INTEGRATED ANNUAL REPORT
for the year ended 31 March 2016
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2016
Contents
About this report
Scope of this report and assurance
Statement of the board of directors on the integrated annual report
Forward-looking statements
The Naspers group
About Naspers
Our purpose
What we do
How we win
Our business
Key figures for 2016
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
Five-year review
Operational review
Internet
Video entertainment
Media
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5
6
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24
30
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36
40
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44
47
48
48
58
63
Contents (continued)
Non-financial review
Sustainable investment
Focus areas
Contributing to our communities
Transformation in South Africa
Black economic empowerment partners
People
Environment
Corporate governance
Corporate governance
Our board
Remuneration report
Social and ethics committee report
Report of the audit committee
Financial
Summarised consolidated annual financial statements
Shareholder and corporate information
Administration and corporate information
Analysis of shareholders and shareholders’ diary
Notice of annual general meeting
Form of proxy and notes to the form of proxy
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110
142
143
144
153
1
Naspers Limited integrated annual report 2016
About this report
¡ Scope of this report and assurance
The Naspers integrated annual report combines financial and non-financial information for the year 1 April 2015 to
31 March 2016 for a full understanding of our group’s performance. Supported by our internal reporting processes and
in combination with our strategy, targets and integrated thinking, we manage the needs and expectations of our key
stakeholders to create long-term value for our shareholders. Key metrics are monitored in managing our businesses, and
engagement processes are in place to regulate the relationships with our key stakeholders. Their feedback is provided to
leadership to ensure that stakeholder views and concerns inform strategic decisionmaking.
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), requirements of the
South African Companies Act No 71 of 2008, as amended, (Companies Act) and International Financial Reporting
Standards (IFRS). Naspers also took into account the Integrated Reporting Framework issued by the International
Integrated Reporting Council (IIRC) in 2013. This framework follows a principle-based approach and promotes the
concept of the six capitals, which takes into consideration material inputs and resources required to create and sustain
value in the long term. Naspers describes the key components of its value chain (business model) that create and
sustain value for its stakeholders. Naspers’s value creation story takes into account the requirements of Companies Act
regulation 43, as well as King III, which are incorporated into the six capitals as shown below.
This report includes the financial performance of Naspers and its subsidiaries, joint ventures and associates
(the group). The scope of reporting on non-financial performance is indicated in this report. Some South African
subsidiaries publish separate integrated annual reports on www.multichoice.co.za, www.media24.com and
www.novus.holdings.
SOUTH AFRICAN
COMPANIES ACT:
INTEGRATED REPORTING
FRAMEWORK:
CORPORATE
GOVERNANCE:
Social and ethics committee
Our six capitals
King III Code
Good corporate citizenship
Good corporate citizenship
Labour and employment
Labour and employment
Financial
Human
Ethical leadership and corporate
citizenship
Ethical leadership and corporate
citizenship
Board and directors*
Board and directors*
Audit committees*
Audit committees*
Social and relationship
The governance of risk*
The governance of risk*
Social and economic development
Social and economic development
IT governance*
IT governance*
Consumer relationship
Consumer relationship
Environmental health and
public safety
Environmental health and
public safety
* Dealt with in the report of corporate governance.
Products and services
Compliance with laws, codes, rules
Compliance with laws, codes, rules
and standards*
and standards*
Intellectual
Natural
Governing stakeholder relationship
Governing stakeholder relationship
Internal audit*
Internal audit*
Integrated reporting and disclosure
Integrated reporting and disclosure
We have used these icons throughout this report to indicate links between our strategy, material issues and the six capitals.
2
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation About this report (continued)
Group reporting standards are continually being developed to make
disclosure meaningful and measurable for stakeholders. This report excludes
financial and non-financial targets or forward-looking statements other than
as explained below.
Information extracted from the audited Naspers Limited consolidated
annual financial statements for the year ended 31 March 2016 has been
included in this integrated annual report. Refer to page 112 for the
PricewaterhouseCoopers Inc. (PwC) report. South African broad-based
black economic empowerment (BBBEE) information was verified by
Empowerlogic (MultiChoice), and AQRate Verification Services (Media24
and Novus Holdings).
Where relevant in this report, we have adjusted amounts and percentages
for the effects of foreign currency and acquisitions and disposals. Such
adjustments (pro forma financial information) are quoted in brackets after the
equivalent metrics reported under IFRS. Refer to page 136 of the summarised
consolidated financial information for a reconciliation of these metrics with
the equivalent amounts reported under IFRS.
¡ Statement of the board of directors on
the integrated annual report
The audit committee and board reviewed the integrated annual report and
the board approved the report. The summarised consolidated annual financial
statements were prepared in accordance with IFRS and the Companies Act,
while the integrated annual report was prepared using the guidelines of the
GRI G4, recommendations of King III and the IIRC framework.
In our opinion the integrated annual report and financial statements fairly
reflect the financial position of the group at 31 March 2016 and its operations
during this period.
On behalf of the board
Koos Bekker
Chair
Cape Town
24 June 2016
Forward-looking
statements
This report may contain forward-
looking statements as defined in the
United States Private Securities
Litigation Reform Act of 1995. Words
such as “believe”, “anticipate”,
“intend”, “seek”, “will”, “plan”, “could”,
“may”, “endeavour” and similar
expressions are intended to identify
such forward-looking statements, but
are not the exclusive means of
identifying such statements. While
these forward-looking statements
represent our judgements and
expectations, a number of risks,
uncertainties and other important
factors could cause actual
developments and results to differ
materially from our expectations.
These include factors that could
adversely affect our businesses and
financial performance. We are not
under any obligation (and expressly
disclaim any such obligation) to
update or alter our forward-looking
statements as a result of new
information, future events or
otherwise. Investors are cautioned
not to place undue reliance on any
forward-looking statements in this
report.
Links to further related
information within this report
and respective websites
Click to view videos
3
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation The Naspers
group
About Naspers
Our purpose
We build leading companies
that empower people and
enrich communities.
How we win
FOCUS the portfolio around core leadership
positions – develop our platforms.
GROW from these core platforms by leveraging
leadership positions, rolling out our most
successful platforms to new, adjacent business
models and expanding into new geographies.
TRANSFORM our portfolio by making
investments into new, disruptive platforms.
What we do
At heart, we’re entrepreneurs.
We push for performance in
everything we do. We back local
teams and learn from each other.
We’re nimble and seize
opportunities. We do the right thing.
5
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business
Founded in 1915, and now operating in more than
130 countries and markets with long-term growth
potential. Naspers builds leading companies that
empower people and enrich communities. It runs
some of the world’s leading platforms in internet,
video entertainment and media.
Naspers companies connect people to each other and the wider
world, help people improve their daily lives, and entertain audiences
with the best of local and global content. Every day, millions of
people use the products and services of companies in which
Naspers has invested, acquired and built, including OLX, Avito,
letgo, Allegro, eMAG, Flipkart, PayU, MultiChoice, ShowMax, Movile,
SimilarWeb and Media24. Similarly, hundreds of millions of people
have made Tencent’s (www.tencent.com; SEHK 00700) and
Mail.ru’s (www.corp.mail.ru; LSE: MAIL) platforms a part of their
daily lives. Looking at our business as a whole (including our share of
associates and joint ventures), over 68% of our revenues are now
derived from the internet and ecommerce segments, while 77% of
our revenues are sourced from outside South Africa.
Shenzhen, China
Every day, millions of people use
the products and services of
companies in which Naspers
has invested.
6
MOCK UP PICTURENaspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
Naspers has its primary listing on the JSE Limited’s stock exchange
(JSE) (NPN.SJ) in South Africa, where it forms part of the Top 10 index
and where most of the trade in its shares takes place. It also has a
level 1 American Depository Receipt (ADR) programme listing on the
London Stock Exchange (LSE) (NPSN) 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). Naspers’s indirect wholly
owned subsidiary, Myriad International Holdings B.V., also has bonds
listed on the Global Exchange Market of the Irish Stock Exchange (ISE).
Throughout our 100-year history, we have grown by investing in,
acquiring and building leading companies with sustainable competitive
advantages. We believe in the power of local-backed-by-global scale, and
historically our success has been based on spotting consumer trends
with global relevance. We continue to consider new business models to
fuel our next wave of growth, and we look for opportunities to address
societal needs in the markets where we see growth potential, wherever
they are. Where we see a company with promise, we move quickly to
expand and scale it.
Operating in more than
130
countries and markets with
long-term growth potential
7
MOCK UP PICTURENaspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
CLASSIFIEDS
ETAIL
MARKETPLACES
OCS
NASPERS
VENTURES
PAYMENTS
C2C
B2C
Ecommerce
Internet
A GLOBAL PLATFORM OPERATOR
Organogram depicts major brands
8
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
AFRICA
ENRICHING LIVES
DTT
DTH
OTHER
Listed
investments
Video entertainment
Media
9
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
330mbuyers and sellers are connected
every month in 40 countries
around the world
10
We believe we are the best growth partner for founders, startups
and other investors with global ambition. Our operating model is
different from that of many other companies. We invest in, as well as
run, leading companies. We create our own businesses or invest in early
stage companies, we take promising models and quickly grow them to
scale, we evolve and grow companies already at scale, and we hold
investments in listed companies.
¡ Internet
Our internet assets are spread across Eastern and Central Europe,
North America, China, Russia, Latin America, India, Southeast Asia, Africa
and the Middle East. We offer a broad range of services, with sustainable
weight on ecommerce, notably:
■ Ecommerce platforms
– Consumer to consumer (C2C)
• Classifieds (general classifieds platforms and a growing presence
in verticals, especially real estate and auto)
– Business to consumer (B2C)
– Payments
– Naspers Ventures
■ Listed investments
– Tencent (www.tencent.com)
– Mail.ru (www.corp.mail.ru)
Our belief that ecommerce will be the largest segment of the
internet in most global markets in future is supported by its growing
traction, in turn fuelled by the proliferation of smartphones.
Ecommerce
Consumer to consumer
Classifieds: The Classifieds business provides mobile and digital local
marketplaces that connect millions of buyers and sellers every month
in 40 countries around the world. OLX, Avito, dubizzle and letgo have
the number one mobile classifieds apps in more than 20 countries.
OLX continues to build the world’s number one classifieds brand
in high-growth markets. letgo is an innovative mobile-only classifieds
platform. Avito is the leading classifieds business in Russia.
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
A video for this graphic will play on the online version
Business to consumer
B2C remains one of the largest revenue pools with businesses and
models having a strong local bias. We work closely with founders and
CEOs to help them scale and grow their local and regional businesses,
while constantly looking for new disruptive models to emerge.
Payments
PayU is one of the largest payment service platforms in the world,
focusing on markets with long-term growth potential. It has leading
positions across Africa, Central and Eastern Europe, India and Latin
America. PayU’s 250 payment options enable safe transactions in
16 countries for more than 160 000 merchants, allowing them to focus
on reaching the 2.2bn consumers in our markets.
PayU’s broad range of payment solutions is available to customers of
Naspers ecommerce companies as well as third-party platforms. PayU
is a regulated financial institution and holds licences from national banks
and local regulators. Its products include a digital consumer wallet, a
Payment Card Industry Data Security Standard (PCI DSS) certified
payment gateway, anti-fraud systems and an online Visa/MasterCard
acquirer.
We believe that ecommerce will
be the largest segment of the
internet in most global markets.
11
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
Video entertainment:
10m
subscribing households in
South Africa and more than
50 countries across
sub-Saharan Africa
12
Naspers Ventures
Our Naspers Ventures team seeks new opportunities to back
companies with disruptive potential and exceptional founders to help
them scale globally, and also guides a number of Naspers portfolio
companies, such as Movile and SimilarWeb.
With expertise in ecommerce strategy, product, mobile and user
experience (UX), mergers and acquisitions (M&A), and research and
intelligence, the team keeps Naspers one step ahead of emerging
consumer, technology and competitive trends.
¡ Video entertainment
Through MultiChoice South Africa and MultiChoice Africa, our
video-entertainment division brings quality entertainment anytime,
anywhere, on any device to more than 10m subscribing households in
South Africa and in more than 50 countries across sub-Saharan Africa.
Channels and content are sourced from around the world. We also
produce and source local content. Extensive investment in the creation
of content made in Africa, for Africa, showcases and builds local talent in
all stages of content production. As an African business, our investments
have brought social and economic benefits to the communities in which
we operate through access to information, job opportunities,
partnerships and training. We partner with local entrepreneurs,
governments and broadcasters across the continent and tailor our
operations to local needs.
We pioneered pay television (pay TV) in Africa and we have a long
history of introducing cutting-edge technology, such as digital satellite
television, the dual-view decoder, DStv Explora, high-definition channels
and mobile television. We also develop content protection and
access-management technologies for internet, pay TV and mobile
platforms.
Main operations include:
■ MultiChoice: Leading provider of video-entertainment services,
including online and mobile. The brands DStv, GOtv, BoxOffice and
DStv Catch Up serve over 10m households in 50 African countries.
■ GOtv: Leading provider of digital terrestrial television (DTT)
video-entertainment services in Africa, with operations in
11 countries and 124 cities.
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our business (continued)
■ M-Net: General channel provider that sources content from
international content owners and commissions local productions.
■ SuperSport: Premier funder and aggregator of sport content for
broadcasting across the African continent.
■ MWEB: Consumer-focused internet service provider in South
Africa.
■ Irdeto: Global provider of content security management and
delivery for pay-media companies.
■ ShowMax: ShowMax, an online subscription video-on-demand
(SVOD) service supplying an extensive catalogue of TV shows and
movies launched during the year under review.
¡ Media
Since 2000 the print and publishing businesses have been organised
under the umbrella brand, Media24. It is South Africa’s leading publisher,
with more than 40 magazines and 80 newspapers reaching more than
13m monthly unique browsers across its digital platforms. The group
has interests in traditional and digital media, printing, distribution, book
publishing, ecommerce, job classifieds and financial data. Most of its
businesses are market leaders in their sectors and the Media24 group
continues to adapt to the changing media landscape. Media24’s activities
are conducted primarily in South Africa, with some operations in
neighbouring countries and expansion into select territories in the
rest of Africa. Main operations include:
■ Media24: Publisher of newspapers and magazines in South Africa.
■ 24.com: Digital publisher in Africa.
■ Careers24: A job classifieds platform in South Africa.
■ Spree: An online fashion retailer in South Africa.
■ Novus Holdings Limited (listed on the JSE in March 2015,
previously Paarl Media Group): A printing and manufacturing group
in Africa.
■ Book publishing: Operates in the South African trade-publishing
market through Jonathan Ball Publishers and NB Publishers. Via Afrika
is a publisher of educational content in print and digital format.
Media24 is South Africa’s leading
publisher, with more than
40
magazines and 80 newspapers
reaching more that 13m monthly
unique browsers across its digital
platforms
13
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Key figures for 2016
Revenue(1)
2012
2013
2014
2015
2016
Core HEPS
2012
2013
2014
2015
2016
US$’m
15 000
12 000
9 000
6 000
3 000
0
US$
300
250
200
150
100
50
0
Trading profit(1)
2012
2013
2014
2015
2016
Free cash flow
2012
2013
2014
2015
2016
Dividend per share
SA cents
Development spend(1)
600
500
400
300
200
100
0
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
US$’m
2 500
2 000
1 500
1 000
500
0
US$’m
500
400
300
200
100
0
(100)
US$’m
1 000
800
600
400
200
0
Note
(1) Including associates and joint ventures on a proportionate basis.
Information presented for the 2013 and 2012 financial years have been translated to US dollar using the average exchange rates
prevailing over the relevant financial year.
14
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation M O C K U P
P I C T U R E
Operational snapshot
¡ Users and services
The main battleground for all internet service categories remains mobile
internet. In a changing ecommerce landscape, B2C and classifieds are
growing fast, and business models are evolving to match customers’
rising expectations.
OLX is one of the world’s largest classifieds groups. Given the
evolution towards mobile, we committed to a US$100m investment
by acquiring a controlling interest in letgo, a hyperlocal marketplace
optimised specifically for mobile use, allowing us to pursue new markets
such as the US. The consolidation with Wallapop in the US subsequent
to year-end will give letgo increased scale. Avito, the leading classifieds
site in Russia, with more than 35m monthly unique visitors, is the fastest
growing ecommerce site in Russia.
In B2C we have leading market positions in most of the countries in
which we operate, including Poland, Romania, South Africa, India and the
Middle East. We lead the market in online travel transactions in India,
and online food delivery in Brazil.
The consolidated PayU brand gives buyers and sellers efficient and
secure payment solutions.
Tencent is building next-generation online-to-offline (O2O) services
by investing and partnering with leading companies such as JD.com,
58.com, Dianping and Koudai. User engagement is stimulated by
providing local services – from transportation and lifestyle, to restaurant
bookings and movie tickets. Weixin and WeChat have reached 762m
combined monthly active users (www.tencent.com).
Mail.ru continues to build internet and mobile products and services
in line with its ‘communitainment’ strategy, with a focus on its social
network platforms, VKontakte and Odnoklassniki (www.corp.mail.ru).
Avito – fastest growing
ecommerce site in Russia –
35m
monthly unique visitors
Moscow, Russia
15
MOCK UP PICTURENaspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Operational snapshot (continued)
MultiChoice’s TV everywhere strategy offers DStv Premium
customers access to a greater selection of entertainment via their
mobile devices – with more than 800 hours of DStv Catch Up
content and a selection of 45 linear channels to stream from
(including events channels) and over 500 DStv Catch Up titles.
The DStv Catch Up service is now available to DStv Compact
subscribers, providing up to 180 hours of on-demand viewing.
The launch of DStv Now in the prior year enables DStv
Premium customers to watch the latest movies, series, live sport and
DStv Catch Up content on their tablets or smartphones – anywhere,
any time. MultiChoice also introduced an enhanced kids catalogue,
DStv Kids, on the personal video recorder (PVR) and through the
DStv Now app. Since the launch of ShowMax we have created a
recognised brand in the South African market that has already
become part of popular culture.
Our news and content businesses are investing in digital,
particularly mobile delivery, and diversifying their portfolios while
managing costs in a challenging trading environment.
¡ Our people
With over 27 000 (2015: 24 000) (including joint ventures, but
excluding associates) permanent employees in some 130 countries,
we have an opportunity to make a difference to our stakeholders.
As competition for the best talent is increasing in most markets, our
group human resources team is addressing this challenge by focusing
on critical issues:
■ Attracting talent with capabilities that are in short supply globally,
such as mobile technology and ecommerce general management.
■ Ensuring our reward packages remain competitive.
■ Ensuring Naspers remains an attractive place to work, and a
respected partner and investor for entrepreneurs and founders.
■ Supporting skills and capability development.
A greater selection of
entertainment via mobile
devices with more than
800
hours of DStv Catch Up
16
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Operational snapshot (continued)
¡ Socio-economic development
Core to sustainability are our economic activities. Naspers’s products
and services directly affect local societies where we operate. We have
businesses in many communities, all with different challenges. Each business
aims to make a difference to its local community by contributing in line with
its strengths and know-how.
The print and video-entertainment segments have a rich history of
contributing to sport and industry bodies. This continued during the year,
but with a focused approach to elected areas where they want to make
a difference.
SuperSport remains the biggest funder of local sport in Africa.
The MultiChoice Diski Challenge, a countrywide initiative in South Africa,
focused on youth development through a reserve league for the Premier
Soccer League (PSL), has been well received. We will also continue with the
SuperSport Let’s Play initiative. Some US$325m was spent on local sport
and content during the financial year. M-Net’s Magic in Motion Film and TV
Academy provides an extensive internship programme in film-making.
Media24 focuses on education, digital media training and enterprise
development. Its flagship corporate social investment (CSI) project, WeCan24,
offers digital journalism training to high school learners and teachers across
South Africa, enabling them to publish their school and other local news on
the free platform. In its first year WeCan24 reached nearly 350 schools and
trained more than 1 000 learners and 500 teachers. The company also
continues to play a meaningful role in developing independent publishers of
community titles. Over the years, more than 360 000 learners in some 1 000
schools have benefited from Media24’s education in the classroom initiatives,
including publishing supplementary educational material in its flagship weekly
magazines Huisgenoot, YOU and DRUM.
The Allegro charity platform in Poland (charytatywni.allegro.pl) connects
an online community willing to help others with relevant non-governmental
organisations seeking funds.
The eMAG Foundation invests in education in Romania. For example, its
Aiming for the Olympiad project sponsors 14 education training centres to
reach almost 1 900 pupils, while over 10 000 pupils enjoy the facilities of
nine highly equipped laboratories.
The Tencent Charity Foundation in China has made investments in
education programmes, public welfare initiatives and disaster relief efforts,
while Tencent employees devote their spare time to assist the Tencent
Charity Foundation in implementing its initiatives.
eMAG Foundation invests
in education – over
10 000
pupils enjoy facilities of nine
highly equipped laboratories
17
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Cape Town, South Africa
Chair’s report
¡ Overview
We are pleased to present our integrated annual report for the year to
31 March 2016 to stakeholders.
Naspers delivered a solid performance this year, against a volatile
macroeconomic backdrop. Improved competitive positions and further
scale contributed to overall financial performance.
While the internet segment continued to grow rapidly, our video-
entertainment segment has borne the brunt of falling commodity prices,
which in turn drove African currencies down and weakened consumer
sentiment. The video-entertainment segment earns revenues in local currency
while incurring a substantial portion of its costs (content and transponder
capacity) in United States dollar (US dollar). When local currencies weaken,
margins and the financial performance of the business are impacted. By
contrast, our ecommerce businesses tend to incur costs and revenues in the
same currency, and the US dollar strength has much less of an impact.
In our Classifieds business, trading losses in the core portfolio were
markedly reduced and we are making solid progress with our etail businesses.
As announced in April 2016, Naspers has changed its financial reporting
from South African rand (SA rand) to US dollar to better reflect its
multinational nature and cost base. In preparing consolidated numbers the
financial performance of the businesses are consolidated in their respective
functional currencies and then translated to US dollar. Given the weakness in
emerging market currencies over the past year, the year-on-year performance
is affected by this translation.
Core headline earnings, which we consider a reliable indicator of
sustainable earnings, grew 21% to US$1.2bn with consolidated development
spend down 14% to US$708m.
While our international
internet ventures scaled
pretty well, our African
video-entertainment
business bore the brunt of
falling commodity prices.
On a 10-year view, the group has grown segment revenues at a
Koos Bekker
18
compound annual rate of around 19%, and trading profits at 18%. Taking a
longer view, our market capitalisation has grown from R2.3bn (US$622m)
on listing in 1994 to R903bn (US$61bn) at the end of March 2016 and
peaking at a new high of over R1trillion on 31 May 2016.
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation ¡ Overview
We are pleased to present our integrated annual report for the year to
31 March 2016 to stakeholders.
Naspers delivered a solid performance this year, against a volatile
macroeconomic backdrop. Improved competitive positions and further
scale contributed to overall financial performance.
While the internet segment continued to grow rapidly, our video-
entertainment segment has borne the brunt of falling commodity prices,
which in turn drove African currencies down and weakened consumer
sentiment. The video-entertainment segment earns revenues in local currency
while incurring a substantial portion of its costs (content and transponder
capacity) in United States dollar (US dollar). When local currencies weaken,
margins and the financial performance of the business are impacted. By
contrast, our ecommerce businesses tend to incur costs and revenues in the
same currency, and the US dollar strength has much less of an impact.
In our Classifieds business, trading losses in the core portfolio were
markedly reduced and we are making solid progress with our etail businesses.
As announced in April 2016, Naspers has changed its financial reporting
from South African rand (SA rand) to US dollar to better reflect its
multinational nature and cost base. In preparing consolidated numbers the
financial performance of the businesses are consolidated in their respective
functional currencies and then translated to US dollar. Given the weakness in
emerging market currencies over the past year, the year-on-year performance
is affected by this translation.
Core headline earnings, which we consider a reliable indicator of
sustainable earnings, grew 21% to US$1.2bn with consolidated development
spend down 14% to US$708m.
On a 10-year view, the group has grown segment revenues at a
compound annual rate of around 19%, and trading profits at 18%. Taking a
longer view, our market capitalisation has grown from R2.3bn (US$622m)
on listing in 1994 to R903bn (US$61bn) at the end of March 2016 and
peaking at a new high of over R1trillion on 31 May 2016.
Chair’s report (continued)
Revenue(1)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CAGR 19%
US$’m
15 000
12 000
9 000
6 000
3 000
0
Note
(1) Including associates and joint ventures on a proportionate basis.
Information presented above for periods before the 2014 financial year has been translated to US dollar using the average exchange rates
prevailing over the relevant financial year.
Trading profit(1)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CAGR 18%
US$’m
2 500
2 000
1 500
1 000
500
0
Note
(1) Including associates and joint ventures on a proportionate basis.
Information presented above for periods before the 2014 financial year has been translated to US dollar using the average exchange rates
prevailing over the relevant financial year.
19
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chair’s report (continued)
There are now over
3bn
internet users around the
world
20
¡ Governance
As a multinational group our risks differ by jurisdiction, as detailed in the
risk management section of this report. The board conducts the group’s
business with integrity, applying appropriate corporate governance
policies and principles. Where Naspers subsidiaries are governed by
independent boards of directors, these apply suitable governance
practices and their committees are mandated to comply with relevant
requirements. Naspers has a legal compliance programme, detailed on
page 79.
Compliance with applicable listings requirements of the JSE Limited
(JSE), London Stock Exchange (LSE) and Irish Stock Exchange (ISE)
is monitored by the audit and risk committees of the board.
The Naspers board is informed of subsidiary activities via a
disciplined reporting structure. Strategies and business plans for financial
and non-financial elements of operations are regularly reviewed. Part of
management’s remuneration is based on performance against targets
(financial and operational), individual and group objectives, and is linked
to strategic objectives.
We continually evaluate areas where governance can be improved.
This is detailed in our application of King III in the governance
frameworks of Naspers, MultiChoice and Media24 on page 79.
¡ Environment in which we operate
In 2015 a number of global factors affected markets and economies,
including falling oil and commodity prices, and a stronger US dollar.
In January 2016 the International Monetary Fund (IMF) revised its
global growth forecast for this year to 3.4% (from 3.6%). The picture
for emerging-market and developing economies is mixed and forward
visibility is low.
There are now over 3bn internet users around the world. In most
of our markets internet use continues to grow, driven by incremental
broadband and mobile adoption. Mobile is leading the charge as the
most disruptive innovation in the technology/internet space. This,
together with relatively low penetration of ecommerce in our focus
markets, allows our internet businesses to deliver strong growth despite
a volatile macroeconomic backdrop.
Although internet access is creating opportunities for our online
businesses, the video-entertainment segment needs to adapt fast as
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chair’s report (continued)
media consumption shifts online. Technology in PVRs is making
on-demand television a reality and, in sub-Saharan Africa, the advent
of DTT TV networks is addressing a mass market that cannot afford
satellite video entertainment. ShowMax recorded a good start in South
Africa with a deeper and more customised content offering than
competitors and with a focus on service delivery.
Each country and business in our portfolio has its own uncertainties.
We believe operating in multiple countries across several businesses
should diminish aggregate risk as volatility and short-term shocks come
and go, while current cycles will reverse in time.
¡ Managing sustainability
Naspers invests in creating useful products and services for customers
that, in time, will yield a sustainable return to investors and benefit our
stakeholders. We are equally mindful of our obligations as a responsible
corporate citizen to respect the natural environment and limit our
impact as far as possible.
In addition to a structured approach to our sustainability strategy, as
summarised below, our governance model and ethical principles are
communicated throughout the group.
Flowing from our business activities, we invest in countries where we
operate. We create business for local suppliers, employ people and pay
taxes and levies to governments, which in turn benefit communities.
Our products and services directly affect local societies. Since
each community has its own challenges, each business makes a
difference to this community by contributing in line with its strengths
and know-how.
Our people are a priority. There is a global shortage of talent and, in
key disciplines, we focus on attracting, developing and retaining the best
people.
The board determines strategy and is ultimately responsible for
overseeing group performance. Management teams across our
businesses implement these strategies, guided by the group’s code
of business ethics and conduct.
The board is responsible for the integrity of our integrated reporting.
It has tasked the audit and risk committees to oversee sustainability
issues and to ensure information is reliable.
We focus on attracting,
developing and retaining
the best people.
21
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chair’s report (continued)
The board recommends that
the annual gross dividend be
increased 11% to
SA cents520
In our social interactions, we
focus on challenges such as
education, skills development
and environmental sustainability.
22
In our social interactions, we focus on challenges such as education,
skills development and environmental sustainability. Our aim is to
improve the living conditions of our employees, their families and the
communities in which we operate, ultimately balancing profit, people
and planet.
For more details, refer to the governance and sustainability section
on our corporate website, www.naspers.com.
¡ Dividend
The board recommends that the annual gross dividend be increased
11% to 520 SA cents (previously 470 SA cents) per listed N ordinary
share, and 104 SA cents (previously 94 SA cents) per unlisted
A ordinary share. If confirmed by shareholders at the annual
general meeting on Friday 26 August 2016, dividends will be payable
to shareholders recorded in the books on Friday 16 September 2016.
It will be paid on Monday 19 September 2016. The last date to trade
cum dividend will be Tuesday 13 September 2016 (shares therefore
to trade ex dividend from Wednesday 14 September 2016). Share
certificates may not be dematerialised or rematerialised between
Wednesday 14 September 2016 and Friday 16 September 2016,
both dates inclusive.
The dividend will be declared from income reserves. It will be subject
to a dividend tax rate of 15%, yielding a net dividend of 442 SA cents
per listed N ordinary share and 88.4 SA cents per unlisted A ordinary
share to those shareholders not exempt from paying dividend tax. Such
dividend tax will amount to 78 SA cents per listed N ordinary share
and 15.6 SA cents per unlisted A ordinary share. The issued ordinary
share capital as at 24 June 2016 was 437 920 115 N ordinary shares
and 907 128 A ordinary shares. The company’s income tax reference
number is 9550138714.
¡ Directors
During the financial year several changes to the board occurred.
As reported last year, Ton Vosloo as non-executive chair, as well as
independent non-executive directors Boetie van Zyl and Yuanhe Ma,
retired from the board on 17 April 2015. We have expressed our
gratitude before, but wish to reiterate that Ton Vosloo was an
outstanding chair, and Boetie van Zyl and Yuanhe Ma exceptional
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chair’s report (continued)
directors. In addition, I rejoined the board as non-executive chair.
Non-executive director, Francine-Ann du Plessis, also resigned from
the board with effect from 29 May 2015.
On 1 April 2016, subsequent to year-end, Guijin Liu and
Hendrik du Toit were appointed as independent non-executive
directors. Guijin is highly experienced in international affairs. He is
Dean of the China-Africa International Business School, Zhejiang
Normal University and a past Chinese ambassador to South Africa.
Hendrik is the chief executive of Investec Asset Management and a
director of Investec plc and Investec Ltd.
In terms of the company’s memorandum of incorporation one third
of non-executive directors retire annually and reappointment is not
automatic. Nolo Letele, Roberto Oliveira de Lima, Cobus Stofberg and
Debra Meyer retire by rotation at the annual general meeting but, being
eligible, offer themselves for re-election.
At the annual general meeting shareholders will be asked to confirm
these appointments and to consider the re-election of these directors
(see notice on page 146).
Members of the audit committee are Don Eriksson, Ben van der
Ross and Rachel Jafta. The board recommends shareholders reappoint
them as audit committee members.
In compliance with the Companies Act, shareholders will be asked
to consider these proposals at the annual general meeting. Directors’
curricula vitae are on pages 84 to 87.
Our board members provided most valuable guidance and support.
We appreciate the leadership of our top executives under Bob van Dijk,
as well as the commitment of our partners and people around the
world. Thank you for the initiative you showed.
Koos Bekker
Chair
24 June 2016
23
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Bengaluru, India
Chief executive’s report
¡ Overview
The internet has given rise to a new age where power is shifting from large
vertically integrated corporations towards ‘platforms’. Platforms come in
different shapes and forms, but the most effective have common
characteristics. They pool fragmented customers. This can create major
network effects: the more customers on a platform, the more valuable it
becomes. The most powerful platforms are built on high-frequency needs.
Platforms tend to have attractive economics, particularly if one owns
the customer interface.
From an obsession to understand consumer behaviour, a key
characteristic of our group, we build technology platforms with global
potential. Our aim is to anticipate changes in consumer behaviour.
Our platforms – currently in ecommerce, online services, video
entertainment and media – matter in the lives of our customers.
Naspers has solid platforms in its global portfolio. For example,
video entertainment and the Classifieds model address lasting consumer
needs, are sustainably monetisable, and have extended into other markets.
As the world around us is changing, we are continuously adapting our
approach to shifting realities. We evolve by staying true to our roots –
being nimble and creating winning platforms in close partnership with
entrepreneurs.
¡ Performance in context
On an economic-interest basis, in local currency terms, excluding M&A,
revenue increased 22% to US$12.2bn, driven by strong growth from
Tencent (www.tencent.com) and ecommerce on the back of revenue
growth in classifieds, travel and etail. Consolidated revenues were
US$5.9bn, down 10% year on year, primarily on the impact of currency
translation. Excluding the impact of currency translation, as well as
acquisitions and disposals, consolidated revenues improved 11%.
Our teams have
delivered meaningful
progress in building the
global customer
platforms of the future.
Bob van Dijk
Click to view video
24
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chief executive’s report (continued)
Continuing the trend of recent years, over 67% of total segment
revenues came from the internet and ecommerce operations. Only
around 23% of revenue is now sourced in South Africa.
Some US$961m was invested in developing our online services, new
classifieds markets (primarily the US) via our mobile app-only letgo
platform, ShowMax and consumer-facing offerings in PayU. Development
spend declined in established classifieds, video-entertainment and etail
platforms as these increase monetisation and scale.
Trading profit grew by 18% to US$2.2bn, again driven by strong
growth from Tencent. Trading profit growth was boosted by lower losses
in classifieds, consolidated etail and payments, offset by the 17% decline in
video-entertainment profitability due to US dollar costs, local currency
revenues and a decline in sub-Saharan DTH customers outside
South Africa.
We raised capital of US$2.5bn in December 2015 before transaction
costs, with almost half used to acquire a controlling stake in Avito, a
leading classifieds business in Russia. Furthermore, a portion of the
proceeds from the equity raise was used to repay borrowings. As a
result, consolidated net gearing dropped to 12%.
Key developments in our business units are summarised below
(including associates and joint ventures on a proportionate basis):
■ Internet: This segment, which includes our ecommerce activities
and listed investments, benefited from good growth in Tencent and
ecommerce and delivered revenues of US$8.2bn, an increase of
18% (31%) year on year. Trading profit was up 38% for the same period
to US$1.6bn. Driven by strong mobile engagement, Tencent again
performed well, with non-GAAP profit attributable to shareholders
growing by 31%.
■ Ecommerce: This segment recorded another successful year.
Given the different stages of maturity and revenue structure of our
ecommerce models, our etail and marketplaces activities currently
Currency movements relative
to US dollar:
31 March 2015 to
31 March 2016
% change
Euro
South African rand
Russian rouble
Polish zloty
Brazilian real
Indian rupee
Nigerian naira
Angolan kwanza
6
(22)
(15)
2
(13)
(6)
0
(49)
25
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chief executive’s report (continued)
Our DTT network is substantially
in place, with GOtv now operating
in 11 countries and
124
cities, serving over 2.2m
customers
26
generate the bulk of segment revenues. Etail delivered solid revenue
growth of 12% (27%) despite aggressive competition in many of our
target markets, with notable contributions from Flipkart (India), Souq
(Middle East and North Africa) and eMAG (Central and Eastern Europe).
Marketplaces recorded improved margins with limited revenue growth.
The ecommerce business model relies on the continued growth and
success of existing businesses while identifying and successfully integrating
new investments. Accordingly, we continue investing to fuel long-term
growth as reflected in acquiring a controlling stake in Avito in December
2015 for an additional investment of US$1.2bn. We also committed to
invest US$100m for a controlling interest in letgo, a more contemporary
mobile app-only product that allows us to pursue new markets, such as
the US where incumbents have not adequately addressed the transition
to mobile.
■ Video entertainment: This segment generated revenues of US$3.4bn,
down 11% (up 10%) year on year. Apart from the currency devaluations
noted earlier, performance was hampered by US dollar-denominated
costs and increased competition for content. The total customer base
was 10.4m at year-end, net growth of 185 000.
Given the severity of currency devaluations and resulting impact on
our businesses, we implemented significant subscription price increases
in most markets in sub-Saharan Africa at a time when consumers find
their real disposable income decreasing. This resulted in customer losses
in many of our markets and a loss of 288 000 DTH customers. Our
South African base was more resilient, adding over 325 000 DTH
customers. Macroeconomic headwinds are likely to prevail for a while
longer and, in the year ahead, we will absorb the full impact of currency
and customer declines, which will continue to depress financial
performance in the near term. Our strategy is to focus on the mid and
lower segments of the market where there is still room for growth.
While early indications are encouraging after content changes and a
commitment to maintain pricing in most sub-Saharan markets, current
volatility remains a significant risk.
Consolidated development spend for the segment declined year on
year as DTT services scaled. ShowMax and DTT in sub-Saharan Africa
outside South Africa accounted for the bulk of development spend.
Our DTT network is substantially in place, with GOtv now operating
in 11 countries and 124 cities, serving over 2.2m customers. Given the
uncertainty about analogue switchoffs (the migration of terrestrial
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Chief executive’s report (continued)
television broadcasting from analogue to digital format), we have chosen
to focus on content, service delivery, decoder sales and retention.
■ Media: Sectoral and macroeconomic headwinds affected Media24’s
topline growth with revenues declining 20% (2%). Year-on-year trading
profit improved marginally to US$29m despite continued investment in
new initiatives. These delivered satisfactory topline growth of 8%.
¡ Significant acquisitions
The group invested US$1.5bn during the year on acquisitions in the
ecommerce sector and also disposed of some businesses. Key transactions
included:
■ Acquisitions
– In December 2015 an additional 49% interest was acquired in the
group’s associate Avito AB (Avito), the leading online classifieds
platform in Russia. The total cash purchase consideration was
US$1.23bn. The additional investment resulted in the group obtaining
control of Avito and holding a 67.5% interest in Avito on a fully diluted
basis directly following the investment.
– In May 2015 US$10m was invested in Ambatana Holdings B.V.
(Ambatana), an entity operating a hyperlocal classifieds marketplace
app under the letgo brand. A further US$50m was invested in
Ambatana during September 2015, resulting in the group holding
a 67.5% interest on a fully diluted basis at the date of the additional
investment.
– During April 2015 we invested US$41m in joint venture Konga
In December 2015 an additional
49%
interest was acquired in the
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.
group’s associate Avito AB (Avito),
the leading online classifieds
– During May 2015 we invested US$10m in joint venture Souq Group
Limited (Souq) as part of a funding round. Souq undertook another
funding round during July 2015 in which Naspers did not participate.
We now hold a 36.4% interest in Souq on a fully diluted basis.
– US$20m was invested in available-for-sale investment Avenida Inc.
(Avenida) during July 2015. The transaction resulted in Avenida
becoming an associate and the group now holds a 23.4% interest
in Avenida on a fully diluted basis.
platform in Russia
27
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation
Chief executive’s report (continued)
During December 2015
US$2.5bn
capital was raised
28
– US$54m was invested in associate Takealot Online (RF) Proprietary
Limited (Takealot) during August 2015 as part of a funding round.
The group holds a 42.4% interest in Takealot on a fully diluted basis.
■ Disposals
– During September 2015 we disposed of our interest in subsidiary
Ricardo.ch AG for US$248m following approval of the transaction
by regulatory authorities.
– The group disposed of its interest in subsidiary Korbitec Proprietary
Limited during November 2015 for US$33m following the receipt
of regulatory approval.
– During March 2016 we disposed of our interest in subsidiary
PayProp Group Services Proprietary Limited for US$10m.
■ Capital raising
– During December 2015, 18 167 848 new N ordinary shares were
placed with qualifying institutional investors at a price of R1 975 per
share, raising gross proceeds of approximately US$2.5bn before
transaction costs. The placing represented approximately 4.3% of
Naspers’s issued N ordinary share capital prior to the share issuance.
– In July 2015 a 10-year US$1.2bn bond was issued by subsidiary
Myriad International Holdings B.V. The bond matures in July 2025
and carries a fixed interest rate of 5.5% per annum.
¡ Investor engagement
We are committed to provide timely, transparent and relevant information,
which helps the investing public understand our business, governance,
financial performance and prospects in a competitive environment. We
disseminate information through a broad range of channels (including
stock exchange news services (SENS), 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.
Following the release of interim and full-year results, we conducted
roadshows in South Africa, the United Kingdom and the United States of
America. We also attended a number of investor conferences in these
regions, as well as in Asia. During the year we had more than 500 direct
interactions with equity and debt investors, involving 17 of our executives,
through a combination of meetings and teleconference calls.
¡ Investing for growth
Over the past century Naspers has evolved from a single-country
newspaper group and early investor in mobile telephony in South Africa
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation
Chief executive’s report (continued)
to a multinational video-entertainment leader and a prominent global
consumer internet and ecommerce group.
Our ecommerce business has scaled rapidly on the back of substantial
investment. We now have one of the largest ecommerce audiences in the
world and we are gaining share from our competitors, most importantly
on mobile devices. This means we are becoming a largely mobile-services
company. Classifieds, etail and online payments are transforming
ecommerce and we are investing to meet this demand. Similarly, in our
video-entertainment business, we have invested to accommodate platform
shifts from linear television services to connected video experiences.
We are playing to win by investing in proven business models that can
become strong cash generators if executed well, such as classifieds, etail
and DTT. In addition, we invest in new opportunities, such as online travel
and mobile-only services, including letgo and other value-added services.
We believe this strategy remains sound – our aim is to deliver value to
our shareholders over the medium to long term and to being an asset
to the communities in which we operate. In 2015 we established Naspers
Ventures, which combines funding with the deep, global operating
experience of the Naspers group, to provide a unique resource to
identified entrepreneurs to build their businesses around the world.
¡ People
Change is fundamental and rapid in our operating industries, and an
important part of our competitive advantage lies in the quality of our
people. We invest to create an attractive environment for all our people:
entrepreneurs, engineers, leaders and professionals at all levels. We provide
our people with a meaningful purpose, and the opportunity to learn and
grow in an environment based on solid values, underpinned by a
competitive reward strategy.
Around the world, our people are proving their commitment,
innovation and agility. The support and guidance of the Naspers board,
as well as the boards of our subsidiaries, associates and joint ventures,
is integral to our success. Your contributions are deeply valued.
Bob van Dijk
Chief executive
24 June 2016
We provide our people with
a meaningful purpose and
opportunity to learn.
29
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our strategy
¡ What we do: Building winning platforms
The internet has given rise to a new age where power is shifting from large vertically integrated corporations
towards ‘platforms’. Platforms come in different shapes and forms, but the most effective have common
characteristics. They pool fragmented customers. This can create major network effects: the more customers on a
platform, the more valuable it becomes. The most powerful platforms are built on high-frequency needs. Platforms
tend to have attractive economics, particularly if one owns the customer interface.
To achieve our goal of
building winning platforms,
we aim to:
Focus on sizeable economies with
strong internet user growth.
Despite our historical focus on
non-Western economies, letgo
illustrates that we will also invest in
more mature markets like the US
if we identify potentially disruptive
platforms.
Continue to place selective,
strategic bets on emerging
platforms that could represent
the next wave of growth for the
company.
30
l}
|2
3}
|4
5}
Be a focused operator of
platforms in which we
believe, maintaining
above-market growth
rates while improving
profitability and growing
in adjacent markets.
Rapidly expand when we
find a model with promise
(ie classifieds).
Be the most desired partner
for successful entrepreneurs in
high-growth markets.
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Our strategy (continued)
As the world around us changes, we continually adapt our approach and balance this with staying true to our
roots – being nimble and creating winning platforms in close partnership with entrepreneurs.
For a fuller understanding of the group in context, key indicators in our major operating regions are summarised
below:
Selected statistics of key focus markets
Population
Internet
penetration
GDP per
capita
Ecommerce size
(B2C)
Ecommerce
growth
2015
calendar year
‘m
2015
calendar year
%
2015
calendar year
US$’000
2015
calendar year
US$’bn
2015 – 2018
calendar year
%
World
7 351
Largest global economies with significant Naspers presence
China
India
Indonesia
Brazil
Russia
South Africa
Poland
Ukraine
Romania
Nigeria
Total share (%)
1 361
1 274
256
205
143
53
38
45
20
180
49
42
53
18
27
57
69
52
67
37
52
38
10.1
3 036
8.3
1.8
3.6
9.8
8.8
7.1
13.5
2.1
8.8
2.8
912
47
16
108
63
13
29
3
3
1
40
18
32
28
32
14
30
41
17
19
16
16
Classifieds
B2C
Payments
Other
Y = Naspers presence
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Data sources: IDC Internet Database (Q2 2015 version), Euromonitor (2016), International Monetary Fund (2015), and Internet Live
stats for internet penetration (2016).
¡ Looking ahead
We focus on internet and video entertainment to create value over the medium to longer term for our
shareholders. 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.
In the year ahead, the focus is on continuing to deliver topline growth while scaling the more established
ecommerce businesses. Naspers will invest in long-term growth opportunities such as ShowMax, letgo and ibibo,
and seek out further new promising models. In video entertainment, the loss of DTH subscribers and falling
currencies in sub-Saharan Africa will have a significant impact on earnings and cash flows. It could take some
time before the plans implemented to reinvigorate growth and cut costs have a positive impact.
31
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation How we manage risk
Risk management is integral to the daily operations of
our businesses. As a multinational group with activities
in over 130 countries, Naspers is 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
Naspers identifies and manages risk in line with international best
corporate governance practice, applying the relevant rules and
regulations.
Management and the board run a process of identifying major risks
in each of the managed business units, using topdown and bottomup
approaches. These are reported to the risk committees of the
respective boards, together with tolerance levels and mitigation plans.
We assess the level of risk we wish to bear, given potential returns.
Major risks from a group perspective are summarised on page 34.
The diversified nature of the group helps spread risk, particularly in
terms of global political and economic instability, market development,
regulatory matters and currency fluctuations. Identifying risk and
developing plans to manage risks are part of each unit’s business plan.
These are assessed biannually by the risk committee and by the board.
32
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation How we manage risk (continued)
¡ Risk policy
The group’s risk profile is based on a formal and planned approach to
risk management. Risk identification, management and reporting are
embedded in business activities and processes.
The group’s risk policy applies to all operations where Naspers has
over 50% ownership and management control. The policy applies to
risks the group faces in executing its strategy, operations, reporting and
compliance activities and is reviewed annually. Some group companies
have specific risk management functions whose output is reviewed by
the Naspers risk committee.
Risk management supports, advises on, formulates, oversees and
manages the risk management system and monitors the group’s risk
profile, ensuring major risks are identified and reported at the
appropriate level in the group.
¡ 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
ERM(1) framework, and ISACA’s Risk IT(2) framework for information
technology (IT).
(1) Committee of Sponsoring Organisations of Treadway Commission: 2004 Enterprise
Risk Management – Integrated Framework.
(2) ISACA: 2009 Risk IT framework (based on COBIT).
The group’s risk profile is based
on a formal and planned approval
to risk management.
33
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation How we manage risk (continued)
d
R e p o rt e
➙
onito
M
r
e
d
Strategic and
operational
Regulatory and
compliance
➙
➙
Risk
I
d
e
n
t
i
f
i
e
d
Human
capital
Health and safety
➙
Documen t e d
d
e
g
a
n
Ma
Financial and
reporting
➙
¡ Major risks
We follow a process of identifying major risks in each of our managed business units, which includes both topdown
and bottomup 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:
The group operates in fiercely competitive
markets. While new technology threatens the
future of existing businesses, in ecommerce
we also face sector specialists, traditional
retailers and new mobile disruptors. We may
be caught off guard by new technologies or
startups, or by current competitors.
How we manage the issue
Significant resources are devoted to analysing competitors,
emerging trends in technology and consumer demand, and
developing new products and services. We plan to invest in
earlier-stage companies to identify opportunities for our
markets sooner and stay ahead of competitors.
Our risks
Competition
and technical
innovations
34
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation
How we manage risk (continued)
Our risks
How we manage the issue
Key management The group relies on individuals with detailed
knowledge of our businesses and markets.
Succession plans are prepared annually, with specific focus on
recruiting and retaining entrepreneurs, management and
engineers.
Global and
political market
developments
The Naspers group operates globally in
markets that are sensitive to political,
economic and other events that may
influence its activities.
Although we can hardly change such developments, we
monitor them as best we can and adjust quickly.
Legislation and
regulation
Currency
fluctuations and
repatriation of
cash
Funding
Technical
failures and
cyber security
The industries we operate in are subject to
increasing regulation. The video-entertainment
businesses throughout Africa face growing
regulatory scrutiny and changes in regulation
are expected, which, if not adequately
mitigated, could have a significant financial
impact. Failure or delays in obtaining or
renewing approvals could also affect the
business. Furthermore, tax authorities around
the world are increasingly questioning the
structures and transfer pricing of international
groups. In some of the countries we operate
in, tax regulation is opaque.
The video-entertainment segment has
significant input costs in foreign currency, but
bills in local currency. It also has cash trapped
in countries such as Angola and Nigeria. The
weakening of the SA rand and sub-Saharan
currencies over the past year has had a
profound impact on customer growth and
cash flows from this business.
While our balance sheet is strong with
gearing at 12%, the material change in the
financial outlook of the video-entertainment
business has an impact on group funding, debt
capacity and ratings.
The internet is subject to numerous risks,
including technical failure, attacks, viruses and
piracy. Globally, cyber risks and related crimes
are a growing concern.
We are strengthening our regulatory and tax teams, increasing
engagement with regulators, improving our relationships and
services to our customers, and strengthening our corporate
and public communications. We always strive to comply with
applicable laws and regulations, and cooperate with regulators
in countries where we operate.
In 2015 it became clearer that price increases and our hedging
policy would not be enough to offset this risk if current
conditions persist long term. We therefore need to boost
growth and cut costs, including renegotiating content purchase
agreements.
We have a broad range of options to fund expansion and a
fully funded business plan. Furthermore, we are focused on
reinvigorating growth and cutting costs in our video-
entertainment segment.
Our businesses aim to manage any identified cyber and other
information security risks to levels that are considered
acceptable and build necessary resilience into systems and
operations. We also conduct rigorous vulnerability assessments
to identify and mitigate sizeable risks. The video-entertainment
services are mostly delivered to customers via satellite, and any
damage or destruction may disrupt services. 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 are
unprotected or only partially covered.
For a detailed review of Naspers’s material issues and how we manage these, refer to
35
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Stakeholder engagement
EMPLOYEES
Employee newsletters, surveys,
management briefings and
intranet sites
SHAREHOLDERS AND
INVESTORS
Communication and
engagement through a dedicated
investor relations unit
REGULATORS
Engage with opinion
formers and regulators
to assist in developing
policy
CUSTOMERS
Measure customer satisfaction
using the net promotor score.
Interact with customers by using
social media
INDUSTRY
Participating in industry
groups to develop shared
practices
36
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Stakeholder engagement (continued)
¡ Stakeholders’ issues and response
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. We also use customer satisfaction (CSAT) scores to
measure the degree to which our products and services meet customers’ expectations.
REGULATORS
We engage with legislators through our public policy teams in each region to operate in
an efficient and positive regulatory environment, and as part of our compliance activities.
Group businesses belong to relevant industry bodies and associations to support the
development of specific sectors.
EMPLOYEES
Our most important asset is our people. At heart we are entrepreneurs, so we push
for performance, back local teams and learn from each other.
We aim to be recognised for providing meaningful work, opportunities to learn and
grow, and rewards for a job well done. In this culture we believe our people will be
motivated to achieve by taking personal responsibility for high performance.
Group companies set and communicate targets that are translated into local and
personal goals to ensure everyone understands the bigger picture. We encourage our
teams to discuss performance to enable everyone to learn and grow, supported by
ongoing education and training. We find new ways to listen and engage with our teams
about making Naspers the best place to work at.
37
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Stakeholder engagement (continued)
Video entertainment
STAKEHOLDERS
RESPONSE
CUSTOMERS
The video-entertainment group has a number of points for customer engagement: the
call centre, email, SMS and 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.
INDUSTRY AND
BUSINESS
PARTNERS
The video-entertainment group plays an active and constructive role in the broadcast
industry in the countries in which it operates. In South Africa, as a member of the
National Association of Broadcasters, it raises 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 assisting the Minister to review legislation governing the sector. In 2016 it
participated in a number of industry workshops and policy-formulation processes and
regularly engaged with suppliers and business partners to develop shared practices.
Investment in local content has deepened, with competitively priced productions that
resonate with our audiences.
SHAREHOLDERS
AND INVESTORS
The group holds regular meetings with shareholders and investors to discuss strategy,
performance and material issues. It also communicates via presentations (such as the
annual and interim results reports) and annual general meetings.
REGULATORS
EMPLOYEES
38
In South Africa we participate in regulatory processes initiated by Icasa 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 the rest of Africa we engage with regulators in the
countries in which we operate.
The video-entertainment group uses a number of platforms (from print to electronic and
face-to-face engagements) to interact with employees and keep them informed. In South
Africa the group also has a workplace forum to represent employees’ interests and
interacts with the company. The group communicates with local communities through
its corporate citizenship activities.
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Stakeholder engagement (continued)
Media24
STAKEHOLDERS
RESPONSE
CUSTOMERS
Media24’s divisions are active on social media platforms. Editorial teams use 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 advertising agencies, readers and digital audiences through
various channels, including customer service call centres and surveys to determine
NPS ratings.
SHAREHOLDERS
Media24 keeps shareholders informed of developments by posting the integrated annual
report, publishing provisional and interim reports in local newspapers and online, holding
annual general meetings where shareholders may ask questions, and by updating
company websites (www.media24.com and www.welkomyizani.co.za).
INDUSTRY
Media24 is a member of local and international industry bodies and attends regular
meetings. In South Africa these include: participation in the Publishers Support Services
(PSS) (which has replaced the industry body Print and Digital Media South Africa) as well
as engagement with various organisations such as the Audit Bureau of Circulations of
South Africa (ABC), the Print Research Council (PRC), the South African National
Editors’ Forum (Sanef), the South African Publishers Association (Pasa), the Media
Development and Diversity Agency (MDDA), the Association of Independent Publishers
(AIP) and the Advertising Standards Authority (ASA). 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 ASA. Media24 abides by the codes
and rulings of these regulatory bodies.
EMPLOYEES
Media24 is an employer of choice, providing an inspiring work environment. Ongoing
staff engagement includes management briefings and roadshows, weekly electronic
newsletters, workshops, knowledge-sharing sessions on industry topics, an annual
leadership conference and staff surveys. Workplace forums representing employees
regularly interact with management. Media24 invests substantially in leadership training
and development.
39
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Balancing profit, people and our planet
Naspers runs platforms that
package content to create
communities. We connect
people by distributing media
products and conducting
ecommerce. Our products
and services play a
developmental role in
societies where we operate
by employing people,
improving quality of life and
stimulating the economy.
Naspers is not only a business; as a responsible corporate citizen we
give back to our communities. Through numerous projects (see the
sustainability section on www.naspers.com), we touch the lives of
millions of people around the world.
Education is one of our most important contributions to Africa. We
help to improve literacy levels through print and digital media, from
newspapers and magazines to school books and digital ventures,
including social networking.
Naspers is operated as a sustainable business, both in terms of the
environment and long-term profitability. We view this as a journey, and
we endeavour to ensure our values and philosophy demonstrate this.
The section on non-financial performance (page 64) focuses mostly on
social and environmental projects with more detail on our website.
Education is one of our most
important contributions to
Africa.
40
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Balancing profit, people and planet (continued)
Poznan, Poland
By harnessing our global infrastructure and ability to innovate and
adapt in a changing world, we aim to address education, skills
development and environmental sustainability. We hope to improve the
living conditions of our employees, their families and the communities in
which we operate, ultimately balancing profit, people and our planet.
The value-added statement on page 42 illustrates how the group
distributes its earnings and how much it retains for reinvestment.
Naspers has a significant effect on the economy of sub-Saharan
Africa. In the review period, we contributed more than US$800m (or
as much as 25% of the total wealth we created) to local governments
where we operate. This comprises various taxes and skills development
levies and is nearly five times what we pay shareholders in dividends.
In addition, the jobs we create stimulate further economic activity.
In the past year we paid US$1bn (31% of wealth created) to
employees, including salaries, bonuses and benefits, and the cost of
training and participating in group share incentive schemes. We provide
jobs to over 27 000 (2015: 24 000) (excluding joint ventures and
associates) permanently employed people and contribute materially
to the countries in which we operate.
To fund our growth, we rely on investors and finance providers, who
are compensated by dividends, share price appreciation and interest
payments. This accounts for 13% of total earnings distributed. The
remaining 31% has been reinvested to ensure we maintain a sustainable
group.
We contributed more than
US$800m (or as much as
25%
of the total wealth we created)
to local governments where we
operate
41
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Value-added statement
for the year ended 31 March
Value added is defined as the value created by the activities of a business and its employees and is calculated as
revenue less the cost of generating that revenue. The value-added statement reports on the calculation of value
added and its application across stakeholder groupings. This statement shows the total wealth created and how
it was distributed, taking into account the amounts retained and reinvested in the group.
31 March 2016
US$’m
31 March 2015
US$’m
%
change
Revenue
Cost of generating revenue
Value added
Income from investments
Wealth created
Wealth distribution:
Employees
Salaries, wages and benefits
Providers of capital
Finance cost
Dividends paid
Governments
Total tax paid
Reinvested in the group
Depreciation and amortisation
Other capital items
Retained earnings
Wealth distributed
5 930
3 975
1 955
1 329
3 284
1 015
432
292
140
813
1 024
278
(115)
861
3 284
6 569
4 345
2 224
1 535
3 759
1 131
399
247
152
939
1 290
296
(103)
1 097
3 759
(10)
(9)
(12)
(13)
(13)
(10)
8
18
(8)
(13)
(21)
(6)
12
(22)
(13)
Value-added statement
US$’bn
Reinvested in the
group
31%
Tax paid to
governments
25%
Value-added statement
US$’bn
Reinvested in the
group
34%
Tax paid to
governments
25%
2016
2015
31%
Employees
13%
Providers of capital
30%
Employees
11%
Providers of capital
42
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Performance
review
Performance review
¡ Financial review
As announced on 18 April 2016 and in view of the growing international
spread of its business, the group has changed the presentation currency
for financial reporting purposes from South African rand (SA rand) to
United States dollar (US dollar). These are the group’s first results
reported in US dollar.
Revenues grew 6% (22%) to US$12.2bn, driven by growth from
Tencent (www.tencent.com) and from ecommerce on the back of
revenue growth in classifieds, travel and etail. Consolidated revenues were
US$5.9bn – down 10% year on year – primarily due to the impact of
currency translation. Excluding the currency translation, as well as the
impact of acquisitions and disposals, consolidated revenues improved 11%.
Development spend, measured on an economic-interest basis, was
stable at US$961m, while consolidated development spend reduced
14% to US$708m. Classifieds development spend, excluding investment
in new markets through letgo, declined by a meaningful US$59m,
DTT development spend in the video-entertainment segment reduced
US$143m and consolidated etail platforms development spend
dropped US$26m, as all three businesses continued to increase
monetisation and scale. New areas of investment include: ibibo’s hotels
offering; building new classifieds markets (primarily the US) via the
mobile app-only letgo platform; ShowMax; and developing consumer-
facing offerings in PayU. Together these accounted for development
spend of US$192m. Losses in our equity-accounted etail investments
widened by US$68m as they build their platforms and grow revenues
to outpace competition.
Trading profit increased 18% (38%) to US$2.2bn, driven by
expansion of 39% (43%) in the group’s share of Tencent’s trading profit.
Lower losses in classifieds and DTT, combined with ibibo’s air-travel
business turning profitable and a reduction in PayU’s PSP losses as it
scales, also boosted growth. These positives were offset by new
The group has changed the
presentation currency for
financial reporting from SA rand
to US dollar.
44
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Performance review (continued)
¡ Financial review (continued)
investments discussed above and a decline in video entertainment’s
profitability. With significant US dollar costs, local currency revenues
and a loss in sub-Saharan DTH customers, trading profit in the
video-entertainment segment declined 17%.
IFRS operating profit declined from a positive US$161m to a
negative US$177m in the current year, mainly due to the effects
of currency weakness in the video-entertainment segment and
impairments, as discussed below. The group’s share of equity-accounted
results was 13% lower at US$1.3bn, largely due to one-off gains of
US$498m in the prior-year figure. In the current year, the group’s share
of equity-accounted earnings includes one-off gains of US$251m and
impairment losses of US$180m recognised by our associates and joint
ventures. The contribution to core headline earnings by equity-
accounted investments, adjusted for these capital items, was up
25% to US$1.6bn.
The group recognised impairment losses of US$251m during the year,
including US$53m relating to Nigerian equity-accounted etail investment,
Konga. As reported in the first half, the group wrote off US$140m on its
Brazilian online comparison shopping (OCS) business, Buscapé, which
faced headwinds. As announced in February 2016, the group waived the
preference share debt owed by Welkom Yizani Investments, the largest
black economic empowerment structure in the South African print media
industry. This gave rise to an impairment of US$29m.
The group’s Czech etail and ecommerce business, Netretail,
and OCS platform, Heureka, were classified as held for sale on
30 September 2015. At year-end, the group recognised a writedown
to fair value less costs of disposal of US$88m for Netretail. The sale of
these businesses was subject to regulatory approval as at 31 March 2016.
Subsequent to year-end, approval was received for the Heureka sale and
we consequently recognised a gain on disposal of approximately US$61m.
Revenues grew 6% to
US$12.2bn
45
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Financial review (continued)
Net interest expense on borrowings rose 19% to US$170m due
to increased interest obligations after the US$1.2bn bond issued in
July 2015.
Core headline earnings increased by 21% (49%) to US$1.2bn on the
back of Tencent’s contribution.
Consolidated free cash outflow of US$38m was recorded, marginally
higher year on year. Lower capital expenditure in the video-
entertainment business, a US$118m reduction in development spend
and higher dividends from associates were offset by weaker cash flow
from the sub-Saharan Africa video-entertainment business.
Following the US$2.5bn equity raise in December 2015, consolidated
net gearing dropped to 12%. Some US$1.2bn of the proceeds was used
for the acquisition of a controlling stake in Avito.
Significant acquisitions
Details of significant acquisitions appear in the summarised consolidated
annual financial statements under business combinations and other
acquisitions (page 129).
Summarised consolidated annual financial
statements
The summarised consolidated annual financial statements appear on
pages 116 to 140 of this report. The complete consolidated annual
financial statements for the year ended 31 March 2016 are on our
website, www.naspers.com.
Core headline earnings
increased by
21%to US$1.2bn
46
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation
Performance review (continued)
¡ Five-year review
US$’m
2016
2015
2014
2013(2)
2012(2)
Income statement items,
including equity-accounted
investments on an economic-
interest basis
Revenue
Trading profit
Statement of financial position
on a consolidated basis
Total assets
Total equity
Total liabilities
Other information
Development spend(1)
Core headline earnings per share
(US cents)
Dividend per N ordinary share
(SA cents) (proposed)
Weighted average number of
N ordinary shares (’000)
12 224
2 246
11 541
1 901
9 919
1 536
8 976
1 675
7 628
1 587
16 723
10 654
6 069
12 936
6 903
6 033
12 213
6 477
5 736
11 180
6 047
5 133
10 598
6 464
4 134
961
298
520
953
255
470
781
216
425
503
259
385
381
250
335
417 575
403 576
395 078
385 064
375 653
Notes
(1) Including associates and joint ventures on a proportionate basis.
(2) Translated from SA rand into US dollar at the average exchange rate for the relevant year.
47
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet
Internet
Naspers operates platforms that offer customers fast,
intuitive and secure environments to communicate,
entertain and shop. Our ecommerce services span
general and vertical classifieds, B2C, specialised online
services such as travel and food delivery, and payments
platforms. In the Naspers Ventures unit we acquire and
operate disruptive platforms. The internet segment
benefited from good growth in Tencent and ecommerce
to deliver revenues of US$8.2bn, up 18% (31%) year on
year. Trading profit was 38% higher at US$1.6bn.
Listed investments
Tencent
Tencent again performed well in an increasingly competitive environment
in China. Through new and expanded services and the excellent
management of Pony Ma, Martin Lau and their teams, it remained
the largest platform operator in China.
In the past year the internet contributed to daily life in China even
more, facilitated by an ongoing transition from desktop PC to mobile.
Messaging and social networking continued to account for the highest
time spent on smartphones, while search queries have now moved
primarily to mobile. Online shopping became increasingly widespread,
especially in lower-tier cities, and ecommerce transaction volumes
showed healthy growth rates. Online advertising activity shifted decisively
from PC to mobile. Users proved increasingly willing to pay for digital
content such as movies, television series and music.
Weixin/WeChat (the mobile communication, social and commerce
platform), QQ Instant Messaging (QQ IM) and QZone (the social
network) anchored Tencent’s leadership in social networking and
communication in China. By the end of March 2016, combined monthly
active users of Weixin and WeChat reached 762m, up 39% year on year.
QQ IM and QZone increased the number of monthly active users on
mobile devices to 658m and 588m respectively. Weixin maintains its
strong market position through richer functionality and by connecting
Revenue*
US$’m
IFRS: +18%
LC: +31%
2015
2016
10 000
8 000
6 000
4 000
2 000
0
EBITDA*
US$’m
IFRS: +32%
2 000
1 500
1 000
500
0
US$’m
2 000
1 500
1 000
500
0
2015
2016
Trading profit*
IFRS: +38%
LC: +44%
2015
2016
* Including associates and joint ventures
on a proportionate basis.
LC = local currency.
48
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
more third-party services to meet the daily needs of its users. It is now
one of the key distribution platforms in China for online-to-offline
(O2O) services, including search for local restaurants and services, meal
delivery and on-demand transportation. Mobile QQ is following Weixin
in developing a similar open-platform strategy.
The mobile games market in China grew rapidly in the past year,
becoming the largest of its kind globally. Tencent continued to lead the
mobile and online games market. Mobile remains a key growth driver
for the online advertising market, particularly in search, video, news and
social platforms. Advertising on Tencent’s social platforms, including
Weixin Moments, Weixin Official Accounts, QQ and QZone, drove
excellent growth in advertising revenues. Mobile also brought dynamic
evolution to payments and internet finance. The explosive rise in social
payments drove the growth of Weixin and QQ payment services. As
example, gifting digital red envelopes via Weixin Pay has become a
major tradition during the Chinese New Year, with a record RMB8bn
worth of red envelopes sent via this platform on New Year’s Eve – an
eightfold increase on the year prior.
Revenues for the year were RMB102.9bn, up 30% annually.
Non-GAAP profit attributable to shareholders (Tencent’s measure
of normalised performance) grew by 31% to RMB32.4bn. Online
value-added services revenue rose 27% to RMB80.7bn and advertising
revenue was up 110% to RMB17.5bn. During the year Tencent
continued to invest aggressively in existing services and new areas,
including video, finance, cloud, payments and healthcare.
Tencent is listed on the Hong Kong Stock Exchange and extensive
information is available on its website, www.tencent.com.
Mail.ru
Mail.ru offers leading platforms in Russia for gaming, social networking,
email, portal, search, instant messaging and online finance. Russia is the
QZone increased the number of
monthly active users on mobile
devices to
658m
49
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
sixth-largest internet population globally, with a user base of 103m
increasingly accessing the internet via mobile devices.
Mail.ru continues to build internet and mobile products and services in line
with its ‘communitainment’ strategy, with mobile daily users of its leading social
network platforms, VKontakte and Odnoklassniki, exceeding those on desktop
for the first time. Mail.ru’s My Target programmatic ad platform has opened up
the mobile advertising market in Russia and is recording strong growth rates,
especially mobile and VKontakte.
Mail.ru is expanding internationally with a range of communication tools
and entertainment products. Building on its position as the largest platform in
Russian online gaming, a key new gaming title, Armored Warfare, was released
in Europe, North America and Russia.
Total revenue for the year was up 11% to RUB36.3bn. Advertising
contributed 40% of the total with revenues of RUB14.7bn, up 19% year on
year. While brand advertising declined slightly, target and web contextual ads
grew 62% and 46% respectively. Massively multiplayer online (MMO) games
revenues grew 6.3% compared to the previous year to RUB8.95bn, driven by
the continued success of Skyforge and Armored Warfare. Community internet
value-added services (IVAS) revenues increased 5.4% in 2015 to RUB12.5bn.
Mail.ru’s depository receipts are listed on the LSE. Further information is
available at www.corp.mail.ru.
Ecommerce
Naspers has a broad portfolio of ecommerce businesses organised by
functional lines, including classifieds, B2C, payments and other specialised online
services. This focus allows us to move faster and build scale more rapidly, while
enabling the businesses to share knowledge, technology and expertise more
effectively. This segment recorded a bright year. Revenue grew 6% (24%) to
US$2.6bn.
Ecommerce is a strategic area of expansion and we are investing in our
platforms to build leadership and scale, deliver superior customer experiences
and expand the market.
Given the differing stages of maturity, timelines to monetisation and the
nature of the various ecommerce models, most ecommerce revenues are
currently generated from the B2C businesses. A number of ecommerce
businesses are still in early stages. We are making investments in these
businesses, particularly in our classifieds, B2C and travel operations, to drive
growth, improve our products and customer experience, and expand the
group’s geographic footprint. We will continue to invest in these businesses
in future.
Revenue split
Other
3%
Travel
3%
Etail
62%
2016
13%
Marketplaces
6%
Naspers ventures
8%
Classifieds
5%
Payments
50
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
B2C
Focusing on attractive growth markets
Etail
Nine companies,
17
markets
#1 in almost all businesses
Marketplaces
Allegro #1 in Poland
Payments
One brand, 16 markets
250+ payment options
Classifieds
OLX is a
leader across
growth
markets
40+ countries
1.7bn
monthly
visits
Travel
goibibo: #1 in hotel booking
3.7m transactions – growing at
429% year on year
redBus: #1 in bus ticketing –
growing 59% year on year
iFood:
More than
800 000
orders per month
100 000+
merchants
Measures and analyses
5m apps and
80m websites
51
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
Consumer to consumer (C2C)
Classifieds
Strong progress was made across our markets, while managing to reduce spending levels as we faced fewer competitive
battles and business matured. The global footprint expanded by entering a new exciting market. The Classifieds portfolio
now comprises 40 markets with 34 leading positions, 10 of which are being monetised.
We continue to invest through acquisitions where there is opportunity. In the financial year 2016, Naspers increased
its investment in the Russian classifieds leader, Avito, to a majority stake.
Mobile remains a priority. During the year we invested in letgo, an app-only classifieds offering that is already capturing
share in exciting markets such as the US.
Fuelled by a focus on strong execution, market share increased in most countries. We are also establishing ourselves
as the global leader in classifieds by creating adjacent verticals to our leading horizontal positions in key markets. Led by
industry veterans, Stradia (auto brand in India) and Storia (real estate brand in Indonesia) launched in the last fiscal
quarter.
The Classifieds team continues to create a global technology platform adapted to local needs. The aim is more speed
at higher quality than any other platform, making the OLX group the industry benchmark.
As part of an ongoing initiative to transform OLX into the world’s largest C2C marketplace, we completed
rebranding to OLX by converting all the group’s Middle Eastern/North African platforms from dubizzle to OLX, except
for the UAE where we serve dual branding.
Global
footprint
40
COUNTRIES
20+
OFFICES
2 000+
EMPLOYEES
35bn+
MONTHLY PAGE
VIEWS
Mobile leadership
Scale
#1 app
20+ COUNTRIES (1)
4.3+
APP RATING
1.7bn+
MONTHLY VISITS
Note:
(1) Google play store; shopping/lifestyle categories
Excludes letgo, includes associates on a proportionate basis
52
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
Business to consumer (B2C)
B2C covers nine companies in 17 markets across four continents.
Allegro Group
Allegro had a successful year and reported solid results. It accelerated
growth rates for gross merchandise value and revenue while maintaining
strong margins in its core business. Particularly, the B2C business is growing
faster than the market. For the first time Allegro complemented its B2C
business by selling directly to customers (first party) to fill supply gaps and
set expectation levels for pricing and service delivery to its marketplace
sellers (third party).
Allegro has also added a new revenue stream – advertising. Clients are
either brands or marketplace sellers in various formats, leveraging Allegro’s
highly frequented platform without compromising the overall user
experience.
eMAG
eMAG is a clear market leader in its home market of Romania. Margins have
improved by expanding marketplace services (third party) and private labels,
53
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
while increased scale has generated better leverage in headcount and
marketing-related cost. This will support future profitability, first in
Romania and then at group level.
eMAG has also expanded into nearby growth markets where it can
take advantage of its brand, platform and delivery capabilities.
Flipkart
Flipkart is widely regarded as the ecommerce pioneer in India. In
addition to growth and scale, it has concentrated on driving use of its
mobile app. As a result, Flipkart has mobile market share of over 50%
with more than a third of Indian Android users having installed its app,
according to SimilarWeb.
At the same time, Flipkart has accelerated its third-party marketplace
business. The Indian market has enjoyed hyper growth in recent years and
is expected to become the second-largest ecommerce market in the
world over time. This has generated a competitive environment, with
Flipkart competing mainly with Amazon India and Snapdeal for market
share.
Souq
Souq is a market leader in the Middle Eastern/North African region, with
the UAE and Saudi Arabia accounting for the largest share of revenues.
Revenue growth remains good on the back of the high mobile share of
transactions, combination of first-party and third-party offerings on the
site, and enhanced own last-mile delivery services to customers. The
business is focused on maintaining its leadership and growth while driving
operating efficiencies.
Takealot
Takealot has become a market leader in South Africa. The business
is growing fast and gaining online market share. As the domestic
ecommerce market is still at an early stage, the focus is to further
mature and scale this business.
Konga
Nigeria faced a tough macroeconomic environment in 2015 due to the
impact of falling oil prices and currency, fuel shortages, as well as political
unrest in the north. Konga is accordingly refining its strategy by promoting
third-party marketplace services, focusing on key cities and early adopters
of online shopping.
Flipkart has mobile market share
of over 50% with more than a
third of Indian Android users
having installed its app, according
to SimilarWeb.
54
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
Markafoni
Markafoni operates a leading online fashion retailer in Turkey, which started
as a flash-sales site of off-season products. The business is focusing on
increasing its in-season selection of branded products and offering more
convenient ways for customers to receive their orders.
Travel
ibibo Group has emerged as the online travel market leader in India in
terms of transactions, focusing mainly on bus, air and hotel platforms. Hotel
has been a key investment focus given the size of this market and online
disruption potential. Based on a technology-orientated and service-
orientated strategy that ensures best selection at good prices, the resulting
growth has allowed ibibo to take a leadership position against incumbents.
In bus ticketing, redBus maintains its leading share in a market
characterised by network effects and fragmented bus operators. Based
on its success in India, redBus is expanding internationally, starting with
Singapore and Malaysia.
Payments
• Global footprint
55
US$11bn Total processed volumeUS$2bn Total processed volume15% operational growthUS$1bn Total processed volume55% operational growthUS$3bn Total processed volume55% operational growthNaspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
Rio de Janeiro, Brazil
The payments segment was built through organic growth and selective
acquisitions. It now operates under one global brand, PayU, and is
present across 16 countries and organised in three main regions:
Latin America, Europe, Middle East and Africa (EMEA), and India.
Its main competitive advantage is to serve online merchants through
local payment platforms, enabling a large and unique choice of local
payment types (250+ payment types) used by consumers and simplicity
of integration.
PayU serves a large number of small online businesses, as well as
some of the most sophisticated brands in select geographies.
Naspers Ventures
Naspers Ventures partners with entrepreneurs to build leading
technology companies in high-growth markets. We identify companies
and founders with high potential and the ambition to scale globally,
quickly impacting the communities where they operate and providing
them with tailored support that enables them to be leaders in their
chosen markets.
Naspers Ventures leverages the global reach, knowledge and
resources of Naspers, one of the largest technology investors in the
world, to enable an environment that helps entrepreneurs build, grow
and scale their businesses. With in-depth experience in more than
130 markets and countries around the world, the Naspers Ventures
team thrives on the unconventional and unprecedented to do what
it takes to help its companies succeed.
PayU is present across
16countries and organised in three
main regions: Latin America,
EMEA (Europe, Middle East and
Africa), and India
56
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Internet (continued)
Movile
Movile operates a wide range of mobile services in Latin America and is
selectively expanding into other global markets. Its growing core mobile
carrier-related value-added services business geographically spreads
across the South American continent.
Movile focuses on B2C-orientated smartphone app-based services,
■
especially in the online-to-offline (O2O) mobile segment in Latin
America:
■ PlayKids is a mobile app for children up to age of seven that was
spun off from the value-added services business and expanded
globally.
iFood is the online food-delivery market leader in Brazil and Mexico,
and expanding across Latin America.
Movile continues to expand its footprint in other mobile O2O
services, including mobile entertainment ticketing service, Ingresso
Rápido, and logistics and same-day delivery services, TruckPad and
Rapiddo.
SimilarWeb
SimilarWeb.com is a free web ranking and competitive analysis tool.
The platform is based on data technology that includes traffic and
user-engagement stats for websites and mobile apps. Given the
importance of data analytics in our broader portfolio, SimilarWeb
measures and analyses over 3m apps and 80m websites, providing
deep insight into traffic flows and consumer behaviour in the mobile
and web-based online world. In the past year SimilarWeb added
product functionality, including user-engagement metrics for apps
in multiple markets.
57
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review
¡ Video entertainment
Video entertainment
Given the headwinds across most of sub-Saharan Africa,
mainly due to the rout in commodity prices, coupled
with severe currency weakness, the video-
entertainment business faced a challenging year.
Weak local currencies across key markets, coupled with increased
competition for content, have affected the cost base and therefore
profitability. We bill customers in local currency which exacerbates
the net negative impact of currency weakness against the US dollar
(the greater proportion of our costs are US dollar denominated).
To counter this, we were forced to increase subscription prices, but
in an environment of shrinking real disposable income, price increases
have resulted in heavy customer losses across most of our key markets.
A net 38 000 new DTH customers were added to the base. The
DTT base grew by 147 000 customers, bringing the closing DTT and
DTH base to 10.4m customers.
Robust strategies have been implemented to boost growth and
expand the business over the longer term, by increasing value and
focusing on our goal of building the leading video-entertainment business
in Africa. At the same time, there is a focus on reducing costs through
monitoring of non-performing content and non-value-adding activities.
Innovation and customer service
Making content available to our customers anywhere, anytime is key to
our long-term growth. We remain focused on developing and enhancing
innovative products and delivering great local and international content
on multiple platforms.
Our flagship DStv Explora remains a key differentiator and is available
to customers at increasingly competitive prices. BoxOffice is now
available in 16 territories across Africa, while the Express from the
US service, which makes content available at the same time it is first
broadcast in the US, is growing in popularity. The DStv Catch Up
offering has been improved. Similarly, the connected Explora ensures
Revenue*
US$’m
IFRS: -11%
LC: +10%
2015
2016
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
EBITDA*
US$’m
-13%
1 000
800
600
400
200
0
US$’m
800
700
600
500
400
300
200
100
0
2015
2016
Trading profit*
IFRS: -17%
LC: +25%
2015
2016
* Including associates and joint ventures
on a proportionate basis.
LC = local currency.
58
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Video entertainment (continued)
Our African footprint
“A world of entertainment, anywhere, anytime”
MAURITANIA
SENEGAL
GUINEA
MALI
O
B U R KIN
FASA
NIGER
CHAD
SUDAN
CÔTE
D’IVOIRE GHANA
NIGERIA
CENTRAL AFRICAN
REPUBLIC
SOUTH
SUDAN
CAMEROON
ETHIOPIA
GABON
CONGO
DEMOCRATIC
REPUBLIC OF
THE CONGO
UGANDA
KENYA
TANZANIA
Joint ventures
Franchises
Agents
Own operations
ANGOLA
ZAMBIA
MOZAMBIQUE
ZIMBABWE
NAMIBIA
BOTSWANA
MADAGASCAR
SOUTH
AFRICA
The DTT base grew by 147 000
customers, bringing the closing
DTT and DTH base to
10.4mcustomers
59
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Video entertainment (continued)
customers have access to a more extensive library of the latest content.
The DStv Now and SuperSport apps have enhanced their search
capabilities and introduced a recommendation engine. The value added
by these apps, such as improved bit-rate technologies and download
functionality, has made them compelling to customers. The launch of
ShowMax added greater depth to our customer offering and further
boosted the anywhere, anytime proposition.
Customer retention, customer service and general cost control
remain key focus areas going forward.
Content
SuperSport strengthened its position as a world-class sport-content
provider and entertained customers with investments in local and
international content on all platforms throughout our broadcast
territories. Sport enthusiasts enjoyed the production and broadcast
of top events, including the 2015 Rugby World Cup, 2016 ICC World
Twenty20, All Africa Games, Cosafa Cup and Copa America. SuperSport
remains the biggest funder of sport in Africa and continues to invest in
local sport leagues at all levels.
M-Net continues to carry great local and international content.
In response to the growing popularity of reality format shows like The
Voice and Idols, and M-Net’s own shows such as Our Perfect Wedding
and Date My Family, regional versions of these shows are also being
produced. In territories where we operate, we continue to invest in
production facilities and partner with local production houses.
Investment in local content has deepened, with competitively priced
productions that resonate with our audiences.
J
O
/
5
5
6
8
4
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H
J
v
t
S
D
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o
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s
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A
RUGBY WORLD CUP 2015.
ALL 48 GAMES LIVE IN HD ON SUPERSPORT.
Only SuperSport can ensure you don’t miss a minute of the heart-racing action
with a dedicated 24 hour rugby channel, live streaming on the SuperSport App,
supersport.com and DStv Now. Plus you get 6 magazine shows to help you keep
pace with the Tournament action.
The Event Mark is protected by Trade Mark and Copyright. TM © Rugby World Cup Limited 2008 – 2015. All rights reserved.
#SSRUGBY
Sport enthusiasts enjoyed the
production and broadcast of top
events, including the 2015 Rugby
World Cup, 2016 ICC World
Twenty20, All Africa Games,
Cosafa Cup and Copa America.
60
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance
Performance review (continued)
¡ Operational review ¡ Video entertainment (continued)
Regulatory
Video-entertainment operations are regulated by relevant bodies across
the continent. Various competition and consumer investigations are
under way and the companies continue to cooperate with regulators.
Regulations are under constant review and we regularly engage with
authorities, whom we consider key stakeholders. The businesses
continue to face regulatory pressure.
Competition
The competitive landscape is fluid, and video consumption on mobile
platforms continues to grow. This year, various over-the-top (OTT)
players entered the territories in which we operate, while aspiring
international groups with large budgets continue to explore investments
across Africa. Regional competitors with sizeable local-content budgets
have also emerged. In response, MultiChoice is expanding its delivery
platforms and improving its products and services.
Business continuity
The Eutelsat 36C satellite was successfully launched on
24 December 2015, providing new capacity to MultiChoice Africa.
This marks an investment to improve infrastructure and allows us to
provide extended services to our customers.
An additional satellite for MultiChoice South Africa will become
available in December 2016. This will further enhance the DStv service
through the addition of more content or channels.
The Eutelsat 36C satellite was
successfully launched on
24 December 2015, providing
new capacity to MultiChoice
Africa
61
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Video entertainment (continued)
ShowMax
ShowMax is the Naspers group’s SVOD service. It was launched in
August 2015, and offers a comprehensive selection of movies and
TV series from leading Hollywood studios, as well as local African
shows produced on the continent.
Customers are able to watch ShowMax on mobile devices such
as smartphones and tablets, on laptops as well as smart TVs and
other media players. Customers are able to download content to
their smartphones or tablets to watch on the move or when they
do not have an adequate internet connection.
Despite the short-term challenges of a suboptimal broadband
infrastructure in key markets, after seven months, we have created
a recognised brand in the South African market that has already
become part of popular culture.
62
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Operational review ¡ Media
Media
Media24 delivered a solid financial performance despite
a decline in print media advertising and circulation
revenues due to structural shifts in the industry and
a weak South African economy. Savings in the mature
print publishing operations lifted the overall trading
performance, and several initiatives are under way to
further reduce the cost base and improve efficiencies.
In parallel, the Media24 group continues to invest to build momentum
in its growth portfolio comprising digital media through 24.com, its
efashion business, Spree, and online job classifieds platform, Careers24.
In the past year, 24.com realigned its digital media operations for
commercial and product focus, especially for mobile. Accelerating the
migration of audiences and advertisers onto digital platforms is key to
Media24’s future – mobile web and apps now account for roughly 80%
of traffic and 70% of page views across 24.com’s publishing network.
Revenue*
US$’m
IFRS: -20%
LC: -2%*
2015
2016
800
700
600
500
400
300
200
100
0
EBITDA*
US$’m
60
50
40
30
20
10
0
US$’m
30
25
20
15
10
5
0
2015
2016
Trading profit*
IFRS: +32%
LC: +59%*
2015
2016
* Including associates and joint ventures
on a proportionate basis.
LC = local currency.
63
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review
¡ Sustainable investment
Sustainable development and economic, social and
environmental protection are global imperatives that
present both opportunities and risks for business. As
a leading media company, Naspers is positioning itself
to meet these challenges.
As our business expands, we aim to contribute to the
communities in which we operate; develop our own
people; contribute to economic prosperity; and
minimise our impact on the environment. In formulating
this policy, we analysed areas where the group can
contribute to sustainable development in the markets
in which it operates.
Source: Sustainable development policy.
As a for-profit organisation, Naspers invests in developing its business to
provide useful products and services to its customers and a sustainable
return to investors. Flowing from these activities, we invest in countries
where we operate by creating demand for local suppliers, employing
people and contributing to the community via direct and indirect taxes.
The group operates in different communities, each with unique
challenges. Understanding that our products and services directly
impact local societies, each business aims to make a difference to its
community by contributing in line with its strengths and know-how.
Think local, employ local, back
local. We endeavour to employ
local citizens in the countries in
which we operate to empower
the communities where we have
a presence. As a result, we drive
for diversity and support
initiatives such as black
economic empowerment.
64
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation Performance review (continued)
¡ Non-financial review (continued)
For example, the print and video-entertainment segments have a
rich history of contributing to the arts, culture, education, sport and
industry academies and bodies. The ecommerce businesses are
actively engaging online and offline communities in various projects
supporting education, community initiatives, sustainable
transportation, ecology and healthy living.
For a detailed review of our initiatives, refer to the sustainability
section at www.naspers.com.
Focus areas
Ongoing educational initiatives include:
■ SuperSport provides leadership development and scholarships for
academic studies.
■ The M-Net Magic in Motion Academy: Launched in 2014, the M-Net
Magic in Motion Academy aims to develop young South Africans in
the film and TV industries by selecting top-performing graduates for
a 12-month internship. They receive on-the-job training and get the
opportunity to work with some of the country’s most experienced
producers. The first group of 12 interns graduated in March 2016,
and in the year ahead, 20 interns will be attending the academy.
■ Media24 provided several bursaries to students to complete their
honours degrees in journalism in South Africa, sponsored two
talented black female employees to complete their master’s degrees
in journalism at Columbia University and offered 34 internships
to graduates in journalism, commerce, computer science and
multimedia. The Media24 Academy and News division also provided
digital media training to 200 members of the Association of
Independent Publishers.
34
internships offered by
Media24 to graduates
65
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review (continued)
The Let’s Play Schools Physical
Education Challenge involved
more than
403 000
children
66
■ The eMAG Foundation aims at investing in education in Romania
supporting teachers and students to improve their performance.
eMAG strongly believes in supporting the sustainable development
of Romanian society through investment in education and research.
Contributing to our communities
MultiChoice is active in communities across Africa, particularly
initiatives that deal with societal concerns. During the financial year, it
invested over R56m in targeted initiatives. An example is SuperSport’s
Let’s Play, now in its 11th year. Let’s Play encourages primary school
children to participate in sport to counter the rising trend of young
children adopting unhealthy adult social habits (inactivity, smoking,
alcohol and drug abuse). This philosophy of good corporate citizenship
and contributing to African economies is also evident in ongoing
investments into the TV production and sport sectors with M-Net
and SuperSport focusing on local content across the continent.
SuperSport, in partnership with the Department of Basic Education,
Sport and Recreation South Africa, the Physical Education Institute
of South Africa and Unicef SA, launched the biggest school sport
initiative of its kind – the Let’s Play Schools Physical Education
Challenge. The challenge was targeted at 10- and 11-year-old children
and reached 477 primary schools. It involved more than 403 000
children and was part of the 10-year anniversary celebrations of Let’s
Play (Let’s Play celebrated its 10th birthday in November 2015).
The MultiChoice Diski Challenge is a football-focused programme
in South Africa that includes a tournament for the reserve Premier
Soccer League clubs, life skills and leadership development for young
players, a broadcasting internship and scholarships for players and
production interns, as well as an opportunity for community television
channels to broadcast Diski matches for free. Our aim is to help
create a new breed of football players and broadcasting professionals,
while bringing the best sport entertainment to customers’ screens.
The second season of the MultiChoice Diski Challenge started in
September 2015 and built on the success of the inaugural season
(where 41 players were promoted to the first teams of their
respective clubs). Season 2 was expanded into a one-round league
with 120 matches. This move bolstered the competitiveness of the
league and saw 523 players taking part in the reserve league. A total
of 36 production interns got the opportunity to work in the field as
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review (continued)
part of a live broadcast crew. These talented youngsters helped
broadcast 44 matches live on SuperSport and community television
channels. The crew included two female camera operators and
15 women who fulfilled various key roles. Eleven players across the
various teams took part in the U23 national team and were chosen to
represent South Africa at the Olympic qualifiers where they qualified
for the 2016 Olympic Games.
M-Net’s Magic in Motion 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 TV industries. At the end of the year each
intern receives a commissioning brief from M-Net to produce, in
conjunction with their production company, their first production.
Graduate students have the opportunity to showcase their work at
film festivals and win an international scholarship in film production.
In 2016 we launched the M-Net Magic in Motion Film Academy.
Designed to bridge the gap between theoretical knowledge and
practical implementation, the academy is focused on delivering highly
employable professionals into a rapidly growing industry. In addition
to on-the-job training, they were tasked with creating, producing and
directing movies for broadcast on the Mzansi Magic channel, ensuring
that what they learnt, was put into practice. They produced four
feature films – ILizwi, The Ring, Forgotten and #LIT – which received
great reviews.
Media24’s social responsibility initiatives, totalling R60m in the
review period, are focused on education, digital media training and
enterprise development. It continues to play a meaningful role in
developing independent publishers of community titles. Apart from
the digital media training provided to 200 independent publishers,
Media24 ran a training and internship programme for black journalists
with disabilities in partnership with the NGO ThisAbility. The group
supports digital education in communities through four Via Afrika
Digital Education Centres, refurbished shipping containers fitted with
Android tablets and preloaded with the latest educational
programmes, apps and textbooks developed by educational publisher
Via Afrika. All the primary school training centres offer free or
sponsored internet connectivity. Data and educator training is also
provided. Numerous initiatives are also supported by the in-house
programme Volunteers24 through which staffers can give back to
their communities.
67
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review (continued)
CASE STUDY:
WeCan24
WeCan24 (www.wecan24.co.za)
is Media24’s flagship corporate
social responsibility (CSR) project.
It is a national online news
network for schools.
Via Afrika Digital Education Centre (refurbished shipping containers)
Through the project, Media24 provides digital training to teachers and learners with a keen
interest in the media industry and give them the necessary tools and skills to set up their own
digital school news websites.
In the past year WeCan24 trained more than 1 000 learners and 500 teachers and reached
nearly 350 schools. It also arranged numerous opportunities for WeCan24 cub reporters to
interview South African newsmakers and celebrities.
The project is steered by Media24 and rolled out by the group’s enterprise development
partners Clothes to Cash Exchange and ForwardFund. Our partners arrange WeCan24 training
sessions with teachers and learners at schools in all nine provinces in South Africa and identify
networking opportunities with key provincial and national governmental and industry partners.
Media24 employee volunteers present on a wide range of topics at all the training sessions.
Our experts include journalists, editors, marketers, photographers and designers.
The programme’s key outcomes are to:
¡ provide digital media training on a large scale
¡ entrench citizen journalism in society
¡ position Media24 as the leader in providing free digital training to under-resourced schools
and teachers
¡ position journalism and the media industry as attractive career options for young South
Africans, and
¡ encourage small business development through our enterprise development partner Clothes
to Cash Exchange.
68
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance
Performance review (continued)
¡ Non-financial review (continued)
Allegro All For Planet Foundation is focused on ecology,
sustainable transportation and a healthy lifestyle. Ride for Kilometers is a
flagship project of the foundation that was held last year for the fourth
consecutive year. Uniquely, it encourages local communities to compete
– by simply riding a bike and collecting kilometres – for foundation-
branded bike racks installed in their cities. So far more than
1 000 colourful bike racks have been installed in more than
100 locations across Poland. In 2015 participants collected a total of
3 700 000km. Employees take part too, and this year they collectively
rode 57 000km, with the winner covering 3 700km in just one month.
The video case study can be seen at: https://vimeo.com/142257576.
Allegro actively contributes to the growth and development of
technology skills in Poland. It coorganises external events such as
Atmosphere, holds technological meetings at its offices (JUG, ADG,
Startup Weekends) and supports Polish universities by teaching
technology to the younger generation (eg in Pozna´n, Warsaw and
Krakow). Finally, Allegro focuses on the education of the youngest by
organising regular software development classes (CoderDojo) and
cooperating with the Children’s University located in Krakow.
Tencent Foundation was established in 2007 and was the first charity
foundation set up by a Chinese internet company. The charity platform
operated under the Tencent Foundation is one of the largest public
donation platforms in China. As of 31 March 2016 more than 62m
donations among Chinese internet users were made via the charity
platform, with the total amount of charitable giving exceeding RMB1bn.
As of 31 March 2016 Tencent and Tencent employees have donated
over RMB1.7bn to the Tencent Foundation, supporting various
charitable and philanthropic causes.
Responding to the corporate call ‘to be the most respected internet
company’, Tencent employees founded the Tencent Volunteers’
Association. Currently, Tencent has a volunteer force of more than
4 500 employees. Tencent volunteers are always participating in
charitable and philanthropic activities in a variety of areas, including
education, poverty relief, disability aid and environmental protection.
69
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Johannesburg, South Africa
Performance review (continued)
¡ Non-financial review (continued)
Transformation in South Africa
It is important for Naspers to ensure it complies with local legislation
and its workforces reflect local demographics. Naspers respects the
dignity and human rights of individuals and communities wherever it
operates. 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 retained a level 2
BBBEE rating, with several notable achievements in important areas
of transformation.
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 performance indicators in the revised codes are more stringent,
which will mean a drop in the performance of South African companies
across all industries. MultiChoice South Africa is taking active steps to
manage its BBBEE status. Impact assessments and alignment work done
to date indicate that this will not be as substantial a drop in
performance as initially anticipated.
For further details on MultiChoice’s BBBEE scorecard, refer to
Three years ago shares in Phuthuma Nathi (PN) and Phuthuma
Nathi 2 (PN2) (launched in 2006 and 2007 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
.
ENRICHING LIVES
70
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review (continued)
South Africa, settled the loan held by MIH Holdings Proprietary
Limited under the preference share agreements. In 2014 the Registrar
of Securities Services (the Registrar) indicated that all traditional
over-the-counter trading platforms should regularise their affairs in
terms of the Financial Markets Act, 2012. PN, PN2 and Welkom Yizani
continue to build on the positive engagement they have had with the
Registrar and remain committed to complying with any directives and/
or conditions issued by the Registrar.
Media24
Media24 continues to drive transformation as a strategic and
commercial imperative. In terms of the latest scorecard prepared by
its black economic empowerment (BEE) verification agency, Media24
attained a level 4 status with a 100% procurement recognition on BEE
spend under the revised BEE Codes.
For further details on Media24’s BBBEE scorecard, refer to
Welkom Yizani, Media24’s BBBEE scheme, launched 10 years ago,
remains the biggest BEE share offer in the South African print media
industry with around 92 000 shareholders. During the financial period,
Naspers agreed to waive US$29m (R400m) in preference share debt
and accrued interest owed by Welkom Yizani.
.
The first Apex Future Leaders, a two-year executive management
programme aimed at driving transformation and black representation
at management level, was successfully completed in March 2016. Four
of the six participating black managers were placed in permanent
management roles and one has returned to a specialist finance role in
the company. In the new fiscal year, the programme will be expanded
to offer 40 places for talented black employees in Media24 and a
further 10 for staff of the Government Communication and
Information System.
Welkom Yizani, Media24’s
BBBEE scheme, launched 10 years
ago, remains the biggest BEE
share offer in the South African
print media industry with around
92 000
shareholders
71
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review (continued)
Headcount by region*
South Africa
60%
APAC
7%
Black economic empowerment partners
Media24, MultiChoice and other group companies have combined their
buying power in South Africa in a centralised bargaining company,
CommerceZone. Suppliers’ BEE performance is evaluated against
specific criteria.
People
At heart, we are entrepreneurs. We focus on attracting the world’s best
talent to build leading companies that empower people and enrich
communities. We build outstanding products that are used by millions
of people every day.
Talent, particularly in the fields of ecommerce, technology and
engineering, is scarce globally. As such, being seen as an attractive and
meaningful place to work, is key to our strategy.
During the year we brought new talent into the group at all levels
and strengthened our focus on people across the organisation, providing
many new opportunities to existing employees. The group employs over
27 000 (2015: 24 000) (including joint ventures, but excluding
associates) permanent employees in some 130 countries.
We empower
We back local teams and learn from each other. We encourage diversity
in our teams and in our thinking. Our people are empowered to be
responsible and make decisions because we trust them to do a great
job. We believe in them and we want them to share their talent and
expertise across the group. Through the Naspers Academy and local
learning and development initiatives, we invest in our people so they
can build their skills, their expertise and ultimately, their careers.
Each year we organise internal networking and learning events to
bring together teams and communities of expertise, often from across
the group, to share ideas and learn from internal and external experts.
In the review period, over 9 000 employees attended one or more
events of this nature.
We perform
We push for performance in everything we do, and we move fast to
capitalise on opportunities others have not seen. We agree on clear
2016
1%
Middle East
10%
Rest of Africa
18%
Europe
4%
LatAm
Headcount by business*
Media24
25.78%
Ecommerce
31.45%
2016
32.93%
MultiChoice SA
9.85%
MultiChoice Africa
* Excludes associates and joint ventures.
72
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance
Performance review (continued)
¡ Non-financial review (continued)
and ambitious goals, have continuous conversations about achieving
even more and reward our people for what they deliver and how they
deliver it. We encourage innovation from all our people. To attract and
retain the skills on which our sustainability depends, and to reward
superior performance, most of our group companies grant share
options/appreciation rights to their employees under a number of
equity compensation plans.
We matter
We matter to the communities we serve and, wherever we operate,
we hold ourselves to high standards. Our code of business ethics and
conduct defines our commitment to conducting business fairly, ethically
and with integrity. This code, and related policies, is communicated to
group employees and available on www.naspers.com.
Many of our companies invest in corporate social responsibility
programmes and we encourage our people to support these by
investing their time. Wherever we operate we employ local people and
we create supportive, flexible and pleasant environments to help them
perform at their best while developing their skills. We focus on the
ongoing development of our managers, as creating an environment
where our people feel cared for, listened to and supported in their
ambitions, is ultimately in their hands. Together we are all responsible
for the positive impact we have on our stakeholders.
People development
Developing our talent is a critical enabler of present and future success,
as well as playing a vital role in the motivation and retention of our
people. Most of our businesses around the world have a learning and
development agenda focused on their own specific needs. This is
influenced by factors such as what the business is aiming to achieve,
the maturity level of the business, the opportunities and challenges it is
tackling, its competitive landscape, and the demographic nuances of the
region or countries in which it operates. At group level we base our
people development focus on four key areas:
■ Reinforcing the leadership pipeline and accelerating the growth of
top talent.
■ Cascading a strong performance culture.
■ Supporting the ongoing development and growth of our businesses
and equipping our people with new skills for tomorrow.
The group employs over
27 000
permanent employees in some
130 countries (including joint
ventures, but excluding associates)
Gender*
Male
52%
Female
48%
2016
* Excludes associates and joint ventures.
73
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Performance review (continued)
¡ Non-financial review (continued)
MultiChoice: Employment equity
■ Developing core business skills in ecommerce, video entertainment
Foreign
1%
Black
86%
and media.
For example, we focus on developing our leaders in order to build a
pipeline of ready-now successors, share knowledge rapidly around the
world, support new business acquisitions, and accelerate the pace of
change in our maturing businesses.
2016
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 vibrant working environment conducive to innovative
thinking.
White
13%
MultiChoice: Employment equity
Female
46%
Male
54%
2016
South Africa
The breakdown of the MultiChoice and Media24 groups’ annual
employment equity statistics is shown below. Under South African
Department of Trade and Industry definitions, black people include
black Africans, coloureds and Indians who are citizens of South Africa by
birth or descent or who became citizens by naturalisation before 1994.
Work environment and welfare
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 – comprising responsible, trained individuals – ensure
regulatory compliance. Appropriate medical emergency and disaster-
recovery plans have been devised.
Annual occupational health and safety risk control audits or reviews
are conducted by the larger operational entities and improvements
implemented as required. Significant matters are reported to and
monitored by the Naspers risk committee.
74
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance
Performance review (continued)
¡ Non-financial review (continued)
Media24’s distribution and printing operations use contractors. Most
Media24: Employment equity
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 manages distribution
networks and printing facilities, makes this the area in the group with
the greatest inherent risk for injuries on duty.
Monitoring: Media24’s safety, health and environment committee
monitors related issues in that group. Media24 and MultiChoice conduct
annual health, safety and environmental compliance audits, as well as
building scans. Injuries on duty are stringently monitored.
Medical benefits: Medical aid membership or private health insurance
is compulsory in most group operations, with the employer contributing
a portion of the monthly premium.
Some group companies provide post-retirement healthcare benefits.
This is based on an employee remaining in service until retirement age,
which is between 60 and 65 in most cases, and completing a minimum
service period.
Wellness: Several wellness programmes are operated by group
subsidiaries in a preventative 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 productions, strict
compliance to their regulated conditions of employment is enforced.
White
37%
Black
63%
2016
Media24: Employment equity
Female
49%
Male
51%
2016
75
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance Irdeto, Hoofddorp, The Netherlands
MultiChoice City, Randburg, South Africa
¡ Environment
The group’s 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 176 131 tonnes of
CO2e, of which scope 2 (electricity usage) is 94% (2015: 177 945 tonnes of
CO2e). Direct (scope 1 and 2) emissions were measured at locations across
South Africa, Poland, the Netherlands and Nigeria. The South African print
operations remain the largest contributor (67%) to the group’s total
measured carbon emissions. Through improvement and sustainable
technological innovation, Naspers strives to minimise its impact on the
environment.
The adequacy of generator capacity in South Africa and Nigeria were
evaluated again. While the capacity is adequate, the running and
maintenance costs of generators are substantially higher than standard
electricity costs.
The group manages its impact on the environment, mainly through
deploying technology and recycling initiatives at facilities and a shift from
printed products to electronic formats. In South Africa options for
alternative sources of energy (other than the current coal base) are limited.
Managing environmental impacts
MANAGING IMPACT
RESPONSE
Risk assessments identify
operations where direct
impact on the environment
is most significant.
76
Our most direct impact on the environment is from Novus Holdings
(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 2016GovernanceFinancialInformationGroupPerformance MANAGING IMPACT
RESPONSE
We use, where possible,
advanced technologies
to reduce impact on the
environment.
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.
A number of initiatives are reducing our carbon footprint and supporting
our sustainability campaign. Energy-efficiency initiatives in some businesses
include:
¡ movement-activated lights
¡ energy-efficient air conditioners
¡ consolidating data centres
¡ power factor correction and load balancing, and
¡ automatic hibernation of PCs.
Waste management initiatives include:
¡ recycling office waste more appropriately, and
¡ installing ewaste bins for customers and employees to safely dispose of
obsolete electronic devices.
Irdeto, our content protection and access-management technologies
business, has offices in The Netherlands designed and built as a green
building. This sustainable office meets the GreenCalc score B.
MultiChoice City, based in South Africa and home to our video-
entertainment segment, is Green Star rated, a rating received from the
Green Building Council of South Africa. Other than the initiatives mentioned
above, the building also offers a grey water reticulation system and heating
and cooling systems and processes to trap and disperse natural light.
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 can track printed products from
their point of origin to responsible, well-managed forestry, and controlled
and recycled sources.
77
Naspers Limited integrated annual report 2016GovernanceFinancialInformationGroupPerformance
Corporate governance
The board of directors conducts the
group’s business with integrity by
applying appropriate corporate
governance policies and practices. The
group continues to enhance and align
policies, systems and processes to
embed sound corporate governance
principles and ethical standards.
Company
secretarial
Stakeholders
Board
Board committees
¡ Introduction
Compliance with the JSE Limited’s stock exchange
(JSE) Listings Requirements, applicable London
Stock Exchange (LSE) Listings Requirements and
the Irish Stock Exchange Listings Requirements is
monitored by the audit and risk committees of the
board.
The board’s executive, audit, risk, human
resources and remuneration, nomination, and social
and ethics committees fulfil key roles in ensuring
good corporate governance. The group uses
independent external advisers to monitor
regulatory developments, locally and internationally,
to enable management to make recommendations
to the Naspers board on matters of
Investor
relations
corporate governance.
Our aim is to keep abreast of
regulatory developments, further
Internal audit
Support functions
MultiChoice/Media24 replication
Group management
Group segments’ management
Our operating businesses
Listed
entities
Risk
management
support
enhance our governance standards,
monitor and ensure compliance
with relevant laws and regulations,
and cultivate a thriving ethical
culture in the different
geographies in which the
group operates. We also aim
to maintain a high standard
E
x
t
e
r
n
a
l
a
u
d
i
t
S
u
p
p
o
r
t
f
u
n
c
t
i
o
n
s
of reporting and
disclosure, keeping in
mind the best interests
of our stakeholders,
and disclosing what is
relevant and critical
to the sustainability
of the group.
Group levels of authority and policies and charters
Corporate strategy
Our values
Code of business ethics and conduct
78
Naspers Limited integrated annual report 2016GroupPerformanceGovernanceFinancialInformation
Group
Performance
Corporate governance (continued)
¡ Application of and approach
to King III
The board, its committees, and the boards and
committees of subsidiaries MultiChoice and
Media24 are responsible for ensuring the
appropriate principles and practices of the King
Code of Governance Principles and the King Report
on Corporate Governance in South Africa (King III)
are applied and embedded in the governance
practices of group companies.
A disciplined reporting structure ensures the
Naspers board is fully apprised of subsidiary
activities, risks and opportunities. All controlled
entities in the group are required to subscribe to
the relevant principles of King III. Business and
governance structures have clear approval
frameworks.
Naspers has an internal control oversight forum
comprising the chief financial officers (CFOs) and
risk and internal audit managers of Naspers,
Naspers ecommerce, MultiChoice and Media24, the
Naspers company secretary, the company secretary
of MultiChoice and Media24 and group general
counsel. The forum was tasked to ensure the
Naspers group’s governance structures and
framework are employed in the in-scope entities
in the group during the financial year. Compliance
and progress are monitored by the audit and risk
committees and reported to the board.
In 2016 the group reviewed its application of
the King III principles and is satisfied that it has
substantially applied the King III principles.
For a review of Naspers’s application of King III,
go to
.
¡ Business ethics
The group’s code of business ethics and conduct is
available on
.
This code applies to all directors and employees
in the group. Ensuring that group companies adopt
appropriate processes and establish supporting
policies and procedures is an ongoing process.
Management focuses on policies and procedures
that address key ethical risks, such as conflicts of
interest, accepting inappropriate gifts and
unacceptable business conduct.
The human resources and remuneration
committee is the overall custodian of business
ethics. Unethical behaviour by senior staff members
is reported to this committee, along with the
manner in which the company’s disciplinary code
was applied. The social and ethics committee has
a monitoring role.
Naspers is committed to conducting its business
on the basis of complying with the law, with integrity
and with proper regard for ethical business
practices.
Whistle-blowing facilities at most subsidiaries
enable employees to anonymously report unethical
business conduct.
¡ Compliance framework
Naspers has a legal compliance programme that
involves preparing and maintaining inventories of
material laws and regulations for each business unit,
implementing policies and procedures based on
these laws and regulations, establishing processes to
supervise compliance and mitigate risks, monitoring
compliance, implementing effective training and
awareness programmes and reporting to the
various boards and management on the
effectiveness of these efforts.
79
Naspers Limited integrated annual report 2016GovernanceFinancialInformation Corporate governance (continued)
¡ Intellectual
At Naspers we strive to keep pace with the rapid
pace of global technological development by placing
a priority on innovation to meet the evolving needs
of our customers. We create intellectual capital
through the development of organisational and
knowledge-based intangibles, including intellectual
property rights and assets; organisational systems
and procedures; and brand and reputational value.
¡ Penalties
Because MultiChoice operates in a highly regulated
environment in South Africa, compliance is
important. The company participates in the
regulatory process affecting its industry through
various public forums and debates, providing inputs
on formulating standards and strategies for this
industry.
MultiChoice and M-Net received fines of
R45 000 from the self-regulatory body, the
Broadcasting Complaints Commission of South
Africa (BCCSA). These relate to failure by channels
to provide correct classification information,
resulting in MultiChoice and M-Net contravening
the BCCSA Code.
In the past year there were no environmental
accidents, nor were any environment-related fines
imposed by any government.
¡ Governance structure
The board
Composition
Details of directors at 31 March 2016 are set out
on page 89.
Naspers has a unitary board, which fulfils
oversight and controlling functions. The board
charter sets out the division of responsibilities. The
80
majority of board members are non-executive
directors and independent of management. To
ensure that no one individual has unfettered powers
of decision-making and authority, the roles of chair
and chief executive are separate.
At 31 March 2016 the board comprised seven
independent non-executive directors, four
non-executive directors and three executive
directors, as defined in the Listings Requirements
of the JSE. Five directors (36%) are from previously
disadvantaged groups and two directors (14%) are
female. These figures are above the average for
JSE-listed companies.
The chair
The chair, Koos Bekker, is a non-executive director.
Fred Phaswana acts as lead director in all matters
where there may be an actual or perceived conflict
of interest.
The chief executive
The chief executive reports to the board and is
responsible for the day-to-day business of the group
and implementing policies and strategies approved
by the board. Chief executives of the various
businesses assist him in this task. Board authority
conferred on management is delegated through the
chief executive, against approved authority levels.
Bob van Dijk is the appointed chief executive.
Orientation and development
An induction programme is held for new members
of the board and key committees, tailored to the
needs of individual appointees. The company
secretary assists the chair with the induction and
orientation of directors, and arranges specific
training if required.
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Corporate governance (continued)
Conflicts of interest
Potential conflicts are appropriately managed to
ensure candidate and existing directors have no
conflicting interests between their obligations to the
company and their personal interests. Any interest
in contracts with the company must be formally
disclosed and documented. Directors must also
adhere to a policy on trading in securities of the
company.
Independent advice
Individual directors may, after consulting with
the chair or chief executive, seek independent
professional advice at the expense of the company
on any matter connected with discharging their
responsibilities as directors.
Meetings and attendance
The board meets at least five times per year, or
more as required. The executive committee attends
to matters that cannot wait for the next scheduled
meeting. Non-executive directors meet at least
once annually without the chief executive, financial
director and chair present, to discuss the
performance of these individuals.
Details of attendance at board and committee
meetings are provided on pages 88 and 89.
Evaluation
The nomination committee carries out the annual
evaluation process. The performance of the board
and its committees, as well as that of the chair of
the board, against their respective mandates in
terms of the board charter and the charters of its
committees, is appraised. The committees perform
self-evaluations against their charters for
consideration by the board. In addition, the
performance of each director is evaluated by other
board members, using an evaluation questionnaire.
The chair of the nomination committee discusses
the results with each director. A consolidated
summary of the evaluation is discussed by the
board. The lead independent director leads the
discussion on the performance of the chair.
Board committees
While the whole board remains accountable for the
performance and affairs of the company, it delegates
certain functions to committees and management
to assist in discharging its duties. Appropriate
structures for those delegations are in place,
accompanied by monitoring and reporting systems.
Each committee acts within agreed, written terms
of reference. The chair of each committee, all of
who are non-executive directors, reports at each
scheduled board meeting.
The chair of each committee is required to
attend annual general meetings to answer questions.
The established board committees in operation
during the financial year are: executive committee,
audit committee, risk committee, human resources
and remuneration committee, nomination
committee, and the social and ethics committee.
The board is satisfied that the committees properly
discharged their responsibilities over the past year.
Internal control systems
As part of the overall management of risk, the
system of internal controls in all material subsidiaries
and joint ventures under the company’s control
aims to prevent and detect any risk materialising
and to mitigate any adverse consequences thereof.
The group’s system of internal controls is designed
to provide reasonable, and not absolute, assurance
on the achievement of company objectives,
including integrity and reliability of the financial
81
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Corporate governance (continued)
statements; to safeguard, verify and maintain
accountability of its assets; and to detect fraud,
potential liability, loss and material misstatement,
while complying with regulations. For those entities
in which Naspers does not have a controlling
interest, the directors representing Naspers on
these boards seek assurance that significant risks
are managed and systems of internal control are
effective.
All internal control systems have shortcomings,
including the possibility of human error or flouting
of control measures. Even the best system may
provide only partial assurance. In the dynamic
environment in which the company operates,
management regularly reviews risks and the design
of the internal controls system to address these,
assisted by the work and reports from internal audit
on the adequacy and operational effectiveness of
controls, which may indicate opportunities for
improvement. The external auditor considers
elements of the internal control systems as part
of its audit and communicates deficiencies when
identified.
The board reviewed the effectiveness of controls
for the year ended 31 March 2016, principally
through a process of management self-assessment,
including formal confirmation in the form of
representation letters by executive management.
Consideration was given to input, including reports
from internal audit and the external auditor,
compliance and the risk management process.
Where necessary, programmes for corrective
actions have been initiated.
Nothing has come to the attention of the board,
external or internal auditors to indicate any material
breakdown in the functioning of internal controls
and systems during the year under review.
82
Internal audit
An internal audit function is in place throughout the
group. The head of internal audit reports to the
chair of the Naspers audit committee, with
administrative reporting to the financial director.
A large part of the internal audit fieldwork is
co-sourced.
Non-audit services
The group’s policy on non-audit services provides
guidelines on dealing with audit, audit-related, tax
and other non-audit services that may be provided
by Naspers’s independent auditor to group entities.
It also sets out services that may not be performed
by the independent auditor.
IT governance
Information technology (IT) governance is
integrated in the operations of the Naspers
businesses. Management of each subsidiary or
business unit is responsible for ensuring effective
processes on IT governance are in place.
Internal audit provides assurance to management
and the audit committee on the effectiveness of IT
governance.
Company secretary
The company secretary, Gillian Kisbey-Green, and
group general counsel (legal compliance officer), are
responsible for guiding the board in discharging its
regulatory responsibilities. David Tudor was
appointed group general counsel effective 1 June
2015. Prior to that, André Coetzee, who retired on
31 March 2014, was acting group legal counsel.
Directors have unlimited access to the advice and
services of the company secretary. She plays a
pivotal role in the company’s corporate governance
and ensures that, in accordance with the pertinent
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Corporate governance (continued)
laws, the proceedings and affairs of the board, the
company itself and, where appropriate, shareholders
are properly administered. She is also the company’s
compliance officer as defined in the Companies Act
and delegated information officer. The company
secretary monitors directors’ dealings in securities
and ensures adherence to closed periods. She
attends all board and committee meetings.
As required by JSE Listings Requirement 3.84(i),
the board has determined that the company
secretary, who is a chartered accountant (SA)
with more than 20 years’ company secretarial
experience, has the 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.
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.
83
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Our board
84
KOOS BEKKER (63) led the founding team of the M-Net/MultiChoice pay-television
business in 1985. He was also a founder of the cellular telephony company MTN.
Koos headed the MIH group in its international expansion and entry into the
internet until 1997, when he became chief executive of Naspers. He serves on the
boards of other companies in the group and associates. 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 Ton Vosloo as
non-executive chair. His academic qualifications include BAHons plus an honorary
doctorate in commerce from Stellenbosch University, an LLB from the University of
the Witwatersrand and an MBA from Columbia University, New York.
BEN VAN DER ROSS (69), 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, Distell Limited and Lewis
Group Limited.
RACHEL JAFTA (55) holds the degrees MEcon and PhD, and is 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, a
member of the management committee of the Bureau for Economic Research at
Stellenbosch University and a member of the international advisory board of
Fondação Dom Cabral Business School, Brazil. Rachel 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.
CRAIG ENENSTEIN (47) 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 Craig in 2005. He holds an MBA
in finance (Wharton School of Business), an MA in international studies (Lauder
Institute, University of Pennsylvania) and a BA (University of California, Berkeley).
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Our board (continued)
FRED PHASWANA (72) 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 2000. 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.
BOB VAN DIJK (43) was appointed chief executive of Naspers Limited in April 2014.
He has over a decade of general management experience in online growth business,
as a founder and entrepreneur and later with eBay and Schibsted, spanning the online
marketplaces, online classifieds and etail segments. He was vice-president and general
manager of eBay Germany and Europe Emerging Markets. He started his career in
McKinsey with a focus on mergers and acquisitions and media. Bob has an MBAHons
from INSEAD and an MSc (cum laude) in econometrics from Erasmus University
Rotterdam.
STEVE PACAK (61), 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 non-executive director on the Naspers board and 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.
ROBERTO OLIVEIRA DE LIMA (65) from Brazil is a board member of Telefonica
Brasil, Rodobens Negócios Imobiliarios, Grupo Pao de Açucar in Brazil and Edenred
in France. Roberto 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.
MARK SOROUR (54) joined the Naspers group in 1994, heading up business
development and corporate finance globally. Following a tour of duty in Hong Kong
and Amsterdam, he returned to Cape Town as group chief investment officer. Since
then he has had global responsibility for all investment activities. Mark is a qualified
chartered accountant (SA) holding a BCom and DipAcc. He is an executive director
on the Naspers board.
85
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Our board (continued)
86
DEBRA MEYER (49) 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. Debra serves as trustee or
board member of several organisations.
COBUS STOFBERG (65) 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.). Cobus holds a BComLaw and LLB
from Stellenbosch University, BComptHons from Unisa and qualified as a chartered
accountant (SA).
BASIL SGOURDOS (46) 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. Basil 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
financial director of the Naspers group on 1 July 2014.
DON ERIKSSON (71) is a chartered accountant (SA) and an honorary life member
of the Institute of Directors of Southern Africa (IoDSA). Don is chair of Oakleaf
Insurance Company Limited, Insurance Group Managers Limited, Renasa Insurance
Company, Summerfield Retirement Village and the remuneration committee of
Discovery Health Medical Scheme. He is also chair of the audit, risk and social and
ethics committees, as well as an independent non-executive director of Naspers
Limited. Don served on the council of IoDSA for a number of years and was a
partner at Coopers & Lybrand (now PricewaterhouseCoopers Inc.).
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Our board (continued)
NOLO LETELE (66) joined M-Net in 1990 and pioneered MultiChoice’s expansion
outside South Africa. In 1995 he moved to Ghana, where he served as West African
regional general manager. In 1999 he was appointed chief executive of MultiChoice
SA, and later served as MultiChoice group chief executive until 2010, when he was
appointed executive chair of the MultiChoice South Africa Holdings board. Nolo has
won several awards including Media Man of the Year in 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). Nolo is a chartered engineer with an honours degree in
electronic engineering (UK). He sits on the boards of several companies, including
Naspers.
HENDRIK DU TOIT (54) is chief executive officer at Investec Asset Management
and an executive director of Investec plc and Investec Limited. He joined the
Investec Group in 1991 as founding member of Investec Asset Management. Under
his stewardship, Investec Asset Management grew from a small South African startup
to an international specialist asset management firm entrusted with over
US$105bn* of client assets. Hendrik has served on the Leadership Council of the
Sustainable Development Solutions Network, a global initiative for the United
Nations since 2014. In 2016 he became a commissioner on the Business and
Sustainable Development Commission. In 2016 he was appointed as a non-
executive director of Naspers Limited. Hendrik holds an MPhil in economics and
politics of development from Cambridge University, as well as an MCom in
economics and international finance (cum laude), BComHons in economics (cum
laude) and a BComLaw from Stellenbosch University.*
GUIJIN LIU (70) graduated from Beijing University of International Studies in 1971
and joined the Ministry of Foreign Affairs. He served in the general office of MFA,
various Chinese embassies (South Africa, 2001 to 2007) and in the Department
of African Affairs for many years. Guijin is experienced in international affairs,
particularly regarding relations between China and the developing world, such as
Africa. He contributed to international conferences of the United Nations, the
African Union and other organisations representing China. Recently he participated
in high-level academic forums like the World Economic Forum and the Summer
Davos. Guijin currently serves as Dean of the China-Africa International Business
School, Zhejiang Normal University, PRC and is president of the Chinese Society
of Asia and Africa Studies.
* As at end December 2015.
87
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Our board (continued)
¡ Directors and attendance at meetings
Date first
appointed in
current position
Date last
appointed
Six board
meetings were
held during
the year.
Attendance:
T Vosloo(1)
J P Bekker(2)
6 October 1997
17 April 2015
30 August 2013
28 August 2015
F-A du Plessis(3)
23 October 2003
30 August 2013
1
6
1
H J du Toit(4)
1 April 2016
1 April 2016
Not applicable
C L Enenstein
16 October 2013
28 August 2015
D G Eriksson
16 October 2013
28 August 2015
6
6
G Liu(4)
R C C Jafta
F L N Letele
1 April 2016
1 April 2016
Not applicable
23 October 2003
22 November 2013 22 November 2013
29 August 2014
D Meyer
25 November 2009
29 August 2014
R Oliveira de Lima
16 October 2013
16 October 2013
Y Ma(1)
S J Z Pacak
T M F Phaswana
M R Sorour
V Sgourdos
J D T Stofberg
B van Dijk
16 October 2013
15 January 2015
16 October 2013
28 August 2015
23 October 2003
15 January 2015
1 July 2014
28 August 2015
28 August 2015
29 August 2014
16 October 2013
1 April 2014
16 October 2013
29 August 2014
B J van der Ross
12 February 1999
28 August 2015
J J M van Zyl(1)
1 January 1988
29 August 2014
Notes
(1) Retired 17 April 2015.
(2) Appointed as a non-executive director and chair with effect from 17 April 2015.
(3) Resigned 29 May 2015.
(4) Appointed 1 April 2016.
88
Category
Non-executive
Non-executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Non-executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Non-executive
Independent
non-executive
Executive
Executive
Independent
non-executive
Executive
Independent
non-executive
Independent
non-executive
6
6
5
6
1
6
6
5
6
6
6
6
1
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Our board (continued)
¡ Committees and attendance at meetings
Executive
committee
One
meeting
held during
the year.
Attendance:
Audit
committee(1)
Four
meetings
held during
the year.
Attendance:
Risk
committee
Four
meetings
held during
the year.
Attendance:
√
√
√
√
√
√
√
0
1
1
1
1
0
1
√
√
√
√
√
√
√
√
√
0
0
4
4
4
4
0
4
4
√
√
√
√
√
0
4
4
0
4
Human
resources
and
remuneration
committee(1)
Seven
meetings
held during
the year.
Attendance:
Nomination
committee(1)
Five
meetings
held during
the year.
Attendance:
Social
and ethics
committee
Three
meetings
held during
the year.
Attendance:
√
√
1
6
√
√
1
4
√
7
√
5
√
√
√
5
6
1
√
√
√
5
4
1
√
√
√
√
√
√
√
√
3
3
3
3
3
0
3
3
Category
Non-executive
Non-executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Non-executive
Independent
non-executive
Non-executive
Independent
non-executive
Executive
Independent
non-executive
Independent
non-executive
Independent
non-executive
Executive
Non-executive
T Vosloo(3)
J P Bekker(2)
F-A du Plessis(4)
D G Eriksson(5)
R C C Jafta
F L N Letele
D Meyer
S J Z Pacak
T M F Phaswana(6)
V Sgourdos
J D T Stofberg(7)
J J M van Zyl(3)
B J van der Ross
B van Dijk
E Weideman
Notes
√ Member.
(1) Executive directors attend meetings by invitation.
(2) Appointed as a non-executive director and chair with effect from 17 April 2015. He attends the audit and risk committees’ meetings
by invitation.
(3) Retired 17 April 2015.
(4) Resigned 29 May 2015.
(5) Appointed chair of the audit committee 17 April 2015.
(6) Appointed 17 April 2015.
(7) Appointed alternate on the committees to Koos Bekker 17 April 2015.
89
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report
This report sets out our remuneration
policy for non-executive directors,
executive directors and staff, as well
as its implementation.
¡ Key aspects of the
remuneration policy
■■ Non-executive directors: The highly
competitive markets we operate in, and the
global competition we face, require us to
continually evaluate the expertise of our board.
At the annual general meeting held in August
2015, shareholders approved a revised payment
structure for non-executive directors to ensure
we attract and retain suitable talent – refer to
pages 93 to 95.
■■ 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:
– fixed salary
– executives receive short-term performance
bonuses by achieving annual targets, and
– 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 84.
¡ 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.
90
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.
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
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:
■■ guaranteed pay for performing the contractual
role
■■ short-term annual individual performance bonus:
based on actual achievement against appropriate
personal and business unit targets for the
financial year, and
■■ 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 benchmarked against similar market 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 performance
condition is therefore to create net new value
above the value on the date of issue. This 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.
91
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 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.
Remuneration report (continued)
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 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.
92
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
Non-executive directors’ remuneration
Using the services of an external consultant, two points of reference are used to develop a proposal for non-
executive directors’ remuneration:
■■ average board compensation of the Top 10 JSE companies, and
■■ 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. The current structure and remuneration approved by shareholders
at the annual general meeting on 28 August 2015 are outlined below:
31 March 2017
(approved at the
annual general
meeting on
28 August 2015)
31 March
2016
2.5 times member
US$164 000
2.5 times member
US$172 200
US$3 500
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
2.5 times member
US$42 420
2.5 times member
US$25 200
2.5 times member
US$29 820
2.5 times member
US$16 065
2.5 times member
US$22 050
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
Board
Chair*
Member
All members: Daily fees when travelling to and
attending meetings outside home country
Committees
Audit committee:
Risk committee:
Chair
Member
Chair
Member
Human resources and
remuneration committee:
Nomination committee:
Social and ethics committee:
Chair
Member
Chair
Member
Chair
Member
Other
Trustee of group share schemes/other personnel
funds
R46 400
* The non-executive chair of Naspers does not receive additional remuneration for attending meetings, or being a member of, or chairing
R44 190
any committee of the board, or for attending Tencent board and committee meetings.
Remuneration of non-executive directors for the year ending 31 March 2017 was approved by shareholders at the
annual general meeting held on 28 August 2015. Remuneration for the year to 31 March 2018, based on a 5%
increase year on year, will be proposed at the annual general meeting in August 2016.
93
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016
Remuneration report (continued)
Non-executive directors’ emoluments for the financial year to 31 March 2016
Fees for services as directors
Fees for services as directors of subsidiary companies
2016
US$’000
3 368
535
3 903
2015
US$’000
2 376
492
2 868
Individual non-executive directors received the following remuneration and emoluments in the current financial
year:
2016
Committee and
trustee fees
Directors’ fees
Other fees
Directors’ fees(1)
2015
Committee and
trustee fees
Other fees
Paid
by
com-
pany
US$’000
Paid
by
sub-
sidiary
US$’000
Paid
by
com-
pany
US$’000
Paid
by
sub-
sidiary
US$’000
Paid
by
com-
pany
US$’000
Paid
by
sub-
sidiary
US$’000
Total
2016
US$’000
Paid
by
com-
pany
US$’000
Paid
by
sub-
sidiary
US$’000
Paid
by
com-
pany
US$’000
Paid
by
sub-
sidiary
US$’000
Paid
by
com-
pany
US$’000
Paid
by
sub-
sidiary
US$’000
Total
2015
US$’000
20
46
59
20
35
—
13
209
161
21
21
24
42
64
22
35
9
11
15
480
41
217
206
206
206
28
192
231
234
234
234
206
28
48
50
50
185
500
54
267
496
435
227
28
244
281
493
276
234
270
50
48
119
190
119
119
119
190
119
190
39
115
169
119
119
398
54
69
23
42
39
9
5
16
44
28
38
9
9
2
28
94
50
50
135
163
240
240
235
128
190
156
240
234
115
169
147
213
398
2 791
180
577
70
—
285
3 903
2 124
188
252
69
—
235
2 868
Non-executive
directors
J P Bekker(1)
F-A du Plessis(2)
C L Enenstein(3)
D G Eriksson
R C C Jafta
F L N Letele
Y Ma(4)
D Meyer
R Oliveira de Lima(3)
S J Z Pacak(3)(5)
T M F Phaswana(1)
J D T Stofberg
B J van der Ross
J J M van Zyl(4)
T Vosloo(4)
94
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
Notes
(1) Appointed 17 April 2015.
(2) Resigned 29 May 2015.
(3) Compensation for assignments.
(4) Retired 17 April 2015.
(5) The comparative for “other fees paid by subsidiary” has been restated as a payment made in April 2015 related to March 2015.
General notes
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.
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. Committee and trustee fees include, where appropriate, fees to be
considered by shareholders at the annual general meeting on 26 August 2016 for services as trustees of the group share-based schemes.
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.
95
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
¡ Executive remuneration
Executive remuneration is guided by the group
policy (refer to page 91) 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:
■■ Companies in our industry can only budget
accurately for the year ahead, not five years on
where targets can only be based on guesswork
prepared by executives themselves.
■■ A complete misalignment of shareholders’ and
executives’ interests may occur. As an 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.
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.
In keeping with our policy to offer competitive
packages, a proposal 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, was approved by
shareholders at the annual general meeting on
28 August 2015. 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
96
equity compensation vehicle for long-term
incentives for the group. RSU grants are 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.
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 2016 the group held 3 393 909
(2015: 3 679 466) 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
1 US cent per N ordinary share (2015: 1 US cent).
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 2016, 548 797 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 compensation, based on
the pensionable salary of these individuals. The value
of contributions for each executive director appears
in the summary of directors’ emoluments. No
non-executive directors of Naspers contributed
to any group pension fund in 2016.
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
Guaranteed package increases
In the 2016 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 2016
Annual cash
bonuses and
performance-
related
payments
US$’000
Salary
US$’000
Pension
contribution
paid on
behalf of
director to
the pension
scheme
US$’000
Total
US$’000
2016
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
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
799
582
1 028
2 409
98
763
503
934
2 298
337
1 199
568
2 104
—
296
1 290
561
2 147
94
298
77
469
11
87
297
96
491
Note
On 30 June 2014 Steve Pacak retired as financial director, but remained on the board as an alternate non-executive director. On
15 January 2015 he was appointed as a non-executive director. Only the comparative figure is shown in the table.
1 230
2 079
1 673
4 982
109
1 146
2 090
1 591
4 936
97
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016
Remuneration report (continued)
Annual performance payments for Basil Sgourdos,
Mark Sorour and Bob van Dijk are based on
financial, operational and discrete personal
objectives, approved by the human resources and
remuneration committee in advance. Bob 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. Mark 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 the annual total cost to
company. Basil 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 98 to 101.
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 2016, is set out below. Full details can be
found in note 42 on page 126 of the consolidated
annual financial statements.
98
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
MIH (Mauritius) Limited share incentive scheme (Naspers share options)
Number of
N shares
Purchase
price
Release
period
Value of
option(1)
Name
V Sgourdos(2)
Offer date
19/09/2011
02/07/2012
11/07/2013
7 082
R350.00
22 247
27 360
R436.83
R770.00
04/09/2014
22 409
R1 380.78
18/09/2015
6 741
R1 742.96
25/09/2015
1 378
R1 702.64
B van Dijk
11/07/2013
20 094
R770.00
28/03/2014
832 000
R1 155.00
19/09/2016
02/07/2016
to 02/07/2017
11/07/2016
to 11/07/2018
04/09/2017
to 04/09/2019
18/09/2018
to 18/09/2020
25/09/2018
to 25/09/2020
11/07/2016
to 11/07/2018
28/03/2017
to 28/03/2019
R171.45
R169.68 to
R182.57
R289.65 to
R344.19
R594.64 to
R695.10
R765.98 to
R914.29
R748.89 to
R894.66
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) On 29 December 2015 Basil Sgourdos sold 71 122 Naspers N ordinary shares at average market prices ranging between R2 095.00
and R2 134.47 per share in the MIH (Mauritius) Limited Share Trust.
MIH Holdings share incentive scheme (Naspers share options)
Name
Offer date
Number of
N shares
Purchase
price
Release
period
Value of
option(1)
M R Sorour(2)
19/09/2011
11 128
R350.00
02/07/2012
37 078
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
18/09/2015
10 111
R1 742.96
25/09/2015
2 067
R1 702.64
19/09/2016
02/07/2016
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
18/09/2018
to 18/09/2020
25/09/2018
to 25/09/2020
R175.85
R176.49
to R188.10
R276.34
to R334.75
R483.39
to R568.24
R568.46
to R676.96
R765.98
to R914.29
R748.89
to R894.66
Notes
(1) The value of the option represents the fair value on grant date in accordance with IFRS.
(2) On 14 August 2015 Mark Sorour sold 29 667 Naspers N ordinary shares at average market prices ranging between R1 700.00 and
R1 707.00 per share in the MIH Holdings Share Trust.
99
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
Directors’ interests in other group share-based incentive schemes
A summary of executive directors’ participation in other Naspers group share-based incentive schemes in relation
to shares not yet released at 31 March 2016, is set out below. Full details can be found in note 42 on page 126 of
the consolidated annual financial statements.
Name
Incentive
scheme
Offer
date
Number
of ARs
Purchase
price
Release
period
Value of
option(1)
M R Sorour(2) Flipkart Limited SAR
10/09/2014
2 469 US$63.64
Flipkart Limited SAR
11/09/2015
4 714 US$63.64
Naspers Global
Ecommerce SAR
Naspers Global
Ecommerce SAR
MIH China/MIH TC 2008
SAR
SimilarWeb Limited SAR
12/09/2014
53 973 US$15.58
17/09/2015
43 034 US$18.59
17/01/2014
24 000 US$42.95
10/09/2014
1 380
US$1.45
SimilarWeb Limited SAR
17/09/2015
7 485
US$6.68
Konga SAR
11/09/2015
5 834
US$8.57
ShowMax SAR
18/09/2015
11 111
US$18
Souq SAR
11/09/2015
2 915 US$17.15
Takealot SAR
11/09/2015
5 470
R111.04
B Sgourdos Naspers Global
Ecommerce SAR
ShowMax SAR
17/09/2015
48 413 US$18.59
18/09/2015
5 556
US$18
B van Dijk
Flipkart Limited SAR
10/09/2014
292 684 US$63.64
Naspers Global
Ecommerce SAR
SimilarWeb Limited SAR
12/09/2014 5 972 907 US$15.58
10/09/2014
159 748
US$1.45
100
10/09/2016
to 10/09/2019
11/09/2016
to 11/09/2020
12/09/2016
to 12/09/2019
17/09/2016
to 17/09/2020
17/01/2017
to 17/01/2019
10/09/2016
to 10/09/2019
17/09/2016
to 17/09/2020
11/09/2016
to 11/09/2020
18/09/2016
to 18/09/2020
11/09/2016
to 11/09/2020
11/09/2016
to 11/09/2020
US$21.20
to US$26.04
US$19.81
to US$26.75
US$4.48
to US$5.26
US$4.99
to US$6.84
US$10.43
to US$11.54
US$0.44
to US$0.55
US$2.37
to US$3.16
US$2.6
to US$3.60
US$7.87
to US$10.28
US$3.80
to US$5.31
US$41.90
to US$61.26
17/09/2016
to 17/09/2020
18/09/2016
to 18/09/2020
US$4.99
to US$6.84
US$7.87
to US$10.28
10/09/2016
to 10/09/2019
12/09/2016
to 12/09/2019
10/09/2016
to 10/09/2019
US$21.20
to US$26.04
US$4.48
to US$5.59
US$0.44
to US$0.55
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
Notes
(1) The value of the option represents the fair value on grant date in accordance with IFRS.
(2) On 18 August 2015 Mark Sorour exercised options in a group share-based incentive plan and received 913 Naspers N ordinary shares
in settlement of the gain made on exercising the options. He then sold 233 073 Naspers N ordinary shares at average market prices
ranging between R1 682.00 and R1 730.08 per share. On 15 December 2015 Mark Sorour exercised options in a group share-based
incentive plan and received 34 435 Naspers N ordinary shares in settlement of the gain made on exercising the options. He then sold
14 560 Naspers N ordinary shares at average market prices ranging between R1 988.04 and R2 000.00 per share and retained the
remaining 19 875 Naspers N ordinary shares. The remaining 19 875 Naspers N ordinary shares were sold on 18 December 2015 at
average market prices ranging between R2 067.00 and R2 072.10 per share.
Directors’ interest in Naspers shares
The directors of Naspers have the following interests in Naspers A ordinary shares on 31 March 2016:
Name
J J M van Zyl(1)
J D T Stofberg(2)
31 March 2016
Naspers A ordinary shares
31 March 2015
Naspers A ordinary shares
Beneficial
Beneficial
Direct
Indirect
Total
Direct
Indirect
Total
—
—
—
166
—
166
745
—
—
130
745
130
Notes
(1) Retired 17 April 2015. Only the comparative figure is shown in the table.
(2) The increase in the number of A ordinary shares year on year is the result of the capitalisation award of A ordinary shares made on
26 November 2015 to the holders of all A ordinary shares in accordance with the company’s memorandum of incorporation (MOI).
Koos Bekker and Cobus Stofberg each have an indirect 25% interest in Wheatfields 221 Proprietary Limited, which
controls 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 2016 or 31 March 2015.
101
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 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 2016
Naspers N ordinary shares
Beneficial
31 March 2015
Naspers N ordinary shares
Beneficial
Name
Direct
Indirect
Total
Direct
Indirect
Total
J P Bekker(1)
F-A du Plessis(2)
C L Enenstein
D G Eriksson
R C C Jafta
F L N Letele
Y Ma(6)
D Meyer
R Oliveira de Lima
S J Z Pacak(3)
T M F Phaswana
V Sgourdos(4)
M R Sorour(5)
J D T Stofberg
B J van der Ross
B van Dijk
J J M van Zyl(6)
T Vosloo(6)
— 4 688 691
—
—
—
—
—
—
—
—
—
737
—
—
—
—
—
—
252 548
646 510
3 530
—
31 952
—
11 128
9 034
291 888
159 831
400
—
—
—
—
—
—
—
4 688 691
—
—
—
—
737
—
—
—
899 058
3 530
31 952
20 162
451 719
400
—
—
—
— 4 688 691
—
—
—
—
—
—
—
—
—
737
—
—
—
—
—
—
272 548
728 510
3 530
—
82 647
—
106 383
9 034
291 888
159 831
400
—
—
—
150 796
50 361
160 000
—
4 688 691
—
—
—
—
737
—
—
—
1 001 058
3 530
82 647
115 417
451 719
400
—
201 157
160 000
816 112
5 280 137
6 096 249
948 473
5 756 883
6 705 356
On 1 April 2016 Hendrik du Toit and Guijin Liu were appointed independent non-executive directors. Neither
holds any Naspers A or N ordinary shares. There have been no further changes to the directors’ interests in the
table above between the end of the financial year and 24 June 2016.
102
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Remuneration report (continued)
Notes
(1) Appointed 17 April 2015.
(2) Resigned 29 May 2015. Only the comparative figure is shown in the table.
(3) On 17 July 2015 Steve Pacak sold 50 000 Naspers N ordinary shares at average market prices ranging between R1 911.01 and
R1 900.00 per share in the Naspers share incentive trust. On 11 December 2015 Steve sold 11 909 Naspers N ordinary shares at
average market prices ranging between R2 025.00 and R2 030.01 per share in the Naspers share incentive trust. On 17 December
2015 he sold 38 091 Naspers N ordinary shares at average market prices ranging between R2 060.00 and R2 080.90 per share in
the Naspers share incentive trust. On 22 January 2016 Steve’s family trust sold 10 000 Naspers N ordinary shares at average market
prices ranging between R1 830.50 and R1 871.81 per share. Furthermore, on 25 January 2016 the family trust sold 5 000 Naspers
N ordinary shares at average market prices ranging between R1 815.12 and R1 924.98 per share.
(4) On 29 December 2015 Basil Sgourdos sold 71 122 Naspers N ordinary shares at average market prices ranging between R2 095.00
and R2 134.47 per share in the MIH (Mauritius) Limited Share Trust.
(5) On 14 August 2015 Mark Sorour sold 29 667 Naspers N ordinary shares at average market prices ranging between R1 700.00 and
R1 707.00 per share in the MIH Holdings Share Trust and 95 255 Naspers N ordinary shares at average market prices ranging
between R1 700.00 and R1 727.00 per share in the MIH (Mauritius) Limited Share Trust. On 18 August 2015 Mark exercised options
in a group share-based incentive plan and received 913 Naspers N ordinary shares in settlement of the gain made on exercising the
options. He then sold 233 073 Naspers N ordinary shares at average market prices ranging between R1 682.00 and R1 730.08
per share. On 15 December 2015 Mark exercised options in a group share-based incentive plan and received 34 435 Naspers N
ordinary shares in settlement of the gain made on exercising the options. He then sold 14 560 Naspers N ordinary shares at average
market prices ranging between R1 988.04 and R2 000.00 per share and retained the remaining 19 875 Naspers N ordinary shares.
The remaining 19 875 Naspers N ordinary shares were sold on 18 December 2015 at average market prices ranging between
R2 067.00 and R2 072.10 per share.
(6) Retired 17 April 2015. Only the comparative figure is shown in the table.
Rachel Jafta
Chair: Human resources and remuneration committee
24 June 2016
103
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Social and ethics committee report
for the year ended 31 March 2016
The purpose of this report is to outline how the
social and ethics committee has discharged its
responsibilities as set out in section 72 of the South
African Companies Act No 71 of 2008, as amended
(the Act), and regulation 43 of the Companies
Regulations 2011 (the regulation), issued in terms
of the Act.
¡ Composition
The social and ethics committee comprises
non-executive and executive directors, and certain
key members of management. On 17 April 2015
Don Eriksson replaced Boetie van Zyl on his
retirement as chair of the social and ethics
committee. This committee met three times during
the financial year. The company secretary also acts
as the secretary of the committee. Details of
attendance at meetings are provided on page 89.
¡ Responsibilities
The committee’s responsibilities cover the group’s
South African operations: MultiChoice and Media24.
Its mandate, set out in its charter, is aligned with the
committee’s statutory responsibilities as set out in
the regulations. The committee monitors:
■■ Social and economic development, including the
company’s standing in terms of the goals and
purposes of:
– the 10 principles set out in the United Nations
Global Compact Principles
– the Organisation for Economic Co-operation
and Development (OECD) recommendations
regarding corruption
– the Employment Equity Act, and
– the Broad-based Black Economic
Empowerment Act.
■■ Corporate citizenship, including the company’s:
– promotion of equality, prevention of unfair
discrimination, and reduction of corruption
– contribution to development of the
communities in which its activities are
predominantly conducted or within which
its products or services are predominantly
marketed, and
– record of sponsorship, donations and
charitable giving.
■■ Environmental, health and public safety matters,
including the impact of the company’s activities
and of its products or services.
■■ Consumer relationships, including the company’s
advertising, public relations and compliance with
consumer protection laws.
■■ Labour and employment, including:
– the company’s standing in terms of the
International Labour Organization Protocol
(ILO) on decent work and working conditions.
■■ The company’s employment relationships and its
contribution toward the educational
development of its employees.
■■ Matters within its mandate to be brought to the
attention of the board as the occasion requires.
104
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Social and ethics committee report (continued)
for the year ended 31 March 2016
■■ Matters within its mandate to be reported to the
shareholders.
¡ Discharge of responsibilities
The committee reviewed:
■■ Employment equity plans for its South African
businesses.
■■ Performance in regard to black economic
empowerment (BEE) as measured against the
Department of Trade and Industry’s (DTI’s)
generic broad-based black economic
empowerment (BBBEE) scorecard.
■■ Skills and other development programmes, aimed
at the educational development of its employees.
■■ Employment philosophy and how it is founded
on promoting equality and preventing unfair
discrimination.
■■ Labour practices and policies, and how these
compare to the ILO protocol on decent working
conditions.
■■ Corporate social investment programmes,
including details of donations and charitable
giving.
■■ The progress of the South African businesses
in addressing the principles of the UN Global
Compact and OECD.
■■ A risk register that addresses the risks associated
with the South African companies in addressing
the statutory responsibilities of the committee,
how they are addressed, including combined
assurance responses.
¡ Conclusion
The committee is of the view that the group takes
its environmental, social and governance
responsibilities seriously. Appropriate policies, plans
and programmes are in place to contribute to social
and economic development, good corporate
citizenship, environmental responsibility, fair labour
practices and good consumer relations.
No substantive non-compliance with legislation
and regulation, or non-adherence with codes of
best practice, relevant to the areas within the
committee’s mandate, has been brought to its
attention. Based on its monitoring activities to date,
the committee has no reason to believe that any
such non-compliance or non-adherence has
occurred.
The committee recognises that the areas within
its mandate are evolving and that management’s
responses too will adapt to changes in the
environmental, social and governance agenda.
Don Eriksson
Chair: Social and ethics committee
24 June 2016
105
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Report of the audit committee
for the year ended 31 March 2016
The audit committee submits this report, as
required by section 94 of the South African
Companies Act No 71 of 2008 (the Act).
■■ Reviewed external audit reports on the
consolidated and separate annual financial
statements.
■■ Reviewed the board-approved internal audit
¡ Functions of the audit
charter.
committee
The audit committee has adopted formal terms of
reference, delegated by the board of directors, as
set out in its audit committee charter.
The audit committee has discharged the
functions in terms of its charter and ascribed to it
in terms of the Act as follows:
■■ Reviewed the interim, provisional, annual financial
statements and integrated annual report,
culminating in a recommendation to the board
to adopt them. In the course of its review, the
committee:
– took appropriate steps to ensure the financial
statements were prepared in accordance with
International Financial Reporting Standards
(IFRS) and in the manner required by the Act
– considered and, when appropriate, made
recommendations on internal financial
controls
– dealt with concerns or complaints on
accounting policies, internal audit, the auditing
or content of annual financial statements, and
internal financial controls, and
– reviewed legal matters that could have an
impact on the organisation’s financial
statements.
■■ Reviewed and approved the internal and external
audit plans.
■■ Reviewed internal audit and risk management
reports and, where relevant, made
recommendations to the board.
■■ Evaluated the effectiveness of risk management,
controls and governance processes.
■■ Verified the independence of the external
auditor, nominated PricewaterhouseCoopers Inc.
as auditor for 2016 and noted the appointment
of Brendan Deegan as the designated auditor.
■■ Approved audit fees and engagement terms of
the external auditor.
■■ Determined the nature and extent of allowable
non-audit services and approved contract terms
for non-audit services by the external auditor.
¡ Members of the audit
committee and attendance
at meetings
The audit committee consists of the independent
non-executive directors listed alongside and meets
at least three times per year in accordance with its
charter. All members act independently as described
in section 94 of the Act. During the year under
review four meetings were held.
106
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016
Report of the audit committee (continued)
for the year ended 31 March 2016
Details of attendance are on page 89 of the integrated annual report.
Name of committee member
Qualifications
Boetie van Zyl(1)
Francine-Ann du Plessis(2)
Don Eriksson
Rachel Jafta(3)
Ben van der Ross
Notes
(1) Retired 17 April 2015.
(2) Resigned 29 May 2015.
(3) Appointed 9 June 2015.
BScMech (UCT) and PrEng
BComTaxHons, LLB and CA(SA)
CTA (Wits) and CA(SA)
MEcon and PhD (SU)
DipLaw (UCT)
On 17 April 2015 Don Eriksson replaced Boetie
van Zyl as chair of the audit committee upon the
latter’s retirement. Furthermore, with effect from
29 May 2015 Naspers’s non-executive director
Francine-Ann du Plessis resigned from the
committee.
On 9 June 2015 Rachel Jafta was appointed to
the audit committee to fill the vacancy following
Francine-Ann du Plessis’s resignation. Her
appointment was confirmed by shareholders at
the annual general meeting on 28 August 2015.
The board and the nomination committee
unanimously recommend to shareholders at the
annual general meeting that the current committee
members be re-elected. All audit committee
members served on the committee for the full
financial year.
¡ Internal audit
The audit committee has oversight of the group’s
financial statements and reporting process, including
the system of internal financial control. It is
responsible for ensuring that the group’s internal
audit function is independent and has the necessary
resources, standing and authority in the organisation
to discharge its duties. The committee oversees
cooperation between internal and external auditors,
and serves as a link between the board of directors
and these functions. The head of internal audit
reports functionally to the chair of the committee
and administratively to the financial director.
¡ Attendance
The internal and external auditors, in their capacity
as auditors to the group, attended and reported at
all meetings of the audit committee. The group risk
management function was also represented.
Executive directors and relevant senior managers
attended meetings by invitation.
¡ Confidential meetings
Audit committee agendas provide for confidential
meetings between committee members and the
internal and external auditors.
¡ Independence of the
external auditor
During the year the audit committee reviewed a
representation by the external auditor and, after
conducting its own review, confirmed the
independence of the auditor.
107
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Report of the audit committee (continued)
for the year ended 31 March 2016
¡ Expertise and experience of
the financial director and
the finance function
As required by the JSE Limited’s (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.
¡ Discharge of responsibilities
The committee determined that, during the financial
year under review, it had discharged its legal and
other responsibilities as outlined in terms of its
remit, details of which are included in the full
corporate governance report on
concurred with this assessment.
. The board
Don Eriksson
Chair: Audit committee
24 June 2016
108
GroupPerformanceGovernanceFinancialInformationNaspers Limited integrated annual report 2016 Financial
Contents
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
Summarised consolidated income statement
Summarised consolidated statement of comprehensive income
Summarised consolidated statement of changes in equity
Summarised consolidated statement of financial position
Summarised consolidated statement of cash flows
Segmental review
Reconciliation of trading profit to operating (loss)/profit
Headline and core headline earnings
Supplementary information
Disposal groups classified as held for sale
Business combinations and other acquisitions
Proceeds from placement of N ordinary shares and issue of listed bond
Financial instruments
Related-party transactions and balances
Events after the reporting period
Pro forma financial information
110
111
112
114
116
117
118
119
120
121
122
123
124
128
129
131
132
132
135
136
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Statement of responsibility by the board of directors
for the year ended 31 March 2016
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.
The directors accept responsibility for the 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 summarised
consolidated annual financial statements 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 112.
The summarised consolidated annual financial statements were approved by the board of directors on
24 June 2016 and are signed on its behalf by:
J P Bekker
Chair
24 June 2016
B van Dijk
Chief executive
111
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Report of the independent auditor
on the summarised consolidated annual financial statements
to the shareholders of Naspers Limited
The summarised consolidated annual financial statements of Naspers Limited, set out on pages 116 to 140 of
the integrated annual report, which comprise the summarised consolidated statement of financial position as at
31 March 2016, 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 2016.
We expressed an unmodified audit opinion on those consolidated annual financial statements in our report dated
24 June 2016. 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
“Basis of presentation and accounting policies” 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.
¡ 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.
112
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Report of the independent auditor (continued)
on the summarised consolidated annual financial statements
to the shareholders of Naspers Limited
¡ 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 2016 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 “Basis of presentation and accounting policies” 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 24 June 2016 states
that as part of our audit of the consolidated annual financial statements for the year ended 31 March 2016, 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
Cape Town, South Africa
24 June 2016
113
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Basis of presentation and accounting policies
for the year ended 31 March
The summarised consolidated annual financial statements for the year ended 31 March 2016 are prepared in
accordance with the JSE Limited’s stock exchange (JSE) Listings Requirements (the Listings Requirements) relevant to
summarised financial statements and the provisions of the Companies Act No 71 of 2008. The Listings Requirements
require summarised financial statements to be prepared in accordance with the framework concepts, the
measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, and Financial Pronouncements as issued by the
Financial Reporting Standards Council, and to also, as a minimum, contain the information required by IAS 34 Interim
Financial Reporting. The summarised consolidated annual financial statements do not include all the disclosures required
for complete annual financial statements prepared in accordance with IFRS as issued by the International Accounting
Standards Board (IASB). The accounting policies applied in the preparation of the consolidated annual financial
statements from which the summarised consolidated annual financial statements were derived, are consistent with
those applied in the previous consolidated annual financial statements except as set out below.
On 18 April 2016 Naspers announced that it had changed the presentation currency in its consolidated financial
statements from South African rand (SA rand) to United States dollar (US dollar) with effect from the financial year
ended on 31 March 2016.
Over the past 100 years the group has evolved from a single-country newspaper business and early investor in
pay television to a video-entertainment leader and global internet and ecommerce group with operations in over
130 countries. Today more than 75% of revenue measured on an economic-interest basis (which includes the group’s
proportionate share of the revenue of associates and joint ventures) is sourced from outside of South Africa.
Coupled with the evolution of the business, the group’s shareholder base now largely comprises foreign investors
to whom financial reporting in SA rand is of limited relevance. Internally, the board also bases its performance
evaluation and many investment decisions on US dollar financial information.
The board therefore believes that US dollar financial reporting provides more relevant presentation of the
group’s financial position, funding and treasury functions, financial performance and its cash flows.
Dividends will continue to be declared in SA rand, with the relevant exchange rate announced at the time
of the dividend payment.
A change in presentation currency represents a change in an accounting policy in terms of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors requiring the restatement of comparative information. In
accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, the following methodology was followed
in restating historical financial information from SA rand into US dollar:
■■ Non-US dollar assets and liabilities were translated at the relevant closing exchange rate at the end of the
reporting period. Non-US dollar items of income and expenditure and cash flows were translated at actual
transaction date exchange rates.
■■ The foreign currency translation reserve was reset to nil as at 1 April 2006, the date on which the group
adopted IFRS, in line with IFRS 1 First-time Adoption of International Financial Reporting Standards. Share capital
114
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Basis of presentation and accounting policies (continued)
for the year ended 31 March
and premium and other reserves, as appropriate, were translated at the historic rates prevailing at the dates
of underlying transactions.
■■ The effects of translating the group’s financial results and financial position into US dollar were recognised in the
foreign currency translation reserve.
Although actual transaction date exchange rates were used to translate previously reported SA rand earnings
and cash flows into US dollar, the group has provided the average exchange rates of its major trading currencies
relative to the US dollar as an approximation for these rates for reference in the table below. The closing exchange
rates of the group’s major trading currencies relative to the US dollar, used when translating the statements of
financial position presented in this release into US dollar, are also detailed in the table below.
South African rand
Euro
Chinese yuan renminbi
Brazilian real
Polish zloty
Russian rouble
31 March 2015
31 March 2014
Average rate
Closing rate
Average rate
Closing rate
0.0899
1.2470
0.1614
0.3997
0.2984
0.0215
0.0824
1.0743
0.1613
0.3143
0.2635
0.0172
0.0982
1.3426
0.1633
0.4412
0.3183
0.0301
0.0950
1.3774
0.1609
0.4433
0.3304
0.0284
The group has adopted all new and amended accounting pronouncements issued by the IASB that are effective
for financial years commencing 1 April 2015. None of the new or amended accounting pronouncements that are
effective for the financial year commencing 1 April 2015 had a material impact on the group.
The group’s reportable segments reflect the components of the group that are regularly reviewed by the chief
executive officer and other senior executives who make strategic decisions. The group proportionately consolidates
its share of the results of its associates and joint ventures in its reportable segments.
Trading profit excludes amortisation of intangible assets (other than software), equity-settled share-based
payment expenses relating to transactions to be settled through the issuance of treasury shares, retention option
expenses and other gains/losses, but includes the finance cost on transponder leases.
Core headline earnings exclude one-off and non-operating items. We believe it is a useful measure of the group’s
sustainable operating performance. However, this is not a defined term under IFRS and may not be comparable
with similarly titled measures reported by other companies.
115
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Summarised consolidated income statement
for the year ended 31 March
Revenue
Cost of providing services and sale of goods
Selling, general and administration expenses
Other gains/(losses) – net
Operating (loss)/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 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 interest
Core headline earnings for the year (US$’m)
Core headline earnings per N ordinary share (US cents)
Fully diluted core headline earnings per N ordinary share (US cents)
Headline earnings for the year (US$’m)
Headline earnings per N ordinary share (US cents)
Fully diluted headline earnings per N ordinary share (US cents)
Earnings per N ordinary share (US cents)
Fully diluted earnings per N ordinary share (US cents)
Net number of shares issued (’000)
– At year-end
– Weighted average for the year
– Fully diluted weighted average
31 March
2016
US$’m
5 930
(3 392)
(2 423)
(292)
(177)
40
(292)
(100)
1 289
1 038
251
(55)
104
452
1 261
(260)
1 001
994
7
1 001
1 246
298
292
701
168
162
238
232
2015
Restated
US$’m
6 569
(3 824)
(2 525)
(59)
161
45
(247)
(49)
1 475
977
498
(39)
113
139
1 598
(338)
1 260
1 257
3
1 260
1 030
255
249
674
167
161
311
305
431 085
417 575
419 208
411 998
403 576
405 171
%
change
(10)
(>100)
6
(21)
(21)
21
17
18
4
1
1
(23)
(24)
* Remeasurements refer to business combination-related gains and losses and disposals of investments.
116
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial
Summarised consolidated statement of
comprehensive income
for the year ended 31 March
Profit for the year
Total other comprehensive income, net of tax, for the year(1)
Translation of foreign operations(2)
Net fair-value gains/(losses)
Cash flow hedges
Share of other comprehensive income and reserves of equity-accounted
investments
Tax on other comprehensive income
Total comprehensive income for the year
Attributable to:
Equity holders of the group
Non-controlling interest
31 March
2016
US$’m
1 001
374
(309)
11
42
633
(3)
1 375
1 406
(31)
1 375
2015
Restated
US$’m
1 260
(1 164)
(1 290)
(2)
34
101
(7)
96
123
(27)
96
Notes
(1) These components of other comprehensive income may subsequently be reclassified to profit or loss except for gains of US$387m
(2015: US$113m) included in the “Share of other comprehensive income and reserves of equity-accounted investments” as well as
losses of US$nil (2015: US$2m) included in “Net fair-value gains/(losses)” relating to remeasurements on the group’s post-employment
benefit plans.
(2) The movement on the foreign currency translation reserve for the year relates primarily to the effects of foreign exchange rate fluctuations
related to the group’s net investments in its foreign operations.
Refer to the “Basis of preparation and accounting policies” for details of the restatement resulting from the group’s change in presentation
currency.
117
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Summarised consolidated statement of changes in equity
for the year ended 31 March
Balance at the beginning of the year
Changes in share capital and premium
Movement in treasury shares
Share capital and premium issued
Changes in reserves
Total comprehensive income for the year
Movement in share-based compensation reserve
Movement in existing control business combination reserve
Movement in valuation reserve
Direct retained earnings movements
Dividends paid to Naspers shareholders
Changes in non-controlling interest
Total comprehensive income for the year
Dividends paid to non-controlling shareholders
Movement in non-controlling interest in reserves
Balance at the end of the year
Comprising:
Share capital and premium
Retained earnings
Share-based compensation reserve
Existing control business combination reserve
Hedging reserve
Valuation reserve
Foreign currency translation reserve
Non-controlling interest
Total
31 March
2016
US$’m
2015
Restated
US$’m
6 903
6 477
(68)
2 300
1 406
120
9
—
—
(161)
(31)
(125)
301
94
310
123
65
(86)
31
(11)
(160)
(27)
(128)
215
10 654
6 903
4 965
6 110
1 231
(184)
35
573
(2 476)
400
10 654
2 733
5 277
724
(193)
(2)
421
(2 312)
255
6 903
Refer to the “Basis of preparation and accounting policies” for details of the restatement resulting from the group’s change in presentation
currency.
118
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Summarised consolidated statement of financial position
at 31 March
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Investments in associates
Investments in joint ventures
Other investments and loans
Other receivables
Derivative financial instruments
Deferred taxation
Current assets
Inventory
Programme and film rights
Trade receivables
Other receivables and loans
Derivative financial instruments
Cash and cash equivalents
Assets classified as held for sale
Total assets
EQUITY AND LIABILITIES
Share capital and reserves
Share capital and premium
Other reserves
Retained earnings
Non-controlling shareholders’ interest
Total equity
Non-current liabilities
Capitalised finance leases
Liabilities – interest-bearing
– non-interest-bearing
Other non-current liabilities
Post-employment medical liability
Derivative financial instruments
Deferred taxation
Current liabilities
Current portion of long-term debt
Trade payables
Accrued expenses and other current liabilities
Derivative financial instruments
Bank overdrafts and call loans
Liabilities classified as held for sale
Total equity and liabilities
Net asset value per N ordinary share (US cents)
31 March
1 April
2016
US$’m
2015 Restated
US$’m
2014 Restated
US$’m
13 486
1 443
2 818
1 190
7 625
218
57
20
—
115
3 237
194
160
393
491
59
1 714
3 011
226
16 723
10 254
4 965
(821)
6 110
400
10 654
4 023
771
2 922
8
3
13
20
286
2 046
227
437
1 253
31
1
1 949
97
16 723
2 379
10 236
1 425
1 891
451
6 058
228
78
—
8
97
2 700
262
154
398
438
37
1 226
2 515
185
12 936
6 648
2 733
(1 362)
5 277
255
6 903
3 852
617
3 057
25
—
17
12
124
2 181
354
448
1 295
47
26
2 170
11
12 936
1 614
9 515
1 619
2 451
541
4 535
164
113
—
—
92
2 698
274
188
460
458
20
1 298
2 698
—
12 213
6 282
2 329
(238)
4 191
195
6 477
3 471
643
2 601
43
—
17
35
132
2 265
250
505
1 327
80
103
2 265
—
12 213
1 580
Refer to the “Basis of preparation and accounting policies” for details of the restatement resulting from the group’s change in presentation
currency.
119
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Summarised consolidated statement of cash flows
for the year ended 31 March
Cash flows from operating activities
Cash generated from operating activities
Interest income received
Dividends received from investments and equity-accounted companies
Interest costs paid
Taxation paid
Net cash generated from operating activities
Cash flows from investing activities
Acquisitions and disposals of tangible and intangible assets
Acquisitions of subsidiaries, associates and joint ventures
Disposals of subsidiaries, associates and joint ventures
Cash movement in other investments and loans
Net cash utilised in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds from long- and short-term loans raised
Repayments of long- and short-term loans
(Outflow)/inflow from share-based compensation transactions
Dividends paid by the holding company and its subsidiaries
Other movements resulting from financing activities
Net cash 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
2016
US$’m
2015
Restated
US$’m
454
46
146
(246)
(322)
78
(228)
(1 426)
289
(19)
(1 384)
2 470
2 000
(2 270)
(13)
(254)
(41)
1 892
586
(73)
1 200
—
1 713
574
46
100
(227)
(334)
159
(292)
(406)
158
(12)
(552)
—
805
(204)
171
(274)
53
551
158
(149)
1 195
(4)
1 200
Refer to the “Basis of preparation and accounting policies” for details of the restatement resulting from the group’s change in presentation
currency.
120
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Segmental review
for the year ended 31 March
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Intersegmental
Economic interest
Less: Equity-accounted investments
Consolidated
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Economic interest
Less: Equity-accounted investments
Consolidated
Revenue
31 March
2016
US$’m
8 237
5 417
173
2 647
3 413
608
1
(35)
12 224
(6 294)
5 930
EBITDA(1)
31 March
2016
US$’m
1 845
2 415
78
(648)
799
52
(12)
2 684
(2 261)
423
2015
US$’m
6 999
4 297
210
2 492
3 830
762
5
(55)
11 541
(4 972)
6 569
2015
US$’m
1 394
1 782
114
(502)
920
52
(30)
2 336
(1 786)
550
Note
(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.
%
change
18
26
(18)
6
(11)
(20)
(80)
36
6
(27)
(10)
%
change
32
36
(32)
(29)
(13)
—
60
15
(27)
(23)
121
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Segmental review (continued)
for the year ended 31 March
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Economic interest
Less: Equity-accounted investments
Consolidated
Trading profit
31 March
2016
US$’m
1 619
2 246
66
(693)
610
29
(12)
2 246
(2 067)
179
2015
US$’m
1 177
1 616
104
(543)
732
22
(30)
1 901
(1 603)
298
%
change
38
39
(37)
(28)
(17)
32
60
18
(29)
(40)
Reconciliation of trading profit to operating (loss)/profit
for the year ended 31 March
Trading profit
Finance cost on transponder leases
Amortisation of other intangible assets
Other gains/(losses) – net
Retention option expense
Share-based incentives settled in treasury shares
Operating (loss)/profit
31 March
2016
US$’m
2015
US$’m
179
33
(68)
(292)
(2)
(27)
(177)
298
34
(68)
(59)
(14)
(30)
161
For a reconciliation of operating (loss)/ profit to profit before taxation, refer to the summarised consolidated income statement.
122
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Headline and core headline earnings
for the year ended 31 March
Net profit attributable to shareholders
Adjusted for:
– insurance proceeds
– impairment of property, plant and equipment and other assets
– impairment of goodwill and other intangible assets
– loss on sale of assets
– loss on remeasurement of disposal groups classified as held for
sale to fair value less costs of disposal
– gains on acquisitions and disposals of investments
– remeasurement of previously held interest
– dilution gains on equity-accounted investments
– remeasurements included in equity-accounted earnings
– impairment of equity-accounted investments
Total tax effects of adjustments
Total adjustment for non-controlling interest
Headline earnings
Adjusted for:
– equity-settled share-based payment expenses
– (recognition)/reversal of deferred tax assets
– amortisation of other intangible assets
– fair-value adjustments and currency translation differences
– retention option expense
– business combination related losses
31 March
2016
US$’m
994
(1)
43
155
3
88
(110)
(348)
(104)
(125)
55
650
54
(3)
701
218
(1)
230
90
2
6
2015
US$’m
1 257
(2)
44
15
—
—
(150)
(3)
(113)
(396)
39
691
(9)
(8)
674
136
20
150
26
12
12
Core headline earnings
1 246
1 030
The diluted earnings, headline earnings and core headline earnings per share figures presented on the face of the
income statement, include a decrease of US$20m (2015: US$20m) relating to the future dilutive impact of potential
ordinary shares issued by equity-accounted investees.
123
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information
for the year ended 31 March
INTEREST RECEIVED/(PAID)
Interest received
– loans and bank accounts
– other
Interest paid
– loans and overdrafts
– transponder leases
– other
Other finance income/(cost) – net
– net foreign exchange differences and fair-value adjustments on derivatives
– preference dividends received
31 March
2016
US$’m
2015
US$’m
40
37
3
(292)
(207)
(33)
(52)
(100)
(102)
2
45
39
6
(247)
(182)
(34)
(31)
(49)
(53)
4
EQUITY-ACCOUNTED RESULTS
The group’s equity-accounted investments contributed to the summarised consolidated financial results as follows:
31 March
2016
US$’m
2015
US$’m
1 289
—
(251)
180
1 218
174
191
6
1 589
1 797
45
(253)
1 475
3
(498)
98
1 078
101
106
(10)
1 275
1 316
90
(131)
Share of equity-accounted results
– sale of assets
– disposal of investments
– impairment of investments
Contribution to headline earnings
– amortisation of other intangible assets
– equity-settled share-based payment expenses
– fair-value adjustments and currency translation differences
Contribution to core headline earnings
Tencent
Mail.ru
Other
124
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
PROFIT BEFORE TAXATION
In addition to the items already detailed, profit before taxation has been determined after taking into account, inter
alia, the following:
31 March
2016
US$’m
2015
US$’m
Depreciation of property, plant and equipment
Amortisation
– other intangible assets
– software
Net realisable value adjustments on inventory, net of reversals(1)
Other gains/(losses) – net
– loss on sale of assets
– impairment of goodwill and other intangible assets
– impairment of property, plant and equipment and other assets
– remeasurement of disposal groups classified as held for sale to fair value less
costs of disposal
– insurance proceeds
– fair-value adjustments on financial instruments
Gains on acquisitions and disposals
– profit on sale of investments
– gains recognised on loss of control transactions
– remeasurement of contingent consideration
– acquisition-related costs
– remeasurement of previously held interest
186
94
67
27
78
(292)
(3)
(155)
(43)
(88)
1
(4)
452
110
—
2
(8)
348
Note
(1) Net realisable value writedowns relate primarily to set-top box subsidies in the video-entertainment segment.
198
88
68
20
55
(59)
—
(15)
(44)
—
2
(2)
139
68
82
2
(16)
3
125
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
GOODWILL
Goodwill is subject to an annual impairment assessment. Movements in the group’s goodwill for the year are
detailed below:
Goodwill
– cost
– accumulated impairment
Opening balance
– foreign currency translation effects
– acquisitions of subsidiaries and businesses
– disposals of subsidiaries and businesses
– transferred to assets classified as held for sale
– impairment
Closing balance
– cost
– accumulated impairment
31 March
2016
US$’m
2015
US$’m
2 170
(279)
1 891
(26)
1 260
(7)
(155)
(145)
2 818
3 175
(357)
2 792
(341)
2 451
(441)
105
(84)
(138)
(2)
1 891
2 170
(279)
The impairment loss recognised during the current reporting period relates primarily to the group’s investment in
its online comparison-shopping business, Buscapé. Buscapé forms part of the ecommerce segment. The impairment
loss has been calculated on a value-in-use basis using a 10-year projected cash flow model, a growth rate of 4% and
a discount rate of 20%. If the discount rate applied to cash flows were to increase by 5% and the growth rate used
to extrapolate cash flows were to decrease by 5%, there would be no further significant impairments that would
have to be recognised.
INVESTMENTS AND LOANS
The following relates to the group’s investments and loans as at the end of the reporting period:
31 March
2016
US$’m
7 900
6 977
923
2015
US$’m
6 364
5 291
1 073
Investments and loans
– listed investments
– unlisted investments and loans
126
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
COMMITMENTS
Commitments relate to amounts for which the group has contracted, but that have not yet been recognised as
obligations in the statement of financial position.
Commitments
– capital expenditure
– programme and film rights
– network and other service commitments
– transponder leases
– operating lease commitments
– set-top box commitments
31 March
2016
US$’m
3 254
16
2 245
176
573
207
37
2015
US$’m
2 918
41
1 650
141
909
124
53
The group has made certain restatements to transponder lease and programme and film rights commitments
reported during the comparative period. The adjustments made resulted in an increase in total commitments
of US$445m.
127
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Disposal groups classified as held for sale
The group classified the net assets and liabilities of Netretail, its Czech online retail and ecommerce platform,
Heureka, the group’s Czech online comparison-shopping platform, as well as the assets and liabilities of other
smaller businesses as held for sale during the year ended 31 March 2016. The above-mentioned transactions
are subject to regulatory approval.
The group concluded the disposals of its subsidiaries Ricardo.ch AG and Korbitec Proprietary Limited following
the receipt of regulatory approval during September and November 2015, respectively. These businesses were
previously classified as held for sale. Refer to note 12 for additional details regarding these disposals.
The carrying values of the assets and liabilities of all disposal groups classified as held for sale as at
31 March 2016 are detailed below:
Assets
Property, plant and equipment
Goodwill and other intangible assets
Investment in joint venture
Deferred taxation assets
Inventory
Trade and other receivables
Cash and cash equivalents
Liabilities
Deferred taxation liabilities
Long-term liabilities
Trade payables
Accrued expenses and other current liabilities
Bank overdrafts
31 March
2016
US$’m
2015
US$’m
226
28
124
4
1
38
19
12
97
9
2
39
35
12
185
8
156
—
6
2
9
4
11
3
—
2
6
—
The group recognised a loss of US$87.7m (2015: US$nil) on remeasuring the net assets of businesses classified as
held for sale to their fair value less costs of disposal during the year. The fair value of the businesses was determined
based on third-party sales prices. This represents a level 3 fair-value measurement.
128
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Business combinations and other acquisitions
The group acquired an additional 49.0% interest in its associate Avito AB (Avito), the leading online classifieds
platform in Russia, during December 2015. The additional investment resulted in the group holding a 67.5% interest
in Avito on a fully diluted basis and was accounted for as a business combination. The total purchase consideration
amounted to US$1.67bn representing cash paid to the former owners of Avito of US$1.23bn, the fair value of the
group’s previously held equity interest in Avito of US$411m, as well as the acquisition-date fair value of Avito’s
vested share-based incentive awards of US$22m. A gain of US$324m has been recognised in “Gains on acquisitions
and disposals” in the income statement on the remeasurement of the group’s previously held equity interest in
Avito to its fair value. The purchase price allocation: property, plant and equipment US$6m; cash US$24m; trade
and other receivables US$9m; deferred tax assets US$2m; intangible assets US$812m; trade and other payables
US$18m; deferred tax liabilities US$161m and the balance of US$1.19bn to goodwill. The main classes of intangible
assets recognised in the business combination were brand names, customer bases and software. The transaction
gave rise to the recognition of a non-controlling interest of US$195m, which has been measured at the non-
controlling interest’s proportionate share of the identifiable net assets of Avito as at the acquisition date.
In May 2015 the group invested US$10m in Ambatana Holdings B.V. (Ambatana), an entity operating a
hyperlocal classifieds marketplace app under the letgo brand. The investment resulted in Ambatana being accounted
for as an associate of the group. A further US$50m was invested in Ambatana during September 2015, resulting in
the group having a 67.5% interest on a fully diluted basis at the date of the additional investment. The additional
investment was accounted for as a business combination with an effective date of 30 September 2015. The total
purchase consideration amounted to US$58m representing the fair value of the group’s previously held equity
interest in Ambatana of US$34m and the fair value of a call option granted to the former owners of Ambatana
amounting to US$24m. The cash invested and cash consideration still payable, in aggregate amounting to US$50m,
remains within the group following the transaction and is accordingly not disclosed as part of the consideration
transferred by the group or assets of Ambatana acquired, although it did affect the amount of goodwill recognised
in the business combination. A gain of US$24m has been recognised in “Gains on acquisitions and disposals” in the
income statement on the remeasurement of the group’s previously held equity interest in Ambatana to its fair
value. The purchase price allocation: cash US$1m; other receivables US$1m; trade and other payables US$3m and
the balance of US$74m to goodwill. The transaction gave rise to the recognition of a non-controlling interest of
US$15m, which has been measured at the non-controlling interest’s proportionate share of the identifiable net
assets of Ambatana as at the acquisition date. On 31 March 2016 the call option granted to the former owners of
Ambatana was settled, resulting in the group holding a 55% interest in Ambatana on a fully diluted basis at year-end.
Since the acquisition dates of the above business combinations, revenue of US$31m and net results (losses) of
US$60m have been included in the income statement relating to Ambatana and Avito. Had the revenue and net
results of Ambatana and Avito been included from 1 April 2015, group revenue and net profit would have
amounted to US$6.01bn and US$1.02bn respectively.
The main factor contributing to the goodwill recognised in the acquisitions is the acquiree’s market presence.
The goodwill that arose is not expected to be deductible for income tax purposes. Total acquisition-related costs
of US$8m were recorded in “Gains on acquisitions and disposals” in the income statement regarding the above
acquisitions.
129
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Business combinations and other acquisitions (continued)
The following relates to the group’s investments in its equity-accounted investees:
During April 2015 the group invested 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.
The group’s associate Flipkart Limited (Flipkart) undertook two funding rounds during April and July 2015 in
which the group did not participate. The funding rounds resulted in a dilution of the group’s interest in Flipkart and
in the recognition of an aggregate net dilution gain of US$61m in “Dilution gains on equity-accounted investments”.
Following the dilutions, the group now holds a 15.0% interest in Flipkart on a fully diluted basis.
During May 2015 the group invested US$10m in its joint venture Souq Group Limited (Souq) as part of a
funding round. Souq undertook further funding rounds during the year in which the group did not participate.
These funding rounds resulted in a dilution of the group’s interest in Souq and in the recognition of an aggregate
net dilution gain of US$75m in “Dilution gains on equity-accounted investments”. Following the dilutions, the group
now holds a 36.4% interest in Souq on a fully diluted basis.
The group also recognised dilution losses of US$42m during the year relating to dilutions in its shareholding in
Tencent on account of the exercise of share-based incentive awards by Tencent’s employees.
The group invested US$20m in its available-for-sale investment Avenida Inc. (Avenida) during July 2015. The
transaction resulted in Avenida becoming an associate and the group now holds a 23.4% interest in Avenida on
a fully diluted basis.
The group invested US$54m as part of a funding round of its associate Takealot Online (RF) Proprietary Limited
(Takealot) during August 2015. The group holds a 42.4% interest in Takealot on a fully diluted basis.
The following relates to significant disposals by the group during the reporting period:
During September 2015 the group disposed of its interest in its subsidiary Ricardo.ch AG following approval of
the transaction by regulatory authorities. The proceeds on sale amounted to US$248m and a gain of US$76m was
recognised in “Gains on acquisitions and disposals” in the income statement following the transaction.
The group disposed of its interest in its subsidiary Korbitec Proprietary Limited during November 2015 for
US$33m following the receipt of regulatory approval. A gain of US$24m was recognised in “Gains on acquisitions
and disposals” in the income statement following the transaction.
During March 2016 the group disposed of its interest in its subsidiary PayProp Group Services Proprietary
Limited for US$10m. The disposal gave rise to the recognition of a gain of US$4m in “Gains on acquisitions and
disposals” in the income statement.
The group disposed of its 9.9% interest in Beijing Media Corporation during August 2015 for a cash
consideration of US$12m. The transaction resulted in the recognition of an aggregate gain on disposal of US$11m,
which has been recognised in “Gains on acquisitions and disposals” in the income statement.
Investments acquired and funding rounds participated in were funded through the utilisation of existing credit
facilities, proceeds received from disposals during the reporting period, as well as the proceeds from the equity
raise during December 2015.
130
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Proceeds from placement of N ordinary shares and issue of
listed bond
During December 2015 the group placed 18 167 848 new N ordinary shares with qualifying institutional investors
at a price of R1 975 per share, thereby raising gross proceeds of approximately US$2.5bn before transaction costs.
The placing represented approximately 4.3% of Naspers’s issued N ordinary share capital prior to the share
issuance. The proceeds raised were utilised to fund the group’s acquisition of a controlling interest in Avito AB, to
repay certain amounts on the group’s offshore revolving credit facility and the remainder will serve to fund the
group’s future growth strategy.
In July 2015 the group issued a 10-year US$1.2bn bond. The bond matures in July 2025 and carries a fixed
interest rate of 5.5% per annum. The proceeds were utilised for general corporate purposes including the
repayment of certain amounts on the group’s offshore revolving credit facility and to fund acquisitions and growth.
131
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Financial instruments
The fair values of the group’s financial instruments that are measured at fair value at each reporting period are
categorised as follows:
Fair-value measurements at 31 March 2016 using:
Quoted prices in
active markets
for identical assets
or liabilities
(level 1)
US$’m
Significant
other
observable
inputs
(level 2)
US$’m
Significant
unobservable
inputs
(level 3)
US$’m
12
—
—
—
—
—
—
—
48
—
17
—
—
21
—
—
11
—
13
22
—
Fair-value measurements at 31 March 2015 using:
Quoted prices in
active markets
for identical assets
or liabilities
(level 1)
US$’m
Significant
other
observable
inputs
(level 2)
US$’m
Significant
unobservable
inputs
(level 3)
US$’m
12
—
—
—
—
—
—
45
2
—
—
28
—
—
—
29
39
—
Assets
Available-for-sale investments
Foreign exchange contracts
Currency devaluation features
Liabilities
Foreign exchange contracts
Shareholders’ liabilities
Earnout obligations
Interest rate swaps
Assets
Available-for-sale investments
Foreign exchange contracts
Liabilities
Foreign exchange contracts
Shareholders’ liabilities
Earnout obligations
Interest rate swaps
There have been no transfers between levels 1, 2 or 3 during the reporting period, nor were there any significant
changes to the valuation techniques and inputs used in measuring fair value.
132
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial
Supplementary information (continued)
for the year ended 31 March
¡ Financial instruments (continued)
Financial instruments for which fair value is disclosed:
31 March 2016
Capitalised finance leases
Publicly traded bonds
31 March 2015
Financial liabilities
Capitalised finance leases
Publicly traded bonds
Carrying
value
US$’m
836
2 900
Carrying
value
US$’m
679
1 700
Fair
value
US$’m
865
3 035
Fair
value
US$’m
703
1 861
The fair values of the capitalised finance leases have been determined through discounted cash flow analysis. The
fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments
as at the end of the reporting period.
A reconciliation of the movements in the carrying values of level 3 fair-value measurements is provided below:
Currency
devaluation
features
US$’m
Share-
holders’
liabilities
US$’m
Earnout
obligations
US$’m
Total
US$’m
Opening balance
Total gains/(losses) in the income
statement
Total gains recognised as adjustments
to the cost of programme and film
rights
Additional obligations raised(1)
Cancellations/reclassifications
Settlements
Foreign currency translation effects
Closing balance
—
8
3
—
—
—
—
11
(29)
(4)
—
(27)
4
43
—
(13)
(39)
3
—
(1)
—
11
4
(22)
Note
(1) Includes an amount of US$2m relating to an obligation raised through the income statement.
(68)
7
3
(28)
4
54
4
(24)
133
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Financial instruments (continued)
31 March 2015
Opening balance
Total (losses)/gains in the income
statement
Additional obligations raised
Cancellations/reclassifications
Settlements
Foreign currency translation effects
Closing balance
Currency
devaluation
features
US$’m
Share-
holders’
liabilities
US$’m
Earnout
obligations
US$’m
—
—
—
—
—
—
—
(77)
(4)
—
45
6
1
(29)
(25)
2
(29)
—
10
3
(39)
Total
US$’m
(102)
(2)
(29)
45
16
4
(68)
134
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Financial instruments (continued)
Currency devaluation features relate to clauses in content acquisition agreements that provide the group with
protection against significant currency devaluations. The fair value of currency devaluation features is measured
through the use of discounted cash flow techniques.
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 earnout 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 earnout 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 active markets and interest
rate extracts from observable yield curves.
¡ Related-party transactions and balances
The group entered into various related-party transactions in the ordinary course of business. There have been no
significant changes in related-party transactions and balances since the previous reporting period.
¡ Events after the reporting period
On 12 May 2016 the group announced the merger of the US operations of its mobile marketplace for second-
hand goods, letgo, with Wallapop, another leader in the mobile classifieds sector. The transaction resulted in the
absorption of Wallapop’s US operations into letgo. The group retains control over letgo following the merger and
will account for the absorption of Wallapop as a business combination in the 2017 financial year.
On 11 May 2016 the group announced its first investment targeting the education technology market by
investing US$15m, through Naspers Ventures, in Brainly – a social learning network. Over 60m students in
35 countries interact with Brainly every month. In line with this strategy, the group also invested US$60m in Udemy,
an online education marketplace with over 7m students enrolled, and US$22m in Codecademy, a leading global
platform focused on online coding education, both during June 2016.
In June 2016 the group received regulatory approval for the sale of its business classified as held for sale,
Heureka. The group consequently recognised a net gain on disposal of approximately US$61m.
135
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Pro forma financial information
The group has presented certain revenue and trading profit metrics in local currency, excluding the effects of
changes in the composition of the group (the pro forma financial information) in the tables that follow. The pro
forma financial information is the responsibility of the board of directors (the board) of Naspers Limited and is
presented for illustrative purposes. Information presented on a pro forma basis has been extracted from the
group’s management accounts, the quality of which the board is satisfied with.
Shareholders are advised that, due to the nature of the pro forma financial information and the fact that it has
been extracted from the group’s management accounts, it may not fairly present the group’s financial position,
changes in equity, results of operations or cash flows.
The pro forma financial information has been prepared to illustrate the impact of changes in foreign exchange
rates and changes in the composition of the group on its results for the periods ended 31 March 2016 and
31 March 2015 respectively. The following methodology was applied in calculating the pro forma financial
information:
■■ Foreign exchange/constant currency adjustments have been calculated by adjusting the current period’s results
to the prior period’s average foreign exchange rates, determined as the average of the monthly exchange rates
for that period. The local currency financial information quoted, is calculated as the constant currency results,
arrived at using the methodology outlined above, compared to the prior period’s actual IFRS results. The relevant
average exchange rates used for the group’s most significant functional currencies are listed in “Basis of
presentation and accounting policies”.
■■ Adjustments made for changes in the composition of the group relate to acquisitions and disposals of
subsidiaries and equity-accounted investments, as well as to changes in the group’s shareholding in its equity-
accounted investments. The following significant changes in the composition of the group during the respective
reporting periods have been adjusted for in arriving at the pro forma financial information:
136
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Pro forma financial information (continued)
Year ended 31 March 2016
Transaction
Disposal of the group’s interest in Ricardo.ch AG
Acquisition of the group’s interest in Avito AB
Acquisition of the group’s interest in Ambatana
Holdings B.V.
Disposal of the group’s interest in 7Pixel Srl
Disposal of Kalahari.com
Merger of the group’s subsidiary iFood with Just Eat
Brazil
Acquisition of the group’s interest in Takealot Online
(RF) Proprietary Limited
Dilution of the group’s interest in Tencent
Dilution of the group’s interest in Flipkart Limited
Disposal by Tencent of its ecommerce businesses
to JD.com
Acquisition of the group’s additional interest in Konga
Online Shopping Limited
Basis of
accounting
Reportable
segment
Acquisition/
Disposal
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Ecommerce
Ecommerce
Disposal
Acquisition
Ecommerce
Ecommerce
Ecommerce
Acquisition
Disposal
Disposal
Subsidiary
Ecommerce
Acquisition
Associate
Associate
Associate
Ecommerce
Acquisition
Internet
Ecommerce
Disposal
Disposal
Associate
Internet
Disposal
Joint venture
Ecommerce
Acquisition
Dilution of the group’s interest in Souq Group Limited
Joint venture
Ecommerce
Disposal
The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2016
amounted to a negative adjustment of US$295m on revenue and a negative adjustment of US$24m on trading
profit.
137
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Pro forma financial information (continued)
Year ended 31 March 2015
Transaction
Acquisition of the group’s controlling interest in redBus
Acquisition of the group’s controlling interest in
Dubizzle Limited
Disposal of Kalahari.com
Acquisition of the group’s additional interest in
Flipkart Limited
Acquisition of the group’s interest in Neralona
Investments Limited (eSky.ru)
Basis of
accounting
Reportable
segment
Acquisition/
Disposal
Subsidiary
Ecommerce
Acquisition
Subsidiary
Subsidiary
Ecommerce
Ecommerce
Acquisition
Disposal
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in SimilarWeb Limited
Associate
Associate
Ecommerce
Ecommerce
Acquisition
Acquisition
Disposal by Tencent of its ecommerce businesses
to JD.com
Acquisition of the group’s additional interest in
Souq Group Limited
Associate
Internet
Disposal
Joint venture
Ecommerce
Acquisition
The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2015
amounted to a negative adjustment of US$288m on revenue and a positive adjustment of US$3m on trading profit.
138
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Pro forma financial information (continued)
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the constant
currency, organic financial information, are presented in the table below:
2015
A
2016
B
2016
C
Foreign
currency
adjustment
US$’m
Group
composition
adjustment
US$’m
(628)
(154)
(77)
(397)
(811)
(142)
—
5
(1 576)
(52)
(63)
(30)
41
(307)
(6)
3
(362)
(121)
(103)
(1 263)
(285)
(33)
(41)
(25)
(203)
(6)
(298)
(280)
20
(38)
—
3
—
—
(295)
(24)
(8)
9
(25)
—
—
—
(24)
—
—
(80)
—
15
(4)
—
(18)
—
IFRS
US$’m
6 999
4 297
210
2 492
3 830
762
5
(55)
11 541
1 177
1 616
104
(543)
732
22
(30)
1 901
953
820
6 569
1 030
161
336
138
1 476
58
31 March
2016
D
Local
currency
growth
US$’m
2 164
1 554
20
590
394
(15)
(4)
15
2 554
518
701
(17)
(166)
185
13
15
731
129
(9)
704
501
74
47
27
395
39
Revenue(1)
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Intersegmental
Economic interest
Trading profit(1)
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Economic interest
Other metrics reported
Development spend
– economic interest
– consolidated
Consolidated revenue
Core headline earnings
Classifieds revenue
Marketplace revenue
Payments revenue
Etail revenue
Travel revenue
Notes
(1) All figures are presented on an economic-interest basis unless otherwise indicated.
(2) A + B + C + D.
(3) D/A x 100.
(4) [(E/A) – 1] x 100.
2016
E(2)
2016
F(3)
2016
G(4)
IFRS
US$’m
8 237
5 417
173
2 647
3 413
608
1
(35)
12 224
1 619
2 246
66
(693)
610
29
(12)
2 246
961
708
5 930
1 246
217
338
140
1 650
91
Local
currency
growth
% change
IFRS
% change
31
36
10
24
10
(2)
(80)
27
22
44
43
(16)
(31)
25
59
50
38
14
(1)
11
49
46
14
20
27
67
18
26
(18)
6
(11)
(20)
(80)
36
6
38
39
(37)
(28)
(17)
32
60
18
1
(14)
(10)
21
35
1
1
12
57
139
Naspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Supplementary information (continued)
for the year ended 31 March
¡ Pro forma financial information (continued)
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the constant
currency, organic financial information, are presented in the table below:
2014
A
IFRS
US$’m
2015
B
2015
C
Foreign
currency
adjustment
US$’m
Group
composition
adjustment
US$’m
31 March
2015
D
Local
currency
growth
US$’m
5 573
3 351
236
1 986
3 582
829
1
(66)
9 919
658
1 059
115
(516)
841
53
(16)
1 536
(306)
(50)
(71)
(185)
(317)
(70)
—
—
(693)
(31)
(18)
(34)
21
(29)
(2)
3
(59)
(303)
(338)
6
29
—
15
—
—
(288)
3
(7)
2
8
—
—
—
3
2 035
1 334
39
662
565
(12)
4
11
2 603
547
582
21
(56)
(80)
(29)
(17)
421
2015
E(2)
2015
F(3)
2015
G(4)
Local
currency
growth
% change
IFRS
% change
37
40
17
33
16
(1)
400
17
26
83
55
18
(11)
(10)
(55)
(106)
27
26
28
(11)
25
7
(8)
400
17
16
79
53
(10)
(5)
(13)
(58)
(88)
24
IFRS
US$’m
6 999
4 297
210
2 492
3 830
762
5
(55)
11 541
1 177
1 616
104
(543)
732
22
(30)
1 901
Revenue(1)
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Intersegmental
Economic interest
Trading profit(1)
Internet
– Tencent
– Mail.ru
– Ecommerce
Video entertainment
Media
Corporate services
Economic interest
Notes
(1) All figures are presented on an economic-interest basis.
(2) A + B + C + D.
(3) D/A x 100.
(4) [(E/A) – 1] x 100.
140
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceInformationGroupFinancial Shareholder
and corporate
information
Administration and corporate information
Company secretary
Gillian 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.
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
142
ADR programme
Bank of New York Mellon maintains a Global
BuyDIRECTSM plan for Naspers Limited.
For additional information, please visit Bank of New
York Mellon’s website at www.globalbuydirect.com or
call Shareholder Relations at 1-888-BNY-ADRS or
1-800-345-1612 or write to:
Bank of New York Mellon
Shareholder Relations Department –
Global BuyDIRECTSM
Church Street Station
PO Box 11258, New York, NY 10286-1258
USA
Sponsor
Investec Bank Limited
(Registration number: 1969/004763/06)
PO Box 785700, Sandton 2146
South Africa
Tel: +27 (0)11 286 7326
Fax: +27 (0)11 286 9986
Attorneys
Werksmans Inc.
PO Box 1474
Cape Town 8000
South Africa
Webber Wentzel (in alliance with Linklaters)
PO Box 61771
Marshalltown
Johannesburg 2107
South Africa
Investor relations
Meloy Horn
InvestorRelations@naspers.com
Tel: +27 (0)11 289 3320
Fax: +27 (0)11 289 3026
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Analysis of shareholders and shareholders’ diary
Analysis of N ordinary 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
N ordinary shares
owned
46 534
22 910
3 278
619
1 401
74 742
1 711 773
7 312 607
6 987 729
4 503 144
417 404 862
437 920 115
The following shareholders hold 5% and more of the N ordinary issued share capital of the company:
Name
% of N ordinary
shares held
Number of
N ordinary shares
owned
Public Investment Corporation of South Africa
Coronation Fund Managers
13.22
5.05
57 889 144
22 101 222
Public shareholder spread (N ordinary shares)
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 2016 was 97.05%, represented by 74 728 shareholders holding
424 988 475 N ordinary shares in the company. The non-public shareholders of the company comprising
14 shareholders representing 12 931 640 N ordinary shares are analysed as follows:
Category
Naspers share-based incentive schemes
Directors
Group companies
Shareholders’ diary
Annual general meeting
Reports
Interim for half-year to September
Announcement of annual results
Annual financial statements
Dividend
Declaration
Payment
Financial year-end
Number of
N ordinary shares
% of N ordinary
issued share capital
3 393 909
6 096 249
3 441 482
0.78
1.39
0.79
August
November
June
July
August
September
March
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation
Notice of annual general meeting
Notice is hereby given in terms of the Companies Act No 71 of 2008, as amended (the Act), that the 102nd annual
general meeting of Naspers Limited (the company or Naspers) will be held on the 17th floor of the Media24
Centre (formerly Naspers Centre), 40 Heerengracht in Cape Town, South Africa on Friday 26 August 2016
at 11:15.
Record date, attendance and voting
The record date for the meeting (being the date used for the purpose of determining which shareholders are
entitled to participate in and vote at the meeting) is 12 August 2016.
Votes at the annual general meeting will be taken by way of a poll and not on a show of hands.
A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, participate in
and vote at the meeting in the place of the shareholder. A proxy need not be a shareholder of the company.
Before any person may attend or participate in a shareholders’ meeting, that person must present reasonably
satisfactory identification and the person presiding at the meeting must be reasonably satisfied that the right of that
person to participate and vote, either as a shareholder, or as a proxy for a shareholder, has been reasonably verified.
Forms of identification include valid identity documents, driver’s licences and passports.
A form of proxy, which includes the relevant instructions for its completion, is attached for the use of holders of
certificated shares and ‘own name’ dematerialised shareholders who wish to be represented at the annual general
meeting. Completion of a form of proxy will not preclude such a shareholder from attending and voting (in
preference to that shareholder’s proxy) at the annual general meeting.
Holders of dematerialised shares, other than ‘own name’ dematerialised shareholders, who wish to vote at the
annual general meeting, must instruct their central securities depository participant (CSDP) or broker accordingly in
the manner and cut-off time stipulated by their CSDP or broker.
Holders of dematerialised shares, other than ‘own name’ dematerialised shareholders, who wish to attend the
annual general meeting in person, need to arrange the necessary authorisation as soon as possible through their
CSDP or broker.
The form appointing a proxy and the authority (if any) under which it is signed, must reach 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) by no later than 11:15 on
Wednesday 24 August 2016 to allow for processing of such proxy. Should you hold Naspers A ordinary shares, the
signed proxy must reach the registered office of the company by no later than 11:15 on Wednesday 24 August
2016 to allow for processing of such proxy. A form of proxy is enclosed with this notice. The form of proxy may
also be obtained from the registered office of the company. All other proxies must be handed to the company
secretary prior to the commencement of the meeting.
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation
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 report and the social and ethics
committee report; (ii) to consider and, if approved, to adopt with or without amendment, the resolutions set out
below; and (iii) to consider any matters raised by the shareholders of the company, with or without advance notice
to the company.
Electronic participation
Shareholders entitled to attend and vote at the meeting or proxies of such shareholders shall be entitled to
participate in the meeting (but not vote) by electronic communication. Should a 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 19 August 2016 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 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 utilise the facility.
Integrated annual report
The integrated annual report of the company for the year ended 31 March 2016 is available on
www.naspers.com or on request during normal business hours at Naspers’s registered address,
40 Heerengracht, Cape Town 8000 (contact person Ms Yasmin Abrahams) and in Johannesburg at MultiChoice City,
144 Bram Fischer Drive, Randburg 2194 (contact person Mrs Toni Lutz).
Ordinary resolutions
In order for the following ordinary resolutions to be adopted, the support of a majority of votes exercised by
shareholders present or represented by proxy at this meeting is required. Ordinary resolution number 9 requires
the support of at least 75% of the total number of votes 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 2016 and the reports of the directors, the auditor and the audit committee. The summarised
form of the financial statements is attached to this notice.
A copy of the complete annual financial statements of the company for the financial year ended 31 March
2016 can be obtained from www.naspers.com or on request during normal business hours at Naspers’s
registered address, 40 Heerengracht, Cape Town 8000 (contact person Ms Yasmin Abrahams) and in
Johannesburg at MultiChoice City, 144 Bram Fischer Drive, Randburg 2194 (contact person Mrs Toni Lutz).
2. To confirm and approve payment of dividends in relation to the N ordinary and A ordinary shares of the
company as authorised by the board, after having applied the solvency and liquidity tests contemplated in the Act.
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Notice of annual general meeting (continued)
3. To reappoint, on the recommendation of the company’s audit committee, the firm PricewaterhouseCoopers
Inc. as independent registered auditor of the company (noting that Mr B Deegan is the individual registered
auditor of that firm who will undertake the audit) for the period until the next annual general meeting of the
company.
4. To approve the appointments of Messrs H J du Toit and G Liu as non-executive directors with effect from
1 April 2016. Their abridged curricula vitae appear in the integrated annual report. The board unanimously
recommends the approval of the appointments of the directors in question.
5. To elect Messrs F L N Letele, R Oliveira de Lima, J D T Stofberg and Prof D Meyer, who retire by rotation and,
being eligible, offer themselves for re-election as directors of the company. Their abridged curricula vitae appear
in the integrated annual report.
The board unanimously recommends that the re-election of directors in terms of resolution number 5 be
approved by the shareholders of the company.
The appointment of directors in ordinary resolution number 4 and the re-election of directors in ordinary
resolution number 5 will be conducted as a series of votes, each being for the candidacy of a single individual
to fill a single vacancy, and in each vote to fill a vacancy, each voting right entitled to be exercised, may be
exercised once.
6. To appoint the audit committee members as required in terms of the Act and as recommended by the
King Code of Governance for South Africa 2009 (King III) (chapter 3).
The board and the nomination committee are satisfied that the company’s audit committee members are
suitably skilled and experienced independent non-executive directors. Collectively they have sufficient
qualifications and experience to fulfil their duties, as contemplated in regulation 42 of the Companies
Regulations 2011. They have a comprehensive understanding of financial reporting, internal financial controls,
risk management and governance processes within the company, as well as International Financial Reporting
Standards (IFRS) and other regulations and guidelines applicable to the company. They keep up to date with
developments affecting their required skills set.
The board and the nomination committee therefore unanimously recommend Messrs D G Eriksson and
B J van der Ross, and Prof R C C Jafta for election to the audit committee. Their abridged curricula vitae appear
in the integrated annual report. The appointment of the members of the audit committee will be conducted by
way of a separate vote in respect of each individual.
7. To endorse the company’s remuneration policy, as set out in the remuneration report contained in the
integrated annual report, by way of a non-binding advisory vote.
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8. To place the authorised but unissued share capital of the company under the control of the directors and to
grant, until the conclusion of the next annual general meeting of the company, an unconditional authority to the
directors to allot and issue at their discretion (but subject to the provisions of the Act, plus the JSE Limited’s
(JSE) Listings Requirements and the rules of any other exchange on which the shares of the company may be
quoted or listed from time to time, plus the memorandum of incorporation of the company), the unissued
shares of the company, on such terms and conditions and to such persons, whether they be shareholders or
not, as the directors in their discretion deem fit.
9. Subject to a minimum of 75% of the votes of shareholders of the company present in person or by proxy at
the annual general meeting and entitled to vote, voting in favour thereof, the directors be authorised and are
hereby authorised to issue unissued shares of a class of shares already in issue in the capital of the company for
cash as and when the opportunity arises, subject to the requirements of the JSE, including the following:
■■ This authority shall not endure beyond the earlier of the next annual general meeting of the company or
beyond fifteen (15) months from the date of this meeting.
■■ That a paid press announcement giving full details, including the intended use of the funds, will be published
at the time of any issue representing, on a cumulative basis within one year, 5% or more of the number of
shares of that class in issue prior to the issue.
■■ The aggregate issue of any particular class of shares in any financial year will not exceed 5% (21 896 005) of
the issued number of that class of shares (including securities that are compulsorily convertible into shares
of that class).
■■ That in determining the price at which an issue of shares will be made in terms of this authority, the discount
at which the shares may be issued, may not exceed 10% of the weighted average traded price of the shares
in question, as determined over the thirty (30) business days prior to the date that the price of the issue is
determined.
■■ That the shares will only be issued to ‘public shareholders’ as defined in the Listings Requirements of the JSE,
and not to related parties.
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.
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Notice of annual general meeting (continued)
Special resolutions numbers 1.1 to 1.13
The approval of the remuneration of the non-executive directors for the year ending 31 March 2018 (5% increase
on fees for 31 March 2017 already approved by shareholders at the annual general meeting on 28 August 2015), as
follows:
Board
1.1 Chair*
1.2 Member
All members: daily fees when travelling to and attending meetings outside home
country
Committees
Risk committee:
1.3 Audit committee:
1.4
1.5
1.6
1.7 Human resources and remuneration committee:
1.8
1.9 Nomination committee:
1.10
1.11 Social and ethics committee:
1.12
Other
1.13 Trustee of group share schemes/other personnel funds
Chair
Member
Chair
Member
Chair
Member
Chair
Member
Chair
Member
31 March 2018
(proposed 5%
increase year on year)
2.5 times member
US$180 800
US$3 500
2.5 times member
US$44 540
2.5 times member
US$26 460
2.5 times member
US$31 300
2.5 times member
US$16 870
2.5 times member
US$23 150
R48 720
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.
The reason for and effect of special resolutions numbers 1.1 to 1.13 is to grant the company the authority to
pay remuneration to its directors for their services as directors.
Each of the special resolutions numbers 1.1 to 1.13 in respect of the proposed 31 March 2018 remuneration,
will be considered by way of a separate vote.
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Special resolution number 2
That the board may authorise the company to generally provide any financial assistance in the manner
contemplated in and subject to the provisions of section 44 of the Act to a director 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
member of a related or inter-related corporation, pursuant to the authority hereby conferred upon the board for
these purposes. This authority shall include and also apply to the granting of financial assistance to the Naspers
share incentive scheme, the other existing group share-based incentive schemes (details of which appear in the
integrated annual report) and such group share-based incentive schemes that are established in future (collectively
the Naspers group share-based incentive schemes) and participants thereunder (which may include directors,
future directors, prescribed officers and future prescribed officers of the company or of a related or inter-related
company) (participants) for the purpose of, or in connection with, the subscription of any option, or any securities,
issued or to be issued by the company or a related or inter-related company, or for the purchase of any securities
of the company or a related or inter-related company, pursuant to the administration and implementation of the
Naspers group share-based incentive schemes, 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 number 2 is to approve generally the provision of financial
assistance to the potential recipients as set out in the resolution.
Special resolution number 3
That the company, as authorised by the board, may generally provide, in terms of and subject to the requirements
of section 45 of the Act, any direct or indirect financial assistance to a related or inter-related company or
corporation, or to a member of a related or inter-related corporation, pursuant to the authority hereby conferred
upon the board for these purposes.
The reason for and effect of special resolution number 3 is to approve generally the provision of financial
assistance to the potential recipients as set out in the resolution.
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:
■■ Any such acquisition of N ordinary shares shall be effected through the order book operated by the JSE trading
system and done without any prior understanding or arrangement.
■■ This general authority shall be valid until the company’s next annual general meeting, provided that it shall not
extend beyond fifteen (15) months from the date of passing of this special resolution.
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Notice of annual general meeting (continued)
■■ An announcement will be published as soon 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.
■■ Acquisitions of N ordinary shares in aggregate in any one financial year may not exceed 20% of the company’s
N ordinary issued share capital as at the date of passing of this special resolution.
■■ In determining the price at which N ordinary shares issued by the company are acquired by it or any of its
subsidiaries in terms of this 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.
■■ At any point the company may only appoint one agent to effect any repurchase on the company’s behalf.
■■ 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.
■■ The company remains in compliance with the minimum shareholder spread requirements of the JSE Listings
Requirements.
■■ 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 the prohibited period.
Before the general repurchase is effected, the directors, having considered the effects of the repurchase of the
maximum number of N ordinary shares in terms of the foregoing general authority, will ensure that for a period of
twelve (12) months after the date of the notice of the annual general meeting:
■■ The company and the group will be able, in the ordinary course of business, to pay their debts.
■■ The assets of the company and the group, fairly valued in accordance with IFRS, will exceed the liabilities of the
company and the group.
■■ 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 appears in the integrated annual report and in the annual
financial statements, and is provided in terms of the JSE Listings Requirements for purposes of the general authority:
■■ Major shareholders.
■■ Share capital of the company.
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Notice of annual general meeting (continued)
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 and certify that, to the best of their knowledge 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 special resolution number 4 contains all relevant information.
Material changes
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 and up to the date of this notice.
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 and its shareholders.
The reason for and effect of special resolution number 4 is to grant the company the authority 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 any director or prescribed officer of the 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 company, or a subsidiary of the company, of the company’s A ordinary shares.
Special resolution number 6
That in terms of article 38 of the memorandum of incorporation of Naspers and in accordance with section
16(1)(c)(i) and (ii) read together with section 16(5)(b) of the Act, Naspers’s existing memorandum of
incorporation be and is hereby amended with effect from the date of filing of the required notice of amendment
with the Companies and Intellectual Property Commission, as follows:
■■ In article 9 of the memorandum of incorporation, the paragraph appearing immediately below the heading
“FRACTIONS OF SHARES” is deleted and substituted with the following:
■■ “9 Subject to the provisions of the Listings Requirements, if a fraction of a share comes into being as a result of any
allocation, the Board shall round all allocations of shares down to the nearest whole number resulting in allocations of
whole shares and a cash payment for the fraction.”
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Notice of annual general meeting (continued)
The reason for and effect of this special resolution is to amend the provisions of the memorandum of
incorporation of the company, dealing with the manner in which fractional entitlement to shares is to be treated by
the company, by aligning it with the new provisions of the JSE Listings Requirements that became effective on
22 February 2016.
The memorandum of incorporation is amended on the basis that the amendments thereto have been approved
by the JSE Limited. The amended memorandum of incorporation will lie for inspection during normal business
hours at Naspers’s registered address, 40 Heerengracht, Cape Town 8000 (contact person Ms Yasmin Abrahams)
and in Johannesburg at MultiChoice City, 144 Bram Fisher Drive, Randburg 2194 (contact person Mrs Toni Lutz).
Ordinary resolution
10. Each of the directors of the company or the company secretary is hereby authorised to do all things, perform
all acts and sign all documentation necessary to effect the implementation of the ordinary and special
resolutions adopted at this annual general meeting.
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
Cape Town
22 July 2016
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Form of proxy
ISIN: ZAE000015889
Naspers Limited
Incorporated in the Republic of South Africa
(Registration number: 1925/001431/06)
JSE share code: NPN
LSE share code: NPSN
(the company)
102nd annual general meeting of shareholders
For use by holders of certificated shares or ‘own name’ dematerialised shareholders at the 102nd 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 26 August 2016 at 11:15.
I/We
ISIN: US 6315121003
(please print)
Of
being a holder of
‘own name’ dematerialised shares of Naspers and entitled to
(see note 1)
certificated shares or
votes hereby appoint,
1.
2.
3.
or, failing him/her,
or, failing him/her,
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 26 August 2016 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.
2.
3.
4.
Acceptance of annual financial statements
Confirmation and approval of payment of dividends
Reappointment of PricewaterhouseCoopers Inc. as auditor
To confirm the appointment of:
4.1 H J du Toit as a non-executive director
4.2 G Liu as a non-executive director
5.
5.1
5.2
5.3
To elect the following directors:
F L N Letele
R Oliveira de Lima
J D T Stofberg
5.4 D Meyer
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation In favour of
Against
Abstain
Form of proxy (continued)
6.
Appointment of the following audit committee members:
6.1 D G Eriksson
6.2
6.3
7.
8.
9.
B J van der Ross
R C C Jafta
To endorse the company’s remuneration policy
Approval of general authority placing unissued shares under
the control of the directors
Approval of general issue of shares for cash
10. Authorisation to implement all resolutions adopted at the
annual general meeting
Special resolution number 1
Approval of the remuneration of the non-executive directors
Proposed financial year 31 March 2018:
1.1
1.2
Board – chair
Board – member
1.3 Audit committee – chair
1.4 Audit committee – member
1.5
1.6
Risk committee – chair
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
Special resolution number 2
Approve generally the provision of financial assistance in terms of
section 44 of the Act
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Against
Abstain
Form of proxy (continued)
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
Special resolution number 6
Amendment to the memorandum of incorporation: Fractions of
shares
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 on this day of
2016
Signature Assisted (where applicable)
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NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation Notes to the form of proxy
1.
The following provisions shall apply in relation to proxies:
1.1
1.2
1.3
1.4
1.5
1.6
1.7
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.
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.
A proxy instrument must be in writing, dated and signed by the shareholder.
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.
A copy of the instrument appointing a proxy must be delivered to the company, or to any other person on behalf of the
company, before the proxy exercises any rights of the shareholder at the annual general meeting.
Irrespective of the form of instrument used to appoint the proxy: (i) the appointment is suspended at any time and to
the extent that the shareholder chooses to act directly and in person in the exercise of any rights as a shareholder; (ii)
the appointment is revocable unless the proxy appointment expressly states otherwise; and (iii) if the appointment is
revocable, a shareholder may revoke the proxy appointment by cancelling it in writing or making a later inconsistent
appointment of a proxy and delivering a copy of the revocation instrument to the proxy and the company.
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
lodged in this manner are to be received by not later than 11:15 on Wednesday 24 August 2016, or such later date if the
annual general meeting is postponed to allow for processing of such proxies. All other proxies must be handed to the
company secretary prior to the commencement of the meeting.
5.
The completion and lodging of this form of proxy will not preclude the certificated shareholder or ‘own name’ dematerialised
shareholder from attending the annual general meeting and speaking and voting in person at the meeting to the exclusion of
any proxy appointed in terms hereof.
6. An instrument of proxy shall be valid for any adjournment or postponement of the annual general meeting, as well as for the
meeting to which it relates, unless the contrary is stated therein, but shall not be used at the resumption of an adjourned
annual general meeting if it could not have been used at the annual general meeting from which it was adjourned for any
reason other than that it was not lodged timeously for the meeting from which the adjournment took place.
7. A vote cast or act done in accordance with the terms of a form of proxy shall be deemed to be valid despite:
■■ the death, insanity, or any other legal disability of the person appointing the proxy, or
■■ the revocation of the proxy, or
■■ the transfer of a share in respect of which the proxy was given, unless notice as to any of the above-mentioned matters
shall have been received by the company at its registered office or by the chair of the annual general meeting at the place
of the annual general meeting, if not held at the registered office, before the commencement or resumption (if adjourned)
of the annual general meeting at which the vote was cast or the act was done or before the poll on which the vote was
cast.
8.
The authority of a person signing the form of proxy:
8.1 under a power of attorney, or
8.2
on behalf of a company or close corporation or trust, must be attached to the form of proxy unless the full power of
attorney has already been received by the company or the transfer secretaries.
9. Where shares are held jointly, all joint holders must sign.
10. Dematerialised shareholders, other than by ‘own name’ registration, must NOT complete this form of proxy and must provide
their central securities depository participant (CSDP) or broker of their voting instructions in terms of the custody agreement
entered into between such shareholders and their CSDP and/or broker.
156
NAVI TO BE UPDATED AFTER TWEEKSNaspers Limited integrated annual report 2016PerformanceGovernanceFinancialGroupInformation All sport pictures ©Getty Images
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