Naspers Ltd Annual Report 2015

Plain-text annual report

A global platform operator integrated annual report 2015 Contents About this report Scope of this report and assurance Forward-looking statements Statement of the board of directors on the integrated annual report The Naspers group About Naspers Our values Our purpose What we do How we do it Our business Key ﬁgures for 2015 Operational snapshot Chair’s report Chief executive’s report Our strategy How we manage risk Stakeholder engagement Balancing proﬁt, people and our planet Value added statement Performance review Financial review Operational review (cid:3)(cid:90) Internet (cid:3)(cid:90) Video entertainment (cid:3)(cid:90) Media24 2 2 3 4 4 5 5 5 6 14 15 18 26 32 34 38 42 44 46 48 48 58 64 Non-ﬁnancial review (cid:3)(cid:90) Sustainable investment (cid:3)(cid:90) Focus areas (cid:3)(cid:90) Contributing to our communities (cid:3)(cid:90) Transformation (cid:3)(cid:90) Black economic empowerment partners (cid:3)(cid:90) People (cid:3)(cid:90) Environment (cid:3)(cid:90) Awards Corporate governance Corporate governance Our board Remuneration report Social and ethics committee report Report of the audit committee Financial Summarised consolidated annual ﬁnancial statements 68 68 69 69 71 73 74 79 82 86 92 100 114 116 120 Shareholder and corporate information Administration and corporate information 142 Analysis of shareholders and shareholders’ diary 143 144 Notice of annual general meeting 155 Appendix 161 Form of proxy and notes to form of proxy P U O R G About this report Scope of this report and assurance Our integrated annual report combines ﬁnancial and non-ﬁnancial information for the year from 1 April 2014 to 31 March 2015 giving a full understanding of our group’s performance. It was prepared using the guidelines of the Global Our South African subsidiaries publish separate integrated reports on www.multichoice.co.za, www.media24.com and www.novus.holdings. Group reporting standards are continually being developed to make our disclosure more meaningful and measurable for stakeholders. This report excludes ﬁnancial and non-ﬁnancial targets Reporting Initiative (GRI G4), recommendations of or forward-looking statements other than the King Report on Corporate Governance in South explained below. Africa 2009 (King III), the International Integrated Information extracted from the audited Reporting Council Framework, requirements of the Companies Act No 71 of 2008 (“Companies Act”), and International Financial Reporting Standards (IFRS). Naspers Limited consolidated annual ﬁnancial statements for the year ended 31 March 2015 has been included in this integrated annual report. Refer to page 121 for the This report includes the ﬁnancial performance PricewaterhouseCoopers Inc. (PwC) report. South of the Naspers group and its subsidiaries, joint ventures and associates. The scope of reporting on non-ﬁnancial performance is indicated in the detail of the report. African broad-based black economic empowerment (BBBEE) information was veriﬁed by Empowerlogic (MultiChoice) and AQRate Veriﬁcation Services (Media24). 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on the integrated annual report The audit committee and board reviewed the integrated annual report and the board approved the report. The summarised consolidated annual ﬁnancial statements were prepared in accordance with IFRS and the South African Companies Act, while the integrated annual report was prepared using the guidelines of the Global Reporting Initiative (GRI G4), recommendations of the King Report on Corporate Governance in South Africa 2009 (King III) and the International Integrated Reporting Council Framework. In our opinion the integrated annual report and ﬁnancial statements fairly reﬂect the true ﬁnancial position of the group at 31 March 2015 and its operations during this period. On behalf of the board Koos Bekker Chair Cape Town 26 June 2015 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 3 About Naspers Our values Above all, we solve problems for customers (cid:29)(cid:3)We love transactions (cid:29)(cid:3)We value cultural diversity (cid:29)(cid:3)We aim to be useful to the communities we serve (cid:29)(cid:3)We create an environment for entrepreneurs to succeed (cid:29)(cid:3)We love to innovate (cid:29)(cid:3)We do business with integrity and within the law P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 4 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 About Naspers (continued) Our purpose What we do How we do it Enriching communities with content and commerce. We develop outstanding products At heart, we are entrepreneurs. for customers in markets We push for performance with growth potential. in everything we do. We enable better We back local teams, and commerce, entertainment learn from each other. and information. We’re nimble and seize opportunities. Doing the right thing is our guiding principle. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 5 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Our business Introduction Over the decades we have transformed thoroughly. Starting as a single-country newspaper group, we risked becoming an early investor in pay television and mobile telephony in one country. Then we grew into a video-entertainment leader and a major global consumer internet and ecommerce group in over 130 countries. Looking at our business as a whole on an economic interest basis and including our share of associates and joint ventures, almost 60% of our revenues are now derived from internet and ecommerce segments. Below 30% of our revenues are sourced in South Africa. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 6 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our business (continued) Today Naspers is a broad-based group with operations in ecommerce (especially online classiﬁeds, etail, marketplaces, online services and payments) and other internet services, video entertainment and print media. We operate mainly in markets with high growth potential – 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. Naspers has its primary listing on the JSE Limited’s stock exchange (JSE) in South Africa, where it forms 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, on the LSE or JSE (details on page 142). (However, most trades de facto take place on the JSE.) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 7 Our business (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I CLASSIFIEDS ETAIL MARKETPLACES C2C ONLINE COMPARISON SHOPPING B2C PAYMENTS ONLINE SERVICES Ecommerce Internet A GLOBAL PLATFORM OPERATOR Given our aim to be a player in selected ecommerce markets, global business units were reshaped under dedicated, specialised management. This improved clarity in terms of strategy, technology, systems and talent management. In addition, vertical (versus geographic) business specialisation leads to faster sharing of knowledge and innovation. 8 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our business (continued) AFRICA ENRICHING LIVES DTT DTH Listed Video entertainment Print NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 9 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Our business (continued) Internet Our internet assets are spread across Eastern and Central Europe, China, Russia, Latin America, India, Southeast Asia, Africa and the Middle East. We (cid:3)(cid:79) Business-to-consumer (B2C) − Etail − Marketplaces − Online comparison shopping offer a broad range of services, but focus on − Payments ecommerce. Notably: (cid:3)(cid:90) Ecommerce platforms (cid:3)(cid:79) Consumer-to-consumer (C2C) − Classiﬁeds (mainly general classiﬁeds sites, with some property verticals) − Online services such as travel and food ordering (cid:3)(cid:90) Listed investments (cid:3)(cid:79) Tencent (cid:3)(cid:79) Mail.ru We believe ecommerce will be the largest segment of the internet in most global markets in years to come. Ecommerce is now gaining traction, supported by the proliferation of smartphones and greater adoption of mobile devices by consumers. CLASSIFIEDS ETAIL MARKETPLACES C2C ONLINE COMPARISON SHOPPING B2C PAYMENTS ONLINE SERVICES Ecommerce Internet 10 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our business (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Ecommerce sector by category (cid:3)(cid:90) Etail: We are building B2C etail businesses that help consumers purchase goods and services through online platforms. In several markets we hold inventory for inventory directly. Revenues from these marketplaces include commission charged on successful transactions, as well as listing and promotional fees. In many markets we combine the ﬁrst-party etail and third-party sale in our own warehouses and fulﬁlment models. centres and deliver items to the end consumer via owned or third-party distribution systems. Tight working capital management and merchandising expertise are key to producing economic returns. In other markets our platforms facilitate third-party B2C and C2C transactions. In these cases we offer sales management tools and trafﬁc generation, but do not hold We also offer online price-comparison services where consumers can source information on the speciﬁcations and product pricing from multiple vendors. We receive a fee from vendors for leads generated and/or transactions completed. (cid:3)(cid:90) Classiﬁeds: We operate online classiﬁeds platforms that facilitate local commerce in categories including items for sale, job NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 11 Our business (continued) opportunities, services for hire, homes for sale mobile-ﬁrst and mobile-only services such as and rent, and much more. Revenues from food ordering, and other mobile value-added classiﬁeds include listing and promotional fees services. as well as third-party advertising. The business model requires signiﬁcant upfront investment to build market leadership, with monetisation coming later. Video entertainment (previously pay television) We operate video-entertainment platforms in This often translates into several years of sub-Saharan Africa. Our strategy is to deliver losses before proﬁts are made. quality entertainment “anytime, anywhere and on (cid:3)(cid:90) Payments: Under the PayU brand, we offer any device”. Various technologies are used to safe and easy payment for goods and services offer direct-to-home (DTH) satellite, digital bought online. These are available to terrestrial television (DTT), online and mobile consumers on our own ecommerce platforms, services. We also develop content protection and as well as platforms operated by third parties. access-management technologies for internet, We differentiate our solutions by offering a video-entertainment and mobile platforms. broad range of local payment options to our customers and good conversion of interest to customers and good conversion of interest to Main operations include: sales for our merchants. sales for our merchants. (cid:3)(cid:90) MultiChoice: Leading provider of video- (cid:90) Online services: We invest in emerging (cid:3)(cid:90) Online services: We invest in emerging entertainment services, including online and opportunities, such as online travel, and opportunities, such as online travel, and mobile. The brands DStv, GOtv, BoxOfﬁce and DStv Catch Up serve some 10m households in 50 African countries. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 12 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 (cid:3)(cid:90) GOtv: Leading provider of DTT video- entertainment services in Africa, with operations in eight countries and 114 cities. (cid:3)(cid:90) M-Net: General channel provider, sourcing content from international content owners and commissioning local productions. (cid:3)(cid:90) SuperSport: Premier funder and broadcaster of sport content across the African continent. (cid:3)(cid:90) MWEB: Consumer-focused internet service provider in South Africa. (cid:3)(cid:90) Irdeto: Global provider of content security management and delivery for pay-media companies. Print This segment comprises primarily digital media, newspapers, magazines, printing, distribution, book-publishing businesses and ecommerce ventures in South Africa. Our main operations include: (cid:3)(cid:90) Media24: Interests in newspapers, magazines and digital media, as well as printing, distribution, book publishing, ecommerce and ﬁnancial data. Most of our businesses are market leaders in their sectors. Activities are conducted primarily in South Africa, with some operations in neighbouring countries and expansion into select territories in the rest of Africa, such as Nigeria and Kenya. (cid:3)(cid:90) 24.com: A leading digital publisher in Africa. (cid:3)(cid:90) Careers24: Leading recruitment site in South Africa. (cid:3)(cid:90) Spree: Leading online fashion retailer in South Africa. Our business (continued) (cid:3)(cid:90) Novus Holdings Limited (“Novus Holdings”) (listed on the JSE in March 2015, previously Paarl Media Group): A leading printing and manufacturing group in Africa. (cid:3)(cid:90) Book publishing: Leading position in the South African trade publishing market through Jonathan Ball Publishers and NB Publishers. (cid:4)(cid:5) (cid:3) (cid:1) (cid:2)(cid:3)(cid:1)(cid:2) OUR LIVES. OUR PAPER. Tuesday 6 January 2015 (cid:1)(cid:2)(cid:7) (cid:14)(cid:8)(cid:13) (cid:2)(cid:5)(cid:5)(cid:8)(cid:10)(cid:3) (cid:12)(cid:8) (cid:3)(cid:6)(cid:4)(cid:9) (cid:5)(cid:2)(cid:2) (cid:4)(cid:1)(cid:3)(cid:2)(cid:5) (cid:11)(cid:7) (cid:9) (cid:6) (cid:8) PRICE: R3,20 nationwide (cid:1)(cid:1) We’ve finished the race! We’ve finished the race! (cid:1)(cid:2)(cid:3)(cid:4) (cid:5)(cid:6)(cid:7)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:13)(cid:4) (cid:9)(cid:6)(cid:14)(cid:4) (cid:15)(cid:5)(cid:2)(cid:16)(cid:3)(cid:17)(cid:3)(cid:10)(cid:13)(cid:4) (cid:5)(cid:3)(cid:18)(cid:3)(cid:19)(cid:10)(cid:15)(cid:9)(cid:3)(cid:20)(cid:4) (cid:16)(cid:8)(cid:4) (cid:21)(cid:16)(cid:20)(cid:10)(cid:15)(cid:8)(cid:20)(cid:4) (cid:11)(cid:3)(cid:13)(cid:9)(cid:3)(cid:10)(cid:20)(cid:15)(cid:11)(cid:22)(cid:4) (cid:23)(cid:2)(cid:3)(cid:10)(cid:3)(cid:4) (cid:9)(cid:2)(cid:3)(cid:11)(cid:4) (cid:24)(cid:3)(cid:9)(cid:4) (cid:9)(cid:2)(cid:3)(cid:4) (cid:19)(cid:15)(cid:13)(cid:16)(cid:5)(cid:4) (cid:3)(cid:20)(cid:7)(cid:5)(cid:15)(cid:9)(cid:16)(cid:6)(cid:8)(cid:4) (cid:24)(cid:16)(cid:8)(cid:16)(cid:13)(cid:9)(cid:3)(cid:10)(cid:25) Photo by Lucky Maibi Full story on P2 BIG FISH STILL SWIMS! ALIVE AND KICKING: Sipho Makhabane is recovering in hospital. Photo by Alex Mkhize Makhabane: I’m not dead By AARON DUBE COMMENTS from sad fans about Big Fish’s death are still trending on Face- book, Twitter and Whatsapp . . . 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(cid:17)(cid:12)(cid:7)(cid:18)(cid:2)(cid:11)(cid:12)(cid:13)(cid:7)(cid:10)(cid:26)(cid:18)(cid:7)(cid:10)(cid:34)(cid:7)(cid:30)(cid:35)(cid:36)(cid:7)(cid:18)(cid:15)(cid:4)(cid:8) CONTINUED ON PAGE 2 (cid:5)(cid:1)(cid:13)(cid:3) (cid:15)(cid:8)(cid:12)(cid:9) (cid:10)(cid:1)(cid:15) (cid:11)(cid:5)(cid:3) (cid:2)(cid:6)(cid:4)(cid:6)(cid:11)(cid:1)(cid:7) (cid:14)(cid:1)(cid:15)(cid:16)  (cid:6)(cid:1)(cid:3)(cid:5)(cid:2)(cid:13)(cid:13)(cid:8)(cid:14)(cid:3)(cid:13)(cid:10)(cid:17)(cid:16)(cid:1)(cid:4)(cid:1)(cid:7)(cid:9)(cid:22)(cid:16)(cid:20)(cid:11)  (cid:19)(cid:21)(cid:7)(cid:19)(cid:19)(cid:5)(cid:15)(cid:14)(cid:3)(cid:13)(cid:10)(cid:17)(cid:12)(cid:4)(cid:1)(cid:7)(cid:9)(cid:22)(cid:16)(cid:20)(cid:11)(cid:16)(cid:1)  (cid:21)(cid:21)(cid:21)(cid:14)(cid:4)(cid:1)(cid:7)(cid:9)(cid:22)(cid:16)(cid:20)(cid:11)(cid:14)(cid:3)(cid:13)(cid:14)(cid:23)(cid:1) NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 13 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I R’m 25 000 20 000 15 000 10 000 5 000 0 R’m 4 000 3 000 2 000 1 000 0 Key ﬁgures for 2015 Revenue(1) R’m Trading profit(1) 150 000 120 000 90 000 60 000 30 000 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Core HEPS cents Free cash flow 3 000 2 500 2 000 1 500 1 000 500 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 (2) 2015 (1 000) Dividend per share cents Development spend(1) 500 400 300 200 100 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 R’m 12 000 10 000 8 000 6 000 4 000 2 000 0 (1) Including associates and joint ventures on a proportionate basis. (2) We report a free cash outﬂow in the current year of R515m, largely due to increased capital expenditure to build our DTT footprint and in-country video-entertainment production facilities in East and West Africa. 14 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Operational snapshot G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Users and services (cid:3)(cid:90) We are now market leader in transactions in (cid:3)(cid:90) Mobile internet remains a battleground in all online travel in India, as well as online food internet service categories. Online retail (etail) delivery in Brazil. and classiﬁeds are growing fast in a changing (cid:3)(cid:90) Our consolidated PayU brand gives buyers and ecommerce landscape. Business models are sellers efﬁcient and secure payment solutions. evolving to match customers’ increasing (cid:3)(cid:90) Tencent continues to build next generation expectations. online-to-ofﬂine (O2O) services by investing (cid:3)(cid:90) We are now the world’s largest classiﬁeds and partnering with leading companies such group measured by users and net new as 58.com, Dianping and Koudai. User listings. engagement is increasing by providing local NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 15 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Operational snapshot (continued) services to users such as transportation, resources team to address this competitive lifestyle, restaurant bookings and movie challenge and focus on critical talent topics: tickets. (cid:3)(cid:90) Attracting senior talent with capabilities that (cid:3)(cid:90) MultiChoice’s “TV everywhere” strategy gained are in short supply globally, such as mobile traction with the launch of Connected Services technology and ecommerce general that offers customers access to a greater management. selection of entertainment. The DStv Catch Up (cid:3)(cid:90) Ensuring our compensation packages remain service provides an expanded catalogue of competitive. over 1 200 hours of content and gives DStv (cid:3)(cid:90) Ensuring we remain an attractive place to Premium PVR customers access to content via work for our people, and a respected partner their mobile devices in the form of 19 linear and investor for our entrepreneurs and channels (including events channels) and founders. some 1 600 DStv Catch Up titles. (cid:3)(cid:90) Supporting skills and capability development. (cid:3)(cid:90) The launch of DStv Now enabled our DStv Premium PVR customers to watch the latest movies, series, live sport and DStv Catch Up Socio-economic development (cid:3)(cid:90) In South Africa some R2,7bn was spent on content on their tablets or smartphones – local sport and content during the ﬁnancial anywhere, any time. MultiChoice also year. SuperSport is by far the biggest funder of introduced an enhanced kids’ catalogue, DStv local sports on the African continent. Kids, on PVR and through the DStv Now app. (cid:3)(cid:90) We introduced the MultiChoice Diski Challenge, (cid:3)(cid:90) BoxOfﬁce, MultiChoice’s video-on-demand which focuses on youth development through service continued to grow with a monthly a reserve league for the Premier Soccer League average of 600 000 movie rentals. The (PSL). This is a countrywide initiative run by the catalogue was expanded to 20 titles on the PSL and has been well received. DStv Explora and an average of 100 titles online. (cid:3)(cid:90) Our news and content businesses are investing in digital, particularly mobile delivery, while managing costs in a challenging environment. Our people Competition for the best talent is increasing in most markets. We have created a group human 16 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Operational snapshot (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N (cid:3)(cid:90) Media24 focuses on education, digital media training and enterprise development: Most weeks each year, the ﬂagship weekly magazines Huisgenoot, YOU and DRUM publish supplementary educational material that is in line with the school curriculum and used by teachers, learners and parents. The company plays a signiﬁcant role in developing small independent publishers of community titles and provided digital media training to 150 members of the Association of Independent Publishers community willing to help others, with relevant (AIP). Its ﬂagship Corporate Social Investment non-governmental organisations seeking funds. (CSI) project, WeCan24, is a mobile-based (cid:3)(cid:90) The eMAG Foundation was launched by our national digital news schools network, which leading Romanian etail business. Its ﬂagship equips budding journalists with the technical projects aim to revitalise the Romanian platforms and journalistic skills to run their own educational system and include: Aiming for the online school news sites. Olympiad – supporting children and teachers (cid:3)(cid:90) A new echarity platform (charytatywni.allegro.pl) who aim to achieve higher performance in was created to better connect an online education. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 17 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Chair’s report We strengthened our position in most markets by investing in people, technology, content and marketing. Koos Bekker Overview We are pleased to present our integrated annual report for the year to 31 March 2015 to stakeholders. Results for the review period reﬂect good progress across our video-entertainment (previously “pay-television”) and internet platforms. We strengthened our position in most markets by investing in people, technology, content and marketing – leading to growth ahead of competitors. Notably strong growth was seen in our Core headline earnings, a measure we view classiﬁeds and etail businesses, with both as a reliable indicator of our sustainable formats gaining market share. Our position operating performance, grew 30% to R11,2bn in mobile offerings strengthened versus (2014: R8,6bn). This was mainly due to competitors. Core headline earnings grew 30% to R11,2bn contributions from Tencent and some of our proﬁtable ecommerce businesses. Taking a 10-year view, the group has grown segment revenues at a compounded annual rate of around 27%, annua and trading proﬁts at 25%. 18 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chair’s report (continued) Segment revenue(1) R’m 150 000 120 000 90 000 60 000 30 000 0 R’m 25 000 20 000 15 000 10 000 5 000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Segment trading profit(1) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1) Including associates and joint ventures on a proportionate basis. Our listed internet investments Tencent language and culture, creating an (particularly) and Mail.ru (less so) were major entrepreneurial spirit and a quality workforce. contributors to our equity-accounted results, increasing to R16,4bn (2014: R10,8bn). We Governance congratulate them on their excellent As a multinational group, our risks differ by management skills. jurisdiction as detailed in the risk management Our video-entertainment business made solid section of this report. The board conducts the progress, passing a milestone to close at over group’s business with integrity, applying 10,2m subscribers. In March 2015 Media24 appropriate corporate governance policies and successfully listed its printing business, Novus principles. Where Naspers subsidiaries are Holdings, raising R1,1bn in cash with this listing. governed by independent boards of directors, Looking ahead, we hope to build sustainable these apply suitable governance practices and positions in growing markets. We focus on local their committees are mandated to comply with NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 19 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Chair’s report (Continued) relevant requirements. Naspers has a legal portfolio has its own unique challenges. compliance programme, detailed on page 87. However, a beneﬁt of operating in multiple The Naspers board is informed of subsidiary countries and embracing multiple technologies is activities via a disciplined reporting structure. that the aggregate risk proﬁle is spread. Strategies and business plans for ﬁnancial and Surviving in such a dynamic environment, non-ﬁnancial elements of operations are however, requires planning and agility. regularly reviewed. Part of management’s During the review period, the use of internet remuneration is based on performance against services continued to expand. The global targets (ﬁnancial and operational), individual and internet audience is forecast to pass the 3bn group objectives, and is linked to strategic user mark in 2015 and more than half the objectives. world’s population is expected to be connected We continually evaluate areas where to the internet by 2018. Mobile is leading the governance can be improved. This is detailed in charge as the most disruptive innovation in the our application of King III in the governance technology/internet space. frameworks of Naspers, MultiChoice and While internet access in various forms is Media24 on page 86 (http://www.naspers- creating opportunities for our internet ventures, reports.com/2015/corporate-governance.php). it also requires our video-entertainment Environment in which we operate businesses to adapt fast. Personal video recorders (PVRs) make on-demand television a reality and, in sub-Saharan Africa, the advent of The 2014 calendar year was a turbulent one for DTT networks is addressing a mass market that the global economy, with widely diverging cannot afford satellite video entertainment. impact. Each country and business in our P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 20 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chair’s report (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Ecommerce continues to take market share main South African units, MultiChoice and from bricks-and-mortar shops. Over the next Media24, are complying with South African decade ecommerce is on track to emerge as the broad-based black economic empowerment largest section of the internet in most countries (BBBEE) requirements. around the world. In a broader regulatory environment that continues to evolve, we operate a legal and Managing sustainability Naspers invests massively to create useful regulatory compliance programme. African products and services for customers. If successful, countries are now strengthening broadcasting this will yield a sustainable return to investors. regulation and new competition legislation is However, our obligations as a corporate citizen being introduced. Elsewhere in the world demand that we respect the natural environment internet regulation is ramping up. Naspers’s and limit our impact as far as possible. licences to provide services are subject to The Naspers group follows a structured conditions that may change over time. Equally, approach to its sustainability strategy. Our our newspaper and magazine businesses are governance model and ethical principles are subject to several regulatory impacts. Our two communicated throughout the group. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 21 Chair’s report (Continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Our approach to sustainability is described we are focused on attracting, developing and below. retaining the best people. Flowing from our business activities are The board determines strategy and is investments in countries where we operate. We ultimately responsible for overseeing our group’s create business for local suppliers, employ performance. Management teams across our people and pay taxes and levies to governments, businesses implement these strategies, guided which in turn helps to improve communities. by the group’s code of business ethics and Our products and services directly affect local conduct. societies. Since each community has its The board is responsible for the integrity of challenges, each business makes a difference to our integrated reporting. It tasked the audit and its local community by contributing in line with risk committees to oversee sustainability issues our strengths and know-how. and to ensure that information is reliable and Our people are a priority. There is a global comparable to ﬁnancial results. shortage of talent and in some of our disciplines 22 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chair’s report (continued) In our social interactions, we focus in listed N ordinary share, and 94 cents (previously particular on challenges such as education, skills 85 cents) per unlisted A ordinary share. If development and environmental sustainability. conﬁrmed by shareholders at the annual Our aim is to improve the living conditions of our general meeting on 28 August 2015, dividends employees, their families and the communities will be payable to shareholders recorded in the in which we operate, ultimately balancing proﬁt, books on Friday 18 September 2015. It will be people and planet. released on Monday 21 September 2015. For more details, refer to the governance and The last date to trade cum dividend will be sustainability section on our corporate website, Friday 11 September 2015 (shares therefore www.naspers.com. Dividend The board recommends that the annual gross dividend be increased 11% to 470 cents (previously 425 cents) per to trade ex dividend from Monday 14 September 2015). Share certiﬁcates may not be dematerialised or rematerialised between Monday 14 September 2015 and Friday 18 September 2015, both dates inclusive. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 23 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Chair’s report (Continued) The dividend will be declared from income reserves. It will be subject to a dividend tax rate of 15%, yielding a net dividend of 399,5 cents per listed N ordinary share and 79,9 cents per unlisted A ordinary share to those shareholders not exempt from paying dividend tax. Such dividend tax will amount to 70,5 cents per listed N ordinary share and 14,1 cents per unlisted A ordinary share. The issued ordinary share capital as at 26 June 2015 was 419 203 470 N ordinary shares and 712 131 A ordinary shares. The company’s income tax reference number is 9550138714. Directors Dividend of 470c per N ordinary share During the ﬁnancial year several changes to the with insight and tact for 23 years. Mr van Zyl board concurred. was appointed to Naspers in January 1988 and Mr Steve Pacak (our excellent ﬁnancial served as independent lead director and on director) retired on 30 June 2014 from his various other group structures. Mr van Zyl very executive position. Mr Basil Sgourdos was ably chaired the Naspers audit, risk, and social appointed to the board as ﬁnancial director and ethics committees. Mr Ma has served on effective 1 July 2014. Mr Pacak became a the board since 2013 and other group boards non-executive director. and committees since February 2003 and On 15 January 2015 Mr Mark Sorour, our provided valuable input. Furthermore, with experienced head of mergers and acquisitions, effect from 29 May 2015 Naspers’s non- and already an alternate executive director, was executive director, Adv Fran du Plessis resigned appointed as an executive director. from the board, having made valued Subsequent to the ﬁnancial year-end on contributions to various other group structures 17 April 2015, Mr Ton Vosloo, non-executive and committees since October 2003. chair, as well as independent non-executive The board expressed its deep gratitude to directors Messrs Boetie van Zyl and Yuanhe Ma, these directors for their commitment to our retired from the board. In addition, I rejoined the group over many years. Their unique board as non-executive chair. Mr Vosloo served contributions were highly appreciated and will with great distinction on the Naspers board since be missed. March 1983. He chaired Naspers, as well as In terms of the company’s memorandum of various group companies and board committees incorporation, one third of non-executive 24 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chair’s report (continued) directors retires annually and reappointment is In compliance with the Companies Act, not automatic. Messrs Craig Enenstein, Don shareholders will be asked to consider these Eriksson, Fred Phaswana and Ben van der Ross proposals at the annual general meeting. The retire by rotation at the annual general meeting abridged curricula vitae of all directors appear on but, being eligible, offer themselves for pages 92 to 97. re-election. I thank my fellow board members for their At the annual general meeting shareholders highly valued guidance and support during will be asked to conﬁrm these appointments and another successful year. Our board appreciates to consider the re-election of these directors the commitment of our top executives under (see notice on page 146). Mr Bob van Dijk. Also our management teams On 9 June 2015 Prof Rachel Jafta was and our employees around the world. We appointed to Naspers’s audit and risk committees. appreciate their enthusiasm and enterprise. Members of the audit committee are now Messrs Don Eriksson and Ben van der Ross and Prof Rachel Jafta. The board recommends shareholders reappoint them as audit committee members. On 17 April 2015 Mr Don Eriksson replaced Mr Boetie van Zyl as chair of the audit Koos Bekker committee as Mr van Zyl retired, while with effect Chair from 29 May 2015 Advocate du Plessis resigned. 26 June 2015 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 25 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Chief executive’s report We push for performance in everything we do. Bob van Dijk Overview Based on a solid understanding of consumer behaviour, we build technology platforms in growth markets, aiming to stay ahead of changes in consumer engagement. Our platforms – currently in ecommerce, online services, video entertainment and print/digital media – are relevant in the lives of our customers. . Generally, platform businesses are the most valuable in media and the internet – consumer destinations (starting points) with repeat use and positive word-of-mouth. Platforms often deliver attractive ﬁnancials on the back of this strong position with consumers. Executed well, the consumer base and cash ﬂow from a strong platform can support the growth of valuable adjacent businesses. Naspers has solid platforms in its global portfolio. For example video entertainment and the Allegro marketplace are businesses that address a real consumer need, are monetised in a sustainable way, and have extended into other markets. 26 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chief executive’s report (continued) Performance in context platforms to grow ahead of our competitors On an economic-interest basis, revenue grew 26% and expand the market. We are also during the year, mainly through solid growth in our ecommerce and video-entertainment segments. adjusting to the rapid shift to smartphones, which are becoming the primary internet Continuing the trend of recent years, Almost 60% device in many of our markets. of total segment revenues came from our internet and ecommerce operations. Some R10,7bn was invested in developing our ecommerce platforms and enhancing our video-entertainment services across Africa. The rand and some of our other operating currencies depreciated against the US dollar. Core headline earnings, a measure the board considers a reliable indicator of sustainable operating performance, grew 30% to R11,2bn (2014: R8,6bn), mainly due to increased earnings contributions from Tencent and some of the proﬁtable ecommerce businesses. As a result, core headline earnings per N ordinary share grew 28% to R27,80. Mobile internet users by region 2018E 2014E -2bn Developed markets Naspers markets m 2 000 1 500 1 000 500 0 A number of agreements were concluded The main developments in our business units are with Schibsted ASA Media Group summarised below and the summary includes associates and joint ventures on a proportionate basis: (“Schibsted”), covering key classiﬁeds assets in Latin America, Southeast Asia and Eastern Europe that should enhance our consumer (cid:3)(cid:90) Internet: This segment includes our ecommerce offering and improve the outlook of our activities and listed investments and recorded classiﬁeds platforms in some of these regions. strong revenue growth of 37%. Tencent performed well, with earnings attributable to shareholders measured in Tencent’s local currency, growing by 54%. Our ecommerce segment recorded a 36% increase in revenue, but also at an increased trading loss of R6,1bn. Ecommerce is growing fast. Given the different stages of maturity and the revenue structure of our ecommerce models, etail and marketplaces currently generate the bulk of ecommerce revenues. We are investing in our ecommerce revenue up 36% NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 27 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Chief executive’s report (cid:3)(cid:90) Video entertainment: This segment produced 11 countries and 114 cities. Our DTT base another consistent performance, generating more than doubled, closing at 2,2m revenues of R42,4bn – up 17% year on year. customers. Kenya is one of the ﬁrst African The net subscriber base across Africa passed the countries to make the transition to digital 10m mark during the period. after the analogue switchoff started in Development spend rose 31% as we January 2015. continue to invest in building our DTT (cid:3)(cid:90) Print: Like traditional media companies services and online platforms, resulting in worldwide, Media24 faced challenges and trading proﬁt contracting by 6% to R8bn. managed marginal revenue growth. Trading Our DTT network is now substantially in proﬁt declined as Media24 stepped up place, with MultiChoice now operating in investment in internet and ecommerce opportunities. Signiﬁcant acquisitions The group invested R4,5bn during the year on acquisitions in the ecommerce sector and disposed of some smaller businesses in that same sector. Key transactions included: (cid:3)(cid:90) Effective January 2015, the group entered into agreements with Schibsted, Telenor Holdings ASA and Singapore Press Holdings Limited to establish joint classiﬁeds business activities in Brazil, Indonesia, Bangladesh and Thailand. The group also acquired Schibsted’s Philippine classiﬁeds business. In February 2015 we entered into further agreements with Schibsted on acquiring Schibsted’s Romanian classiﬁeds P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 28 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chief executive’s report (continued) business and the sale of the group’s Hungarian classiﬁeds business. (cid:3)(cid:90) Various acquisitions were made within the Movile group, especially with respect to the group’s online food-ordering business, iFood, which merged with Just Eat’s Brazilian subsidiary. (cid:3)(cid:90) In February 2015 the group acquired a 46,5% interest in Takealot Online (RF) Proprietary Limited (“Takealot”) in exchange for its South African etail business, Kalahari. com, and the issue of Naspers N ordinary shares. (cid:3)(cid:90) In March 2015 the group acquired the shares held in and loans extended by minority shareholders in its subsidiaries MIH Allegro B.V. and FixeAds B.V. under the terms of pre-existing exit agreements. (cid:3)(cid:90) Also during March 2015 the group disposed of its subsidiary 7Pixel S.r.l. for R678m. with its 50,9% interests on a fully diluted (cid:3)(cid:90) The group participated in two funding basis. rounds of its associate Flipkart Limited (cid:3)(cid:90) In January 2015 the group disposed of the (“Flipkart”). These funding rounds, in May backend infrastructure of the MWEB and August 2014, resulted in additional Business, Optinet Services and Networks investments of R555m and R2,67bn divisions, to Dimension Data and entered respectively. The group now has a 15,83% into a joint Wi-Fi business venture with interest in Flipkart on a fully diluted basis. Dimension Data by contributing its MWEB (cid:3)(cid:90) We also invested a further R297m in cash in Wi-Fi division in exchange for a 49% our joint venture, Konga Online Shopping interest. MWEB is now a consumer-focused Limited (“Konga”), in October 2014. internet service provider only. At 31 March 2015 the group held a 40,2% interest in Konga on a fully diluted basis. Investor engagement After the end of the reporting period, the We are committed to providing timely, transparent group invested a further US$41m in Konga. and relevant information, which helps the Following this investment, the group investing public understand our business, continues to exert joint control over Konga governance, ﬁnancial performance and prospects NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 29 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Chief executive’s report in a competitive environment. We disseminate Investing for growth information through a broad range of channels (including stock exchange news services, the corporate website and news distribution service providers). This is supplemented by direct communication such as investor conference calls, group presentations and one-on-one meetings. During the year we conducted 327 meetings and teleconference calls with both equity and bond investors. We hosted an India ecommerce day in Bangaluru (Bangalore) and attended a number of conferences. Following the release of interim and full-year results, we conducted non-deal roadshows in South Africa, the United Kingdom and the United States of America. Over the past 100 years Naspers has gone through a good deal of change from a single- country print media company and an early investor in mobile telephony in one country to a multinational video-entertainment player and a global consumer internet/ecommerce company. Mobile is transforming emerging markets faster in mature markets. For Naspers this means we are becoming a largely mobile- services company. Classiﬁeds, etail and online payments are transforming ecommerce and we continue to invest to meet this demand. In our video-entertainment business, platform shifts occur from linear television services to video-on-demand (VOD). Our top priority is to give customers what they want. This changing This changing environment offers Naspers opportunities. opportunities. The combination of our large and rapid and rapidly growing target markets, our platfo platform offering for both ecommerce and content delivery, offers growth potential for the years ahead. We are playing to win and are investing in proven business models that can become strong cash generators if executed well, such as classiﬁeds, etail and DTT. In a addition, we invest in new o opportunities, such as online tr travel in India and mobile-only P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 30 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Chief executive’s report (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N services such as food ordering and other mobile All over the value-added services. world our people We are also actively reinvesting in the growth continue to prove of core models. their We believe this strategy is sound – our aim is commitment, to deliver value to our shareholders over the innovation and medium to long term and to contribute to the agility. The communities in which we operate. support and guidance of the Naspers People board, as well as the boards of our subsidiaries, associates and joint ventures, is integral to our We operate in industries where change happens success. These contributions are valued and quickly and an important part of our competitive appreciated. advantage comes from the quality of our people. We invest to make sure we create an attractive place to be for all our people: entrepreneurs, engineers, leaders and professionals at all levels. We are providing our people with a meaningful Bob van Dijk purpose, the opportunity to learn and grow in an Chief executive environment with great values, underpinned by a 26 June 2015 competitive reward strategy. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 31 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Our strategy Above all, we solve problems for customers. Where we play The business we are building Our long-term goals and aspirations We observe consumer behaviour and technology changes when we set our strategic priorities: (cid:29)(cid:3)The internet and especially mobile devices are taking share of consumer interest and time spent. (cid:29)(cid:3)Platforms, etail and classiﬁeds. (cid:29)(cid:3)From a geographic perspective, we will continue our focus on growth markets. (cid:29)(cid:3)Based on a solid understanding of consumer behaviour, we build technology platforms in growth markets, aiming to stay ahead of changes in consumer needs. (cid:29)(cid:3)Become more scalable as an operator, maintain above-market growth rates while improving proﬁtability. (cid:29)(cid:3)Be focused and strategic as an acquirer of assets. (cid:29)(cid:3)Continue to place selective, strategic bets on emerging platforms that can represent the next wave of growth for the company. (cid:29)(cid:3)Be the most desired partner for successful entrepreneurs in growth markets. 32 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our strategy (continued) For a fuller understanding of our group in context, we summarise key indicators in our major operating regions below: Population (m) Internet users (m) Internet pene- tration Mobile users (m) Mobile pene- tration Smart- phone users (m) Smart- phone pene- tration PPP* GDP (US$bn) GDP per capita (US$) Africa and Middle East 1 440 446 31 1 218 85% 173 12% 9 104 6 322 China 1 374 646 47 1 360 99% 522 38% 15 982 11 632 Eastern Europe 214 110 51 295 >100% 90 42% 3 241 15 145 India 1 276 281 22 1 000 78% 140 11% 5 872 4 602 Southeast Asia Latin America 833 260 31 788 95% 167 21% 4 999 8 619 580 313 54 459 79% 186 32% 7 977 13 753 Russia 142 87 61 253 >100% 65 46% 2 738 19 282 Western Europe 417 389 93 534 >100% 250 60% 15 815 37 926 *Purchasing power parity. Sources: IMF, BOA Merrill Lynch, CNNIC, IAMAI, Emarketer. Looking ahead We focus on internet (speciﬁcally ecommerce) and video entertainment 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 prepared to strengthen our position with appropriate acquisitions, subject to a robust evaluation process. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 33 How we manage risk Risk management is integral to the daily operations of our businesses. As a multinational multimedia group with activities in over 130 countries, we are exposed to a wide range of risks that may have serious consequences. While the diversiﬁed nature of the group spreads this exposure, it does add complexity. Risk philosophy Risk policy Naspers identiﬁes and manages risk in line with The group’s risk proﬁle is based on a formal and international best corporate governance practice planned approach to risk management. Risk and applies the relevant rules and regulations. identiﬁcation, management and reporting are The board is responsible for the governance of embedded in business activities and processes. risk and is satisﬁed with the effectiveness of the The group’s risk policy applies to all operations risk management process. Risk management where Naspers has more than 50% ownership plans and processes are presented, discussed and management control. and approved at risk committee meetings. Heat The policy applies to risks the group faces in maps and registers of signiﬁcant risks facing the executing its strategy, operations, reporting and group are discussed, along with management compliance activities and it is reviewed annually. actions to control these risks within board- Some group companies have speciﬁc risk approved ranges of tolerance. management functions whose output is The diversiﬁed nature of the group helps reviewed by the Naspers risk committee. spread risk, particularly in terms of global Risk management supports, advises on, political and economic instability, market formulates, oversees and manages the risk development, regulatory matters and currency management system and monitors the group’s ﬂuctuations. Identifying risk and developing risk proﬁle, ensuring major risks are identiﬁed plans to manage risks are part of each unit’s and reported at the appropriate level in the business plan. These are assessed annually by group. the board. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 34 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 How we manage risk (continued) 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 (IT). D R T E REP O M O NIT O R E D Strategic and operational Regulatory and compliance Human capital I D E N T I F I E D Financial and reporting D E G A N A M RISKS Health and safety DOCUMEN T E D 1 COSO ERM: Committee of Sponsoring Organizations of Treadway Commission Framework for Enterprise-wide Risk Management. 2 COBIT: Control Objectives for Information and Related Technology, the internationally accepted framework for IT governance. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 35 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I How we manage risk (continued) Major risks We follow a process of identifying major risks in each of our managed business units, which includes both top-down and bottom-up approaches. These are reported to the risk committees of the respective boards, together with tolerance levels and plans for mitigation. The group then assesses the level of risk we wish to bear, given potential returns. From a group perspective, major risks include: OUR RISKS Competition and technical innovations Our group operates in ﬁercely competitive markets. In media, convergence opens the landscape to global and non-traditional competitors. New technology threatens the future of television and traditional print media. Different media platforms ﬁght for revenue. In ecommerce, we face both ecommerce specialists and traditional retailers. Failure to capitalise on user migration to mobile Internet use is rapidly moving to mobile devices. The use and engagement behaviour of mobile users are different to those operating on a desktop. If we fail to deliver our product and services adequately on mobile, it could severely affect our long-term prospects. Critical talent The group relies on individuals with detailed knowledge of our businesses and the markets in which we operate. Global political and market developments The Naspers group operates in global markets that are sensitive to political, economic and other events. These may inﬂuence our activities. Legislation and regulation Our industries are subject to increasing regulation. Failure or delays in obtaining or renewing approvals could affect us. Currency ﬂuctuations The group reports in South African rand and this exchange rate may vary against other currencies. In addition, in several markets, we have substantial input costs in foreign currencies, so currency translation gains or losses may distort the group’s ﬁnancial accounts. Technical failures The internet is subject to a variety of risks, including technical failure, attacks, viruses, piracy and others. Our video-entertainment services are mostly delivered to customers via satellite, and any damage or destruction may disrupt services. 36 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 How we manage risk (continued) HOW WE MANAGE THE ISSUE The group devotes signiﬁcant resources to analysing competitors, and to emerging trends in technology and consumer demand. Signiﬁcant funds are spent developing new products and services. However, we may be caught off-guard by new technologies or startups, or by current competitors. We respond by building mobile applications for our products and services ﬁrst. We measure and track performance of our products and services on mobile. We will also continue to invest in developing online services and products. Succession plans are prepared annually, with speciﬁc focus on recruiting and retaining entrepreneurs, leaders, engineers and professionals with hard-to-replace skills sets. Although we can hardly inﬂuence such developments, we monitor them as best we can and try to adjust quickly. Developments in any country in which we operate could cause damage. We monitor current risks in those countries. We strive to comply with applicable laws and regulations, and cooperate with regulators in countries in which we operate. We have a policy to hedge 100% of our longer-term foreign currency transactions for at least 12 months and up to 24 months, where this is achievable and affordable. Mitigating procedures range from backup capacity to built-in redundancy. The cost of each mitigating option is considered against the likelihood and impact of the risk occurring. In some cases, the result is that satellites or other key technical components remain unprotected or only partially covered. For a detailed review of Naspers’s material issues and how we manage these, http://www.naspers-reports.com/2015/pdf/risk.pdf. refer to NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 37 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Stakeholder engagement We engage with our stakeholders through different channels Industry Employees Communities Participating in industry groups to develop shared practices Employee newsletters, surveys, management brieﬁngs and intranet sites Engaging with local communities through corporate citizenship activities Customers Interact with users through user-experience ratings on our ecommerce platforms Regulators Engage with opinion formers and regulators to assist in developing policy Shareholders and investors Communication and engagement through a dedicated investor-relations unit Subscribers Interaction with readers and subscribers using various channels, including feedback through letters to the editor, emails, text messages and social media Suppliers One-on-one meetings with suppliers and business partners. Supplier ratings from customers on our ecommerce platforms communicated to suppliers and opinion formers, shareholders and potential investors P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 38 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Stakeholder engagement (continued) Stakeholders’ issues and our response Key issues for our business segments are set out below: INTERNET Stakeholders Response Customers Most of our internet businesses have adopted the net promoter score (NPS) metric to measure customer satisfaction. We focus on providing the best experience to all our customers, whether they are consumers, merchants or partners. On the merchant side, we are committed to working with upstream and downstream partners to provide quality solutions for their businesses. Regulators We engage with legislators through our public policy teams in each region, so as to operate in an efﬁcient and positive regulatory environment. The group also engages with regulators as part of its compliance activities. Group businesses are members of several industry bodies and associations to support development of speciﬁc sectors. Employees Our most important asset is our people. At heart we are entrepreneurs, so we push for performance in everything we do. We back local teams and learn from each other. We want to be recognised for providing meaningful work, the opportunity to learn and grow, and be rewarded for a job well done. In this kind of culture we believe our people will be motivated to achieve by being personally responsible for high performance. Our group companies set and communicate clear goals and ambitions that are translated into local and personal goals so everyone understands the big picture. We encourage all our teams to discuss performance to enable everyone to learn and grow. We believe in ongoing education and training of our teams. We continue to ﬁnd new ways to listen and talk with our teams about making Naspers the best place to work. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 39 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Stakeholder engagement VIDEO ENTERTAINMENT Stakeholders Response Customers Industry and business partners The video-entertainment group has a number of points for customer engagement. These include the call centre, email and SMSs as well as social media platforms (such as the DStv Forum, Twitter and Facebook). Customer insights from email research and ﬁeld trial panels are used in product development. The video-entertainment group plays an active and constructive role in the broadcast industry in all countries in which it operates. In South Africa: As a member of the National Association of Broadcasters, it has raised industry issues with the Department of Communications, the regulator, The Independent Communications Authority of South Africa (Icasa), and the parliamentary portfolio committee on communications. It is represented on the information and communications technology (ICT) policy review panel established to assist the minister in reviewing legislation governing the ICT sector. In the year ahead the video-entertainment group will take part in a number of industry workshops and policy-formulation processes and regularly engage with suppliers and business partners to develop shared practices. Shareholders and investors The video-entertainment group holds regular meetings with shareholders and investors where strategy, performance and material issues are discussed. The group also communicates via presentations (such as the annual and interim results report) as well as through annual general meetings. Regulators Employees South Africa: The video-entertainment group takes part in regulatory processes initiated by Icasa. The objective is to develop an environment conducive to the growth of the ICT sector. The group also engages with opinion leaders and regulators to assist with policy development and is subject to regulation by the Broadcasting Complaints Commission of South Africa (BCCSA). We work closely with the BCCSA to ensure compliance as South Africa moves from an analogue to a digital environment. In Africa we engage with regulators in the countries in which we operate. The video-entertainment group uses a number of media platforms (from print to electronic and face-to-face engagements) to interact with our employees and keep them informed of developments. In South Africa the group also has a Workplace Forum – a body that represents employees’ interests and interacts with the company. The video-entertainment group communicates with local communities through our corporate citizenship activities. 40 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Stakeholder engagement (continued) MEDIA24 Stakeholders Response Customers Shareholders Industry Media24 divisions are active on social media platforms. Editorial teams use social media platforms such as Facebook and Twitter to engage with audiences on topical issues, share and promote content from their latest print and digital offerings, and test new ideas. Business units conduct client satisfaction surveys with, for example, advertising agencies, readers and digital audiences. This is done through various channels, including customer service call centres and surveys to determine net promoter score ratings. Media24 keeps shareholders informed of company developments by posting the integrated annual report, publishing provisional and interim reports in local newspapers and online, holding annual general meetings at which shareholders may ask questions, and by placing information on company websites. Media24 attends regular meetings with various industry bodies and is a member of local and international industry bodies. In South Africa these include: Print and Digital Media South Africa (PDMSA), Audit Bureau of Circulations of South Africa (ABC), South African Advertising Research Foundation (Saarf), South African National Editors’ Forum (Sanef), Interactive Advertising Bureau (IAB) and South African Publishers Association (Pasa). Novus Holdings is a member of the Print Industries Federation of Southern Africa (Pifsa) and attends international industry events to remain abreast of developments. Regulators Print media is regulated by the Press Code and the Advertising Standards Authority (ASA). Media24 abides by the codes and rulings of these regulatory bodies. Employees Media24 is an employer of choice providing an inspiring working environment. Staff engagement is ongoing through management brieﬁngs and roadshows, weekly electronic newsletters, workshops, knowledge- sharing sessions on industry topics, an annual leadership conference and staff engagement surveys. Workplace Forums who represent employees regularly interact with management. Media24 invests substantially in leadership training and development. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 41 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Balancing proﬁt, people and our planet Naspers creates communities, packages content and runs platforms. We connect people, distribute media products and conduct ecommerce. Our products and services play a developmental role in societies where we operate. We employ people, improve the quality of life and stimulate the economy where we operate. Naspers is not only a business; as a responsible corporate citizen, we give back to our communities. Through a myriad of projects (see the sustainability section on www.naspers.com), our group companies touch the lives of millions 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. Source: Summary of the group sustainable development policy. 42 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Balancing proﬁt, people and our planet (continued) Naspers is styled as a sustainable business, both our employees, their families and the in terms of the environment and sustainable communities in which we operate, ultimately proﬁts. We view this as a journey, and we balancing proﬁt, people and planet. endeavour to ensure that our values and philosophy demonstrate this. The value added statement on page 44 illustrates how the group distributes its earnings and how much it retains for reinvestment. We contributed R10,4bn (or as much as 25% of the total wealth we created) to local governments where we have operations. This comprises various taxes and skills development levies and is more than double what we pay shareholders in dividends. In addition, the jobs we create stimulate further economic activity. No doubt Naspers has a signiﬁcant effect on the economy of sub-Saharan Africa. In the past year we paid some R12,6bn (30% of wealth created) to employees, which includes salaries, bonuses and beneﬁts, and the cost of The section on non-ﬁnancial training and participation in group share performance (page 68) incentive schemes. We provide jobs to over focuses mostly on social 24 000 (2014: 22 500) permanently employed and environmental people and contribute in a major way to the projects with more detail countries in which we operate. on www.naspers.com, ( http://www.naspers- To fund our growth, we rely on investors and reports.com/2015/sustainable- providers of ﬁnance, who are compensated by investment.php). By harnessing our dividends, share price appreciation and interest global infrastructure and ability to payments. This accounts for 11% of total innovate and adapt in a changing world, earnings distributed. The remaining 34% has we aim to address education, skills been reinvested to ensure we maintain a development and environmental sustainability. sustainable group. We hope to improve the living conditions of NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 43 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Value added statement for the year ended 31 March 2015 Value added is deﬁned as the value created by the activities of a business and its employees and is calculated as revenue less the cost of generating that revenue. The value added statement reports on the calculation of value added and its application across stakeholder groupings. This statement shows the total wealth created and how it was distributed, taking into account the amounts retained and reinvested in the group. 31 March 2015 R’m 31 March 2014 R’m Change % 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 73 092 48 493 24 599 17 057 41 656 12 590 4 467 2 752 1 715 10 439 14 160 3 305 (1 317) 12 172 41 656 Wealth distribution 2015 17 20 10 45 22 19 12 12 12 13 37 6 (144) 187 22 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 2014 34% 25% 30% 27% Paid to governments by way of tax Paid to providers of capital Paid to employees Reinvested into the group 11% 12% 30% 31% 44 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 W E I V E R E C N A M R O F R E P NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 45 Performance review Financial review On an economic-interest basis, revenue grew on the dilution of Tencent’s interest in Kakao 26% during the year driven by solid growth in the Corporation following a merger. A net once-off internet, ecommerce and video-entertainment gain of R1,5bn was recognised mainly relating to segments. dilutions of our shareholding in Flipkart. Development spend, measured on an Impairment losses of R478m was booked on economic-interest basis, increased by 33% to underperforming equity-accounted investments R10,7bn (7% of which was driven by foreign in the ecommerce segment. exchange rate movements). This is mainly Core headline earnings grew 30% to R11,2bn attributable to the ecommerce and video- (2014: R8,6bn), mainly due to increased entertainment segments, including increased earnings contributions from Tencent and some of shareholdings in equity-accounted ecommerce the proﬁtable ecommerce businesses. investments Souq, Konga and Flipkart, plus Impairment losses of R684m were recognised continued investment in DTT in the video- mainly relating to broadcasting equipment and entertainment segment. Given ongoing delays in intangible assets in the ecommerce segment. analogue switchoffs, we decided to invest Net interest incurred on borrowings amounted incrementally in the second half of the year to to R1,6bn (2014: R1,3bn), on the back of the continue to drive DTT growth, which resulted in rand depreciating against the US dollar and 1,4m African homes being added to the base to drawdowns on existing credit facilities to fund close the year at 2,2m subscribers. acquisitions and development spend. Listed internet investments, Tencent and Consolidated net gearing stood at 30% at Mail.ru, were the main contributors to the 31 March, excluding transponder leases and group’s share of equity-accounted results non-interest-bearing liabilities. increasing to R16,4bn (2014: R10,8bn). Increased development spend, capital Tencent produced strong results as it continues expenditure to build our DTT footprint and on its growth path. Our share of equity- TV production facilities in East and West Africa accounted earnings includes once-off gains on resulted in free cash outﬂow of R515m the remeasurement of Mail.ru’s interest in (2014: outﬂow of R349m). Tax payments were VK.com, the sale of Mail.ru’s shares in Qiwi up 16% year on year, as a result of higher proﬁts amounting to R3,9bn, as well as R1,7bn in the video-entertainment segment and representing our share of gains realised by proﬁtable ecommerce businesses. Tencent on the sale of certain investments and P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 46 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Financial review (continued) Signiﬁcant acquisitions Details of signiﬁcant acquisitions appear in the summarised consolidated annual ﬁnancial Summarised consolidated annual ﬁnancial statements The summarised consolidated annual ﬁnancial statements under “Business combinations and statements appear on pages 120 to 140 of this other acquisitions” on page 134. integrated annual report. The complete set of consolidated annual ﬁnancial statements for the year ended 31 March 2015 is available on our website at www.naspers.com. Five-year review R’m Income statement items, including equity-accounted investments on an economic interest basis 2011 2012 2013 2014 2015 Revenue Trading proﬁt 45 103 56 522 76 776 104 981 132 446 10 546 11 762 14 326 15 613 21 027 Statement of ﬁnancial position on a consolidated basis Total assets Total equity Total liabilities Other information Development spend (R’m)(1) Core headline earnings per share (cents) Dividend per N ordinary share (cents) (proposed) Weighted average number of N ordinary shares (’000) 69 855 81 278 103 263 128 602 157 043 42 942 49 576 55 853 68 205 83 808 26 913 31 702 47 410 60 397 73 235 1 535 1 612 270 2 823 1 850 335 4 306 2 216 385 7 978 10 739 2 181 2 782 425 470 374 501 375 653 385 064 395 078 403 576 (1)Including associates and joint ventures on a proportionate basis. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 47 Performance review (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 48 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review INTERNET Internet Naspers operates platforms that offer customers fast, intuitive and secure environments where they can communicate, entertain and shop. Our ecommerce services include general and vertical classiﬁeds, general and vertical etail, marketplaces, online price-comparison services and specialised online services such as travel, food delivery and Revenue* R’m +37% 2014 2015 EBITDA* +81% G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N 80 000 60 000 40 000 20 000 0 R’m 20 000 15 000 10 000 5 000 0 R’m 15 000 12 000 9 000 6 000 3 000 0 payments. 2014 2015 Trading profit* +96% 2014 2015 * Including associates and joint ventures on a proportional basis. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 49 Performance review (continued) Operational review INTERNET (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Listed investments Tencent QQ instant messaging (QQ IM) and QZone (social network) recorded strong growth. Tencent Tencent’s performance continues to reﬂect the invested heavily in literature, music and video excellent management of Pony Ma, Martin Lau services, contributing to trafﬁc growth. At end and their team, with healthy growth in a very March QQ IM had 832m monthly active users, competitive domestic market and investment 603m on mobile. For QZone, 85% of its 668m environment. The rapid transition of users in China monthly users accessed the platform via mobile from desktop PC to mobile continued. In China devices. Combined monthly active users of Weixin mobile internet users now account for 85% of and the international WeChat were 549m, up 39% total internet users. International expansion is year on year. Over the past year Tencent increased proceeding. its share of the mobile gaming market as many From gaming to social networking, video and smartphone users, including some who were advertising, Tencent increased the number of users previously not PC game players, started playing accessing its platforms on mobile devices. Its core mobile games. The popularity of mobile video and platforms, Weixin/WeChat (mobile music rose as users sought entertainment on the communication, social and commerce platform), go. Mobile social advertising increased as 50 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review INTERNET (continued) advertisers integrated social data for targeted content and services, enriching their lives both advertising. The adoption of mobile payments on- and ofﬂine. expanded on the back of new technologies and Tencent is listed on the Hong Kong Stock promotion by market leaders. Exchange and extensive further information is Revenues for the year were RMB78,9bn, up available on its website www.tencent.com. 31% on the prior year, while proﬁt attributable to shareholders was 43% higher at RMB24,2bn – on a non-generally accepted accounting practice basis (AARP). Online valued-added services revenues rose 41% to RMB63,3bn and advertising revenue was up 65% to RMB8,3bn. Tencent recorded strong growth in video and performance-based social advertising, as well as a good start to advertising on Weixin/WeChat. However, following its strategic transaction with JD.com in March 2014, revenues from ecommerce transactions decreased 51% to RMB4,8bn for the year. During the year Tencent expanded its partnerships in the online-to-ofﬂine and vertical segments by investing in leading industry players to enrich its ecosystem. These include Dianping for local restaurant and services search, Didi Dache for mobile taxi booking, 58.com for online classiﬁeds, Bitauto for auto-related content and services and Leju for real estate services. These investments are part of Tencent’s strategy of linking its users with high-quality Mail.ru Mail.ru is one of the largest internet groups in the Russian-speaking market. It operates the largest Russian portal, the leading Russian- language social networks (VKontakte, Odnoklassniki and My World) and the country’s largest online games business. During the year Mail.ru acquired the remaining 48,01% interest in the VKontakte social network. VKontakte has since been integrated into the Mail.ru group and is performing well, particularly in mobile. Mail.ru launched a mobile advertising platform to capitalise on increased mobile activity among its users. International initiatives under the My.com brand are proceeding. Mail.ru recorded 15% growth in revenues to RUB35,8bn for the year, despite a tough economic and geopolitical environment. Net proﬁt rose 11% to RUB12,5bn. Revenues for massive multiplayer online games grew 26% to RUB8,4bn and community internet value-added services revenues rose 16% to RUB11,9bn. Online advertising grew 8% to RUB12,5bn. The display advertising business, however, faces challenges in the prevailing environment, with major advertisers signiﬁcantly reducing budgets across most forms of media in Russia. Mail.ru’s depository receipts are listed on the London Stock Exchange. Further information is available at www.corp.mail.ru. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 51 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Operational review INTERNET (continued) Ecommerce Revenues from our ecommerce activities, Given the differing stages of maturity, timelines to monetisation and the nature of the various measured on an economic interest basis, increased ecommerce models, most ecommerce revenues 36% to R27,8bn in the review period. Ecommerce is an area of expansion and we are investing in are currently generated from our etail and marketplace businesses. A number of our our platforms to deliver superior customer experiences and to expand the market. This has implications for development spend, which totalled some R8bn for this segment and, as a result, the trading loss widened to R6,1bn. We have a broad portfolio of ecommerce ecommerce businesses are still in early stages. We are making signiﬁcant investments in these businesses, particularly in our classiﬁeds and etail segments, to drive growth, improve our products and customer experience, and expand our geographic footprint. We will continue to invest businesses organised by functional lines. This focus signiﬁcantly in these businesses in future. allows us to move faster and build scale more rapidly. In addition, the businesses can share knowledge, technology and expertise more effectively. Consumer-to-consumer (C2C) Classiﬁeds The classiﬁeds business made good progress, expanding its global footprint by entering ﬁve new +40 Countries +20 Ofﬁces +1 000 Employees REACH 8,5M Monthly transactions 17B Monthly page views +240M Monthly active users +35M Mobile app downloads ACTIVITY 25M Monthly listing Note: numbers include OLX brand only 52 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review INTERNET (continued) markets and scaling up in existing markets under an efﬁcient operational plan. Our global portfolio now comprises some 40 markets, 30 of which are in leading positions and eight already monetising some services. In March 2015 OLX served some 240m active users worldwide and garnered 34m visits per day on average. We continued to improve operational structures for mobile products and build strong local teams. Our enhanced Android app was well received, improving both engagement and trading volumes. Daily visits m* +16% 40 30 20 10 0 March 2014 March 2015 Daily page views m* +39% 800 700 600 500 400 300 200 100 0 March 2014 March 2015 Click here to access online video. With strong investor interest, competition remains intense in the classiﬁeds market. However, fuelled by the focus on strong operations, we have maintained or extended market share almost universally. After assessing our investment positions, we have rationalised our portfolio. With Schibsted, Telenor and Singapore Press Holdings, we have created joint ventures in Brazil, Indonesia, Thailand and Bangladesh. This will allow us to capture value early and improve returns on capital invested. We have taken major steps to becoming a global operating company in classiﬁeds by rebranding our platforms in Southeast Asia and Eastern Europe to OLX. This has made OLX a top internet brand globally, with over 240m monthly active users. For the new ﬁnancial year the business is aiming for revenue growth. It will continue to build one operating company with speciﬁc actions on * Select criteria as measured for the month of March 2015, not technology, retention-driven growth and a adjusted for acquisitions and disposals, and reﬂecting associates on a proportionate basis. broadened monetisation agenda. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 53 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Operational review INTERNET (continued) Business-to-consumer (B2C) political and economic situation there has B2C combines our activities in marketplaces, etail, stabilised, despite the long-term potential of this online price-comparison shopping and online market and our solid position. During the year we services. These businesses are giving customers an classiﬁed the net assets of Ricardo (Switzerland) improved experience compared to their ofﬂine as held-for-sale, with the transaction expected to counterparts, and are rapidly taking market share close in the new ﬁnancial year, pending in many categories through better pricing, regulatory approval. selection and, increasingly, convenience. 11 Companies 19 Markets +118% Average daily GMV Marketplaces The Allegro marketplace portfolio continues to Etail Takealot deliver solid ﬁnancial results and progress against In South Africa we merged the Kalahari business strategic priorities, particularly in B2C activities, with competitor Takealot to increase the scale of which account for the majority of the overall the combined business. South Africa is still a business. Strong momentum in Allegro.pl is relatively early-stage ecommerce market with less somewhat offset by poorer performance in other than 2% of retail transacted online. However, international marketplaces. As example, our signiﬁcant growth is expected. The merged Ukrainian operation will underperform until the business will be able to capitalise on these opportunities while achieving cost efﬁciencies. 54 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review INTERNET (continued) Flipkart Flipkart is the leading B2C ecommerce platform in India, led by a strong local founding team. The Indian ecommerce market has grown rapidly, mainly due to the proliferation of connected mobile devices, cash on delivery, and the fragmented ofﬂine retail environment. Flipkart secured ﬁrst-mover advantage in its ﬁeld through its focus on the best customer experience and has built a track record in scaling fast and staying ahead of competition, driven by mobile transactions from native mobile apps. It will continue to invest aggressively to maintain its leadership. Souq signiﬁcant competition by focusing on customer acquisition, building marketplaces in addition to Souq is the leading B2C platform in the Middle etail, and last-mile delivery services. East/North Africa region, an attractive market with a young and growing internet population and high Online comparison shopping gross domestic product (GDP) per capita in countries We operate the largest global online comparison such as Saudi Arabia and the United Arab Emirates. shopping group with a footprint ranging from Souq has recorded strong growth, focusing primarily Brazil to Eastern Europe and Africa. The focus in on Saudi Arabia, United Arab Emirates and Egypt, the past year was on combining effective operating both direct-to-consumer and marketplace marketing and cost efﬁciencies to generate services, and building its own last-mile delivery, proﬁtable revenue. This initiative will continue in Q-Express, which now covers over 58% of total the new ﬁnancial year. We sold our stake in the orders. Souq’s competition is from both ofﬂine 7Pixel business, which mainly provides services in retailers and international etailers and marketplaces. Italy, as part of optimising our group structure. Konga Konga operates in the fast-growing ecommerce market of Nigeria. Run by a local entrepreneurial team, Konga has achieved market leadership despite G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 55 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Operational review INTERNET (continued) Online services Movile/mobile services For you PlayKids Superplayer iFood Cinepapaya Apontador Fun with kids For companies Music any time Food anywhere Easy tickets Local information Rapiddo Maplink Messaging Content Same-day delivery Maps and routing Fast communication Mobile entertainment Movile operates a wide range of mobile services goibibo (online travel agent), redBus (bus ticketing in the Latin American market. Its growing core platform) and TravelBoutiqueOnline business-to- business is mobile carrier-related value-added business (B2B) services. It is the fastest growing services geographically spread across the online travel group in India. continent. ibibo recorded strong growth in all segments, Movile has entered B2C-oriented smartphone signiﬁcantly outpacing its closest competitors. app-based services, especially in the online-to- Sources of supply include mainly air, bus and a. iFood ofﬂine (O2O) mobile space in Latin America. iFood ader in e is by far the online food-delivery market leader in t Brazil, and formed a joint venture with Just Eat, a UK-based global leader in this s s segment. Movile made further investments in other mobile O2O services, including a local directory-type service, as well as a mobile entertainment ticketing service for countries outside Brazil. Travel ibibo Group is an online travel group focused on India, mainly through its 56 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review INTERNET (continued) hotel through various channels. In the year We are transforming ﬁve existing regional ahead ibibo will focus on accelerating payment businesses into one global company investment and securing a strong lead over with a single brand and common supporting the competition. Payments infrastructure, similar to the way in which we scaled our classiﬁeds businesses. Our new senior management team continues to strengthen PayU is a global online payments company talent across the business. Daily payment offering innovative and secure payment methods. transactions have increased 67% year on year Whether someone wants to make a payment to US$27,6m. online on a computer, tablet, mobile device, We will continue to grow our payment service ewallet, and even ofﬂine, PayU’s 250 or so provider business and are laying the groundwork payment methods are designed to make it simple for an innovative consumer electronic wallet or and secure. ewallet business. Europe Poland, Czech Republic, Turkey, Ukraine, Hungary, Romania, Russia Latin America Chile, Panama, Peru, Brazil, Argentina, Mexico, Colombia Africa South Africa, Kenya, Nigeria India 1 Brand 18 Markets >100k Merchants +250 Payment options Online merchant $$$ sell rate $$$ buy rate Multiple acquiring banks NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 57 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Performance review (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 58 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review VIDEO ENTERTAINMENT Video entertainment Revenue* R’m +17% Intense competition of a global nature is due to arrive soon. Africa has limited broadband infrastructure and almost no cable access. In fulﬁlling our strategic objective to deliver quality entertainment, we offer digital satellite, digital terrestrial and other video-entertainment services, such as mobile television, for all income groups. To meet rising demand for mobile applications, we offer apps on tablets, smartphones and feature phones that give our subscribers access to online services, live sport streaming, information, communication and self-service functions (including payments). 50 000 40 000 30 000 20 000 10 000 0 R’m 12 000 10 000 8 000 6 000 4 000 2 000 0 R’m 10 000 8 000 6 000 4 000 2 000 0 2014 2015 EBITDA* -3% 2014 2015 Trading profit* -6% 2014 2015 * Including associates and joint ventures on a proportionate basis. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 59 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Performance review (continued) Operational review VIDEO ENTERTAINMENT (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I t Sales and customer support Within the video-entertainment segment, we achieved direct-to-home (DTH) customer growth of 10%. This is an increase of 727 000 customers bringing our closing base of growth was slower than anticipated due to DTH customers to 8m. Our DTH initiatives will delays in analogue switchoffs (ASOs) in focus on developing innovative products and sub-Saharan Africa. delivering great local and international content The DStv Explora, our ﬂagship personal video on multiple platforms. Our digital terrestrial recorder (PVR), is proving a signiﬁcant television (DTT) network is substantially in place, differentiator. The software was recently with MultiChoice now operating in 11 countries enhanced to allow for the Explora to be and 114 cities across Africa. Although our DTT connected to the internet, allowing these customer base closed with 2,2m customers, subscribers access to a deeper library of 60 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review VIDEO ENTERTAINMENT (continued) DStv CatchUp content. In South Africa it was voted Most Innovative Technology Product of the Year in its category for 2015. We launched a new high-deﬁnition (HD) single-view decoder and made our HD channels available on all bouquets. Our range of decoders have been standardised to HD. Signiﬁcant enhancements were made to our customer care service during the year. The decoder payment plan was launched in South Proﬁtability management Cost management will remain a focus area as competition intensiﬁes across the continent. Currency ﬂuctuations have become a consideration, given the rand’s depreciation against our trading partners’ currencies and the currency devaluation in some of our major territories on the continent. The signiﬁcant drop in the oil price is affecting economies and exchange rates in Nigeria, Africa, providing an easy and affordable Angola and Zambia. alternative to households who cannot afford the once-off price of the DStv Explora. 9 Joint ventures 4 Franchisees 37 Country agents NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 61 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Performance review (continued) Operational review VIDEO ENTERTAINMENT (continued) Content Internationally, costs of sports rights keep escalating, resulting in a signiﬁcant increase in costs. Sport enthusiasts enjoyed SuperSport’s broadcast of several major international events, including the Fifa Soccer World Cup, Commonwealth Games, ICC Cricket World Cup, SANZAR, Premier Soccer Leagues, English Premier League, UEFA Champions League and Spanish La Liga football, as well as the West Indies cricket tour of South Africa, Africa Cup of Nations 2015 and over 500 ﬁxtures of local football leagues across Africa. Across the IS20 and E36B satellites 24 new channels were launched to customers across channels were launched to customers ac Africa and seven HD channels were made Africa and seven HD channels were mad available. available. The group continued to make signiﬁcant The group continued to make signiﬁca investments in local content across the African investments in local content across the A continent. Our focus is on producing home- continent. Our focus is on producing hom grown content tailored to speciﬁc audience grown content tailored to speciﬁc audien preferences. Regional production hubs were preferences. Regional production hubs w further enhanced in Nigeria and Kenya. We further enhanced in Nigeria and Kenya. W support local production industries within the support local production industries within markets in which we operate. markets in which we operate. Regulatory Regulatory The legislative and regulatory environme The legislative and regulatory environment continues to develop. Video entertainme continues to develop. Video entertainment attracts ongoing regulatory scrutiny in se attracts ongoing regulatory scrutiny in several territories, particularly South Africa, Nige territories, particularly South Africa, Nigeria, Kenya and Zambia. As regulators are key Kenya and Zambia. As regulators are key stakeholders in our business, MultiChoice stakeholders in our business, MultiChoice supports developments in the broadcasting supports developments in the broadcast regulatory landscape while monitoring events regulatory landscape while monitoring e that may increase business complexity. that may increase business complexity. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 62 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review VIDEO ENTERTAINMENT (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N 2 9 7 5 4 B H J t r o p S r e p u S / v t S D n o n e e s s A Competition Competition in the wider broadcasting market is growing, with linear, online and free-to-air providers increasingly entering the online entertainment segment. The global shift to mobile content viewing has produced a substantially more competitive landscape. The proliferation of competitors in MultiChoice’s markets is expected to continue. 2014 FIFA WORLD CUP BRAZILTM ON SUPERSPORT LIVE STREAMING ON supersport.com Get front row seats to all the action on the go with DStv mobile Walka 7 or live streaming on the SuperSport app. Watch all the highlights on Catch Up using your DStv Explora. supersport.com OFFICIAL BROADCASTER Competition from international online players site, with 24 channel playouts operational at such as Netﬂix, Amazon and Google, who the end of March 2015. Both MultiChoice operate globally, is increasing. MultiChoice is South Africa and MultiChoice Africa have expanding its delivery platforms and concluded contracts to improve business improving its products and services. continuity in terms of satellite capacity over Business continuity A major achievement in the review period the next 12 to 24 months. Additional transponder capacity was purchased from Eutelsat and Intelsat to was the commissioning of Samrand broadcast strengthen our in-orbit backup capacity. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 63 Performance review (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 64 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review MEDIA24 Media24 At Media24 global headwinds affecting the print sector were felt. Several initiatives are under way to save costs and improve efﬁciencies in the established print media businesses. At the same time, the group is investing in new growth areas – ecommerce through its online fashion store, Spree, online job classiﬁeds through Careers24 and digital media through 24.com. Novus Holdings Limited Media24 unbundled its printing division Paarl Media Group into a separate company listed on the JSE Limited as Novus Holdings Limited (“Novus Holdings”). This will support growth and drive its diversiﬁcation strategy into tissue manufacturing and technology related to its core business such as specialised label printing. Over the past year Novus Holdings improved productivity in its core business of printing magazines, newspapers, catalogues, brochures and books, while diversifying into new G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Revenue* R’m +3% 2014 2015 EBITDA* -23% 2014 2015 Trading profit* -48% 15 000 12 000 9 000 6 000 3 000 0 R’m 1 200 1 000 800 600 400 200 0 R’m 800 600 400 200 0 market segments. The group also grew its footprint on the 2014 2015 rest of the continent. * Including associates and joint ventures on a proportional basis. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 65 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Operational review MEDIA24 (continued) 24.com In the past year all the digital media assets in Media24 were consolidated in 24.com to drive scale and monetisation of its audiences. The group’s combined reach across all media channels now exceeds 2m unique browsers and 10m pageviews per day, with 70% of the users accessing its platforms via mobile devices. 24.com is South Africa’s largest digital publishing network and provides news and entertainment content across internet, mobile, apps and video. Centred on its ﬂagship brand, News24, the network attracts roughly 40% of South Africa’s internet population and expanded its presence in Nigeria in the past year. It also geria o oper operates online recruitment c clas classiﬁeds platform Careers24. In In the past ﬁscal, Careers24 re reached the leading market p position in South Africa in te terms of daily unique b browsers and pageviews. The business is competing aggressively in Nigeria. News A leading newspaper publisher in South Africa, Media24 News’s stable spans 100 titles including the Sunday newspaper City Press, as well as Africa’s largest daily, Daily Sun, and Soccer Laduma. The division experienced a tough year on the back of shortfalls in advertising and a circulation revenues, c c despite implementing d d www.netwerk24.com Die Burger Vrydag | 12 September 2014 | R6,90 (BTW ingesluit) | . Regter is verkeerd oor Oscar, sê kenners Nou wat nou? NIE moord; dalk glad nie tronk toe – bl. 6 JAWS Een van die langste skurke groet bl. 3 Einde van die MTBS? bl. 4 Fokus op Agri- megaweek in die Overberg –Landbou Heerengracht 40, Kaapstad Nege-en-negentigste jaargang www.dieburger.com (cid:7) (cid:3) (cid:2) (cid:3) (cid:1) (cid:2) (cid:4)(cid:4)(cid:3)(cid:8)(cid:7)(cid:6) (cid:4)(cid:5)(cid:8)(cid:8)(cid:3)(cid:3) (cid:38)(cid:68)(cid:79)(cid:89)(cid:76)(cid:81)(cid:76)(cid:68) (cid:43)(cid:82)(cid:87)(cid:72)(cid:79) (cid:9) (cid:55)(cid:68)(cid:81)(cid:78)(cid:90)(cid:68) (cid:47)(cid:82)(cid:71)(cid:74)(cid:72) (cid:37)(cid:60) (cid:19)(cid:21)(cid:26) (cid:22)(cid:23)(cid:20) (cid:20)(cid:24)(cid:20)(cid:21) (cid:358) (cid:40)(cid:29) (cid:69)(cid:82)(cid:82)(cid:78)(cid:35)(cid:70)(cid:68)(cid:79)(cid:89)(cid:76)(cid:81)(cid:76)(cid:68)(cid:75)(cid:82)(cid:87)(cid:72)(cid:79)(cid:17)(cid:70)(cid:82)(cid:17)(cid:93)(cid:68) (cid:358) (cid:90)(cid:90)(cid:90)(cid:17)(cid:70)(cid:68)(cid:79)(cid:89)(cid:76)(cid:81)(cid:76)(cid:68)(cid:75)(cid:82)(cid:87)(cid:72)(cid:79)(cid:17)(cid:70)(cid:82)(cid:17)(cid:93)(cid:68) (cid:358) (cid:36)(cid:79)(cid:79)(cid:72) (cid:78)(cid:68)(cid:80)(cid:72)(cid:85)(cid:86) (cid:72)(cid:81) (cid:86)(cid:88)(cid:76)(cid:87)(cid:72) (cid:358) (cid:47)(cid:88)(cid:74)(cid:89)(cid:72)(cid:85)(cid:86)(cid:82)(cid:85)(cid:74)(cid:76)(cid:81)(cid:74) (cid:358) (cid:46)(cid:82)(cid:81)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:86)(cid:76)(cid:72)(cid:74)(cid:72)(cid:85)(cid:76)(cid:72)(cid:90)(cid:72) (cid:358) (cid:55)(cid:85)(cid:82)(cid:88)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72) (cid:358) (cid:53)(cid:72)(cid:86)(cid:87)(cid:68)(cid:88)(cid:85)(cid:68)(cid:81)(cid:87) (cid:72)(cid:81) (cid:78)(cid:85)(cid:82)(cid:72)(cid:74) (cid:358) (cid:37)(cid:85)(cid:68)(cid:68)(cid:76)(cid:83)(cid:79)(cid:72)(cid:78) (cid:72)(cid:81) (cid:69)(cid:76)(cid:72)(cid:85)(cid:87)(cid:88)(cid:76)(cid:81) (cid:358) (cid:57)(cid:72)(cid:76)(cid:79)(cid:76)(cid:74)(cid:72) (cid:83)(cid:68)(cid:85)(cid:78)(cid:72)(cid:72)(cid:85)(cid:83)(cid:79)(cid:72)(cid:78) (cid:358) (cid:42)(cid:85)(cid:68)(cid:87)(cid:76)(cid:86) (cid:58)(cid:76)(cid:16)(cid:41)(cid:76) (cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:72)(cid:87) (cid:358) (cid:53)(cid:72)(cid:74)(cid:87)(cid:72) (cid:83)(cid:79)(cid:68)(cid:87)(cid:87)(cid:72)(cid:79)(cid:68)(cid:81)(cid:71)(cid:86)(cid:72) (cid:78)(cid:82)(cid:86) (cid:358) (cid:51)(cid:88)(cid:76)(cid:78) (cid:74)(cid:68)(cid:86)(cid:89)(cid:85)(cid:92)(cid:75)(cid:72)(cid:76)(cid:71) (cid:358) (cid:21)(cid:23)(cid:16)(cid:75)(cid:88)(cid:88)(cid:85)(cid:16)(cid:82)(cid:81)(cid:87)(cid:89)(cid:68)(cid:81)(cid:74)(cid:86) (cid:358) (cid:54)(cid:90)(cid:72)(cid:80)(cid:69)(cid:68)(cid:71)(cid:71)(cid:72)(cid:81)(cid:86) Die Paralimpiese atleet Oscar Pistorius kom onder ongekende belangstelling by die Noord-Gautengse hooggeregshof in Pretoria aan. Dit was gister die eerste dag van die uit- spraak in die opspraakwekkendste moordsaak in Suid-Afrika se geskiedenis. Die hofsaak het in Maart vanjaar begin. Regter Thokozile Masipa sal vandag om 09:30 haar uitspraak voortsit. Volg die hofsitting op DStv-kanaal 199, ander nuuskanale, www.netwerk24.com en Die Burger se Facebook-blad. Foto: HERMAN VERWEY Kiwi-breier: ‘Heyneke, bring daar twee biere’ bl. 3 ‘Skeur op rugby se reëlboek!’ bl. 20 9/11 13 jaar later bl. 11 LAURIKA sing sal sy sing – Vrydag! 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(cid:89)(cid:82)(cid:82)(cid:85)(cid:85)(cid:68)(cid:68)(cid:71) (cid:75)(cid:82)(cid:88) (cid:135) (cid:37)(cid:72)(cid:75)(cid:82)(cid:88)(cid:71)(cid:72)(cid:81)(cid:86) (cid:73)(cid:82)(cid:88)(cid:87)(cid:72) (cid:72)(cid:81) (cid:90)(cid:72)(cid:74)(cid:79)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17) (cid:50)(cid:81)(cid:86) (cid:83)(cid:85)(cid:82)(cid:69)(cid:72)(cid:72)(cid:85) (cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:78)(cid:72)(cid:85) (cid:71)(cid:68)(cid:87) (cid:68)(cid:79)(cid:79)(cid:72) (cid:74)(cid:72)(cid:68)(cid:71)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:72)(cid:85)(cid:71)(cid:72) (cid:79)(cid:92)(cid:81)(cid:72) (cid:78)(cid:82)(cid:85)(cid:85)(cid:72)(cid:78) (cid:76)(cid:86)(cid:17) (cid:44)(cid:81)(cid:71)(cid:76)(cid:72)(cid:81) (cid:76)(cid:81)(cid:79)(cid:76)(cid:74)(cid:87)(cid:76)(cid:81)(cid:74) (cid:72)(cid:74)(cid:87)(cid:72)(cid:85) (cid:89)(cid:72)(cid:85)(cid:78)(cid:72)(cid:72)(cid:85)(cid:71) (cid:74)(cid:72)(cid:71)(cid:85)(cid:88)(cid:78) (cid:90)(cid:82)(cid:85)(cid:71) (cid:82)(cid:73) (cid:181)(cid:81) (cid:73)(cid:82)(cid:88)(cid:87) (cid:89)(cid:82)(cid:82)(cid:85)(cid:78)(cid:82)(cid:80)(cid:15) (cid:90)(cid:82)(cid:85)(cid:71) (cid:71)(cid:76)(cid:72) (cid:78)(cid:82)(cid:85)(cid:85)(cid:72)(cid:78)(cid:87)(cid:72) (cid:76)(cid:81)(cid:79)(cid:76)(cid:74)(cid:87)(cid:76)(cid:81)(cid:74) (cid:82)(cid:83) (cid:181)(cid:81) (cid:78)(cid:72)(cid:81)(cid:81)(cid:76)(cid:86)(cid:74)(cid:72)(cid:90)(cid:76)(cid:81)(cid:74) (cid:76)(cid:81) (cid:71)(cid:76)(cid:72) (cid:90)(cid:76)(cid:81)(cid:78)(cid:72)(cid:79) (cid:89)(cid:72)(cid:85)(cid:87)(cid:82)(cid:82)(cid:81) (cid:135) (cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:78) (cid:76)(cid:86) (cid:74)(cid:72)(cid:86)(cid:87)(cid:76)(cid:79)(cid:72)(cid:72)(cid:85) (cid:89)(cid:76)(cid:85) (cid:73)(cid:82)(cid:87)(cid:82)(cid:74)(cid:85)(cid:68)(cid:191)(cid:72)(cid:17) several cost-cutting measures. s s Lifestyle M Media24 Lifestyle is the market leader in the South M A A African magazine industry and boasts seven of the t t top 10 consumer magazines. Its portfolio of 60 t t titles includes the powerful weeklies Huisgenoot, YOU and DRUM – with a readership of some 8m Y Y every week – as well as international titles such as e e 66 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Operational review MEDIA24 (continued) market. Leisure Books is South Africa’s largest book club business. Via Afrika is the digital market leader in basic education. The books division experienced a tough year mainly due to lacklustre trade sales and lower schoolbook orders. Top Gear and Women’s Health, which are published under licensing agreements. The division posted excellent results, beneﬁting from interventions to reduce costs and strong performances by the weekly magazine portfolio and associates. Books Media24 Books is home to several business units. Ecommerce (Spree) Media24’s online fashion venture, Spree, recorded strong sales growth and increased its market share considerably over the past year. It also expanded into new product categories, signed up NB Publishers remains the largest general-interest an international fashion retailer and launched its publisher, while Jonathan Ball Publishers is the leading publisher and distributor of English- language general books in the South African book ﬁrst private label brands. Spree consistently achieves high customer satisfaction levels. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 67 Performance review (continued) Non-ﬁnancial review 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. Source: Extract from sustainable development policy. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 68 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review (continued) Naspers is a for-proﬁt organisation that invests (cid:3)(cid:90) Media24 has been the winner of the South signiﬁcantly in developing its business to provide African Graduate Employers’ Association useful products and services to our customers and a (SAGEA) employer of choice award in the media sustainable return to investors. Flowing from our sector for three years running. Last year it business activities, we invest in countries where we awarded 17 bursaries to graduates in operate by creating business for local suppliers, commerce, engineering and multi-media and employing people and giving governments their offered 31 internships in journalism, dues via taxes and levies. engineering and ecommerce. It also provided Our products and services directly impact local digital media training to 150 independent societies. We operate in many different publishers. Through its education in the communities, each with different challenges. classroom initiatives, it provided 218 000 free Each business aims to make a difference to its local newspapers, which beneﬁted more than 2 650 community by contributing in line with our strengths schools and 730 000 learners nationwide. The and know-how. The print and video-entertainment mobile-based national digital school network, segments have a rich history of contributing to the WeCan24, reached 48 schools and three arts, culture, education, sport and industry non-governmental organisations (NGOs) in academies and bodies. Our ecommerce businesses 2014. are actively engaging online and ofﬂine communities in various projects s supporting education, community initiatives, sustainable transportation, ecology and healthy living. For a more detailed review of our initiatives, refer to the sustainability section at www.naspers.com on the corporate website. Focus areas Contributing to our communities MultiChoice plays a role in communities across Africa, particularly through drives that deal with Ongoing educational initiatives include: societal concerns. An example is SuperSport’s Let’s (cid:3)(cid:90) SuperSport initiatives such as leadership Play initiative, which celebrates 10 years in 2015. development and scholarships for academic Let’s Play encourages primary school children to studies. participate in sport in response to the rising trend (cid:3)(cid:90) The M-Net Magic in Motion Academy: 12 recent of young children adopting unhealthy adult social ﬁlm and television graduates are selected for a habits (inactivity, smoking, alcohol and drug year-long internship with various production abuse). This philosophy of good corporate houses. citizenship and contributing to African economies NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 69 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Performance review (continued) Non-ﬁnancial review continued is also evident in ongoing investments in For the past 15 years Allegro has partnered developing the television production and sport with the biggest Polish charity auction, Great industries with M-Net and SuperSport focusing on Orchestra of Christmas Charity, by organising online local content across the continent. auctions to raise funds for paediatric and The MultiChoice Diski Challenge is a football- oncological treatment for children, as well as focused programme that includes a tournament digniﬁed healthcare for senior citizens. A new for the reserve Premier Soccer League clubs, life online charity platform (charytatywni.allegro.pl) skills and leadership development for young was created to better connect an online players, a broadcasting internship and scholarships community willing to help all the non- for players and production interns, as well as an governmental organisations seeking funds. opportunity for community television channels to The Media24 Rachel’s Angels, a youth broadcast Diski matches. Our aim is to help create mentorship and empowerment programme, pairs a new breed of football players and broadcasting high school learners with Stellenbosch University professionals, while bringing the best sport mentors for a two-year period and aims to entertainment to our customers’ screens. improve the learners’ academic performance – 43 of these learners will be offered full bursaries M-Net’s Magic in Motion and 55 learners loans to study at Stellenbosch Academy welcomed 12 interns in March 2015. The academy is developing talent and equipping promising young people with skills, knowledge and practical experience in the ﬁlm and television industries. television industries. University in 2016. Numerous initiatives are also supported through its in-house programme, Volunteers24, through which staffers can give back. In India OLX builds connections with its communities through programmes such as voluntary blood donation camps, winter clothing P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 70 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review continued Ownership: MultiChoice achieved full points on this element of the scorecard. A cornerstone of our approach to ownership was creating a scheme to provide an accessible shareholding opportunity to a new group of South Africans. Black South Africans now have a 47,32% economic interest in the MultiChoice South Africa group. (cid:3)(cid:90) Three years ago shares in Phuthuma Nathi and Phuthuma Nathi 2 (launched in 2006 and 2007 as PN and PN2, respectively) began trading on an over-the-counter platform. In the current year PN and PN2, which collectively hold 20% of the issued share capital in MultiChoice South Africa, settled the loan held by MIH Holdings Proprietary Limited under the preference share agreements. Regulatory developments affecting these schemes are summarised on page 73. Preferential procurement: Our preferential procurement programme continues to support the development of black-owned (including black women-owned) small, medium and micro- enterprises (SMMEs). MultiChoice’s preferential procurement spend on compliant companies was R7,7bn (48%) in the reporting period: 13% of this was on exempt micro-enterprises and qualifying small enterprises. MultiChoice has a network of over 1 300 accredited installers, employing some 3 000 people across South Africa. donation and a school bag drive for underprivileged children. The eMAG foundation was launched by our leading Romanian etail business. Its ﬂagship projects aim to revitalise the Romanian educational system. Transformation Transformation is important for Naspers to ensure we comply with local legislation and our workforces reﬂect local demographics. We respect the dignity and human rights of individuals and communities wherever we operate. We aim to make a positive and enduring contribution to the social and economic development of South Africa, and recognise the role we can play by leveraging our resources and the goodwill of our staff. MultiChoice Monitored against the Information and Communications Technology (ICT) sector code of good practice for broad-based black economic empowerment (BBBEE), MultiChoice South Africa Enterprise development: Our achievements in retained a level-2 BBBEE rating, with several notable achievements in important areas of transformation: enterprise development (ED) reﬂect our commitment to development and sustainability in our sector. The MultiChoice Enterprise NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 71 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Non-ﬁnancial review continued Development Trust provides loans to A platform to share: We provide airtime across qualifying beneﬁciaries according to our ED channels to organisations whose work beneﬁts strategy. We support the cash ﬂow South Africans in distress. These organisations requirements of our qualifying suppliers by paying them early, and provide business development support to partners, producers and innovators in the group. Entities in the MultiChoice South Africa group are subject to the ICT sector code, which will inevitably be aligned to the revised Department of Trade and Industry (DTI) codes of good practice. The weightings and performance indicators in the revised codes are more stringent, which will mean a substantial drop in the performance of South African companies across all industries. MultiChoice South Africa is taking active steps to manage its BBBEE status. provide feedback on the impact this far-reaching and high-impact marketing has on their abilities to achieve their goals of improving the lives of South Africans. Media24 Media24 has made solid progress with its transformation aims. These are tracked against a scorecard for the DTI’s code of good practice for BBBEE. As independently veriﬁed, Media24 increased its overall score to 80,55 points – its highest ever – and retained level-3 status. Black ownership is now 45,22%, and Media24 also scored full points for socio-economic development and enterprise development. Next year Media24’s The MultiChoice Enterprise Development Trust The MultiChoice Enterprise Development Trust ensures that new talent and previously disadvantaged businesses receive the opportunity to compete fairly with established contributors of content. The trust provides ﬁnance for emerging production companies to acquire skills needed for high-quality productions. Linked with a contract from our broadcast partners (eg M-Net and SuperSport) to purchase the content and provide business support where required, we assist these production companies to be productive, efﬁcient and proﬁtable. In addition, we are innovating to produce content relevant to our audiences. This includes local productions that provide opportunities to expose emerging ﬁlm-makers to commercial television production, budgeting, scheduling and delivery requirements, while turning their stories and ideas into ﬁlms. 72 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review continued scorecard will be assessed in terms of the revised BBBEE codes, which have signiﬁcantly higher thresholds for compliance. Media24 expects a signiﬁcantly lower score and recognition level in line with its competitors and comparable companies across industries. Apex Future Leaders: It is a two-year executive management programme created to drive transformation at management level. The programme combines academic training with practical assignments and six-month stints in our print and digital publishing divisions. Six talented black managers will complete the programme in March 2016. Welkom Yizani: In 2006 Media24 launched the largest BBBEE share offer in the print media industry, Welkom Yizani, with eligible black people and groups now 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, improving chances for Welkom Markets Act, 2012. The schemes have engaged Yizani shareholders to proﬁt from their original proactively with the registrar and remain investment. committed to complying with any directives or In December 2013 shares in Welkom Yizani conditions issued by the registrar. began trading publicly. In September 2014 Welkom Yizani received an ordinary dividend from Media24 of R21,7m. Black economic empowerment partners In the past year the Registrar of Securities Media24, MultiChoice and other group Services (“the registrar”) indicated that all companies have combined their buying power in traditional over-the-counter trading platforms South Africa in a centralised bargaining company, like PN, PN2 and Welkom Yizani should CommerceZone. Suppliers’ BEE performance is regularise their affairs against the Financial evaluated against speciﬁc criteria. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 73 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Non-ﬁnancial review continued People Naspers group: Total workforce split* 2014 2015 43% 46% 57% Male Female 54% *MultiChoice South Africa, MultiChoice Nigeria, Media24, Allegro group and the BuscaPé group. Developing outstanding products for customers in In our communities: markets with great growth potential requires (cid:3)(cid:90) We operate in various geographies, where we talented teams across our business. Talent, employ local citizens and empower the particularly in the ﬁelds of ecommerce, technology communities in which we operate. and engineering, is scarce globally. Being (cid:3)(cid:90) We contribute to educational programmes to perceived as an attractive place to work, is raise awareness of our products, and create therefore key to our strategy. much-needed skills. In the past 12 months we continued our (cid:3)(cid:90) We conduct business fairly, ethically and with efforts to make Naspers a great place for our integrity. Our code of business ethics and people to work and develop. In May 2014 we conduct deﬁnes our culture. These and related appointed Aileen O’Toole to lead human policies appear on www.naspers.com. resources, creating dedicated responsibility for a (cid:3)(cid:90) We support previously disadvantaged groupwide people strategy. Focused on hiring, businesses in South Africa by actively seeking developing, and engaging great people in a suppliers in line with local legislation. performance-driven, values-based culture, the new group human resources team is designed to For our people: strengthen support for Naspers operating (cid:3)(cid:90) We aim to create a great place to work. companies and the group as a whole. (cid:3)(cid:90) We invest in the continuous development of With over 24 000 (2014: 22 500) permanent our people to retain a competitive advantage. employees in some 130 countries, we have an (cid:3)(cid:90) We encourage our employees to contribute to opportunity to make a difference to our the group’s sustainability and innovation by customers, employees, partners and investors supporting our community initiatives worldwide. ﬁnancially or donating their time. 74 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review continued (cid:3)(cid:90) We respect the rights of our employees and Reward for success their diversity. Each year we encourage employees to set clear (cid:3)(cid:90) We encourage employees to report areas and ambitious goals that contribute to the where the group might be failing in its success of the business. We encourage our business conduct and values through secure managers and their teams to regularly discuss channels. progress against these goals, and to differentiate (cid:3)(cid:90) We comply with local employment laws. reward according to what is delivered, and how it is delivered. Values-based and performance- driven culture Ownership: To attract and retain the skills on We believe that talented and engaged employees which our sustainability depends and reward build customer experiences that in turn create superior performance, most group companies sustainable shareholder returns. We encourage a grant share options/appreciation rights to values-based and performance-driven culture employees under a number of equity across the group to create the right environment compensation plans. in which talented people can ﬂourish: a meaningful job contributing to clear business aims, People development great leadership providing the opportunity for We have several areas of focus: developing everyone to learn and grow, and relevant reward the full potential of our own people, extending and recognition for a job well done. this training outside the group to develop Many of our subsidiaries have embedded their talent, and offering learnerships and bursaries values in their day-to-day ways of working. All to young people with potential for our group, our people are responsible for delivering results particularly in key ﬁelds such as engineering. with innovation, integrity, respect and passion. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 75 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Non-ﬁnancial review continued The projects below illustrate our commitment development programme, the General to our people and to the communities in which Management University. Through these we operate. programmes, we promote knowledge sharing, In recent years Media24 has made signiﬁcant investments in training, introduced for example, the Graduates-in-Media internship programme, ran an extensive digital media training programme for journalists, launched a series of knowledge-sharing talks on industry-related topics, and provided digital media training to over 150 independent publishers with the aid of funding from a services sector education and training authority (SSETA). In the global classiﬁeds business we are developing talent in-house through a bespoke Siyandiza online learning in video entertainment MultiChoice employees can complete online courses through a system called Siyandiza. This includes classroom and online learning on general business skills, strategy and operations to professional effectiveness, leadership skills and wellness, among others. In the past 12 months, 435 online courses were accessed and over 24 000 online learning completions were recorded, which included 3 680 individual completions. MultiChoice’s learnership programmes combine vocational education and training modules towards qualiﬁcations registered on the National Qualiﬁcations Framework (NQF). Highlights during the year include: 334 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. 116 internships were offered at M-Net, SuperSport and MultiChoice. 247 employees completed management development programmes, including advanced management programmes, introduction to management and executive coaching. 76 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Seven people are currently completing their second year in the adult basic education and training (ABET) programme. 40 information technology (IT) graduates were employed in our graduate programme. R3,8m was made available for bursaries, with R1,8m speciﬁcally designated for women. Performance review (continued) Non-ﬁnancial review continued increase the overall skill level and harmonise our Multichoice: Employment equity ways of working. We also launched the Global Leadership Gateway, a fast-track rotation programme for future country managers, held over 12 multi-day training sessions. In our etail and online comparison shopping 52% 2015 segments we encourage the exchange of ideas and best practices, and identify collaboration opportunities between our portfolio companies. In addition, we organise sector-speciﬁc conferences as well as global benchmarking. Diversity and inclusion Employment equity In line with local legislation, and our own employment policy, we value diversity in the workplace. It aligns our company with our customers and encourages tolerance and understanding. Just as importantly, it cultivates a 2015 13% 1% Male Female 48% Black Foreign White 86% vibrant working environment conducive to Media24: Employment equity innovative thinking. The breakdown of the MultiChoice and Media24 groups’ annual employment equity statistics is shown below. Under DTI deﬁnitions, black people include black Africans, coloureds and Indians who are citizens of 47% South Africa by birth or descent or who became citizens by naturalisation before 1994. 2015 Work environment and welfare 2015 Maintaining a healthy, safe workplace at all our sites is a priority to achieve the lowest possible harm rate on duty. Health and safety committees 39% – comprising responsible, trained individuals – ensure regulatory compliance. Appropriate medical-emergency and disaster-recovery plans have been devised. Male Female 53% Black White 61% G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 77 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Performance review (continued) Non-ﬁnancial review continued Annual occupational health and safety risk control audits or reviews are conducted by our larger operational entities and improvements implemented as required. Signiﬁcant matters are reported to and monitored by the Naspers risk committee. Media24’s distribution and printing operations use contractors and organisers. Most of these people are from disadvantaged backgrounds and receive training from Media24 on executing their jobs safely and effectively. The nature of the print business, which owns and group operations, with the employer contributing manages distribution networks and printing a portion of the monthly premium. facilities, makes this the area in our group with the Some group companies provide post-retirement greatest inherent risk for injuries on duty. healthcare beneﬁts. This is based on an employee remaining in service until retirement age, which is Monitoring: Media24’s safety, health and between 60 and 65 in most cases, and completing environment committee monitors related issues in a minimum service period. the group. Media24 and MultiChoice conduct annual health, safety and environmental Wellness: Several wellness programmes are compliance audits, as well as building scans. operated by group subsidiaries in a preventive Injuries on duty are stringently monitored. approach to employee health. 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 is low in the group. Where children are used in local Medical beneﬁts: Medical aid membership or productions, strict compliance to their regulated private health insurance is compulsory in most conditions of employment is enforced. 78 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review continued Environment Our diverse operations range from printing plants to transactional internet platforms. Each type of business has a unique effect on the environment, requiring different mitigating responses. Our gross measured carbon footprint (scope 1 and 2) is 177 945 tonnes of CO2e, of which scope 2 (electricity usage) is 96% (2014: 185 105 tonnes of CO2e). We measured direct (scope 1 and 2) emissions at our locations across South Africa, Poland, the Netherlands and Nigeria. Our South African print operations remain the largest contributor (70%) to the group’s total measured carbon emissions. Through improvement and sustainable technological innovation, Naspers strives to minimise its impact on the environment. We have again evaluated the adequacy of our generator capacity in South Africa and Nigeria. While this is adequate, the running and maintenance costs of generators are substantially higher than standard electricity costs. MANAGING ENVIRONMENTAL IMPACTS Managing impact Response Risk assessments identify operations where our direct impact on the environment is most signiﬁcant. Our most direct impact on the environment is from Media24 (70% 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. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 79 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Performance review (continued) Non-ﬁnancial review continued P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I MANAGING ENVIRONMENTAL IMPACTS (continued) Managing impact Response A number of initiatives are reducing our carbon footprint and supporting our sustainability campaign. Energy-efﬁciency initiatives in some businesses include: (cid:3)(cid:90) Movement-activated lights (cid:3)(cid:90) Energy-efﬁcient air conditioners (cid:3)(cid:90) Consolidating data centres (cid:3)(cid:90) Power factor correction and load balancing (cid:3)(cid:90) Automatic hibernation of PCs. Waste management initiatives include: (cid:3)(cid:90) Recycling ofﬁce waste more appropriately (cid:3)(cid:90) Installing ewaste bins for customers end employees to safely dispose of obsolete electronic devices. Throughout Novus Holdings, equipment is in place to collect and recycle dust particles from the printing process. Irdeto operates in line with ISO 9001 and ISO 27001, with its implementation of both standards regularly audited by an external certiﬁcation body. As disclosed above. No ﬁnes were received. Novus Holdings 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. We use, where possible, advanced technologies to reduce our impact on the environment. Our printing operations apply leading emission- reduction technology to minimise and responsibly dispose of waste. We monitor environmental compliance standards at our facilities and participate in third-party reviews. We measure and report on our carbon footprint. Where possible, we use environmentally responsible energy sources, invest in improving energy efﬁciency and design energy-efﬁcient facilities. 80 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review continued Novus Holdings Media24 Despite our ongoing efforts to manage our impact Media24’s operations are diverse, ranging from on the environment, mainly through deploying printing plants to ecommerce platforms. The group technology and recycling initiatives at our facilities mainly produces newspapers, magazines and and a shift from the printed product to electronic books, recycling all unsold magazines and formats, the ongoing electricity crisis in South newspapers. Through informative articles published Africa where our video-entertainment and printed in its magazines, newspapers and digital platforms, platforms operate, has had a negative impact on consumers are educated about lowering their our carbon footprint and cost base. However, in impact on the environment. South Africa, options for alternative sources of energy (other than the current coal base) are limited. MultiChoice City – our ﬁrst building to be Green Star-rated MultiChoice City, the group’s new building in Randburg, is our ﬁrst building to be Green Star-rated, a rating received from the Green Building Council of South Africa. The building comprises over 34 500m2 of ofﬁce area and was designed to energy-efﬁcient speciﬁcations for a 5-star Green Star ofﬁce design. A green building offers beneﬁts like signiﬁcant electricity cost savings by using energy-efﬁcient systems and occupancy sensors. MultiChoice City’s other green elements include a grey-water reticulation system, heating and cooling systems and processes to trap and disperse natural light. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 81 Performance review (continued) Non-ﬁnancial review continued Awards Prestigious awards received by group companies during the year included: Internet businesses and awards Markafoni received the Superbrands award in 2014 for the second time in a row. Markafoni was recognised for its role in fuelling Turkey’s economy. For the seventh year in a row Allegro was rated the number one Polish commerce brand in a Polish brand 2014 contest by the Rzeczpospolita daily. Mobile Trend Award 2014 for Allegro as the best promoter of mobile solutions in Poland. goibibo won the coveted Economic Times Most Promising Brands Award 2015 as the most promising and fastest growing brand. Goibibo. com has been commended for capturing maximum mindshare in the market very quickly. goibibo rated best website in the leisure and travel category by Website of the Year Awards 2014. Top 20 – Most Respected Companies in Nigeria, BusinessDay Media Limited (2014). Best etailer company and best use of social media in marketing, Marketing World Awards (2014). Best digital marketing company, Creative Entrepreneurs of Nigeria. Best Customer Service Company in ecommerce, Nigeria Customer Service Awards (2014). India Fifth most trusted online brand by Trust Research Advisory’s Brand Trust Report 2015. South Africa Best Practice Award 2014 Competitive Strategy Innovation Leadership in ecommerce retail, by Frost & Sullivan. Mail and Guardian Top Companies Reputation Index 2014 in the online classiﬁeds category. Mcommerce app of the year at Mobile Appies. Flipkart won the best legal team award for the ecommerce industry at the Legal Era Awards 2015. Innovation in HR Award – Wall- Street.ro, November 2014. Cool Brands Award by Forbes Magazine. xcellence in Management Award – Capital Magazine, March 2015. Brazil Best customer service in internet category, Prémio ÉPOCA Reclame AQUI. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 82 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Performance review (continued) Non-ﬁnancial review continued Video entertainment businesses and awards Winner of one gold and one silver PromaxBDA Africa Award 2014. Winner of one bronze PromaxBDA Global Excellence Award 2014. SuperSport iOS app voted MTN’s best consumer app of 2014. First place in the ISP category at Ask Afrika Orange Index® Awards. Winner of nine gold and seven silver PromaxBDA Awards 2014. Winner of one gold, two silver and two bronze PromaxBDA Global Excellence Awards 2014. Let’s Play nominated as a ﬁnalist in Discovery Sport Industry Awards 2015. Winner of nine gold and ﬁve silver PromaxBDA Africa Awards 2014. Winner of two silver and two bronze PromaxBDA Global Excellence Awards 2014. Winner of two bronze Loerie awards 2014. Winner of media owner sales team (MOST) award for the fourth time (2014). ENRICHING LIVES DStv Explora voted most innovative at the 2015 Product of the Year Awards. DStv rated the top socially devoted Facebook brand by Social Bakers. AFRICA Best Pay-TV brand in Mozambique Best Brand Awards (2014 and 2015). Winner Best Pay-TV Brand of the Year 2014 by Marketing World, Nigeria. Winner GOtv – Best Customer Care Company 2014 by Marketing World, Nigeria. Winner of 17 South African Film and Television Awards. Winner of 10 Royalty Soapie Awards. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 83 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Ferial Haffajee, City Press’s editor-in-chief, was a co-recipient of the International Press Freedom Award by the US-based Committee to Protect Journalists (CPJ). NB Publishers again scooped 28 prestigious literary prizes. Performance review (continued) Non-ﬁnancial review continued Awards continued Media24 businesses and awards News24’s elections app that gave live results for the 2014 SA national elections, won a gold, silver and bronze pixel at the 2015 Interactive Advertising Bureau South Africa (IAB) Bookmarks Awards. Media24’s efashion store, Spree, achieved a silver pixel for its newsletters and a bronze pixel for its ecommerce site at the 2015 IAB Bookmarks Awards. Media24’s publications and journalists scooped 10 prizes at the annual Standard Bank Sikuvile Journalism Awards – more than any other media company – across categories ranging from design, printing and layout to photography, as well as multimedia journalism. Media24 again won the Frewin (Beeld), McCall (Volksblad) and Joel Mervis (City Press) trophies for design excellence. Beeld won SA Story of the Year for its multimedia coverage of the Oscar Pistorius trial. At the annual MDDA-Sanlam Local Newspaper Awards, Media24’s titles and journalists won ﬁve awards. Tygerburger was named best free (corporate-owned) newspaper in South Africa. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 84 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 E C N A N R E V O G NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 85 Corporate governance P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I The board of directors conducts the group’s governance structures have clear approval business with integrity by applying appropriate frameworks. corporate governance policies and practices. Naspers has an internal control oversight Introduction forum comprising the chief ﬁnancial ofﬁcers (CFOs) and risk and internal audit managers of Compliance with the JSE Limited’s stock Naspers, MultiChoice and Media24, the Naspers exchange (JSE) Listings Requirements, applicable company secretary, the company secretary of London Stock Exchange (LSE) Listings MultiChoice and Media24 and group general Requirements and the Irish Stock Exchange counsel. The forum was tasked to ensure the Listings Requirements is monitored by the audit Naspers group’s governance structures and and risk committees of the board. framework are employed in the in-scope entities The board’s executive, audit, risk, human in the group during the ﬁnancial year. resources and remuneration, nomination, and Compliance and progress are monitored by social and ethics committees fulﬁl key roles in the audit and risk committees and reported to ensuring good corporate governance. The group the board. uses independent external advisers to monitor For a review of Naspers’s application of regulatory developments, locally and King III, go to http://www.naspers-reports. internationally, to enable management to make com/2015/pdf/king-3.pdf. recommendations to the Naspers board on matters of corporate governance. Application of and approach to King III Business ethics The group’s code of business ethics and conduct is available on http://www.naspers.com/pdf/ policies/code-of-ethics.pdf. The board, its committees, and the boards and This code applies to all directors and committees of subsidiaries MultiChoice and employees in the group. Ensuring that group Media24 are responsible for ensuring the companies adopt appropriate processes and appropriate principles and practices of the King establish supporting policies and procedures is Code of Governance Principles and the King an ongoing process. Management focuses on Report on Corporate Governance in South Africa policies and procedures that address key (King III) are applied and embedded in the ethical risks, such as conﬂicts of interest, governance practices of group companies. accepting inappropriate gifts and acceptable A disciplined reporting structure ensures the business conduct. Naspers board is fully apprised of subsidiary The human resources and remuneration activities, risks and opportunities. All controlled committee is the overall custodian of business entities in the group are required to subscribe to ethics. Unethical behaviour by senior staff the relevant principles of King III. Business and members is reported to this committee, along 86 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Corporate governance (continued) with the manner in which the company’s Africa (BCCSA). These relate to incorrect disciplinary code was applied. The social and scheduling of content and incorrect parental ethics committee has a monitoring role. guidance rating for certain content or in the Naspers is committed to conducting its electronic programme guide. Most of these business on the basis of complying with the law, issues are due to human error. Steps are being with integrity and with proper regard for ethical taken to correct this, both by M-Net internally business practices. and with third-party suppliers of channels. Whistle-blowing facilities at most subsidiaries In the past year there were no environmental enable employees to anonymously report accidents, nor were any environment-related unethical business conduct. ﬁnes imposed by any government. Compliance framework The board Naspers has a legal compliance programme that Composition involves preparing and maintaining inventories Details of directors at 31 March 2015 are set out of material laws and regulations for each on page 98. business unit, implementing policies and Naspers has a unitary board, which fulﬁls procedures based on these laws and regulations, oversight and controlling functions. The board establishing processes to supervise compliance charter sets out the division of responsibilities. and mitigate risks, monitoring compliance, The majority of board members are non- implementing effective training and awareness executive directors and independent of programmes and reporting to the various boards management. To ensure that no one individual and management on the effectiveness of has unfettered powers of decisionmaking and these efforts. Penalties authority, the roles of chair and chief executive are separate. At 31 March 2015 the board comprised Because MultiChoice operates in a highly 10 independent non-executive directors, four regulated environment in South Africa, non-executive directors and three executive compliance is important. The company directors, as deﬁned under the Listings participates in the regulatory process affecting Requirements of the JSE. Five directors (27%) its industry through various public forums and are from previously disadvantaged groups and debates, providing inputs on formulating three directors (20%) are female. These ﬁgures standards and strategies for this industry. are above the average for JSE-listed companies. MultiChoice and M-Net received ﬁnes of R85 000 from the self-regulatory body, the Broadcasting Complaints Commission of South G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 87 Corporate governance (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I The chair Independent advice The chair, Mr Koos Bekker, is a non-executive Individual directors may, after consulting with director. He replaced Mr Ton Vosloo, who retired the chair or chief executive, seek independent in April 2015. Mr Fred Phaswana replaced professional advice at the expense of the Mr Boetie van Zyl, who retired as lead director company on any matter connected with in all matters not dealt with by the non- discharging their responsibilities as directors. executive chair. Meetings and attendance The chief executive The board meets at least four times a year, or The chief executive reports to the board and is more as required. The executive committee responsible for the day-to-day business of the attends to matters that cannot wait for the next group and implementing policies and strategies scheduled meeting. Non-executive directors approved by the board. Chief executives of the meet at least once annually without the chief various businesses assist him in this task. Board executive, ﬁnancial director and chair present, to authority conferred on management is delegated discuss the performance of these individuals. through the chief executive, against approved Details of attendance at board and committee authority levels. On 1 April 2014 Mr Bob van Dijk meetings are provided on pages 98 and 99. was appointed chief executive. Evaluation Orientation and development The nomination committee carries out the An induction programme is held for new annual evaluation process. The performance of members of the board and key committees, the board and its committees, as well as that of tailored to the needs of individual appointees. the chair of the board, against their respective The company secretary assists the chair with the mandates in terms of the board charter and the induction and orientation of directors, and charters of its committees, is appraised. The arranges speciﬁc training if required. committees perform self-evaluations against Conﬂicts of interest their charters for consideration by the board. In addition, the performance of each director is Potential conﬂicts are appropriately managed to evaluated by the other board members, using ensure candidate and existing directors have no an evaluation questionnaire. The chair of the conﬂicting interests between their obligations nomination committee discusses the results with to the company and their personal interests. Any each director. A consolidated summary of the interest in contracts with the company must be evaluation is discussed by the board. The lead formally disclosed and documented. Directors independent director leads the discussion on the must also adhere to a policy on trading in performance of the chair. securities of the company. 88 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Corporate governance (continued) Board committees statements; to safeguard, verify and maintain While the whole board remains accountable for accountability of its assets; and to detect fraud, the performance and affairs of the company, it potential liability, loss and material delegates certain functions to committees and misstatement, while complying with regulations. management to assist in discharging its duties. For those entities in which Naspers does not Appropriate structures for those delegations are have a controlling interest, the directors in place, accompanied by monitoring and representing Naspers on these boards seek reporting systems. assurance that signiﬁcant risks are managed and Each committee acts within agreed, written systems of internal control are effective. terms of reference. The chair of each committee, All internal control systems have all of who are non-executive directors, reports at shortcomings, including the possibility of human each scheduled board meeting. error or ﬂouting of control measures. Even the The chair of each committee is required to best system may provide only partial assurance. attend annual general meetings to answer In the dynamic environment in which the questions. company operates, management regularly The established board committees in reviews risks and the design of the internal operation during the ﬁnancial year are: executive controls system to address these, assisted by the committee, audit committee, risk committee, work and reports from internal audit on the human resources and remuneration committee, adequacy and operational effectiveness of nomination committee, and the social and ethics controls, which may indicate opportunities for committee. The board is satisﬁed that the improvement. The external auditor considers committees properly discharged their elements of the internal controls system as part responsibilities over the past year. of its audit and communicates deﬁciencies when identiﬁed. Internal control systems The board reviewed the effectiveness of As part of the overall management of risk, the controls for the year ended 31 March 2015, system of internal controls in all material principally through a process of management subsidiaries and joint ventures under the self-assessment, including formal conﬁrmation in company’s control aims to prevent and detect the form of representation letters by executive any risk materialising and to mitigate any management. Consideration was given to input, adverse consequences thereof. The group’s including reports from internal audit and the system of internal controls is designed to provide external auditor, compliance and the risk reasonable, and not absolute, assurance on the management process. Where necessary, achievement of company objectives, including programmes for corrective actions have been integrity and reliability of the ﬁnancial initiated. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 89 Corporate governance (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Nothing has come to the attention of the Company secretary board, external or internal auditors to indicate The company secretary, Mrs Gillian Kisbey-Green, any material breakdown in the functioning of and group legal counsel (legal compliance internal controls and systems during the year ofﬁcer), are responsible for guiding the board in under review. Internal audit discharging its regulatory responsibilities. On 31 March 2015 Mr Craig Opperman resigned as group legal counsel. Mr André Coetzee, who An internal audit function is in place throughout retired on 31 March 2014, stepped in as acting the group. The head of internal audit reports to group legal counsel. Mr David Tudor was the chair of the Naspers audit committee, with appointed group legal counsel effective administrative reporting to the ﬁnancial director. 1 June 2015. A large part of the internal audit ﬁeldwork is Directors have unlimited access to the advice outsourced. Non-audit services and services of the company secretary. She plays a pivotal role in the company’s corporate governance and ensures that, in accordance with The group’s policy on non-audit services provides the pertinent laws, the proceedings and affairs guidelines on dealing with audit, audit-related, of the board, the company itself and, where tax and other non-audit services that may be appropriate, shareholders are properly provided by Naspers’s independent auditor to administered. She is also the company’s group entities. It also sets out services that may compliance ofﬁcer as deﬁned in the Companies not be performed by the independent auditor. Act and delegated information ofﬁcer. The IT governance company secretary monitors directors’ dealings in securities and ensures adherence to closed Information technology (IT) governance is periods. She attends all board and committee integrated in the operations of the Naspers meetings. businesses. Management of each subsidiary or As required by JSE Listings Requirement business unit is responsible for ensuring effective 3.84(i), the board has determined that the processes on IT governance are in place. company secretary, who is a chartered Internal audit provides assurance to accountant (SA) with more than 20 years’ management and the audit committee on the company secretarial experience, has the effectiveness of IT governance. requisite competence, knowledge and experience to carry out the duties of a secretary of a public company, and has an arm’s length relationship with the board. 90 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Corporate governance (continued) Investor relations Naspers’s investor relations policy can be found on www.naspers.com. It describes the principles and practices applied in interacting with shareholders and investors. Naspers is committed to providing timely and transparent information on corporate strategies and ﬁnancial data to the investing public. In addition, we consider the demand for transparency and accountability on our non-ﬁnancial (or sustainability) performance. In line with King III, Naspers recognises that this performance is based on its risk proﬁle and strategy, which includes non-ﬁnancial risks and opportunities. The company manages communications with its key ﬁnancial audiences, including institutional shareholders and ﬁnancial (debt and equity) analysts, through a dedicated investor relations unit. Presentations and conference calls take place after publishing interim and ﬁnal results. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 91 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Our board Our board Koos Bekker (62) led the founding team of the M-Net/MultiChoice pay-television business in 1985. He was also a founder of the cellular telephony, MTN. Mr Bekker 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 as chief executive of Naspers and stepped down from the board. On 17 April 2015 he was reappointed to the Naspers board and succeeded Mr Vosloo as non-executive chair. His academic qualiﬁcations include: BAHons plus an honorary doctorate in commerce (Stellenbosch University), an LLB (University of the Witwatersrand) and an MBA (Columbia University, New York). Rachel Jafta (54) holds the degrees MEcon and PhD, and is a professor of 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 a member of the management committee of the Bureau for Economic Research at Stellenbosch University. She is a member of the human resources and remuneration committee of Media24 and chair of the nomination committee of Media24. She was appointed chair of the Media24 board in April 2013 and on 9 June 2015 she was appointed to Naspers’s audit and risk committees. In 2015 she was appointed to the international advisory board of Fondação Dom Cabral Business School, Brazil. Roberto Oliveira de Lima (64) from Brazil is a board member of Telefonica Brasil, Rodobens Negócios Imobiliarios, Grupo Pao de Açucar in Brazil and Edenred in France. Mr Oliveira de Lima has been CEO of Natura Cosmeticos in Brazil since September 2014. He also serves as board member on a pro bono basis in Centro de Pesquisas Tecnológicas – CPqD and Fundação Mata Atlantica. 92 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our board (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Craig Enenstein (46) is 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 in ﬁnance (Wharton School of Business), an MA International Studies (Lauder Institute, University of Pennsylvania) and a BA (University of California, Berkeley). Bob van Dijk (42) was appointed chief executive of Naspers in April 2014. He joined the group as Allegro Group CEO in August 2013 and was promoted to CEO Global Transaction eCommerce in October 2013. He has over 10 years of general management experience in online growth business, mainly with eBay and Schibsted, spanning the online marketplaces, online classiﬁeds and fashion segments. Most recently he was vice-president and general manager of eBay Germany and Europe Emerging Markets. Prior to his general management career, Mr van Dijk was an entrepreneur in online ﬁnancial products. He started his career in McKinsey with a focus on mergers and acquisitions and media. Mr van Dijk has an MBAHons from INSEAD and an MSc (cum laude) in econometrics from Erasmus University Rotterdam. Fred Phaswana (71) holds the qualiﬁcations MA (Unisa) and BComHons (Rand Afrikaans University, now University of Johannesburg), and obtained a BA (philosophy, politics and economics) from Unisa in 2010. He joined Naspers as a director in 2003. He recently stepped down as chair of The Standard Bank Group and of Standard Bank of South Africa Limited and he is joint chair of the Mondi Group. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 93 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Our board (continued) Steve Pacak (60), a chartered accountant (SA), began his career with Naspers at M-Net in 1988 and has held various executive positions in the Naspers group. He is a director of MultiChoice South Africa Holdings and other companies in the wider Naspers group. He was appointed an executive director of Naspers in 1998. He retired as Naspers’s ﬁnancial director on 30 June 2014, but remained on the board as an alternate non-executive director. On 15 January 2015 he was appointed as a non-executive director on the Naspers board. Mark Sorour (53) joined the Naspers group in 1994, heading up business development and corporate ﬁnance throughout Africa, the Middle East, Thailand, China, Europe, USA and Asia. Following assignments located in Hong Kong and Amsterdam, he returned to Cape Town in 2002 as the group chief investment ofﬁcer. Since then he has had global responsibility for equity capital markets and mergers and acquisitions activities. Mr Sorour is a qualiﬁed chartered accountant (SA) holding a BCom and DipAcc. On 16 April 2014 he was appointed as alternate executive director on the Naspers board and then as an executive director on 15 January 2015. Ben van der Ross (68), who holds the qualiﬁcation DipLaw (University of Cape Town) and is an admitted attorney, is chair of Strategic Real Estate Management Proprietary Limited that manages the Emira Property Fund. He also serves, inter alia, on the boards of FirstRand Limited, MMI Holdings Limited, Pick n Pay Stores Limited, Distell Limited and Lewis Group Limited. 94 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our board (continued) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Debra Meyer (48) is professor of biochemistry and executive dean of the faculty of science at the University of Johannesburg. She was a Fulbright Scholar at the University of California, Davis, where she obtained a PhD in biochemistry and molecular biology. 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 serves as trustee or board member of several organisations. Basil Sgourdos (45) was appointed ﬁnancial director of Naspers in July 2014. A qualiﬁed chartered accountant (SA), he worked at PricewaterhouseCoopers Inc. from 1989 to 1994. Thereafter he joined Naspers, initially as the ﬁnance manager of the South African operations division in MultiChoice and then as chief ﬁnancial ofﬁcer of our investment in the Thai-listed United Broadcasting Corporation Pcl., where he remained for 10 years. Mr Sgourdos then spent two years in Amsterdam as general manager of pay-television business development globally, before being appointed as group chief ﬁnancial ofﬁcer of MIH in January 2009. He held this position until he became group chief ﬁnancial ofﬁcer of the Naspers group on 1 July 2014. Cobus Stofberg (64) 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 BComLaw and LLB from Stellenbosch University, BComptHons from Unisa and qualiﬁed as a chartered accountant (SA). NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 95 Our board (continued) Don Eriksson (70) is a chartered accountant (SA) and an honorary life member of the Institute of Directors of Southern Africa (IoDSA). Mr Eriksson is 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 and an independent non- executive director of Naspers Limited. He served on the council of IoDSA for a number of years and was a partner at Coopers & Lybrand (now PricewaterhouseCoopers Inc.). Nolo Letele (65) 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. Mr Letele has won several awards including Media Man of the Year in 2001 (Saturday Star – Business Report); Media Owner of the Year in 2003 (Financial Mail Adfocus); and the Lifetime Africa Achievement Prize for media development in Africa (Millennium Excellence Foundation). He holds an honours degree in electronic engineering (UK). His directorships include BuiltAfrica Proprietary Limited. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 96 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our board (continued) Directors who stepped down from the board subsequent to year-end. Ton Vosloo (77) became managing director of Naspers in 1984, serving as executive chair from 1992 to 1997. Mr Vosloo worked as a journalist from 1956 to 1983 and as editor of Beeld from 1977 to 1983. Until recently he was a director of Media24 and MultiChoice South Africa Holdings. He was the non-executive chair of the board of Naspers, a position he held since 1997. On 17 April 2015 Mr Vosloo retired as chair and board member from the Naspers board. 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. Yuanhe Ma (74) retired from his post as head of State Administration of Radio, Film and Television’s (SARFT’s) ofﬁce in Hong Kong in March 2002. Before moving to Hong Kong, he was director-general of the foreign affairs department of SARFT. He worked in SARFT for more than 30 years. He graduated from Beijing Broadcasting Institute’s foreign language department. Subsequent to the ﬁnancial year-end, Mr Ma retired from the Naspers board on 17 April 2015. Francine-Ann du Plessis (60) was a director of Naspers from 2003 to 2015 and holds the qualiﬁcations BComHons (taxation), LLB and CA(SA). Although admitted as an advocate of the Cape High Court, she practises as a chartered accountant and is a director of LDP Inc. She was a member of the audit and risk committees of Naspers. She also served on the boards of Standard Bank and ArcelorMittal. With effect from 29 May 2015 Advocate du Plessis resigned from the Naspers board and committees. Boetie van Zyl (76) holds the qualiﬁcations PrEng and BScEng (mechanical) (University of Cape Town). He joined Naspers as a director in 1988. He is a director of the Peace Parks Foundation and a trustee of WWF South Africa. He was 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. Subsequent to the ﬁnancial year-end on 17 April 2015, Mr van Zyl retired from the Naspers board and committees. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 97 Our board (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Directors and attendance at meetings Date ﬁrst appointed in current position Date last appointed Eight board meetings were held during the year. Attendance: T Vosloo(1) F-A du Plessis(2) 6 October 1997 23 October 2003 30 August 2013 30 August 2013 C L Enenstein 16 October 2013 16 October 2013 D G Eriksson 16 October 2013 16 October 2013 R C C Jafta 23 October 2003 29 August 2014 F L N Letele D Meyer 22 November 2013 22 November 2013 25 November 2009 29 August 2014 R Oliveira de Lima 16 October 2013 16 October 2013 Y Ma(1) 16 October 2013 16 October 2013 S J Z Pacak(3) T M F Phaswana 15 January 2015 23 October 2003 15 January 2015 30 August 2013 M R Sorour(4) V Sgourdos(5) J D T Stofberg B van Dijk B J van der Ross 15 January 2015 1 July 2014 16 October 2013 1 April 2014 12 February 1999 15 January 2015 1 July 2014 16 October 2013 1 April 2014 30 August 2013 J J M van Zyl(1) 1 January 1988 29 August 2014 8 8 8 7 8 8 8 8 8 8 7 7 6 7 8 8 8 Category 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 Non-executive Independent non-executive Executive Executive Non-executive Executive Independent non-executive Independent non-executive Notes Mr Bekker was appointed as a non-executive director and chair with effect from 17 April 2015. (1) Retired 17 April 2015. (2) Resigned 29 May 2015. (3) Retired 30 June 2014 as an executive and ﬁnancial director. Appointed alternate director 1 July 2014. Resigned as alternate director and appointed a non-executive director 15 January 2015. (4) Appointed alternate director 16 April 2014. Resigned as alternate director and appointed as an executive director 15 January 2015. (5) Appointed ﬁnancial director 1 July 2014. 98 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Our board (continued) Committees and attendance at meetings Executive committee Audit committee(1) Risk committee Human resources and remuneration committee(1) Nomination committee(1) Social and ethics committee No meetings held during the year. Four meetings held during the year. Attendance: Four meetings held during the year. Attendance: Six meetings held during the year. Attendance: Six meetings held during the year. Attendance: Three meetings held during the year. Attendance: Category T Vosloo(2) F-A du Plessis(3) D G Eriksson(4) R C C Jafta F L N Letele D Meyer S J Z Pacak(5) T M F Phaswana(6) V Sgourdos(7) J D T Stofberg(8) J J M van Zyl(2) B J van der Ross √ √ √ √ √ √ √ √ √ √ 4 4 4 4 √ √ √ √ √ √ √ √ 4 4 4 4 4 4 4 √ 6 √ 6 √ 6 √ 6 √ √ √ n/a n/a 6 √ √ √ n/a n/a 6 √ √ √ √ √ √ √ 1 3 3 3 1 2 3 Non-executive Independent non-executive Independent non-executive Independent non-executive Non-executive Independent non-executive Non-executive Independent non-executive Executive Non-executive Independent non-executive Independent non-executive Executive Non-executive 4 √ √ B van Dijk(9) E Weideman Notes √ Member. Mr Bekker was appointed as a non-executive director and chair with effect from 17 April 2015. Mr Bekker will serve on the human resources and remuneration committee as chair and a member of the nomination committee. He will attend the audit and risk committees’ meetings by invitation. (1) Executive directors attend meetings by invitation. (2) Retired 17 April 2015. (3) Resigned 29 May 2015. (4) Appointed a member of the audit committee 29 August 2014. Previously, Mr Eriksson attended audit committee meetings in an 3 3 √ √ advisory role. Appointed chair of the audit committee 17 April 2015. (5) Retired 30 June 2014 as an executive and ﬁnancial director. Appointed alternate director 1 July 2014. Resigned as alternate director and appointed a non-executive director 15 January 2015. (6) Appointed 17 April 2015. (7) Appointed 1 July 2014. (8) Appointed alternate on the committees to Mr Bekker 17 April 2015. (9) Appointed 1 April 2014. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 99 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Remuneration report P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Salient features This report sets out our remuneration policy for non-executive directors, executive directors and staff, as well as its implementation. Some key points: (cid:3)(cid:90) Non-executive directors: The highly competitive markets we operate in, and the brutal global competition we face, require us to continually evaluate the expertise of our board. Recently we realised annual savings of some R20m per year by collapsing two traditional structures into a single combined board. To appropriately compensate the new combined board, we envisage a revised payment structure for non-executive directors to ensure we attract and retain suitable talent – please see pages 102 to 103. (cid:3)(cid:90) Executives: As with non-executive directors, we need to recruit and keep vital executive skills in a competitive, global market. Our three-tier remuneration structure aligns the interests of executives and shareholders: (cid:3)(cid:79) ﬁxed salary (cid:3)(cid:79) executives receive short-term performance bonuses by achieving annual targets, and (cid:3)(cid:79) longer-term incentives mirror shareholder gains, with executives being rewarded for their contribution to the performance of their business unit by receiving a portion of medium-term gains made by shareholders – page 101. Remuneration strategy and policy Naspers’s remuneration strategy aims to attract, motivate and retain the best leaders, entrepreneurs, creative engineers and employees to create sustainable shareholder value. Policies and practices align the remuneration and incentives for executives and employees to the group’s business strategy. Group companies are responsible for developing their own policies and beneﬁts within the parameters of group remuneration policy and local laws, as well as each company’s needs. Naspers has an integrated and balanced approach to its reward strategy that aligns stakeholder interests. Accordingly, individual reward components are aligned to the business-speciﬁc value drivers of the group. Our primary objectives include promoting superior performance; directing employees’ energies to key business goals; achieving the most effective returns for employee spend; and addressing diverse needs across differing cultures. Non-executive director remuneration Non-executive directors receive annual remuneration as opposed to a fee per meeting, which recognises their ongoing responsibility for efﬁcient control of the company. This is augmented by compensation for services on committees of the board and the boards of subsidiaries. A premium is payable to the chairs of boards and committees. Remuneration is reviewed annually, and is not linked to the company’s share price or performance. Non-executive directors do not qualify for share allocations under the group’s incentive schemes. Supported by independent advice, the human resources and remuneration committee makes its recommendations to the board which, in advance, annually recommends the remuneration of non-executive directors for approval by shareholders. Executive remuneration At executive level, our focus is on the most appropriate balance between guaranteed annual remuneration and individual incentive plans linked to creating shareholder value. In this context, Naspers usually has a three-tiered structure for remuneration: (cid:3)(cid:90) Guaranteed pay for performing the contractual role. 100 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) (cid:3)(cid:90) Short-term annual individual performance bonus: based on actual achievement against appropriate personal and business unit targets for the ﬁnancial year, plus discrete individual objectives. (cid:3)(cid:90) Long-term incentives: share-based incentive schemes, which are aligned with shareholders’ net gains. At senior level, we aim to tailor compensation structure to the needs of the speciﬁc business. Guaranteed pay This includes base pay, and may contain a car allowance, pension, medical and other optional beneﬁts. Remuneration packages are reviewed annually and compared with reported ﬁgures for similar positions to ensure they are fair and sensible. In some cases, independent consultants provide benchmarks. We have no speciﬁc group policies to, for example, pay the median wage as the requirements of a group serving a multitude of countries differ widely. Short-term bonus Most executives have an annual bonus scheme that may comprise a variable component for surpassing business unit ﬁnancial and operational objectives, as well as ﬁxed amounts for achieving speciﬁc discrete personal objectives. This incentive plan for each executive is agreed annually in advance, and based on targets that are veriﬁable and aligned to the speciﬁc business unit’s annual business plan, risk management policy and strategy. Where targets are not met, no bonus is paid. Long-term incentives These are generally share-based schemes using Naspers N shares or shares/appreciation rights in relevant business units. These awards normally vest over four or ﬁve years and must be exercised within ﬁve to 10 years from the date of grant. These incentives are not free: employees are offered the share/appreciation right at market value on the day of the award. They beneﬁt only if they, together with colleagues in that unit, create additional value over the next four or ﬁve years. The demand is therefore to create net new value above the value on the date of issue. This completely aligns employee and shareholder interests. Various remuneration committees in the group review share-based awards annually. In addition, if a group company employs people during the year, awards may be made on appointment. Guidelines for making awards have been set. No awards are made during closed periods, backdating is prohibited, and there is no repricing or automatic regranting of underwater shares/appreciation rights. There is no automatic entitlement to bonuses or early vesting of share-based incentives if an executive leaves the company. A cap applies to the number of shares/appreciation rights that may be awarded in aggregate and to any individual. Service contracts Executives’ contracts comply with terms and conditions of employment in the local jurisdiction. Top executives’ contracts do not contain golden parachute clauses and none automatically trigger a restraint payment. 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. Approval and implementation The board, based on the recommendation of the human resources and remuneration committee, approves the remuneration policy. Implementation is delegated to the Naspers human resources and remuneration committee. The boards of subsidiaries follow a similar NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 101 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Remuneration report (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I practice, within the parameters of the Naspers remuneration policy. The remuneration policy is put to shareholders at the annual general meeting for a non-binding vote. Non-executive directors Non-executive directors’ terms of appointment The board has clear procedures for appointing and orientating directors. The nomination committee periodically assesses the skills represented on the board and determines whether these meet the company’s needs. Annual self-evaluations are done by the board and its committees. Directors are invited to give their input in identifying potential candidates. 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, 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. Rationale for non-executive directors’ remuneration Naspers started 100 years ago as a South African-based print media company. In 1984 we bought a minority stake in a pay-television venture, then entered mobile telephony. In 2000 we swapped our mobile telephony stake for control of the pay-TV business, which gradually started investing in internet ventures. Between 2000 and 2013 a “dual board” structure evolved, where the electronic interests (pay-TV and internet) were mainly controlled by the board of subsidiary MIH, which comprised several directors based outside South Africa and always met abroad. Naspers, the mother company, comprised South Africans and met almost always domestically. This structure made sense while print interests were a substantial part of the business but, over time, the electronic interests grew to represent the bulk of the business, increasingly located outside South Africa. To put this in context: today the group operates in some 130 countries, competing with global players in the ﬁeld of internet, ecommerce and video-entertainment services. Naspers is the third largest company on the JSE with a market capitalisation of around US$60bn at year-end and it is ranked at 130 of over 2 400 securities in the MSCI All World Index. The international scale of the group means we need to navigate and compete in a ﬁeld of high technology and changing consumer habits. It also means Naspers needs non-executive directors with global expertise. As the group evolved, the work of the Naspers and MIH boards overlapped almost completely. By combining these boards in 2013, we reduced an aggregate 20 (nine MIH plus 11 Naspers) non-executive directors to a present 12 members. Nine scheduled board meetings (ﬁve abroad, four in SA) were reduced to ﬁve (two in SA, three abroad); eight audit and risk committees’ meetings were cut to four; and nine human resources and remuneration and nomination committees’ meetings became ﬁve. The resultant savings were in director’s fees, travel costs, and the cost of producing board and committee papers are estimated to be in excess of R20m (this ﬁgure has not been audited by PricewaterhouseCoopers Inc.). This excludes the 102 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) cost of management’s time spent preparing for and attending the various committee and board meetings. After the decision to combine the boards, we sought external advice on setting a suitable compensation level for the new combined board, using two points of reference: (cid:3)(cid:90) Average board compensation of the Top 10 JSE companies. (cid:3)(cid:90) Average board compensation of Naspers’s industry peers internationally, ie competitors in the same broad ﬁeld and of similar scale. These ﬁgures were aggregated and an average obtained. To err on the side of caution, 80% of this aggregated benchmark was used as suitable compensation for the new combined board. The current structure and detailed table of proposed compensation for the 2016 ﬁnancial year are shown below: Board Chair* Member 1.1 1.2 31 March 2016 (proposed) 2,5 times member US$164 000 All members: daily fees when travelling to and attending meetings outside home country US$3 500 Committees Audit committee: Chair Member Risk committee: Chair Member Human resources and remuneration committee: Chair Member Nomination committee: Chair Social and ethics committee: Chair Member Member 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 Other Trustee of group share schemes/other personnel funds 1.13 1.14 Media24 pension fund: Chair 1.15 Trustee 2,5 times member US$40 400 2,5 times member US$24 000 2,5 times member US$28 400 2,5 times member US$15 300 2,5 times member US$21 000 R44 190 R111 548 R76 365 Note * The non-executive chair of Naspers does not receive additional remuneration for attending meetings, or being a member of, or chairing any committee of the board, or for attending Tencent board and committee meetings. Remuneration of non-executive directors for the year ending 31 March 2017, based on a 5% increase year on year, will be proposed at the annual general meeting in August 2015. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 103 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Remuneration report (continued) Non-executive directors’ emoluments for the ﬁnancial year to 31 March 2015 Fees for services as directors Fees for services as directors of subsidiary companies 2015 R’000 26 264 4 966 31 230 2014 R’000 14 262 6 885 21 147 Individual non-executive directors received the following remuneration and emoluments in the current ﬁnancial year: 2015 Committee(2) and trustee(3) fees Directors’ fees(1) Other fees(4) Directors’ fees(1) Paid by com- pany R’000 4 412 1 312 2 090 1 312 1 312 — 1 312 2 090 1 312 2 090 456 1 274 — 1 866 — 1 312 1 312 — 23 462 Paid by sub- sidiary R’000 — — — 600 770 — — — 257 — 470 — — — — — — — 2 097 Paid by com- pany R’000 — 494 — 308 428 — 98 — 98 — 22 — — — — 308 1 046 — 2 802 Paid by sub- sidiary R’000 Paid by com- pany R’000 — — — 430 101 — — — 58 — 179 — — — — — — — 768 — — — — — — — — — — — — — — — — — — — Paid by sub- sidiary R’000 — — 553 — — — — — — 553 995 — — — — — — — 2 101 Total 2015 R’000 4 412 1 806 2 643 2 650 2 611 — 1 410 2 090 1 725 2 643 2 122 1 274 — 1 866 — 1 620 2 358 — 31 230 Paid by com- pany R’000 3 145 615 793 282 615 359 205 793 615 793 — 615 410 756 359 615 615 359 11 944 Paid by sub- sidiary R’000 1 437 — 108 350 720 86 — 108 240 108 — — 1 655 — 86 — 591 86 5 575 2014 Committee(2) and trustee(3) fees Paid by com- pany R’000 — 455 — 128 322 41 29 — 88 — — — — — — 280 934 41 2 318 Paid by sub- sidiary R’000 189 — 253 198 95 60 — — 14 255 — — 32 — 21 — 179 14 1 310 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 21 147 Non-executive directors T Vosloo(5) F-A du Plessis(6) C L Enenstein(4) D G Eriksson(7) R C C Jafta L N Jonker(8) F L N Letele Y Ma(5) D Meyer R Oliveira de Lima(4) S J Z Pacak(4), (9) T M F Phaswana L P Retief(10) J D T Stofberg N P van Heerden(8) B J van der Ross J J M van Zyl(5) H S S Willemse(8) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 104 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) Notes (1) Directors’ fees include fees for services as directors, where appropriate, of Media24 Proprietary Limited, MultiChoice South Africa Holdings Proprietary Limited and NMS Insurance Services Limited. An additional fee may be paid to directors for work done as directors with speciﬁc expertise. (2) Committee fees include fees for attending meetings of the audit committee, risk committee, human resources and remuneration committee, nomination committee, and social and ethics committee. (3) Trustee fees include fees for attending meetings of the group’s retirement funds. (4) Compensation for assignments. (5) Retired 17 April 2015. (6) Resigned 29 May 2015. (7) At the annual general meeting on 29 August 2014, Mr Eriksson was elected a member of the audit committee. As an independent non-executive director, he previously attended meetings in an advisory role. (8) Resigned 16 October 2013. Only the comparative ﬁgures are shown in the table. (9) Retired as ﬁnancial director on 30 June 2014 and appointed alternate to a non-executive director on 1 July 2014. On 15 January 2015 Mr Pacak was appointed as a non-executive director. (10) Resigned 21 November 2013. Only the comparative ﬁgure is shown in the table. General notes Committee and trustee fees include, where appropriate, fees to be considered by shareholders at the annual general meeting on 28 August 2015 for services as trustees or members, as appropriate, of the group share schemes/retirement funds/Media24 safety, health and environment committee. 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. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 105 Remuneration report (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Executive remuneration Executive remuneration is guided by the group policy (refer to page 100) and tailored for individual companies. Long-term incentives Supported by the recent ﬁndings of remuneration experts, we believe our long-term share-based incentive schemes are more effective than one in which an individual is set targets over ﬁve years and paid a bonus on achieving that, because: (cid:3)(cid:90) Companies in our industry can only budget accurately for the year ahead, not ﬁve years out where targets can only be based on guesswork prepared by executives themselves. (cid:3)(cid:90) A complete misalignment of shareholders’ and executives’ interests may occur. For example, an executive may meet the targets, but the company’s share price may decline because a competitor outperforms it, resulting in the executive receiving a long-term bonus while the shareholder loses value. In keeping with our policy to offer competitive packages, a proposal was approved by the board, and will be tabled for consideration by shareholders at the annual general meeting in August 2015, to introduce a restricted stock unit (RSU) scheme based on Naspers shares, similar to those offered by many global internet ﬁrms with which we compete for talent. This RSU scheme is not aimed at senior and executive management and will not replace the group’s share option and share appreciation rights plans, which remain the primary equity compensation vehicle for long-term incentives for the group. If approved by shareholders, RSU grants will be used to attract and retain critical talent: mid-level individuals in the organisation, such as engineers and those employees with specialist skills sets. It will act as an important retention tool throughout the four-year-phased vesting period. All our equity plans are benchmarked to the external market. We subscribe to the concept of value creation and pay for performance. Grants are generally made to employees, who, through their individual and collective efforts, drive the creation of shareholder value. We aim to align the interests of our employees and shareholders by offering employees (as many as is practicable) the opportunity to become shareholders themselves. The group’s numerous share-based incentive schemes are set out in equity compensation beneﬁts in the notes to the annual ﬁnancial statements on www.naspers.com. At 31 March 2015 the group held 3 679 466 (2014: 15 567 818) Naspers N ordinary shares as treasury shares to settle outstanding options under certain group share incentive schemes. The expected dilutive effect of these treasury shares on the group’s earnings, on a per-share basis, was 14 cents per N ordinary share (2014: 37 cents). In accordance with schedule 14 of the JSE Limited Listings Requirements and the South African Companies Act, at the annual general meeting in August 2011 shareholders approved that up to 40 588 541 Naspers N ordinary shares (some 10% of Naspers’s N ordinary share capital at 31 March 2010) may be issued for the group’s share-based incentive schemes. During the ﬁnancial year to 31 March 2015, 699 556 new N ordinary shares had been so issued. Pension and medical beneﬁts During the year group companies made contributions for executive directors to appropriate pension schemes. The rate of contribution is variable and is considered in total 106 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) compensation, based on the pensionable salary of these individuals. The value of contributions for each executive director appears in the summary of directors’ emoluments below. No non-executive directors of Naspers contributed to any group pension fund in 2015. Guaranteed package increases In the 2015 ﬁnancial year the overall ﬁxed salary increase for the Naspers group varied across the jurisdictions where we operate. In determining salary increases we consider local economic indicators such as inﬂation and cost-of-living changes, overall movement in the local (and, where appropriate, regional and global) labour market, any collective bargaining agreements and, most importantly, the performance of the individual employee. Where appropriate, the committee annually benchmarks the total compensation of Naspers senior executives, and considers this along with individual and company performance when awarding compensation. The committee uses external consultants to benchmark the remuneration of its senior executives. Executive directors’ emoluments for the ﬁnancial year to 31 March 2015 Annual cash bonuses and performance- related payments R’000 Pension contribution paid on behalf of director to the pension scheme R’000 Total R’000 — 123 1 208 3 275 14 261 6 994 24 530 2 845 2 845 789 12 671 3 087 23 105 4 291 20 982 8 290 57 966 474 474 7 518 7 518 Salary R’000 1 085 8 607 5 757 9 697 25 146 4 199 4 199 2015 S J Z Pacak Paid by other companies in the group V Sgourdos Paid by other companies in the group M R Sorour Paid by other companies in the group B van Dijk Paid by other companies in the group Total 2014 S J Z Pacak Total G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 107 Remuneration report (continued) On 30 June 2014 Mr Pacak retired as ﬁnancial director, but remained on the board as an alternate non-executive director. Mr Sgourdos succeeded Mr Pacak as chief ﬁnancial ofﬁcer and has an indeﬁnite employment contract. On 15 January 2015 Mr Pacak was appointed as a non-executive director. Mr van Dijk was appointed chief executive on 1 April 2014. Mr Sorour was appointed as alternate executive director on 16 April 2014 and an executive director on 15 January 2015. Annual performance payments for Messrs Sgourdos, Sorour and van Dijk are based on ﬁnancial, operational and discrete personal objectives, approved by the human resources and remuneration committee in advance. Mr van Dijk’s bonus is capped at a maximum of the annual total cost to company and is entirely linked to achieving the group business plan as approved by the board and personal targets. Mr Sorour is responsible for mergers, acquisitions and divestitures and therefore holds a highly commercial role with a direct and signiﬁcant impact on the group’s success. His bonus is capped at double his annual total cost to company. Mr Sgourdos’s bonus is primarily driven by the ﬁnancial performance of the group and certain corporate governance objectives. His annual performance cap is 50% of the total cost to company. No other remuneration is paid to executive directors. Remuneration is earned for services rendered in conducting the business of the group. Interests in group share-based incentive schemes are set out on pages 108 to 110. Executive directors’ contracts No executive director has a notice period of more than one year. No executive director’s service contract includes predetermined compensation on termination exceeding one year’s salary and beneﬁts. Shareholding Directors’ interests in the group’s share incentive schemes The executive directors of Naspers are allowed to participate in group share-based incentive schemes. Executive directors who retire and become non-executive directors are allowed to retain their share options/appreciation rights under the rules of the group’s share-based incentive schemes only if they serve on group boards. A summary of executive directors’ participation in Naspers scheme shares, in relation to shares not yet released at 31 March 2015, is set out below. Full details can be found in note 17 on page 74 of the consolidated annual ﬁnancial statements. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 108 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) MIH (Mauritius) Limited share incentive scheme Name Offer date Number of N shares Purchase price Release period Value of option(1) S J Z Pacak(2) 07/09/2012 54 000 R484,70 V Sgourdos(3) 08/09/2010 19/09/2011 2 223 14 163 R306,00 R350,00 02/07/2012 33 370 R436,83 11/07/2013 27 360 R770,00 04/09/2014 22 409 R1 380,78 B van Dijk(4) 11/07/2013 20 094 R770,00 28/03/2014 832 000 R1 155,00 07/09/2015 to 07/09/2017 R159,91 to R189,16 08/09/2015 19/09/2015 to 19/09/2016 02/07/2015 to 02/07/2017 11/07/2016 to 11/07/2018 04/09/2017 to 04/09/2019 11/07/2016 to 11/07/2018 28/03/2017 to 28/03/2019 R134,76 R160,56 to R171,46 R154,75 to R182,57 R289,65 to R344,19 R594,64 to R695,10 R289,65 to R344,19 R503,76 to R581,92 Notes (1) The value of the option represents the fair value on grant date in accordance with IFRS. (2) Retired as ﬁnancial director on 30 June 2014 and appointed alternate director to a non-executive director on 1 July 2014. On 15 January 2015 Mr Pacak was appointed as a non-executive director. (3) Appointed on 1 July 2014 as ﬁnancial director. (4) Appointed 1 April 2014. MIH Holdings share incentive scheme Name Offer date Number of N shares Purchase price Release period M R Sorour(2) 19/09/2011 22 256 R350,00 02/07/2012 55 617 R436,83 11/07/2013 41 040 R770,00 28/03/2014 30 000 R1 155,00 04/09/2014 28 011 R1 380,78 19/09/2015 to 19/09/2016 02/07/2015 to 02/07/2017 11/07/2016 to 11/07/2018 28/03/2017 to 28/03/2019 04/09/2017 to 04/09/2019 Notes (1) The value of the option represents the fair value on grant date in accordance with IFRS. (2) Appointed 16 April 2014 as alternate director and appointed director on 15 January 2015. Value of option(1) R166,13 to R175,85 R162,95 to R188,10 R276,34 to R334,75 R483,39 to R568,24 R568,46 to R676,96 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 109 Remuneration report (continued) Director’s interest in other group share-based incentive schemes A summary of executive directors’ participation in other Naspers group share-based incentive schemes for the year to 31 March 2015 is set out below. Full details can be found in note 17 on page 74 of the consolidated annual ﬁnancial statements. Name Incentive scheme Offer date Number of ARs Purchase price M R Sorour(2) Flipkart Limited SAR 10/09/2014 3 086 US$63,64 Naspers Global Ecommerce SAR MIH China/MIH TC 2008 SAR SimilarWeb SAR Limited 12/09/2014 67 466 US$15,58 17/01/2014 32 000 US$42,95 10/09/2014 1 724 US$1,45 B van Dijk(3) Flipkart Limited SAR 10/09/2014 365 854 US$63,64 Naspers Global Ecommerce SAR SimilarWeb Limited SAR 12/09/2014 7 466 133 US$15,58 10/09/2014 199 685 US$1,45 Release period 10/09/2015 to 10/09/2019 12/09/2015 to 12/09/2019 17/01/2016 to 17/01/2019 10/09/2015 to 10/09/2019 10/09/2015 to 10/09/2019 12/09/2015 to 12/09/2019 10/09/2015 to 10/09/2019 Value of option(1) US$19,04 to US$26,04 US$4,01 to US$5,59 US$9,40 to US$11,54 US$0,39 to US$0,55 US$19,04 to US$26,04 US$4,01 to US$5,59 US$0,39 to US$0,55 Notes (1) The value of the option represents the fair value on grant date in accordance with IFRS. (2) Appointed 16 April 2014 as alternate director and appointed director on 15 January 2015. On 25 November 2014 Mr Sorour exercised options in a group share-based incentive plan and received 443 456 Naspers N ordinary shares in settlement of the gain made on exercising the options. Mr Sorour then sold 226 028 Naspers N ordinary shares at average market prices ranging between R1 489,90 and R1 499 per share, on 26 November 2014 Mr Sorour sold 87 746 Naspers N ordinary shares at average market prices ranging between R1 460 and R1 470 per share and on 27 November 2014 sold 129 682 Naspers N ordinary shares at average market prices ranging between R1 446,50 and R1 464,20 per share. Furthermore, on 20 March 2015 Mr Sorour exercised options in a group share-based incentive plan that would have expired in terms of the rules of that plan after the tenth anniversary of the award, which was 28 June 2015. Mr Sorour received 13 351 Naspers N ordinary shares in settlement of the gain made on exercising the options. Mr Sorour then sold 5 217 Naspers N ordinary shares at a market price of R1 805 per share and retained the remaining 8 134 Naspers N ordinary shares. (3) Appointed 1 April 2014. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 110 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) Directors’ interest in Naspers shares The directors of Naspers have the following interests in Naspers A ordinary shares on 31 March 2015: 31 March 2015 Naspers A ordinary shares Beneﬁcial 31 March 2014 Naspers A ordinary shares Beneﬁcial Name Direct Indirect Total Direct Indirect J J M van Zyl(1) 745 — 745 745 — Total 745 Note (1) Retired 17 April 2015. 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 2015 or 31 March 2014. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 111 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Remuneration report (continued) The directors of Naspers (and their associates) had the following interests in Naspers N ordinary shares as at 31 March: 31 March 2015 Naspers N ordinary shares Beneﬁcial 31 March 2014 Naspers N ordinary shares Beneﬁcial Name Direct Indirect Total Direct Indirect Total T Vosloo(1) F-A du Plessis(2) C L Enenstein D G Eriksson R C C Jafta F L N Letele(3) Y Ma(1) D Meyer R Oliveira de Lima(4) S J Z Pacak(5) T M F Phaswana V Sgourdos(6) M R Sorour(7) J D T Stofberg B J van der Ross B van Dijk(4) J J M van Zyl(1) — — — — — 737 — — — 728 510 — — 9 034 159 831 — — 50 361 160 000 — — — — — — — — 160 000 — — — — 737 — — — 272 548 1 001 058 3 530 82 647 115 417 451 719 400 — 201 157 3 530 82 647 106 383 291 888 400 — 150 796 — — — — — 7 006 — — — 778 510 — — 900 159 831 — — 50 361 160 000 — — — — — — — — 272 548 3 530 58 462 95 255 291 888 400 — 150 796 160 000 — — — — 7 006 — — — 1 051 058 3 530 58 462 96 155 451 719 400 — 201 157 948 473 1 068 192 2 016 665 996 608 1 032 879 2 029 487 Subsequent to year-end, Mr Bekker succeeded Mr Vosloo as chair on 17 April 2015. Mr Bekker holds an indirect beneﬁcial interest in 4 688 691 Naspers N ordinary shares. 112 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Remuneration report (continued) Notes (1) Retired 17 April 2015. (2) Resigned 29 May 2015. (3) On 25 September 2014 Mr Letele sold 4 025 Naspers N ordinary shares at average market prices ranging between R1 252,50 and R1 289 per share held in the MIH Holdings Share Trust. At the same time, Mr Letele exercised share appreciation rights in a group share-based incentive plan and received 545 Naspers N ordinary shares in settlement of the gain. The 545 N ordinary shares were sold at a market price of R1 289 per share. Furthermore, Mr Letele sold 2 244 Naspers N ordinary shares at average market prices ranging between R1 276,40 and R1 281,50 per share held in his own name. (4) Appointed 1 April 2014. (5) Retired as ﬁnancial director on 30 June 2014 and appointed alternate director to a non-executive director on 1 July 2014. On 15 January 2015 Mr Pacak was appointed as a non-executive director. 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 29 September 2014 Mr Steve Pacak sold 10 000 Naspers N ordinary shares at average market prices ranging between R1 263,00 and R1 268,39 per share. On 18 December 2014 Mr Pacak sold 15 000 Naspers N ordinary shares at a market price of R1 452,73 per share. Furthermore, on 5 January 2015 Mr Pacak sold 10 000 Naspers N ordinary shares at average market prices ranging between R1 540 and R1 545 per share. On 23 March 2015 Mr Pacak sold 15 000 Naspers N ordinary shares at a market price of R1 800 per share. (6) Appointed on 1 July 2014 as ﬁnancial director. (7) Appointed on 16 April 2014 as alternate director and appointed director 15 January 2015. On 25 November 2014 Mr Sorour exercised options in a group share-based incentive plan and received 443 456 Naspers N ordinary shares in settlement of the gain made on exercising the options. Mr Sorour then sold 226 028 Naspers N ordinary shares at average market prices ranging between R1 489,90 and R1 499 per share, on 26 November 2014 Mr Sorour sold 87 746 Naspers N ordinary shares at average market prices ranging between R1 460 and R1 470 per share and on 27 November 2014 sold 129 682 Naspers N ordinary shares at average market prices ranging between R1 446,50 and R1 464,20 per share. Furthermore, on 20 March 2015 Mr Sorour exercised options in a group share-based incentive plan that would have expired in terms of the rules of that plan after the tenth anniversary of the award, which was 28 June 2015. Mr Sorour received 13 351 Naspers N ordinary shares in settlement of the gain made on exercising the options. Mr Sorour then sold 5 217 Naspers N ordinary shares at a market price of R1 805 per share and retained the remaining 8 134 Naspers N ordinary shares. Prof R C C Jafta Chair: Human resources and remuneration committee 26 June 2015 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 113 Social and ethics committee report P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I The purpose of this report is to outline how the (cid:3)(cid:79) the Employment Equity Act, and social and ethics committee has discharged its (cid:3)(cid:79) the Broad-based Black Economic responsibilities as set out in section 72 of the Empowerment Act South African Companies Act No 71 of 2008, as (cid:3)(cid:90) corporate citizenship, including the company’s: amended (“the Act”), and regulation 43 of the (cid:3)(cid:79) promotion of equality, prevention of unfair Companies Regulations 2011 (“the regulation”), discrimination, and reduction of corruption issued in terms of the Act. (cid:3)(cid:79) contribution to development of the Composition communities in which its activities are predominantly conducted or within which The social and ethics committee comprises its products or services are predominantly non-executive and executive directors, and marketed, and certain key members of management. On (cid:3)(cid:79) record of sponsorship, donations and 17 April 2015 Mr Don Eriksson replaced charitable giving Mr Boetie van Zyl on his retirement as chair of (cid:3)(cid:90) environmental, health and public safety the social and ethics committee. This committee matters, including the impact of the met three times during the ﬁnancial year. The company’s activities and of its products company secretary also acts as the secretary of or services the committee. Details of attendance at (cid:3)(cid:90) consumer relationships, including the meetings are provided on page 99. company’s advertising, public relations and Responsibilities compliance with consumer protection laws (cid:3)(cid:90) labour and employment, including: The committee’s responsibilities cover the (cid:3)(cid:79) the company’s standing in terms of the group’s South African operations: MultiChoice and International Labour Organization Protocol Media24. Its mandate, set out in its charter, is (ILO) on decent work and working aligned with the committee’s statutory conditions responsibilities as set out in the regulations. (cid:3)(cid:90) the company’s employment relationships and The committee monitors: its contribution toward the educational (cid:3)(cid:90) social and economic development, including development of its employees the company’s standing in terms of the goals (cid:3)(cid:90) matters within its mandate to be brought to and purposes of: the attention of the board as the occasion (cid:3)(cid:79) the 10 principles set out in the United requires, and Nations Global Compact Principles (cid:3)(cid:90) matters within its mandate to be reported to (cid:3)(cid:79) the Organisation for Economic Co-operation the shareholders. and Development (OECD) recommendations regarding corruption 114 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Social and ethics committee report (continued) Discharge of responsibilities Conclusion The committee reviewed: The committee is of the view that the group (cid:3)(cid:90) employment equity plans for its South African takes its environmental, social and governance businesses responsibilities seriously. Appropriate policies, (cid:3)(cid:90) performance in regard to black economic plans and programmes are in place to contribute empowerment (BEE) as measured against the to social and economic development, good Department of Trade and Industry’s (DTI’s) corporate citizenship, environmental generic broad-based black economic responsibility, fair labour practices and good empowerment (BBBEE) scorecard consumer relations. (cid:3)(cid:90) skills and other development programmes, No substantive non-compliance with aimed at the educational development of legislation and regulation, or non-adherence its employees with codes of best practice, relevant to the areas (cid:3)(cid:90) employment philosophy and how it is within the committee’s mandate, has been founded on promoting equality and brought to its attention. Based on its monitoring preventing unfair discrimination activities to date, the committee has no reason (cid:3)(cid:90) labour practices and policies, and how these to believe that any such non-compliance or compare to the ILO protocol on decent non-adherence has occurred. working conditions The committee recognises that the areas (cid:3)(cid:90) corporate social investment programmes, within its mandate are evolving and that including details of donations and charitable management’s responses too will adapt to giving changes in the environmental, social and (cid:3)(cid:90) the progress of the South African businesses governance agenda. in addressing the principles of the UN Global Compact and OECD, and (cid:3)(cid:90) a risk register that addresses the risks associated with the South African companies in addressing the statutory responsibilities of D G Eriksson the committee, how they are addressed, Chair: Social and ethics committee including combined assurance responses. 26 June 2015 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 115 Report of the audit committee for the year ended 31 March 2015 The audit committee submits this report, as (cid:3)(cid:90) Reviewed external audit reports on the annual required by section 94 of the South African ﬁnancial statements. Companies Act No 71 of 2008 (“the Act”). (cid:3)(cid:90) Reviewed the board-approved internal audit Functions of the audit committee charter. (cid:3)(cid:90) Reviewed and approved the internal and external audit plans. The audit committee has adopted formal terms (cid:3)(cid:90) Reviewed internal audit and risk management of reference, delegated by the board of directors, reports and, where relevant, made as set out in its audit committee charter. recommendations to the board. The audit committee has discharged the (cid:3)(cid:90) Evaluated the effectiveness of risk functions in terms of its charter and ascribed to it management, controls and governance in terms of the Act as follows: processes. (cid:3)(cid:90) Reviewed the interim, provisional, year-end (cid:3)(cid:90) Veriﬁed the independence of the external ﬁnancial statements and integrated annual auditor, nominated PricewaterhouseCoopers report, culminating in a recommendation to Inc. as auditor for 2015 and noted the the board to adopt them. In the course of its appointment of Mr Brendan Deegan as the review, the committee: designated auditor. (cid:3)(cid:79) took appropriate steps to ensure the (cid:3)(cid:90) Approved audit fees and engagement terms ﬁnancial statements were prepared in of the external auditor. accordance with International Financial (cid:3)(cid:90) Determined the nature and extent of Reporting Standards (IFRS) and in the allowable non-audit services and approved manner required by the Act contract terms for non-audit services by the (cid:3)(cid:79) considered and, when appropriate, made external auditor. recommendations on internal ﬁnancial controls (cid:3)(cid:79) dealt with concerns or complaints on accounting policies, internal audit, the Members of the audit committee and attendance at meetings auditing or content of annual ﬁnancial The audit committee consists of the independent statements, and internal ﬁnancial controls, non-executive directors listed below and meets and at least three times per year in accordance with (cid:3)(cid:79) reviewed legal matters that could have a its charter. All members act independently as signiﬁcant impact on the organisation’s described in section 94 of the Act. During the ﬁnancial statements. year under review four meetings were held. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 116 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Report of the audit committee (continued) for the year ended 31 March 2015 Details of attendance are on page 99 of the integrated annual report. Name of committee member Qualiﬁcations Boetie van Zyl(1) BScMechanical (UCT) and PrEng Francine-Ann du Plessis(2) BComTaxHons LLB and CA(SA) Don Eriksson Rachel Jafta(3) Ben van der Ross (1) Retired 17 April 2015. (2) Resigned 29 May 2015. (3) Appointed 9 June 2015. CTA (Wits) and CA(SA) MEcon and PhD (SU) DipLaw (UCT) At the annual general meeting on 29 August Internal audit 2014 Mr Don Eriksson was elected as a member of the audit committee. Previously, Mr Eriksson, The audit committee has oversight of the group’s ﬁnancial statements and reporting process, an independent non-executive director, attended including the system of internal ﬁnancial control. audit committee meetings in an advisory role. On 17 April 2015 Mr Eriksson replaced Mr Boetie van Zyl as chair of the audit committee upon Mr van Zyl’s retirement. Furthermore, with effect from 29 May 2015 Naspers’s non-executive director, Advocate Fran du Plessis, resigned from the committee. On 9 June 2015 Professor Rachel Jafta was appointed to the audit committee to ﬁll the vacancy following Advocate du Plessis’s resignation. 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. The board and the nomination committee Attendance unanimously recommend to shareholders at the The internal and external auditors, in their annual general meeting that the current committee members be re-elected. All committee members served on the committee for the full ﬁnancial year, except for Mr Eriksson as mentioned above. 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. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 117 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Report of the audit committee (continued) for the year ended 31 March 2015 Conﬁdential meetings Audit committee agendas provide for Discharge of responsibilities The committee determined that, during the conﬁdential meetings between committee ﬁnancial year under review, it had discharged its members and the internal and external auditors. legal and other responsibilities as outlined in Independence of the external auditor in the full corporate governance report on http://www.naspers-reports.com/2015/ During the year the audit committee reviewed a corporate-governance.php. The board concurred terms of its remit, details of which are included representation by the external auditor and, after with this assessment. conducting its own review, conﬁrmed the independence of the auditor. Expertise and experience of the ﬁnancial director and the ﬁnance function D G Eriksson Chair: Audit committee As required by the JSE Limited’s stock exchange 26 June 2015 (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. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 118 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 L A I C N A N I F NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 119 Contents P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I Summarised consolidated annual ﬁnancial statements 120 121 122 123 124 125 126 127 Statement of responsibility by the board of directors Report of the independent auditor on the summarised consolidated annual ﬁnancial statements Basis of presentation and accounting policies Segmental review Reconciliation of trading proﬁt to operating proﬁt Summarised consolidated income statement Summarised consolidated statement of comprehensive income Summarised consolidated statement of changes in equity 128 129 130 131 134 134 137 140 Summarised consolidated statement of ﬁnancial position Summarised consolidated statement of cash ﬂows Calculation of headline and core headline earnings Supplementary information Disposal groups classiﬁed as held-for-sale Business combinations and other acquisitions Financial instruments Events after the reporting period Statement of responsibility by the board of directors for the year ended 31 March 2015 The summarised consolidated 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 consolidated annual ﬁnancial statements, separately available on www.naspers.com, in accordance with International Financial Reporting Standards (IFRS) and the Companies Act No 71 of 2008. The summarised consolidated annual ﬁnancial statements include amounts based on judgements and estimates made by management. The information given is comprehensive and presented in a responsible manner. ﬁnancial results was supervised by the ﬁnancial director, Basil Sgourdos, 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 consolidated annual ﬁnancial statements from which the summarised consolidated annual ﬁnancial statements were derived. The directors believe that representations made to the independent auditor during audit were valid and appropriate. PricewaterhouseCoopers Inc.’s audit report is presented on page 121. The directors accept responsibility for the The summarised consolidated annual ﬁnancial preparation, integrity and fair presentation of the summarised consolidated 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 consolidated annual ﬁnancial statements support the viability of the company and the group. The preparation of the 120 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 statements were approved by the board of directors on 26 June 2015 and are signed on its behalf by: J P Bekker Chair 26 June 2015 B van Dijk Chief executive Report of the independent auditor on the summarised consolidated annual ﬁnancial statements The summarised consolidated annual ﬁnancial statements of Naspers Limited, set out on pages 122 to 140 of the integrated annual report, which comprise the summarised consolidated statement of ﬁnancial position as at 31 March 2015, and the summarised consolidated income statement and summarised consolidated statements of comprehensive income, changes in equity and cash ﬂows for the year then ended, and related notes, are derived from the audited consolidated annual ﬁnancial statements of Naspers Limited for the year ended 31 March 2015. We expressed an unmodiﬁed audit opinion on those consolidated annual ﬁnancial statements in our report dated 26 June 2015. Our auditor’s report on the audited consolidated annual ﬁnancial statements contained an Other Matter paragraph: “Other Reports Required by the Companies Act” (refer below). The summarised consolidated annual ﬁnancial statements do not contain all the disclosures required by International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa as applicable to consolidated annual ﬁnancial statements. Reading the summarised consolidated annual ﬁnancial statements, therefore, is not a substitute for reading the audited consolidated annual ﬁnancial statements of Naspers Limited. Directors’ responsibility for the summarised consolidated annual ﬁnancial statements The directors are responsible for the preparation of a summary of the audited consolidated annual ﬁnancial statements in accordance with the JSE Limited’s (JSE’s) requirements for summary ﬁnancial statements, set out in note 2 to the summarised consolidated annual ﬁnancial statements, and the requirements of the Companies Act of South Africa as applicable to summary ﬁnancial statements, and for such internal control as the directors determine is necessary to enable the preparation of summarised consolidated annual ﬁnancial statements that are free from material misstatement, whether due to fraud or error. to the shareholders of Naspers Limited Auditor’s responsibility Our responsibility is to express an opinion on the summarised consolidated annual 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”. Opinion In our opinion, the summarised consolidated annual ﬁnancial statements derived from the audited consolidated annual ﬁnancial statements of Naspers Limited for the year ended 31 March 2015 are consistent, in all material respects, with those consolidated annual ﬁnancial statements, in accordance with the JSE’s requirements for summary ﬁnancial statements, set out in note 2 to the summary consolidated annual ﬁnancial statements, and the requirements of the Companies Act of South Africa as applicable to summary ﬁnancial statements. The “Other Reports Required by the Companies Act” paragraph in our audit report dated 26 June 2015 states that as part of our audit of the consolidated annual ﬁnancial statements for the year ended 31 March 2015, 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 annual ﬁnancial statements. These reports are the responsibility of the respective preparers. The paragraph also states that, based on reading these reports, we have not identiﬁed material inconsistencies between these reports and the audited consolidated annual ﬁnancial statements. The paragraph furthermore states that we have not audited these reports and accordingly do not express an opinion on these reports. The paragraph does not have an effect on the summarised consolidated annual ﬁnancial statements or our opinion thereon. PricewaterhouseCoopers Inc. Director: Brendan Deegan Registered auditor Sunninghill, South Africa 26 June 2015 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 121 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N Basis of presentation and accounting policies for the year ended 31 March 2015 The summarised consolidated annual ﬁnancial accounting pronouncements that are effective statements are prepared in accordance with the for the ﬁnancial year commencing 1 April 2014 requirements of the JSE Limited’s stock exchange had a material impact on the group. (JSE) Listings Requirements and the South African The group’s reportable segments reﬂect those Companies Act No 71 of 2008. The Listings components of the group that are regularly Requirements require summarised consolidated reviewed by the chief executive ofﬁcer and other annual ﬁnancial statements to be prepared in senior executives who make strategic decisions. accordance with the framework concepts, the The group proportionately consolidates its share measurement and recognition requirements of of the results of its associated companies and International Financial Reporting Standards joint ventures in its reportable segments. This is (IFRS), the SAICA Financial Reporting Guides as considered to be more reﬂective of the economic issued by the Accounting Practices Committee value of these investments. and Financial Pronouncements as issued by the Trading proﬁt excludes amortisation of Financial Reporting Standards Council and to also, intangible assets (other than software), as a minimum, contain the information required equity-settled share-based payment expenses by IAS 34 “Interim Financial Reporting”. The relating to transactions to be settled through the accounting policies applied in the preparation of issuance of treasury shares, retention option the consolidated annual ﬁnancial statements expenses and other gains/losses, but includes from which the summarised consolidated the ﬁnance cost on transponder leases. ﬁnancial statements were derived, are in terms Core headline earnings exclude once-off and of IFRS and are consistent with those applied in non-operating items. We believe that it is a the previous consolidated annual ﬁnancial useful measure for shareholders of the group’s statements. The group has adopted all new and sustainable operating performance. However, amended accounting pronouncements issued by this is not a deﬁned term under IFRS and may the International Accounting Standards Board not be comparable with similarly titled measures that are effective for ﬁnancial years commencing reported by other companies. 1 April 2014. None of the new or amended P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 122 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Segmental review for the year ended 31 March 2015 Revenue Year ended 31 March 2015 R’m 78 010 47 911 2 327 27 772 42 419 12 016 1 132 446 (59 354) 73 092 2014 R’m 57 018 34 256 2 407 20 355 36 271 11 692 — 104 981 (42 253) 62 728 EBITDA Year ended 31 March 2015 R’m 15 457 19 832 1 263 (5 638) 10 098 825 (335) 26 045 (20 089) 5 956 2014 R’m 8 540 12 232 1 286 (4 978) 10 370 1 073 (150) 19 833 (13 442) 6 391 Trading proﬁt Year ended 31 March 2015 R’m 13 042 17 987 1 148 (6 093) 8 009 314 (338) 21 027 (17 877) 3 150 2014 R’m 6 638 10 792 1 175 (5 329) 8 520 606 (151) 15 613 (11 707) 3 906 % change 37 40 (3) 36 17 3 — 26 40 17 % change 81 62 (2) (13) (3) (23) (>100) 31 49 (7) % change 96 67 (2) (14) (6) (48) (>100) 35 53 (19) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N Internet – Tencent – Mail.ru – Ecommerce Video entertainment* Print media Corporate services Economic interest Less: Equity-accounted investments Consolidated Internet – Tencent – Mail.ru – Ecommerce Video entertainment* Print media Corporate services Economic interest Less: Equity-accounted investments Consolidated EBITDA refers to earnings before interest, tax, depreciation and amortisation. Internet – Tencent – Mail.ru – Ecommerce Video entertainment* Print media Corporate services Economic interest Less: Equity-accounted investments Consolidated * Previously referred to as the pay-television segment. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 123 Reconciliation of trading proﬁt to operating proﬁt for the year ended 31 March 2015 Trading proﬁt Finance cost on transponder leases Amortisation of other intangible assets Other gains/(losses) – net Retention option expense Equity-settled share-based payment expenses Operating proﬁt 31 March 2015 R’m 31 March 2014 R’m 3 150 376 (751) (688) (149) (343) 1 595 3 906 356 (711) (1 320) (132) (81) 2 018 Note For a reconciliation of operating proﬁt to proﬁt before taxation, refer to the summarised consolidated income statement. P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 124 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Summarised consolidated income statement for the year ended 31 March 2015 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 resulting from remeasurements* net gain resulting from remeasurements* Impairment of equity-accounted investments Dilution gains/(losses) on equity-accounted investments Gains on acquisitions and disposals Proﬁt before taxation Taxation Proﬁt for the year Attributable to: Equity holders of the group Non-controlling interests 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 2015 R’m 73 092 (42 759) (28 050) (688) 1 595 501 (2 752) (573) 16 384 10 772 5 612 (478) 1 499 1 605 17 781 (3 757) 14 024 14 023 1 14 024 11 228 2 782 2 717 7 234 1 792 1 731 3 475 3 407 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 1 418 411 998 403 576 405 171 397 625 395 078 405 469 % change 17 (21) 36 89 115 30 28 28 21 18 17 139 140 * Remeasurements refer to business combination-related gains and losses and disposals of investments. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 125 Summarised consolidated statement of comprehensive income for the year ended 31 March 2015 Proﬁt for the year Total other comprehensive income, net of tax, for the year(1) Translation of foreign operations(2) Net fair value losses Cash ﬂow hedges Share of other comprehensive income and reserves of equity-accounted investments Tax on other comprehensive income 31 March 2015 R’m 31 March 2014 R’m 14 024 (2 456) (3 805) (22) 350 1 094 (73) 6 529 6 727 4 910 (7) (204) 1 951 77 Total comprehensive income for the year 11 568 13 256 Attributable to: Equity holders of the group Non-controlling interests 11 552 16 11 568 12 492 764 13 256 (1) These components of other comprehensive income may subsequently be reclassiﬁed to proﬁt or loss, except for gains of R1,2bn (2014: R552,0m) included in the “Share of other comprehensive income and reserves of equity-accounted investments” as well as losses of R25,0m included in “Net fair value losses” relating to remeasurements on the group’s post-employment beneﬁt plans. (2) The movement on the foreign currency translation reserve for the year relates primarily to the effects of foreign exchange rate ﬂuctuations related to the group’s net investments in its subsidiaries. P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 126 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Summarised consolidated statement of changes in equity for the year ended 31 March 2015 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 interests Total comprehensive income for the year Dividends paid to non-controlling shareholders Movement in non-controlling interest in reserves 31 March 2015 R’m 31 March 2014 R’m 68 205 55 853 1 012 3 670 11 552 819 (1 016) 356 (136) (1 702) 16 (1 447) 2 479 (17) 1 293 12 492 487 (340) — 23 (1 526) 764 (1 142) 318 Balance at the end of the year 83 808 68 205 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 interests 21 019 44 156 6 904 (1 856) (23) 3 218 7 290 3 100 83 808 16 337 31 971 5 082 (1 065) (262) 3 005 11 085 2 052 68 205 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 127 Summarised consolidated statement of ﬁnancial position for the year ended 31 March 2015 P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 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 Assets classiﬁed as held-for-sale Total assets EQUITY AND LIABILITIES Share capital and reserves Share capital and premium Other reserves Retained earnings Non-controlling interests 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 Liabilities classiﬁed as held-for-sale Total equity and liabilities Net asset value per N ordinary share (cents) 128 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 31 March 2015 R’m 31 March 2014 R’m 124 276 17 300 22 956 5 476 73 547 2 769 952 102 1 174 32 767 3 183 1 868 4 834 5 307 449 14 881 30 522 2 245 100 212 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 — 157 043 128 602 80 708 21 019 15 533 44 156 3 100 83 808 46 767 7 486 37 111 306 203 151 1 510 26 468 4 295 5 436 15 721 569 312 26 333 135 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 23 848 — 157 043 19 589 128 602 16 637 Summarised consolidated statement of cash ﬂows for the year ended 31 March 2015 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 classiﬁed as held-for-sale Cash and cash equivalents at the end of the year 31 March 2015 R’m 31 March 2014 R’m 1 671 (6 021) 6 181 1 831 205 12 583 (50) 14 569 3 274 (8 036) 2 114 (2 648) 1 001 14 230 — 12 583 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 129 Calculation of headline and core headline earnings for the year ended 31 March 2015 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 other intangible assets – loss/(proﬁt) on sale of property, plant and equipment and intangible assets – gains on acquisitions and disposals of investments – remeasurement of previously held interest – dilution (gains)/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 interests Headline earnings Adjusted for: – equity-settled share-based payment expenses – reversal of non-recurring deferred tax effects – amortisation of other intangible assets – fair-value adjustments and currency translation differences – retention option expense – business combination losses/(proﬁts) Core headline earnings 31 March 2015 R’m 31 March 2014 R’m 14 023 5 751 (21) 508 176 1 (1 730) (39) (1 499) (4 469) 478 7 428 (115) (79) 7 234 1 525 228 1 667 301 133 140 11 228 — 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 P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 130 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Supplementary information for the year ended 31 March 2015 INTEREST (PAID)/RECEIVED 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 31 March 2015 R’m 31 March 2014 R’m 501 415 86 (2 752) (2 020) (376) (356) (573) (615) 42 606 456 150 (2 466) (1 717) (356) (393) (267) (344) 77 EQUITY-ACCOUNTED RESULTS The group’s equity-accounted associated companies and joint ventures contributed to the consolidated ﬁnancial results as follows: Share of equity-accounted results – sale of assets – disposal of investments – impairment of investments Contribution to headline earnings – amortisation of other intangible assets – equity-settled share-based payment expenses – fair-value adjustments and currency translation differences – reversal of deferred tax assets Contribution to core headline earnings Tencent Mail.ru Abril Other 31 March 2015 R’m 31 March 2014 R’m 16 384 30 (5 612) 1 101 11 903 1 125 1 182 (121) — 14 089 14 588 983 — (1 482) 10 835 (19) (2 929) 532 8 419 897 987 (181) 35 10 157 9 724 911 (110) (368) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 131 Supplementary information (continued) for the year ended 31 March 2015 PROFIT BEFORE TAXATION Apart from the items detailed above, proﬁt before taxation has been determined after taking into account, inter alia, the following: Depreciation of property, plant and equipment Amortisation – other intangible assets – software Other grains/(losses) – net – (loss)/proﬁt on sale of property, plant and equipment and intangible assets – impairment of goodwill and other intangible assets – impairment of property, plant and equipment and other assets – dividends received on investments – insurance proceeds – fair-value adjustment on ﬁnancial instruments Gains on acquisitions and disposals – proﬁt on sale of investments – gains recognised on loss of control transactions – remeasurement of contingent consideration – acquisition-related costs – remeasurement of previously held interest – other 31 March 2015 R’m 31 March 2014 R’m 2 205 976 751 225 (688) (1) (176) (508) 6 21 (30) 1 605 788 936 29 (192) 39 5 1 942 898 711 187 (1 320) 58 (1 461) (112) — — 195 751 44 — 48 (41) 700 — P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 132 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Supplementary information (continued) for the year ended 31 March 2015 GOODWILL Goodwill is subject to an annual impairment assessment. Movements in the group’s goodwill for the year are detailed below: Goodwill – cost – accumulated impairment Opening balance – foreign currency translation effects – acquisitions of subsidiaries and businesses – disposals of subsidiaries and businesses – transferred to assets classiﬁed as held-for-sale – impairment Closing balance – cost – accumulated impairment 31 March 2015 R’m 31 March 2014 R’m 29 405 (3 594) 25 811 (1 350) 1 185 (996) (1 671) (23) 22 956 26 353 (3 397) 24 077 (2 484) 21 593 3 226 2 003 (18) — (993) 25 811 29 405 (3 594) INVESTMENTS AND LOANS The following relates to the group’s investments and loans as at the end of the reporting period: Investments and loans – listed investments – unlisted investments and loans 31 March 2015 R’m 77 268 64 232 13 036 31 March 2014 R’m 50 675 44 194 6 481 COMMITMENTS Commitments relate to amounts that the group has contracted for, but which have not yet been recognised as obligations in the statement of ﬁnancial position. Commitments – capital expenditure – programme and ﬁlm rights – network and other service commitments – transponder leases – operating lease commitments – set-top box commitments 31 March 2015 R’m 31 March 2014 R’m 30 023 498 18 416 1 716 7 248 1 503 642 22 417 740 17 701 1 530 424 1 413 609 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 133 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N Supplementary information (continued) for the year ended 31 March 2015 Disposal groups classiﬁed as held-for-sale Business combinations and other acquisitions During February 2015 the group entered into a Effective January 2015 the group entered into sale agreement to dispose of its online agreements with Schibsted ASA Media Group marketplace subsidiary Ricardo.ch AG (“Ricardo”). (“Schibsted”), Telenor Holdings ASA and The transaction is subject to regulatory approval. Singapore Press Holdings Limited for the At 31 March 2015 the group classiﬁed the net establishment of joint classiﬁeds business assets of Ricardo as held-for-sale. Ricardo forms activities in Brazil, Indonesia, Bangladesh and part of the group’s ecommerce reportable Thailand. The group also acquired Schibsted’s segment. The group also classiﬁed various other Philippine classiﬁeds business. smaller businesses as held-for-sale. The In February 2015 we entered into further aggregate net assets of all disposal groups agreements with Schibsted regarding the classiﬁed as held-for-sale comprised trade and acquisition of Schibsted’s Romanian classiﬁeds other receivables (R107m), property, plant and business and the sale of our Hungarian equipment (R102m), goodwill and other classiﬁeds business. intangible assets (R1,89bn), cash and other Following these transactions, the group held current assets (R71m), deferred taxation assets the following interests in the relevant territories: (R74m), trade and other payables (R101m) and deferred taxation liabilities (R34m). Country Brazil Indonesia Bangladesh Thailand Philippines Romania Naspers interest Nature of investment 50% 64% 49,7% 44,1% 83,9% 100% Joint venture (equity accounted) Subsidiary Associate (equity accounted) Associate (equity accounted) Acquisition of classiﬁeds business Acquisition of classiﬁeds business The total income statement impact of the above transactions was the recognition of an aggregate disposal gain of R1bn in “Gains on acquisitions and disposals” in the income statement. P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 134 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Supplementary information (continued) for the year ended 31 March 2015 Business combinations and other acquisitions (continued) Following the transactions, the group retained control over Silver Indonesia JVCo B.V. (previously Tokobagus Exploitatie B.V.) and accounted for the acquisition of the business contributed jointly by the other shareholders as a business combination. The purchase price allocation: property, plant and equipment R3m; intangible assets R102m; cash R23m; loans and other receivables R314m; loans and other payables R340m; deferred tax liability R25m and the balance of R490m to goodwill. The acquisition of Schibsted’s Philippine and Romanian businesses gave rise to the recognition of intangible assets MapLink, a trafﬁc data and routing service. These other acquisitions gave rise to aggregate goodwill of R170m. During January 2015 the group disposed of its MWEB Business, Optinet Services and Networks divisions in South Africa to Dimension Data for a cash purchase consideration of R368m and, at the same time, entered into a joint Wi-Fi business venture with Dimension Data by contributing its MWEB Wi-Fi division to a joint venture in exchange for a 49% shareholding. An aggregate loss on disposal of R219m has been recognised in the income statement following the transactions. The joint Wi-Fi business venture is accounted for as an investment in a joint of R98m, deferred tax liabilities of R12m and venture. goodwill of R237m. The aggregated deemed and During March 2015 the group acquired the cash purchase consideration amounted to R890m. Various acquisitions were made within the Movile group during the reporting period, most notably relating to the group’s online food- ordering business – iFood. The merger, in November 2014, of the iFood business with Just Eat’s Brazilian subsidiary was accounted for as a business combination and resulted in the group having a 60,2% interest in the merged business shares held in and loans extended by minority shareholders in its subsidiaries MIH Allegro B.V. and FixeAds B.V. under the terms of pre-existing exit agreements. The transaction was settled through the issue of 1 078 178 Naspers N ordinary shares and resulted in an increase in share capital and reserves of R1,86bn, being the aggregate purchase consideration. The excess of the consideration paid over the net asset value acquired, including loans and the settlement of as at 31 March 2015. The total deemed purchase other amounts owing to the minority consideration amounted to R385m. The purchase shareholders, was recognised in the “Existing price allocation: intangible assets R249m; control business combination reserve” in equity deferred tax liability R85m; cash R60m; other net and totalled R1,27bn. The group now has a assets R25m and goodwill R136m. Movile also acquired other smaller subsidiaries including 100% and 93,36% interest in the issued share capital of MIH Allegro B.V. and FixeAds B.V. Apontador, a leading local search service, and respectively. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 135 P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I Supplementary information (continued) for the year ended 31 March 2015 Business combinations and other acquisitions (continued) Also during March 2015 the group disposed of its subsidiary 7Pixel S.r.l. for a purchase (cid:3)(cid:90) The group also invested a further R297m in cash in its joint venture Konga Online Shopping Limited (“Konga”) during October 2014. Following the additional investment, consideration of R678m. The transaction resulted the group held a 40,2% interest in Konga on a in the recognition of a gain on disposal of fully diluted basis. R310m. The main factor contributing to the goodwill recognised in these acquisitions is their market presence. This goodwill is not expected to be deductible for income tax purposes. Total acquisition-related costs of R192m were recorded in “Gains on acquisitions and disposals” in the income statement regarding the above acquisitions. Had the revenues and net results of the subsidiaries and businesses acquired been included from 1 April 2014, it would not have had a signiﬁcant effect on the group’s consolidated revenue and net results. (cid:3)(cid:90) During February 2015 the group acquired a 46,5% interest in Takealot Online (RF) Proprietary Limited (“Takealot”) in exchange for the contribution of its South African etail business, Kalahari.com, and the issue of 612 977 Naspers N ordinary shares. The aggregate purchase consideration in the transaction amounted to R1,2bn and the acquisition gave rise to a deemed disposal gain of R154m, which has been recognised in “Gains on acquisitions and disposals” in the income statement. The group’s interest in Takealot is accounted for as an investment in an associate. The group has a 41,86% interest The following relates to the group’s investments in Takealot on a fully diluted basis. in associated companies and joint ventures: (cid:3)(cid:90) Investments acquired in cash were primarily (cid:3)(cid:90) The group participated in two funding rounds funded through the utilisation of existing of its associate Flipkart Private Limited credit facilities. (“Flipkart”). These funding rounds, during May and August 2014, resulted in additional investments of R555m and R2,67bn, respectively, in cash and in the recognition of a net dilution gain of R1,5bn in the income statement as a result of a decrease in the group’s effective interest. The group now has a 15,83% interest in Flipkart on a fully diluted basis. 136 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Supplementary information (continued) for the year ended 31 March 2015 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 fair-value hierarchy. Assets Available-for-sale investments and loans Foreign exchange contracts Liabilities Foreign exchange contracts Shareholders’ liabilities Earn-out obligations Interest rate swaps Fair-value measurements at 31 March 2015 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 143 — — — — — — 551 19 — — 343 — — — 358 477 — 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 Assets Available-for-sale investments and loans Foreign exchange contracts Interest rate swaps Liabilities Foreign exchange contracts Shareholders’ liabilities Earn-out obligations Interest rate swaps 120 — — — — — — — 210 1 66 — — 332 — — — — 806 263 — There have been no transfers between levels 1, 2 or 3 during the period, nor were there any signiﬁcant changes to the valuation techniques and inputs used to determine fair values. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 137 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N Supplementary information (continued) for the year ended 31 March 2015 Financial instruments (continued) Financial instruments for which fair value is disclosed: 31 March 2015 Financial liabilities Capitalised ﬁnance leases Publicly traded bonds 31 March 2014 Financial liabilities Loans from non-controlling shareholders Capitalised ﬁnance leases Publicly traded bonds Carrying value R’m Fair value R’m 8 248 20 637 8 530 22 590 Carrying value R’m Fair value R’m 480 7 277 17 784 478 7 074 19 706 The fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments at the reporting date. P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 138 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Supplementary information (continued) for the year ended 31 March 2015 Financial instruments (continued) Reconciliation of level 3 ﬁnancial liabilities The following table presents the changes in level 3 instruments for the year ended 31 March 2015: Opening balance Total losses/(gains) recognised in the income statement Additional obligations raised Cancellations/reclassiﬁcations to derivative ﬁnancial instruments Settlements Foreign currency translation effects Closing balance Shareholders’ liabilities R’m Earn-out obligations R’m Total R’m 806 263 1 069 50 — (493) (78) 73 358 (18) 345 — (109) (4) 477 32 345 (493) (187) 69 835 The following table presents the changes in level 3 instruments for the year ended 31 March 2014: Shareholders’ liabilities R’m Earn-out obligations R’m Opening balance Total gains recognised in the income statement Additional obligations raised Settlements Foreign currency translation effects Closing balance 704 (145) 284 (82) 45 806 185 (13) 155 (91) 27 263 Total R’m 889 (158) 439 (173) 72 1 069 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C I A L I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 139 Supplementary information (continued) for the year ended 31 March 2015 Financial instruments (continued) 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 believes 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. Events after the reporting period After the reporting period, the group invested a further US$41m in its joint venture Konga Online Shopping Limited (“Konga”). Following the additional investment, the group continues to exert joint control over Konga with its 50,9% interest on a fully diluted basis. During June 2015 the group entered into an agreement for the sale of its subsidiary, Korbitec Proprietary Limited. The transaction is subject to regulatory approval. P U O R G E C N A M R O F R E P E C N A N R E V O G L A I C N A N I F N O I T A M R O F N I 140 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 N O I T A M R O F N I NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 141 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Administration and corporate information Company secretary ADR programme G Kisbey-Green MultiChoice City 144 Bram Fischer Drive 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. 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 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 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 142 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 www.naspers.com 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 38 633 22 727 3 383 618 1 273 1 501 084 7 469 244 7 271 171 4 472 114 398 489 857 The following shareholders hold 5% and more of the issued share capital of the company: Name Public Investment Corporation of South Africa Public shareholder spread % held Number of shares owned 13,14 55 071 122 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 2015 was 98%, represented by 66 617 shareholders holding 409 981 723 ordinary shares in the company. The non-public shareholders of the company comprising 17 shareholders representing 9 221 747 ordinary shares are analysed as follows: Category Naspers share-based incentive schemes Directors Group companies 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 3 753 122 2 016 665 3 451 960 0,89 0,48 0,82 Shareholders’ diary August November June July August September March NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 143 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Notice of annual general meeting P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Notice is hereby given in terms of the use of holders of certiﬁcated shares and “own Companies Act No 71 of 2008, as amended name” dematerialised shareholders who wish to (“the Act”), that the 101st annual general be represented at the annual general meeting. meeting of Naspers Limited (”the company” or Completion of a form of proxy will not preclude “Naspers”) will be held on the 17th ﬂoor of the such a shareholder from attending and voting Media24 Centre (formerly Naspers Centre), (in preference to that shareholder’s proxy) at the 40 Heerengracht in Cape Town, South Africa on annual general meeting. Friday 28 August 2015 at 11:15. Holders of dematerialised shares, other than Record date, attendance and voting “own name” dematerialised shareholders, who wish to vote at the annual general meeting, must instruct their central securities depository The record date for the meeting (being the date participant (CSDP) or broker accordingly in the used for the purpose of determining which manner and cut-off time stipulated by their CSDP shareholders are entitled to participate in and or broker. vote at the meeting) is 14 August 2015. Holders of dematerialised shares, other than Votes at the annual general meeting will be “own name” dematerialised shareholders, who taken by way of a poll and not on a show wish to attend the annual general meeting in of hands. person, need to arrange the necessary A shareholder entitled to attend and vote at authorisation as soon as possible through their the meeting is entitled to appoint a proxy to CSDP or broker. attend, participate in and vote at the meeting in The form appointing a proxy and the authority the place of the shareholder. A proxy need not (if any) under which it is signed, must reach the be a shareholder of the company. transfer secretaries of the company (Link Market Before any person may attend or participate Services South Africa Proprietary Limited, in a shareholders’ meeting, that person must 13th ﬂoor, Rennie House, 19 Ameshoff Street, present reasonably satisfactory identiﬁcation and Braamfontein 2001 or PO Box 4844, the person presiding at the meeting must be Johannesburg 2000) by no later than 11:15 on reasonably satisﬁed that the right of that person Wednesday 26 August 2015. Should you hold to participate and vote, either as a shareholder, Naspers A ordinary shares, the signed proxy or as a proxy for a shareholder, has been must reach the registered ofﬁce of the company reasonably veriﬁed. Forms of identiﬁcation by no later than 11:15 on Wednesday include valid identity documents, driver’s licences 26 August 2015. A form of proxy is enclosed and passports. with this notice. The form of proxy may also A form of proxy, which includes the relevant be obtained from the registered ofﬁce of instructions for its completion, is attached for the the company. 144 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Notice of annual general meeting (continued) Purpose of meeting The purpose of the meeting is: (i) to present the directors’ report and the audited annual ﬁnancial statements of the company for the immediate preceding ﬁnancial year, an audit committee secure code and instructions to access the electronic communication during the annual general meeting. Shareholders must note that access to the electronic communication will be at the expense of the shareholders who wish to report and the social and ethics committee utilise the facility. report; (ii) to consider and, if approved, to adopt with or without amendment, the resolutions set out below; and (iii) to consider any matters Integrated annual report The integrated annual report of the company for raised by the shareholders of the company, with the year ended 31 March 2015 is available on or without advance notice to the company. Electronic participation www.naspers.com or on request during normal business hours at Naspers’s registered address, 40 Heerengracht, Cape Town 8000 (contact Shareholders entitled to attend and vote at the person Ms Yasmin Abrahams) and in meeting or proxies of such shareholders shall be entitled to participate in the meeting (but not Johannesburg at MultiChoice City, 144 Bram Fischer Drive, Randburg 2194 (contact person vote) by electronic communication. Should a Mrs Toni Lutz). shareholder wish to participate in the meeting by electronic communication, the shareholder concerned should advise the company thereof by no later than 09:00 on Friday 21 August 2015 by submitting via registered mail addressed to the company (for the attention of Mrs Gillian Kisbey-Green) relevant contact details, as well as full details of the shareholder’s title to securities issued by the company and proof of identity, in the form of certiﬁed copies of identity documents and share certiﬁcates (in the case of materialised shares) and (in the case of dematerialised shares) written conﬁrmation from the shareholder’s CSDP, conﬁrming the shareholder’s title to the dematerialised shares. Upon receipt of the required information, the shareholder concerned will be provided with a Ordinary resolutions In order for the ordinary resolutions below to be adopted, the support of a majority of votes exercised by shareholders present or represented by proxy at this meeting is required. Ordinary resolutions numbers 9, 10 and 11 require the support of at least 75% of the total number of votes that may be exercised by the shareholders present or represented by proxy at this meeting. 1. To consider and accept the ﬁnancial statements of the company and the group for the twelve (12) months ended 31 March 2015 and the reports of the directors, the auditor and the audit G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 145 Notice of annual general meeting (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I committee. The summarised form of annual report. The board unanimously the ﬁnancial statements is attached to recommends the approval of the this notice. appointments of the directors in question. A copy of the complete annual ﬁnancial 5. To elect Messrs C L Enenstein, D G Eriksson, statements of the company for the T M F Phaswana and B J van der Ross, who ﬁnancial year ended 31 March 2015 can retire by rotation and, being eligible, offer be obtained from www.naspers.com or themselves for re-election as directors of on request during normal business hours the company. Their abridged curricula vitae at Naspers’s registered address, appear in the integrated annual report. 40 Heerengracht, Cape Town 8000 The board unanimously recommends (contact person Ms Yasmin Abrahams) and that the re-election of directors in terms of in Johannesburg at MultiChoice City, resolution number 5 be approved by the 144 Bram Fischer Drive, Randburg 2194 shareholders of the company. The (contact person Mrs Toni Lutz). appointment of directors in ordinary 2. To conﬁrm and approve payment of resolution number 4 and the re-election of dividends in relation to the N ordinary and directors in ordinary resolution number 5 A ordinary shares of the company as will be conducted as a series of votes, authorised by the board, after having each being for the candidacy of a single applied the solvency and liquidity tests individual to ﬁll a single vacancy, and in contemplated in the Act. each vote to ﬁll a vacancy, each voting 3. To reappoint, on the recommendation of right entitled to be exercised, may be the company’s audit committee, the ﬁrm exercised once. PricewaterhouseCoopers Inc. as 6. To appoint the audit committee members independent registered auditor of the as required in terms of the Act and as company (noting that Mr B Deegan is the recommended by the King Code of individual registered auditor of that ﬁrm Governance for South Africa 2009 (King III) who will undertake the audit) for the (chapter 3). period until the next annual general The board and the nomination meeting of the company. committee are satisﬁed that the 4. To approve the appointments of company’s audit committee members are Mr S J Z Pacak as a non-executive director suitably skilled and experienced and Mr M R Sorour as an executive director independent non-executive directors. with effect from 15 January 2015, as well Collectively they have sufﬁcient as Mr J P Bekker, who was appointed as a qualiﬁcations and experience to fulﬁl their non-executive director and chair with duties, as contemplated in regulation 42 of effect from 17 April 2015. Their abridged the Companies Regulations 2011. They curricula vitae appear in the integrated have a comprehensive understanding of 146 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Notice of annual general meeting (continued) ﬁnancial reporting, internal ﬁnancial company), the unissued shares of the controls, risk management and governance company, on such terms and conditions processes within the company, as well as and to such persons, whether they be International Financial Reporting Standards shareholders or not, as the directors in (IFRS) and other regulations and guidelines their discretion deem ﬁt. applicable to the company. They keep up 9. Subject to a minimum of 75% of the votes to date with developments affecting their of shareholders of the company present in required skills set. person or by proxy at the annual general The board and the nomination meeting and entitled to vote, voting in committee therefore unanimously favour thereof, the directors be authorised recommend Messrs D G Eriksson and and are hereby authorised to issue B J van der Ross, and Prof R C C Jafta for unissued shares of a class of shares election to the audit committee. Their already in issue in the capital of the abridged curricula vitae appear in the company for cash as and when the integrated annual report. The appointment opportunity arises, subject to the of the members of the audit committee requirements of the JSE, including the will be conducted by way of a separate following: vote in respect of each individual. (cid:3)(cid:90) this authority shall not endure beyond 7. To endorse the company’s remuneration the earlier of the next annual general policy, as set out in the remuneration meeting of the company or beyond report contained in the integrated annual ﬁfteen (15) months from the date of report, by way of a non-binding advisory this meeting vote. (cid:3)(cid:90) that a paid press announcement giving 8. To place the authorised but unissued share full details, including the intended use capital of the company under the control of the funds, will be published at the of the directors and to grant, until the time of any issue representing, on a conclusion of the next annual general cumulative basis within one year, meeting of the company, an unconditional 5% or more of the number of shares authority to the directors to allot and issue of that class in issue prior to the issue at their discretion (but subject to the (cid:3)(cid:90) the aggregate issue of any particular provisions of the Act, plus the JSE Limited’s class of shares in any ﬁnancial year stock exchange (JSE) Listings Requirements will not exceed 5% (20 960 174) of and the rules of any other exchange on the issued number of that class of which the shares of the company may be shares (including securities that are quoted or listed from time to time, plus compulsorily convertible into shares of the memorandum of incorporation of the that class) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 147 Notice of annual general meeting (continued) (cid:3)(cid:90) that in determining the price at which shareholders present or represented by an issue of shares will be made in proxy at the annual general meeting. In terms of this authority, the discount at compliance with paragraphs 14.6 and which the shares may be issued, may 14.7 of schedule 14 of the JSE Listings not exceed 10% of the weighted Requirements, a summary of the principal average traded price of the shares in terms of the Naspers restricted stock plan question, as determined over the has been circulated together with this thirty (30) business days prior to the notice of the annual general meeting. The date that the price of the issue is complete trust deed of the Naspers determined, and restricted stock plan will be made (cid:3)(cid:90) that the shares will only be issued to available for inspection by shareholders “public shareholders” as deﬁned in the during normal business hours at the Listings Requirements of the JSE, and company’s registered address, not to related parties. 40 Heerengracht, Cape Town 8000 10. Resolved that, in terms of schedule 14 of (contact person Ms Yasmin Abrahams) and the JSE Listings Requirements, the in Johannesburg at MultiChoice City, company hereby approves the trust deed 144 Bram Fischer Drive, Randburg 2194 of the Naspers restricted stock plan. (contact person Mrs Toni Lutz) for a period The trust deed of the Naspers restricted of not less than fourteen (14) days prior to stock plan will be tabled at the annual the annual general meeting. general meeting and initialled by the 11. To approve amendments to the MIH chairman for identiﬁcation purposes. A Holdings share trust deed, MIH (Mauritius) summary of the principal terms are set out Limited share trust deed and Naspers in the schedule headed summary of the share incentive trust deed (collectively the principal terms of the Naspers restricted “trust deeds”) and the share schemes stock plan annexed to this notice of the envisaged thereby (collectively, the annual general meeting. “schemes”) “resolved that the Pursuant to the JSE Listings amendments to each of the trust deeds Requirements, the company will only be be and are hereby approved in the form entitled to adopt the Naspers restricted of each amended trust deed laid before stock plan if this ordinary resolution the meeting, with effect from the date of number 10 is passed by a majority of this resolution.” 75% or more of the votes cast by all P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 148 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Notice of annual general meeting (continued) Reason and effect of ordinary resolution: requirements. In some instances the Schedule 14 of the JSE Listings continuation of a beneﬁciary’s participation Requirements (“schedule 14”) governs in the relevant scheme may result in tax, share option schemes and share incentive legal or other complications or adverse schemes involving the issue of equity consequences for the group (and hence securities by issuers to, or for the beneﬁt shareholders). In this regard, the proposed of, employees and other persons involved amendments give the group the discretion in the business of the Naspers group (“the in such instances to terminate, with the group”) and which result in a dilution of beneﬁciary’s consent to the extent the shareholding of equity securities required in terms of the trust deeds, a holders in the issuer. This includes the beneﬁciary’s participation in a scheme and issue of equity securities from the issuer’s to accelerate vesting in respect of such authorised but unissued share capital, as beneﬁciary. well as the use of equity securities held as This ordinary resolution number 11 will treasury shares. Schedule 14 is applicable only be effective if passed by a majority of to the schemes and each of the trust 75% or more of the votes cast by all deeds governing the schemes. shareholders present or represented by The trust deeds were originally proxy, excluding any votes exercised in approved in terms of schedule 14. respect of any treasury shares held by the The board has evaluated the trust deeds group and any shares held by share based on recent developments and has schemes of the group. made certain amendments to the trust The amended trust deeds will be deeds that are being placed before the available for inspection by shareholders shareholders of the company, in during normal business hours at Naspers’s compliance with the requirements of registered address, 40 Heerengracht, schedule 14. These amendments will be Cape Town 8000 (contact person effective on and as from the date on Ms Yasmin Abrahams) and in which they are approved by the company’s Johannesburg at 144 Bram Fischer Drive, shareholders. Randburg 2194 (contact person Mrs Toni The group operates in a number of Lutz) for a period of fourteen (14) days jurisdictions and is consequently subject to prior to the date of this annual general numerous tax and legal regulatory meeting. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 149 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Notice of annual general meeting (continued) Special resolutions The special resolutions set out on the following pages require the support of at least 75% of votes exercised by shareholders present or represented by proxy at this meeting in order to be adopted. Special resolutions numbers 1.1 to 1.16 The approval of the remuneration of the non-executive directors for the years ending 31 March 2016 and 31 March 2017, as follows: Board Chair* Member Daily fees when travelling to and attending meetings outside home country Committees Audit committee: Chair Risk committee: Human resources and remuneration committee: Nomination committee: Social and ethics committee: Member Chair Member Chair Member Chair Member Chair Member 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 Other Trustee of group share schemes/other personnel funds 1.13 1.14 Media24 pension fund: 1.15 Chair Trustee 31 March 2016 (proposed) 2,5 times member US$164 000 US$3 500 2,5 times member US$40 400 2,5 times member US$24 000 2,5 times member US$28 400 2,5 times member US$15 300 2,5 times member US$21 000 R44 190 R111 548 R76 365 Note * The chair of Naspers does not receive additional remuneration for attending meetings, or being a member of or chairing any committee of the board. 150 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Notice of annual general meeting (continued) 1.16 The approval of the remuneration of the are established in future (collectively “the non-executive directors for the year Naspers group share-based incentive schemes”) ending 31 March 2017, based on a and participants thereunder (which may include 5% increase year on year. directors, future directors, prescribed ofﬁcers and The reason for and effect of special future prescribed ofﬁcers of the company or of a resolutions numbers 1.1 to 1.16 is to grant related or inter-related company) (participants) the company the authority to pay for the purpose of, or in connection with, the remuneration to its directors for their subscription of any option, or any securities, services as directors. issued or to be issued by the company or a Each of the special resolutions numbers related or inter-related company, or for the 1.1 to 1.16 in respect of each of the purchase of any securities of the company or a proposed 31 March 2016 and the related or inter-related company, pursuant to the proposed 31 March 2017 remuneration, administration and implementation of the will be considered by way of a separate Naspers group share-based incentive schemes, vote. Special resolution number 2 That the board may authorise the company to in each instance on the terms applicable to the Naspers group share-based incentive scheme in question. The reason for and effect of special resolution generally provide any ﬁnancial assistance in the number 2 is to approve generally the provision manner contemplated in and subject to the of ﬁnancial assistance to the potential recipients provisions of section 44 of the Act to a director as set out in the resolution. or prescribed ofﬁcer of the company or of a related or inter-related company, or to a related or inter-related company or corporation, or to a Special resolution number 3 That the company, as authorised by the board, member of a related or inter-related corporation, may generally provide, in terms of and subject pursuant to the authority hereby conferred upon to the requirements of section 45 of the Act, any the board for these purposes. This authority shall direct or indirect ﬁnancial assistance to a related include and also apply to the granting of or inter-related company or corporation, or to a ﬁnancial assistance to the Naspers share member of a related or inter-related corporation, incentive scheme, the other existing group pursuant to the authority hereby conferred upon share-based incentive schemes (details of which the board for these purposes. appear in the integrated annual report), the The reason for and effect of special resolution Naspers restricted stock plan referred to in number 3 is to approve generally the provision ordinary resolution number 10 of this notice and of ﬁnancial assistance to the potential recipients such group share-based incentive schemes that as set out in the resolution. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 151 Notice of annual general meeting (continued) P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Special resolution number 4 That the company or any of its subsidiaries be and are hereby authorised to acquire N 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 prescribed ofﬁcer of the company), in terms of and subject to the Act and in terms of the rules and requirements of the JSE, being that: (cid:3)(cid:90) any such acquisition of N ordinary shares shall general authority, the maximum premium at which such N ordinary shares may be acquired, will not exceed 10% of the weighted average of the market value at which such N ordinary shares are traded on the JSE as determined over the ﬁve (5) business days immediately preceding the date of repurchase of such N ordinary shares by the company or any of its subsidiaries (cid:3)(cid:90) at any point the company may only appoint one agent to effect any repurchase on the be effected through the order book operated company’s behalf by the JSE trading system and done without any prior understanding or arrangement (cid:3)(cid:90) this general authority shall be valid until the company’s next annual general meeting, provided that it shall not extend beyond (cid:3)(cid:90) the company’s sponsor must conﬁrm the adequacy of the company’s working capital for purposes of undertaking the repurchase of N ordinary shares in writing to the JSE before entering the market for the repurchase ﬁfteen (15) months from the date of passing (cid:3)(cid:90) the company remains in compliance with the of this special resolution minimum shareholder spread requirements of (cid:3)(cid:90) an announcement will be published as soon the JSE Listings Requirements, and as the company or any of its subsidiaries have acquired N ordinary shares constituting, on a cumulative basis, 3% of the number of N ordinary shares in issue prior to the acquisition, pursuant to which the aforesaid 3% threshold is reached, and for each 3% in aggregate acquired thereafter, containing full details of such acquisitions (cid:3)(cid:90) acquisitions of N ordinary shares in aggregate (cid:3)(cid:90) the company and/or its subsidiaries may not repurchase any N ordinary shares during a prohibited period as deﬁned by the JSE Listings Requirements, unless a repurchase programme is in place where dates and quantities of shares to be traded during the prohibited period are ﬁxed, and full details of the programme have been submitted to the JSE in writing prior to the commencement of in any one ﬁnancial year may not exceed the prohibited period. 20% of the company’s N ordinary issued share capital as at the date of passing of this special resolution Before the general repurchase is effected, the directors, having considered the effects of the (cid:3)(cid:90) in determining the price at which N ordinary repurchase of the maximum number of shares issued by the company are acquired by N ordinary shares in terms of the foregoing it or any of its subsidiaries in terms of this general authority, will ensure that for a period of 152 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Notice of annual general meeting (continued) twelve (12) months after the date of the notice Material changes of the annual general meeting: (cid:3)(cid:90) the company and the group will be able, in the ordinary course of business, to pay their debts (cid:3)(cid:90) the assets of the company and the group, fairly valued in accordance with IFRS; will Other than the facts and developments reported on in the integrated annual report and annual ﬁnancial statements, there have 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 exceed the liabilities of the company and the and up to the date of this notice. group, and (cid:3)(cid:90) the company and the group’s ordinary share capital, reserves and working capital will be adequate for ordinary business purposes. Additional information in respect of the following The directors have no speciﬁc intention, at present, for the company to repurchase any of its N ordinary shares, but believe that such a general authority should be put in place in case an opportunity presents itself during the year, which is in the best interests of the company appears in the integrated annual report and in and its shareholders. the annual ﬁnancial statements, and is provided in terms of the JSE Listings Requirements for The reason for and effect of special resolution number 4 is to grant the company the authority purposes of the general authority: (cid:3)(cid:90) major shareholders, and (cid:3)(cid:90) share capital of the company. 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 resolution number 4 in terms of the Act and the JSE Listings Requirements for the acquisition by the company, or a subsidiary of the company, of the company’s N ordinary shares. Special resolution number 5 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 and certify that, to the best of their knowledge any director or prescribed ofﬁcer of the and belief, there are no facts that have been omitted that would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that company), in terms of and subject to the Act. The reason for and effect of special resolution number 5 is to grant the company the authority in terms of the Act for the acquisition by the special resolution number 4 contains all relevant company, or a subsidiary of the company, of the information. company’s A ordinary shares. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 153 Notice of annual general meeting (continued) Ordinary resolution 12. 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. 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 24 July 2015 Cape Town P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 154 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Appendix Salient features of the proposed Naspers restricted stock plan (“the scheme”) 1. The scheme, which will be administered 3. Eligible employees would have fulﬁlled the through the Naspers restricted stock plan relevant criteria prior to the date of being trust (“trust”) and is constituted in terms of granted an award in terms of the trust trust deed of the trust (“trust deed”). It is deed. The scheme is not intended to intended to incentivise the performance of replace existing share appreciation rights, and retain critical talent employees of stock option schemes and other share Naspers Limited (“the company”) and trusts of the group which will remain the other members of the company’s group, primary equity programmes for senior such as engineers and those with executives. specialist skill sets at the mid-level of the 4. The scheme provides for the granting, by group as identiﬁed by the board the trustees, at the discretion of the board, (“employees”), and to promote the group’s of a conditional right to delivery of shares continued growth by providing those (“award”) to employees of the company employees with an opportunity to own or members of the group (each an “N” ordinary shares (“shares”) in the “employer company”) on behalf of such company. employer company. Subject to the 2. The criteria for participation in the scheme provisions of the trust deed and the JSE is performance based, with the board of Listings Requirements, the trustees have the company (“board”) having the ﬁnal ﬁnal authority and full power in respect of discretion with regard to criteria and the the administration of the scheme. decision as to who will participate in the 5. The scheme is intended to apply scheme and the quantum of the awards to throughout the group, and for this purpose, be made to the employees by the trustees the trustees shall incur the obligation and of the Naspers restricted stock plan trust costs in respect of settling vested awards, (“trustees”), subject to the ability of the on behalf of the relevant employer Board to delegate such authority to other company, which amounts shall be settled persons as the board deems ﬁt. by the employer company in terms of a recharge policy between, inter alia, the company and the employer companies, G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 155 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I Appendix (continued) subject to the board’s discretion to 8. An employee shall have no rights to determine that such recharge policy shall dividends or voting rights attaching to, not be applied in respect of a speciﬁc arising from or in relation to shares prior to award. All communications and the vesting date, which shall vest in the administration of the scheme shall be trustees prior to such time, with such carried out by the trustees, on behalf of shares being held by the trustees until the the relevant employer companies, subject vesting date. to the ability of the trustees to delegate 9. The maximum number of shares that may such authority to other persons as the be settled by the issue of shares by the trustees deem ﬁt. company or the delivery of treasury shares 6. The awards shall be settled, at the under the scheme shall not exceed the discretion of the board, in whole or in part, maximum number of shares authorised by through the issue of shares to employees, the shareholders of the company to be the purchase of shares on the open available for fresh issue in connection with market and transfer to employees, through all share-based schemes of the group, the transfer of treasury shares to being 40 588 541 shares, as approved at employees, in cash (in lieu of shares) or the annual general meeting of the any combination thereof, where the company held on 27 August 2010 and current intention is to settle the awards conﬁrmed at the annual general meeting through the purchase of shares on the held on 26 August 2011, which number open market, acquired on the date of will increase by virtue of any subdivision grant of the award. of shares or decrease by virtue of any 7. Awards will vest in four equal annual consolidation of shares, as the case may tranches, with the ﬁrst tranche vesting on be, and which maximum may not be the ﬁrst anniversary of the date of grant of amended except with the prior approval the award and the further tranches vesting by ordinary resolution of the equity on each subsequent anniversary of the security holders of the company(1). date of grant of the award. Settlement of 10. Furthermore, the maximum aggregate awards will take place on each of the number of shares at any time allocated in relevant vesting dates of the awards. respect of all unvested awards to any one (1) In order to approve such resolution, a 75% majority of the votes must be cast in favour of such resolution by all equity security holders present or represented by proxy at the annual general meeting. 156 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Appendix (continued) employee shall not exceed 20 000 shares, b. collective retrenchment, retirement, either alone or when aggregated with the the employee ceasing to qualify for number of shares that such employee is participation in the scheme due to entitled to in terms of all share-based “jurisdictional issues”(2) or as a result of schemes of the group, which number will a business disposition by the company increase by virtue of any subdivision of (or an employer company) or transfer shares or decrease by virtue of any by an employer company (or by consolidation of shares, as the case operation of law) of an employee’s may be. employment pursuant to a transaction 11. The scheme is also subject to the ultimate involving a person other than an limit that no more than 200 000 awards employer company – in which cases may be granted by the trustees in any one the vesting of such employee’s award ﬁnancial year and their powers shall be shall be accelerated on a pro rata limited accordingly. basis(3). 12. In the event of termination of an 13. Whenever a vesting date or the date for employee’s employment with an employer the performance of any relevant action or company, all of that employee’s unvested election in terms of scheme (“key date”) awards shall lapse, save in the event of: falls within a prohibited period(4), or a. death, ill health, disability or any other performance of the relevant action or event, matter, fact or circumstances election in terms of this trust deed is approved in the sole discretion of the prohibited in terms of the JSE Listings board (“discretionary event”) – in Requirements, applicable law or regulation which cases all unvested awards will including those relating to price-sensitive be accelerated and vest on the date of or inside information (or comparable termination of employment (subject to provisions) or any policy adopted by the the board’s discretion to vest only a company (including those relating to portion of unvested awards in the case dealings in securities by directors) or is of a discretionary event), and inadvisable or impractical, as determined (2) “Jurisdictional issues” are deﬁned in the trust deed as “tax, legal or other complications or impediments created or existing for an employer company or for the administration and/or implementation of the scheme in a country or jurisdiction in which a participant resides or is employed, the consequences of which are set out in paragraph 32 (of the trust deed).” (3) The accelerated portion to be vested will only be in respect of that portion of the employee’s awards which would have vested on the following vesting tranche, not in relation to all outstanding tranches. (4) Any period during which dealing in shares by an employee is prohibited, whether by virtue of the JSE Listings Requirements or any other exchange on which the shares may from time to time be listed, the internal rules of the company or applicable legislation and/or any period designated for the purposes of the scheme as a “prohibited period” by the board. NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 157 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N Appendix (continued) in the discretion of the board (“relevant 15. In relation to a corporate event event”), the relevant key date shall be contemplated in paragraph 14.a above, extended to a date 14 days immediately the board, having regard to such succeeding the expiration of the relevant professional advice as it considers event, or such increased period as appropriate in the circumstances, must determined by the trustees. make such substitution of and/or 14. The trust deed regulates certain “corporate adjustment to the scheme and the awards events”, including where: granted or to be granted. In relation to a. shares are divided into a greater a corporate event contemplated in number and/or shares are paragraph 14.b or 14.c above, the board, consolidated into a lesser number, having regard to such professional advice b. there is a pro rata cash or in specie as it considers appropriate in the distribution in respect of the shares by circumstances, may, in its discretion, make way of a return of capital or a special such substitution of and/or adjustment dividend, or to the scheme and the awards granted or c. there is a pro rata issue or distribution to be granted. of shares to shareholders by way of a 16. Such adjustments may include (but are not bonus issue or capitalisation of any limited to): account in satisfaction of any dividend, a. substitution of awards; or by way of any other distribution in b. adjusting any of the terms, rights and/ specie shareholders are given in that or beneﬁts attributable to any award, capacity a pro rata right to acquire shares. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 158 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Appendix (continued) including as to the number of shares 18. The board will procure that the auditors of and/or relevant securities of the the company, or other independent company to which the award relates, advisers acceptable to the JSE, conﬁrm to the number of awards, the date(s) of the JSE (copied to the trustees), in writing, vesting, beneﬁts payable on vesting of that any adjustments made, as an award, the beneﬁts attributable to contemplated in paragraph 15 above, are the award and/or manner of in accordance with the provisions of the calculation thereof and/or an deed; that such written conﬁrmation is adjustment to the maximum limits provided to the JSE at the time that any contemplated by paragraphs 9 and/or such adjustment is ﬁnalised; and that any 10 (as applicable), and/or such adjustment is reported on in the c. requiring and/or permitting company’s annual ﬁnancial statements employees to dispose of or cancel all in the year during which the adjustment or any number of their awards, on is made. stipulated terms (including fair 19. The issue of shares as consideration for an compensation). acquisition, the issue of shares for cash 17. In respect of a corporate event speciﬁed in and the issue of shares for a vendor paragraph 14.a above, the adjustment consideration placing will not be regarded should give an employee entitlement as a corporate event requiring adjustment – de minimis variations aside – to the in terms of the trust deed. same proportion of the equity capital 20. Any amendment of the trust deed in of the company as that to which the relation to the matters outlined in employee was previously entitled, and paragraph 14.1 of the JSE Listings shall include a corresponding adjustment Requirements must be approved by to the maximum limits set contemplated shareholders of the company in by paragraphs 9 and/or 10 (as applicable). accordance with the JSE Listings Requirements and the trust deed. G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 159 Appendix (continued) 21. The scheme must be approved by a 23. The trust deed will be available for majority of 75% or more of the votes cast inspection by shareholders during normal by all shareholders present or represented business hours at Naspers’s registered by proxy, excluding any votes exercised in address, 40 Heerengracht, Cape Town respect of any treasury shares held by the 8000 (contact person Ms Yasmin group and any shares held by share Abrahams) and in Johannesburg at schemes of the group. 144 Bram Fischer Drive, Randburg 2194 22. This summary of the salient terms of the (contact person Mrs Toni Lutz) for a period scheme is not exhaustive of all the terms of fourteen (14) days prior to the date of of the scheme, and shareholders should this annual general meeting. review the full trust deed should they require further information in relation to the scheme. P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 160 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 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 101st annual general meeting of shareholders For use by holders of certiﬁcated shares or “own name” dematerialised shareholders at the 101st annual general meeting of shareholders of the company to be held on the 17th ﬂoor of the Media24 Centre (formerly the Naspers Centre), 40 Heerengracht, Cape Town, South Africa on Friday 28 August 2015 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 Media24 Centre (formerly the Naspers Centre), 40 Heerengracht in Cape Town on Friday 28 August 2015 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. 3. Conﬁrmation and approval of payment of dividends Reappointment of PricewaterhouseCoopers Inc. as auditor 4. To conﬁrm the appointment of: 4.1 Mr S J Z Pacak as a non-executive director 4.2 Mr M R Sorour as an executive director 4.3 Mr J P Bekker as a non-executive director and chair 5. To elect the following directors: 5.1 Mr C L Enenstein 5.2 Mr D G Eriksson 5.3 Mr T M F Phaswana 5.4 Mr B J van der Ross NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 161 G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N In favour of Against Abstain Form of proxy (continued) 6. Appointment of the following audit committee members: 6.1 Mr D G Eriksson 6.2 Mr B J van der Ross 6.3 Prof R C C Jafta 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. 11. Approval of the new Naspers restricted stock plan trust deed Approve amendments to the MIH Holdings share trust deed, MIH (Mauritius) Limited share trust deed and Naspers share incentive trust deed 12. 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 2016 1.1 Board – chair 1.2 Board – member 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 P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 162 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 Form of proxy (continued) In favour of Against Abstain Proposed 31 March 2017 1.16 Approval of the remuneration of the non-executive directors Special resolution number 2 Approve generally the provision of ﬁnancial assistance in terms of section 44 of the Act Special resolution number 3 Approve generally the provision of ﬁnancial assistance in terms of section 45 of the Act Special resolution number 4 General authority for the company or its subsidiaries to acquire N ordinary shares in the company Special resolution number 5 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 2015 Assisted (where applicable) G R O U P P E R F O R M A N C E G O V E R N A N C E F I N A N C A L I I N F O R M A T I O N NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 163 Notes to form of proxy P U O R G E C N A M R O F R E P E C N A N R E V O G I L A C N A N I F N O I T A M R O F N I 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. 1.5 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. 1.6 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, 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 that shareholder in the appropriate space provided, failing which the proxy shall not be entitled to vote at the annual general meeting in respect of the shareholder’s votes exercisable at that meeting, provided where the proxy is the chair, failure to so comply will be deemed to authorise the chair to vote in favour of the resolutions. 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 26 August 2015, 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: (cid:3)(cid:90) the death, insanity, or any other legal disability of the person appointing the proxy, or (cid:3)(cid:90) the revocation of the proxy, or (cid:3)(cid:90) 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. 164 NASPERS LIMITED INTEGRATED ANNUAL REPORT 2015 BASTION GRAPHICS www.naspers.com

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