Integrated annual report 2014
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WE
LOVE
transactions
Integrated an
Integrated annual report 2014 NASPERS LIMITED
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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.
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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
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Integrated annual report 2014 NASPERS LIMITED
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ABOUT Naspers
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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
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ABOVE ALL, WE SOLVE
PROBLEMS FOR CUSTOMERS
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Integrated annual report 2014 NASPERS LIMITED
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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
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INTERNET
PAY TELEVISION
PRINT MEDIA
TECHNOLOGY
We provide services in more than 130 countries.
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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
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OUR business
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(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.
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NASPERS LIMITED Integrated annual report 2014
OUR business (continued)
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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
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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
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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
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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.
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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
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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+)
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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
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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.
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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.
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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.
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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.
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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
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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
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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
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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
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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.
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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
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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.
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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
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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
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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
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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
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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.
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NASPERS LIMITED Integrated annual report 2014
OUR strategy (continued)
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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.
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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
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Strategic and
operational
M
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Regulatory
and compliance
Entity
level
Business
unit
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Human
capital
Subsidiary
Financial
and reporting
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Health and
safety
DOCUMEN T E D
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
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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
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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.
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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.
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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.
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Integrated annual report 2014 NASPERS LIMITED
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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
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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
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PERFORMANCE review
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NASPERS LIMITED Integrated annual report 2014
PERFORMANCE review (continued)
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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.
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Dividend: N shares
Compounded annual growth rate over 10 years: 27%
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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
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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)
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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.
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Revenue*
R’m
EBITDA*
+65%
+16%
R’m
Trading
profit*
+8%
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60 000
50 000
40 000
30 000
20 000
10 000
0
10 000
8 000
6 000
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2 000
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2013
2014
2013
2014
R’m
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2 000
1 000
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*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
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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
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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
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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
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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).
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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
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2014
12 000
10 000
8 000
6 000
4 000
2 000
0
2013
2014
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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
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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)
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Integrated annual report 2014 NASPERS LIMITED
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PERFORMANCE review (continued)
.
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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
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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.
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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
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SUPERSPORT
FUNDS
ROUGHLY
OF ALL
SUB-SAHARAN
SPORT
70%
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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.
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Revenue*
R’m
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R’m
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-8%
-18%
14 000
12 000
10 000
8 000
6 000
4 000
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800
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800
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*Including associates and joint ventures on a proportional basis
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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.
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was strengthened to cater for extra printing
work. The company expanded its African
footprint by securing printing work for literacy
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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.
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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
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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
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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%).
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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
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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.
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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
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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%
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Black
(cid:144) White
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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.
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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
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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.
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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
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you must learn to adapt!
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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
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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
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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.
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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
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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.
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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.
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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.
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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.
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CORPORATE governance
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CORPORATE governance (continued)
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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.
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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.
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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
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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
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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.
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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.
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OUR board
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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
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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
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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.
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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
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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.
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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
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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.
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Integrated annual report 2014 NASPERS LIMITED
101
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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
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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
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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.
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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
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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
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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
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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.
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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.
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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.
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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
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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
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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)
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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
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SUMMARISED ANNUAL financial statements
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118
NASPERS LIMITED Integrated annual report 2014
SUMMARISED ANNUAL financial statements (continued)
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Integrated annual report 2014 NASPERS LIMITED
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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.
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PricewaterhouseCoopers Inc.
Director: A Wentzel
Registered auditor
Cape Town, South Africa
20 June 2014
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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
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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
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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
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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
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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)
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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
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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)
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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.
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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
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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
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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
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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
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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
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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
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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
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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.
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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.
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139
SHAREHOLDER and corporate information
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NASPERS LIMITED Integrated annual report 2014
SHAREHOLDER and corporate information (continued)
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Integrated annual report 2014 NASPERS LIMITED
141
ADMINISTRATION and corporate information
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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
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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
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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
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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
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NOTICE OF annual general meeting (continued)
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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.
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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
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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.
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Integrated annual report 2014 NASPERS LIMITED
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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
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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
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Integrated annual report 2014 NASPERS LIMITED
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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
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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
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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
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156
NASPERS LIMITED Integrated annual report 2014
FORM of proxy (continued)
In favour of
Against
Abstain
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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
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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
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