilities. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 84 NASPERS LIMITED Integrated annual report 2014 ALLEGRO: All For Planet Foundation The All For Planet Foundation was established by Allegro in November 2008 to reach over 13m people using Allegro websites. The aim is to raise ecological awareness and promote environmentally friendly solutions, primarily through activities relating to municipal ecology within the broader sustainable development framework. This year the foundation decided to build an ECO-Christmas tree, together with Pozna(cid:457) residents, from thousands of plastic polyethylene terephthalate (PET) bottles destined for disposal. We promised to change things for the better, so we wanted to show that even Christmas can receive its ecological touch. According to ecological reports, this PERFORMANCE review (continued) period is not only a burden to our budget, but also to the natural environment – during the festive season, worldwide approximately 50 000 trees are cut down to produce 8 000 tonnes of gift wrapping paper and 4m tonnes of shopping and gift bags are thrown away. Typical Christmas lights with traditional bulbs use approximately 99% more energy than LED lights. Many Pozna(cid:457) residents wished to participate in this ECO-Christmas campaign, unique in Europe, to show that we can change things for the better. On 14 December the lights were ofﬁcially switched on, and the public was invited to take part in workshops on eco-friendly gift wrapping. Once Christmas was over, the plastic bottles were recycled to produce eco-friendly pillows that were sold to raise money for charity. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 85 p u o r G e c n a m r o f r e P e c n a n r e v o G PERFORMANCE review (continued) Media24 Media24 produces mainly books, magazines (cid:90) PENALTIES Because MultiChoice operates in a highly and newspapers, recycling all unsold regulated environment in South Africa, magazines and newspapers. It also uses its compliance is important. The company magazines and newspapers as platforms to participates in the regulatory process affecting educate readers about lowering their impact the communications industry through various on the environment. public forums and debates, providing inputs on formulating standards and strategies for this Pay television During the year over 120 tonnes of waste was industry. removed from MultiChoice ofﬁces in South MultiChoice and M-Net received some ﬁnes Africa. Some 44% of this waste was recycled, (R10 000) from the self-regulatory body, reducing the MultiChoice group’s carbon Broadcasting Complaints Commission of South footprint by an estimated 195 tonnes CO2e. Nigeria is also implementing a range of waste- Africa. These relate to incorrect scheduling of content and the incorrect parental guidance management initiatives to recycle ofﬁce waste. rating for certain content or in the electronic Internet Various recycling and energy-saving initiatives programme guide. Most of these problems are due to human error. Steps are being taken to correct this both by M-Net and with third-party are under way at Allegro, Buscapé and our suppliers of channels. other internet companies. Once again, in the past year, there were no environmental accidents, nor were any envi environment-related ﬁnes imposed by any government. The group will continue to re reﬁne its processes for ma managing its impact on the envi environment. l i a c n a n F i n o i t a m r o f n I 86 NASPERS LIMITED Integrated annual report 2014 PERFORMANCE review (continued) (cid:90) AWARDS Prestigious awards received by group companies during the year included: BUSINESS AWARD Projects by the Allegro All For Planet Foundation dominated the competition Ace of Business Responsibility, aiming to select the most interesting CSR initiatives in the Wielkopolska region. In an online poll, we were awarded the main prize for Ride for kilometres, Park in a favourable climate, and for Don’t be a redneck – eat veggies. For the second year running, PayU received the Ekomers award for the best payment solution in Poland. For the sixth year in a row, Allegro.pl was ranked as this year’s strongest Polish household name in the commerce category, prepared by Rzeczpospolita, one of the leading daily newspapers in Poland. In the general list of top 100 Polish brands, Allegro is number seven. According to a survey done by Antal International, the Allegro Group has been rated the most desired employer in Poland in the retail and ecommerce category. Agito.pl has been awarded Consumer’s Golden Laurel 2013, a prize for the most popular Polish products and brands. This award is especially valuable because Agito has been chosen upon surveys (including telephone ones) conducted among consumers from the whole country. Ibibo Group won the DSCI Excellence Award 2013 for security in ecommerce. Phanindra Sama, founder and CEO of redBus won the Forbes India Leadership Award in the category Outstanding Start-up. Pratap K Singh, President, IT ibibo Group was selected as Top CIO 100 Awards 2013 winner. BoxOfﬁce Online received three awards during the year: a silver from the Bookmarks Awards ENRICHING LIVES for best display advertising, a silver from Assegai Awards for online search and display advertising, and a gold from Promax Awards for its Ninja advertisement as the best promo not using programme footage. SuperSport was awarded best app of the year by MTN The DStv iPad app received a bronze from the Bookmarks Awards for the best tablet app and DStv also received a bronze for the best multi-platform publisher. Via Afrika Education was named Seﬁka Educational Publisher of the Year for the third consecutive time. SARIE won seven prizes at the annual Pica industry awards, including for Magazine of the Year and Editor of the Year (Michélle van Breda). Men’s Health was named International General Interest Magazine of the Year. Media24 Magazines scooped a total of 22 Pica Awards. Beeld won the Frewin Trophy, Volksblad the McCall Trophy and City Press the Joel Mervis Trophy for design excellence at the annual Standard Bank Sikuvile Journalism Awards. Integrated annual report 2014 NASPERS LIMITED 87 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n CORPORATE governance p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 88 NASPERS LIMITED Integrated annual report 2014 CORPORATE governance (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 89 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CORPORATE governance (continued) The board of directors conducts the group’s All controlled entities in the group are business with integrity by applying required to subscribe to the relevant appropriate corporate governance policies principles of King III. Business and and practices. governance structures have clear approval frameworks. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) INTRODUCTION Compliance with both the JSE, applicable Naspers has an internal control oversight forum comprising the CFOs and risk and LSE Listings Requirements and the Irish Stock internal audit managers of Naspers, Exchange Listings Requirements is monitored MultiChoice and Media24, the Naspers by the audit and risk committees of the company secretary, the company secretary board. of MultiChoice and Media24 and group The board’s executive, audit, risk, human general counsel. The forum was tasked to resources and remuneration, nomination, ensure the Naspers group’s governance and social and ethics committees fulﬁl key structures and framework are employed in roles in ensuring good corporate the in-scope entities in the group during the governance. The group uses independent ﬁnancial year. Compliance and progress are external advisers to monitor regulatory monitored by the audit and risk committees developments, locally and internationally, to and reported to the board. enable management to make For a review of Naspers’s application recommendations to the Naspers board on of King III, please go to www.naspers.org/ matters of corporate governance. corporate-governance.php. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) APPLICATION OF AND APPROACH TO KING III The board, its committees, and the boards (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) BUSINESS ETHICS The group’s code of business ethics and business conduct is available on and committees of subsidiaries MultiChoice www.naspers.com. and Media24 are responsible for ensuring This code applies to all directors and the appropriate principles and practices employees in the group. Ensuring that group contained in King III are applied and companies adopt appropriate processes and embedded in the governance practices of establish supporting policies and procedures the group companies. is an ongoing process. Management focuses A disciplined reporting structure ensures on policies and procedures that address key the Naspers board is fully apprised of ethical risks, such as conﬂicts of interest, subsidiary activities, risks and opportunities. accepting inappropriate gifts and acceptable business conduct. 90 NASPERS LIMITED Integrated annual report 2014 CORPORATE governance (continued) The human resources and remuneration committee is the overall custodian of business ethics. Unethical behaviour by (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) THE BOARD Composition Details of directors at 31 March 2014 are set senior staff members is reported to this out on pages 97 to 99. committee, along with the manner in which Naspers has a unitary board, which fulﬁls the company’s disciplinary code was applied. oversight and controlling functions. The The social and ethics committee has a monitoring role. board charter sets out the division of responsibilities. The majority of board Naspers is committed to conducting its members are non-executive directors and business on the basis of complying with the independent of management. To ensure that law, with integrity and with proper regard no one individual has unfettered powers of for ethical business practices. Whistle-blowing facilities at most subsidiaries enable employees to anonymously report unethical business conduct. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) COMPLIANCE FRAMEWORK Naspers has a legal compliance programme decision-making and authority, the roles of chair and chief executive are separate. At 31 March 2014 the board comprised 10 independent non-executive directors, three non-executive directors and two executive directors, as deﬁned under the Listings Requirements of the JSE. Four directors (27%) are from previously which involves preparing and maintaining disadvantaged groups and three directors inventories of material laws and regulations (20%) are female. These ﬁgures are above for each business unit, implementing policies the average for JSE-listed companies. and procedures based on these laws and regulations, establishing processes to The chair supervise compliance and mitigate risks, monitoring compliance, implementing effective training and awareness The chair, Ton Vosloo, is a non-executive director. Boetie van Zyl acts as lead director in all matters not dealt with by the programmes and reporting to the various non-executive chair. boards and management on the effectiveness of these efforts. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 91 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CORPORATE governance (continued) The chief executive Independent advice The chief executive reports to the board and Individual directors may, after consulting is responsible for the day-to-day business of with the chair or chief executive, seek the group and implementation of policies independent professional advice, at the and strategies approved by the board. Chief expense of the company, on any matter executives of the various businesses assist connected with discharging their him in this task. Board authority conferred responsibilities as directors. on management is delegated through the chief executive, against approved authority Meetings and attendance levels. Subsequent to the year-end, Bob van The board meets at least four times a year, Dijk was appointed chief executive, replacing or as required. The executive committee Koos Bekker who retired on 31 March 2014. attends to matters that cannot wait for the next scheduled meeting. Non-executive Orientation and development directors meet at least once annually An induction programme is held for new without the chief executive, ﬁnancial members of the board and key committees, director and chair present, to discuss the tailored to the needs of individual performance of these individuals. appointees. The company secretary assists Details of attendance at board and the chair with the induction and orientation committee meetings are provided on pages of directors, and arranges speciﬁc training if 100 and 101. required. Evaluation Conﬂicts of interest The nomination committee carries out the Potential conﬂicts are appropriately annual evaluation process. The performance managed to ensure candidate and existing of the board and its committees, as well as directors have no conﬂicting interests the chair of the board, against their between their obligations to the company respective mandates in terms of the board and their personal interests. Any interest in charter and the charters of its committees, is contracts with the company must be appraised. The committees perform formally disclosed and documented. self-evaluations against their charters for Directors must also adhere to a policy on consideration by the board. In addition, the trading in securities of the company. performance of each director is evaluated by 92 NASPERS LIMITED Integrated annual report 2014 CORPORATE governance (continued) the other board members, using an Internal control systems evaluation questionnaire. The chair of the As part of the overall management of risk, nomination committee discusses the results the system of internal controls in all material with each director. A consolidated summary subsidiaries and joint ventures under the of the evaluation is discussed by the board. company’s control aims to prevent and The lead independent director leads the detect any risk materialising and to mitigate discussion on the performance of the chair. any adverse consequences thereof. The Board committees group’s system of internal controls is designed to provide reasonable, and not While the whole board remains accountable absolute, assurance on the achievement of for the performance and affairs of the company objectives, including integrity and company, it delegates certain functions to reliability of the ﬁnancial statements; to committees and management to assist in safeguard, verify and maintain accountability discharging its duties. Appropriate structures of its assets; and to detect fraud, potential for those delegations are in place, liability, loss and material misstatement, accompanied by monitoring and reporting while complying with regulations. For those systems. entities in which Naspers does not have a Each committee acts within agreed, controlling interest, the directors written terms of reference. The chair of each representing Naspers on these boards seek committee, all of whom are non-executive assurance that signiﬁcant risks are managed directors, reports at each scheduled board and systems of internal control are effective. meeting. All internal control systems have The chair of each committee is required to shortcomings, including the possibility of attend annual general meetings to answer human error or ﬂouting of control measures. questions. Even the best system may provide only The established board committees in partial assurance. In the dynamic operation during the ﬁnancial year are: environment the company operates in, executive committee, audit committee, risk management regularly reviews risks and the committee, human resources and design of the internal controls system to remuneration committee, nomination address these, assisted by the work and committee, and the social and ethics reports from internal audit on the adequacy committee. The board is satisﬁed that the and operational effectiveness of controls, committees properly discharged their which may indicate opportunities for responsibilities over the past year. improvement. The external auditor considers Integrated annual report 2014 NASPERS LIMITED 93 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n CORPORATE governance (continued) elements of the internal controls system as Non-audit services part of its audit and communicates The group’s policy on non-audit services deﬁciencies when identiﬁed. provides guidelines on dealing with audit, The board reviewed the effectiveness of audit-related, tax and other non-audit controls for the year ended 31 March 2014, services that may be provided by Naspers’s principally through a process of independent auditor to group entities. It also management self-assessment, including sets out services that may not be performed formal conﬁrmation in the form of by the independent auditor. representation letters by executive management. Consideration was given to IT governance input, including reports from internal audit Information technology (IT) governance and the external auditor, compliance and is integrated in the operations of the the risk management process. Where Naspers businesses. Management of each necessary, programmes for corrective actions subsidiary or business unit is responsible for have been initiated. ensuring effective processes on IT Nothing has come to the attention of the governance are in place. board, external or internal auditors to Internal audit provides assurance to indicate any material breakdown in the management and the audit committee on functioning of internal controls and systems the effectiveness of IT governance. during the year under review. Company secretary Internal audit The company secretary, Gillian Kisbey-Green, An internal audit function is in place and group legal counsel (legal compliance throughout the group. The head of internal ofﬁcer), are responsible for guiding the audit reports to the chair of the Naspers board in discharging its regulatory audit committee, with administrative responsibilities. Subsequent to year-end, reporting to the ﬁnancial director. A large Craig Opperman was appointed as group part of the internal audit ﬁeldwork is legal counsel, replacing André Coetzee who outsourced. retired on 31 March 2014. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 94 NASPERS LIMITED Integrated annual report 2014 CORPORATE governance (continued) Directors have unlimited access to the Investor relations advice and services of the company Naspers’s investor relations policy can be secretary. She plays a pivotal role in the found on www.naspers.com. It describes company’s corporate governance and the principles and practices applied in ensures that, in accordance with the interacting with shareholders and investors. pertinent laws, the proceedings and affairs Naspers is committed to providing timely of the board, the company itself and, where and transparent information on corporate appropriate, shareholders are properly strategies and ﬁnancial data to the investing administered. She is also the company’s public. In addition, we consider the growing compliance ofﬁcer as deﬁned in the demand for transparency and accountability Companies Act and delegated information on our non-ﬁnancial (or sustainability) ofﬁcer. The company secretary monitors performance. In line with King III, Naspers directors’ dealings in securities and ensures recognises that this performance is based on adherence to closed periods. She attends all its risk proﬁle and strategy, which includes board and committee meetings. non-ﬁnancial risks and opportunities. As required by JSE Listings Requirement The company manages communications 3.84(i), the board has determined that the with its key ﬁnancial audiences, including company secretary, who is a chartered institutional shareholders and ﬁnancial (debt accountant (SA) with more than 20 years’ and equity) analysts, through a dedicated company secretarial experience, has the investor relations unit. requisite competence, knowledge and Presentations and conference calls experience to carry out the duties of a take place after publishing interim and secretary of a public company, and has an ﬁnal results. arm’s length relationship with the board. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 95 OUR board p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I From top, left to right: Craig Enenstein, Nolo Letele, Boetie van Zyl, Roberto Oliveira de Lima, Yuanhe Ma, Rachel Jafta, Cobus Stofberg, Bob van Dijk, Debra Meyer, Fred Phaswana, Steve Pacak, Ton Vosloo, Ben van der Ross, Don Eriksson, Francine-Ann du Plessis, Mark Sorour 96 NASPERS LIMITED Integrated annual report 2014 OUR board (continued) Ton Vosloo (76) became managing director of Naspers in 1984, serving as executive director of Loubser du Plessis Inc. She is a member of the audit and risk committees of chair from 1992 to 1997. Mr Vosloo worked Naspers. She also serves on the boards of as a journalist from 1956 to 1983 and as Standard Bank, ArcelorMittal and Life editor of Beeld from 1977 to 1983. Until Healthcare. recently he was a director of Media24 and MultiChoice South Africa Holdings. He is the non-executive chair of the board of Naspers, a position he has held since 1997. He is a former chair of Sanlam, M-Net, WWF South Africa and the Cape Philharmonic Orchestra. He was awarded the Nieman Fellowship from Harvard University in 1970. Mr Vosloo has been awarded three honorary doctorates. Koos Bekker (61) led the founding team of M-Net/MultiChoice pay-television business in 1985. He was also a founder of MTN in cellular telephony. Koos headed the MIH group in its international and internet expansion until 1997 when he became chief executive of Naspers. He serves on the boards of other companies in the wider group, as well as on various public bodies. On 31 March 2014 he retired from the group and will succeed Mr Vosloo as non-executive chair in April 2015. Academic qualiﬁcations include BAHons and honorary doctorate in commerce (Stellenbosch University), LLB (University of the Witwatersrand) and MBA (Columbia University, New York). Franc ne-Ann du Pless s (59) has been a director of Naspers since 2003 and holds the qualiﬁcations BComHons (taxation), LLB and CA(SA). Although she is admitted as an advocate of the Cape High Court, she practises as a chartered accountant and is a Cra g Enenste n (45) is currently the CEO of Corridor Capital, LLC, an operationally intensive private equity ﬁrm focused on the lower middle market. Corridor Capital, LLC is based in Los Angeles and was founded by Mr Enenstein in 2005. He holds an MBA Finance (Wharton School of Business), an MA International Studies (Lauder Institute: University of Pennsylvania) and a BA (University of California: Berkeley). Don Er ksson (68) is a chartered accountant (SA) and an honorary life member of the Institute of Directors (IOD). Don is currently chair of Oakleaf Insurance Company Limited, Insurance Outsourcing Managers Holdings Limited, Renasa Insurance Company, Summerﬁeld Retirement Village and the remuneration committee of Discovery Health Medical Scheme. He is also a member of the audit and risk committees of Discovery Health Medical Scheme. He served on the council of the IOD for a number of years and is an active member of its audit committee forum. Rachel Jafta (53), MEcon and PhD, is a professor in economics at Stellenbosch University. She joined Naspers as a director in 2003 and was appointed a director of Media24 in 2007. She is a member of the South African Economic Society, director of Econex, chair of the Cape Town Carnival Trust and board member of the South African Institute of Race Relations. She is a Integrated annual report 2014 NASPERS LIMITED 97 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I OUR board (continued) member of the nomination committee at Naspers and the human resources and Debra Meyer (47) was appointed as director in 2009. She is a professor of remuneration committee of Media24. She is biochemistry and heads this department at chair of the human resources and the University of Pretoria. She was a remuneration committee of Naspers and the Fulbright Scholar at UC Davis (University of nomination committee of Media24. She was California) where she obtained a PhD in appointed chair of the Media24 board in biochemistry and molecular biology. She April 2013 and is a member of the Naspers regularly publishes HIV/Aids research in social and ethics committee. Nolo Letele (64) joined M-Net in 1990 and pioneered MultiChoice’s expansion outside South Africa. In 1995 he moved to Ghana, where he served as West African regional general manager. In 1999 he was appointed chief executive of MultiChoice SA, and later served as MultiChoice group chief executive until 2010, when he was appointed executive chair of the MultiChoice South Africa Holdings board. Nolo has won several awards including Media Man of The year in science journals and organises education and community service projects on this topic. She has completed modules in media strategy and academic leadership at Harvard and Gibs (University of Pretoria) and makes regular contributions to several newspapers and magazines. She is a published poet and has received several awards in her area of expertise. She serves as trustee or board member of several organisations including Dagbreektrust, Media24, and the council of North-West University. 2001 (Saturday Star – Business Report); Media Owner of the Year in 2003 (Financial Roberto Ol ve ra de L ma (63) from Brazil is a board member of Telefonica Brasil, Mail Adfocus); and the Lifetime, Africa Natura Cosmeticos, Rodobens Negócios Achievement Prize for media development in Imobiliarios, Grupo Pao de Açucar in Brazil Africa (Millennium Excellence Foundation). and Edenred in France. He also serves as He holds an honours degree in electronic board member on pro-bono basis in Abrinq, engineering (UK). His directorships include Centro de Pesquisas Tecnologicas – CpqD BuiltAfrica Proprietary Limited. and Fundação Mata Atlantica. Yuanhe Ma (73) retired from his post as head of State Administration of Radio, Film Steve Pacak (59) is a chartered accountant (SA), began his career with Naspers at M-Net and Television’s (SARFT’s) ofﬁce in Hong in 1988 and has held various executive Kong in March 2002, where he worked for positions in the Naspers group. He is a three years. Before moving to Hong Kong, director of Media24 and MultiChoice South he worked as director-general of the foreign Africa Holdings and other companies in the affairs department of SARFT. He worked in wider Naspers group. He was appointed an SARFT for more than 30 years. He graduated executive director of Naspers in 1998. from Beijing Broadcasting Institute’s Foreign Language Department. 98 NASPERS LIMITED Integrated annual report 2014 OUR board (continued) Fred Phaswana (69) holds the qualiﬁcations MA and BComHons, and Ben van der Ross (67), who holds the qualiﬁcation DipLaw (UCT) and is an obtained a BA (philosophy, politics and admitted attorney, is chair of Strategic Real economics) from Unisa in 2010. He joined Estate Management Proprietary Limited, the Naspers as a director in 2003. He is chair of managers of the Emira Property Fund. He The Standard Bank Group and of Standard also serves, inter alia, on the boards of Bank of South Africa Limited and joint chair FirstRand Limited, MMI Holdings Limited, of Mondi Group. Pick n Pay Stores Limited, Distell Limited and Mark Sorour (52) joined the Naspers group in 1994 heading up business development and corporate ﬁnance throughout Africa, Lewis Group Limited. Bob van D k (41) was appointed chief executive of Naspers in April 2014. He the Middle East, Thailand, China, Europe, joined as Allegro Group CEO in August 2013 USA and Asia. Following assignments and was promoted to CEO Global located in Hong Kong and Amsterdam, he Transaction eCommerce in October 2013. returned to Cape Town in 2002 as the group He has over 10 years of general chief investment ofﬁcer. Since then he has management experience in online growth had global responsibility for equity capital business, mainly with eBay and Schibsted, markets and merger and acquisitions spanning the online marketplaces, online activities. Mark is a qualiﬁed chartered classiﬁeds and etail segments. Most recently accountant holding a BComm, Dip Acc, he was vice-president and general manager CA(SA). Cobus Stofberg (63) is a founder member of M-Net in 1986. He served as CEO of the MIH group from 1997 to 2011, and has been instrumental in the expansion of the group. Prior to joining M-Net, he was a partner of Coopers & Lybrand (predecessor of PricewaterhouseCoopers Inc.). He holds a of eBay Germany and Europe emerging markets. Prior to his general management career, Bob was an entrepreneur and he started his career in McKinsey with a focus on mergers and acquisitions, and media. Bob has an MBA from INSEAD and an MSc in econometrics from Erasmus University Rotterdam. BCom (Law) and LLB from Stellenbosch, BCompt (honours) from Unisa and qualiﬁed Boet e van Zyl (75) holds the qualiﬁcations PrEng and BScEng as a chartered accountant in South Africa. (mechanical) (UCT). He joined Naspers as a G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l director in 1988. He is a director of the Peace Parks Foundation and a trustee of WWF South Africa. He is chair of the audit, risk and social and ethics committees of Naspers and a member of the human resources and remuneration committee and nomination committee of Naspers. I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 99 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i OUR board (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) DIRECTORS AND ATTENDANCE AT MEETINGS Date ﬁrst appointed in current position Date last appointed Five board meetings were held during the year. Attendance: T Vosloo J P Bekker(5) 6 October 1997 30 August 2013 6 October 1997 1 April 2008 F-A du Plessis 23 October 2003 30 August 2013 C L Enenstein(1) 16 October 2013 16 October 2013 D G Eriksson(1) 16 October 2013 16 October 2013 R C C Jafta 23 October 2003 31 August 2012 L N Jonker(2) 7 June 1996 30 August 2013 F L N Letele(4) 22 November 2013 22 November 2013 D Meyer 25 November 2009 31 August 2012 R Oliveira de Lima(1) 16 October 2013 16 October 2013 Y Ma(1) 16 October 2013 16 October 2013 S J Z Pacak 24 April 1998 1 April 2009 T M F Phaswana 23 October 2003 30 August 2013 L P Retief(3) 1 September 2008 31 August 2012 J D T Stofberg(1) 16 October 2013 16 October 2013 B van Dijk(6) 1 April 2014 1 April 2014 B J van der Ross 12 February 1999 30 August 2013 N P van Heerden(2) 7 June 1996 31 August 2012 J J M van Zyl 1 January 1988 26 August 2011 H S S Willemse(2) 30 August 2002 31 August 2012 5 5 5 2 2 5 3 1 5 2 2 5 5 3 2 — 5 3 5 3 Category Non-executive Executive Independent non-executive Independent non-executive Independent non-executive Independent non-executive Independent non-executive Non-executive Independent non-executive Independent non-executive Independent non-executive Executive Independent non-executive Non-executive Non-executive Executive Independent non-executive Independent non-executive Independent non-executive Independent non-executive n o i t a m r o f n I Notes (1) Appointed 16 October 2013. (2) Resigned 16 October 2013. (3) Resigned 21 November 2013. (4) Appointed 22 November 2013. (5) Retired 31 March 2014. (6) Appointed 1 April 2014. 100 NASPERS LIMITED Integrated annual report 2014 (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) COMMITTEES AND ATTENDANCE AT MEETINGS OUR board (continued) Executive committee Audit committee(1) Risk committee Human resources and remuneration committee(1) No meetings held during the year. Five meetings held during the year. Attendance: Five meetings held during the year. Attendance: Five meetings held during the year. Attendance: Nomination committee(1) Six meetings held during the year. Attendance: Social and ethics committee Two meetings held during the year. Attendance: Category T Vosloo J P Bekker(4) F-A du Plessis D G Eriksson(2) R C C Jafta(3) F L N Letele D Meyer S J Z Pacak J J M van Zyl B J van der Ross B van Dijk(5) E Weideman (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) 5 (cid:57) (cid:57) 5 4 (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) 5 4 5 2 5 5 4 n/a (cid:57) 5 (cid:57) 6 Non-executive (cid:57) 1 Executive (cid:57) 5 (cid:57) 6 (cid:57) 5 (cid:57) 6 Independent non-executive Independent non-executive Independent non-executive Non-executive Independent non-executive Executive Independent non-executive Independent non-executive Executive Non-executive (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) (cid:57) 2 2 2 2 n/a 2 Notes (cid:57)(cid:3)Member. (1) Executive directors attend meetings by invitation. (2) Appointed to the risk committee on 16 October 2013. Mr Eriksson attends audit committee meetings in an advisory capacity. (3) Appointed to the social and ethics committee on 21 June 2013. (4) Retired on 31 March 2014. (5) Appointed on 1 April 2014. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 101 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I REMUNERATION report (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) HUMAN RESOURCES AND REMUNERATION COMMITTEE AND ITS ROLE The human resources and remuneration committee comprises only non-executive directors. Executive directors and certain members of management attend meetings by invitation. This committee met ﬁve times during the ﬁnancial year. Details of attendance at meetings are provided on page 101. ▶ Fulﬁl delegated responsibilities on the Naspers group’s share-based incentive plans, for example appointing trustees and compliance ofﬁcers. ▶ Approve the most senior appointments and promotions. ▶ Review incidents of unethical behaviour by senior managers and the chief executive. ▶ Review annually the company’s code of business ethics and business conduct. ▶ Review annually the committee’s charter The main responsibilities of the committee and recommend required amendments. are as follows: ▶ Determine and approve the group’s general remuneration policy, which must be tabled at each annual general meeting for a non-binding advisory vote by shareholders. ▶ Prepare an annual remuneration report for inclusion in the company’s integrated annual report. ▶ Review and approve annually the ▶ Approve amendments to the Naspers group’s share-based incentive plans. ▶ Perform an annual self-assessment of the effectiveness of the committee, reporting these ﬁndings to the board. ▶ Review annually the charters of the group’s signiﬁcant subsidiaries’ remuneration committees, and their annual assessment of compliance with these charters to establish if the Naspers committee can rely on the work of the remuneration packages of the most senior subsidiary companies’ committees. executives, including incentive schemes and increases, ensuring they are The committee fulﬁlled its remit during the appropriate and in line with the year. remuneration policy. ▶ Annually appraise the performance of the chief executive. ▶ Review the remuneration of non-executive directors of the board and its committees annually. Make proposals to the board for ﬁnal approval by shareholders in the annual general meeting. Remuneration is approved by shareholders in advance. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) REMUNERATION STRATEGY AND POLICY Naspers’s remuneration strategy aims to attract, motivate and retain competent leaders in its drive to create sustainable shareholder value. We aim to attract entrepreneurs and the best creative engineers to grow the value of 102 NASPERS LIMITED Integrated annual report 2014 REMUNERATION report (continued) the group and to recognise top be paid to international non-executive performance. directors for additional work they have been Our policies and practices align the asked to perform as directors with speciﬁc remuneration and incentives of executives expertise. All the non-executive directors and employees to the group’s long-term also receive a daily amount when travelling business strategy. Group companies are to and attending meetings outside their responsible for developing their own policies home country. and beneﬁts within the conﬁnes of the Remuneration is reviewed annually. group remuneration policy and in Independent advice is acquired to assist accordance with their local laws and each the human resources and remuneration company’s needs. committee. This remuneration is not Primary objectives include the need to linked to the company’s share price or promote superior performance; direct performance. Non-executive directors do employees’ energies towards key business not qualify for shares in terms of the goals; achieve the most effective returns for group’s incentive schemes. The board employee spend; address needs across annually recommends remuneration of differing cultures; and have credible non-executive directors for approval by remuneration policies. shareholders in advance. Naspers has an integrated approach to its In the past the benchmark used reward strategy, encompassing a balanced for directors’ fees was referenced to the design in which reward components are Top 20 JSE-listed companies, some (but not aligned to the strategic direction and all) of which have dual listings on major business-speciﬁc value drivers of Naspers. international exchanges. This comparison (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) OVERVIEW OF REMUNERATION Non-executive directors currently receive showed that, notwithstanding the increase approved by shareholders last year, due to our fast growth, Naspers is still behind the annual remuneration as opposed to a benchmark. To rectify this, an appropriate payment per meeting. This recognises the catch-up increase is recommended for ongoing responsibility of directors for the the 2014 ﬁnancial year, after which a efﬁcient control of the company. This slower pace of increase is envisaged. remuneration is augmented by An additional amount per day for all compensation for services on committees directors spent travelling to meetings of the board and boards of subsidiaries. held not in their home countries, is also A premium is payable to the chair of the proposed. In arriving at these proposals, board, as well as to the chairs of the the committee used data comparisons committees. An additional amount may compiled by an independent consultant. Integrated annual report 2014 NASPERS LIMITED 103 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I REMUNERATION report (continued) In remunerating executives, the group aims to attract, motivate and retain (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ANNUAL BONUS Most executives have an annual cash bonus competent and committed leaders in its scheme that may comprise a variable drive to create sustainable shareholder value. component based on surpassing ﬁnancial We aim to recognise top performance and and operational objectives, as well as ﬁxed attract entrepreneurs and the best creative amounts for achieving speciﬁc discrete engineers and people to grow the value of objectives. The incentive for each executive the group. The remuneration policies strive is agreed annually in advance. Incentives are to meet this objective. Accordingly, the focus based on targets that are veriﬁable and is not primarily on guaranteed annual aligned to the group’s business plan, risk remuneration, but on individual incentive management policy and strategy. If targets plans linked to creating shareholder value. are not met, no bonus is paid. Naspers usually structures packages on a total cost-to-company basis, which incorporates base pay, car allowance, (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) LONG-TERM INCENTIVES Long-term incentives are generally share- pension, medical aid and other optional based incentive schemes for Naspers beneﬁts. In addition, most executives qualify N ordinary shares and/or shares or for individual and/or team performance incentives. At senior level, we avoid appreciation rights in respective companies or subsidiaries. These awards normally vest standardised packages and aim to tailor the over a period of four or ﬁve years and must compensation structure to the needs of the be exercised within ﬁve to 10 years from the speciﬁc business. date of grant. The shares/appreciation rights Remuneration packages are reviewed are not free: the employee is offered the annually and are monitored and compared shares/appreciation rights at market value on with reported ﬁgures for similar positions to the day of the award. Employees beneﬁt ensure they are fair and sensible. In some only if they, together with colleagues in that cases independent consultants provide benchmarks. We have no speciﬁc group unit, can create additional value above the value on the date of issue. The various policies to, for example, pay the median, as remuneration committees in the group the requirements of a group serving a multitude of countries differ widely. annually review the share awards. In addition, if a particular group company 104 NASPERS LIMITED Integrated annual report 2014 employs people during the year, that remuneration committee may decide to make awards to those individuals. No awards of shares/appreciation rights are made during a closed period for trading, REMUNERATION report (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SERVICE CONTRACTS Executives’ contracts generally are subject to terms and conditions of employment in the local jurisdiction. The company’s executive and non-executive directors’ contracts do backdating awards is prohibited, and there is not contain ‘golden parachute’ clauses. no repricing and automatic regranting of Non-executive directors are subject to underwater shares/appreciation rights. There is no automatic entitlement to bonuses or early vesting of share-based regulations on appointment and rotation in terms of the company’s memorandum of incorporation and the South African incentives should an executive leave the Companies Act. employment of the company. There is a maximum number of shares/appreciation rights that may be awarded in aggregate (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SHARE-BASED INCENTIVE PLANS The group operates a number of share- and to any individual for each share-based based incentive schemes. Some offer incentive scheme. employees Naspers shares, others relate The group operates numerous share- directly to individual operating companies. based incentive schemes, as set out in equity Details are contained in the annual ﬁnancial compensation beneﬁts in the notes to the statements, which can be found on annual ﬁnancial statements which can be www.naspers.com. found on www.naspers.com. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) PENSION FUND AND MEDICAL AID During the year the relevant group At 31 March 2014 the group held 19 188 252 (2013: 21 268 454) Naspers N ordinary shares as treasury shares to settle outstanding options under certain of the companies made contributions for executive group’s share incentive schemes. The dilution effect of these treasury shares amounted to 41,42 cents per N ordinary share (2013: 8,98 cents). directors to the Naspers pension fund. The rate of contribution is 10%, based on the pensionable salary of these individuals. The value of contributions for each executive director appears in the summary of directors’ emoluments on page 106. None of the non-executive directors of Naspers contributed to any group pension fund during 2014. Integrated annual report 2014 NASPERS LIMITED 105 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n REMUNERATION report (continued) In accordance with schedule 14 of the JSE Limited Listings Requirements and the requirements of the South African Companies Act, at the annual general meeting in August 2011, shareholders approved that going forward, up to 40 588 541 new Naspers N ordinary shares (approximately 10% of Naspers’s N ordinary share capital at 31 March 2010) may be issued for purposes of the group’s share-based incentive schemes. As at 31 March 2014, 1 272 500 new N ordinary shares had been issued for this purpose. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) EXECUTIVE DIRECTORS Annual cash bonuses and performance- related payments R’000 Salary R’000 Pension contribution paid on behalf of director to the pension scheme R’000 Total R’000 2014 S J Z Pacak Paid by other companies in the group 4 199 2 845 474 7 518 2013 S J Z Pacak Paid by other companies in the group 3 801 3 200 391 7 392 Steve Pacak’s annual performance payment is based on ﬁnancial, operational and discrete objectives, which were approved by the human resources and remuneration committee in advance. The bonus is capped at a maximum of the annual total cost to company. The outgoing chief executive, Koos Bekker, did not earn any remuneration from the group. In particular, no salary, bonus, car scheme, medical or pension contributions of any nature are payable. No other remuneration is paid to the executive directors. Remuneration is earned for services rendered in connection with the carrying on of the affairs of the business in the company. Interests in group share-based incentive schemes are set out on the following page. p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 106 NASPERS LIMITED Integrated annual report 2014 REMUNERATION report (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) EXECUTIVE DIRECTORS’ CONTRACTS No executive director has a notice period of more than one year. No executive director’s service contract includes predetermined compensation as a result of termination exceeding one year’s salary and beneﬁts. Koos Bekker’s ﬁve-year contract, which started on 1 April 2008, was extended to the end of February 2014. No remuneration was paid in respect of the extended contract for the 2013/2014 ﬁnancial year and no share offers were made. No compensation applied to termination. The ﬁnancial director, Steve Pacak, has an indeﬁnite employment contract. On 30 June 2014 Steve will retire as ﬁnancial director but will remain on the board as an alternate non-executive director. Basil Sgourdos, presently Naspers’s head of ﬁnance, will succeed Steve. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) DIRECTORS’ INTERESTS IN SCHEME SHARES OF THE GROUP’S SHARE INCENTIVE SCHEMES The executive directors of Naspers are allowed to participate in Naspers group share-based incentive schemes. Details as at 31 March 2014 in respect of the executive directors’ participation in Naspers scheme shares not yet released, are as follows: Name Incentive scheme Offer date Number of N shares Purchase price Release period Value of option(1) S J Z Pacak MIH (Mauritius) Limited share incentive scheme MIH (Mauritius) Limited share incentive scheme MIH (Mauritius) Limited share incentive scheme 2012/09/07 18 000 R484,70 2017/09/07 R189,16 2012/09/07 18 000 R484,70 2016/09/07 R175,38 2012/09/07 18 000 R484,70 2015/09/07 R159,91 Note (1) The value of the option represents the fair value on grant date in accordance with IFRS. Executive directors did not participate in any other Naspers group share-based incentive for the year to 31 March 2014. Integrated annual report 2014 NASPERS LIMITED 107 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n REMUNERATION report (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) NON-EXECUTIVE DIRECTORS’ TERMS OF APPOINTMENT Appointments to the board The board has a policy on procedures for the appointment and orientation of directors. The nomination committee periodically assesses the skills represented on the board by non-executive directors and determines whether these meet the company’s needs. Annual self-evaluations conducted by the board and its committees also assist. Directors are invited to give their input in identifying potential candidates. The members of the nomination committee propose suitable candidates for consideration by the board. A ﬁt and proper evaluation is performed for each candidate. Retirement and re-election of directors All non-executive directors are subject to retirement and re-election by shareholders every three years. Additionally, all non-executive directors are subject to election by shareholders at the ﬁrst suitable opportunity for interim appointments. The names of non-executive directors submitted for election or re-election are accompanied by brief biographical details to enable shareholders to make an informed decision on their election. The reappointment of non- executive directors is not automatic. Directors’ emoluments Non-executive directors Fees for services as directors Fees for services as directors of subsidiary companies 2014 R’000 2013 R’000 14 262 6 885 21 147 9 743 6 255 15 998 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 108 NASPERS LIMITED Integrated annual report 2014 Fees for the current year and proposed for 31 March 2015 and 31 March 2016 are as follows: REMUNERATION report (continued) Board 1.1 Chair*** 1.2 Member (South African resident) Member (non-South African resident) Member: Additional amount for non-South African resident (when needed) All members: daily amount when travelling to and attending meetings outside home country Committees 1.3 Audit committee: Chair 1.4 1.5 1.6 1.7 Human resources and Risk committee: Member Chair Member remuneration committee: Chair Member 1.8 Chair 1.9 Nomination committee: 1.10 Member 1.11 Social and ethics committee: Chair 1.12 Member Other 1.13 Trustee of group share schemes/other personnel funds 1.14 Media24 pension fund: Chair 1.15 Trustee 31 March 31 March 31 March 2015** 2016** 2014* (proposed) (proposed) R3 145 000 R615 000 US$97 500 US$60 000 (maximum) R3 800 000 R700 000 US$120 000 US$63 500 (maximum) R4 100 000 R755 000 US$130 000 US$68 580 (maximum) US$3 500 US$3 500 US$3 500 R360 000 R180 000 R200 000 R100 000 R235 000 R117 500 R86 000 R43 000 R175 000 R87 500 R395 000 R197 500 R220 000 R110 000 R270 000 R135 000 R120 000 R60 000 R195 000 R97 500 R425 000 R212 500 R238 000 R119 000 R285 000 R142 500 R138 000 R69 000 R210 000 R105 000 R38 600 R97 500 R65 000 R41 300 R104 250 R69 500 R44 190 R111 548 R74 365 G r o u p P e r f o r m a n c e G o v e r n a n c e These fees were approved by shareholders on 30 August 2013. Notes * ** The proposed 31 March remuneration is subject to such annual increase as may be retrospectively approved by the shareholders at the respective 2015 and 2016 Naspers annual general meetings. *** The chair of the board does not receive additional remuneration if he/she is a member of or chairs any committee of the board. i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 109 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i REMUNERATION report (continued) Individual non-executive directors received the following remuneration and emoluments during the current ﬁnancial year: Directors’ fees Committee(1), trustee and other(2) fees Directors’ fees Committee(1), trustee and other(2) fees Paid by com- pany R’000 3 145 615 793 282 — 615 359 205 793 615 793 615 410 756 359 615 615 359 Paid by sub- sidiary R’000 Paid by com- pany R’000 Paid by sub- sidiary R’000 1 437 — 108 350 — 720 86 — 108 240 108 — 1 655 — 86 — 591 86 — 455 — 128 — 322 41 29 — 88 — — — — — 280 934 41 189 — 253 198 — 95 60 — — 14 255 — 32 — 21 — 179 14 Paid by com- pany R’000 2 630 473 — — 355 473 473 — — 473 — 473 473 — 473 473 473 473 Total 2014 R’000 4 771 1 070 1 154 958 — 1 752 546 234 901 957 1 156 615 2 097 756 466 895 2 319 500 Paid by sub- sidiary R’000 Paid by com- pany R’000 Paid by sub- sidiary R’000 1 845 — — — 504 224 — — — — — — 1 933 — — — 885 — — 394 — — 218 231 51 — — 77 — — — — — 231 775 51 165 — — — 60 345 — — — — — — 51 — — — 243 — Total 2013 R’000 4 640 867 — — 1 137 1 273 524 — — 550 — 473 2 457 — 473 704 2 376 524 11 944 5 575 2 318 1 310 21 147 7 715 5 391 2 028 864 15 998 Non-execuitve directors T Vosloo(3) F-A du Plessis C L Enenstein(2), (3), (5) D G Eriksson(3), (5) G J Gerwel(8) R C C Jafta(3) L N Jonker(3), (4) F L N Letele(3), (7) Y Ma(3), (5) D Meyer(3) R Oliveira de Lima(2), (3), (5) T M F Phaswana L P Retief(3), (6) J D T Stofberg(5) N P van Heerden(4) B J van der Ross(3) J J M van Zyl(3) H S S Willemse(3), (4) Notes (1) Committee fees include fees for the attendance of the audit committee, risk committee, human resources and remuneration committee, the nomination committee and the social and ethics committee meetings of the board. (2) Trustee fees include fees for the attendance of the various retirement fund trustee meetings of the group’s retirement funds. An additional fee may be paid to directors for work done as directors with specific expertise. (3) Directors’ fees include fees for services as directors, where appropriate, of Media24 Proprietary Limited, Paarl Media Holdings Proprietary Limited, MIH Holdings Proprietary Limited (up to 16 October 2013) and MultiChoice South Africa Holdings Proprietary Limited. (4) Resigned 16 October 2013. (5) Appointed 16 October 2013. (6) Resigned 21 November 2013. (7) Appointed 22 November 2013. (8) Deceased 28 November 2012. n o i t a m r o f n I General notes Committee and trustee fees include, where appropriate, fees to be considered by shareholders at the annual general meeting on 29 August 2014 for services as trustees or members, as appropriate, of the group share schemes/retirement funds/Media24 safety, health and environment committee. Craig Enenstein and Roberto Oliveira de Lima are paid an additional fee for specific work done as directors with specific expertise. Non-executive directors are subject to regulations on appointment and rotation in terms of the company’s memorandum of incorporation and the South African Companies Act. 110 NASPERS LIMITED Integrated annual report 2014 REMUNERATION report (continued) Shareholding Directors’ interest in Naspers shares The directors of Naspers have the following interests in Naspers A ordinary shares on 31 March 2014: 31 March 2014 Naspers A ordinary shares Beneﬁcial 31 March 2013 Naspers A ordinary shares Beneﬁcial Name Direct Indirect Total Direct Indirect J J M van Zyl 745 — 745 745 — Total 745 Messrs J P Bekker and J D T Stofberg each have an indirect 25% interest in Wheatﬁelds 221 Proprietary Limited, which owns 168 605 Naspers Beleggings (RF) Beperk ordinary shares, 16 860 500 Keeromstraat 30 Beleggings (RF) Beperk ordinary shares and 133 350 Naspers A shares. No other director of Naspers had any direct interest in Naspers A ordinary shares at 31 March 2014 or 31 March 2013. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 111 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I REMUNERATION report (continued) The directors of Naspers (and their associates) had the following interests in Naspers N ordinary shares as at 31 March: 31 March 2014 Naspers N ordinary shares Beneﬁcial 31 March 2013 Naspers N ordinary shares Beneﬁcial Name Direct Indirect Total Direct Indirect Total T Vosloo(5) J P Bekker(7) F-A du Plessis C L Enenstein(2) D G Eriksson(2) R C C Jafta L N Jonker(4) F L N Letele(6) Y Ma(2) D Meyer R Oliveira de Lima(2) S J Z Pacak(3) T M F Phaswana L P Retief(1) J D T Stofberg(2) N P van Heerden(4) B J van der Ross J J M van Zyl H S S Willemse(4) — 11 687 808 — — — — — 7 006 — — — 778 510 — — 159 831 — — 50 361 — 160 000 4 688 691 — — — — — — — — — 272 548 3 530 — 291 888 — 400 150 796 — 160 000 16 376 499 — — — — — 7 006 — — — 1 051 058 3 530 — 451 719 — 400 201 157 — — 11 687 808 — — — — 1 000 — — — — 711 843 — — — — — 50 361 85 185 000 4 688 691 — — — — 52 000 — — — — 282 548 3 530 — — 2 600 400 150 796 3 205 185 000 16 376 499 — — — — 53 000 — — — — 994 391 3 530 — — 2 600 400 201 157 3 290 12 683 516 5 567 853 18 251 369 12 451 097 5 368 770 17 819 867 Notes (1) The Media24 group entered into a contract with the Retief family trust in October 2008, which contains a put option whereby the Retief family trust can enforce a buy-out by Media24 group of their remaining interest in Paarl Media Holdings Proprietary Limited (currently 5%) and Paarl Coldset Proprietary Limited (currently 12,6%). The Retief family trust exercised its put option in November 2013. The transaction is awaiting the approval of the South African Competition Commission. (2) Appointed 16 October 2013. (3) During the financial year 66 667 Naspers N ordinary shares at an offer price of R154,00 were released and reserved for Steve Pacak in the Naspers group’s share incentive schemes. On 9 September 2004 Steve was offered, and accepted, 100 000 Naspers N ordinary shares at the listed market price of the shares on that date. In terms of the rules of the Naspers share incentive trust, the shares vested over time and delivery of the shares acquired must be taken no later than the 10th anniversary of the offer date. Accordingly, on 5 September 2013, 10 000 Naspers N ordinary shares were sold at average market prices ranging between R883,50 and R889,00 per share. On the same day a total of 90 000 Naspers N ordinary shares were delivered to his family trust upon payment of the amount of R5 000 000,00, being the listed market value on the date of the offer. The proceeds of the sale of the 10 000 Naspers N ordinary shares were used to settle the amount due to the Naspers share incentive trust. (4) Resigned 16 October 2013. (5) In September 2013 the Ton Vosloo trust sold 5 000 Naspers N ordinary shares at average market prices ranging between R870,67 and R886,88 per share. Furthermore, in November 2013, the Ton Vosloo trust sold 20 000 Naspers N ordinary shares at average market prices ranging between R949,99 and R962,99 per share. (6) Appointed 22 November 2013. (7) Retired 31 March 2014. 112 NASPERS LIMITED Integrated annual report 2014 REMUNERATION report (continued) Between the end of the ﬁnancial year and 20 June 2014, on 1 April 2014, Bob van Dijk succeeded Koos Bekker as chief executive, but had no beneﬁcial interest in Naspers N ordinary shares. Mark Sorour was appointed an alternate to an executive director on 16 April 2014. Mark holds a beneﬁcial direct interest in 900 Naspers N ordinary shares. He also holds 95 255 Naspers N ordinary shares in group share schemes which have been released, but not yet paid for and delivered. The nature of Mark’s interest in these shares is an indirect beneﬁcial interest. Prof R C C Jafta Chair: Human resources and remuneration committee 20 June 2014 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 113 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I SOCIAL AND ETHICS committee report The purpose of this report is to outline how • the Employment Equity Act, and the social and ethics committee has • the Broad-based Black Economic discharged its responsibilities as set out in Empowerment Act section 72 of the South African Companies ▶ corporate citizenship, including the Act No 71 of 2008, as amended (“the Act”), company’s: and regulation 43 of the Companies • promotion of equality, prevention of Regulations 2011 (“the regulation”), issued unfair discrimination, and reduction in terms of the Act. of corruption (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) COMPOSITION The social and ethics committee comprises • contribution to development of the communities in which its activities are predominantly conducted or within non-executive, executive directors and which its products or services are certain key members of management. This predominantly marketed, and committee met three times during the • record of sponsorship, donations and ﬁnancial year. The company secretary also charitable giving acts as the secretary of the committee. ▶ environmental, health and public safety Details of attendance at meetings are matters, including the impact of the provided on page 101. company’s activities and of its products or services (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) RESPONSIBILITIES The committee’s responsibilities cover the ▶ consumer relationships, including the company’s advertising, public relations group’s South African operations; and compliance with consumer MultiChoice, Media24 and MIH Internet protection laws Africa. Its mandate, set out in its charter, is ▶ labour and employment, including: aligned with the committee’s statutory • the company’s standing in terms of the responsibilities as set out in the regulations. International Labour Organization The committee monitors: ▶ social and economic development, Protocol (ILO) on decent work and working conditions including the company’s standing in terms ▶ the company’s employment relationships of the goals and purposes of: and its contribution toward the • the 10 principles set out in the United Nations Global Compact Principles educational development of its employees ▶ matters within its mandate to be brought • the Organisation for Economic to the attention of the board as the Co-operation and Development (OECD) occasion requires, and recommendations regarding corruption ▶ matters within its mandate to be reported to the shareholders. 114 NASPERS LIMITED Integrated annual report 2014 SOCIAL AND ETHICS committee report (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) DISCHARGE OF RESPONSIBILITIES The committee reviewed: ▶ employment equity plans for its South (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) CONCLUSION The committee is of the view that the group takes its environmental, social and African businesses governance responsibilities seriously. ▶ performance in regard to black economic Appropriate policies, plans and programmes empowerment as measured against the are in place to contribute to social and Department of Trade and Industry (DTI) economic development, good corporate generic broad-based black economic citizenship, environmental responsibility, fair empowerment (BBBEE) scorecard labour practices and good consumer ▶ skills and other development relations. programmes, aimed at the educational No substantive non-compliance with development of its employees legislation and regulation, or non-adherence ▶ employment philosophy and how it is with codes of best practice, relevant to the founded on promoting equality and areas within the committee’s mandate has preventing unfair discrimination been brought to its attention. Based on its ▶ labour practices and policies, and how monitoring activities to date, the committee these compare to the ILO Protocol on has no reason to believe that any such decent working conditions non-compliance or non-adherence has ▶ corporate social investment programmes, occurred. including details of donations and The committee recognises that the areas charitable giving within its mandate are evolving and that ▶ the progress of the South African management’s responses too will adapt to businesses in addressing the principles of changes in the environmental, social and governance agenda. the UN Global Compact and OECD, and ▶ a risk register, which addresses the risks associated with the South African companies in addressing the statutory responsibilities of the committee, how they are addressed, including combined J J M van Zyl assurance responses. Chair: Social and ethics committee 20 June 2014 Integrated annual report 2014 NASPERS LIMITED 115 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i REPORT OF THE audit committee for the year ended 31 March 2014 The audit committee submits this report, as required by section 94 of the South African Companies Act No 71 of 2008 (“the Act”). relevant, made recommendations to the board ▶ evaluated the effectiveness of risk (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) FUNCTIONS OF THE AUDIT COMMITTEE The audit committee has adopted formal terms of reference, delegated by the board of directors, as set out in its audit committee charter. The audit committee has discharged the functions in terms of its charter and ascribed to it in terms of the Act as follows: ▶ reviewed the interim, provisional, year-end ﬁnancial statements and integrated annual report, culminating in a recommendation to the board to adopt them. In the course of its review the committee: • took appropriate steps to ensure the ﬁnancial statements were prepared in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Act • considered and, when appropriate, made recommendations on internal ﬁnancial controls • dealt with concerns or complaints on accounting policies, internal audit, the auditing or content of annual ﬁnancial statements, and internal ﬁnancial controls, and • reviewed legal matters that could have a signiﬁcant impact on the organisation’s ﬁnancial statements management, controls and governance processes ▶ veriﬁed the independence of the external auditor, nominated PricewaterhouseCoopers Inc. as auditor for 2014 and noted the appointment of Mr Anton Wentzel as the designated auditor ▶ approved audit fees and engagement terms of the external auditor, and ▶ determined the nature and extent of allowable non-audit services and approved contract terms for non-audit services by the external auditor. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) MEMBERS OF THE AUDIT COMMITTEE AND ATTENDANCE AT MEETINGS The audit committee consists of the independent non-executive directors listed below and meets at least three times per year in accordance with its charter. All members act independently as described in section 94 of the Act. During the year under review four meetings were held. Details of attendance are on page 101 of the integrated annual report. Name of committee member Qualiﬁcations Francine-Ann du Plessis BComHons(Taxation), LLB and CA(SA) ▶ reviewed external audit reports on the Ben van der Ross DipLaw (UCT) n o i t a m r o f n I annual ﬁnancial statements ▶ reviewed the board-approved internal audit charter ▶ reviewed and approved the internal audit plan ▶ reviewed internal audit and risk management reports and, where Boetie van Zyl BScEng(Mechanical) (UCT) and PrEng Don Eriksson, an independent non-executive director, currently attends audit committee meetings in an advisory role. The board and 116 NASPERS LIMITED Integrated annual report 2014 REPORT OF THE audit committee (continued) for the year ended 31 March 2014 the nomination committee unanimously recommend to shareholders at the annual general meeting that Mr D G Eriksson be elected to the audit committee, along with the current committee members. All committee members served on the committee for the full ﬁnancial year. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) INTERNAL AUDIT The audit committee has oversight of the group’s ﬁnancial statements and reporting process, including the system of internal ﬁnancial control. It is responsible for ensuring that the group’s internal audit function is independent and has the necessary resources, standing and authority in the organisation to discharge its duties. The committee oversees cooperation between internal and external auditors, and serves as a link between the board of directors and these functions. The head of internal audit reports functionally to the chair of the committee and administratively to the ﬁnancial director. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ATTENDANCE The internal and external auditors, in their capacity as auditors to the group, attended and reported at all meetings of the audit committee. The group risk management function was also represented. Executive directors and relevant senior managers attended meetings by invitation. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) CONFIDENTIAL MEETINGS Audit committee agendas provide for conﬁdential meetings between committee members and the internal and external auditors. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) INDEPENDENCE OF THE EXTERNAL AUDITOR During the year the audit committee reviewed a representation by the external auditor and, after conducting its own review, conﬁrmed the independence of the auditor. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) EXPERTISE AND EXPERIENCE OF THE FINANCIAL DIRECTOR AND THE FINANCE FUNCTION As required by JSE Listings Requirement 3.84(h), the audit committee has satisﬁed itself that the ﬁnancial director has appropriate expertise and experience. In addition, the committee satisﬁed itself that the composition, experience and skills set of the ﬁnance function met the group’s requirements. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) DISCHARGE OF RESPONSIBILITIES The committee determined that, during the ﬁnancial year under review, it had discharged its legal and other responsibilities as outlined in terms of its remit, details of which are included in the full corporate governance report on www.naspers.org/corporate-governance.php. The board concurred with this assessment. CLIENT TO CHECK J J M van Zyl Chair: Audit committee 20 June 2014 Integrated annual report 2014 NASPERS LIMITED 117 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n SUMMARISED ANNUAL financial statements p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 118 NASPERS LIMITED Integrated annual report 2014 SUMMARISED ANNUAL financial statements (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 119 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CONTENTS SUMMARISED ANNUAL FINANCIAL STATEMENTS 120 Statement of responsibility by the board of directors 121 Report of the independent auditor on the summarised consolidated ﬁnancial statements 122 Basis of presentation and accounting policies 126 Segmental review 127 Reconciliation of trading proﬁt to operating proﬁt 128 Consolidated income statement 129 Condensed consolidated statement of comprehensive income 130 Condensed consolidated statement of changes in equity 131 Condensed consolidated statement of ﬁnancial position 132 Condensed consolidated statement of cash ﬂows 133 Calculation of headline and core headline earnings 134 Supplementary information 136 Issue of listed bond and repayment of existing facility 136 Business combinations and other acquisitions 138 Financial instruments 139 Reconciliation of level 3 ﬁnancial liabilities STATEMENT OF RESPONSIBILITY by the board of directors for the year ended 31 March 2014 The summarised annual ﬁnancial statements of the group are the responsibility of the directors of Naspers Limited. In discharging this responsibility, they rely on the management of the group to prepare the annual ﬁnancial statements separately available on www.naspers.com in accordance with International Financial Reporting Standards (IFRS) and the South African Companies Act No 71 of 2008. As such, the summarised annual ﬁnancial statements include amounts based on judgements and estimates made by management. The information given is comprehensive and presented in a responsible manner. The directors accept responsibility for the preparation, integrity and fair presentation of the summarised annual ﬁnancial statements and are satisﬁed that the systems and internal ﬁnancial controls implemented by management are effective. The directors believe that the company and group have adequate resources to continue operations as a going concern in the foreseeable future, based on forecasts and available cash resources. The summarised annual ﬁnancial statements support the viability of the company and the group. The preparation of the ﬁnancial results was supervised by our ﬁnancial director, Steve Pacak CA(SA). The independent auditing ﬁrm PricewaterhouseCoopers Inc., which was given unrestricted access to all ﬁnancial records and related data, including minutes of all meetings of shareholders, the board of directors and committees of the board, has audited the group annual ﬁnancial statements from which the summarised annual ﬁnancial statements were derived. The directors believe that all representations made to the independent auditor during his audit were valid and appropriate. PricewaterhouseCoopers Inc.’s audit report is presented on page 121. The summarised annual ﬁnancial statements were approved by the board of directors on 20 June 2014 and are signed on its behalf by: T Vosloo Chair B van Dijk Chief executive 20 June 2014 120 NASPERS LIMITED Integrated annual report 2014 REPORT OF THE INDEPENDENT AUDITOR on the summarised consolidated financial statements to the shareholders of Naspers Limited The summarised consolidated ﬁnancial statements, which comprise the condensed consolidated statement of ﬁnancial position as at 31 March 2014, and the consolidated income statement and condensed consolidated statements of comprehensive income, changes in equity and cash ﬂows for the year then ended, and related notes, as set out on pages 128 to 139 are derived from the audited consolidated ﬁnancial statements of Naspers Limited for the year ended 31 March 2014. We expressed an unmodiﬁed audit opinion on those consolidated ﬁnancial statements in our report dated 20 June 2014. Our auditor’s report on the audited consolidated ﬁnancial statements contained an “Other matter” paragraph (refer below). The summarised consolidated ﬁnancial statements do not contain all the disclosures required by International Financial Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual ﬁnancial statements. Reading the summarised consolidated ﬁnancial statements, therefore, is not a substitute for reading the audited consolidated ﬁnancial statements of Naspers Limited. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) DIRECTORS’ RESPONSIBILITY FOR THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS The company’s directors are responsible for the preparation of a summary of the audited consolidated annual ﬁnancial statements in accordance with the requirements of section 8.57 of the JSE Limited Listings Requirements and the requirements of the Companies Act of South Africa as applicable to summarised ﬁnancial statements. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on the summarised consolidated ﬁnancial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810 “Engagements to Report on Summary Financial Statements”. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) OPINION In our opinion, the summarised consolidated ﬁnancial statements derived from the audited consolidated ﬁnancial statements of Naspers Limited for the year ended 31 March 2014 are consistent, in all material respects, with those consolidated ﬁnancial statements, in accordance with the requirements of section 8.57 of the JSE Limited Listings Requirements and the requirements of the Companies Act of South Africa as applicable to summarised ﬁnancial statements. The “Other matter” paragraph in our audit report dated 20 June 2014 states that as part of our audit of the consolidated ﬁnancial statements for the year ended 31 March 2014, we have read the directors’ report, the audit committee’s report and the company secretary’s certiﬁcate for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated ﬁnancial statements. These reports are the responsibility of the respective preparers. The “Other matter” paragraph states that, based on reading these reports, we have not identiﬁed material inconsistencies between these reports and the audited consolidated ﬁnancial statements. The paragraph furthermore states that we have not audited these reports and accordingly do not express an opinion on these reports. The “Other matter” paragraph does not have an effect on the summarised consolidated ﬁnancial statements or our opinion thereon. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l PricewaterhouseCoopers Inc. Director: A Wentzel Registered auditor Cape Town, South Africa 20 June 2014 I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 121 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I BASIS OF PRESENTATION and accounting policies for the year ended 31 March 2014 The summarised annual ﬁnancial statements make strategic decisions in accordance with are prepared in accordance with the IFRS 8 “Operating Segments”. The group requirements of the JSE Limited Listings proportionately consolidates its share of the Requirements and the South African results of its associated companies and joint Companies Act No 71 of 2008. The Listings ventures in the various reportable segments. Requirements require summarised annual This is considered to be more reﬂective of ﬁnancial statements to be prepared in the economic value of these investments. accordance with the framework concepts, The group aggregated the previously the measurement and recognition reported “other internet” segment with the requirements of International Financial “ecommerce” segment as these segments Reporting Standards (IFRS), the SAICA are now considered to have similar Financial Reporting Guides as issued by the economic characteristics and meet the Accounting Practices Committee and aggregation criteria of IFRS 8. Comparative Financial Pronouncements as issued by the information has been restated accordingly. Financial Reporting Standards Council and Trading proﬁt excludes amortisation of to also, as a minimum, contain the intangible assets (other than software), information required by IAS 34 “Interim equity-settled share scheme charges, Financial Reporting”. The accounting policies retention option expenses and other gains/ applied in the preparation of the losses, but includes the ﬁnance cost on consolidated ﬁnancial statements from transponder leases. which the summarised annual ﬁnancial Core headline earnings exclude once-off statements were derived are in terms of and non-operating items. We believe that it IFRS and are, except as noted below, also is a useful measure for shareholders of the consistent with those applied in the previous group’s sustainable operating performance. annual ﬁnancial statements. However, this is not a deﬁned term under The group’s reportable segments reﬂect IFRS and may not be comparable with those components of the group that are similarly titled measures reported by regularly reviewed by the chief executive other companies. ofﬁcer and other senior executives that 122 NASPERS LIMITED Integrated annual report 2014 BASIS OF PRESENTATION and accounting policies (continued) for the year ended 31 March 2014 The group has adopted all new and amended accounting pronouncements as issued by the International Accounting (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) IFRS 11 JOINT ARRANGEMENTS IFRS 11 replaces the guidance previously contained in IAS 31 “Interests in Joint Standards Board (IASB), which were effective Ventures” and SIC-13 “Jointly Controlled for ﬁnancial years commencing on 1 April Entities – Non-Monetary Contributions by 2013. The following key new pronouncements have been adopted: (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) IFRS 10 CONSOLIDATED FINANCIAL STATEMENTS IFRS 10 replaces the consolidation and Venturers”. Signiﬁcantly, IFRS 11 requires all interests in joint ventures to be accounted for under the equity method. The group previously accounted for its interests in joint ventures by applying proportionate consolidation – a line-by-line consolidation control guidance previously contained in of the group’s share of the results of the IAS 27 “Consolidated and Separate Financial joint ventures. Statements” and SIC-12 “Consolidation – The group has applied IFRS 11 on a fully Special Purpose Entities”. The application of retrospective basis by accounting for joint IFRS 10 did not result in any changes in the ventures in terms of the equity method from consolidation status of the group’s the beginning of the earliest period presented subsidiaries and consequently no changes to in this provisional report, 1 April 2012. the group’s consolidated ﬁnancial results. The impact of the adoption of IFRS 11 on (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) IFRS 13 FAIR VALUE MEASUREMENT IFRS 13 aims to improve consistency and the group’s consolidated ﬁnancial results is illustrated in the annual ﬁnancial statements on pages 55 and 56 (the application of reduce complexity by providing a precise IFRS 11 did not have a signiﬁcant impact on deﬁnition of fair value and a single source of the statement of comprehensive income). fair value measurement and disclosure requirements for use across IFRS. IFRS 13 was adopted and applied prospectively and it was assessed that the adoption did not result in any material impact on the ﬁnancial results of the group. Integrated annual report 2014 NASPERS LIMITED 123 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n BASIS OF PRESENTATION and accounting policies (continued) for the year ended 31 March 2014 Year ended 31 March 2013 Previously reported R’m Change in accounting policy R’m p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i CONSOLIDATED INCOME STATEMENT Revenue Cost of providing services and sale of goods Selling, general and administration expenses Other gains/(losses) – net Operating proﬁt Interest received Interest paid Other ﬁnance income/(costs) – net Share of equity-accounted results – excluding net gain on disposal of investments – net gain on disposal of investments Impairment of equity-accounted investments Dilution losses on equity-accounted investments Losses on acquisitions and disposals Proﬁt before taxation Taxation Proﬁt for the year 50 249 (27 852) (17 751) (831) 3 815 433 (1 501) (248) 9 001 6 359 2 642 (2 057) (96) (47) 9 300 (2 552) 6 748 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Cash ﬂow generated from operating activities Cash ﬂow utilised in investing activities Cash ﬂow generated from ﬁnancing activities 9 845 (6 213) 1 280 Net movement in cash and cash equivalents Foreign exchange translation adjustments Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 4 912 687 n o i t a m r o f n I 124 NASPERS LIMITED Integrated annual report 2014 Restated R’m 49 869 (27 676) (17 359) (735) 4 099 443 (1 495) (258) 8 778 6 130 2 648 (2 137) (96) (53) 9 281 (2 533) 6 748 10 035 (6 409) 1 286 4 912 670 (380) 176 392 96 284 10 6 (10) (223) (229) 6 (80) — (6) (19) 19 — 190 (196) 6 — (17) 8 791 (143) 8 648 14 390 (160) 14 230 BASIS OF PRESENTATION and accounting policies (continued) for the year ended 31 March 2014 31 March 2013 Previously reported R’m Change in accounting policy R’m Restated R’m Previously reported R’m 1 April 2012 Change in accounting policy R’m 11 (94) (45) 76 109 13 810 26 440 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Non-current assets Property, plant and equipment Goodwill and other intangible assets Investments in associates and joint ventures Investments and loans Derivatives Deferred taxation Current assets Inventory Programme and ﬁlm rights Trade and other receivables and loans Derivatives Cash and cash equivalents 33 150 1 891 72 746 27 427 1 941 1 868 7 310 449 15 813 27 381 46 237 (83) — (4) (284) (5) — (119) — (160) (284) — Non-current assets held-for-sale 76 120 13 716 26 395 33 387 1 808 72 742 27 143 1 936 1 868 7 191 449 15 653 27 097 46 Total assets 103 536 (273) 103 263 Total equity Non-current liabilities Long-term liabilities Post-retirement medical liability Derivatives Deferred taxation Current liabilities Current portion of long-term debt Trade payables Accrued expenses and other current liabilities Derivatives Bank overdrafts and call loans Liabilities classiﬁed as held-for-sale 55 853 29 192 26 720 164 972 1 336 18 491 2 298 4 179 10 411 180 1 423 18 491 — — (16) (5) (3) — (8) (257) (2) (72) (183) — — (257) — 55 853 29 176 26 715 161 972 1 328 18 234 2 296 4 107 10 228 180 1 423 18 234 — 62 037 8 879 21 768 28 095 2 564 86 645 19 241 1 238 1 522 5 935 85 9 825 18 605 636 81 278 49 576 17 845 15 552 139 839 1 315 13 857 1 613 2 865 7 981 206 1 034 13 699 158 Restated R’m 62 011 8 764 21 593 28 461 2 467 86 640 18 991 1 231 1 522 5 835 85 9 682 18 355 636 (26) (115) (175) 366 (97) — (5) (250) (7) — (100) — (143) (250) — (276) 81 002 — (41) (25) (2) — (14) (235) (3) (72) (160) — — (235) — 49 576 17 804 15 527 137 839 1 301 13 622 1 610 2 793 7 821 206 1 034 13 464 158 Total equity and liabilities 103 536 (273) 103 263 81 278 (276) 81 002 Integrated annual report 2014 NASPERS LIMITED 125 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I SEGMENTAL review for the year ended 31 March 2014 The group’s reportable segments reﬂect those components of the group that are regularly reviewed by the chief executive ofﬁcer and other senior executives that make strategic decisions in accordance with IFRS 8 “Operating Segments”. The group proportionately consolidates its share of the results of its associated companies and joint ventures in the various reportable segments. This is considered to be more reﬂective of the economic value of these investments. Revenue Year ended 31 March 2014 R’m 57 018 34 256 2 407 20 355 36 271 11 692 104 981 (42 253) 2013 (Restated) R’m 34 587 20 532 1 669 12 386 30 257 11 932 76 776 (26 907) Internet – Tencent – Mail.ru – Ecommerce Pay television Print Segment revenue Less: Equity-accounted investments Consolidated 62 728 49 869 Internet – Tencent – Mail.ru – Ecommerce Pay television Print Corporate services Segment EBITDA Less: Equity-accounted investments Consolidated EBITDA Year ended 31 March 2014 R’m 8 540 12 232 1 286 (4 978) 10 370 1 073 (150) 19 833 (13 442) 6 391 2013 (Restated) R’m 7 389 8 603 895 (2 109) 8 933 1 167 (138) 17 351 (9 565) 7 786 % change 65 67 44 64 20 (2) 37 57 26 % change 16 42 44 > (100) 16 (8) — 14 41 (18) 126 NASPERS LIMITED Integrated annual report 2014 SEGMENTAL review (continued) for the year ended 31 March 2014 Trading proﬁt Year ended 31 March 2014 R’m 6 638 10 792 1 175 (5 329) 8 520 606 (151) 15 613 (11 707) 3 906 2013 (Restated) R’m 6 163 7 702 798 (2 337) 7 559 743 (139) 14 326 (8 414) 5 912 % change 8 40 47 > (100) 13 (18) — 9 39 (34) Internet – Tencent – Mail.ru – Ecommerce Pay television Print Corporate services Segment trading proﬁt Less: Equity-accounted investments Consolidated RECONCILIATION OF TRADING PROFIT to operating profit for the year ended 31 March 2014 Trading proﬁt Finance cost on transponder leases Amortisation of intangible assets Other gains/(losses) – net Retention option expense Equity-settled share-based charge Operating proﬁt Year ended 31 March 2014 R’m 3 906 356 (711) (1 320) (132) (81) 2 018 2013 (Restated) R’m 5 912 231 (996) (735) (138) (175) 4 099 Note For a reconciliation of operating profit to profit before taxation, refer to the Consolidated income statement. Integrated annual report 2014 NASPERS LIMITED 127 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I CONSOLIDATED income statement for the year ended 31 March 2014 Revenue Cost of providing services and sale of goods Selling, general and administration expenses Other gains/(losses) – net Operating proﬁt Interest received Interest paid Other ﬁnance income/(costs) – net Share of equity-accounted results – excluding net gain on disposal of investments – net gain on disposal of investments Impairment of equity-accounted investments Dilution losses on equity-accounted investments Gains/(losses) on acquisitions and disposals Proﬁt before taxation Taxation Proﬁt for the year Attributable to: Equity holders of the group Non-controlling interest Core headline earnings for the year (R’m) Core headline earnings per N ordinary share (cents) Fully diluted core headline earnings per N ordinary share (cents) Headline earnings for the year (R’m) Headline earnings per N ordinary share (cents) Fully diluted headline earnings per N ordinary share (cents) Earnings per N ordinary share (cents) Fully diluted earnings per N ordinary share (cents) Net number of shares issued (’000) – At year-end – Weighted average for the year – Fully diluted weighted average 31 March 2014 R’m 62 728 (35 416) (23 974) (1 320) 2 018 606 (2 466) (267) 10 835 7 906 2 929 (1 201) (852) 751 9 424 (2 895) 6 529 5 751 778 6 529 8 616 2 181 2 125 5 981 1 514 1 475 1 456 1 418 31 March 2013 (Restated) R’m 49 869 (27 676) (17 359) (735) 4 099 443 (1 495) (258) 8 778 6 130 2 648 (2 137) (96) (53) 9 281 (2 533) 6 748 6 047 701 6 748 8 533 2 216 2 164 6 630 1 722 1 681 1 570 1 533 397 625 395 078 405 469 394 272 385 064 394 365 % change 26 (51) 29 2 (3) 1 (2) (2) (10) (12) (12) (7) (8) 128 NASPERS LIMITED Integrated annual report 2014 CONDENSED CONSOLIDATED statement of comprehensive income for the year ended 31 March 2014 Proﬁt for the year Total other comprehensive income, net of tax, for the year* Translation of foreign operations Fair value losses Cash ﬂow hedges Share of other comprehensive income and reserves of equity- accounted investments Tax on other comprehensive income 31 March 2014 R’m 31 March 2013 (Restated) R’m 6 529 6 727 4 910 (7) (204) 1 951 77 6 748 1 527 5 292 — 237 (3 946) (56) Total comprehensive income for the year 13 256 8 275 Attributable to: Equity holders of the group Non-controlling interest 12 492 764 13 256 7 463 812 8 275 * These components of other comprehensive income may subsequently be reclassified to profit or loss, except for R552m (2013: R401m) included in the Share of other comprehensive income and reserves of equity-accounted investments. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 129 CONDENSED CONSOLIDATED statement of changes in equity for the year ended 31 March 2014 Balance at the beginning of the year Changes in share capital and premium Movement in treasury shares Share capital and premium issued Changes in reserves Total comprehensive income for the year Movement in share-based compensation reserve Movement in existing control business combination reserve Movement in valuation reserve Direct retained earnings movements Dividends paid to Naspers shareholders Changes in non-controlling interest Total comprehensive income for the year Dividends paid to non-controlling shareholders Movement in non-controlling interest in reserves 31 March 2014 R’m 31 March 2013 (Restated) R’m 55 853 49 576 (17) 1 293 12 492 487 (340) — 23 (1 526) 764 (1 142) 318 (1 695) 2 067 7 463 441 (700) 39 (98) (1 291) 812 (1 180) 419 Balance at the end of the year 68 205 55 853 Comprising: Share capital and premium Retained earnings Share-based compensation reserve Existing control business combination reserve Hedging reserve Valuation reserve Foreign currency translation reserve Non-controlling interest Total 16 337 31 971 5 082 (1 065) (262) 3 005 11 085 2 052 68 205 15 061 27 723 4 006 (688) (175) 1 623 6 191 2 112 55 853 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 130 NASPERS LIMITED Integrated annual report 2014 CONDENSED CONSOLIDATED statement of financial position for the year ended 31 March 2014 ASSETS Non-current assets Property, plant and equipment Goodwill Other intangible assets Investments in associates Investments in joint ventures Investments and loans Derivatives Deferred taxation Current assets Inventory Programme and ﬁlm rights Trade receivables Other receivables and loans Derivatives Cash and cash equivalents Non-current assets held-for-sale Total assets EQUITY AND LIABILITIES Share capital and reserves Share capital and premium Other reserves Retained earnings Non-controlling shareholders’ interest Total equity Non-current liabilities Capitalised ﬁnance leases Liabilities – interest-bearing – non-interest-bearing Post-employment medical liability Derivatives Deferred taxation Current liabilities Current portion of long-term debt Trade payables Accrued expenses and other current liabilities Derivatives Bank overdrafts and call loans Total equity and liabilities Net asset value per N ordinary share (cents) 31 March 2014 R’m 31 March 2013 (Restated) R’m 100 212 17 053 25 811 5 702 47 755 1 727 1 193 2 969 28 390 2 882 1 979 4 849 4 807 209 13 664 28 390 — 76 120 13 716 21 593 4 802 32 767 620 1 808 72 742 27 143 1 936 1 868 4 042 3 149 449 15 653 27 097 46 128 602 103 263 66 153 16 337 17 845 31 971 2 052 68 205 36 549 6 768 27 395 452 176 364 1 394 23 848 2 628 5 318 13 981 840 1 081 53 741 15 061 10 957 27 723 2 112 55 853 29 176 5 868 20 571 276 161 972 1 328 18 234 2 296 4 107 10 228 180 1 423 128 602 103 263 16 637 13 630 Integrated annual report 2014 NASPERS LIMITED 131 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n CONDENSED CONSOLIDATED statement of cash flows for the year ended 31 March 2014 Cash ﬂow generated from operating activities Cash ﬂow utilised in investing activities Cash ﬂow generated from ﬁnancing activities Net movement in cash and cash equivalents Foreign exchange translation adjustments Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 31 March 2014 R’m 3 274 (8 036) 2 114 (2 648) 1 001 14 230 12 583 31 March 2013 (Restated) R’m 10 035 (6 409) 1 286 4 912 670 8 648 14 230 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 132 NASPERS LIMITED Integrated annual report 2014 CALCULATION of headline and core headline earnings for the year ended 31 March 2014 Proﬁt attributable to equity holders of the group Adjusted for: – insurance proceeds – impairment of property, plant and equipment and other assets – impairment of goodwill and intangible assets – (proﬁt)/loss on sale of property, plant and equipment and intangible assets – gains on acquisitions and disposals of investments – remeasurement of previously held interest – dilution losses on equity-accounted investments – remeasurements included in equity-accounted earnings – impairment of equity-accounted investments Total tax effects of adjustments Total adjustment for non-controlling interest Headline earnings Adjusted for: – equity-settled share-based charges – reversal/(recognition) of deferred tax assets – special dividend income – taxation adjustment – amortisation of intangible assets – fair value adjustments and currency translation differences – retention option expense – business combination (proﬁts)/losses Core headline earnings 31 March 2014 R’m 31 March 2013 (Restated) R’m 5 751 6 047 — 112 1 461 (58) (45) (700) 852 (2 447) 1 201 6 127 (81) (65) 5 981 1 120 58 — — 1 385 (47) 128 (9) 8 616 (2) 97 588 17 (11) — 96 (2 278) 2 137 6 691 (29) (32) 6 630 850 (195) (423) (191) 1 403 273 135 51 8 533 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 133 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i SUPPLEMENTARY information for the year ended 31 March 2014 Interest received – loans and bank accounts – other Interest paid – loans and overdrafts – transponder leases – other Other ﬁnance income/(cost) – net – net foreign exchange differences and fair value adjustments on derivatives – preference dividends received Share of equity-accounted results – sale of assets – sale of investments – impairment of investments – gains on acquisitions and disposals Contribution to headline earnings – amortisation of intangible assets – equity-settled share scheme charges – business combination costs – special dividend income – taxation adjustment – fair value adjustments and currency translation differences – reversal/(recognition) of deferred tax assets Contribution to core headline earnings Tencent Mail.ru Abril Other Depreciation of property, plant and equipment Amortisation – intangible assets – software n o i t a m r o f n I 134 NASPERS LIMITED Integrated annual report 2014 31 March 2014 R’m 31 March 2013 (Restated) R’m 606 456 150 (2 466) (1 717) (356) (393) (267) (344) 77 10 835 (19) (2 929) 532 — 8 419 897 987 — — — (181) 35 10 157 9 724 911 (110) (368) 1 942 898 711 187 443 408 35 (1 495) (1 044) (231) (220) (258) (383) 125 8 778 — (2 648) 348 (8) 6 470 692 675 13 (423) (191) (61) (195) 6 980 6 652 652 (69) (255) 1 493 1 146 996 150 SUPPLEMENTARY information (continued) for the year ended 31 March 2014 31 March 2014 R’m 31 March 2013 (Restated) R’m Other gains/(losses) – net – proﬁt/(loss) on sale of property, plant and equipment and intangible assets – impairment of goodwill and intangible assets – impairment of property, plant and equipment and other assets – insurance proceeds – fair value adjustment on ﬁnancial instruments Gains/(losses) on acquisitions and disposals – proﬁt on sale of investments – losses recognised on loss of control transactions – remeasurement of contingent consideration – acquisition-related costs – remeasurement of previously held interest – other Goodwill – cost – accumulated impairment Opening balance – foreign currency translation effects – acquisitions – disposals – impairment Closing balance – cost – accumulated impairment Investments and loans – listed investments – unlisted investments and loans Commitments – capital expenditure – programme and ﬁlm rights – network and other service commitments – transponder leases – operating lease commitments – set-top box commitments (1 320) 58 (1 461) (112) — 195 751 44 — 48 (41) 700 — 24 077 (2 484) 21 593 3 226 2 003 (18) (993) 25 811 29 405 (3 594) 50 675 44 194 6 481 22 417 740 17 701 1 530 424 1 413 609 (735) (17) (588) (97) 2 (35) (53) 68 (44) 13 (73) — (17) 19 610 (1 873) 17 737 2 103 2 423 (164) (506) 21 593 24 077 (2 484) 35 195 29 157 6 038 18 073 1 064 13 559 1 158 399 1 333 560 Integrated annual report 2014 NASPERS LIMITED 135 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i SUPPLEMENTARY information (continued) for the year ended 31 March 2014 (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ISSUE OF LISTED BOND AND REPAYMENT OF EXISTING FACILITIES The group issued a seven-year US$1bn the option expired. The group previously accounted for MIH India as a joint venture. The fair value of the total deemed purchase international bond in July 2013. The bond consideration was R321m, being the matures in July 2020 and carries a ﬁxed interest rate of 6% per annum. The acquisition date fair value of the interest held in MIH India. A gain of R274m has proceeds were used to partly pay down an been recognised as a result of remeasuring offshore revolving credit facility. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) BUSINESS COMBINATIONS AND OTHER ACQUISITIONS In June 2013 the group’s subsidiary, MIH to fair value the existing interest in MIH India. The purchase price allocation: property, plant and equipment R5m; intangible assets R162m; cash R71m; trade and other receivables R64m; trade and other Global Internet Limited (MIH India), acquired payables R78m; deferred tax liability R51m; a 100% interest in redBus, an Indian online and the balance to goodwill. ticketing platform. The fair value of the total In July 2013 the group acquired an purchase consideration was R1bn in cash. additional interest of 28,6% in Dubizzle, an The purchase price allocation: property, plant online classiﬁeds platform centred on Dubai. and equipment R4m; intangible assets R354m; cash R29m and restricted cash The group’s total interest in Dubizzle increased to 53,6% and the group now R96m; trade and other receivables R27m; accounts for Dubizzle as a subsidiary. The trade and other payables R41m; deferred tax fair value of the total purchase consideration liability R114m and the balance to goodwill. was R939m, consisting of R477m in cash for During June 2013 the option to subscribe the additional interest and R462m being the for new shares in MIH India held by Tencent acquisition date fair value of the existing Holdings Limited expired. MIH India operates interest held in Dubizzle. The purchase price ecommerce platforms under the ibibo brand. allocation: property, plant and equipment In terms of IFRS 10, the group exercised control over MIH India from the date that R2m; intangible assets R381m; cash R231m; trade and other receivables R16m; trade and n o i t a m r o f n I 136 NASPERS LIMITED Integrated annual report 2014 SUPPLEMENTARY information (continued) for the year ended 31 March 2014 other payables R37m; and the balance to Limited, an online retailer, marketplace and goodwill. A non-controlling interest of payment platform business, with operations R252m was recognised at the acquisition in the UAE, Saudi Arabia, Egypt and Kuwait date. A gain of R231m has been recognised for R296m in cash. During March 2014 the as a result of remeasuring to fair value the group acquired a further interest of 11,8% group’s existing interest in Dubizzle before in Souq Group Limited for R911m in cash. the acquisition of the additional interest. The group now has a 47,6% interest in The main factor contributing to the Souq Group Limited. goodwill recognised in these acquisitions is In July 2013 the group acquired an their market presence. This goodwill is not additional 8,6% interest in Flipkart Private expected to be deductible for income tax Limited, a leading ecommerce site in India, purposes. The non-controlling interest was for R1 376m in cash. During May 2014 the measured using the proportionate share of group invested a further R543m in cash in the identiﬁable net assets. Flipkart. The group now has a 17,7% The group made various smaller interest in Flipkart on a fully diluted basis. acquisitions with a combined cost of In February 2014 the group acquired R270m. Total acquisition-related costs of 26,1% in SimilarWeb Limited, an online R41m were recorded in “Gains/(losses) on analytics provider for R155m in cash. The acquisitions and disposals” in the income group has a 22,5% interest in SimilarWeb statement. Had the revenues and net results on a fully diluted basis. of redBus and Dubizzle been included from During February 2014 the group acquired 1 April 2013, it would not have had a a 30,7% interest for R200m in cash in signiﬁcant effect on the group’s consolidated Neralona Investments Limited, trading as revenue and net results. eSky.ru, an online children’s goods retailer in The following investments in associated Russia. companies and joint ventures were made: The above acquisitions were primarily In June 2013 the group acquired an funded through the utilisation of existing additional 6,1% interest in Souq Group credit facilities. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 137 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I SUPPLEMENTARY information (continued) for the year ended 31 March 2014 (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) FINANCIAL INSTRUMENTS The information below analyses the group’s ﬁnancial instruments, which are carried at fair value at each reporting period, by level of the hierarchy as required by IFRS 7 and IFRS 13. Fair value measurements at 31 March 2014 using: Quoted prices in active markets for identical assets or liabilities (Level 1) R'm Signiﬁcant other observable inputs (Level 2) R'm Signiﬁcant unobservable inputs (Level 3) R'm 120 — — — — — — — 210 1 66 — — 332 — — — — 806 263 — Assets Available-for-sale investments Foreign exchange contracts Interest rate swaps Liabilities Foreign exchange contracts Shareholders' liabilities Earn-out obligations Interest rate swaps There have been no transfers between level 1, 2 or 3 during the period, nor were there any signiﬁcant changes to the valuation techniques and inputs used to determine fair values. Financial instruments for which fair value is disclosed: 31 March 2014 Financial liabilities Loans from non-controlling shareholders Capitalised ﬁnance leases Publicly traded bonds Carrying value R’m Fair value R’m Level 1 R’m Level 2 R’m Level 3 R’m 480 7 277 17 784 478 7 074 19 706 — — — — — 19 706 478 7 074 — The fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments at the reporting date. 138 NASPERS LIMITED Integrated annual report 2014 SUPPLEMENTARY information (continued) for the year ended 31 March 2014 Reconciliation of level 3 financial liabilities The following table presents the changes in level 3 instruments for the period ended 31 March 2014: Opening balance at 1 April 2013 Total gains in proﬁt or loss Issues Settlements Foreign currency translation effects Closing balance at 31 March 2014 Shareholders’ liabilities R'm Earn-out obligations R'm 704 (145) 284 (82) 45 806 185 (13) 155 (91) 27 263 The fair value of shareholders’ liabilities is determined using a discounted cash ﬂow model. Business speciﬁc adjusted discount rates are applied to estimated future cash ﬂows. For earn-out obligations, current forecasts of the extent to which management believe performance criteria will be met, discount rates reﬂecting the time value, of money and contractually speciﬁed earn-out payments are used. Changes in these assumptions could affect the reported fair value of these ﬁnancial instruments. The fair value of level 2 ﬁnancial instruments is determined with the use of exchange rates quoted in an active market and interest rate extracts from observable yield curves. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) EVENTS AFTER THE REPORTING PERIOD Subsequent to year-end, the group invested a further R543m in cash in Flipkart. G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 139 SHAREHOLDER and corporate information p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 140 NASPERS LIMITED Integrated annual report 2014 SHAREHOLDER and corporate information (continued) G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 141 ADMINISTRATION and corporate information p u o r G e c n a m r o f r e P e c n a n r e v o G Company secretary G Kisbey-Green 251 Oak Avenue Randburg 2194 South Africa Registered office 40 Heerengracht Cape Town 8001 South Africa PO Box 2271 Cape Town 8000 South Africa Tel: +27 (0)21 406 2121 Fax: +27 (0)21 406 3753 Registration number 1925/001431/06 Incorporated in South Africa Auditor PricewaterhouseCoopers Inc. Transfer secretaries Link Market Services South Africa Proprietary Limited (Registration number: 2000/007239/07) PO Box 4844 Johannesburg 2000 South Africa Tel: +27 (0)11 630 0800 Fax: +27 (0)11 834 4398 l i a c n a n F i n o i t a m r o f n I ADR programme Bank of New York Mellon maintains a Global BuyDIRECTSM plan for Naspers Limited. For additional information, please visit Bank of New York Mellon’s website at www.globalbuydirect.com or call Shareholder Relations at 1-888-BNY-ADRS or 1-800-345-1612 or write to: Bank of New York Mellon Shareholder Relations Department – Global BuyDIRECTSM Church Street Station PO Box 11258, New York, NY 10286-1258 USA Sponsor Investec Bank Limited (Registration number: 1969/004763/06) PO Box 785700, Sandton 2146 South Africa Tel: +27 (0)11 286 7326 Fax: +27 (0)11 286 9986 Attorneys Werksmans Inc. PO Box 1474 Cape Town 8000 South Africa Investor relations M Horn InvestorRelations@naspers.com Tel: +27 (0)11 289 3320 Fax: +27 (0)11 289 3026 w w w . n a s p e r s . c o m 142 NASPERS LIMITED Integrated annual report 2014 ANALYSIS OF SHAREHOLDERS and shareholders’ diary Analysis of shareholders Size of holdings 1 – 100 shares 101 – 1 000 shares 1 001 – 5 000 shares 5 001 – 10 000 shares More than 10 000 shares Number of shareholders Number of shares owned 31 369 22 534 3 621 607 1 203 1 271 856 7 580 918 7 803 705 4 362 401 395 793 879 The following shareholders hold 5% and more of the issued share capital of the company: Name % held Number of shares owned Public Investment Corporation of South Africa 14,52 60 382 560 Public shareholder spread To the best knowledge of the directors, the spread of public shareholders in terms of section 4.25 of the JSE Limited Listings Requirements at 31 March 2014 was 91,13%, represented by 59 319 shareholders holding 379 824 857 ordinary shares in the company. The non-public shareholders of the company comprising 15 shareholders representing 36 987 902 ordinary shares are analysed as follows: Category Naspers share trusts Directors Group companies Shareholders’ diary Annual general meeting Reports Interim for half-year to September Announcement of annual results Annual ﬁnancial statements Dividend Declaration Payment Financial year-end Number of shares % of issued share capital 15 713 267 17 799 650 3 474 985 3,77 4,27 0,83 August November June July August September March Integrated annual report 2014 NASPERS LIMITED 143 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I NOTICE OF annual general meeting Notice is hereby given in terms of the A form of proxy, which includes the Companies Act No 71 of 2008, as amended relevant instructions for its completion, is (“the Act”), that the 100th annual general attached for the use of holders of meeting of Naspers Limited (”the company” certiﬁcated shares and “own name” or “Naspers”) will be held on the 17th ﬂoor dematerialised shareholders who wish to be of the Naspers Centre, 40 Heerengracht in represented at the annual general meeting. Cape Town, South Africa on Friday Completion of a form of proxy will not 29 August 2014 at 11:15. preclude such a shareholder from attending (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) RECORD DATE, ATTENDANCE AND VOTING The record date for the meeting (being the and voting (in preference to that shareholder’s proxy) at the annual general meeting. Holders of dematerialised shares, other date used for the purpose of determining than “own name” dematerialised which shareholders are entitled to shareholders, who wish to vote at the participate in and vote at the meeting) is annual general meeting, must instruct their 15 August 2014. central securities depository participant Votes at the annual general meeting will (CSDP) or broker accordingly in the manner be taken by way of a poll and not on a show and cut-off time stipulated by their CSDP of hands. or broker. A shareholder entitled to attend and vote Holders of dematerialised shares, other at the meeting is entitled to appoint a proxy than “own name” dematerialised to attend, participate in and vote at the shareholders, who wish to attend the annual meeting in the place of the shareholder. general meeting in person, need to arrange A proxy need not be a shareholder of the necessary authorisation as soon as the company. possible through their CSDP or broker. Before any person may attend or The form appointing a proxy and the participate in a shareholders’ meeting, that authority (if any) under which it is signed, person must present reasonably satisfactory must reach the transfer secretaries of the identiﬁcation and the person presiding at company (Link Market Services South Africa the meeting must be reasonably satisﬁed Proprietary Limited, 13th ﬂoor, Rennie that the right of that person to participate House, 19 Ameshoff Street, Braamfontein and vote, either as a shareholder, or as a 2001 or PO Box 4844, Johannesburg 2000) proxy for a shareholder, has been reasonably by no later than 11:15 on Wednesday veriﬁed. Forms of identiﬁcation include valid 27 August 2014. Should you hold Naspers identity documents, driver’s licences and A ordinary shares, the signed proxy must passports. reach the registered ofﬁce of the company 144 NASPERS LIMITED Integrated annual report 2014 NOTICE OF annual general meeting (continued) by no later than 11:15 on Wednesday the case of materialised shares) and (in the 27 August 2014. A form of proxy is enclosed case of dematerialised shares) written with this notice. The form of proxy may also conﬁrmation from the shareholder’s CSDP, be obtained from the registered ofﬁce of conﬁrming the shareholder’s title to the the company. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) PURPOSE OF MEETING The purpose of the meeting is (i) to present dematerialised shares. Upon receipt of the required information, the shareholder concerned will be provided with a secure code and instructions to access the the directors’ report and the audited annual electronic communication during the annual ﬁnancial statements of the company for the general meeting. Shareholders must note immediate preceding ﬁnancial year, an audit that access to the electronic communication committee report and the social and ethics will be at the expense of the shareholders committee report; (ii) to consider and, if who wish to utilise the facility. approved, to adopt with or without amendment, the resolutions set out below; and (iii) to consider any matters raised by the (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) INTEGRATED ANNUAL REPORT The integrated annual report of the shareholders of the company, with or company for the year ended 31 March 2014 without advance notice to the company. is available on www.naspers.com or on request during normal business hours at (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ELECTRONIC PARTICIPATION Shareholders entitled to attend and vote at Naspers’s registered address, 40 Heerengracht, Cape Town 8000 the meeting or proxies of such shareholders (contact person Ms Yasmin Abrahams) and shall be entitled to participate in the meeting in Johannesburg at 251 Oak Avenue, (but not vote) by electronic communication. Randburg 2194 (contact person Should a shareholder wish to participate in Mrs Toni Lutz). the meeting by electronic communication, the shareholder concerned should advise the company thereof by no later than 09:00 on (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ORDINARY RESOLUTIONS In order for the ordinary resolutions below Friday 22 August 2014 by submitting via to be adopted, the support of a majority of registered mail addressed to the company votes exercised by shareholders present or (for the attention of Mrs Gillian Kisbey- represented by proxy at this meeting is Green) relevant contact details, as well as required. Ordinary resolution number 8 full details of the shareholder’s title to requires the support of at least 75% of the securities issued by the company and proof total number of votes that may be exercised of identity, in the form of certiﬁed copies of by the shareholders present or represented identity documents and share certiﬁcates (in by proxy at this meeting. Integrated annual report 2014 NASPERS LIMITED 145 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I NOTICE OF annual general meeting (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ORDINARY RESOLUTIONS 1. The ﬁnancial statements of the company and the group for the twelve (12) months ended 31 March 2014 and the reports of the directors, the auditor and the audit committee to be considered and accepted. The summarised form of the ﬁnancial statements is attached to this notice. A copy of the complete annual ﬁnancial statements of the company for the ﬁnancial year ended 31 March 2014 can be obtained from www.naspers.com or on request during normal business hours at Naspers’s registered address, 40 Heerengracht, Cape Town 8000 (contact person Ms Yasmin Abrahams) and in Johannesburg at 251 Oak Avenue, Randburg 2194 (contact person Mrs Toni Lutz). 2. The conﬁrmation and approval of payment of dividends in relation to the N ordinary and A ordinary shares of the company as authorised by the board after having applied the solvency and liquidity tests contemplated in the Act. 3. To reappoint, on the recommendation of the company’s audit committee, the ﬁrm PricewaterhouseCoopers Inc. as independent registered auditor of the company (noting that Mr B Deegan is the individual registered auditor of that ﬁrm who will undertake the audit) for the period until the next annual general meeting of the company. 4. To approve the appointments of Messrs C L Enenstein, D G Eriksson, R Oliveira de Lima, Y Ma and J D T Stofberg who were appointed as directors with effect from 16 October 2013, Mr F L N Letele who was appointed as a director with effect from 22 November 2013 and Mr B van Dijk who was appointed as an executive director with effect from 1 April 2014. Their abridged curricula vitae appear in the integrated annual report. Also to conﬁrm the appointment of Mr V Sgourdos, who was appointed executive ﬁnancial director on 1 July 2014. Vasilios (Basil), CA(SA), worked for PricewaterhouseCoopers Inc. before joining MultiChoice in 1994. He has held several positions in the group including chief ﬁnancial ofﬁcer (CFO) of United Broadcasting Corporation Pcl. in Thailand and group CFO of MIH before being appointed as Naspers group CFO on 1 April 2014. The board unanimously recommends the approval of the appointments of the directors in question. The approval will be conducted by way of a separate vote in respect of each individual. 5. To elect Prof R C C Jafta, Prof D Meyer and Mr J J M van Zyl, who retire by rotation and, being eligible, offer themselves for re-election as directors of the company. Their abridged curricula vitae appear in the integrated annual report. 146 NASPERS LIMITED Integrated annual report 2014 NOTICE OF annual general meeting (continued) The board unanimously recommends The board and the nomination that the re-election of directors in terms committee therefore unanimously of resolution number 5 be approved by recommend Adv F-A du Plessis, Messrs the shareholders of the company. The D G Eriksson, B J van der Ross and re-election is to be conducted as a series J J M van Zyl for election to the audit of votes, each of which is on the committee. Their abridged curricula candidacy of a single individual to ﬁll a vitae appear in the integrated annual single vacancy, and in each vote to ﬁll a report. vacancy, each voting right entitled to be The appointment of the members of exercised may be exercised once. the audit committee will be conducted 6. To appoint the audit committee by way of a separate vote in respect of members as required in terms of the Act each individual. and as recommended by the King Code 7. To endorse the company’s remuneration of Governance for South Africa 2009 policy, as set out in the remuneration (King III) (chapter 3). report contained in the integrated The board and the nomination annual report, by way of a non-binding committee are satisﬁed that the advisory vote. company’s audit committee members 8. To place the authorised but unissued are suitably skilled and experienced share capital of the company under the independent non-executive directors. control of the directors and to grant, Collectively they have sufﬁcient until the conclusion of the next annual qualiﬁcations and experience to fulﬁl general meeting of the company, an their duties, as contemplated in unconditional authority to the directors regulation 42 of the Companies to allot and issue at their discretion (but Regulations 2011. They have a subject to the provisions of the Act, and comprehensive understanding of the requirements of the JSE Limited (JSE) ﬁnancial reporting, internal ﬁnancial and any other exchange on which the controls, risk management and shares of the company may be quoted governance processes within the or listed from time to time and the company, as well as International memorandum of incorporation of the Financial Reporting Standards and other company), the unissued shares of regulations and guidelines applicable to the company, on such terms and the company. They keep up to date with conditions and to such persons, whether developments affecting their required they be shareholders or not, as the skills set. directors at their discretion deem ﬁt. Integrated annual report 2014 NASPERS LIMITED 147 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n NOTICE OF annual general meeting (continued) p u o r G e c n a m r o f r e P e c n a n r e v o G 9. Subject to a minimum of 75% of the (cid:96) that in determining the price at which votes of shareholders of the company an issue of shares will be made in present in person or by proxy at the terms of this authority, the discount at annual general meeting and entitled to which the shares may be issued, may vote, voting in favour thereof, the not exceed 10% of the weighted directors be authorised and are hereby average traded price of the shares in authorised to issue unissued shares of a question, as determined over the class of shares already in issue in the thirty (30) business days prior to the capital of the company for cash as and date that the price of the issue is when the opportunity arises, subject to determined, and the requirements of the JSE, including (cid:96) that the shares will only be issued to the following: “public shareholders” as deﬁned in (cid:96) this authority shall not endure beyond the Listings Requirements of the JSE, the earlier of the next annual general and not to related parties. meeting of the company or beyond ﬁfteen (15) months from the date of the meeting (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTIONS The special resolutions set out on the (cid:96) that a paid press announcement following pages require the support of at giving full details, including the least 75% of votes exercised by shareholders impact on the net asset value and present or represented by proxy at this earnings per share, will be published meeting in order to be adopted. l i a c n a n F i n o i t a m r o f n I at the time of any issue representing, on a cumulative basis within one year, 5% or more of the number of shares of that class in issue prior to the issue (cid:96) the aggregate issue of any particular class of shares in any ﬁnancial year will not exceed 5% (20 840 637) of the issued number of that class of shares (including securities which are compulsorily convertible into shares of that class) 148 NASPERS LIMITED Integrated annual report 2014 NOTICE OF annual general meeting (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTIONS NUMBERS 1.1 TO 1.15 The approval of the remuneration of the non-executive directors for the years ending 31 March 2015 and 31 March 2016, as follows: 31 March 2014* 31 March 2015** 31 March 2016** (proposed) (proposed) Board 1.1 Chair*** 1.2 Member (South African resident) R3 145 000 R615 000 R3 800 000 R700 000 R4 100 000 R755 000 Member (non-South African resident) US$97 500 US$120 000 US$130 000 Member: Additional amount for non-South African resident (when needed) All members: Daily amount when travelling to and attending meetings outside home country US$60 000 (maximum) US$63 500 (maximum) US$68 580 (maximum) US$3 500 US$3 500 US$3 500 Chair Member Chair Member Chair Member Chair Member Committees 1.3 Audit committee: 1.4 1.5 1.6 1.7 Human resources and Risk committee: remuneration committee: 1.8 1.9 Nomination committee: 1.10 1.11 Social and ethics committee: Chair 1.12 Member Other 1.13 Trustee of group share schemes/other personnel funds 1.14 Media24 pension fund: 1.15 Chair Trustee R360 000 R180 000 R200 000 R100 000 R235 000 R117 500 R86 000 R43 000 R175 000 R87 500 R38 600 R97 500 R65 000 R395 000 R197 500 R220 000 R110 000 R270 000 R135 000 R120 000 R60 000 R195 000 R97 500 R41 300 R104 250 R69 500 R425 000 R212 500 R238 000 R119 000 R285 000 R142 500 R138 000 R69 000 R210 000 R105 000 R44 190 R111 548 R74 365 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l Notes * These fees were approved by shareholders on 30 August 2013. ** The proposed 31 March remuneration is subject to such annual increase as may be retrospectively approved by the shareholders at the respective 2015 and 2016 Naspers annual general meetings. *** The chair of the board does not receive additional remuneration if he/she is a member of or chairs any committee of the board. I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 149 p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I NOTICE OF annual general meeting (continued) The reason for and effect of special in the manner contemplated in and subject resolutions numbers 1.1 to 1.15 is to grant to the provisions of section 44 of the Act to the company the authority to pay a director or prescribed ofﬁcer of the remuneration to its directors for their company or of a related or inter-related services as directors. company, or to a related or inter-related Each of the special resolutions numbers company or corporation, or to a member of 1.1 to 1.15 in respect of each of the a related or inter-related corporation, proposed 31 March 2015 and the proposed pursuant to the authority hereby conferred 31 March 2016 remuneration will be upon the board for these purposes. This considered by way of a separate vote. authority shall include and also apply to the (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTION NUMBER 2 That the memorandum of incorporation granting of ﬁnancial assistance to the Naspers share incentive scheme, the other existing group share-based incentive (MOI) of the company be amended in schemes (details of which appear in the accordance with section 16(5)(b)(ii) of the integrated annual report) and such group Act by deleting from article 26.1 the words share-based incentive schemes that are “ﬁfteen (15)” and replacing them with established in future (collectively “the “twenty (20)”, the result of which is that Naspers group share-based incentive article 26.1 will read as follows: schemes”) and participants thereunder “26.1 The board comprises not less than (which may include directors, future four (4) and not more than twenty directors, prescribed ofﬁcers and future (20) directors, the majority of prescribed ofﬁcers of the company or of a whom are to be elected by the related or inter-related company) shareholders, as contemplated in (“participants”) for the purpose of, or in section 66(4)(b) of the Act.” connection with, the subscription of any The reason for special resolution option, or any securities, issued or to be number 2 is to increase the limit on the issued by the company or a related or number of directors that may be appointed inter-related company, or for the purchase of to the board. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTION NUMBER 3 That the board may authorise the company to generally provide any ﬁnancial assistance any securities of the company or a related or inter-related company pursuant to the administration and implementation of the 150 NASPERS LIMITED Integrated annual report 2014 NOTICE OF annual general meeting (continued) Naspers group share-based incentive of and subject to the Act and in terms of the schemes, in each instance on the terms applicable to the Naspers group share-based rules and requirements of the JSE, being that: ▶ any such acquisition of N ordinary shares incentive scheme in question. shall be effected through the order book The reason for and effect of special operated by the JSE trading system and resolution number 3 is to approve generally done without any prior understanding or the provision of ﬁnancial assistance to the arrangement potential recipients as set out in the ▶ this general authority shall be valid until resolution. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTION NUMBER 4 That the company, as authorised by the board, may generally provide, in terms of the company’s next annual general meeting, provided that it shall not extend beyond ﬁfteen (15) months from the date of passing of this special resolution ▶ an announcement will be published as and subject to the requirements of section soon as the company or any of its 45 of the Act, any direct or indirect ﬁnancial subsidiaries have acquired N ordinary assistance to a related or inter-related shares constituting, on a cumulative basis, company or corporation, or to a member 3% of the number of N ordinary shares in of a related or inter-related corporation, issue prior to the acquisition pursuant to pursuant to the authority hereby conferred which the aforesaid 3% threshold is upon the board for these purposes. reached, and for each 3% in aggregate The reason for and effect of special acquired thereafter, containing full details resolution number 4 is to approve of such acquisitions generally the provision of ﬁnancial ▶ acquisitions of N ordinary shares in assistance to the potential recipients as aggregate in any one ﬁnancial year may set out in the resolution. not exceed 20% of the company’s N ordinary issued share capital as at the date (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTION NUMBER 5 That the company or any of its subsidiaries be of passing of this special resolution ▶ in determining the price at which N and are hereby authorised to acquire ordinary shares issued by the company are N ordinary shares issued by the company acquired by it or any of its subsidiaries in from any person whosoever (including any terms of this general authority, the director or prescribed ofﬁcer of the company maximum premium at which such N or any person related to any director or ordinary shares may be acquired, will not prescribed ofﬁcer of the company), in terms Integrated annual report 2014 NASPERS LIMITED 151 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I NOTICE OF annual general meeting (continued) exceed 10% of the weighted average of Before the general repurchase is effected, the market value at which such N ordinary the directors, having considered the effects shares are traded on the JSE as of the repurchase of the maximum number determined over the ﬁve (5) business days of N ordinary shares in terms of the immediately preceding the date of foregoing general authority, will ensure that repurchase of such N ordinary shares by for a period of twelve (12) months after the the company or any of its subsidiaries ▶ at any point, the company may only appoint one agent to effect any date of the notice of the annual general meeting: ▶ the company and the group will be able, repurchase on the company’s behalf in the ordinary course of business, to pay ▶ the company’s sponsor must conﬁrm the their debts adequacy of the company’s working ▶ the assets of the company and the group, capital for purposes of undertaking the fairly valued in accordance with repurchase of N ordinary shares in writing International Financial Reporting to the JSE before entering the market for Standards, will exceed the liabilities of the the repurchase company and the group, and ▶ the company remains in compliance with ▶ the company and the group’s ordinary the minimum shareholder spread share capital, reserves and working capital requirements of the JSE Listings will be adequate for ordinary business Requirements, and purposes. ▶ the company and/or its subsidiaries may Additional information in respect of the not repurchase any N ordinary shares following appears in the integrated annual during a prohibited period as deﬁned by report and in the annual ﬁnancial the JSE Listings Requirements, unless a statements, and is provided in terms of the repurchase programme is in place where JSE Listings Requirements for purposes of dates and quantities of shares to be traded during the prohibited period are ﬁxed, and full details of the programme have been disclosed in an announcement over the Securities Exchange News Service the general authority: ▶ directors ▶ major shareholders ▶ directors’ interests in ordinary shares, and ▶ share capital of the company and (SENS) prior to the commencement of the litigation. prohibited period. 152 NASPERS LIMITED Integrated annual report 2014 NOTICE OF annual general meeting (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) DIRECTORS’ RESPONSIBILITY STATEMENT The directors, whose names appear in the list of directors contained in the integrated annual report, collectively and individually accept full responsibility for the accuracy of the information pertaining to this special do so during the year, which is in the best interests of the company and its shareholders. The reason for and effect of special resolution number 5 is to grant the company the authority in terms of the Act and the JSE Listings Requirements for the acquisition by resolution number 5 and certify that, to the best of their knowledge and belief, there are the company, or a subsidiary of the company, of the company’s N ordinary no facts that have been omitted which shares. would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that special resolution number 5 contains all relevant information. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) MATERIAL CHANGES Other than the facts and developments (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) SPECIAL RESOLUTION NUMBER 6 That the company or any of its subsidiaries be and are hereby authorised to acquire A ordinary shares issued by the company from any person whosoever (including any director or prescribed ofﬁcer of the company or any person related to any director or reported on in the integrated annual report prescribed ofﬁcer of the company), in terms and annual ﬁnancial statements, there have of and subject to the Act. been no material changes in the affairs or ﬁnancial position of the company and its subsidiaries since the date of signature of the audit report and up to the date of this notice. The reason for and effect of special resolution number 6 is to grant the company the authority in terms of the Act for the acquisition by the company, or a subsidiary of the company, of the company’s A ordinary The directors have no speciﬁc intention, at shares. present, for the company to repurchase any of its N ordinary shares, but consider that such a general authority should be put in place should an opportunity present itself to G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n Integrated annual report 2014 NASPERS LIMITED 153 NOTICE OF annual general meeting (continued) (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) ORDINARY RESOLUTION 10. Each of the directors of the company or the company secretary is hereby authorised to do all things, perform all acts and sign all documentation necessary to effect the implementation of the ordinary and special resolutions adopted at this annual general meeting. (cid:3)(cid:3)(cid:3)(cid:3)(cid:90) OTHER BUSINESS To transact such other business as may be transacted at an annual general meeting. By order of the board G Kisbey-Green Company secretary 25 July 2014 Cape Town p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I 154 NASPERS LIMITED Integrated annual report 2014 FORM of proxy Naspers Limited Incorporated in the Republic of South Africa Registration number: 1925/001431/06 JSE share code: NPN LSE share code: NPSN (“the company”) ISIN: ZAE000015889 ISIN: US 6315121003 One-hundredth annual general meeting of shareholders For use by holders of certiﬁcated shares or “own name” dematerialised shareholders at the 100th annual general meeting of shareholders of the company to be held on the 17th ﬂoor of the Naspers Centre, 40 Heerengracht, Cape Town, South Africa on Friday 29 August 2014 at 11:15. I/We of being a holder of “own name” dematerialised shares of Naspers and entitled to (see note 1) 1. 2. (please print) certiﬁcated shares or votes hereby appoint, or, failing him/her, or, failing him/her, 3. the chair of the annual general meeting as my/our proxy to act for me/us at the annual general meeting, which will be held in the boardroom on the 17th ﬂoor, the Naspers Centre, 40 Heerengracht in Cape Town on Friday 29 August 2014 at 11:15 for the purpose of considering and, if deemed ﬁt, passing, with or without modiﬁcation, the resolutions to be proposed thereat and at each adjournment or postponement thereof, and to vote for or against the resolutions and/or abstain from voting in respect of the shares in the issued share capital of the company registered in my/our name(s) (see note 2) as follows: In favour of Against Abstain Ordinary resolutions 1. Acceptance of annual ﬁnancial statements 2. Conﬁrmation and approval of payment of dividends 3. Reappointment of PricewaterhouseCoopers Inc. as auditor 4. To conﬁrm the appointment of the following directors: 4.1 Mr C L Enenstein 4.2 Mr D G Eriksson 4.3 Mr R Oliveira de Lima 4.4 Mr Y Ma 4.5 Mr J D T Stofberg 4.6 Mr F L N Letele 4.7 Mr B van Dijk 4.8 Mr V Sgourdos 5. To elect the following directors: 5.1 Prof R C C Jafta 5.2 Prof D Meyer 5.3 Mr J J M van Zyl Integrated annual report 2014 NASPERS LIMITED 155 G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i In favour of Against Abstain FORM of proxy (continued) 6. Appointment of the following audit committee members: 6.1 Adv F-A du Plessis 6.2 Mr D G Eriksson 6.3 Mr B J van der Ross 6.4 Mr J J M van Zyl 7. 8. To endorse the company’s remuneration policy Approval of general authority placing unissued shares under the control of the directors 9. Approval of issue of shares for cash 10. Authorisation to implement all resolutions adopted at the annual general meeting Special resolution number 1 Approval of the remuneration of the non-executive directors: Proposed 31 March 2015 1.1 Board – chair 1.2 Board – member (South African resident) Board – member (non-South African resident) Board – member (additional amount for non-South African resident) Board – member (daily amount) 1.3 Audit committee – chair 1.4 Audit committee – member 1.5 Risk committee – chair 1.6 Risk committee – member 1.7 Human resources and remuneration committee – chair 1.8 Human resources and remuneration committee – member 1.9 Nomination committee – chair 1.10 Nomination committee – member 1.11 Social and ethics committee – chair 1.12 Social and ethics committee – member 1.13 Trustees of group share schemes/other personnel funds 1.14 Media24 pension fund – chair 1.15 Media24 pension fund – trustee n o i t a m r o f n I 156 NASPERS LIMITED Integrated annual report 2014 FORM of proxy (continued) In favour of Against Abstain G r o u p P e r f o r m a n c e G o v e r n a n c e i F n a n c a i l Proposed 31 March 2016 1.1 Board – chair 1.2 Board – member (South African resident) Board – member (non-South African resident) Board – member (additional amount for non-South African resident) Board – member (daily amount) 1.3 Audit committee – chair 1.4 Audit committee – member 1.5 Risk committee – chair 1.6 Risk committee – member 1.7 Human resources and remuneration committee – chair 1.8 Human resources and remuneration committee – member 1.9 Nomination committee – chair 1.10 Nomination committee – member 1.11 Social and ethics committee – chair 1.12 Social and ethics committee – member 1.13 Trustees of group share schemes/other personnel funds 1.14 Media24 pension fund – chair 1.15 Media24 pension fund – trustee Special resolution number 2 Amendment to article 26 of the memorandum of incorporation Special resolution number 3 Approve generally the provision of ﬁnancial assistance in terms of section 44 of the Act Special resolution number 4 Approve generally the provision of ﬁnancial assistance in terms of section 45 of the Act Special resolution number 5 General authority for the company or its subsidiaries to acquire N ordinary shares in the company Special resolution number 6 General authority for the company or its subsidiaries to acquire A ordinary shares in the company and generally to act as my/our proxy at the said annual general meeting (tick whichever is applicable. If no indication is given, the proxy holder will be entitled to vote or to abstain from voting as the proxy holder deems ﬁt). Signed at Signature on this day of 2014 Assisted (where applicable) Integrated annual report 2014 NASPERS LIMITED 157 I n f o r m a t i o n p u o r G e c n a m r o f r e P e c n a n r e v o G l i a c n a n F i n o i t a m r o f n I NOTES TO form of proxy 1. The following provisions shall apply in relation to proxies: 1.1 A shareholder of the company may appoint any individual (including an individual who is not a shareholder of the company) as a proxy to participate in, speak and vote at the annual general meeting of the company. 1.2 A shareholder may appoint two or more persons concurrently as proxies and may appoint more than one proxy to exercise voting rights attached to different securities held by the shareholder. 1.3 A proxy instrument must be in writing, dated and signed by the shareholder. 1.4 A proxy may delegate the proxy’s authority to act on behalf of the shareholder to another person subject to any restrictions set out in the instrument appointing the proxy. 1.6 1.5 A copy of the instrument appointing a proxy must be delivered to the company, or to any other person on behalf of the company, before the proxy exercises any rights of the shareholder at the annual general meeting. Irrespective of the form of instrument used to appoint the proxy: (i) the appointment is suspended at any time and to the extent that the shareholder chooses to act directly and in person in the exercise of any rights as a shareholder; (ii) the appointment is revocable unless the proxy appointment expressly states otherwise; and (iii) if the appointment is revocable, a shareholder may revoke the proxy appointment by cancelling it in writing or making a later inconsistent appointment of a proxy and delivering a copy of the revocation instrument to the proxy and the company. 1.7 The proxy is entitled to exercise, or abstain from exercising, any voting right of the shareholder without direction except to the extent that the memorandum of incorporation of the company, or the instrument appointing the proxy, provides otherwise. 2. A certiﬁcated or “own name” dematerialised shareholder may insert the names of two alternative proxies of the shareholder’s choice in the space provided, with or without deleting “the chair of the annual general meeting”. The person whose name appears ﬁrst on the form of proxy and whose name has not been deleted and who attends the meeting, will be entitled and authorised to act as proxy to the exclusion of those whose names follow. 3. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate space provided. Failure to comply herewith will be deemed to authorise the proxy to vote at the annual general meeting as he/she deems ﬁt in respect of the shareholder’s votes exercisable at that meeting, but where the proxy is the chair, failure to so comply will be deemed to authorise the chair to vote in favour of the resolutions. A shareholder or his/her proxy is not obliged to use all the votes exercisable by the shareholder or by the proxy. 4. Forms of proxy for Naspers N ordinary shares must be lodged at or posted to the transfer secretaries of the company, Link Market Services South Africa Proprietary Limited, 13th ﬂoor, Rennie House, 19 Ameshoff Street, Braamfontein 2001 or PO Box 4844, Johannesburg 2000. Forms of proxy for Naspers A ordinary shares must be lodged at or posted to the registered ofﬁce of the company, 40 Heerengracht, Cape Town 8001 or PO Box 2271, Cape Town 8000. Forms of proxy to be received by not later than 11:15 on Wednesday 27 August 2014, or such later date if the annual general meeting is postponed. 5. The completion and lodging of this form of proxy will not preclude the certiﬁcated shareholder or “own name” dematerialised shareholder from attending the annual general meeting and speaking and voting in person at the meeting to the exclusion of any proxy appointed in terms hereof. 6. An instrument of proxy shall be valid for any adjournment or postponement of the annual general meeting, as well as for the meeting to which it relates, unless the contrary is stated therein, but shall not be used at the resumption of an adjourned annual general meeting if it could not have been used at the annual general meeting from which it was adjourned for any reason other than that it was not lodged timeously for the meeting from which the adjournment took place. 7. A vote cast or act done in accordance with the terms of a form of proxy shall be deemed to be valid despite: ▶ the death, insanity, or any other legal disability of the person appointing the proxy, or ▶ the revocation of the proxy, or ▶ the transfer of a share in respect of which the proxy was given, unless notice as to any of the above mentioned matters shall have been received by the company at its registered ofﬁce or by the chair of the annual general meeting at the place of the annual general meeting if not held at the registered ofﬁce, before the commencement or resumption (if adjourned) of the annual general meeting at which the vote was cast or the act was done or before the poll on which the vote was cast. 8. The authority of a person signing the form of proxy: 8.1 under a power of attorney, or 8.2 on behalf of a company or close corporation or trust, must be attached to the form of proxy unless the full power of attorney has already been received by the company or the transfer secretaries. 9. Where shares are held jointly, all joint holders must sign. 10. Dematerialised shareholders, other than by “own name” registration, must NOT complete this form of proxy and must provide their central securities depository participant (CSDP) or broker of their voting instructions in terms of the custody agreement entered into between such shareholders and their CSDP and/or broker. 158 NASPERS LIMITED Integrated annual report 2014 All sport pictures ©Gallo Images Arrow ©Warner Brothers Television Blacklist ©Davis Entertainment in association with Sony Pictures Television Carte Blanche ©Combined Artistic Productions Marvel’s Agent of S.H.I.E.L.D. ©ABC Studios Strictly Come Dancing ©BBC 2 Broke Girls ©Warners Brothers Television BASTION GRAPHICS www.naspers.com

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