Creating
value ...
Mumbai, India
Integrated annual report 2019
... by improving
lives
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
01
01
Contents
In the following pages we share our story – who we
are and why we are here; how we create value for
all our stakeholders; our performance and progress
in this financial year; and where we are heading.
Group overview
Investing in improving
lives around the world �������������������������� 02
About this report ����������������������������������� 03
Group overview �������������������������������������� 05
Chair’s review ����������������������������������������� 07
Chief executive’s review ����������������������� 09
We are on an exciting journey �������������11
Growing our core businesses ��������������� 12
And anticipating the next wave ���������� 13
To make a positive difference
around the world ����������������������������������� 14
Bringing it all to life in India ��������������� 15
Creating value for
our stakeholders ������������������������������������ 16
Spotlight on MultiChoice Group ��������� 19
Spotlight on South Africa ��������������������� 20
The world around us ����������������������������� 22
Engaging our stakeholders ������������������� 24
Capital allocation strategy ������������������ 30
Performance review
Performance ������������������������������������������� 32
Classifieds ����������������������������������������������� 33
Payments and Fintech ��������������������������� 35
Food Delivery ����������������������������������������� 37
Etail ���������������������������������������������������������� 39
Travel ������������������������������������������������������� 41
Ventures �������������������������������������������������� 42
Social and internet platforms ������������� 43
Media ������������������������������������������������������� 44
Our people ���������������������������������������������� 45
Spotlight on machine learning ������������ 48
Tax ������������������������������������������������������������ 49
Financial review ������������������������������������� 51
Risks and opportunities ����������������������� 52
Governance
Our board ����������������������������������������������� 56
Governance at a glance ������������������������ 58
Governance for a
sustainable business ������������������������������ 59
Remuneration at a glance �������������������� 67
Summarised
consolidated annual
financial statements
Summarised consolidated
annual financial statements ���������������73
Statement of responsibility
by the board of directors���������������������73
Independent auditor’s report
on the summary consolidated
financial statements ���������������������������� 74
Notes to the summarised
consolidated financial
statements ���������������������������������������������80
Further information
Notice of annual
general meeting ������������������������������������94
Form of proxy ������������������������������������� 100
Notes to the form of proxy ���������������101
Shareholder and
corporate information �����������������������102
Analysis of shareholders
and shareholders’ diary ���������������������103
Naspers’s voting
control structure ���������������������������������104
Group overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
02
29%(1)
growth in group revenues
to US$19.0bn
22%(1)
growth in trading profit
to US$3.3bn
60%
improvement in free cash flow
>1.3bn
online users around the world
26%
increase in core headline
earnings to US$3.0bn
29%
IRR realised, following the
disposal of our interest in
Flipkart for US$2.2bn
“ Naspers is a strategic
investor and operator.
We support exceptional
companies and
entrepreneurs for
the long term ...”
Bob van Dijk
Chief executive
Notes
(1) On an economic-interest basis. Growth in local currency, excluding
acquisitions and disposals.
(2) Fintech or financial technology covers new applications, processes,
products or business models in the financial services industry.
(3) Using online technology to improve education.
Investing in improving
lives around the world
Naspers is a global consumer internet group and
one of the largest and most successful technology
investors in the world.
We are committed to investing in entrepreneurs and in
technologies that improve people’s lives. From India to
Brazil to South Africa to Russia – well over a billion people
around the world benefit from Naspers-backed businesses.
Billions more are within our reach and we’re keen to help
them too. We continue to grow and address big societal
needs and, in turn, create greater value over time.
Naspers builds leading companies that empower people
and enrich communities by operating and investing in
countries and markets with long-term growth potential
across the world. The group operates or partners with
a number of leading internet businesses across Africa,
Central and Eastern Europe, the Americas and Asia
in sectors that include online classifieds, food delivery,
payments and fintech(2), travel, education(3), health,
and social and internet platforms.
Every day, hundreds of millions of people use the products
and services of companies that Naspers has invested
in, acquired or built, including Avito, Brainly, BYJU’S,
Codecademy, eMAG, Honor, ibibo, iFood, letgo, Media24,
Movile, OLX, PayU, SimilarWeb, Swiggy, Takealot
and Udemy.
Similarly, hundreds of millions of people have made
the platforms of our associates part of their daily lives:
Tencent (www.tencent.com; SEHK 00700), Mail.ru
(www.corp.mail.ru; LSE: MAIL), MakeMyTrip Limited
(www.makemytrip.com; NASDAQ: MMYT) and Delivery
Hero (www.deliveryhero.com; Xetra: DHER).
Today, Naspers companies and associates help improve
the lives of around one fifth of the world’s population.
We actively search for new opportunities to partner
with exceptional entrepreneurs who are using technology
to address big societal needs.
Naspers has a primary listing on the JSE Limited’s stock
exchange (NPN.SJ) and a secondary listing on the A2X
Exchange (NPN.AJ) in South Africa, and has an ADR
listing on the London Stock Exchange (LSE: NPSN).
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
03
About this report
The Naspers integrated annual report assesses our performance
for the financial year ended 31 March 2019, focusing on the
value we created for our key stakeholders. The aim is to provide
a picture of our progress and impact.
Our purpose
(Why we’re here)
Who we are
(What we do)
The Naspers approach
(How we do it)
Managed on strong
foundations (How we do it)
Creating a positive
impact (The outcomes)
Reporting
From India to Brazil to
South Africa to Russia –
well over a billion people
around the world benefit
from Naspers-backed
businesses. Billions more
are within our reach
and we’re keen to help
them too.
We are a global
consumer internet group
and one of the largest
and most successful
technology investors
in the world. We are
committed to investing
in entrepreneurs and
technologies that
improve people’s
daily lives.
We think global and
support local teams.
We rigorously manage
our assets and capital
allocation for growth.
We understand the
importance of making
a positive impact
on society.
We understand the risks
we take and manage
these to minimise their
impact on our business
and results.
Our strong governance
is integral to the way
we think and make
decisions.
Delivering financial
performance and value
for our stakeholders.
Chief executive’s
review
Group overview
Business model
Governance
Value creation
Read more on page 09
Read more on page 05
Read more on page 16
Read more on page 55
Read more on page 72
In line with best practice
for integrated reporting,
we report on the six
capitals that together
provide a true picture of
value across the group.
This way of telling
a comprehensive,
connected story fits well
with our holistic view of
value and our focus on
creating sustainable value
for long-term good.
Financial
Human
Manufactured
Intellectual
Social and
relationship
Natural
Chief executive’s
STI achievements
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
04
About this report
continued
How it all fits together
We measure our performance by
evaluating how we create value for
our key stakeholders, taking account
of the six capitals(1), as well as progress
against our strategy, and by regularly
measuring returns on invested capital.
We understand the risks we take and
manage these to minimise their impact
on our business and results.
We pursue growth by building leading
companies that empower people and
enrich communities.
Listing information
Naspers has its primary listing on the
JSE Limited’s stock exchange (JSE)
(NPN.SJ) and a secondary listing on
the A2X Exchange (NPN.AJ) in South
Africa, where it forms part of the Top
10 index and where most of its shares
trade. 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 in
the United States (US). International
investors are therefore able to buy
and sell Naspers securities through
the OTC market on the LSE or JSE
(details on page 02). Naspers’s indirect
wholly owned subsidiary, Prosus N.V.
(Prosus), formerly Myriad International
Holdings N.V., also has three bonds
listed on the Irish Stock Exchange (ISE).
Scope and boundary of reporting
Financial and non-financial reporting
This report extends beyond financial
reporting. It reflects on non-financial
performance, opportunities, risks and
outcomes attributable to or associated
with key stakeholders who have
a significant influence on our ability
to create value.
It includes the financial performance of
Naspers and its subsidiaries, associates
and joint ventures (the group). The
scope of reporting on non-financial
performance is indicated in this report.
Media24, a South African subsidiary,
publishes a separate integrated annual
report (www.media24.com). Group
reporting standards are continually
being developed to make disclosure
meaningful and measurable for
stakeholders. Given the highly
competitive environment in which
we operate, this report mostly excludes
financial targets or forward-looking
statements other than as explained
on page 04.
Where relevant, we have adjusted
amounts and percentages for the
effects of foreign currency as well
as acquisitions and disposals. Such
adjustments (pro forma financial
information) are quoted in brackets
after the equivalent metrics reported
under International Financial Reporting
Standards (IFRS). Refer to page 91
of the summarised consolidated
annual financial statements for a
reconciliation of these metrics with
the equivalent amounts reported
under IFRS. Financial commentary
and segmental reviews are prepared
on an economic-interest basis (which
includes consolidated subsidiaries and
a proportionate share of associated
companies and joint ventures), unless
otherwise stated. We presented our
Video Entertainment segment as a
discontinued operation for financial
reporting purposes following the
distribution of MultiChoice Group
to shareholders in the current year.
Unless otherwise stated, all financial
information and related commentary
relates to continuing operations.
Sustainability
Through our policies and governance
structures, we demonstrate our
commitment to ethical and sustainable
entrepreneurship. We also recognise
that our stakeholders are taking a
growing interest in the sustainability
of our operations and our approach
to corporate citizenship. We take our
responsibility seriously and are fully
aware of the impact of our actions
on our social and relationship capital.
We are proud to support the United
Nations’ Sustainable Development
Goals (SDGs) and we are committed to
identifying and focusing on the goals our
business aligns with. We discuss this
alignment and our activities in support
of the SDGs in this report.
other important factors could cause
actual developments and results to
differ materially from our expectations.
The legislation and frameworks
that inform our reporting
This integrated annual report was
prepared against local and global
standards, including:
• Framework of the International
Integrated Reporting Council (IIRC):
this principles-based approach
promotes the concept of the six
capitals, which considers material
inputs and resources required to
create and sustain value in the long
term. We describe key components
of the Naspers value chain (business
model) that creates and sustains
value for our stakeholders.
• South African Companies Act No 71
of 2008, as amended (Companies Act).
• King IV Report on Corporate
GovernanceTM(2) in South Africa
2016 (King IV).
• IFRS.
Materiality and material matters
We apply the principle of materiality
in assessing what information to include
in our integrated report. This report
focuses particularly on those issues,
opportunities and challenges that
impact materially on the group, as well
as its ability to be a sustainable business
that consistently delivers value to key
stakeholders, including our shareholders.
Forward-looking statements
This report contains 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. By their nature, forward-
looking statements involve risk and
uncertainty because they relate to
future events and circumstances and
should be considered in light of various
important factors. While these
forward-looking statements represent
our judgements and future expectations,
a number of risks, uncertainties and
The key factors that could cause our
actual performance or achievements
to differ materially from those in the
forward-looking statements include
changes to IFRS and associated
interpretations, applications and
practices as they apply to past,
present and future periods; ongoing
and future acquisitions; changes to
domestic and international business
and market conditions such as exchange
rate and interest rate movements;
changes in domestic and international
regulatory and legislative environments;
changes to domestic and international
operational, social, economic and
political conditions; any labour
disruptions and industrial action;
and the effects of both current and
future litigation. We are not under
any obligation to (and expressly
disclaim any such obligation to)
revise or update any forward-looking
statements in this report, whether as
a result of new information, future
events or otherwise. We cannot give
any assurance that forward-looking
statements will prove correct and
investors are cautioned not to place
undue reliance on any forward-looking
statements in this report.
Assurance
Financial information contained in this
report and that has been extracted
from the audited Naspers Limited
consolidated annual financial statements
for the year ended 31 March 2019 was
audited by PricewaterhouseCoopers
Inc. (PwC) (refer to page 74 for its
report). PwC also performed specific
procedures on material non-financial
information in this report. South
African broad-based black economic
empowerment (BBBEE) information
was assured by EmpowerLogic
(for Naspers and Media24).
The group has a combined assurance
model for internal use. This model is
designed to cover the key risks through
a combination of assurance service
providers and functions as appropriate
for Naspers.
Notes
(1) As identified in the Framework of the International Integrated Reporting Council: financial, human, intellectual, manufacturing, social and relationship, and natural capitals.
(2) The Institute of Directors in Southern Africa NPC (IoDSA) owns all copyright and trademarks for King IV.
Statement of the board of directors
on the integrated annual report
This report is primarily intended to address the information
requirements of long-term investors (our equity shareholders,
bondholders and prospective investors). We also present
information relevant to the way we create value for other
key stakeholders, including our employees, clients,
regulators and society.
After being reviewed by the audit committee and
board, the board approved the integrated annual 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 IIRC framework and recommendations of King IV. In our
opinion, the integrated annual report and annual financial
statements fairly reflect the financial position of the group
at 31 March 2019 and its operations for this period.
On behalf of the board
Koos Bekker
Chair
Cape Town
21 June 2019
Bob van Dijk
Chief executive
The audit committee recommends
to the shareholders the appointment
of the external auditor, reviews the
auditor’s independence annually and
oversees the external audit. The
committee makes recommendations
to the board and assists the board in
ensuring the integrity of external
reports. The chief executive/chief
financial officer’s (CFO) annual sign-off
process also covers financial reporting.
An overview of combined assurance
per key risk is reported for consideration
by the joint audit and risk committees.
The scope for our group internal audit
and risk support function includes all
controlled assets. The head of internal
audit and risk support reports to the
audit committee and presents for its
approval an objective-driven, risk-based
internal audit plan. Where required,
external parties support the internal
audit function, such as forensic
specialists and data-analytics experts.
Other external assurance providers
are enlisted as needed. In our more
regulated businesses (like PayU),
regulatory inspectors visit on a periodic,
ongoing basis.
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
0505
We think global
and act local ...
It’s at the heart of how we create
value by improving people’s lives
Group
overview
Group overview05
Chair’s review 07
Chief executive’s review 09
We are on an exciting journey 11
Growing our core businesses 12
And anticipating the next wave 13
To make a positive difference
around the world 14
Bringing it all to life in India 15
Creating value for
our stakeholders 16
Spotlight on MultiChoice Group 19
Spotlight on South Africa 20
The world around us 22
Engaging our stakeholders 24
Capital allocation strategy 30
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
06
Group overview
We focus on internet services, where we have investments
in classifieds, payments and fintech, food delivery, etail
and travel, as well as new ventures and social and internet
platforms. We also have a media business.
Market leaders
We are market leaders in
many of the businesses and
markets where we operate.
Our most significant markets
are Africa, China, Russia,
Central and Eastern Europe,
North America, Latin
America, India, Southeast
Asia and the Middle East.
Global consumer internet portfolio (ecommerce)
Food Delivery
Etail
Travel(2)
Ventures
Classifieds
OLX Group
REVENUE(1)
US$875m
up 39%
Payments and
Fintech
REVENUE(1)
US$360m
up 22%
REVENUE(1)
US$377m
up >100%
TRADING PROFIT(1)
TRADING LOSS(1)
TRADING LOSS(1)
US$2m
up >100%
EMPLOYEES
5 614
Our footprint spreads across
38 countries. Our companies
OLX, Avito and letgo were
ranked the number 1 mobile
classifieds app in more than
22 countries.
Consumer brands
US$43m
up 33%
EMPLOYEES
1 449
PayU is one of the largest
online payment service
platforms in the world, with
operations in 18 markets
across Africa and the Middle
East, Central and Eastern
Europe, India and Latin
America. Included in this
segment are the group’s
fintech and credit associates
Remitly, PaySense and
ZestMoney.
US$171m
down >100%
This portfolio consists of
food-delivery businesses that
lead in 36 markets globally,
including iFood, Delivery Hero
and Swiggy.
REVENUE(1)
US$1 847m
down 10%
TRADING LOSS(1)
US$150m
up 44%
EMPLOYEES
6 259
This comprises our
etail subsidiaries, eMAG
and Takealot, and, until its
disposal, our associate Flipkart.
Operations are spread across
Central and Eastern Europe
and South Africa.
Read more on page XX
REVENUE(1)
US$234m
up 11%
TRADING LOSS(1)
US$37m
up 39%
REVENUE(1)
US$241m
up 8%
TRADING LOSS(1)
US$214m
down 23%
EMPLOYEES
2 802
Naspers Ventures partners
with entrepreneurs to build
leading technology companies,
with the ambition to fuel
the next wave of growth
for Naspers.
MakeMyTrip, listed
on the NASDAQ, is
a leading Indian online travel
company. It provides online
travel services, including
flight tickets, domestic
and international holiday
packages, hotel reservations,
and bus tickets.
Social and internet
platforms
Media
We also hold investments
in listed internet companies:
Tencent (31.1%), China’s
largest and most-used
internet-services platform,
and Mail.ru Group (28.0%)
is the leading internet
company in Russian-
speaking markets.
REVENUE(1)
US$326m
down 36%
TRADING LOSS(1)
US$14m
down >100%
EMPLOYEES
3 579
Media24 is Africa’s leading media
group with interests in digital
media and services, newspapers,
magazines, ecommerce, book
publishing, print and distribution.
It publishes some 30 magazines
and 80 newspapers and reaches
more than 16 million average
daily unique browsers across
its digital platforms.
Get a career you can be proud of.
Read more on page 33
Read more on page 35
Read more on page 37
Read more on page 39
Read more on page 41
Read more on page 42
Read more on page 43
Read more on page 44
Notes
(1) Results reported on an economic-interest basis.
(2)
In April 2019, we announced that, subject to customary closing conditions, including obtaining the requisite regulatory approvals, we will exchange
our 43% effective interest in MakeMyTrip for an approximate 6% effective interest in Ctrip. This transaction is expected to close in the second half of 2019.
07
Chair’s review
Naspers tries to create value by improving
people’s lives around the world. We do
it by backing entrepreneurs and new
technologies that address societal needs.
This year we made some significant
changes in our business, notably
unbundling our Video Entertainment
business to create a standalone
African entertainment powerhouse,
MultiChoice Group, and announcing
our intention to list our international
internet assets on Euronext
Amsterdam. We are now a pure
global consumer internet company
that is ready to further transform.
Creating sustainable value
At heart, we are entrepreneurs
who want to have a positive impact
on the world.
We aim to change people’s lives for the
better by backing people, technology
and businesses that meet fundamental
human needs. We focus on creating
sustainable, all-round value for our
different stakeholders. We measure
and report on this value across the six
capitals: financial, human, intellectual,
manufacturing, social and relationship,
and natural capital.
We also support the United Nations’
Sustainable Development Goals
(SDGs) and are working to identify
and focus on the SDGs our business
aligns with – the ones where we can
make the biggest positive difference.
Through this report we highlight
examples of our impact against
these SDGs.
Sharing a strong culture
Our commitment to creating
sustainable value is reinforced by
our culture. Across our wide-ranging
businesses, we share the same
entrepreneurial spirit and pride in
performance. This culture reflects
our purpose and is key to our
employees’ engagement, retention
and productivity.
Investing in South Africa
Our ongoing commitment to South
Africa was demonstrated this year in
a number of ways.
Through Naspers Foundry, we have
allocated R1.4bn to invest in South
African startups over the next three
years. This complements R3.2bn
already committed to our existing
South African businesses. In addition,
through Naspers Labs, we are piloting
an innovative programme designed
to help address South Africa’s youth
unemployment crisis. We also
contributed significantly in terms of tax.
In total, Naspers group paid R6.9bn in
taxes in South Africa during the year.
Working together to succeed
Our growth and success depends
above all on the commitment and
contributions of everyone in Naspers.
On behalf of the board, I thank all
our people.
Our executives, led by Bob van Dijk,
continued to implement our strategy
with energy and skill.
Board members provided valuable
guidance and support during a year
that demanded an unusual number
of meetings.
We also recognise the contributions
of our many partners and suppliers,
as well as collaboration with
governments and regulatory
bodies in numerous countries.
Ensuring good governance
We are committed to good
governance. As a multinational group,
our risks differ depending on local
jurisdictions, market dynamics,
culture and opportunities. We try
to manage all these risks rigorously.
More information appears in our
risk management section on page 52.
We aim to conduct the group’s business
with integrity, applying appropriate
corporate governance policies
and principles around the world.
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 52.
The board’s audit and risk committees
also monitor the group’s compliance
with the listings requirements of the JSE
Limited (JSE), London Stock Exchange
(LSE) and Irish Stock Exchange (ISE).
Koos Bekker
Chair
PROPOSED
DIVIDEND
715
SA cents
715 SA cents
(previously 650 SA
cents) per listed
N ordinary share,
and 143 SA cents
(previously 130 SA
cents) per unlisted
A ordinary share.
The 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
financial and operational targets as
well as against individual and group
objectives linked to strategic objectives.
We continually evaluate areas where
governance can be improved. This is
detailed in our application of King IV
in the governance frameworks of
Naspers and Media24 in the full
online governance report.
“ Throughout its long
history, Naspers has
kept changing. Change
is a core characteristic
of our entrepreneurial
spirit and critical to
our ongoing growth.”
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 08
Focusing on sustainability
We are working on refining and evolving our
sustainability strategy in line with the United
Nations’ Sustainable Development Goals (SDGs).
As a responsible business committed to making a
lasting positive difference in the world, we want to
make sure we identify and focus on the goals where
we can have the greatest impact.
The next steps for us on this journey will be
to define our sustainability objectives; identify
the key SDGs where we have the greatest impact;
set key performance indicators; and measure our
success and impact in relation to sustainability.
The global goals for
sustainable development
Chair’s review continued
“ This has been
a landmark year
of growth and
transformation
for Naspers.”
Board changes
Having reached the age of 73 and after
several years of valuable contributions
to the Naspers board, Guijin Liu has
stepped down from the board effective
25 February 2019. The board expressed
its gratitude to Guijin Liu.
As a consequence of the listing of
MultiChoice Group on the JSE in South
Africa on 27 February 2019, and the
subsequent unbundling of the Video
Entertainment business to Naspers
shareholders, Nolo Letele became
a non-executive director.
Furthermore, we announced on
6 May 2019 that Manisha Girotra
will be appointed as an independent
non-executive director after the
listing of Naspers’s subsidiary Prosus
on Euronext Amsterdam (with a
secondary listing on the JSE), which
is expected to be in September 2019.
Manisha will also serve on the board
of Prosus, and as a member of the
Naspers and Prosus audit committees.
As per the company’s memorandum
of incorporation, one third of
non-executive directors retire annually
and reappointment is not automatic.
Debra Meyer, Steve Pacak, Cobus
Stofberg, Ben van der Ross and I
retire by rotation at the annual
general meeting but, being eligible,
offer ourselves for re-election. At this
meeting, shareholders will be asked
to consider the re-election of these
directors (see notice on page 94).
Don Eriksson, Ben van der Ross and
Rachel Jafta are members of the audit
committee. The board recommends to
shareholders that they be reappointed
to this committee. This is a demanding
committee of any board.
In compliance with the Companies Act,
shareholders will be asked to consider
these proposals at the annual general
meeting. Please see directors’ curricula
vitae on pages 56 and 57.
Dividend (in South African cents)
The board recommends that the annual
gross dividend be increased by 10% to
715 cents (previously 650 cents) per
listed N ordinary share, and 143 cents
(previously 130 cents) per unlisted
A ordinary share.
If confirmed by shareholders at the
annual general meeting on 23 August
2019, dividends will be payable to
shareholders recorded in the books
on Friday 13 September 2019 and
paid on Monday 16 September 2019.
The last date to trade cum dividend
will be on Tuesday 10 September
2019 (shares trade ex-dividend from
Wednesday 11 September 2019).
Share certificates may not be
dematerialised or rematerialised
between Wednesday 11 September
2019 and Friday 13 September 2019,
both dates inclusive.
The dividend will be declared from
income reserves. It will be subject to
the dividend tax rate of 20%, yielding
a net dividend of 572 cents per listed
N ordinary share and 114 cents per
unlisted A ordinary share to those
shareholders not exempt from paying
dividend tax. Dividend tax will be
143 cents per listed N ordinary share
and 29 cents per unlisted A ordinary
share. The issued ordinary share capital
as at 21 June 2019 was 438 656 059 N
ordinary shares and 907 128 A ordinary
shares. The company’s income tax
reference number is 9550138714.
Looking ahead
This has been a lively year of growth
and evolution for Naspers. On behalf
of the board, I thank everyone involved
and look forward to our continued
journey ahead as a pure consumer
internet company.
Koos Bekker
Chair
21 June 2019
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
09
Chief executive’s
review
Key events through the year
Bob van Dijk
Chief executive
“ This was a standout year for
Naspers – a period of continued
strong growth and performance
across our businesses and a year of
great transformation as we achieved
our aim to become a 100% global
consumer internet company.”
Over recent years, we have been on a
deliberate and disciplined journey to
grow and excel in creating value by
improving people’s lives. It is a journey
that has seen us pass through three key
strategic phases. In 2014–2015, we reset
the business – organising ourselves into
global segments, establishing an excellent
ecommerce team, and divesting of
low-potential assets. Over 2016–2017,
we accelerated ecommerce growth,
consolidated for leadership, exited
peak-value businesses, and executed
quality growth investments. This in turn
enabled us to focus over the past two
years on growing ecommerce to
profitability, developing core segments
into US$5–10bn+ businesses and
planting seeds for longer-term growth.
Transforming to excel
This year we achieved a landmark
in our transformation – listing and
unbundling our Video Entertainment
business and completing our evolution
into a global consumer internet
company. This step unlocked
considerable value for shareholders and
allows the new MultiChoice Group to
excel as Africa’s leading entertainment
business. It also enables us to focus with
even greater intensity on fulfilling our
purpose and ambitions as a pure global
consumer internet company.
This is an exciting time to be part of
the Naspers family. Collectively, we are
now one of the world’s top 10 internet
companies by market capitalisation,
with around a fifth of the people on the
planet using the products and services
of our companies and associates to
improve their daily lives. We have
now laid the foundation to take our
growth and success to the next level.
Playing our part in South
Africa’s success
While transforming, we have stayed
true to our South African roots and
are committed to the continued growth
and success of this amazing country.
With the new MultiChoice Group,
we were very pleased to be able
to create further value for Phuthuma
Nathi shareholders who, through
MultiChoice South Africa (MCSA),
have already participated in one
of South Africa’s most successful
empowerment schemes. Phuthuma
Nathi shareholders were allocated an
additional 5% stake in the issued share
capital of MCSA for no consideration.
As a result, their indirect interest in
MCSA has risen from 20% to 25%.
With Naspers Labs and Naspers
Foundry, we are bringing our
commitment to life through two
initiatives focused on helping and
investing in the next generation
of South African talent and
tech entrepreneurs.
Tackling youth unemployment
Naspers Labs is our flagship social
impact project designed to transform
and launch South Africa’s unemployed
youth into economic activity.
The programme has been designed to
remove the unique barriers to entering
the economy for impoverished South
African youth. Our ambition is to be
a driving force behind increasing access
to economic opportunity for millions
of young people living in low income
peri-urban areas of South Africa.
Backing entrepreneurial talent
Naspers Foundry is our startup funding
initiative focused on helping talented
and ambitious South African tech
entrepreneurs develop and grow
businesses that improve peoples’ lives.
We have allocated R1.4bn to invest in
South African tech startups over three
years. This complements the R3.2bn
already committed to developing the
group’s existing South African businesses.
Growing revenues and profitability
Alongside our transformation, and
indeed helping to fuel it, we delivered
another strong year of growth. Group
revenue from continuing operations
on an economic-interest basis was
US$19bn, up 16% on last year (or 29%
in local currency and adjusted for
acquisitions and disposals).
Our core focus areas – Classifieds,
Payments and Fintech, and Food
Delivery – were key in delivering this
growth. On the same basis, group
trading profit from continuing
operations rose 10% to US$3.3bn
(or 22% in local currency and adjusted
for acquisitions and disposals).
Core headline earnings from continuing
operations was up 26% on last year
at US$3bn.
2018
May
Jun
July
Aug
Sept
Naspers invests US$35m in
Honor, enabling the health
innovator to grow its national
network of home-care agencies.
OLX Group and Properati agree
to join forces in Latin America,
strengthening its presence in
that real estate market.
OLX Group invests US$89m
in Frontier Car Group to
continue expanding and
disrupting the used-car sector
in high-growth markets.
Naspers further commits to
Indian food-delivery business
Swiggy, investing US$79m
as part of a US$210m
investment round.
US$79m
Movile announces a new round
of investment, led by Naspers
with participation by Brazilian
investment fund, Innova Capital
(Innova), with a combination
of primary and secondary
investment totalling US$124m.
PayU invests US$12m in
PaySense. PaySense is a fintech
startup based in Mumbai India.
The company is focused on digital
lending, serving short-duration
microloans to Indian consumers.
PayU announces the acquisition
of leading payments technology
platform, Zooz, for US$60m.
The deal supports PayU’s ongoing
expansion into high-growth
markets and addresses the
significant opportunity in cross-
border payments.
letgo acquires the share
capital held by non-controlling
shareholders of letgo USA B.V.
of US$189m.
Naspers disposes of its 12%
stake in Indian ecommerce
company, Flipkart, to US-based
retailer Walmart for US$2.2bn,
delivering a 29% internal rate
of return on investment.
29%
internal rate of return on
investment in Flipkart
Naspers announces its intention
to separately list and unbundle its
Video Entertainment business as
MultiChoice Group on the JSE,
creating an empowered,
standalone Africa-wide
entertainment business;
unlocking value for Naspers
shareholders; and increasing
Phuthuma Nathi shareholding
in MultiChoice South Africa
to 25%.
Naspers invests US$5.6m
in SoloLearn to enable the
education innovator to fund
product enhancement, global
expansion and launch a career
service for the community.
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
10
Chief executive’s
review continued
Strengthening our core
We have a range of excellent
businesses in the group and we cover
their performance in some detail later
in this report, but I touch on a few key
highlights here.
As a pure global consumer internet
company, we are currently focusing on
three core areas where we can work
to create value by improving people’s
lives: Classifieds, Payments and Fintech,
and Food Delivery. In all three areas,
we had a strong year.
In Classifieds, OLX Group achieved
its first year of profitability and
annual revenues exceeded target.
We continued to invest and expand,
notably into car, real estate and
convenience offers, while reorganising
and streamlining, where necessary, to
increase efficiency and customer focus.
In Payments and Fintech, the core
payments business of PayU continued
to grow and recorded its first profit on
a standalone basis.
We continued to
build on core payments and moved
progressively into broader fintech credit
services, with additional investments in
PaySense and ZestMoney.
“ Across our chosen areas of focus, we want
to take a much bigger space in the hearts
and minds of internet consumers around
the world. So we back excellent
entrepreneurs building great business
models with very strong local components.”
US$716m
Investment in
Indian food-delivery
leader Swiggy
US$383m
Investment in
Indian educational
company BYJU’S
Along with Innova
In the fast-growing sector of Food
Delivery, we increased our focus
and investment.
Capital we committed to invest
additional capital of US$400m in iFood
to enable iFood to accelerate growth by
expanding coverage and investment in
first-party delivery capabilities, speed up
product development and innovation,
and deliver personalised experiences
to its customers. We also invested
US$716m in Indian food-delivery
leader, Swiggy. We believe technology
will transform the way people eat,
and we are investing in that.
While concentrating on the core,
we also continued to identify, explore
and build the next wave of growth
for Naspers. Investments ranged from
adding to our education portfolio with
an investment in Indian educational
company BYJU’S by investing US$383m,
to taking an initial stake in healthcare
innovator, Honor.
Our investments in social and internet
platforms also performed well.
Tencent continued to excel in China
while Mail. ru consolidated its position
as Russia’s leading internet group.
These businesses are leaders in
two of the world’s most dynamic
high-growth markets.
Developing and encouraging
our people
Another key asset for us is, of course,
our outstanding people. They are
at the heart of everything we do at
Naspers. The experience we give
our customers, the value we deliver
to our shareholders, the success of the
business – all these rest on the quality
and commitment of our people. So we
work hard to recruit, develop and retain
the best people throughout the group.
One of the ways we are developing and
encouraging all our people to be their
best is through MyAcademy, our global
learning and development platform. It
operates as an online learning hub and
is supplemented by classroom training
and is open to all our people, including
employees in our minority investments.
We offer a range of experiences that
allow our people to enhance their skills
in areas such as leadership, technology,
cybersecurity, machine learning,
business and commercial skills, and
foreign languages. MyAcademy is an
engine and enabler of growth and
change across the group. We use it to
amplify and accelerate innovation and
entrepreneurship and to ensure our
people have the right knowledge to
support our priorities and ambitions.
Making the most of
machine learning
Across all our businesses, we are
increasingly investing in and making
the most of machine learning (ML).
From image recognition to the ability to
interpret text, ML has advanced rapidly
in recent years. As a data-rich business,
we have the fundamental asset – the
essential ingredient – to make the most
of technology’s strengths and potential.
We are using ML to create value in
different ways across the group, such
as increasing the trust and safety of
interactions between buyers and
sellers, and making services simpler
and more streamlined.
Looking ahead
Looking ahead, we have only just begun
to capitalise on the added drive, focus,
energy and opportunities that come
from being a pure global consumer
internet company.
Towards the end of our financial year,
we announced the next major step in
our ongoing journey – our intention to
list our international internet assets on
Euronext Amsterdam.
The new company, Prosus, will
likely be the largest listed consumer
internet group in Europe by asset value,
comprising some of the world’s leading
and fastest-growing internet companies
in some of the most interesting markets
on the planet.
This is a significant step for Naspers,
which will own at least 73% of Prosus.
We believe that the listing will present
an appealing new opportunity for global
tech investors to have access to our
unique portfolio of international internet
assets. As well as opening up investment
to a broader category of investors, the
listing aims to reduce our weighting on
the JSE, which we believe will help us
maximise shareholder value over time.
I am pleased and proud to say that
we have an even more exciting future
ahead. A future in which more and
more people can share – customers,
investors, our teams, and our key
stakeholders. I look forward to
continuing to help shape this future.
Bob van Dijk
Chief executive
21 June 2019
Oct
Nov
Dec
2019
Jan
Feb
Mar
Naspers confirms it is piloting
Naspers Labs – its holistic
programme to address youth
unemployment in South Africa.
Naspers boosts the South
African technology sector with
a R4.6bn commitment over the
next three years: R1.4bn will
be invested in startups through
Naspers Foundry and R3.2bn in
further developing the group’s
existing South African
businesses.
R4.6bn
Movile receives a new funding
commitment from Naspers and
Innova to invest an additional
US$400m in iFood, to enable
iFood to accelerate growth by
expanding coverage and
investment in first-party delivery
capabilities, speed up product
development and innovation and
deliver personalised experiences
to its customers.
US$400m
Naspers invests in dott
to transform city mobility
in Europe.
Naspers invests US$383m as
part of a US$540m investment
round in BYJU’S, one of the
world’s largest education
companies. The funds will fuel
international expansion and
further personalise learning.
Naspers shares approved for
inclusion in the list of qualifying
equity securities to be traded on
A2X from 27 December 2018.
Naspers invests US$637m as
part of a US$1bn investment
round in Swiggy, India’s largest
food-delivery platform.
OLX Group invests US$1.16bn
to acquire the share capital held
by non-controlling shareholders
of Avito, the leading online
general classifieds and property
platform in Russia, taking its
effective interest to 100%.
MultiChoice Group lists on
the JSE.
Video Entertainment
business unbundled.
Naspers announces its intention
to list its international assets
on Euronext Amsterdam.
100%
Naspers integrated annual report 2019
Performance review
11
We are on an
exciting
journey ...
A journey to back entrepreneurs with
differential ideas and businesses that
change the world for the better –
improving the lives of billions of people
from Cape Town to Kolkata, São Paulo
to Saint Petersburg, and beyond.
It is an ongoing journey that involves looking ahead and moving
forward, spotting the best opportunities and investing in them in
the long term A journey that has seen us continue to grow and
focus to become a pure global consumer internet company
From food delivered fast to your door, to easier ways to pay
for everyday things while you’re out and about – we know that
digital technology can transform people’s lives for the better
We also know this transformation has only just begun We are
deeply committed to it, and we are in it for the long haul
Our journey so far
1. Reset
• Organised in
global segments
• Established an
2. Accelerate
• Accelerated
ecommerce growth
• Consolidated for
ecommerce team
leadership
• Divested low-
potential assets
• Exited peak-value
businesses
• Executed quality
growth investments
3. Crystallise
• Grow commerce
and profitability
• Develop core
segments into
US$5–10bn+
businesses
• Plant seeds for
longer-term growth
4.Build
• Continue to
invest and grow
in core areas
• Pioneer more
improvements
in people’s lives
1
Reset
2015–2016
3
Crystallise
2018–2019
2
Accelerate
2017–2018
4
Build
2020 onwards
Our journey to online
11%
34%
77%
100%
Online revenue
Video Entertainment
and Media revenue
2007
2012
2017
2019
IntroductionGroup overviewGovernanceFinancial statementsFurther informationPerformance review Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
12
...growing
the next wave ...
Focusing on core needs
We’re focused and disciplined about how we go
about this. As a pure global consumer internet
business, we have identified three core areas
where we are going all-in to invest, operate,
lead and transform people’s lives for the better.
Aiming to be the best
These three core areas are Classifieds, Payments
and Fintech, and Food Delivery. In each area,
we have businesses that are growing fast and doing
great things for consumers. Our ambition is to be
the best option for our users, to go the furthest
and do the most for people in these core areas
so that we play a big part in improving their lives.
We focus on where we can make the biggest,
most positive long-term difference to people’s
lives around the world.
Making a big difference
We think global and act local – backing
entrepreneurs and businesses using technologies
to address big societal needs. This is at the heart
of how we fulfil our purpose to create value by
improving people’s lives around the world.
Global online food delivery market
US$ 65.91bn
Market value in 2017
US$ 161.74bn
Revenue expected in 2023
Source: Adroit Market Research
Our core businesses
Naspers integrated annual report 2019
Introduction
Governance
13
... andanticipating
the next wave ...
As well as focusing on our core
segments, we also explore and back
businesses in other key areas where
consumer-focused technology can
change people’s lives for the better.
Always looking ahead
We keep looking ahead and anticipating
the next wave for consumers.
We are, for example, exploring
a number of newer areas such
as education and health.
From making it easier for people
to learn new skills to enabling the
elderly to have great home care –
as entrepreneurial investor-operators,
we never stop searching for new
opportunities to create value by
improving people’s lives around
the world.
5% CAGR
Growth in spend
on education over
2015-2020
US$6tr
Value of global education by 2020
Our next-wave businesses
Global spend
on education
Group overviewFinancial statementsFurther informationPerformance review 14
Embracing our responsibilities
We are proud to make a positive difference around
the world. We invest in and operate companies in
some 80 markets and countries, with thousands
of people building products and services used by
hundreds of millions of consumers every day. As
we go about our business, we take our responsibility
to hold ourselves to the highest standards, seriously.
Having a real impact
The companies we back, the people we employ
and the taxes we pay all create value, helping to
build stronger economies in the countries we invest,
work and live in. We support a range of corporate
social initiatives that make a real difference to the
people and communities who benefit from them.
Our governance structures, code of business
ethics and conduct, and various policies provide
the frameworks and guidance for our people
to do the right thing.
Investing in the future
Launched in 2019, Naspers Foundry is a great
example of our commitment to making a positive
difference around the world. We have allocated
R1.4bn to invest in helping talented and ambitious
South African tech entrepreneurs develop and
grow their startup businesses over the next three
years. We are proud of our roots and committed to
the continued growth and success of South Africa.
1
5
Naspers companies and associates
help improve the lives of around
one fifth of the world’s population
... to make a positive
differencearound the world
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Introduction
Group overview
15
Bringing it all
to life in
India
Smartphone
penetration
in India
350m
smartphone
penetration in 2019
700m
smartphone
penetration
by 2023
75%
of new users will
access internet
in vernacular
languages by 2050
50%
of new internet
users will be rural
45%
of new internet
users will be over
the age of 35
by 2050
The world’s fastest-growing large economy,
a vibrant democracy of over 1.3 billion people,
home to some of the planet’s most talented
entrepreneurs – we love India.
We’ve been investing in India for more than
a decade – over US$2bn, or around 20% of
our worldwide investment in the last decade.
This long-term commitment has seen us create
considerable value by supporting home-grown
businesses that are pioneering great change and
improvements for people across the country.
We are growing fast in India in our core segments
of Food Delivery, Payments and Fintech, and
Classifieds. Our Ventures team is also forging
ahead with the next wave, notably in education.
Investing in India’s most-loved
food-delivery brand
During the year, we invested an additional US$716m
in Swiggy, India’s most-loved food-delivery brand.
Providing excellent service to consumers through
over 85 000 restaurant partners and 170 000
delivery partners across more than 130 cities,
Swiggy is an Indian success story we are proud
to be part of.
Pioneering payments and fintech
PayU is focused on increasing its leadership in
payments and fintech in India and launching
innovative products and services, such as convenient
credit options for consumers. We aim to keep
building on our Payments and Fintech success
through investments in startups such as ZestMoney
and PaySense.
Revolutionising learning
In December 2018, we invested US$383m in
Indian online tutorial startup BYJU’S. Valued at
US$3.5bn, BYJU’S has grown rapidly and now
has 2 million paid subscribers and over 30 million
general users.
Our key businesses in India
Payments and Fintech
Food Delivery
Classifieds
Ventures
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Financial statements
16
Creating value for our stakeholders
Our business model
In line with best practice for
integrated reporting, we report
on the six capitals that together
provide a true picture of value
across the group: financial capital,
human capital, manufactured
capital, intellectual capital,
social and relationship capital,
and natural capital.
We anticipate changes in
the world around us ...
Machine learning and artificial intelligence will soon
become an integral part of everything we do.
Read more on page 48
... we take into account
the views of our stakeholders ...
Engaging with our stakeholders, understanding
their perspectives and feedback.
Read more on pages 24 to 29
... and we align our value
creation to the UN Sustainable
Development Goals.
Read more on pages 58 to 66
The resources we need
(Our six capitals)
How we add value
We pursue growth by building leading companies
that empower people and enrich communities.
What we do:
Financial
The financial funds and
assets across the group.
Human
The skills, development,
opportunities and well-
being of people, notably
the thousands of people
we employ around
the world.
Social and relationships
The relationships we
build with customers,
communities, trade
organisations and other
groups we work with
and contribute to.
Manufactured
Our investments in the
facilities and technologies
across the group.
Intellectual property
The ideas, information,
inventions, procedures,
source code, domains,
know-how and knowledge
we create, own and
protect through, for
example, patents,
copyrights and trademarks.
Natural resources
The natural resources
we have an impact on,
for example, the energy
we use and the water
we conserve.
Read more on page 18
We partner with
entrepreneurs
We create sustainable
leadership positions
Invest
We build businesses
with broad potential
e
s
i
m
i
t
p
O
G ro w
We focus on high-
growth markets
We address big
societal needs
Underpinned by our active capital allocation and strategy.
We ensure we optimise our portfolio for growth and competitiveness.
Read more on page 30
For all our stakeholders
Customers
Provide exciting and innovative
products and services to
improve our customers’ lives.
Employees
Create a compelling place
to work where our people
are engaged and motivated
to achieve their full potential.
Shareholders and investors
Deliver long-term shareholder
value through disciplined
capital allocation, differentiated
execution and strong financial
performance.
Suppliers and partners
Treat our suppliers fairly and
drive high social, ethical and
environmental standards in the
products and services we buy.
Local communities
Invest in improving the
communities we operate,
live and work in.
Read more on page 28
Industry
Use our global scale to ensure
industry development
considers and benefits
stakeholders.
Regulators
Engage in developing dialogue
and policy that support
vibrant industries and
benefit stakeholders.
We create value for key
stakeholders across all
our businesses
Read more on pages 24 to 29
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Naspers integrated annual report 2019
Introduction
Performance review
Governance
Financial statements
Further information
1717
Creating value for our stakeholders
Value creation this year
We create value for key stakeholders through our business model,
drawing on our pool of six capitals and in line with the UN
Sustainable Development Goals (SDGs). In this section we highlight
the value we created this year for our different stakeholders.
For more information on our sustainability journey, see pages 16 to 18
For more information on risks and opportunities, see pages 52 to 54
Taxes paid
As a global company, we
recognise that the tax we
pay is an important element
of our broader economic
and social contribution to
the countries where
we operate.
US$23.4bn
direct, indirect and induced
taxes paid
Read more on
pages 49 and 50
Governments and indirectly
local communities
Financial returns for shareholders
We manage our finances
rigorously to maximise
performance. In 2019
we performed strongly,
with significant growth
in core headline earnings.
All figures are from
continuing operations,
ie excluding the Video
Entertainment segment.
Read more on page 51
26%
growth in core
headline earnings
10%
growth in proposed annual
dividend (growth in SA
rand terms)
Revenue (US$’m)(1)
2019
2018
2017
2016
18 990
16 352
Trading profit (US$’m)(1)
3 304
2 994
6.94
5.53
2019
2018
2017
2016
Core EPS (US cents)(1)
2019
2018
2017
2016
Shareholders and investors
Note
(1) Presented on an economic-
interest basis and from
continuing operations.
Two of the 2018 Innovation Award winners.
Innovation and product
development
We look for and back innovation across the group, making
sure we protect the resulting intellectual property and make
the best use of it. In 2019, we continued to encourage, invest
in and protect innovation.
INVESTING IN MACHINE LEARNING
From image recognition to the ability to interpret text,
machine learning (ML) technology has advanced rapidly
in recent years. As a data-rich business we have the
fundamental asset, the essential ingredient, to really
make the most of this technology’s strengths and potential.
We use ML to create value in different ways across the
group. For example, to increase the trust and safety of
interactions between buyers and sellers and to make
services simpler and more streamlined.
Read more on page 48
80%
customer satisfaction
score (NPS or Net
Promoter Score)
Customers and industry
Economic
contribution
We aim to make a positive,
lasting economic contribution
to the countries we live and work
in around the world.
PLAYING OUR PART IN INDIA’S
GREAT GROWTH
India is the world’s fastest-growing
large economy, a vibrant
democracy of over 1.3 billion
people and home to some of
the planet’s most talented
entrepreneurs. We’ve been
investing in India for over a decade
– over US$2bn, around 20% of
our worldwide investment in the
last decade. This long-term
commitment has seen us create
considerable value by supporting
home-grown businesses that are
pioneering great change and
improvements for people across
the country. We’re growing fast in
India in our core segments of Food
Delivery, Payments and Fintech,
and Classifieds. And we’re also
investing in the next wave,
notably in education.
Read more on page 15
Industry, employees
and local communities
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1818
Creating value for our stakeholders continued
Value creation this year continued
Natural resources
Across the group, we endeavour to
minimise the impact on the environment.
ENVIRONMENT
All emissions (scope 1 and scope 2)
totalled some 363 485.22
(2018: 87 022.47) tonnes of CO2e with
electricity the highest contributor of total
measured emissions at 93%. MultiChoice
Group being the largest contributor
within the scoped entities, representing
59% of the total emissions. The carbon
footprint excluded MultiChoice Group
for March 2019 as the listing and
unbundling of MultiChoice Group
took place on 27 February and
4 March 2019 respectively.
REDUCING ENVIRONMENTAL IMPACT
Businesses across the group are reducing
their environmental impact in different
ways. For example, Takealot has
introduced 100% recyclable packaging
for its deliveries, including the voids that
protect products inside the packaging.
It has also updated its transport fleet to
newer, larger and more energy-efficient
vehicles. In addition, more energy-efficient
LED lighting is being introduced in the
distribution centres. And, where possible,
Takealot is using seafreight rather than
airfreight – more cost efficient and more
environmentally friendly.
Industry and local communities
Meaningful careers for our employees
We are committed to supporting and encouraging all our people to develop their skills and
capabilities to the full. In 2019, we delivered on this commitment in a number of ways – from further
enhancing our global online learning platform and delivering classroom training under the MyAcademy
banner to talent development efforts at the individual level through personal development plans.
Number of employees(1)
2019
2018
20 196
17 823
2017
Read more on page 45
2016
US$995m
in salaries, wages
and employee benefits
US$10m
investment in
employee training
>25 000
people accessed content
on MyAcademy online
>180 000
hours of online lectures
watched by active learners
Unbundling of
MultiChoice Group
This year we took the landmark
decision to separately list and
unbundle our Video Entertainment
business. This exciting step
unlocked considerable value
for shareholders and allows
the newly named MultiChoice
Group to excel as Africa’s leading
entertainment business. It also
enables us to focus even more
intensely on fulfilling our purpose
and ambitions as a pure global
consumer internet company.
Read more on page 19
Shareholders, employees
and local communities
Reinvesting in our
South African roots
We are proud of our South
African roots and remain
committed to invest in the success
of the country. Through Naspers
Foundry, we have allocated R1.4bn
to South African startups over the
next three years, and through
Naspers Labs we are pioneering
an innovative social impact
initiative to tackle South Africa’s
youth unemployment crisis.
R4.6bn
In total, we have committed to
investing R4.6bn in South African
businesses over the next three years.
Read more on pages 20 and 21
Industry, employees
and local communities
Employees
Note
(1) Excludes the Video Entertainment segment.
Manufactured capital
We invest heavily in technology, notably
in machine learning (ML) across our
businesses, to improve products and
services, enhance the customer
experience and increase operational
efficiencies.
Investment in CAPEX (US$’m)
2019
2018
2017
2016
152
138
Industry, employees
and local communities
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1919
Spotlight on MultiChoice Group
Industry, employees
and local communities
A great step forward
This year, we took the landmark
decision to separately list and unbundle
our Video Entertainment business.
This step unlocked considerable
value for shareholders and allows
MultiChoice Group to excel as
Africa’s leading entertainment business.
It also enables us to focus even more
intensely on fulfilling our purpose and
ambitions as a pure global consumer
internet company.
A new era
On 27 February 2019, MultiChoice
Group was successfully listed on the
JSE Limited in South Africa, to the
traditional sound of the kudu horn.
This marked the beginning of a new
era for MultiChoice Group, our former
Video Entertainment business, and
for Naspers.
As part of Naspers, the business
grew to become Africa’s video-
entertainment leader with around
14 million subscribers across the
continent.
A profitable cash-
generative business offering an
unmatched selection of local and
original content as well as world-class
sport coverage. It is a classic example
of our approach in action – building
leading companies that improve the
daily lives of the millions of people
who use their products and services.
Looking ahead
As a standalone company, MultiChoice
Group is now well positioned to capture
the significant growth opportunities
offered by Africa’s ascendance.
Unlocking considerable value
The unbundling unlocks the value we
have created in MultiChoice Group for
our shareholders. We were also very
pleased to be able to create further
value for Phuthuma Nathi (PN)
shareholders who, through MultiChoice
“ Unbundling our Video
Entertainment business
and listing it separately as
MultiChoice Group marks
a significant step forward
for Naspers as we complete
our evolution into a global
consumer internet company.”
Bob van Dijk
Chief executive
South Africa (MCSA), had already
participated in one of South Africa’s
most successful empowerment schemes.
PN shareholders were allocated an
additional 5% stake in the issued share
capital of MCSA for no consideration.
As a result, PN shareholders’ indirect
interest in MCSA has increased from
20% to 25%, which will increase their
share of dividend flows by 25%.
Focusing wholeheartedly
The unbundling completed the
transformation of Naspers to a pure
global consumer internet company,
with effectively 100% of our revenues
and profits now coming from online.
THREE KEY BENEFITS
• Completes Naspers’s
transformation into a pure
global consumer internet company
– one of the leading players in the
world of tech, transforming people’s
lives for the better.
Now we can focus our energy and
experience, our talent and resources,
our hearts and minds on building
leading technology companies and
identifying new waves of growth to
create value by improving people’s
lives around the world.
Not just for our shareholders, but for
everyone who works in our companies,
the many millions of people who use
our products and services, their
communities and society at large.
• Allows MultiChoice Group
to continue growing as Africa’s
leading entertainment business.
• Creates considerable value
for shareholders.
Naspers
Naspers listed Video
Entertainment on the JSE
as MultiChoice Group
Naspers
MultiChoice
Group
to
From
80% 100%
of Naspers revenues generated
by internet segment after Video
Entertainment was unbundled
R47.1bn
revenues
>90 000
Phuthuma Nathi
shareholders
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Spotlight on South Africa
Industry, employees
and local communities
“ Our gravest and most
pressing challenge is
youth unemployment.
It is therefore a matter of
great urgency that we draw
young people in far greater
numbers into productive
economic activity.”
President Cyril Ramaphosa
March 2019
Investing in the next generation
of South African talent
We are proud of our South African
roots and are committed to the
continued growth and success of
this country. With Naspers Labs
and Naspers Foundry, we are bringing
this commitment to life through two
initiatives focused on helping and
investing in the next generation
of South African talent.
TWO COMPLEMENTARY INITIATIVES
Investing in the future
At Naspers, we aim to create value
by improving lives. We don’t just do
this by investing in technologies,
entrepreneurs and businesses that
address big societal needs.
We also seek to improve lives through
social investment that makes a real
difference to the communities we live
and work in around the world.
For us, investing in local entrepreneurs
and investing in local communities are
two sides of the same core story of
improvement.
In South Africa, we are pioneering
Naspers Labs and Naspers Foundry –
two complementary initiatives that
together are focused on helping current
and future generations of young South
African talent achieve their true
potential and, in so doing, transform
the country for the better.
Naspers Labs
Empowering the young people
of South Africa
Through Naspers Labs we are zeroing
in on youth unemployment, a systemic
and growing challenge that we are
determined to help address.
Building on our expertise and
experience in technology-enabled
learning and development businesses
such as Udemy and Brainly, and
partnering with local expertise in the
youth development sector, our
ambition is to tackle the problem at
scale and be a driving force behind
transforming the lives of millions of
unemployed young South Africans.
The three pillars of Naspers Labs
that trigger this youth transformation
are firstly, personalised learning
through an adaptive online learning
and development platform that
includes hard and soft skills.
27%
over 6 million of South African
18 to 24-year-olds are unemployed
“ With Naspers Labs, young
people can come and learn
skills that they didn’t think
they would learn. They
should be learning about
virtual reality, they should
be learning to code – they
should literally be designing
the future. They innovate
out of necessity, so if they
go into the workforce with
the same determination and
the same ability to innovate
– imagine what they’ll do.”
Allan van der Muelen
Naspers Labs
Developing the next generation
of South African businesses
Our startup initiative focuses
on helping talented and ambitious
South African tech entrepreneurs
develop and grow businesses that
improve people’s lives.
Developing the next
generation of South
African talent
Naspers Labs is our long-term
investment strategy in human
capital development. Our
flagship social impact project
blends physical space and a
bespoke online platform that
strikes at the heart of
communities most affected by
unemployment and poverty.
• An innovative project with
a mission to be a driving force
behind increasing access
to economic opportunity.
• Ambition to help millions of
young South Africans living
in low-income peri-urban
areas of South Africa into
meaningful opportunities.
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21
Spotlight on South Africa continued
NASPERS LABS
Graduates have
a defined path into
the economy
Traditional jobs
Entry-level jobs pipeline
Innovation and enterprise
Growing youth-owned small
and micro enterprises
Information and
communication technology
ICT-related industries
“ Technology innovation is transforming the
world. The Naspers Foundry aims to encourage
and back South African entrepreneurs
to create businesses that ensure South Africa
benefits from this technology innovation.
The Naspers group started in South Africa
and we understand the innovative and
entrepreneurial spirit of South Africans.
We believe the best ideas often start locally,
with passionate entrepreneurs starting
businesses that meet the needs of the
communities they know best. And when
those needs are universal across the markets
we know well, with the right backing, there
is the potential for their businesses to grow
beyond their home markets.”
Bob van Dijk
Chief executive
NASPERS FOUNDRY
• Encouraging the
South African startup
ecosystem
• Supporting tech
startups that address
big societal needs
• Building the tech
businesses of the
future
• Stimulating local
economics
• Creating jobs and
opportunities for
South Africans
Ideation
Product
Lifecycle
Expansion
Revenues
Secondly, is peer-to-peer youth cafés
using the unique locally developed
socio-economic model that has been
tried and tested by social enterprise
and project partner RLabs.
Their first job is the first step for
Naspers Labs graduates who are
motivated and stay in the programme
to keep learning so they may achieve
their goals.
And thirdly, our project unlocks the
potential of township economies
by supporting and incubating new
micro- and small businesses to
absorb young people into dignified
employment.
With Naspers Labs, young people
go on a structured three-stage journey.
It starts with enabling them to believe
in their potential, unlocking their hopes
and dreams.
This is the essential foundation for them
focusing on personalised training and
learning modules to create the future
they want. This in turn leads to the third
stage where we prepare them for the
world of work and secure their first
work opportunity.
Vitally, Naspers Labs cafés are in
communities where unemployed young
people live – spaces where dedicated
Naspers Labs ambassadors help them
make the most of the programme and
digital platform. It is this unique blend
of the best of technology with the best
of human potential that unlocks the full
potential of young people.
This year we piloted the project in
two impoverished communities, with
encouraging results.
Next year we are testing two further
labs. Subject to the results of the pilot
labs, our aspiration is to roll out the
project to low-income peri-urban areas
of South Africa, starting in priority
provinces.
Sustainability
As part of our
commitment to
improving lives and
aligning to the United
Nations’ Sustainable
Development
Goals (SDGs),
we are proud
that 65% of Labs
attendees were
female and the
programme
launched almost
600 graduates into
the economy. This is
a great example of
our support for the
SDGs, in particular
SDG 5 and SDG 8
Naspers Foundry
Backing talented and ambitious
South African tech entrepreneurs
Over the next three years, Naspers
Foundry will invest R1.4bn to help
talented and ambitious South African
tech entrepreneurs develop and grow
their startup businesses.
Naspers Foundry will strengthen and
encourage the South African tech
ecosystem and will seek to invest in tech
startups, focussing on those that address
big societal needs: unemployment,
education, safety and security, and
economic resilience, among others.
Naspers Foundry fully aligns with
our groupwide approach to backing
and growing great entrepreneurs
and businesses around the world.
So we are looking to back South African
entrepreneurs with unique insights
into their local communities.
At Naspers we believe that when we
invest in an entrepreneur, we are able
to bring much more to the table than
funding. Through the Naspers group
network, international expertise will
be on hand to help startups accelerate
their growth. The aim is to provide
long-term help and support to
encourage and nurture the future stars
of the South African tech ecosystem.
We are focusing on creating businesses
that have a positive impact on the
communities they serve, the local
economy and, ultimately, South Africa
at large, prioritising broad-based black
economic empowerment (BBBEE).
We aim to bring the scale and expertise
of Naspers to bear on the businesses
we back, helping them grow and
expand beyond their local market,
across Africa and beyond.
R1.4bn
allocated to South
African startups
over three years
R3.2bn
already committed
to developing the
group’s existing South
African businesses
In June 2019, Naspers Foundry
announced its first investment,
investing R30m into SweepSouth, an
innovative new business co-founded
by Aisha Pandor and Alen Ribic.
All the workers, predominantly
single mothers with dependants,
are interviewed by SweepSouth
before they start using the platform.
SweepSouth aims to launch similar
services in Kenya, Botswana, Nigeria
and Ghana. It’s a great Naspers
Foundry-backed success story in
the making.
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2222
The world around us
Key trends are profoundly changing the
world around us. We believe these trends
play to our purpose and strengths as a global
consumer internet company focused on
addressing big societal needs to improve
people’s daily lives in high-growth markets.
Gurgaon, India
Macroeconomic
trends
Changing for the better
From the rise of China and India
to the rapid spread of digital
technologies – the world is changing
fast. And in many key ways, it is
changing for the better, with major
improvements in the levels of
poverty, child mortality, youth
illiteracy and life expectancy.
The growth of the
global middle class
Half of the world’s population can
now be considered middle class.
This key group drives 90% of gross
domestic product (GDP) growth.
The shift east
The centre of economic gravity is
shifting from west and north to east
and south. Developing economies
have accounted for almost two thirds
of global GDP growth and more
than half of new consumption in the
past 15 years.
Key trends
1
On core measures – such
as levels of poverty and
life expectancy – the
world is improving.
2
Global economic energy
is shifting east.
3
The internet continues
to transform people’s
lives – and there is much
more to come.
4
Machine learning is at
the heart of the new wave
of improvements.
5
Innovation, responsibility
and customer focus
are pivotal for success.
6
The global shortage
of digital talent continues.
Source: World Bank, UN, UNESCO
The best decade in human history
EXTREME POVERTY
2018
2008
CHILD MORTALITY
2018
2008
YOUTH ILLITERACY
2018
2008
(%)
8.6
18.1
(%)
3.9
5.8
(%)
8.6
11.3
MACROECONOMIC
TRENDS
91%
of global
consumption growth
is generated by
middle-class people
(2015–2030)
1
2
A global tipping
point: Half the
world is now middle
class or wealthier
LIFE EXPECTANCY
(YEARS)
2018
2008
72.2
69.8
TECHNOLOGY
TRENDS
3.5bn
active smartphones
globally
71%
of the global
population will
have a smartphone
by 2025
<40%
of industries on
average are digitised
Technology trends
The accelerating pace and
impact of technology
Technology continues to transform
people’s lives around the world.
There are, for example, now 3.5 billion
active smartphones. By 2025, 71%
of the global population will have a
smartphone. And people are spending
more time, more frequently, online,
and doing more while they’re online.
We’re heading towards an ‘everyone
always on’ world.
Industries are increasingly digital
From music to retail – the internet
is shifting whole industries to digital,
transforming the way things are done,
the products and services offered,
the experiences customers can have
and the winners and losers across
different sectors. It is a great time for
entrepreneurs with new ideas and
business models.
There are still big changes to come
The use of the internet is only just
beginning. On average, industries are
less than 40% digitised. But the impact
is increasingly revolutionary, with the
emergence of a next generation of
global platforms that are pushing
boundaries to create more seamless
experiences for consumers.
We may well be on the verge of a
second internet revolution – one that
deals with the digitisation of the ‘real’
offline world.
The rise of machine learning
ML has moved out of the labs to power
application platforms and consumer
services across many aspects of life.
ML is on a path to transform economies
and societies, just as other revolutionary
general-purpose technologies – such as
electricity and the internet – have done
in the past. ML’s impact has already
been massive and, by 2030, it could add
as much as US$13tr to global output.
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The world around us
continued
Market trends
An age of big winners
In the internet age, we have seen
the emergence of a few big winners
– 2018 marked the first trillion-dollar
companies. But continued leadership is
not guaranteed; to stay ahead, one has
to keep investing, innovating and taking
care of one’s customers. In China, for
example, a next generation of players
has already popped up – born in the
mobile age and focused on the newest
iteration of online services, fuelled by
ML and sharing.
Leveraging tech to improve lives
As the power and impact of technology
grows, there is increasing pressure to
demonstrate good governance and
ethical business practices. Now, more
than ever, being a tech business that
aims to act responsibly is critical.
Constant improvement is key
Continually delivering technology-
driven customer-centric improvements
at scale makes all the difference.
Regulatory trends
There are increasingly assertive moves
by governments across the globe to
regulate internet businesses and their
impact on the economy and society.
This is particularly true for larger
internet businesses where governments
are intensely focused on data privacy,
market dominance, platform regulation,
and appropriate taxation. Some of the
public policies and regulations that may
result from these developments could
have an impact on the sustainable
long-term prospects of different
internet business models.
It is therefore necessary that we
work with policy-makers and other
stakeholders to help to shape regulation
that benefits our customers, our
shareholders, and the communities
in which we operate. We aim to act
responsibly and with accountability
in a transparent manner – a trusted
thought leader for policy-makers.
Our ‘third way’ as an investor in
high-growth markets, a global partner
empowering local entrepreneurship,
having genuine local impact and value
creation – including employment,
innovation and fiscal contribution –
sets us apart.
We believe that innovative local
entrepreneurs are the heart of
a vibrant, inclusive society. We
therefore support policies that:
• Encourage entrepreneurs.
Entrepreneurs take the lead in
transforming society through their
ideas, vision and determination.
Successful entrepreneurs can have a
positive impact on the world and
bring many benefits to their
communities.
• Embrace the power of technology.
Technological progress can create
significant value. We highlight the
ways in which our businesses have
used technological innovation to
improve and even transform
people’s everyday lives.
Additionally, the structure of work
is changing, and individuals no longer
strive for the relative security of a big
organisation, often preferring to be
self-employed in the ‘gig economy’
or having the confidence to start their
own business straight out of university.
Change of employer
In this environment, employees are
likely to change employers much more
frequently than in the mid-to-late
20th century, and expect an employer
with a clear societal purpose and a
compelling proposition for them: a place
where they can do meaningful work
and where they can learn and grow
within a relatively flexible structure.
To be successful, digital companies
must be effective at competing for
and retaining talented people.
A diverse and inclusive workplace
The challenge of creating a diverse
and inclusive workplace is one shared
by employers across many industries.
Prospective and existing employees
will consider the approach to diversity
and inclusion as they evaluate
employers. Gender diversity is a
particular challenge across the
consumer internet sector globally,
and the representation of women in
senior executive and technical roles and
their experience in the workplace, has
received much media attention recently.
• Promote global trade and investment.
But doing so in a way that is respectful
of our stakeholders’ interests and the
communities in which we operate.
More than what we do, it’s who
we are: we create value and
improve lives.
Talent trends
There is a global shortage of digital skills,
and the best people have real choices
about where to deploy their talents.
Regardless of where in the world
we are operating, the competition
for software developers, product
designers, machine learning specialists,
data scientists, digital marketers and
digital content creators, to name just
a few skillsets, is fierce.
Global competition
This competition is increasingly
global, with talented people being
courted by global players and having
the opportunity to work outside their
home country if they choose to do so.
WHAT THIS MEANS FOR NASPERS
Key themes
Strategic implications
Growth
• Centre of gravity shifting to global
growth markets
• Focus on India and other top-
growth markets
• Continue to address big societal
needs in core areas
Technology
• ML supercharging companies and society
• Accelerate deployment of ML
Market
• Ongoing investment in innovation is critical
• Ramp up investment in innovative
customer-centric products and services
Regulation
• Role and power of platforms, globally
and locally
Talent
• Global shortage of digital talent
• Aspire to act responsibly and
with accountability
• Transparent, trusted thought leader
for policy-makers
• Focus on attracting, developing
and retaining the best people
• Emphasis on a diverse and
inclusive workplace
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Engaging our stakeholders
We aim to build constructive relationships with our key stakeholders.
This is critical to our business. We are focused on long-term success and
making a lasting difference around the world. It is about creating sustainable
value in the broad sense – one that plays out across the six capitals and
considers, engages and involves all our stakeholders. We have identified
seven distinct groups:
Our key stakeholders and why they matter to us
Customers and users
Employees
Government and regulators
Our products and services are enjoyed by
millions of customers around the world –
from individuals to businesses. We want
to delight them.
Our employees are at the heart
of our success – their commitment
and entrepreneurial drive make
all the difference.
We recognise how important it is to
work with governments and regulators,
particularly given that many of our
businesses have such a big impact
on people’s lives.
Investors and shareholders
Industry bodies
Society
Media
We want to be an industry
leader that works closely with
partners across the group.
We want to be an industry
leader that works closely with
partners across the group.
We are committed to
making a lasting positive
impact. We want to make
a difference for society,
the world we live in.
As part of the media we
know the responsibility,
we have to report honestly
and transparently to those
who wish to engage with us.
We want to be a partner of
choice for other members
of the sector.
Stakeholder relationships
Representatives of our businesses manage various
external and internal stakeholder relationships.
Our businesses manage their stakeholder
relationships based on a stakeholder-inclusive
approach that balances the needs, interests and
expectations of material stakeholders in the best
interests of the businesses.
To support the board in fulfilling its governance role,
the Naspers social and ethics committee receives
reports on stakeholder management across the
group – refer to the social and ethics committee’s
report in the 2019 governance report.
An overview of our stakeholders and stakeholder
engagement is provided on page 25.
Naspers integrated annual report 2019
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25
Engaging our stakeholders continued
The issues that
matter most
Reputation
We focus on managing reputational
risks, notably the risks of a misalignment
of our values or deviation from our
desired business culture across our
diverse, geographically dispersed group.
Read more on page 54
Operations
Throughout our group, we build trust
with our customers, colleagues and
communities by behaving openly and
actively tackling key threats such as
online fraud.
Read more on pages 32 to 44
Financial sustainability
We closely manage our assets and
capital allocation to deliver strong
returns on investment.
Read more on page 51
Contribution to society
We aim to take a responsible approach
to tax, making sure we pay full and fair
taxes in local jurisdictions around the
world to contribute to communities in
which we operate.
Read more on pages 49 and 50
Privacy and cybersecurity
We focus a great deal of expertise and
resources on ensuring privacy and
cybersecurity for our customers and
across our group.
User experience
Our businesses focus on making their
products and services as easy, enjoyable
and useful as possible for our millions of
customers around the world.
Read more on pages 64 to 66
Our employee value proposition
We aim to provide our people with meaningful
jobs with line of sight to business outcomes and the
opportunity to learn and grow professionally, in
a purpose-driven environment that they enjoy; where
they are recognised for a job well done and are paid
fairly in line with personal and company performance.
MAKING SELLING SIMPLE
Our fast-growing Classifieds business
has released several machine learning
tools to automate and streamline
the selling experience. With OLX’s
deep learning image processing,
for instance, images of items on
sale are optimised for quality and
automatically categorised and
labelled. This makes selling simpler
and it makes the items easier to
find for prospective buyers.
Read more on pages 33 and 34
Customer satisfaction
Across our group, we focus a great
deal on understanding and meeting
the needs of our customers.
Read more on pages 24 to 29
Competing fairly
We seek to compete successfully and
fairly around the world, complying with
international and local competition law.
Read more on pages 64 to 66
ENSURING DATA PRIVACY
We have a groupwide policy on
data-privacy governance that sets
out the responsibilities, principles
and programmes for ensuring
data privacy. It is designed to define
and document how data privacy is
managed in the group; to promote
best practice; to accommodate the
different business models, resources,
culture and legal requirements across
the group; and to support trust
in our businesses’ products
and services.
The critical foundation is to give
clear accountability to individual
businesses. Each business is directly
responsible for managing data privacy
within its organisation. This approach
resonates with Naspers’s model of
decentralised governance and
broader belief in encouraging great
leaders and businesses to excel.
We believe setting the right shared
principles and giving businesses the
direct responsibility to enact them
is the best way to have a greater
long-term positive impact. More
broadly, we are fostering a culture
of data privacy and looking to
businesses to ensure privacy by
design, where privacy becomes part
of the fabric of day-to-day work.
a l
e
n
m
t
n
Professio
develo p
Meanin
job
s
g
f
u
l
y
a
p
d
n
responsible
Fair a
C
u
l
e
a
l
t
u
d
r
e
e
r
s
a
h
n
i
d
p
Our employee
value proposition
is central to
our success
Employ e e
recognit i o n
US$10m
invested in learning and development
Read more on pages 67 to 71
Read more about remuneration
in the 2019 remuneration report
Social mobility and
financial inclusion
We support social mobility and
financial inclusion across the group.
CREDIT TO THE UNBANKED(1)
PayU specialises in innovative
products and services that improve
access to credit in high-growth
markets across the globe. These
include India, Africa and Brazil, and
have typically lacked widespread
access to credit, and in turn to
opportunity and economic growth.
PayU is dedicated to removing risks
to merchants and allowing customers
to use credit in ways that suit them.
This dedication connects customers
to businesses and enables finance
access to a great number of
previously underserved citizens
and small businesses.
Note
(1) Source: https://corporate.payu.com/credit.
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
26
Engaging our stakeholders continued
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
Customers and users
Our products and services are enjoyed by millions of customers around
the world – from individuals to businesses. We want to delight them.
Employees
Our employees are at the heart of our success – their
commitment and entrepreneurial drive make all the difference.
HOW DO WE ENGAGE WITH THEM?
HOW DO WE ENGAGE WITH THEM?
• Call centres, showrooms and client relationship
• Surveys and market research
managers (CRMs)
• Electronic communication
(email, SMS, apps, web and social media platforms)
MAIN ISSUES
• Good customer/user service
and experience (fast delivery, return, feedback)
• Competitive pricing
and range of products
• Content preference
• Trust
• Product safety
• Data privacy
OUR RESPONSE AND IMPACT
We work to continuously improve our range of products,
customer experience and ensure that we fairly price
our offerings.
• Products/services and experience
Listening to our customers – we have engaged
in several ways:
– Call listening sessions are done every week between
team leaders and agents to assess customer service.
– Specialised employees assist with email queries,
ensuring a 24-hour turnaround.
– eMAG – we have expanded the team, offering
a permanent call-centre service (24/7) with
improved client waiting times. We have also
introduced a dedicated team for social media
channel support on order tracking.
– Movile – responded to 100% of complaints and 70%
of customers believed the problem had been solved;
70% of all clients who had issues would do business
with Movile apps and platforms again.
– Takealot – promotional email and push notifications
are unidirectional and intended only to keep
customers informed of promotions that may
interest them.
– Media24 – we continue to invest in improving user
experience and content to ensure our products
remain relevant to our audiences. Where we
received reader feedback the editors, at their
discretion, engage with readers by publishing their
letters in the newspapers or magazines or respond
via social media platforms or on our websites.
– PayU – we are pioneering credit for underbanked
people in India, where millions of people have not
had access to credit, by investing in PaySense, which
focuses on digital lending serving short-duration
microloans to customers in India.
• Trust and safety
– OLX – we have planned to revamp the trust and
safety initiative within OLX Group in the 2020
financial year and all trust and safety initiatives
now sit with our chief product officer.
– Naspers has a data-privacy programme led
by the global head of data privacy, and adopted
a group cybersecurity policy and a data-privacy
governance policy.
• In person through managers, executives, employee
forums, onboarding sessions, employee networks
and training
• Where appropriate, we also engage formally
through employment equity forums (South Africa)
and workplace forums
• Online via intranets, apps, surveys
and remote training and development
MAIN ISSUES
• Talent – recruitment, retention and development
• Impact of business restructuring
OUR RESPONSE AND IMPACT
• Investing in talent
Offering fair and competitive pay practices.
Employee engagement surveys and related plans
to improve employee confidence. Continuous
conversations between people and their managers
on performance, career development plans and
recognition. Development programmes delivered
through our ML programme, MyAcademy,
graduate programmes and local programmes
on high performance.
– eMAG – monthly tech talks, annual 24-hour
coding hackathon, tech blog, eMAG culture book
launch and warehouse quarterly print magazine.
• Transparency
Ensuring clear and regular communication on
business performance and strategy by leadership.
– PayU – executive team site visits used to update
employees in person. This is based on the company
strategy which is cascaded internally.
• Culture – including diversity, employee wellbeing
• Diverse and inclusive cultures – diversity
awareness programmes
– CEO sponsorship of gender-diversity efforts
– see page 47.
– Takealot – rolled out wellness initiatives based
on company needs’ assessment.
– Media24 – employment equity plan has identified
barriers to transformation and action plans
to address these.
– OLX – diversity and inclusion team established, with
a subject specialist running a number of programmes
such as unconscious bias training and iFood Pólen,
a broad-based diversity committee.
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
27
Engaging our stakeholders continued
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
Investors and shareholders
We are a for-profit organisation committed
to growing and increasing value for our investors.
HOW DO WE ENGAGE WITH THEM?
• Financial results calendar: including annual financial
statements, interim and provisional reports and
financial results presentations
• Integrated annual report, annual financial
statements, interim and provisional reports
• Corporate website and corporate documents
(including factsheet)
• Investor days, results presentations, business visits
and meetings (face-to-face and teleconferences)
MAIN ISSUES
• Strategy to sustain good returns
over the long term
• Holding company discount
• Remuneration policy and disclosure
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
Governments and regulators
We recognise how important it is to work with governments and regulators,
particularly given that many of our businesses have such a big impact on people’s lives.
• Press and SENS announcements
• Dedicated email communications
(Investorrelations@Naspers.com)
• Directors are available at the annual
general meeting to respond to queries
HOW DO WE ENGAGE WITH THEM?
• Participate in advisory committees, meetings
• Participating in sector and industry associations
and public consultations
• Formal one-on-one meetings and round tables
• Response to sector and company-specific enquiries
and international forums
• Site visits (host official delegations)
• Integrated annual report
• Control structure
• Investment and development spend
• Strategy for online food delivery
OUR RESPONSE AND IMPACT
• Openly exploring and acting on measures
• Continue to improve disclosure in annual
to reduce discount.
• Unbundled MultiChoice Group and sold stake
in Flipkart.
• Have management on the road with greater
frequency, including a remuneration road show
with the chief people officer.
and interim results.
• Focused messaging on the segments’ profit strategy
and future potential of online food delivery.
• Update internal rate of return data (for total
portfolio and ecommerce) biannually.
• An expanded investor relations team is in place.
MAIN ISSUES
• Global group topics:
– Competition policy, mergers and acquisitions (M&A)
– Taxation
– Foreign direct investments and international trade
– Data protection
– AI and ML
• Segments/Companies:
– Intermediary liability
– Financial services legislation
OUR RESPONSE AND IMPACT
– Copyright and intellectual property
– Privacy
– Technology policy
(including ecommerce, gig-economy)
– Societal contribution, including employment,
social policy and broad-based black economic
empowerment (South Africa)
• Provide transparency on our legal programme to ensure
compliance with all applicable laws and regulations.
• Formal representations and written submissions
to express views.
• When invited or relevant, provide information to
policy-makers in the form of expert advice, based on
experience globally or tech and sector expertise.
• Express views through media engagement
and public speeches.
• Invest in group and segment specific capability and
capacity to respond to enquiries and requests to
share views on legislation and issues affecting industry.
• Media24 initiated data-privacy and cybersecurity
training and awareness campaigns for all employees,
not only those who handle data. Media24 formulated
a new strategy to ensure the Protection of Personal
Information (PoPI) compliance, which will be initiated
in the 2020 financial year.
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
28
Engaging our stakeholders continued
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
Media
As part of the media we know the responsibility we have to report honestly and transparently to those
who wish to engage with us. We want to be a partner of choice for other members of the sector.
Society
We are committed to making a lasting positive impact. We want to
make a difference to society, the world we live in.
HOW DO WE ENGAGE WITH THEM?
• Interviews, particularly around key announcements
(eg, results and significant transactions), and events
(eg, the annual general meeting and investor days)
• Providing timely comment and information in
response to media enquiries to our press office
• Press releases, editorials and articles on the activities
of Naspers and its companies
MAIN ISSUES
• Naspers financial performance and holding
company discount weighting on JSE
• Strategic focus – investments, M&A and
divestiture activity
OUR RESPONSE AND IMPACT
• Consolidate our corporate media offering, ensuring
timely responses to inbound media enquiries.
• Proactive media schedules providing access
to key management, supporting communication
of context, background information and
strategic updates (eg, results and engagement
on significant transactions).
• Providing reporting, news and thought leadership
through the company website and Naspers channels,
on Medium and LinkedIn
• Background and contextual conversations, use of
right-of-reply and, where necessary, correcting
inaccurate reporting
HOW DO WE ENGAGE WITH THEM?
• Corporate social investment (CSI) programmes
• Employment offering and service providers
• Website content and public announcements
on material issues
• Activities of our companies and associates
• Remuneration policy and disclosures
• Corporate investment to support meaningful impact
• Sound business operations to improve quality of life
while minimising our environmental impact
• Local employment and value creation, including
supporting local businesses
• Adherence to local laws and paying taxes due
MAIN ISSUES
• Reactive engagement, responding to requests
for comment and correcting inaccurate reporting.
• Thought leadership – participating in events and
publishing commentary on topics of interest.
OUR RESPONSE AND IMPACT
• Corporate social responsibility programmes in the group
such as our strategic programmes, Naspers Labs (refer to
page 20) and Naspers Foundry (refer to page 21) and the
contribution we make in local communities such as:
Media24’s flagship corporate social responsibility project,
WeCan24, offering digital journalism training to high
school learners and teachers; eMAG Foundation, which
supports education and programmes that facilitate access
to education for pupils and students, and others.
• Developing products/services to meet societal needs,
for example food delivery (iFood and Swiggy) and
education (BYJU’s, Codecademy and Brainly). Trading
through online platform OLX to purchase secondhand
products lowers carbon emissions.
• Focus on hiring local employees and growing local
talent, including investment in local businesses.
• Movile – increasing engagement with colleges and
universities to increase job offers and a supplier policy
introduced to prioritise local businesses.
• The Naspers groupwide legal compliance programme
is adopted by group businesses, tailored to unique
risks and local laws (refer to pages 64 to 66).
• Board-approved group tax policy and tax disclosure in
the integrated annual report (refer to pages 49 and 50).
Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
29
Engaging our stakeholders continued
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
MATERIAL STAKEHOLDERS AND CAPITAL IMPACT
Business partners
We want to be an industry leader that works
closely with partners across the group.
HOW DO WE ENGAGE WITH THEM?
• Structured – meetings, calls
and electronic communication
MAIN ISSUES
• Ensuring awareness on relevant
developments in the business
OUR RESPONSE AND IMPACT
• Active engagement and timely responses
when ad hoc engagement is needed.
• Strong relationship management systems in place
to ensure regular communication between key
management and business representatives.
• Structured grievance processes to ensure that,
in the event of a dispute, there is timely action
to find a resolution.
Industry bodies
We want to be an industry leader that works
closely with partners across the group.
HOW DO WE ENGAGE WITH THEM?
• Membership of selected and appropriate bodies
• Cooperating with selected partners on projects
addressing legislative initiatives
• Understanding and recognising our partners’ rights,
specifically on changing procurement processes, pricing,
content, platform use, privacy and security
• Clear communication of material issues
• Engagement around increasing
meaningful and positive impact
• How to ensure a positive sector experience,
eg regulation and culture of the sectors
MAIN ISSUES
• Active negotiations to ensure mandates lay out
relationship and agreement terms and requirements.
• Ensuring business approaches are reviewed timeously
to ensure alignment with international norms.
OUR RESPONSE AND IMPACT
• Responding to industry consultations on proposed
• Position papers on material issues.
regulations and legislation.
• Sharing our approach and examples of action on specific
topics such as how we aligned to changing legislation.
Naspers integrated annual report 2019
Naspers integrated annual report 2019
Introduction
Introduction
Group overview
Group overview
Performance review
Performance review
Governance
Governance
Financial statements
Financial statements
Further information
Further information
30
30
Capital allocation strategy
To support our continued growth and success as a global consumer internet
company, we have a systematic approach to how and where we allocate our capital.
Our ambition
More than ever before, technology
has the power to transform and
improve lives at scale, particularly
in the high-growth markets that we
focus on. Around a fifth of the world’s
population already improve their daily
lives using the products and services
of our companies and associates.
We believe we can achieve more.
We are doing this in a highly disciplined
way, building on our proven approach
and entrepreneurial spirit. It’s our way
of creating greater long-term value for
our stakeholders.
Our systematic approach:
1 Focus for maximum impact
• We focus on opportunities that
address big societal needs – from
giving people better ways to pay
for things to offering more options
for their meals, providing quality
food, delivered faster and cheaper.
• We concentrate on high-growth
markets – from India to Brazil.
• We look for opportunities with
a strong local component.
2 Invest early
• We typically invest in new
businesses early on.
• We take care to find great
entrepreneurs and businesses,
and are quick to back them.
• While accelerating our core
segments to scale, we look for
the next wave of growth.
“ You can’t build a great internet business
without investing some money first.
At Naspers, we have the ability to move
quickly and to invest for the long term
in hyper-growth internet businesses.”
Bob van Dijk,
Chief executive
Priorities
Our systematic
approach:
2
Invest early
1
Focus for
maximum
impact
3
Scale
progressively
4
Strategic
approach
3 Scale progressively
• We scale progressively – building
lasting, leading businesses in our
chosen focus areas.
• Once we have evidence of good
traction and sustained growth, we
step up our investment, helping them
build scale and market leadership.
• Once we are comfortable about
a compelling proposition, we go
all-in, driving these businesses to
profitability and cash generation.
4 Strategic approach
• Thesis driven – all our investment
decisions are guided by a clear vision
on the disruptive impact of new
technologies on a particular sector.
• Global perspective – we build deep
industry expertise by focusing on a
few core sectors globally, while
understanding local nuances.
• Going beyond money – we don’t just
provide funding, we provide active
support to help founders solve the big
challenges they face – whether that’s
providing strong business strategy
expertise, operating experience or
access to on-the-ground resources
in key expansion markets.
Our portfolio priorities
Our priorities for the next few
years are to:
• continue driving our path
to profitability
• accelerate our core segments to scale
• consolidate key leadership positions
• selectively invest in new opportunities,
and
• optimise near-term value creation
for non-core assets.
A focused strategy to win
Across our portfolio, we have a range of
businesses at varying stages of development.
They inevitably have different dynamics but
we aim to accelerate all our core segments
to full potential by doing the following:
We are building more integrated
ecosystems to deliver superior
consumer value
To become even more relevant, our
platforms are following the customer into
offline adjacencies. To illustrate: last year our
Classifieds leader, OLX, started investing
in convenient transactions beyond online
listings through offline partnerships by offering
customers instant cash for their trade-in cars.
We are reinforcing our
machine learning capabilities
We are implementing ML across all
segments. Thanks to our large and data-
intense platforms, we have a strong foundation
to implement ML at scale to improve the
products and services we offer, give people
an ever-better experience, and increase the
efficiency of all our operations. ML is a key tool
for us and we intend to accelerate, scale and
embed ML-by-design across Naspers to drive
our growth and success.
We take responsibility for our
user’s wellbeing
We recognise the increasing role we play in
the lives of our customers and hold ourselves
accountable for the impact we are having.
We will also seek to work closely with relevant
stakeholders and regulatory bodies to help
design the much-required user-oriented
legal frameworks for the digital age.
We are promoting inclusiveness
and diversity
To truly understand our diverse customers
and build solutions targeted to them, we are
committed to reflecting our core audience
groups inside our teams. While our teams are
diverse in culture and nationality, we have
fallen short of attracting a balanced gender
mix at senior levels. We are therefore
focused on improving gender diversity
across the group.
Naspers Integrated annual report 2019
Further information
31
31
Performance
review
Performance ��������������������������������������32
Classifieds �����������������������������������������33
Payments and Fintech ���������������������35
Food Delivery ������������������������������������37
Etail ����������������������������������������������������39
Travel ��������������������������������������������������41
Ventures ���������������������������������������������42
Social and internet platforms ��������43
Media ������������������������������������������������ 44
Our people ����������������������������������������45
Spotlight on machine learning ������ 48
Tax ������������������������������������������������������49
Financial review ��������������������������������51
Risks and opportunities ������������������52
We’re making the most
of machine learning
throughout our group ...
It’s at the heart of how we create
value by improving people’s lives
Read more on page 48
IntroductionGroup overviewGovernanceFinancial statementsNaspers Integrated annual report 2019Performance review Naspers Integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
32
Performance
From Classifieds to Payments and Fintech, to Food Delivery – we focus on
high-growth consumer internet businesses in areas where we can make a
lasting positive difference to people around the world. This year we delivered
a strong performance across our segments, characterised by continued
growth, breakthroughs in profitability and ever-greater customer focus.
Highlights of the year
Global consumer internet portfolio
Classifieds
Payments
and Fintech
Food Delivery
Etail
Travel
Ventures
Social and
internet platforms
Media
OLX Group achieved its
first year of profitability,
and annual revenues
exceeded target.
We continued to invest
and expand, notably
into car and real estate
convenience offers,
while reorganising
and streamlining, where
necessary, to increase
efficiency and
customer focus.
Consumer brands
PayU continued to
grow fast and the
core payments service
provider business
moved into profit
for the first time. We
continued to build on
core payments and
moved progressively into
broader fintech, notably
credit services.
We increased our focus
and investment in the
fast-growing world of
food delivery. We
committed to, along
with Innova, invest
an additional US$400m
in iFood. We also
invested a further
US$716m in Indian
food-delivery
leader, Swiggy.
eMAG delivered another
year of strong growth,
with its Romanian
business increasing
profits year on year.
In South Africa, all
three Takealot
businesses grew
and improved unit
economics extensively
through scale and
cost efficiencies.
MakeMyTrip extended
its position as India’s
number 1 online travel
agency (OTA). In April
2019, we announced that,
subject to customary
closing conditions,
including obtaining the
requisite regulatory
approvals, Naspers
will exchange its 43%
effective interest in
MakeMyTrip for an
approximate 6%
effective interest in
Ctrip. This transaction
is expected to close in
the second half of the
2019 calendar year.
We continued to identify,
explore and build the next
wave of growth for
Naspers. Investments
ranged from adding to our
education portfolio through
a US$35m investment
for an initial stake in
healthcare innovator Honor
to a US$383m investment
in Indian educational
company BYJU’S.
Tencent continued
to excel in China,
providing digital content
to its users across online
media platforms.
Mail.ru consolidated
its position as Russia’s
leading internet group.
International revenue
now accounts for over
63% of Mail.ru’s online
games revenue.
Media24 focused on
growing its digital media
and ecommerce
operations while
maximising profitability
in print media.
Get a career you can be proud of.
Read more on page 33
Read more on page 35
Read more on page 37
Read more on page 39
Read more on page 41
Read more on page 42
Read more on page 43
Read more on page 44
Classifieds
REVENUE(1) (US$’m)
2019
2018
IFRS:
39% LC:
37%
TRADING PROFIT/LOSS(1) (US$’m)
2019
2018
IFRS:
>100% LC:
>100%
875
628
2
(114)
PERFORMANCE HIGHLIGHTS
Our Classifieds business had
a standout year. OLX Group
achieved its first year of profitability,
with revenue up 39% (37%) to
US$875m. The segment was
profitable overall (including letgo)
with trading profit of US$2m which
was a US$116m improvement from
the US$114m trading loss in the
previous year. We continued to invest
and expand, notably into car and
real estate convenience offers, while
reorganising and streamlining, where
necessary, to increase efficiency and
customer focus. OLX is on track
to become one of the world’s most
successful classifieds companies.
Notes
(1) Presented on an economic-interest basis.
LC = local currency.:
“ Our vision is to deliver
superior value for over a
billion people. We want
to make it easy for anyone
to buy and sell almost
anything – from household
goods to phones, cars and
houses. Convenience is the
future of classifieds and
we are driving it.”
Martin Scheepbouwer
CEO: OLX Group
Becoming even more
customer centric
Throughout the year, we focused on
increasing efficiency and scalability,
taking every opportunity to become
more customer centric. Accordingly,
we simplified our organisation into
four business units: OLX Markets,
Avito, letgo and OLX Ventures.
We reorganised OLX Markets into
a global unit with one management
team and a coordinated focus on
product and technology, allowing us
to innovate faster for customers at
lower costs. We continued to roll
out our global product platform,
successfully launching it in two new
markets, Pakistan and India. We also
consolidated our teams and now have
seven technology hubs in: Berlin, Lisbon,
Buenos Aires, Delhi, Poznan, Moscow
and Barcelona.
This opens the way for us to work
together, share ideas, apply technology
and develop products and services
for customers far more quickly
and effectively.
In August 2018, we announced
Growing letgo in the US
letgo is a hyperlocal mobile classifieds
marketplace app mostly used in the US
and Turkey. During the year, monthly
unique listers increased by 34% while
monthly unique buyers increased by
29%.
that letgo acquired the share capital
held by non-controlling shareholders
of Letgo USA B.V. for US$189m.
With over 100 million downloads and
400 million listings, letgo is the biggest
and fastest-growing app for buying and
selling locally. The new funding will help
letgo accelerate its growth through
product evolution, expansion into new
verticals and monetisation.
From electronics to cars to clothing
and collectibles, the free letgo app
makes it easy to list what you no longer
need and find great deals nearby on
anything you do need. It is known for
its innovative, easy-to-use features
such as video listings.
total brand awareness for letgo
LETGO
82%
34%
29%
increase in monthly unique listers
more monthly unique buyers
“ We are extraordinarily
fortunate to have investors
who believe so strongly in
our vision and team. We
are fuelling unprecedented
growth in the secondhand
economy through meaningful
innovation. Our app makes it
simple for tens of millions of
buyers and sellers to connect
in their own neighbourhoods
so they can put more money
in their pockets, declutter
their lives and put their
space to better use.”
Alex Oxenford
Co-founder: letgo
The team has applied artificial
intelligence (AI) and machine learning
(ML) to develop letgo Reveal – an
innovative feature that allows you
to scan an object with your mobile
camera, operated through the app,
which then automatically suggests a
price, time to sell and description.
You simply need to decide whether
or not you want to sell the item.
OLX Markets
Through OLX Markets, we operate
online classifieds marketplaces in about
38 countries across Eastern Europe,
Portugal, Southeast Asia, Latin America,
Africa and the Middle East.
Consolidating our position in Russia
In January 2019, OLX invested a
further US$1.16bn in Avito, bringing its
effective ownership of Russia’s leading
online classifieds player to 100%. We
first invested in Avito in 2013 and it has
since continued to grow fast in five key
categories: goods, autos, real estate,
jobs and services.
33
1.2
3.6
4.0
3.0
TOTAL ADDRESSABLE MARKET IN
THE US (US$BN)
11.8
Goods
Jobs and services
Real estate
Cars
Source: 10-year market size US (Source:
market sizing exercise conducted with
OLX and Naspers M&A team).
OLX
monthly active users worldwide
on our classifieds apps and platforms
340m
71m
38
net new listings and 17 million items are
bought and sold every month on average
countries across Eastern Europe,
Portugal, Southeast Asia, LatAm,
Africa and the Middle East
US$2m
trading profits achieved by OLX Group
during its first year of profitability
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review
Classifieds continued
Avito now attracts a large portion
of the Russian internet population
every day. It has made substantial
improvements in monetisation, driving
more sales efficiency and increasing
paying users. Our investment
demonstrates our continued belief in
the long-term growth prospects of
this great business and the Russian
internet market.
Offering customers
greater convenience
We made a number of significant
investments in convenient transactions
to expand our ecosystem with deeper
and broader offers to meet our
customers’ needs. Increasingly, we are
expanding our dedicated automotive
and real estate vertical businesses,
where the opportunities to scale and
monetise are high. We facilitate over
70% of all used-car transactions in India,
and 57% of OLX Group revenues
currently come from vehicles and
real estate.
AVITO
#1
Avito is the leading
online classifieds
marketplace in
Russia, and Dubizzle
is a leading online
classifieds
marketplace
in the Middle East
and North Africa
34
The Voice Notes Fraud Detection
application applies ML models to voice
notes to catch potential scammers.
The OLX app facilitates a chat function
between buyer and seller that permits
leaving voice notes. These voice notes
can be transcribed to standard
text format.
In order to catch potential fraudulent
activities, the invention uses ML models
to analyse the transcribed text through
a fraud detection service. If some fraud
is detected, the offending party may
be banned automatically.
Looking ahead
Our focus will be on building the
world’s best ecosystem of classifieds
for customers. In many ways, this is a
continuation and acceleration of what
we have achieved this year. We will
concentrate on increasing ease of
use, convenience, trust and safety for
customers and making the most of
ML to solve customers’ pain points.
Our aim is to give hundreds of millions
of people around the world the very
best classifieds experience.
OFFERING CUSTOMERS GREATER
CONVENIENCE – BREAKDOWN OF
CONVENIENT TRANSACTIONS
Vehicles
Real estate
Jobs/Services
Goods
Others
Making it easier to buy and sell cars
In May 2018, we invested US$89m
in Frontier Car Group (FCG).
A fast-growing online and offline car
marketplace, FCG currently operates in
Nigeria, Mexico, Chile, Turkey, Pakistan
and Indonesia. Private car buyers and
sellers and dealers all benefit from the
combination of FCG’s instant cash
services and OLX Group’s proprietary
classifieds technology, increasing the
speed and convenience of buying
and selling.
Boosting our presence in online
real estate
In line with our growing focus on real
estate, in Latin America we joined
forces with Properati, the leading
real-estate platform in Argentina.
The deal covers Argentina and 13
other countries. It also includes full
ownership of Credirati, a platform that
streamlines mortgage-loan acquisitions.
%
40
17
18
12
12
Capitalising on ML
We continue to capitalise on advances
in technology, in particular ML and we
are focusing on identifying how AI can
help us even more in our businesses.
We currently have around 200 ML
specialists working on some 80 different
use cases. As ever, the emphasis is on
improving things for customers –
making products easier to use, smarter,
more personalised and improving levels
of trust and safety.
We registered three new patents this
year – letgo’s Reveal product, Dynamic
Determination of Smart Meetup
application, and Voice Notes Fraud
Detection application.
The Determination of Smart Meetup
application is a feature which allows, in
any chat conversation within an OLX
app, a buyer and a seller to request safe
meetup suggestions to complete a
transaction. The meetup suggestions
screen will dynamically take into
account both the buyer and seller’s
current location and suggest a list of
meetup points based on the customer’s
preferences and/or known safe
locations. Both buyer and seller can
then select a meetup location, and the
OLX app will give them directions and
travel times.
FUTURE FOCUS – BUILD AN ECOSYSTEM OF CLASSIFIEDS
AROUND CUSTOMER NEEDS
1
Focus on key
user needs ...
2
... in the right
markets
3
... with the right
enablers
• Easy and liquid
• Smart and personalised
• Safe and trustworthy
• Convenient
• Deploy in
value-driving
markets
• Build with a talented
and diverse team
• Support via M&A
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review
35
PAYU
Mumbai, India.
18
PayU operates in 18 high-growth markets,
five of which are among the ten
fastest-growing markets globally: India,
Turkey, Russia, South Africa and Mexico
Moving into profit
We delivered on our three-year goal
to bring the core Payments business
to profitability on an operational basis.
This business reported a 4% trading
profit margin this year, compared to
a 7% trading loss margin last year.
This included remittances (Remitly)
while consolidating our Payments and
Fintech business through the acquisition
of Citrus, and making a foray into credit
with further investments in PaySense
and ZestMoney, and building our own
credit product, LazyPay.
Opening up a world
of credit to people
In line with PayU’s mission to build
a world without financial borders, we
are pioneering credit for underbanked
people in India. Until now, millions of
people have not had access to credit,
and have been prevented from
benefiting fully from the ecommerce
revolution. By combining our
experience and access to data with
smart technology, particularly ML,
we have developed state-of-the-art
credit underwriting and data-driven
credit-decision models that enable us
to make credit available where
previously it was not.
Our aim is to build the leading credit
platform for India – an easy-to-use
trusted platform for customers and
merchants alike.
This year we expanded further, notably
in credit. In India, we now have over
1 million credit transactions per month.
Significant growth in India
India is a great growth story for us. It is
our largest and fastest-growing market.
We are the leader in ecommerce
payments in India and it is the major
driver of our growing payment
transaction volumes. India is also key
to our success in credit, where we have
rapidly grown to more than 1 million
credit transactions per month. We are
looking at growing our franchise and
evolving into a digital financial services
platform from a pure play online
merchants payments service provider.
Payments and
Fintech
REVENUE(1) (US$’m)
2019
2018
IFRS:
22% LC:
28%
TRADING LOSS(1) (US$’m)
2019
2018
IFRS:
33% LC:
67%
360
294
43
64
Growing well
We more than doubled the size of
our Payments and Fintech business
over the past three years. This year
we processed 920 million transactions,
up 41% on last year’s more than
650 million. Total payment volume was
US$30bn, up 29% in local currency.
Continuing to expand into fintech
We made key investments to extend
our scope beyond pure payments,
thereby becoming a broader
fintech business.
PAYMENTS AND FINTECH
41%
This year we processed 920 million
transactions, up 41% on last year’s
more than 650 million
29%
Total payment volume was US$30bn,
29% above last year in local currency
PERFORMANCE HIGHLIGHTS
Growing fast and generating profit
from its core Payments business for
the first time, PayU forged ahead
on its mission to build a world
without financial borders. For both
core payments and newer credit
services, India is proving a highly
dynamic and significant market for
us. We processed close to 500 million
transactions with a total value of
US$15bn in India and currently
handle over 1 million consumer
loans per month.
Notes
(1) Presented on an economic-interest basis.
LC = local currency.
“ PayU is a significantly
different business today to
three years ago. We have
transformed it from a
local-payments-only
company into a broader
financial services firm
across high-growth
markets. Our ambition is
to build a world without
financial borders”
Laurent Le Moal
CEO: PayU
AN UNDERBANKED WORLD
2 billion adults without credit bureau coverage – regional % of population
63%
Europe and
Central Asia
87%
South Asia
88%
Middle East and
North Africa
93%
Sub-Saharan
Africa
78%
East Asia
and Pacific
60%
Latin America
and Caribbean
Spotlight on
India – a world
of opportunity
for payments
and fintech
In India, digital transactions are
forecast to overtake cash payments
by 2022.
Around 50% of India’s 1.3 billion
people are under 30. Over the
next decade, over 100 million young
digitally savvy Indians will join the
country’s workforce and consumer
pool. Smartphone penetration will
more than double to around
700 million in 2020.
The size of India’s digital payments
industry is estimated at US$200bn
– US$110bn online and US$90bn
offline via card transactions at
point of sale. The online portion
comprises US$30bn in ecommerce-
related payments and some
US$80bn in utility bills and
recurring payments.
INDIA
500m
In India, we process close to
500 million transactions with
a total US$15bn in value
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review 36
Looking ahead
We expect our strong growth in
Payments and Fintech to continue.
Our aim is to again double our
Payments and Fintech business over
the next three years and to have digital
financial services and credit platforms.
We will continue to look for good
growth and opportunities to extend
our fintech offering, including through
M&A. We have, for example, made
exploratory investments in blockchain
and cryptocurrency.
Payments and Fintech continued
GLOBAL PAYMENTS*
MACHINE LEARNING
60%
of absolute revenue growth coming
from developing markets by 2022
80%
reduction in the manual workload while
maintaining the level of fraud management
Making the most of ML
In November 2018, we rolled out
a fraud-monitoring solution using ML
in Europe. As a result, we were able to
maintain the level of fraud management
while reducing the manual workload
by 80% – increasing efficiency and the
scope to scale. This service is currently
at the forefront of its industry and
demonstrates what we can do by
applying ML to make improvements
for merchants and customers.
“ Our mission at PayU is to
democratise credit across
all markets. Companies
like PaySense encompass
everything we’re looking
for: a great product,
an outstanding team
and an extensive
market opportunity.”
Fady Abdel-Nour
Global head M&A and investments: PayU
Investing for success
During the year, we made a number
of key investments to strengthen our
core Payments business and our
growing Fintech offering. We invested
US$12m in PaySense, the Indian online
credit provider for customers currently
underserved by traditional sources of
credit. In the past year, PaySense and
ZestMoney combined have disbursed
loans to the value of over US$140m
to customers across India.
Creating a global payments hub
We acquired leading payments
technology platform, Zooz for US$60m
in August 2018. This strengthens our
ability to provide a single global PayU
payments hub covering a population of
2.3 billion across high-growth markets.
With a global platform, we make it
easier for merchants to grow their
businesses, provide a better customer
experience and gain efficiencies
from streamlining our operations, so
everybody wins. We will optimise the
PayU hub in the coming year. It is a key
part of our aim to remove financial
borders so we can make the lives of
merchants and consumers as easy as
possible and, in turn, create value for
everyone involved.
*Source: Accenture.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review 37
SWIGGY
85 000
Swiggy restaurant partners spread
across 130 cities
US$716m
invested in Swiggy, India’s largest
food-delivery platform
Food Delivery
REVENUE(1) (US$’m)
2019
2018
IFRS:
>100% LC:
57%
TRADING LOSS(1) (US$’m)
2019
2018
IFRS:
>100% LC:
>100%
377
166
171
30
PERFORMANCE HIGHLIGHTS
This year we increased our focus
and investment in the fast-growing
world of food delivery. It is now
one of our three core segments,
alongside Classifieds, and Payments
and Fintech. During the year, we
committed, along with Innova, to
invest an additional US$400m in
iFood to enable the business to
accelerate growth by expanding
coverage and investment in
first-party delivery capabilities,
speed up product development and
innovation and deliver personalised
experiences to customers. We also
invested a total of US$716m in
Indian food-delivery leader, Swiggy,
during the year. iFood remains the
clear leader in Brazil and holds
competitive positions in Mexico and
Colombia. Swiggy’s annualised GMV
increased 265% and annualised
order volumes increased by 320%.
Delivery Hero reported €4.5bn
in GMV and €665m revenue
from continuing operations for its
year ended 31 December 2018.
Notes
(1) Presented on an economic-interest basis.
(2)
Interest following the US$637m investment
in January 2019.
LC = local currency.
“ We’re thrilled to have grown
the online food-delivery
market in India at an
exponential rate by always
considering our customers.
Swiggy has been at the
forefront of elevating the
potential of Indian food
delivery with its industry-
changing innovations and
focus on delivering the best
consumer experience to
millions of Indians.”
Sriharsha Majety
CEO: Swiggy
Making the most of the food-
delivery opportunity
The world of food delivery is a great
example of using smart technology
to give us the things we love more
quickly, easily and enjoyably. In tandem,
shifting global trends such as the rise
in urban populations, smartphone
use, middle-class spending, a growing
youth population and mobile payments
are fuelling growth. It is therefore no
surprise that the food-delivery market
is expanding rapidly across the globe.
Globally delivered food is a US$300bn
market, growing at two to three times
the rate of the overall food market,
while online food delivery is growing
at 30% per year and is already a
US$75bn+ global market.
GLOBAL FOOD DELIVERY
US$300bn
Globally, delivered food is a US$300bn
market, growing at about four times the rate
of the overall food market
US$75bn
Online food delivery is growing at 30%
per year and is already a US$75bn+
global market
It is changing fast, too – with the
development of new offline elements
such as kitchens designed only for
food delivery (independent kitchens
producing food usually under an
online-only brand) fuelling the drive
to give people greater choice, quality
and speed of delivery, and restaurants’
new ways to sell more food.
Building on our strong presence
We continue to build on our strong
presence in food delivery, where
we currently have leadership positions
in 36 markets.
Delivery Hero
We have a 22% stake in Delivery Hero,
which operates in 41 countries around
the world and leads in 33. Delivery
Hero is predominantly a third-party
(3P) marketplace model, where its
platforms arrange for restaurants to
deliver food to users. But it also has a
first-party (1P) marketplace model,
where it provides the delivery services
as well. Delivery Hero fulfilled 369 million
orders over its financial year ended
31 December 2018.
Swiggy
We have a 39%(2) stake in Swiggy and
invested an additional US$716m in this
business during the year. Since our first
investment in June 2017, Swiggy has
grown its monthly orders tenfold. It is
the most-loved food delivery brand in
India, providing the best service to
consumers through over 85 000
restaurant partners and 170 000
delivery partners across more than
130 cities. Swiggy is an Indian success
story we are proud to be part of.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review iFood
We also back Movile subsidiary iFood, a
leading online food-delivery platform in
Latin America. iFood is Brazil’s favourite
food-delivery option and also operates
in Mexico and Colombia. It is one of the
fastest-growing large-scale food-delivery
companies in the world. Naspers
and Innova’s US$400m additional
funding commitment enables iFood to
accelerate growth by expanding
coverage and investment in first-party
delivery capabilities, speed up product
development and innovation, and
deliver personalised experiences to its
customers – the largest tech-funding
commitment in Latin America at the
time of the announcement.
During the year, iFood focused on
increasing brand awareness, offering
a much more reliable, quicker delivery
service for customers, and a greater
range of more affordable food options.
For example, we pioneered affordable
lunch offers, where customers can
get lunch delivered for around
US$4 per order.
Food Delivery continued
iFOOD
558 000
orders handled by iFood per day in Brazil,
17 times more than its nearest competitor
in terms of daily unique users
66 000
iFood’s 66 000 restaurant partners and
120 000 couriers offer customers the best
choice and quality of food, delivered fast,
using iFood’s innovative technology platform
US$360m
invested in iFood over the years
The number of restaurants and
couriers increased more than 100%
in Brazil, iFood’s main market. There
are currently 120 000 couriers
connected to iFood and 66 000
restaurants in 500 cities.
iFood works closely with restaurants to
help them build their businesses via the
platform, for example by helping them
advertise and by providing tools to help
with order management. Similarly, the
team works with its network of
delivery partners.
38
“ We want our consumers
to have an amazing
delivery experience from
the moment they order
their food to the moment it
arrives, and our partners –
the restaurants and delivery
fleet – make that happen
by living our purpose of
improving people’s lives
using our services.”
Carlos Moyses
CEO: iFood
The platform is there for all to gain from
great food delivery, from a restaurant
looking to expand its orders, to a
courier keen to earn more money
or a customer wanting great food, fast.
iFood aims to build the largest,
most-loved food-delivery company in
Latin America. To support that goal,
ongoing investment in technology,
notably ML, is increasingly important
in key areas such as pricing, demand
prediction and order management,
offering more relevant options to
customers and orchestrating quick,
reliable deliveries. Technology is at
the core of improving the experience
for customers, restaurants and
couriers alike.
Mr D Food
Through Takealot, we own Mr D
Food, the leading online food-delivery
business in South Africa. Mr D Food is
reported as part of the Etail segment
as its logistics are closely integrated
with that of Takealot.
iFOOD
17.4m
orders processed by iFood in March
in Brazil, representing growth of almost
130% compared to 7.6 million orders
in the same month last year
12.6m
unique customers in more than 500 cities
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Etail
REVENUE(1) (US$’m)
2019
2018
IFRS:
10% LC:
20%
TRADING LOSS(1) (US$’m)
2019
2018
IFRS:
44% LC:
14%
1 847
2 060
150
270
PERFORMANCE HIGHLIGHTS
eMAG
eMAG’s Romanian business
continued to grow above the market
rate and generated higher profits
year on year. Its other businesses
also grew and eMAG increased
operational efficiency. To become
Central and Eastern Europe’s
leading online retailer, the focus is
on improving profitability, adding
more value and increasing customer
satisfaction and loyalty.
Takealot
Building on its position as South
Africa’s leading etailer, Takealot had
another good year across its three
core businesses: Takealot.com,
Superbalist and Mr D Food. All
three businesses grew and improved
unit economics through scale and
cost efficiencies. Group gross
merchandise volume (GMV) grew
53% and group gross margin after
delivery costs improved by 2%.
Notes
(1) Presented on an economic-interest basis.
LC = local currency.
eMAG
Optimising marketplaces
Through its dedicated team, eMAG
optimises 3P marketplaces – looking
after the interests of customers,
protecting and building the eMAG
business and brand, and helping third
parties improve their businesses.
Diversifying to grow
eMAG is diversifying its sales through
a mix of 1P and 3P models and
product categories.
Growing well in Central and
Eastern Europe
eMAG delivered another year of
strong growth. The Romanian business
achieved 25% gross merchandise
volume (GMV) and 11% year-on-year
revenue growth. Performance was
particularly pleasing across the 3P
marketplace, which grew 50%.
eMAG’s Bulgarian and Hungarian
businesses improved and the Fashion
Days brand also performed well.
Getting together to generate
great new ideas
eMAG holds annual hackathons –
coders get together for 24 hours
to code something amazing, winning
great prizes. Now in their fifth year, the
hackathons have become bigger and
better each year.
They led to a great new product idea,
now being offered to eMAG customers.
During the 2017 hackathon, a team
came up with the idea of adding a
self-service barcode interface to eMAG
lockers – enabling customers to save
time when collecting their purchases.
EasyBOX launched in Bucharest, giving
customers the option to quickly, easily
and securely pick up orders 24/7.
EMAG
25%
21%
50%
gross merchandise volume (GMV)
year-on-year revenue growth
increase in performance across the
3P marketplace
39
Improving operations
A new warehouse was built and
opened on time and ahead of budget.
It uses LED panels for energy-efficient
lighting and eMAG is considering solar
panels in warehouses.
The investment in the new warehouse
is part of eMAG’s focus on improving
operational efficiencies and driving
down costs, understanding that
everyday improvements can have
a major impact.
For example, eMAG’s internal audit
team has identified a way to improve
the speed and efficiency of stocktaking
by adapting the algorithm for scanning
stock to the different sizes and set-ups
of warehouses across eMAG’s network
of businesses.
eMAG continues to capitalise on
ML, with inhouse technology teams
developing new tools and ways to
give the business more predictability
and enable it to react faster, as
well as building customer-friendly
improvements such as helpful
recommendations on what to buy.
Merging in Hungary
Towards the end of the year, eMAG
announced the planned merger of its
Hungarian business with local player,
Extreme Digital, which is subject to
regulatory approval. This will create one
of the leading ecommerce businesses
in Central and Eastern Europe, with
a combined turnover of €220m and
a goal of tripling sales in five years.
“ Entrepreneurship is like
magic: you put in the
work, you put in the
capital, and what comes
out of it does good things
both for the community
and for the company.”
Iulian Stanciu
CEO: eMAG
This is a good demonstration of the
quality and teamwork of our people, of
learning and developing together and
applying technology in smart ways to
improve the experience of customers.
Dedicated to quality
To continuously increase the quality of
eMAG’s 3P marketplaces, a dedicated
team focuses on monitoring and helping
3P sellers. The team’s work ranges from
providing advice and training, to blocking
fraudulent activity.
This marketplace optimisation
safeguards and improves the customer
experience while protecting eMAG’s
brand and reputation. It also helps third
parties develop their businesses and
sell more.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review
Fashion forward
Online fashion site Superbalist grew
80%, including sales from Spree, with
which it merged in October 2018.
The merger created a stronger fashion
business with greater scale and cost
efficiencies. It was executed successfully
in time for peak season. The combined
business is fully operational on the
Superbalist platform under that brand.
Number 1 for food delivery
South Africa’s leading food-delivery
business, Mr D Food, continued its
rapid expansion, growing revenue
147% year on year. Its success is
based on offering superior service,
greater geographic coverage, better
restaurant selection and competitive
pricing, which benefits customers
and restaurants alike. Its business is
predominantly mobile based – a key
growth characteristic.
Etail continued
“ The growth in our
businesses is really the result
of executing well – providing
good customer service and
value and convenience to
consumers. But we’ve also
got the wind behind us,
with great room for more
ecommerce growth
in South Africa.”
Kim Reid
Founder and CEO: Takealot
Takealot
Performance highlights
Building on its position as South Africa’s
leading etailer, Takealot had another
good year across its three core
businesses: Takealot.com, Superbalist
and Mr D Food. All three businesses
grew and improved unit economics
through scale and cost efficiencies.
GMV grew 53% and group gross margin
after delivery costs improved by 2%.
Leading in South African etail
Takealot.com, South Africa’s leading
online store, grew revenue 31% in
local currency year on year. The 3P
marketplace is a major part of this
success: from 24% last year, 3P
accounted for 30% of GMV this year.
The goal is to have 50% of GMV
generated through the 3P marketplace,
benefiting consumer selection and
choice, pricing and profitability.
Takealot.com, South Africa’s leading online
store, grew revenue 31% year on year
TAKEALOT
31%
100%
R3.8m
of Takealot’s packaging is recyclable
has up to date been donated to Beautiful
Gate, an organisation dedicated to
supporting family welfare in Cape Town
Room for growth
There is still significant room for growth
in the South African ecommerce market.
Current ecommerce penetration is
1.3% compared to 11–19% in the US,
China and the UK. This is forecast to
grow to 3% by 2020. So Takealot is in
the right market at the right time, but
continued growth and success is
above all the result of executing well
– providing good customer service
and value.
The end-to-end delivery advantage
A key advantage for Takealot is its own
established end-to-end delivery system.
This enables Takealot to push technology
into the business and provide a better
customer experience – with notable
benefits such as same-day delivery,
weekend deliveries, pick-up points and
more predictable delivery cycles.
40
It also has a longstanding link with
Beautiful Gate, an organisation
dedicated to supporting family welfare
in Cape Town. Whenever someone
checks out of a Takealot site, they have
the option to donate to Beautiful Gate.
Around R100 000 was donated in the
first year of the partnership. Seven
years on, donations now total R3.8m.
Continue growing
Looking ahead, key initiatives with
Takealot.com revolve around logistics
and certainty of delivery.
With Superbalist, the focus next year
will be on bedding down and building
the merged fashion business.
At Mr D Food, rapid growth is
expected to continue as we capitalise
on existing advantages, including our
delivery systems, to continue this
success story.
Flipkart
Creating value with Flipkart
In August 2018, we sold our 12% stake
in Indian ecommerce company, Flipkart,
to US-based retailer Walmart for
US$2.2bn. We first invested in Flipkart
in 2012 and helped it become India’s
largest domestic online retailer. Our
sale delivered a healthy 29% internal
rate of return on our investment.
Takealot is now arguably the largest
direct-to-home delivery business in
the country – making as many as
1.3 million deliveries a month.
Investing in top talent
As Takealot continues to grow, the
challenge is to keep recruiting and
retaining the very best talent.
A graduate recruitment programme
and the establishment of development
offices in Stellenbosch and Johannesburg
have helped attract further engineering
talent. Takealot is determined to keep
the quality of recruits high even as
pressure to increase the quantity grows.
Accordingly, a rigorous, groupwide
recruitment programme, Extraordinary
Minds, ensures the right people are hired.
Going greener
Last year, Takealot made 100% of its
packaging recyclable. This year, it took a
further green step by replacing plastic
voids with paper voids, so that the
material used to protect products inside
the packaging not only keeps customers’
purchases safe but also goes some way
to caring for the planet.
Takealot has also updated its transport
fleet to newer, larger, more energy-
efficient vehicles. This saves money
and is better for the environment.
More energy-efficient LED lighting
is also being introduced in the
distribution centres.
In addition, where possible, Takealot is
using seafreight rather than airfreight,
which again is more cost efficient and
environmentally friendly.
Giving back to local communities
Takealot has formed a partnership with
Uturn, which focuses on supporting the
homeless in Cape Town.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Travel
REVENUE(1) (US$’m)
2019
2018
IFRS:
11% LC:
20%
TRADING LOSS(1) (US$’m)
2019
2018
IFRS:
39% LC:
46%
234
211
37
61
PERFORMANCE HIGHLIGHTS
MakeMyTrip (MMYT) extended its
position as India’s number 1 online
travel agency with our share of its
revenue, growing 30% year on year.
The company continued to focus
on the high-growth domestic hotels
business, especially the budget
segment which serves the mass
market. During the year, MMYT
significantly reduced its trading
losses, with our share reducing by
39% as it continued along its
path to profitability.
Notes
(1) Presented on an economic-interest basis.
LC = local currency.
“ The Indian market is thriving,
and we are well poised to
capitalise on the strong travel
trends that India has to offer.
MakeMyTrip’s powerful
portfolio of brands today
commands unrivalled
market share, scale and
brand recognition. We
maintain an unwavering
focus on the online hotels
segment, which is highly
fragmented in India.”
Deep Kalra
Co-founder, chair and group CEO:
MakeMyTrip
Leading in India
MakeMyTrip (MMYT) is the clear market
leader in the large, fast-growing Indian
online travel agency (OTA) market. We
own 43% of MMYT, which leads the
Indian online air and hotel market
segments and, through its redBus brand,
the online bus travel segment.
MMYT is building the largest OTA in
India, spanning air, hotel and bus travel.
Every step of the way – from research
to planning to booking – MMYT gives
customers a one-stop service for all
their travel needs. Services include
air ticketing, hotel and alternative
accommodation bookings, holiday
packages, inter-city bus ticketing and
other travel-related services. Across
all these services, MMYT delivers a
best-in-class experience by leveraging
technology and customer insights.
Appealing to the mass market
MMYT continues to focus on the
domestic hotels business, especially
the budget segment which serves
the mass market.
Heading to profitability
MMYT has reduced losses and is
on the path to profitability.
An ever-better customer experience
The company continues to focus its
investment on the high-growth hotels
segment, where online penetration is
still relatively low, at 16%, and margins
at scale are attractive. MMYT therefore
plans to expand by bringing more
customers online and increasing the
transaction frequency of existing
customers, for example by offering
an ever-better customer experience.
MMYT uses ML to optimise the
user experience and costs. This
includes providing personalised
recommendations for destinations,
places to stay and other travel
experiences. In addition, ML-enabled
chatbots provide 24/7 support to
customers. MMYT also uses ML to
dynamically update pricing, rank hotels,
predict air fares, classify images and
user-generated content, and perform
other data-intensive operations.
41
MAKEMYTRIP
MMYT extended its position as India’s
number 1 online travel agency
#1
45 000
MMYT customers can access over
45 000 hotels and 13 500 alternative
accommodation properties in India as
well as more than
500 000
hotels and properties outside the country
Growing fast
The Indian online travel market is
expected to grow from US$13.2bn
in 2016 to US$32.8bn in 2020.
Alternative accommodation is expected
to grow from US$1.7bn in 2016 to
US$4.6bn in 2020.
INDIAN ONLINE TRAVEL
25% COMPOUND ANNUAL
GROWTH RATE (CAGR)
2020
2016
32.8
13.2
Looking ahead, MMYT will continue
to consolidate its position as the
number 1 OTA in India as it heads
towards profitability.
In April 2019, we announced that,
subject to customary closing conditions,
including obtaining the requisite
regulatory approvals, we will exchange
our 43% effective interest in MakeMyTrip
for an approximate 6% effective interest
in Ctrip. This transaction is expected
to close in the second half of 2019.
Ctrip is a leading travel service
provider for accommodation
reservation, transportation ticketing,
packaged tours and corporate travel
management. Ctrip targets its services
primarily at business and leisure
travellers in China who do not
travel in groups.
These types of travellers form
a traditionally under-served yet
fast-growing segment of the
China travel market. Ctrip believes
it is the largest consolidator of hotel
accommodation in China in terms of
the number of room nights booked, as
well as the largest consolidator of airline
tickets and the top air ticket distribution
agency in China in terms of the total
number of airline tickets booked and sold
through it. Ctrip has also successfully
established a global presence.
A great choice of accommodation
MMYT customers can access over
45 000 hotels and 13 500 alternative
accommodation properties in India, as
well as more than 500 000 hotels and
properties outside the country.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Ventures
PERFORMANCE HIGHLIGHTS
This year, our food-delivery
businesses graduated from Ventures
to become a core standalone
Naspers segment. We continued
to invest in other key areas, from
adding to our education portfolio
through a US$383m in investment
in Indian educational company
BYJU’S, to taking an initial stake
in healthcare innovator Honor for
US$35m. In many ways, it was a
real Ventures’s year of identifying,
exploring and building the next
wave for Naspers.
Notes
(1) Presented on an economic-interest basis.
LC = local currency.
Investing in the next wave
Since our earliest days over 100 years
ago, we have always sought to anticipate
and identify new opportunities to
evolve and grow. This forward-focused
drive has seen Naspers transform itself
from a South African print media business
in 1915 to today’s global consumer
internet group. Our Ventures arm builds
on this tradition with the key mandate
to find, invest in and nurture new
technologies and businesses that will fuel
the next waves of growth.
As core segments reach maturity in
terms of scale and profitability, Ventures
makes certain that newer areas of
investment emerge and develop so
that growth continues.
In December 2018 for example, our
food-delivery businesses separated from
Ventures to become a core standalone
segment. Having progressively invested in
and grown these businesses, we decided
it was the right time to take them to the
next level. This means going all-in in food
delivery in our chosen growth markets
around the world, alongside our other
core segments of Classifieds and
Payments and Fintech.
“ Naspers invests in
companies that address big
societal needs in markets
where we see the greatest
growth potential. Ventures
leads the way in spotting
this potential.”
Martin Tschopp
Chief operating officer: Naspers Ventures
EDUCATION
US$6tr
Global spend on education is set to grow
at 5% CAGR over 2015–2020, reaching
over US$6tr in value by 2020
150m
Each month, 150 million students in
35 countries, all turn to Brainly to ask
more, know more, and learn faster
Codecademy has taught over 45 million
people around the world to code
45m
20m
With 42 000 instructors teaching
100 000 courses, Udemy connects over
20 million students around the world to
world-class learning
We aim to back complementary
businesses that can work with each
other and provide consumers with a
better, broader education experience.
BYJU’S
30m
More than 30 million students have used
the BYJU’S learning app
Investing in BYJU’S
In December 2018, we invested
US$383m in BYJU’S, the leader in
personalised learning programmes for
school students in grades 4 to 12 in
India. It has grown rapidly by providing
high-quality videos and content online
to simplify subjects such as maths and
science. More than 30 million students
have used the BYJU’S learning app and
it has amassed over 2 million cumulative
annual paid subscriptions, with an
average engagement of 64 minutes
per student per day.
Investing in SoloLearn
SOLOLEARN
1.1m+
monthly active users – 90% of them learning
on-the-go via their smartphone
We also led a US$5.6m investment in
SoloLearn in September 2018. SoloLearn
is a leading mobile-first knowledge-
sharing community where students can
learn, create and share programming
content. This innovative peer-to-peer
learning platform has grown fast since
launch and currently has over 1.1 million
monthly active users. An additional
funding round of US$1.4m took place
in December 2018, in which we
participated for US$379 000.
42
Exploring health
Health is another area for Ventures.
The global population of people over
60 is projected to more than double by
2050. At the same time, disability rates
are increasing. We are getting older
and living longer, but not necessarily
healthier, lives. All of which increases
the importance of the right kind of care
when and where needed. Providing
non-medical care in the home is a key
aspect. This is a big and growing societal
need where smart technology can
really make a difference.
Investing in Honor
In May 2018 we made a US$35m
investment in Honor. A US-based
home-care company, Honor will use
the funds to expand its innovative
Honor Care Network. Working with
care network partners, Honor helps
older people live safely and comfortably
in their own homes by providing
reliable, transparent, high-quality care.
Honor handles all caregiver recruiting,
payroll, billing, insurance, legal and
compliance issues for its partners.
The technology platform helps agencies
schedule care more easily and have
greater visibility on patient care. By
reducing the day-to-day back-office
challenges of running an agency, owners
have more time to focus on growing
their business, supporting their clients
and delivering the best care experience.
Identifying and investing in the best
opportunities
Looking ahead, we will continue to
identify trends, technologies, segments
and geographies expected to record
significant growth in the coming
decades and invest in the best
opportunities we see. From education
and health technology to blockchain(1)
and beyond, we will continue to nurture
the next wave of growth.
Note
(1) A system in which a record of transactions
made in bitcoin or another cryptocurrency
is maintained across several computers linked
in a peer-to-peer network.
Focusing on education
Another area with promising potential is
education. Encouraging and enabling
learning around the world is an
undeniably great aim. The brilliant aspect
about marrying learning with technology
is that it enables all kinds of innovative
ways for more and more people to add
to their skills and knowledge: often more
quickly, effectively and enjoyably than
before. This is an opportunity that can
make a real difference to people’s lives
around the world and there is still much
more to be done. So for us, it ticks all the
right boxes.
Our education portfolio
We have invested in a number of
education businesses. They include:
Udemy, the leading global marketplace
for learning and instruction, serving
more than 30 million lifelong learners
in 190 countries around the world;
Codecademy, the vocational learning
platform where over 45 million people
so far have taken courses to learn to
code; and Brainly, the world’s largest
social learning community serving over
150 million students in more than
35 countries.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Social and
internet
platforms
REVENUE(1) (US$’bn)
2019
2018
IFRS:
20% LC:
31%
TRADING PROFIT(1) (US$’bn)
2019
2018
IFRS:
6% LC:
15%
14.7
12.3
4.0
3.7
PERFORMANCE HIGHLIGHTS
Early in the development of our
internet strategy we invested in
leading social and internet platforms
in two of our key high-growth
markets, China and Russia. Tencent
continued to excel in China, while
Mail.ru strengthened its position
as Russia’s leading internet group.
Notes
(1) Presented on an economic-interest basis.
LC = local currency.
TENCENT
60%
Among the top 100 mobile apps in
China, Tencent takes up over 60% of
all time spent online by Chinese users
Tencent continues to excel in China
Tencent continues to perform well
in a highly competitive and dynamic
environment. Through its ecosystem
of online services and the excellent
management of Pony Ma, Martin Lau
and their teams, it remains the largest
platform operator in China with ten of
the top 20 mobile apps. Among the top
100 mobile apps in China, Tencent
takes up over 60% of all time spent
online by Chinese users.
In social and communication, Weixin
and WeChat’s combined monthly
active users reached 1.1 billion and
its super-app status was strengthened
by the expansion of Weixin Mini
Programs, now widely adopted by
users and enterprises, setting the
industry trend for connecting online
users with offline enterprises.
Hundreds of millions of social videos
are uploaded and shared on the
Weixin platform every day. In online
games, Tencent is the world’s largest
game platform.
League of Legends continued to be the
biggest PC game and PUBG MOBILE
became the most popular smartphone
game globally. In online media, Tencent
Video enhanced market leadership
amidst fierce competition. Tencent built
up an array of newsfeed products and
achieved rapid growth in total page
views and video views.
Tencent Music had a successful initial
public offering in New York in 2018.
In mobile utilities, Tencent’s mobile
manager, YingYongBao, defended
leadership and increased monetisation
efficiency. In Cloud services, Tencent
maintained the number 2 position
with market share steadily increasing.
Tencent extended its market leadership
as the leading mobile payment
platform by active users and number
of transactions in China. Total daily
payment transaction volume exceeded
1 billion in 2018, driven by rapid growth
in commercial payments, which
represented more than half of the
number of transactions.
Tencent revenue for the year to
December 2018 increased by 32%
year on year to RMB313bn, primarily
driven by fintech services, social and
video advertising, and digital content
subscriptions and sales.
From a regulatory perspective, online
gaming is one of the sectors, among
many, subject to tightened government
scrutiny. Uncertainty and delays on the
game approval and monetisation
process has weighed on Tencent’s
financial performance in online games.
The games approval uncertainty eased
partially by the end of 2018 as the
regulators resumed the review and
approval process after a nine-month
suspension. The strength of Tencent’s
platforms and products were reflected
in the strong performances in online
advertising revenue. Revenues grew
by 44% year on year, mainly driven by
strong growth in advertising on Weixin,
Mini Program, Tencent Video and
news services.
Revenue from other streams
performed well, mainly driven by
payment-related and cloud services.
43
MAIL�RU
29m
daily active users (DAUs) across
Mail.ru’s platforms
VKontakte, the most popular mobile
messaging and social networking app
in Russia, continued to perform well,
increasing engagement and audience.
Total monthly active users reached
70 million, of which over 60 million
were mobile users.
The number of daily video views on
Odnoklassniki reached 870 million
in early 2019. The number of games
running on this mobile platform
doubled by the end of 2018.
Mail.ru continues to invest in strategic
areas. It is forming a social commerce
alliance in Russia and the Commonwealth
of Independent States (CIS) with Alibaba,
RDIF and MegaFon. It also acquired the
remaining 80% of United Media Agency
(UMA), an aggregator and distributor of
digital content in Russia. With 2.1 million
paid and trial subscriptions, Mail.ru now
has the largest content subscription user
base in Russia.
Mail.ru’s depository receipts are listed
on the London Stock Exchange. Further
information is available on its website
www.corp.mail.ru.
While Tencent continues to focus
on building its existing businesses, it is
also investing heavily to position the
company for sustained growth over
the long term. One notable market
opportunity is the digital transformation
of traditional industries. Given Tencent’s
ecosystem strengths and leadership
in social and payments, it aims to be
the preferred partner by offering smart
solutions to many traditional corporate
customers as they move online, assisting
them in upgrading and innovating for
the digital age. Tencent is integrating its
advanced cloud computing capability,
data analytics, AI and security solutions
to develop customised solutions for
various industries such as retail, financial,
transportation, healthcare
and education.
Tencent is listed on the Hong Kong
Stock Exchange and extensive further
information is available on its website
www.tencent.com.
Mail.ru strengthens its position as
a leading Russian internet group
Mail.ru remains the largest internet
group in Russia by users, with 29 million
daily active users (DAUs) across
its platforms.
Its leading platforms cover gaming, social
networking, email, portal, search, instant
messaging, ecommerce, business
services and maps. It is the top mobile
app publisher in Russia by both number
of downloads and consumer spending.
Mail.ru’s revenue for the year to
December 2018 was up 33% to
RUB75bn, driven by online games and
advertising. Massive multiplayer online
(MMO) games revenue grew 30% year
on year to RUB16bn, with international
revenues accounting for 63% of the
total. Advertising revenue continued to
grow strongly, increasing 42% year on
year to RUB32bn; mobile advertising
in social networks remained the
fastest-growing area.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Award for best local format for Die
Kliek on VIA; two SAB Sport Media
Awards; three WAN-IFRA 2018
African Digital Media Awards, including
best reader revenue initiative
(Netwerk24: migration of Lifestyle
publications to the platform); best
branded content project (News24:
Mzansi through her Eyes and Media24
Lifestyle: Eskort Just Delicious) and best
digital news startup (Daily Kick); and
nine Sikuvile Journalism Awards,
including Story of the Year and
Investigative Journalism Award for
#Guptaleaks (News24 with
AmaBhungane and Daily Maverick);
the Photographer of the Year Award
at the Vodacom Journalist of the Year
Award; nine Forum of Community
Journalists Excellence Awards; eight IAB
Bookmark Awards, including a coveted
Black Pixel for Best Digital Publisher for
24.com for the third year running; and
Best Media Owner at the MOST
Awards (Media24 Lifestyle).
BUSINESS INSIDER
#1
in the business sector within three months
and beating its revenue expectations
Business Insider South Africa reached
the number 1 position in the business
sector within three months and beat
its revenue expectations.
We were the first digital publisher
globally to acquire the Google
performance ad tech stack, to expand
audience targeting capabilities in our
quest to grow digital advertising
revenue market share.
Winning awards
Our businesses won a range of awards,
including Trade Publisher of the Year for
2018 for Jonathan Ball Publishers; five
SA Literary Awards for NB Publishers’
authors; 42 local and international
editorial, design and publishing New
Media Publishing awards (print and
digital); SA Film and Television
44
Helping communities
Media24 has a proud tradition of
enriching lives beyond our product
offering. Projects range from book
donations to schools and learners in
historically disadvantaged communities
and staff participation in charity and
goodwill initiatives and fundraising,
to educational bursary funds, literacy
drives and journalism training for
young people.
The WeCan24 programme, offering
digital journalism training for learners
and teachers across South Africa,
concluded at the end of this financial
year. Media24 will now join forces with
the Naspers-funded WeCode24
programme, offering training in coding
and life-skills development to learners
at under-served schools in the
Western Cape.
Between April 2018 and March 2019,
Media24 staff volunteered 747 days
through the Volunteers24 programme,
giving time worth R982 000 to
charitable causes.
Media(1)
REVENUE(2) (US$’m)
2019
2018
IFRS:
36% LC:
4%
TRADING LOSS(2) (US$’m)
2019
2018
IFRS:
>100% LC:
30%
326
374
14
30
PERFORMANCE HIGHLIGHTS
During the year, we remained
focused on repositioning Media24
for a sustainable future by growing
our digital media operations,
investing in our ecommerce business
and maximising profitability in print
media. Media24 revenue was
US$326m. Our online fashion store
Spree merged with Superbalist,
Naspers’s other South African
fashion etailer. 24.com achieved
5% year-on-year revenue
growth in an extremely tough
advertising environment.
Notes
(1) All figures exclude Novus Holdings Limited
which was distributed to shareholders in
September 2017.
(2) Presented on an economic-interest basis.
LC = local currency.
“ It has been a year of great
change for Media24 as we
repositioned our core media
operations to become a
more focused operation
while investing in the
growth of our merged
ecommerce business.”
Ishmet Davidson
CEO: Media24
Media24 acquired the minority
shareholdings in Soccer Laduma and
New Media Publishing and incorporated
these companies into its business.
VIA remains the most popular lifestyle
channel among Afrikaans viewers on
DStv, maintaining a healthy 27% reach
in this segment – almost triple the
contractual requirement. Sponsorship
revenue grew 36% and airtime
revenue grew 63%.
Focusing on our growth portfolio
With the merger of Spree and
Superbalist, Media24 now owns
51% of the largest fashion etailer in
South Africa. Revenue grew by 90%
year on year as a result of the rapid
growth in ecommerce in general as well
as due to the merger with Superbalist.
However, losses more than doubled
– largely as a consequence of the stock
impairments and ongoing investment
to grow the business.
24.com reduced its loss by 36% year
on year due to a combination of
revenue growth, cost cutting and
the closure of the aggregators.
Among SA publishers, 24.com leads
by far with an audience market share
of 35%, growing average daily unique
browsers by 13% to 1.8 million and
average daily unique pageviews by 8%
to 10.2 million. Mobile access now
stands at almost 89%.
24�COM
5%
24.com grew revenue 5% year on year
With the closure of the aggregators,
we are also now able to fully focus
our engineering capacity on our two
main news brands: News24 and
Netwerk24.
Netwerk24 grew its paying subscriber
base by 30% year on year to just below
50 000, further strengthening its
position as the largest paywall news
service in the country.
Making the most of our
mature portfolio
Despite revenue declining by 7%
year on year, our print media division
(News, Lifestyle and On the Dot)
more than doubled profits year on year
to record its highest profit in more than
a decade off the back of renegotiated
printing contracts.
On the Dot made considerable
headway in building a variable cost base
by starting to outsource its warehousing
and distribution. On the Dot also
recorded its highest profit ever.
Media24 maintained its considerable
print media reach – eight out of every
10 newspapers and magazines
consumed by South African adults in
print or online are Media24 publications
– and retained its advertising and
circulation market leadership in both
these sectors. We publish five of the top
10 paid-for newspaper titles, including
Soccer Laduma in a very close second
to the Sunday Times. Media24 Lifestyle
publishes six of the top 10 consumer
magazines, including the top four.
Die Burger changed the frequency of
its Eastern Cape printed edition from
six days to print on Fridays only, with
digital editions available Monday to
Friday. Around 95% of the original
print subscribers were retained, and the
bulk converted to paying Netwerk24
subscriptions. Friday sales of the print
edition increased by 5% over the year.
Soccer Laduma, the second-largest
selling newspaper in the country, now
earns more revenue from digital
advertising than print advertising and
also recorded its highest profit in its
20-year history.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review MyAcademy – making
learning accessible for all
Our group learning hub, MyAcademy,
offers online and offline learning
experiences to all our people. We
have curated the very best learning
experiences from providers around the
world, including our own education
partners (Udemy, Codecademy and
Brainly) as well as other leading global
providers such as Big Think, Harvard
Business School, Ready, Vado and
Rosetta Stone, and our own,
home-grown content. It offers content
for developers and engineers (including
the opportunity to upskill and gain
accredited qualifications, earning
‘nano-degrees’ in important areas
like data science and ML), leadership
and management skills, personal
development skills and cross-cultural
training to name but a few.
MyAcademy online:
• 25 730 users
• 6 900 unique active users per month
• 183 133 hours of learning consumed
over the past 12 months
• Average of 7 hours and 5 minutes per
learner over the past 12 months.
Popular courses include: Complete
Python Bootcamp: Go from zero to
hero in Python3; Security Awareness
Training; Machine Learning A-Z:
Hands-on Python & R In Data Science;
and Brilliant Customer Service: How to
Impress your Customers!
Through MyAcademy, our people
can tap into online learning.
Our people
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“ Our people are central to
everything we do at Naspers.
The experience we give our
customers, the value we
deliver to our shareholders,
the success of the business
– it all rides on the quality
and commitment of our
people. So, we work hard to
recruit, develop and retain
the best people throughout
the group.”
Aileen O’Toole
Chief people officer: Naspers
Talent is a competitive advantage
The quality of talent is a key competitive
advantage in our industry and we need
creative minds to explore new frontiers.
Across the group, day in day out, our
people do all kinds of brilliant things
to keep us moving forward by providing
great customer experiences around
the world. We are an innovative
entrepreneurial business at heart
and that spirit comes to life through
our people.
Without the driven entrepreneurs with
whom we partner, the digital leaders
who drive us forward and the skills our
people bring to the group in highly
specialised areas such as technology
development, product design, ML,
digital marketing and many other
disciplines, we would not be able to
compete as effectively as we do. We
operate in a highly competitive, global
market for this type of talent, and we
compete against other world-class
companies for great people. We strive
to create an inclusive environment that
is attractive to many kinds of people.
%
73
20
7
0
%
28
28
19
15
8
3
45
OUR EMPLOYEE VALUE PROPOSITION
To compete for and win the very best global talent,
we need a compelling value proposition for our people.
Our people seek meaningful jobs with line of sight to
business outcomes and the opportunity to learn and
grow professionally, in a purpose-driven environment
that they enjoy; where they are recognised for a job
well done and are paid fairly in line with personal and
company performance.
a l
e
n
m
t
n
Professio
develo p
Meanin
job
s
g
f
u
l
y
a
p
d
n
responsible
Fair a
Our employee
value proposition
is central to
our success
Employ e e
recognit i o n
C
u
l
e
a
l
t
u
d
r
e
e
r
s
a
h
n
i
d
p
MYACADEMY
unique active users per month
6 900
7
Average of 7 hours and 5 minutes
per learner over the past 12 months
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review
46
Engagement
We believe happy and engaged
employees create fantastic customer
experiences and in a competitive global
talent market, it is important that we
provide our people with a compelling
place to work. We measure employee
engagement across the group and we
ask our people to comment anonymously
on their experience of working at our
various group companies. We have
seen engagement levels broadly in line
with external benchmarks and our
operating teams are working on
addressing issues raised and sharing
best practice with one another.
A GREAT PLACE TO LEARN
AND DEVELOP
Through MyAcademy, we give everyone
across Naspers a great shared place to
learn and develop as much as they like
in their own time and at their own pace.
This year 25 730 people boosted their
skills, knowledge and know-how on
the platform.
HELPING FEMALE DELIVERY DRIVERS
STAY SAFE
Our Indian food-delivery business uses
technology to manage schedules for
female drivers to help ensure they can
go about their work safely.
Our people continued
PERMANENT EMPLOYEES(1)
20 196
The group employs 20 196 (2018: 17 823)
permanent employees in some 80 countries
and markets.
FEMALE VS MALE EMPLOYEE(1)
HEADCOUNT
Female
Male
%
46
54
Note
(1)
All numbers have been adjusted to exclude the
Video Entertainment segment which has been
presented as a discontinued operation.
CALLING ALL INNOVATIVE
ENTREPRENEURS
What kind of person thrives and makes
a difference at Naspers? Entrepreneurial
innovators – people who share the spirit
of the great founders and businesses we
operate and invest in. People – people
who, like us, are very focused on doing
the right thing. Can-do people who like
to perform. These are the people we
love to meet and recruit, and the ones
who are recognised and rewarded
at Naspers.
Culture
We are a diverse group of global
companies, but some things are
consistent for our people regardless
of where in the world we operate:
• 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. 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.
• We perform. We push for
performance in everything we do, and
we link achievements and rewards.
We agree on clear 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/share appreciation
rights to their employees under a
number of long-term incentive 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
are communicated to group
employees and are 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, heard and supported in their
ambitions, is ultimately in their hands.
Together we are all responsible for
the positive impact we have on
our stakeholders.
Learning
Developing our talent is a critical
enabler of present and future
success, as well as playing a 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
where it operates. At group level we
base our people-development focus
on three key areas:
• Reinforcing the leadership pipeline
and accelerating the growth of
top talent.
• Driving a performance culture.
• Supporting the ongoing development
and growth of our businesses by
equipping our people with core
consumer internet and digital media
skills such as new programming
languages, cybersecurity, machine
learning/data science, commercial/
sales and business skills (eg, finance).
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review
Our people continued
NASPERS: BROAD-BASED BLACK ECONOMIC EMPOWERMENT (BBBEE) GENERIC SCORECARD(1)
Target
score
Bonus
points
available
Bonus
points
achieved
Actual score achieved 2019
Element
Equity ownership
Management control
Employment equity
Skills development
Preferential procurement
Enterprise and supplier development
Socio-economic development
Total score
Performance (%)
BBBEE-rating
Priority elements achieved
25
9
10
20
25
15
5
109
20
2.17
4.24
5
2
2
1.89
15.98 (includes the
1.89 bonus points)
2 17.89 (includes the 2 bonus points)
2
17 (includes the 2 bonus points)
82.28 (includes the bonus points)
75.48%
Level 4
Y
Note
(1)
BBBEE is a form of economic empowerment legislated in South Africa.
Transformation and diversity
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 employees. Naspers has
maintained a level 4 BBBEE status and
remains committed to managing our
transformation efforts in South Africa.
More broadly, we are committed
to creating inclusive workplaces that
welcome a diverse group of people,
regardless of gender, gender identity,
gender expression, transgender status,
sexual orientation, class, race, religion,
creed, colour, marital or family status,
age, nationality, political association
or disability.
5
For further details on Media24’s BBBEE
scorecard, refer to www�media24�com.
Our companies are working on
the diversity and inclusion topics that
are most relevant for their particular
context, and across the group we
are paying particular attention to gender
equality which is an issue that manifests
itself across the consumer tech
industry. Bob van Dijk is a member
of the Male Champions
of Change global technology group
https://malechampionsofchange.com/
globaltech/ and is sponsoring our
efforts in this respect.
Independent BBBEE verifications were
performed for the above period.
Helping learners with disabilities
to increase their skills
We want everyone to learn and
develop their skills as much as possible.
This year, for example, we had 33
learners with disabilities graduating
in formal learnership programmes –
14 obtained Further Education and
Training Certificates (FETCs) in Business
Administration Learnership and 19 in
Project Management Learnership.
The majority of these learners are
now studying for the next qualification:
a National Diploma in Customer
Management Learnership. All in all
we have 36 people studying for this
qualification. They are due to graduate
in March 2020. The total cost for this
2020 intake, including programme costs
and stipends of R5 500 per month for
each learner, is R7m.
Employment equity
For a breakdown of Media24’s annual
employment equity statistics, refer
to the corporate website,
www�media24�com.
47
Occupational health and safety
The health, safety and wellness of
our people is critical, given that our
growth depends on their skills. For
Naspers, employee wellness is key
to organisational sustainability.
Accordingly, we care for our
employees through multiple initiatives,
understanding that a healthy and
resilient workforce is essential to
support the changes our business is
navigating. Health and safety is one
of the standard risks considered and
assessed in our risk management
framework. Businesses are required to
report on any health and safety-related
incidents. Any reported matter gets
reviewed by the group’s governance
committee that meets quarterly.
In 2019 no reports of serious injuries
sustained by employees while on duty
were reported.
Helping learners with disabilities to increase their skills.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review 48
“ Data is part of the assets
and the nature of the work
that we do. That’s always
been the case. What’s
changed is that machine
learning tools and
capabilities have become
material, reliable and
proven. So when we
combine these two – the
data and the tech – we have
a new avenue for creating
value. Now that we have this
opportunity, we are going to
make the most of it
throughout Naspers. It’s the
right time and we have the
right ingredients to leverage
machine learning for value.”
Euro Beinat
Global head for data science and artificial
intelligence: Naspers
Spotlight on machine learning
Industry, employees
Now we have reached the point at
which machine learning (ML) is powerful
and mature enough to make a critical
difference to value creation. Increasingly,
ML is part and parcel of how we grow
and succeed in improving people’s lives
around the world. It is a mission-critical
enabler for us.
A positive cycle
From image-recognition to the ability
to interpret text, ML technology
has advanced rapidly in recent years.
As a data-rich business, we have
the fundamental asset – the essential
ingredient – to really make the most
of this technology’s strengths
and potential.
Importantly, a natural positive cycle
accelerates value creation – the more
quality data you can flow into ML, the
better your algorithms will be. Better
algorithms make better tools which
create better services that, in turn,
attract and keep more customers,
which creates yet more good data
to flow back into your ML. It is a quality
and quantity game – one where we
have a distinct advantage in our
markets: strong local businesses
generating volumes of great data for
ML. So, for example, when we train
open-source image-recognition tools
on our proprietary data sets for
classifieds, we obtain much more
accurate models than otherwise
possible. These models, in turn, serve
to deliver a more personalised buyer
experience and a more streamlined
seller experience.
Focusing for greater impact
The key for us is to focus on the
greatest value creation. As such,
we are firstly ensuring that we design
and implement strategies for data –
data acquisition, data management
and data use as well as sharing inside
the organisation.
Secondly, we are focused on acquiring
and retaining the right amount of talent
in the right places, organised in the right
way for our ambitious, amalgamated,
high-growth business.
We therefore have a group of data
scientists wherever we work around
the world, along with a relatively small
team at the centre, coordinating the
whole, sharing best practice and
fostering innovation across the
organisation. We implemented this
structure during the year and it is
working well.
THE CENTRAL TEAM HAS THREE
KEY TASKS:
• To help all organisations in the
portfolio activate the tools and
opportunities necessary to get
the value of ML realised as fast
as possible – to accelerate.
• To scale – ensure we use ML
efficiently throughout the entire
organisation, to serve customers
better and improve our
operational performance and
efficiency.
• To embed ML as a super-utility
across the organisation – a
horizontal layer of competence
and technology that everyone
uses, much as we use electricity
today. This naturally leads to
a new and exciting era of
ML-by-design.
Creating value in many
different ways
We use ML to create value in many
different ways across the group. For
example, you can use it to increase the
trust and safety of interactions between
buyers and sellers, or to make a service
simpler and more streamlined. All these
individual improvements combine to
create greater value.
In Classifieds, ML has a big impact on
convenience – making the platforms as
simple and as convenient as possible to
the end user. For example, OLX uses
ML to help buyers identify items of
interest. By interpreting what the buyer
is actually looking for, the algorithms are
able to suggest the most relevant items
across the OLX catalogue. ML is also
improving trust and safety on platforms,
or improving the sellers’ experience
for instance by suggesting the sale
price for items.
In Payments and Fintech, ML is supporting
advances in fraud detection. We are
also able to offer groundbreaking new
credit services to underbanked people
in India, for example, who have simply
not had access to such services.
Our ML tools make it possible for
us to offer micro-credit to these
customers, which really makes
a difference in their lives.
In Food Delivery, we are using ML
to increase and enhance automation,
improve demand and supply prediction,
optimise and personalise search, and
ensure faster, more reliable deliveries –
all of which makes for happier restaurants
and customers and, in turn, fuels the
extensive growth of our food-delivery
businesses.
Looking ahead
We are working on deepening and
extending the understanding and use
of ML across the group so we can
move faster and incorporate more
advanced tasks. Training is critical –
from education and coaching for senior
leaders to enabling a large portion of
the entire workforce, not just our
engineers, to understand the
technology: at any point in time, several
hundred associates are participating in
ML education programmes across
Naspers. Our aim is to capitalise on ML
across the group to accelerate the way
in which we create value by improving
people’s lives. ML is an exceptional tool
in our business and we are determined
to make the most of it.
A GREAT NEW WAY TO PAY
With several hundred million
transactions a year on its platforms,
PayU has a wealth of data to combine
with ML for valuable insights and to
create attractive new products for
customers. LazyPay is a good example.
This innovative PayU product gives
people in India an easy, one-click
checkout option for transactions up to
US$300 without needing a credit card.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review
49
5
11
85
243
55
89
38
46
47
73
171
308
GLOBAL TAXES
US$1 170m
in taxes paid and collected by the
Naspers group in FY19 globally
TAX PAID AND COLLECTED PER GEOGRAPHICAL
AREA (US$’m)
Amounts paid to tax authorities
Amounts collected on behalf of tax authorities
Other
Europe
Asia
Latin
America
Rest of
Africa
South
Africa
Tax
Naspers aims to
contribute positively to
the communities within
which it operates. As
a global company, we
recognise that the tax
we pay is an important
element of our broader
economic and social
contribution to the
countries where
we operate.
NASPERS CONTRIBUTED AN ESTIMATED R24�6BN TO THE SOUTH AFRICAN FISCUS IN FY19
R2 814m
Value-added tax (VAT)
R1 406m
Personal income tax (PIT)
R1 687m
Corporate income tax (CIT)
R541m
other taxes paid
R245m
other taxes
collected
R112m
withholding tax:
entity cost
R143m
customs and excise,
ad valorem
R6.9bn
R2.3bn direct and R4.0bn
indirect tax contribution
R16.5bn+
induced tax
R23.4bn
total tax for FY19
Naspers businesses pay taxes where
they operate. At Naspers there is zero
tolerance for non-compliance with tax
laws in all jurisdictions in which our
businesses find themselves. In managing
our tax affairs we take into account the
interests of all our stakeholders, including
governments and our shareholders.
Our tax principles are laid down in the
Naspers group tax policy which is
available on our website.
The digitalisation of the economy is
raising various tax challenges that need
to be addressed. Naspers regards it as
important that consensus is reached
on a global basis for the solutions to
these challenges.
Tax profiles of companies can
be skewed as a consequence of
magnitude and footprint.
At Naspers we like to keep it simple:
businesses should pay tax locally,
ie where their operations are and
where their clients and users are.
Paying taxes in the countries where one
operates is an important contribution
to local societies and economies.
An economic impact assessment (EIA)
model is used to capture Naspers’s
economic contributions.
We are of the view that local taxes
should be equally applicable to all
companies irrespective of whether
companies have a global, regional or
local footprint. The playing field should
be level.
Taxes paid and collected in SA
The Naspers group is a large
contributor to the South African fiscus.
In the 2019 financial year, the Naspers
group paid and collected R6.9bn
(US$479m) in taxes in South Africa.
This accounts for 41% of taxes paid and
collected by the group globally. In the
past financial year, in South Africa, the
Naspers group paid and collected
R1 687m (US$116m) in corporate
income tax, R2 814m (US$194m) in
VAT, R1 406m (US$96m) in employee
taxes and R1 042m (US$72m) in
other taxes.
The EIA model measures how Naspers
affects different industry clusters and
sectors in the South African economy.
Naspers’s interdependencies within
different sectors of the economy,
both upstream and downstream,
are identified.
The size of the additional economic
activity generated by Naspers’s
interdependencies are calculated
using the multiplier effect.
The different rounds of the multiplier
effect, from the initial spending in the
sector, through to employees spending
their salaries on goods and services (and
its resultant effects), indicate the
induced tax contributions made to the
economy. The induced tax for 2019 is
R16.5bn, and together with the direct
and indirect taxes, this adds up to a
total tax contribution of R23.4bn.
During the 2019 financial year,
MultiChoice Group (MCG) paid and
collected US$569m globally. 86% of this
was generated on the African continent,
and US$374m in South Africa alone.
The 2019 figures include only
11 months of the MCG operations,
up to the unbundling date of MCG
on 4 March 2019.
It is difficult to compare the 11 months’
figures for the 2019 reporting period for
MCG with last year’s figures as a result
of statutory payment terms, resulting in
back-loading of taxes like corporate
income tax in the last month of the
financial year (which falls outside the
11-month period in which MCG
was part of Naspers). Exchange
rate differences result in a further
significant (22%) dilution of the total
taxes paid and collected in the 2019
financial year compared to those in
the previous year.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Tax continued
Taxes paid and collected globally
The tax payments and collections on
behalf of revenue authorities show an
increase in 2019 across all tax types,
except for corporate income tax,
compared to 2018.
This increase in taxes paid and collected
is a reflection of the trend that our
businesses across the globe are reaching
maturity and profitability. The slight
drop in corporate income taxes paid
is a result of the fact that the second
provisional payments for MCG’s
corporate income tax payments in
South Africa are not included in these
figures as the payment deadline was
31 March 2019, which falls after the
date of MCG’s unbundling.
If the taxes paid and collected by
MCG are eliminated, the global tax
contributions for the Naspers group
adds up to US$602m. Excluding MCG,
45% of the total tax paid and collected
by the Naspers group is paid and
collected in Europe, 23% in Asia, 18%
in South Africa, 14% in Latin America
and 1% elsewhere.
Latin America shows a slight growth
of 1% in 2019 compared to 2018, while
the tax paid and collected in Europe
and Asia shows growth of 7% and 6%
respectively. This is driven by the
improved profitability of the businesses
in those markets.
We are seeing an increased
number of businesses reach scale
and profitability, with profitable
businesses now contributing 50%
of ecommerce revenues.
Effective tax rate
Naspers continues to show a
meaningful normalised effective tax
rate of 29.0% for the 2019 financial
year. The group accounts for its share
of the results of its equity-accounted
investments net of the taxation
recognised by those investments. In
order to provide a more comparable
effective tax rate, the tax recognised as
part of the group’s share of the results
from equity-accounted investments is
included, for purposes of the calculation
of the normalised effective tax rate, in
the total tax recognised by the group.
ILLUSTRATIVE EXAMPLE
Illustrative example of social benefits if National Treasury allocates Naspers’s
total tax contribution of R24.6bn based on the FY19 budget allocation.
EDUCATORS
6 549
HOSPITAL BEDS
1 794
CHILDREN FED
77 146
LOW-COST HOUSES
5 014
DOCTORS
481
POLICE OFFICERS
6 327
Furthermore, exceptional items like
tax-free capital gains on the sale of
subsidiaries are excluded from the
profit before tax to arrive at the
normalised effective tax rate of 29.0%.
Sustainable tax
At Naspers we believe in the power of
local backed by global scale and we look
for opportunities to address significant
societal needs in markets where we see
growth potential. With this strategy
we aim to create long-term value by
improving lives. We are proud to make
a positive difference around the world.
We create value in a number of ways,
for example through the companies we
back and the people we employ. We
also recognise that the taxes we pay
contribute to long-term value creation,
helping to build stronger economies
in the countries in which we invest,
work and live. By adhering to our tax
principles and paying taxes where
we operate, Naspers supports local
governments in generating resources,
therefore our taxes form an important
element of our broader economic and
social contribution to the countries
where we operate.
In order to get a holistic view of
Naspers’s contribution to the South
African economy and how this supports
local government, we conducted
a two-step approach.
1. Firstly, we calculated our total tax
contribution, including direct taxes,
indirect taxes and induced taxes
(using the Economic Impact
Assessment model).
2. Thereafter we estimated Naspers’s
social impact. The basis for this
analysis is the government spending
portions as per National Treasury’s
budget. Naspers’s total tax
contribution is divided in the same
ratios as per government spending.
In this way Naspers, through its tax
contributions, is able to contribute to
the funding of national social objectives.
As an illustrative example, Naspers’s
total 2019 tax contribution to South
Africa’s National Treasury is able to feed
77 146 children, finance 1 794 hospital
beds and 481 doctors, 6 549 educators,
5 014 low-cost houses and 6 327
police officers.
Tax transparency
We believe that responsible and
tax-transparent behaviour are key
to building social trust and addressing
the expectations of the public and
policymakers alike. On the topic of
tax and corporate social responsibility,
CSR Europe(1) recently published
a blueprint for responsible and
transparent tax behaviour. Naspers
is one of the participating companies
and shared its experience in the area
of interaction with tax authorities,
which is included in the blueprint as
a best practice company case.
Note
(1) https://www.csreurope.org.
50
TAX PAID AND COLLECTED GLOBALLY (EXCLUDING MCG)
PER TAX TYPE (US$’m)
FY19
FY18(1)
Corporate
income tax/
Profit tax
VAT/
Consumption
taxes
Labour/
Employee
taxes
Other taxes
and grants
(paid)
Withholding
tax (entity
cost)
Customs
and excise,
ad valorem
Other taxes
and grants
(collected)
80
84
5%
222
212
169
164
3%
1%
59
81
22
16
8
3
42
40
28%
34%
206%
6%
Note
(1) FY18 tax paid and collected disclosure is updated as the amount of dividend
tax (some US$18.5m) was not available in consolidated format at the time
of printing in the prior year.
TAX PAID AND COLLECTED (EXCLUDING MCG)
GLOBALLY PER GEOGRAPHY (US$’m)
Amounts paid to tax authorities
Amounts collected on behalf of tax authorities
Other
Europe
Asia
Latin
America
South
Africa
5
2
53
216
54
84
37
45
20
86
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review 51
RATE OF RETURN
29%
annual internal rate of return (IRR) following
the disposal of our 12% interest in Flipkart
FREE CASH INFLOWS
US$673m
aggregate of free cash inflows generated by
ecommerce and internet units that are free
cash flow positive
Financial review
The past year was transformational
for the Naspers group as we
initiated and executed a number
of significant strategic initiatives.
We invested to strengthen
our ecommerce segments and
broadened our ambitions in
food delivery. All key segments
made good progress against
financial and strategic objectives.
FINANCIAL SUMMARY
Revenue(1)
Trading profit(1)
Dividend per N ordinary share (SA cents)
(2019 reflects dividend proposed)
2019
US$’m
2018
US$’m
18 990
16 352
3 304
2 994
715
650
Note
(1) Reported on an economic-interest basis, excluding discontinued operations.
The contribution to group earnings
by equity-accounted investments
was up 4%. This includes investment
disposal gains of US$126m, impairment
losses of US$799m and fair-value
adjustments on financial instruments
of US$1.5bn that were recognised by
these companies.
A gain of US$1.6bn was recorded after
disposing of our 12% interest in Flipkart
in August 2018 for US$2.2bn, yielding
an internal annual rate of return of 29%.
Following distribution of MultiChoice
Group to shareholders, a gain on
distribution of US$2.5bn was recorded.
This has been presented as part of the
profit from discontinued operations
in the summarised consolidated income
statement (refer to page 76).
Impairment losses of US$123m related
primarily to an equity-accounted
investment focused on providing
consumer lending and financial services
in the Payments and Fintech business.
We impaired this investment (including
convertible debt funding provided) as
performance and the opportunity to
leverage the investment in some of our
core markets fell below our expectations.
Put option liabilities totalled US$827m
at 31 March 2019, compared to
US$2.4bn a year ago, with an aggregate
remeasurement income of US$53m
recorded in the income statement on
these liabilities over the period. The
significant decrease year on year relates
primarily to the settlement of put
option liabilities related to the Avito
and Dubizzle businesses, as well as
a portion of the put option liability
in the Classifieds business, letgo.
We report a healthy net cash position
(including short-term cash investments)
of US$6.3bn at year-end, primarily as
a result of proceeds retained from the
Flipkart disposal in August 2018 and the
trim of our holding in Tencent last year.
The higher net cash position resulted
in net interest income of US$82m.
The progress made by our core
segments, which are growing fast
and scaling well, gives us confidence
in our ability to continue identifying
opportunities that can unlock significant
value. The aggregate of free cash
inflows generated by ecommerce and
internet units that are free cash flow
positive, increased from US$217m
in 2016 to US$673m this year.
This includes dividends received from
Tencent and represents a compounded
annual growth rate of 46% on the
back of strong profitability gains in
these businesses.
To offset the dilutionary impact of
share options and restricted stock
units granted to our employees,
we invested US$78m to acquire
Naspers N ordinary shares on market
and will continue to do so in future.
Consolidated free cash flow was
US$184m, a substantial improvement
on the prior year. This was driven by
the increased profitability of the
ecommerce businesses, dividends
received from Tencent of US$342m
and positive working capital effects in
Video Entertainment. Consolidated
free cash outflow from continuing
operations (thus excluding Video
Entertainment) was US$120m – a
60% improvement on the prior year
when measured on the same basis.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers Integrated annual report 2019Performance review Risks and opportunities
As entrepreneurs, our effectiveness in identifying and responding
to opportunities and risks is key to our success.
At Naspers we acknowledge the
importance of managing risks and
opportunities as effectively as possible
given our global footprint and diverse
business models. As a group, we
promote a culture in which robust risk
acceptance processes and a systematic
way to evaluate opportunities are seen
as a driver of competitive advantage.
These are integrated into our
everyday decisionmaking and
good governance practice.
How we manage and govern
risk and consider opportunities
We seek to create value for our
stakeholders by operating within the
ambit of approval by our managing
board and supporting governance
committees (refer to governance
structures on page 60). We set
relevant tolerance levels for each
significant risk individually and manage
our business within these parameters.
We understand that certain risks may
have multiple consequences and that
a certain consequence may materialise
from different types of risk. The same
applies to opportunities.
We require our businesses to apply
a methodical approach to governance,
risk and compliance. The six capitals
transformation model is considered
useful to analyse risks and opportunities
as we aim to continuously reduce
our impact and stimulate positive
capital transformation.
RISK MANAGEMENT
Segmental risk
committees
Group risk
committee
Board
Internal
audit
For management at group and
subsidiary level, our policies provide
direction, scope and ambit to apply
practices and principles to manage risk
and opportunity, both operationally and
strategically. Key risks are reported to
segmental risk committees who in turn
will communicate to the board. The risk
committee assists the board to ensure
that risk is governed in a way that
supports the group in setting and
achieving its strategic objectives.
Stakeholder relationship management,
both internal and external, forms an
integral part of our risk management
processes. We are aware of the risks
associated with outsourced services
and third-party applications and
continually look at better ways to
manage our relationships with suppliers.
Our legal compliance office provides
support with the help of in-country
legal teams and where required,
we consult specialists when
contracting with potential suppliers
and service providers.
We are cautious around privacy
requirements for both internal and
external stakeholders as well as
our customers.
Drawing on best practice
Our risk management framework,
system and processes draw on
internationally recognised best business
practice and frameworks. We promote
the sharing of knowledge and learning
from any incidents and good
management practice between
businesses within the group.
Responsibility
Management and the board are
accountable for the choices and
decisions we make, how we
execute these and for delivering
a commensurate reward – ie value
in its broadest definition – within
the parameters of the risk profile
the board deems acceptable.
As Naspers continues to evolve and
invest in companies that operate
at different maturity levels, risk
tolerance levels are set top-down and
management of the business segments
is accountable to manage risk within
these levels.
The responsibility for managing risk lies
with the owner of risk: in most cases
operational management, assisted
by the finance function and, where
considered useful in our businesses,
specialised risk management and risk
support functions.
Group internal audit and risk support
assess the effectiveness of the system
of risk management and internal
control and may provide assistance
and guidance to the business.
At least semi-annually, our external
auditor provides assurance over the
reliability of the financial information
that we publish.
52
ANALYSING AND RESPONDING TO DIFFERENT RISKS
Our businesses are expected to apply a defined, structured
approach to identifying, assessing, analysing and responding to
risk and opportunities within tolerance levels set by the board.
Identify
Assess
Analyse
Respond
Our risk analysis focuses on the
impact of risk on our objectives
without losing sight of any
opportunities that may arise.
For risks we are not prepared
to accept, we act to reduce
our vulnerability.
Depending on the importance
of the risk in relation to tolerance
levels, active management
of the risk takes various
forms and varies in extent.
1
Controls to
prevent and
detect risk
2
Spread risk
We operate
or implement
enhanced control
and monitoring
measures that either
prevent or detect
the materialisation
of a risk at the
earliest stage.
We take measures
that mitigate
any material
consequences
and, on a portfolio
basis, we spread
uncorrelated risks.
3
Share or
transfer risk
Where we can,
we explore ways
to share or
transfer risk.
k
s
i
r
g
n
i
s
a
e
r
c
n
I
4
Mitigate risk
5
Exit strategy
We run adequate
insurance
programmes to
mitigate the risk
of sudden losses
caused by the
materialisation
of insurable risk.
Wherever we find
a risk outside
acceptable levels,
we consider ways
to avoid the risk
altogether, for
example by entering
into an exit strategy.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Performance review
53
OBJECTIVE-DRIVEN DYNAMIC APPROACH
Selected
objectives
Potential
Business
opportunities
Strategy
delivery
Sustainable
value
Capitals
transformation
Performance
Risks and opportunities continued
Our objective-driven dynamic
approach
Our programmes are aimed to mitigate
risk within levels we deem acceptable
and to also stimulate identification
of opportunities to either improve our
performance or strengthen our potential.
Our overarching aim is to transform
our capitals for a net positive impact.
This approach gives rise to various risks,
specifically over-using any of the six
capitals (higher input than intended)
or under-producing (lower output
than intended). We may also identify
opportunities for greater efficiency
(lower input than anticipated) or more
effective production (higher output
than anticipated) in any of the capitals
and therefore, exceed against our
original objectives. This can translate
into wasted resources. Creating
sustainable value is a continual process
of balancing available resources for
optimal benefit to our entire
stakeholder base.
For our stakeholders, opportunities
and risks matter most where they
have the greatest impact on value
(in its broadest sense). Therefore,
we select opportunities and assess,
manage and accept risks primarily
on the basis of their potential impact
on determined value drivers.
Our six capitals
Financial
Human
Manufactured
Intellectual
Social and
relationship
Natural
Risk impact
Improvement opportunity
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Performance review
54
Risks and opportunities continued
Key areas of focus in the year
Platform, technology and
architecture optimisation
For our core businesses, improving
platforms and architecture to enhance
customer experience and support
scalability and security has been
a leading theme.
Talent management
The talent that we need to execute
on our strategic ambitions is scarce
and highly sought after. Increasingly,
talent shortage is a risk. We are
addressing this issue by investing in HR
support, enhancing our recruitment
and retention strategies and by
bettering our learning and development
offering for all employees, eg through
our MyAcademy learning platform. We
also increasingly encourage businesses
to consider and address topics of
diversity (including gender equality)
and inclusion.
Capital reallocation
During the year we have executed
and/or announced a number of
major transactions that we see as
transformational. All these implied
(and still imply) careful weighing up of
significant risk and opportunity and
required significant management
attention.
Main examples are:
• reinforcing our balance sheet for
growth (eg, US$9.8bn in proceeds
following the March 2018 Tencent
trim and US$2.2bn Flipkart
divestment, in both cases realising
value created)
• unbundling our US$3.8bn Video
Entertainment segment, thereby
effectively creating a 100% online
group of consumer internet
businesses, and
• our announcement to pursue
a listing on Euronext Amsterdam,
creating Europe’s largest
consumer internet company.
We have furthermore redeployed
significant amounts of capital to
accelerate growth of our core
businesses, such as:
• Classifieds: enlarging our interest
in Avito and investing in letgo
(respectively US$1.16bn and
US$189m)
• a number of acquisitions in Payments
and Fintech, and
• our US$716m investment and further
capital injections and commitments
in our food business, Swiggy.
Our efforts to continuously optimise
our capital allocation also means that
we, more often than not, reject
opportunities and/or deals that we
deem either not sufficiently attractive
or outside risk parameters we feel
comfortable with.
This entails developing and introducing
product improvements (including
application of ML and AI solutions),
integration and consolidation of existing
platforms and effect operational
improvements by transitioning
applications to cloud environments.
Cybersecurity and data privacy
As in the previous year, our
cybersecurity and resilience has
remained a major area of focus with
a specific eye on data privacy, which
has gained importance in the eyes of
both our stakeholders and regulators
worldwide. We are committed to
protect sensitive data and operate our
businesses such that we are able to
detect and respond promptly to any
attempts to breach data or abuse our
systems: we understand that being able
to do so is to manage a number of
related risks. This may have a positive
impact on our relationship with
customers and other stakeholders.
Future focus areas
For the near future we do not
foresee the key focus areas
becoming less relevant. In addition,
we expect that the following topics
will demand growing attention:
Data-driven technologies
Our businesses are placing greater emphasis
on opportunities to enhance our services and
customer experience through the development
and deployment of data-driven technologies such
as ML.
We need to understand and effectively manage the
emerging risks that present themselves as a result.
Such risks may relate to privacy and compliance
in connection with the use of data, and also the
control over and consequences of automated
decisionmaking.
Sustainability
Through our policies and governance structures
we put our commitment to ethical and sustainable
entrepreneurship into practice. We also realise
that the communities we serve and our various
stakeholders take a growing interest in the
sustainability of our operations and the impact of
our corporate citizenship. We value our reputation
and are fully aware of the importance of our social
and relationship capital.
We understand that reputational risks relating
to our commitment predominantly come from a
misalignment of our values or a deviation from our
desired business culture, which, in a group as diverse
and geographically spread as ours, naturally is
a challenge to eliminate.
Throughout our group we will continue
to emphasise the importance of ethical
and responsible behaviour and undertake various
initiatives to ensure awareness of, and adherence
to, our code of business ethics and conduct, while
promoting a culture of integrated thinking in
everything we do.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Further information
55
55
Governance
Our board ������������������������������������������56
Governance at a glance ������������������58
Governance for a
sustainable business ������������������������59
Remuneration at a glance ��������������67
We’re backing the next
generation of talent and
tech entrepreneurs in South
Africa through Naspers Labs
and Naspers Foundry …
It’s at the heart of how we create
value by improving people’s lives
Read more on pages 20 and 21
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 56
E Executive committee
A Audit committee
R Risk committee
H Human resources and
remuneration committee
N Nomination committee
S Social and ethics committee
Executive
Non-executive
Independent non-executive
Our board
E
R
S
Bob van Dijk
Chief executive
Bob was appointed chief executive of Naspers
in April 2014. He joined the group as Allegro’s
group chief executive officer in August 2013
and was promoted to chief executive officer of
global transactions ecommerce in October 2013.
He has 15 years of general management
experience in online growth businesses globally,
spanning the online marketplaces, online
classifieds and etail segments. Prior to his general
management career, Bob was a founder of an
online financial derivatives marketplace. He
started his career at McKinsey, focusing on
mergers and acquisitions, and media. Bob
has an MBAHons from Insead and an MSc
(cum laude) in econometrics from Erasmus
University, Rotterdam.
E
H
N
H
N
S
Nolo Letele
Nolo joined M-Net in 1990 and pioneered
MultiChoice’s expansion outside South Africa.
In 1995, he moved to the Republic of Ghana,
where he served as West African regional
general manager. In 1999, he was appointed chief
executive of MultiChoice South Africa Holdings
Proprietary Limited, and later served as the
MultiChoice group chief executive officer until
2010, when he was appointed executive chair
of the MultiChoice South Africa Holdings
board. Nolo has won several awards for his
contributions to the media industry over the
years. He holds an honours degree in electronic
engineering (UK).
A
R
S
Don Eriksson
Don is the chair of Oakleaf Insurance
Company Limited, Renasa Insurance Company,
NMS Insurance Services and a director of
MultiChoice Group Limited. He served on
the council of the Institute of Directors of
Southern Africa (IoDSA) for a number of
years and is an honorary life member, and as
a trustee to the Discovery Health Medical Aid.
He was a partner at Coopers & Lybrand (now
PricewaterhouseCoopers Inc.) and an executive
director of the Commercial Union group (CGU
Insurance Company (SA) Limited, Commercial
Union Life Insurance Company Limited and
Sentrasure Limited). He is a qualified South
African chartered accountant with a certificate
in the Theory of Accountancy from the
University of the Witwatersrand.
Craig Enenstein
Craig is chief executive officer of Corridor
Capital llc, an operationally intensive private
equity firm focused on the lower-middle market.
Corridor Capital is based in Los Angeles and
was founded by Craig in 2005. He holds an MBA
in finance from Wharton School of Business, an
MA in international studies from the Lauder
Institute, University of Pennsylvania and a BA
from the University of California, Berkeley.
A
R
N
S
Rachel Jafta
Rachel is a professor of economics at
Stellenbosch University. She joined Naspers as a
director in 2003 and was appointed a director of
Media24 in 2007. She is a member of the South
African Economic Society, a director of Econex,
chair of the Cape Town Carnival Trust, 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. She was appointed chair of the
Media24 board in April 2013. She is also a
director of Nasbel. She holds an MEcon and
PhD from Stellenbosch University.
Koos Bekker
Chair
Koos led the founding team of the M-Net/
MultiChoice (MIH) pay-television business in
1985. He was also a founder of MTN Group
Limited, a major telecommunications group
in Africa. Koos headed the MIH group in its
international and internet expansion until 1997,
when he became chief executive of Naspers.
He retired from this role in March 2014 and, in
April 2015, became non-executive chair of the
Naspers board. He holds a BAHons and an
honorary doctorate in commerce from
Stellenbosch University, an LLB from the
University of the Witwatersrand and an MBA
degree from Columbia University, New York.
E
R
S
Basil Sgourdos
CFO
Basil was appointed financial director of Naspers
in July 2014. As a qualified chartered accountant
(SA), he worked at PricewaterhouseCoopers Inc.
from 1989 to 1994. He then joined Naspers,
initially as 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 Plc,
where he remained for 10 years. He then spent
two years in Amsterdam as general manager
of pay-television business development globally
before being appointed group chief financial
officer of MIH in 2009. He held this position until
he became group chief financial officer of the
Naspers group. He is a qualified South African
chartered accountant with a BCom from the
University of the Witwatersrand and a
BAccHons from the University of South Africa.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Our board
continued
A
R
Ben van der Ross
Ben was chair of Strategic Real Estate
Management Proprietary Limited, the managers
of the Emira Property Fund. He served on the
boards of Distell Limited, FirstRand Limited,
Lewis Group Limited, Pick n Pay Holdings
Limited and MMI Holdings Limited. He is also
a director of Nasbel. He is an attorney of the
High Court of South Africa and holds a DipLaw
from the University of Cape Town.
H
N
N
Hendrik du Toit
Hendrik is chief executive officer of Investec
Asset Management and a director of Investec plc
and Investec Limited. He is a commissioner of
the Global Commission on Business and
Sustainable Development. He holds an MPhil
in economics and politics of development from
Cambridge University, as well as an MCom in
economics (cum laude) from Stellenbosch
University. Hendrik is currently a member
of the Global Business and Sustainable
Development Commission.
Fred Phaswana
Lead independent director
S
Fred joined Naspers as a director in 2003.
He is joint chair of the Mondi Group and former
chair of The Standard Bank Group and Standard
Bank of South Africa Limited. He holds a BA
(philosophy, politics and economics) and an
MA from the University of South Africa, and
BComHons from the University of Johannesburg.
Cobus Stofberg
Cobus was a founding member of the M-Net/
MultiChoice pay-television business in 1985.
He was chief executive officer of the MIH
group from 1997 to 2011 and was instrumental
in its expansion. Prior to M-Net, he was a
partner at Coopers & Lybrand (predecessor
of PricewaterhouseCoopers Inc.). He holds
a BComLaw and LLB from Stellenbosch
University, BComptHons from the University
of South Africa and qualified as a chartered
accountant (SA).
H
N
Roberto Oliveira de Lima
Roberto developed his career in companies like
Accor S.A., Rhone Poulenc S.A. (now part of
Sanofi S.A.) and Compagnie de Saint-Gobain
S.A. in the information technology and finance
areas. He graduated in public administration and
has a postgraduate degree in business
management from Fundação Getulio Vargas in
Brazil. He also holds a specialisation in finance
and strategic planning from Institut Superieur
des Affaires in France. He was chair and chief
executive officer of Credicard Group, chief
executive officer of Vivo S.A., the largest mobile
telecommunications company in Brazil, chair of
Publicis Brazil and president of Natura S.A. He
has been a board member of Edenred S.A. in
France, Pão de Açúcar S.A. (Casino) and Natura
in Brazil since 2011. He is a member of the board
of Petrobras Distribuidora S.A., RNI Negócios
Imobiliários S.A. and Telefônica Brasil S.A. He
holds a BA and MA in business management
from Fundação Getúlio Vargas in Brazil and an
MA from Institut Superieur des Affaires at Jouy
en Josas, France.
Mark Sorour
Mark joined the Naspers group in 1994, heading
up business development and corporate finance
globally. Following assignments in Hong Kong
and Amsterdam, he returned to Cape Town
in 2002 as group chief investment officer
responsible for all global investment activities.
In March 2018, he retired after more than
20 years with the Naspers group but remained
on the board as a non-executive director. He is
a qualified South African chartered accountant
and holds a BCom and DipAcc from the
University of KwaZulu-Natal.
S
Debra Meyer
Debra is professor of biochemistry and
executive dean of the faculty of science at the
University of Johannesburg. She has completed
modules in media strategy and academic
leadership at Harvard and GIBS (University of
Pretoria) and regularly contributes to several
newspapers and magazines. Debra serves as
trustee or board member of several
organisations. She is also a director of Nasbel.
She holds a BSc in biological sciences, a BScHons
and MSc in biochemistry from the University of
Johannesburg and a PhD in biochemistry and
molecular biology from the University of
California, Davis (which she attended as a
Fulbright scholar).
57
E Executive committee
A Audit committee
R Risk committee
H Human resources and
remuneration committee
N Nomination committee
S Social and ethics committee
Executive
Non-executive
Independent non-executive
R
H
Emilie Choi
Emilie leads corporate and business development,
business operations and analytics, and ventures
businesses for CB Payments Limited and
Coinbase UK Limited. Prior to Coinbase, she ran
corporate development for LinkedIn and led all
its investment activities, including Bizo, Newsie,
Bright Pulse, CardMunch, Connected Rapportive,
Donnectifier, IndexTank, Lynda and SlideShare,
as well as leading the LinkedIn joint venture in
China. Before that, she worked in corporate
development and strategy roles at Warner Bros
Entertainment as well as Yahoo Inc, where she
worked on Yahoo’s acquisition of Flickr Inc and its
investment in Alibaba. Emilie holds an MBA from
Wharton School at the University of Pennsylvania
and a BA in economics from Johns Hopkins
University. She joined the Naspers board as
a director in 2017.
E
R
Steve Pacak
Steve began his career with Naspers at M-Net
in 1988 and has held various executive positions
in the Naspers group. He is a director of
MultiChoice Group, MultiChoice South Africa
Holdings, and companies in the wider Naspers
group. He was appointed an executive director
of Naspers in 1998 and a non-executive director
in January 2015. He retired as Naspers’s financial
director in June 2014, but remained on the
board as an alternate non-executive director.
Steve is a qualified South African chartered
accountant and holds a BAcc from the University
of the Witwatersrand.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Governance at a glance
58
Focus areas this year
Strategy
(see page 30 for more details)
Review the group’s strategy,
five-year plan and budget.
Continue to address the discount
and unlock value through the
MultiChoice Group unbundling
and Euronext listing.
Focus on future investment and
value creation in the portfolio.
Financial
(see page 51 for more details)
Review the group’s performance
and results.
Governance and sustainability
(see page 55 for more details)
Continued application of King IV
practices.
Started the journey to determine
which of the United Nations’
Sustainable Development Goals
(SDGs) are best aligned to our
impact areas.
Embed data privacy and cybersecurity
throughout the group.
People and learning
(see page 45 for more details)
Recognise the importance of
machine learning and embed
learning throughout the group,
including board level.
BOARD COMPOSITION
NATIONALITIES
LENGTH AND TENURE
GENDER DIVERSITY
2019
2018
2017
3
13
3
14
2
14
Number of directors
Number of directors
Number of directors
Number of directors
Chair
Executive
Independent non-executive
Non-executive
1
2
9
4
South Africa
USA
Brazil
The Netherlands
12
2
1
1
0–2 years
2–4 years
4–6 years
6–9+ years
Female
Male
1
5
6
4
4
13
Date first appointed
in current position
Date last appointed
Seven board meetings
held during the year. Attendance:
J P Bekker(1)
E M Choi
H J du Toit
C L Enenstein
D G Eriksson
R C C Jafta
F L N Letele(2)
G Liu(3)
D Meyer
R Oliveira de Lima
S J Z Pacak(1)
T M F Phaswana(1)
M R Sorour(4)
V Sgourdos(1)
J D T Stofberg
B van Dijk(1)
B J van der Ross
17 April 2015
21 April 2017
1 April 2016
16 October 2013
16 October 2013
23 October 2003
22 November 2013
1 April 2016
25 November 2009
16 October 2013
15 January 2015
23 October 2003
15 January 2015
1 July 2014
16 October 2013
1 April 2014
12 February 1999
25 August 2017
25 August 2017
24 August 2018
24 August 2018
24 August 2018
25 August 2017
26 August 2016
24 August 2018
26 August 2016
24 August 2018
25 August 2017
25 August 2017
24 August 2018
29 August 2014
26 August 2016
29 August 2014
25 August 2017
7
7
5
7
7
7
7
7
7
6
7
7
7
7
6
7
7
Notes
(1) Members of
executive
committee.
(2) Reclassified as
non-executive
director on
27 February 2019.
(3) Resigned as director
on 25 February
2019.
(4) Appointed as
non-executive
director on
1 April 2018.
Category
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
Non-executive
Executive
Non-executive
Executive
Independent non-executive
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Governance for a sustainable business
59
“I am pleased to present
this year’s governance
report. We are committed
to ensuring high standards
of corporate governance
are maintained around
the group.”
Koos Bekker
Chair: Naspers
The board of directors conducts
the group’s business with integrity
by applying appropriate corporate
governance policies and practices.
Our aim is to keep abreast of regulatory
developments, further enhance our
governance standards, monitor and
ensure compliance with relevant laws
and regulations, and cultivate a thriving
organisational ethical culture in the
different geographies in which we
operate. We also aim to maintain a high
standard of reporting and disclosure,
keeping in mind the best interests of
our stakeholders and disclosing what
is relevant and important to the
sustainability of the group.
Introduction
Naspers has a primary listing on the
JSE Limited (JSE) and a secondary listing
on the A2X exchange in South Africa.
It is therefore subject to the JSE Listings
Requirements, guidelines in the King IV
Report on Corporate GovernanceTM(1)
for South Africa, 2016 (King IV), as well as
legislation for publicly listed companies in
South Africa. Naspers has a secondary
listing of its American Depository
Receipts (ADRs) on the London Stock
Exchange (LSE). In addition, a subsidiary,
Prosus N.V. (Prosus) (formerly Myriad
International Holdings N.V.), has bonds
guaranteed by Naspers and is listed on
the Irish Stock Exchange.
The audit and risk committees of
the board monitor compliance with
the JSE and applicable LSE listings
requirements and the Irish Stock
Exchange requirements applicable in
relation to the Prosus bonds listed on
that exchange.
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
corporate governance.
How we integrate governance
into our business
Naspers recognises the value of an
integrated approach to assurance and
compliance. The adopted governance,
risk and compliance framework
is the basis for how Naspers
manages governance.
The governance framework illustrates
how we achieve a sustainable business
integrated with governance, assurance,
risk management and compliance, in line
with legislated requirements and King IV
recommendations, and reported
through the relevant structures.
Naspers group governance
framework
The Naspers board is the focal point
for, and custodian of, the group’s
corporate governance systems. The
board conducts the group’s business
with integrity and applies appropriate
corporate governance policies and
practices in the group.
The Naspers board, its committees,
and the boards and committees of
subsidiaries are responsible for ensuring
the appropriate principles and practices
of King IV 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 principles of King IV.
Business and governance structures
have clear approval frameworks.
Naspers has a governance committee
comprising the chief financial officers
(CFOs) of Naspers, Naspers
ecommerce segments and Media24,
as well as Naspers’s group company
secretary, global governance partner,
group general counsel, global
compliance lead and head of internal
audit and risk support. The committee
was tasked to ensure the Naspers
group’s governance structures and
framework are employed across the
in-scope entities in the group during the
financial year. Governance and progress
are monitored by the audit and risk
committees, and reported to the board.
The composition of committees of the
board is reviewed annually and, where
required, amended.
Details of the enterprisewide risk
management framework appear on
pages 52 to 54.
Our approach to applying King IV
and statement by the board
Naspers is required, in terms of the
JSE Listings Requirements, to report its
application of the principles of King IV.
In line with the overriding principle in
King IV of ‘apply and explain’, the board,
to the best of its knowledge, believes
the group has satisfactorily applied the
principles of King IV. For a more detailed
review of Naspers’s application of
King IV, refer to the King IV application
report 2019.
All board and board committee
charters and policies are aligned with
the South African Companies Act
requirements and the principles in
King IV and the requirements of the
JSE Listings Requirements.
King IV advocates a qualitative approach
to implementing recommended
practices to realise the intended
governance outcomes. In line with
the King IV recommendations we
consider proportionality when we apply
corporate governance in the group.
This means we apply the practices
needed to demonstrate the group’s
governance in terms of King IV as
appropriate across the group. As the
companies in our group are diverse and
at different maturity stages, a one-size-
fits-all approach cannot be followed in
implementing governance practices.
All good governance principles apply to
all types and sizes of companies, but the
practices implemented by different
companies to achieve the principles
may be different. Practices must be
implemented as appropriate for each
company, in line with the overarching
good governance principles.
Our focus areas this year
Last year, we reported on how we
aligned with King IV and our approach
to apply these principles. In the 2019
financial year, we continued to
implement recommended or
alternative practices to demonstrate
application of King IV’s principles.
Focus areas for the year included
additional reporting to our board
committees and board on how we
implement good corporate governance
in the group and improved corporate
governance disclosures in the integrated
annual report. Governance of information
and technology, particularly data privacy
and cybersecurity, remained focus areas.
We increased our focus on sustainability
this year and will continue to do so.
Sustainability and corporate
citizenship
Our commitment to sustainability
The group’s commitment to sustainable
development and corporate citizenship is
articulated in its sustainable development
policy on www�naspers�com. The
governance team has been tasked to
work with group businesses on
sustainability matters and related
reporting.
To support the board in fulfilling its
governance role, the Naspers social
and ethics, and risk committees receive
reports on sustainability matters at each
meeting – refer to the social and ethics
committee and the risk committee
report in the 2019 governance report.
investment where we can have the most
material impact in addressing big societal
needs and building leading companies,
empowering people and enriching
communities. Corporate citizenship
is integral to the way we do business.
In line with this commitment, we support
the United Nations’ Sustainable
Development Goals (SDGs) and are
working to identify and focus on the goals
where we can have the greatest positive
impact. This is an ongoing journey. To see
examples of how our business aligns with
the SDGs, refer to page 62.
We recognise that we are on our
journey to understand our impact on
the environment and the environment’s
impact on us. We are working to better
understand our responsibility in this
space for future reporting and will
continuously work to improve the
quality of our coverage and data.
In 2019 our emissions (scope 1 and scope
2) totalled 363 485 tonnes of CO2e
(2018: 87 022 tonnes CO2e). As from
last year, electricity usage is our largest
contributor at 93% of our footprint.
In 2019 we expanded our boundaries
to include Takealot and Movile. Irdeto,
which is part of MultiChoice Group, is
the business with the greatest share
of our footprint at 47%. The carbon
footprint excluded MultiChoice Group
for March 2019, as the listing and
unbundling of MultiChoice Group took
place on 27 February 2019 and 4 March
2019 respectively.
In the future, we will continue to
improve reporting to the social and
ethics committee on responsible
corporate citizenship and sustainable
development using appropriate tools
such as the six capitals reporting
framework and SDGs.
Operating as a responsible business is
a global imperative that presents both
opportunities and risks. We focus our
Note
(1) The Institute of Directors in Southern Africa
NPC (IoDSA) owns all copyright and
trademarks for King IV.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
6060
Governance for a sustainable business
continued
Naspers group governance framework
Ultimately we report to stakeholders in the
integrated report and other releases
Board
Supported
by company
secretary/
governance
framework
Board
committees
Supported
by company
secretary/
governance
framework
Management
and group
support
functions
Underlying
framework
foundation
Board
Audit
Finance policies and group
levels of authority
Combined assurance, internal
and external audit
Risk
Management of information
Management of technology
Management of risk
Compliance management
Human resources
and remuneration
Remuneration
Ethical business culture
Nomination
Social and ethics
Board diversity
Board and board committee
Organisational ethics
Corporate citizenship and sustainability
Stakeholder relationships
Group and
segment
management
Naspers
governance
committee
Management
of operating
businesses
Group support functions
• Human resources
and remuneration
• Legal and compliance
• Data privacy
• Intellectual property
• Tax
• Public relations
• Corporate communications
• Investor relations
• Internal audit and risk support
• Finance
• Machine learning
Values
Code of business
ethics and conduct
Strategy
Various charters
and policies
Naspers good
governance guidelines
Reporting to ensure
accountability in
these governance
areas
Performance against
strategy (financial and
non-financial: six capitals)
Read more on page 16
Business ethics
Read more on page 62
Responsible corporate
citizenship
Read more on page 59
Risk governance
Read more on pages 52
to 54
Technology and
information governance
Read more on page 64
Legal compliance
governance
Read more on pages 64
to 66
Combined assurance
Read more on page 52
Stakeholder relationship
governance
Read more on pages 24
to 29
Group governance
Read more on pages 55
to 66
Remuneration governance
Read more on pages 67
to 71
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Governance for a sustainable business
continued
Governance progress and milestones
Aligned charters, policies, processes
and practices to King IV
Continued application of King IV practices
Naspers policies in place
• Anti-bribery and
anti-corruption policy
• Anti-harassment policy
• Code of business ethics
and conduct
• Communication policy
• Competition
compliance policy
• Group data-privacy policy
and human resources
data-privacy policy
• Guarantee policy
• Group levels of authority
• Indemnity policy
• Information and technology
• Sanctions and export
controls policy
• Security policy
• Sustainable
governance charter
• Internal audit charter
• Investor relations policy
• Legal compliance policy
• Naspers intellectual
property guidelines
• Remuneration policy
• Risk management policy
development policy
• Tax policy
• Trading in securities policy
• Treasury policy
• Whistleblower policy
Naspers good governance guidelines
The Naspers good governance guidelines set out the key governance elements
subsidiaries need to be observed as part of the Naspers group governance
framework. The good governance guidelines consider proportionality,
as Naspers’s governance approach is proportional to the size, workforce,
resources and complexity of activities of the individual businesses, which
are at various stages of maturity.
61
April 2019 onwards
Continued application of King IV practices
After year-end (31 March 2019), the businesses
were required to sign off through an annual sign-off
process on the extent of implementation of
Naspers guidelines and policies.
Continuous enhancement
• Alignment of governance framework and policies
to applicable laws, regulations and governance
requirements due to Prosus’s listing on
Euronext Amsterdam.
• Analyse governance and sustainability trends
and align where appropriate.
2018
2019
Ongoing engagement,
enhancement and reporting
• Engagement with business on governance and
reporting requirements.
• Support to business to implement policies
and principles.
• Regular reporting to Naspers governance
committee, board committees and the board
on governance matters.
• There is continuous enhancement of our
Naspers policies and governance guidelines
and our group governance reporting to the
board, board committees and in the
integrated annual report.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Governance for a sustainable business
continued
SUSTAINABILITY AND OUR SDG JOURNEY
SDG
goals
2019
2020
2020
onwards
• Started to analyse the SDGs
and their underlying goals to
determine which SDGs are
best aligned to our impact areas.
• Engaged with investors on
Environmental, Social and
Governance (ESG) matters.
• Analysed the overlap between
ESG reporting requirements
and other reporting frameworks.
• Identify material sustainability risks
• Our future goals include
and opportunities to Naspers.
• Decide on focus areas for the
next three years, informing the
development of plans for these.
• Align with the most appropriate
reporting frameworks to support
how we report.
developing plans for focus
areas and to enhance
how we define and
measure performance
in those areas.
How
Through research, education, gap analysis consultation and validation
with our in-scope businesses and segments, the various Naspers functions,
the Naspers CEO and executive, board and board committees.
Report on progress to risk, and social and ethics committees and board,
and in integrated annual reports.
SDG goals
We recognise the importance of the global Sustainable Development Goals, which address global
challenges and aim to achieve a sustainable future for all.
62
Culture and business ethics
The board recognises that creating
value for both shareholders and society
in a responsible, efficient and sustainable
way requires a healthy business culture.
Although we operate a wide range of
businesses, we are united behind a
common purpose to address big
societal needs and help improve the
lives of half the world’s population
over the next few years.
We believe our culture is a key
strength of our business and we see
the benefits of this in our employees’
engagement, retention and productivity.
Our Naspers corporate values are
approved by the board and our
subsidiaries adopt values aligned to our
expectations, tailored for their business
environment.
Our culture reflects:
• At our heart, we are entrepreneurs.
• We push for performance in
everything we do – it’s good for
Naspers, our stakeholders and
our careers.
• We do the right thing.
• We matter to the communities we
serve and, wherever we operate,
we hold ourselves to high standards.
• We encourage diversity in our teams
and in our thinking.
The group’s code of business
ethics and conduct is available on
www�naspers�com. 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.
We focus on policies and procedures
that address key ethical risks, such
as conflicts of interest, accepting
inappropriate gifts and unacceptable
business conduct.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Governance for a sustainable business
continued
OPENLINE OPERATES GLOBALLY
The social and ethics committee
is responsible for overseeing and
reporting on business ethics in the
Naspers group, taking into account
specific disclosures and best practice
as recommended by King IV. Businesses
in our group apply zero tolerance to
violations of the code. Appropriate
action is taken, including disciplinary,
criminal or civil procedures or
improving the control environment.
Reports are provided to the social
and ethics committee to demonstrate
this. Unethical behaviour by senior
employees is also reported to the
human resources and remuneration
committee, along with the way
the company’s disciplinary code
was applied.
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.
It expects all directors and employees
to comply with these principles and, in
particular, to avoid conflicts of interest
and not to engage in insider trading,
illegal anti-competitive activities, and
bribery and corruption.
Ethics officers
We have 12 designated ethics
officers in the group. They serve
as central points of contact for
advice on ethics-related queries,
improprieties, allegations and
complaints. They report on
related matters to the Naspers
ethics officer (who is the central
contact for the group). Reports
are provided regularly to the social
and ethics committee.
Ethics officers’ responsibilities include:
• understanding and applying the
code of business ethics
and conduct, whistleblower policy,
and upholding corporate values
• managing internal ‘speak-ups’ and
providing guidance
• assisting with awareness campaigns
on the code and whistleblower
policy
• maintaining confidentiality
on ethics-related matters, and
• maintaining records and reporting
on ethics-related matters.
Encouraging whistleblowing
through OpenLine
Under the global whistleblower policy,
Naspers employees are encouraged to
report suspected unethical behaviour
and matters contrary to the code.
Employees enjoy protection when
they report such matters in good faith.
The Naspers whistleblower facility
(OpenLine) is a safe platform for
employees to report misconduct in
the workplace, with the option to
have their identity protected or
to remain completely anonymous.
All stakeholders can report unethical
behaviour and wrongdoing
anonymously and confidentially.
63
COUNT OF REPORTS BY
FINANCIAL YEAR
2019
2018
The Naspers social and ethics
committee receives reports on
business ethics management and
monitoring – refer to the social and
ethics committee report in the 2019
governance report.
33
55
Future focus
Future focus areas include regular
engagement between the group’s ethics
officers, to share experiences, identify
ethics challenges and share best practice.
This will establish a Naspers-designated
ethics officers’ community and assist us
in tailoring tools and support.
We also plan to launch an ethics
refresher campaign for our in-scope
subsidiaries. The campaign will educate
employees on ethics learnings, based on
principles from our code.
Stakeholder relationships
Representatives of our businesses
manage various external and internal
stakeholder relationships. Our
businesses manage their stakeholder
relationships using an inclusive approach
that balances the needs, interests and
expectations of material stakeholders
with the best interests of the businesses.
To support the board in fulfilling its
governance role, the Naspers social and
ethics committee receives reports on
stakeholder management across the
group – refer to the social and ethics
committee report in the 2019
governance report.
An overview of our stakeholders and
stakeholder engagement appears on
pages 24 to 29.
The line operates globally, around the
clock, with live answering. In addition,
the facility offers the opportunity to
report matters through a dedicated
website, or through email or
postal service.
The OpenLine facility is independently
managed by Deloitte Tip-off
Anonymous (a global ethics and
fraud hotline service provider).
The internal audit and risk support
function oversees the effective
operation of OpenLine and ensures
employees are sufficiently aware of its
existence. This function also monitors
that reports are dealt with and
independently investigated in line
with the whistleblower policy.
Where appropriate, internal audit
and/or external forensic consultants
investigate reported matters.
Significant allegations and validated
cases of wrongdoing are reported
to the audit and risk committees.
The social and ethics committee
also receives regular reports on
whistleblower activity and ethics
performance around the group.
This year there were 33 reports,
compared to 55 the year before.
Creating awareness and training
During the year we created
awareness on the code and
whistleblower policy throughout
the group. Training methods used
by subsidiaries included elearning
modules on the MyAcademy platform,
face-to-face training, presentations and
storyboarding for disabled employees.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Governance for a sustainable business
continued
Legal compliance
Legal compliance rests with the group
general counsel, who is also the chief
legal compliance officer. The Naspers
board has delegated responsibility for
overseeing legal compliance to its risk
committee, which receives regular
reports from the chief legal compliance
officer. Legal compliance is a standing
agenda point. Responsibility for legal
compliance in each segment rests with
their general counsel, who oversees
legal compliance for subsidiaries in
that segment.
In the 2018 financial year, the group
enhanced its legal compliance framework
in response to the increased expectations
of regulators and stakeholders, and to
align the group to market standards.
The legal compliance framework
includes anti-bribery and anti-
corruption, sanctions and export
controls, and competition compliance
policies which were reviewed and
approved by the Naspers board in
June 2017.
OPENLINE PROCESS FLOW
Collect
Manage
• Deloitte Tip-off
Anonymous incident
management
system
• Naspers’s internal
audit and risk
support (IARS)
system oversight
• IARS independent
monitoring and
appropriate
escalation
of incident
• Investigating
internal audit
and/or external
forensic consultants
Hotline
Web
Email
Postal
service
This year
In the 2019 financial year, the group
focused on implementing these policies.
This included local risk assessments,
training and awareness initiatives
and the design and implementation
of appropriate measures to
ensure compliance.
64
The risk committee assists the board in
overseeing I&T-related matters. I&T
governance is a standing point on its
agenda, and I&T objectives have been
included in its charter. The committee
considers the risk register, as well as
reports on I&T from internal audit
and risk support, and our legal
compliance function.
The group’s subsidiaries are required
to act in line with Naspers good
governance guidelines, which detail
I&T governance-related matters.
Subsidiaries of each major entity are
required to submit an annual formal
written report on the extent to which
they have implemented the principles,
and chief executives and chief financial
officers’ sign off on this. Any notable
exceptions are summarised and reported
to the risk committee.
We continuously look at how we can
better integrate people, technologies
and processes. During our annual
business-planning process, our
businesses consider their platform
requirements. The platform strategy
starts from the business strategy
and is translated into technical and
process requirements.
Business continuity is included in the
group’s risk register, which is reviewed
and discussed by the risk committee
twice a year, and annually by the board.
Business resilience is the key objective
of our cybersecurity policy. The
capability of businesses to respond to
disruption is in-scope for internal audit,
bearing in mind the perspective of our
customers and end users.
In the future
Group legal compliance will remain
focused on raising compliance
awareness across the group.
Improvements to the legal compliance
framework will be made based on
emerging risks, feedback from
monitoring activities and a continued
focus on third-party risks.
As part of this framework, each
segment is required to provide a
quarterly legal compliance report to
the group legal compliance function.
This includes an overview of key
compliance risk areas, mitigating
measures, key compliance regulatory
developments and material compliance
incidents and investigations. The group
legal compliance function uses these
reports to compile a consolidated
report that is reviewed by the chief
compliance officer and is subsequently
provided to the risk committee of
the Naspers board.
Assurance on the effectiveness of
compliance management is received
through a combined assurance model.
There were no material or repeated
regulatory penalties, including General
Data Protection Regulation (GDPR),
sanctions or fines for contraventions
of, or non-compliance with, statutory
obligations. There were no inspections
by environmental regulators that
resulted in findings of non-compliance.
To support the board to fulfil its
governance role, the Naspers risk
committee receives reports on
legal compliance – refer to the risk
committee report in the 2019
governance report.
Information and technology
governance
Information and technology (I&T)
governance is integrated in the
operations of the Naspers businesses.
Management of each subsidiary or
business unit is responsible for ensuring
effective processes on I&T governance
are in place.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 65
Governance for a sustainable business
continued
Operational boundaries to dealing with
I&T are subject to the group’s code of
business ethics and conduct, and legal
compliance policy. Our risk management
practices ensure that relevant risks
on the ethical and responsible use
of I&T are identified and assessed.
Our social and ethics committee
oversees this area.
We run a privacy programme to
ensure that personal data is stored and
processed ethically and in compliance
with applicable privacy laws, such as
the GDPR in Europe. Internal audit
provides assurance to management, the
audit committee and the board on the
effectiveness of I&T governance. The
detail of controls to manage identified
risks and reduce vulnerability forms the
basis of internal audit’s assurance plans.
To support the board in fulfilling its
governance role, the Naspers risk
committee receives reports on
I&T management – refer to risk
committee report in the 2019
governance report.
In the future
Planned focus areas for I&T
governance include developing and
deploying data-driven technologies
(such as machine learning), accounting
for cybersecurity and data privacy
by design.
For data acquisition and data
processing undertaken in the context
of our central machine learning team’s
services to group companies, we have
established internal guidelines and
contractual measures to ensure
compliance with applicable laws and
integrating best practice. Ethical use
of machine learning and artificial
intelligence is a rapidly developing field.
We intend to enhance our guidelines in
this area over time, based on our
learnings and as best practice develops.
SPOTLIGHT ON DATA PRIVACY
At Naspers, we recognise that
privacy is an important value and
an essential element of public trust.
We strive to be a trusted company
and expect all our businesses to
aspire to the same status. We
expect each business to implement
responsible data-privacy practices
in a way that is adapted to its own
circumstances, which considers its
business model, the cultures of the
countries in which it operates, its
compliance obligations, and its
human and financial resources.
“For many years we have viewed data
privacy as an important strategic area
for Naspers, not only in terms of good
governance and risk management, but
to do the right thing and build trust
with our key stakeholders. Accordingly,
we have a comprehensive data-privacy
governance policy and a privacy
programme designed to ensure
the vast amount of data across the
different businesses within the group
is protected and managed.”
Justin B. Weiss
Global head of data privacy: Naspers
A groupwide policy
Our policy on data-privacy governance
sets out the responsibilities, principles
and programmes for ensuring data
privacy across the Naspers group. It is
designed to define and document how
data privacy is managed in the group; to
promote best practice; to accommodate
the different business models, resources,
culture and legal requirements across
the group; and to support trust in our
businesses’ products and services.
Clear accountability
The critical foundation is to give clear
accountability to individual businesses.
Each business is directly responsible
for managing data privacy in its
organisation. This responsibility rests
ultimately with the CEOs of each
business – they lead in implementing
the group’s policy and are directly
accountable for the data-protection
programmes and privacy standards
in their organisations.
This approach to data privacy aligns
with Naspers’s model of decentralised
governance and broader belief in
encouraging great leaders and
businesses to excel. We believe setting
the right shared principles and giving
businesses the direct responsibility to
enact them is the best way to have a
greater long-term positive impact. More
broadly, we are fostering a culture of
data privacy and looking to businesses
to ensure privacy by design, where
privacy becomes part of the fabric of
day-to-day work rather than an add-on.
Seven data-privacy principles
Each business is expected to respect
and implement seven core data-privacy
principles. Widely recognised
internationally as fair information privacy
principles, they are ethical guidelines for
the responsible use of data. Critically,
they are both universal and able to be
applied to the different businesses in the
group – from established global players
to startups in jurisdictions that may not
yet have a data-privacy law.
SEVEN DATA-PRIVACY PRINCIPLES:
1 Notice
We offer appropriate notice about
our data-privacy practices.
2 Individual control
We honour data subjects’ choices
regarding their personal data.
3 Respect for context
We recognise that data subjects’
expectations about fair and ethical
use of their personal data is informed
by the context in which their data
was first collected.
4 Limited sharing
We limit unnecessary personal data
sharing with third parties.
5 Retention
We retain personal data only for as
long as we need it.
6 Security
We ensure appropriate security.
7 Governments
We engage with governments and
data-protection authorities.
Data-privacy programme
To help businesses put the principles
into practice, we have a data-privacy
programme designed to scale to their
different needs and circumstances. This
ensures that our core data-privacy
commitment and approach is followed
in ways that really work for our businesses.
The programme has seven key elements:
ensuring executive buy-in; knowing your
data; setting policies; training employees;
managing vendors and third parties;
legal compliance; and reporting.
Supporting and monitoring
The group’s data-privacy office
supports and monitors the businesses.
Help ranges from guidance on
implementing the data-privacy
programme, a secondment programme
that develops and trains future privacy
leaders nominated by companies
within the group, and advice on any
data-privacy implications of mergers
and acquisitions.
Businesses provide regular privacy and
security reports to group executives
as an integral part of ongoing business
reviews. The board’s risk committee
reviews the data-privacy policy and its
implementation annually as part of its
oversight and governance responsibilities.
Implementing enhancements
This year we formalised the appointment
of data-protection officers in the
businesses. Regular calls and meetings
take place with the officers ensuring
data-privacy best practice is shared
across the group.
We also deployed new technology,
including automated data-mapping
and record-keeping, to facilitate the
requirement to know your data –
an increasingly complex challenge
in businesses that are growing fast.
In addition, we deployed internal audit
resources to verify data privacy to
ensure that what is reported to the
group matches what is happening in
the businesses.
Doing the best for our customers
and the group
Implementation of our data-privacy
programme continues to evolve across
the businesses in the group. As well as
meeting specific requirements, notably
the GDPR in the EU, we are driving
for comprehensive data-privacy and
protection throughout the group,
around the world.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 66
Governance for a sustainable business
continued
Understanding that there is always
more to do and more to learn, we
never stop striving to ensure good
data-privacy practices so that we can
do the best for our customers and
the group.
Internal control systems
As part of the overall management
of risk, our system of internal controls
in all material subsidiaries and joint
ventures under Naspers’s control
aims to prevent or detect any risk
materialising and to mitigate any adverse
consequences. The group’s system of
internal controls is designed to provide
reasonable assurance on achieving
company objectives, including integrity
and reliability of the financial 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 bypassing 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
of 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
controls system as part of its audit,
and communicates deficiencies
when identified.
The board reviewed the effectiveness
of controls and combined assurance on
key risks for the year ended 31 March
2019. This assurance was obtained
principally through a process of
management self-assessment, including
formal confirmation via representation
letters by executive management. In
addition, 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 review period.
Internal audit
An internal audit function is in place for
the group. The head of internal audit
and risk support reports to the chair
of the Naspers audit committee,
with administrative reporting to the
financial director.
Internal audit and risk support
provides a statement annually on the
effectiveness of Naspers’s governance,
risk management and control processes
to the audit committee. An
independent review of internal audit’s
conformance to international standards
for the professional practice of internal
auditing and code of ethics (Standards),
issued by the international Institute
of Internal Auditors, is done at
least every five years. The last review
was performed by PwC in 2017
with no significant exceptions noted
(generally conforms). The head of
internal audit and risk support annually
confirms to the audit committee
that internal audit continues to meet
the Standards and has remained
independent from management.
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.
The audit committee preapproves audit
and non-audit services to ensure these
do not impair the auditor’s independence
and comply with legislation. Under our
guiding principles, the auditor’s
independence will be deemed impaired if
the auditor provides a service where they:
• function in the role of management
of the company, or
• audit their own work, or
• serve in an advocacy role for
the company.
Company secretary
The company secretary, Gillian
Kisbey-Green, and David Tudor,
group general counsel (and legal
compliance officer), are responsible
for guiding the board in discharging
its regulatory responsibilities.
Directors have unlimited access to the
advice and services of the company
secretary, whose functions and
responsibilities include:
• Playing a pivotal role in the company’s
corporate governance and ensuring
that, in line with pertinent laws, the
proceedings and affairs of the board,
the company and, where appropriate,
shareholders are properly administered.
• Acting as the company’s compliance
officer as defined in the Companies
Act, and is the delegated information
officer.
• Monitoring directors’ dealings in
securities and ensuring adherence
to closed periods.
• Attending all board and
committee meetings.
In accordance with King IV, the
performance and independence of the
company secretary is evaluated annually.
As required by JSE Listings Requirement
3.84(h), the board has determined that
the company secretary, a chartered
accountant (SA) with over 30 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. The board is satisfied that
arrangements for providing corporate
governance services are effective.
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 IV, we
recognise that this performance is based
on the group’s 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.
A broad range of public communication
channels (including stock exchange
news services, corporate website,
press agencies, news wires and news
distribution service providers) are used
to disseminate news releases.
These channels are supplemented
by direct communication via email,
conference calls, group presentations
and one-on-one meetings. Our policy
is not to provide forward-looking
information. Naspers also complies
with legislation and stock exchange
rules on forward-looking statements.
Closed periods
Naspers would typically be in a closed
period on the day after the end of a
reporting period (30 September or
31 March) until releasing results.
General investor interaction during
this time is limited to discussions on
strategy and/or historical, publicly
available information.
Analyst reports
To enhance the quantity and quality of
research, Naspers maintains working
relationships with stockbrokers,
investment banks and credit-rating
agencies – irrespective of their views
or recommendations on the group.
Naspers may review an analyst’s report
or earnings model for factual accuracy
of information in the public domain but,
in line with regulations and group policy,
we do not provide guidance or forecasts.
The board encourages shareholders
to attend the annual general meeting,
notice of which appears in this
integrated annual report, where
shareholders have the opportunity to
put questions to the board, management
and chairs of the various committees.
The company’s website provides the
latest and historical financial and other
information, including financial reports.
The full governance report can be
found on www�naspers�com.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Remuneration at a glance
67
“ We aim to attract,
motivate and retain
the best people to
create sustainable
shareholder value.”
Craig Enenstein
Chair: Human resources and
remuneration committee
Structure of report
In compliance with the
King IV Report on Corporate
Governance™(1) in South Africa
2016 (King IV) the report is split
into three sections:
1. Background statement:
Provides an overview of pay
outcomes for FY19 and our
approach for FY20.
Read more on pages 7 to 13 of
the remuneration report 2019
2. Remuneration policy: Provides
information on the components
of our executive-pay packages.
Read more on pages 14 to 20 of
the remuneration report 2019
3. Implementation of
remuneration policy: Sets
out information on how we
implemented our policy for FY20.
Read more on pages 21 to 30 of
the remuneration report 2019
Notes
(1) The Institute of Directors in South Africa
NPC (IoDSA) owns all copyright and
trademarks for King IV.
(2) On an economic-interest basis adjusted
for foreign exchange and M&A. All
financial figures in this report are from
continuing operations.
Dear Shareholder
On behalf of the board, I am pleased
to present our 2019 financial year
remuneration report.
Last year we made changes to our
remuneration report in order to
demonstrate more clearly the
link between Naspers’s strategy,
performance and our remuneration
philosophy. We aim to provide a
transparent view on executive and
non-executive pay, and this year
we have refined the report further
with this objective in mind.
This year, we successfully unbundled
our Video Entertainment (VE) business
to our shareholders, unlocking value for
them. MultiChoice Group was listed
on the JSE Limited’s stock exchange on
27 February 2019. We also disposed
of our stake in the Indian etail business
Flipkart in August 2018. The impact
of these transactions on executive
remuneration is detailed on page 19
of the remuneration report 2019.
We are also pleased to report solid
financial results for FY19, delivering
revenue growth of 29%(2) year on
year, to US$19.0bn, trading profit(2)
growth of 22% year on year to
US$3.3bn, core headline earnings
of US$3bn (up 26% year on year)
and free cash flow of US$120m.
We are grateful to our shareholders
for their input, which was considered
carefully. We are pleased to see
N-shareholder support for our
remuneration policy increasing from
24.15% in 2017 to 43.04% in favour of
the policy and 52.24% in favour of its
implementation in 2018. While the
trend is improving, we strive to obtain
an even higher level of N-shareholder
support over time. In that spirit we
have continued to make appropriate
changes to our remuneration design
and disclosure this year.
We have amended the design of
executive remuneration for the
forthcoming 2020 financial year.
This is detailed in sections 1 and 3.
When making executive awards, the
committee has considered the need
to maximise shareholder value.
Details of the cost of our long-term
incentives can be found on pages 4 and
5 of the remuneration report 2019.
We plan to introduce performance
conditions on a proportion of the
long-term incentives granted to
senior executives which will vest
only after three years. Details can be
found on page 28 of the remuneration
report 2019.
We engaged external advisers
to provide advice on executive
remuneration and the committee
is satisfied that they are objective
and independent.
Our strategy drives our pay
principles
Across our group, we use technology to
provide new and exciting ways for our
customers to be informed, educated
and to trade online. As one of the
largest technology investors in the
world, operating in some 80 countries,
we focus on high-growth markets and
we invest in local empowered teams
with an ownership mentality.
This year we introduced clawback
provisions on the short-term and
long-term incentives for the CEO and
his direct reports. In the 2019 financial
year, these clawback provisions
were not invoked.
Our business moves fast as technology
trends and consumer adoption change,
and we seek to run businesses that
have broad potential, can address big
societal needs and can attain market
leadership over time.
Our remuneration philosophy
Our remuneration philosophy
underpins our group’s strategy and
enables us to achieve our business
objectives. Our commitment to pay
for performance and alignment with
shareholder value creation drives all
our remuneration activities and
supports the ownership mentality
and spirit of entrepreneurship in our
teams around the world. We believe
in a level playing field for our people.
We strive to pay fairly and responsibly
and as much as possible, the structure
of our pay is similar, regardless of the
seniority of the employee. In the
committee’s view, the remuneration
policy achieved its stated objectives
in the year under review.
We endeavour at all times to balance
the need to compete globally for the
very best talent with the need to pay
fairly and responsibly. Our philosophy is
underpinned by our desire to perform
effectively as a committee, to allow us
to deliver fit-for-purpose remuneration
systems and to continue engaging
our stakeholders.
We also introduced a shareholding
requirement for the chief executive,
whereby he must hold 10 times his base
salary in Naspers shares at all times.
Effective 31 March 2019, he has met
this requirement.
Craig Enenstein
Chair: Human resources and
remuneration committee
21 June 2019
Our people are at the heart of our
success. The driven entrepreneurs with
whom we partner, the digital leaders
who drive us forward, and the skills
our people bring to the group in
highly specialised areas (eg, technology,
product design, machine learning, digital
marketing and many other disciplines)
allow us to compete effectively. We
operate in a highly competitive global
market for this type of talent, and we
compete against other world-class
companies for the best.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Remuneration at a glance
continued
68
Our context
How we add value
We pursue growth by
building leading companies
that empower people and
enrich communities
Read more on page 16
Underpinned by our
active capital allocation
and strategy
We ensure that we optimise
our portfolio for growth
and competitiveness
Financial summary
Revenue(1)
Trading profit(1)
We partner with
entrepreneurs
We create sustainable
leadership positions
Invest
We build businesses
with broad potential
e
s
i
m
i
t
p
O
G ro w
We focus on high-
growth markets
We address big
societal needs
The Naspers approach to remuneration
We believe in pay for performance: we are comfortable with
bigger rewards for those who make the highest contribution
Remuneration must be aligned with shareholder outcomes
Remuneration must incentivise the achievement of strategic,
operational and financial objectives, in both the short
and longer term
We are consistent: our reward package elements
are broadly the same, regardless of seniority*
Dividend per N ordinary share (SA cents) (2019 reflects dividend proposed)
Notes
(1) Reported on an economic-interest basis. All financial figures are from continuing operations.
(2)
In local currency, excluding acquisitions and disposals.
2019
(US$’m)
2018
(US$’m)
%
change
18 990
16 352
3 304
715
2 994
650
29(2)
22(2)
10
Read more on page 51
Our reward systems must help us attract and retain the
best talent around the world in a fair and responsible way
* Some employees do not receive longer-term incentives.
Read more on pages 14 to 20 of
the remuneration report 2019.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Remuneration at a glance
continued
Our context: Attracting and retaining the best talent
21st century talent: Our reality
69
Human capital is a key competitive advantage
in our industry
The global battle for digital talent continues –
digital talent is scarce in all our markets
We need creative minds to explore new frontiers
Diversity is essential – we need to provide an
inclusive work environment so that many types
of people want to work with us
There is a global shortage
of digital talent
We fight for talent in each of the countries
in which we operate.
To compete for talent, our approach to
remuneration must stand up to the high
bar set by global tech players such as
Facebook, Google, Amazon, Alibaba, and
Microsoft, as well as other global, local
and regional competitors.
Read more on pages 45 to 47
Our employee value proposition
Remuneration is only one element of attracting and retaining talent.
Our people seek meaningful jobs with line of sight to business outcomes
and the opportunity to learn and grow professionally, in a purpose-driven
environment that they enjoy; where they are recognised for a job well
done and are paid fairly – in line with personal and company performance.
Our approach to fair
and responsible pay
Our remuneration systems are:
a l
e
n
m
t
n
Professio
develo p
Meanin
job
s
g
f
u
l
C
u
l
e
a
l
t
u
d
r
e
e
r
s
a
h
n
i
d
p
Our employee
value proposition
is central to
our success
Employ e e
recognit i o n
y
a
p
d
n
responsible
Fair a
Fair
• Rational: easy to explain
• Equitable: free
from discrimination
• Relevant: linked
to personal and
company performance
Responsible
• Independent: with
oversight, top-down
via board
• Managed: all employee
pay decisions are
properly overseen
• Considered: judgement
is applied; we shy
away from formulaic
appraisals that could
lead to unacceptable
outcomes
• Sustainable:
remuneration designed
with sustainability in mind
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Remuneration at a glance
continued
The outcomes
Executive director remuneration for the year ended 31 March 2019
Compensation is mostly ‘at risk’ and long term
BOB VAN DIJK
BASIL SGOURDOS
70
Guaranteed
fixed pay
Base salary/total
cost to company
(TCTC) benefits
Short-term
incentives
(STIs)
Annual performance-
related incentives
Longer-term
incentives
(LTIs)
Share appreciation
rights (SARs) and/or
share options (SOs)
Total
remuneration
Total single-figure (remuneration) for executive directors for the year ended 31 March
Bob van Dijk
(€’000)(1)
(US$’000)
Basil Sgourdos
(US$’000)
Remuneration type/year
Salary/TCTC
Pension
Benefits
STIs
LTI plan(4)
2019
1 122
75
59
987(2)
2018
1 079
66
53
863
2019
2018
1 259
1 332
85
66
1 108
10 368
81
65
1 064
9 636
Total remuneration
12 886
12 178
Notes
(1) Bob van Dijk is paid in euro. Over the past financial year the euro weakened against the US dollar by almost 10%.
As a result, the FY19 annual salary of the chief executive in US dollars is lower compared to FY18.
(2) Achievement of chief executive’s STI goals are indicated in this report by
(3)
Includes an additional variable bonus capped at 25% of TCTC relating to obtaining new general funding.
(4) Fair value: represents the estimated value of the option on grant date in accordance with IFRS. The actual
on pages: 9, 10, 15, 19, 32-33, 35, 37, 39, 48 and 51.
value accruing to the executive will depend on the real value created over the term of the option.
Read more on pages 21 to 30 of
the remuneration report 2019
2019
897
85
27
1 006
5 460
7 475
2018
862
81
27
605(3)
1 954
3 529
Annual fixed pay
Annual STI (target)
Annual fair-value LTI
%
10.94
8.59
80.47
Annual fixed pay
Annual STI (target)
Annual fair-value LTI
%
13.49
13.47
73.04
The minimum STI payout is 0% of salary/TCTC.
The target and maximum STI opportunity are the same.
Read more on pages 21 to 30 of
the remuneration report 2019
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Remuneration at a glance
continued
Looking forward to FY20
Salary and short-term incentives
BOB VAN DIJK
Base salary
BASIL SGOURDOS
TCTC(1)
1 April
2020
(US$’000)
1 April
2020
(€’000)
1 April
2019
(US$’000)
1 April(2)
2019
(€’000)
€%(3)
change
1 April
2020
(US$’000)
1 April
2019
(US$’000)
1 388
1 235
1 259
1 122
10
1 069
1 009
FY20 STI scheme structure
Maximum STI opportunity: 100% base salary
FY20 STI scheme structure
Maximum STI opportunity: 100% base salary(4)
71
LTIs
We have set out below information on the long-term awards to be made during the 2020 financial year:
Naspers N
share options (SOs)
Naspers Global Ecommerce share
appreciation rights (SARs)
Naspers
performance
share units (PSUs)
Number
of
options
Face
value
(US$)
Fair
value
(US$)
Number
of SARs
Face
value (US$)
Fair
value
(US$)
Fair value (US$)
15 835 3 972 183 1 350 000
436 832 16 031 719 6 075 000
6 075 000
%
change
6
Name
Bob
van Dijk
Basil Sgourdos
8 211 2 059 651
700 000
226 505
8 312 743 3 150 000
3 150 000
Financial goals:
Revenue
Core headline earnings (including Tencent)
Core headline earnings (excluding Tencent)
Free cash flow
Strategic goals:
Classifieds
Food Delivery
Payments and Fintech
B2C
Corporate structure
Diversity and inclusion
Machine learning and artificial intelligence
Read more on pages 27 to 30 of
the remuneration report 2019
%
10
15
15
10
50%
10
10
5
2.5
10
5
7.5
50%
Financial goals:
Core headline earnings (including Tencent)
Core headline earnings (excluding Tencent)
Free cash flow
Strategic goals:
Structuring
Taxation
Investor relations
Operations
Governance, internal audit and risk management
Team and talent
%
12.5
12.5
25
50%
25
10
5
2.5
2.5
5
50%
Notes
(1)
(2) Bob van Dijk is paid in euro. Over the past financial year the euro
Includes pension and other benefits.
weakened against the US dollar by almost 10%. As a result, the FY19
annual salary of the chief executive in US dollars is lower compared to FY18.
(3) Bob van Dijk received an increase in his base salary of 10%, driven by personal
performance (eg, listing and unbundling of MultiChoice Group and divestiture of
Flipkart), company performance and base pay levels relative to benchmarks.
(4) An additional variable bonus capped at 25% of TCTC(relating to obtaining new
general funding) applies.
Changes for FY20
Performance
conditions
on LTIs(1)
The committee intends to introduce
performance conditions on a
proportion of the LTIs awarded to
senior executives in FY20.
The performance share unit (PSU)
plan will vest at the end of a three-year
period (cliff-vesting) subject to the
performance condition set at the time
of the grant being achieved. The
performance condition for the 2019
grant relates to the three-year CAGR
on the Ecommerce SAR scheme,
relative to an appropriate equity index.
Further details can be found on page 28
of the remuneration report 2019.
Note
(1) Proposed LTI scheme amendments to facilitate
the introduction of performance conditions to
be tabled at the annual general meeting on
23 August 2019.
Post this allocation and as at 31 March 2020 the fair value of Bob van
Dijk’s and Basil Sgourdos’s share-based incentives will be balanced
approximately as follows:
THE LTIs OF THE CEO
ARE BALANCED BETWEEN
ECOMMERCE SEGMENTS
AND NASPERS
THE LTIs OF THE CFO
ARE BALANCED BETWEEN
ECOMMERCE SEGMENTS
AND NASPERS
Ecommerce SARs
Naspers SOs
Naspers PSUs
%
41
42
17
Ecommerce SARs
Naspers SOs
Naspers PSUs
%
50
27
23
Read more on pages 27 to 30 of
the remuneration report 2019
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Further information
72
7272
Summarised consolidated annual
financial
statements
Summarised consolidated
annual financial statements73
Statement of responsibility
by the board of directors 73
Independent auditor’s report
on the summary consolidated
financial statements 74
Notes to the summarised
consolidated financial
statements 80
We’re investing in
top talent around
the world ...
It’s at the heart of how
we create value by
improving people’s lives
Read more on pages 45 to 47
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Summarised consolidated annual financial statements
Statement of responsibility by the board of directors
for the year ended 31 March 2019
73
Contents
Statement of responsibility by the board of directors
Independent auditor’s report on the summary consolidated financial statements
Segmental review
Reconciliation of consolidated trading loss to consolidated operating loss
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
Notes to the summarised consolidated financial statements
Page
73
74
75
76
76
77
78
78
79
80
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 wwwnasperscom, 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 74.
The summarised consolidated annual financial statements were approved by the board of directors on 21 June 2019 and are
signed on its behalf by:
Koos Bekker
Chair
Bob van Dijk
Chief executive
21 June 2019
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
74
Independent auditor’s report on the summary
consolidated financial statements
To the Shareholders of Naspers Limited
Opinion
The summary consolidated financial statements of Naspers Limited, set out on pages 75 to 90 of the integrated annual
report, which comprise the summary consolidated statement of financial position as at 31 March 2019, the summary
consolidated income statement, the summary 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 financial statements of
Naspers Limited for the year ended 31 March 2019.
In our opinion, the accompanying summary consolidated financial statements are consistent, in all material respects, with
the audited consolidated financial statements, in accordance with the JSE Limited’s (JSE) requirements for summary financial
statements, as set out in the “Basis of presentation and accounting policies” note to the summary consolidated financial
statements, and the requirements of the Companies Act of South Africa as applicable to summary financial statements.
Summary Consolidated Financial Statements
The summary consolidated financial statements do not contain all the disclosures required by International Financial
Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual financial statements.
Reading the summary consolidated financial statements and the auditor’s report thereon, therefore, is not a substitute for
reading the audited consolidated financial statements and the auditor’s report thereon.
Director’s Responsibility for the Summary Consolidated Financial Statements
The directors are responsible for the preparation of the summary consolidated financial statements in accordance with the
JSE’s requirements for summary financial statements, set out in the “Basis of presentation and accounting policies” note to
the summary consolidated financial statements, and the requirements of the Companies Act of South Africa as applicable to
summary financial statements.
Auditor’s Responsibility
Our responsibility is to express an opinion on whether the summary consolidated financial statements are consistent, in
all material respects, with the audited consolidated financial statements based on our procedures, which were conducted
in accordance with International Standard on Auditing (ISA) 810 (Revised), Engagements to Report on Summary
Financial Statements.
Other matter
We have not audited future financial performance and expectations expressed by the directors included in the commentary
in the accompanying summary consolidated financial statements and accordingly do not express an opinion thereon.
The Audited Consolidated Financial Statements and Our Report Thereon
We expressed an unmodified audit opinion on the audited consolidated financial statements in our report dated 21 June 2019.
That report also includes communication of key audit matters. Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the consolidated financial statements of the current period.
PricewaterhouseCoopers Inc.
Director: Brendan Deegan
Registered Auditor
Cape Town
21 June 2019
PricewaterhouseCoopers Inc.,
5 Silo Square, V&A Waterfront, Cape Town 8002, P O Box 2799, Cape Town 8000
T: +27 (0) 21 529 2000, F: +27 (0) 21 529 3300, www.pwc.co.za
Chief Executive Officer: T D Shango
Management Committee: S N Madikane, J S Masondo, P J Mothibe, C Richardson, F Tonelli, C Volschenk
The Company’s principal place of business is at 4 Lisbon Lane, Waterfall City, Jukskei View, where a list of directors’ names is available for inspection.
Reg. no. 1998/012055/21, VAT reg.no. 4950174682
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 75
Segmental review
for the year ended 31 March
Continuing operations
Internet
Ecommerce
– Classifieds
– Payments and Fintech
– Food Delivery
– Etail
– Travel(2)
– Other(3)
Social and internet platforms
– Tencent
– Mail.ru
Media(4)
Corporate segment
Intersegmental
Revenue
2019
2018
US$’m
US$’m
18 678
3 934
875
360
377
1 847
234
241
14 744
14 457
287
326
2
(16)
15 863
3 582
628
294
166
2 060
211
223
12 281
12 024
257
507
2
(20)
Total economic interest from
continuing operations
Less:
Equity-accounted investments
18 990
16 352
(15 699)
(13 367)
Total consolidated from
continuing operations
Total from
discontinued operations
Consolidated(5)
3 291
3 321
6 612
2 985
3 672
6 657
EBITDA(1)
2019
2018
US$’m
US$’m
3 813
(556)
19
(39)
(162)
(133)
(36)
(205)
4 369
4 324
45
(7)
(17)
–
3 342
(655)
(99)
(60)
(20)
(248)
(59)
(169)
3 997
3 925
72
10
(18)
–
3 789
3 334
(4 120)
(3 744)
(331)
(410)
655
324
669
259
%
change
14
15
>100
35
>(100)
46
39
(21)
9
10
(38)
>(100)
6
14
(10)
19
(2)
25
Trading profit
2019
2018
US$’m
US$’m
3 339
3 013
(613)
2
(43)
(171)
(150)
(37)
(214)
3 952
3 929
23
(14)
(21)
–
(713)
(114)
(64)
(30)
(270)
(61)
(174)
3 726
3 675
51
3
(22)
–
3 304
2 994
(3 686)
(3 449)
(382)
512
130
(455)
415
(40)
%
change
11
14
>100
33
>(100)
44
39
(23)
6
7
(55)
>(100)
5
10
(7)
16
23
>100
%
change
18
10
39
22
>100
(10)
11
8
20
20
12
(36)
–
16
(17)
10
(10)
(1)
Notes
(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.
(2) Travel revenue for the year ended 31 March 2018 has been reduced by US$65m due to the effect of the adoption of IFRS 15 on the group’s associate MakeMyTrip Limited. This adjustment did not have an impact on EBITDA or trading profit.
(3) The group historically allocated a portion of its corporate costs to the Video Entertainment segment. Following the distribution of MultiChoice Group to shareholders in the current year, and the consequent presentation of the Video Entertainment
segment as a discontinued operation, corporate costs are now only allocated to the ecommerce business. The group views these corporate costs as primarily relating to the support of the ecommerce business. In line with IFRS 8 Operating
Segments the group has accordingly presented the comparative information contained in the segmental review on a similar basis.
(4) 31 March 2018 includes revenue of US$133.0m, EBITDA of US$33.3m and trading profit of US$33.3m relating to Novus Holdings Limited (Novus). The group distributed the majority of its shareholding in Novus to its shareholders in
September 2017.
Includes the results of the Video Entertainment segment which has been classified as a discontinued operation.
(5)
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Reconciliation of consolidated trading loss
to consolidated operating loss
year ended 31 March
Summarised consolidated income statement
for the year ended 31 March
76
2018
Restated
US$’m
2019
US$’m
2018
Restated(1)
US$’m
%
change
Consolidated trading loss from continuing operations(1)
Adjusted for:
Finance cost on capitalised finance leases
Amortisation of other intangible assets
Other gains/(losses) – net
Retention option expense
Share-based incentives settled in treasury shares
Consolidated operating loss from continuing operations
2019
US$’m
(398)
1
(94)
(38)
(11)
(27)
(567)
(496)
Continuing operations
Revenue from contracts with customers
Cost of providing services and sale of goods
Selling, general and administration expenses
Other (losses)/gains – net
Operating loss
Interest income
–
(97)
(32)
(7)
(27)
(659)
Interest expense
Notes
(1)
Includes the net profit impact of trading between continuing and discontinued operations of US$15.7m (2018: US$40.5m).
For a reconciliation of consolidated operating loss to consolidated profit before taxation, refer to the summarised consolidated income statement.
Other finance income/(costs) – net
Share of equity-accounted results
Refer to the basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
Impairment of equity-accounted investments
Dilution (losses)/gains on equity-accounted investments
Gains/(losses) on acquisitions and disposals
Profit before taxation
Taxation
Profit from continuing operations
Profit from discontinued operations
Profit for the year
Attributable to:
Equity holders of the group
Non-controlling interest
Note
(1) Relates to the impact of adopting IFRS 15.
10
14
(61)
(39)
3 291
(2 104)
(1 716)
(38)
(567)
284
(205)
130
3 410
(88)
(182)
1 609
4 391
(229)
4 162
2 759
6 921
6 901
20
6 921
2 985
(1 884)
(1 728)
(32)
(659)
52
(197)
(379)
3 285
(46)
9 216
(93)
11 179
(70)
11 109
190
11 299
11 358
(59)
11 299
Refer to basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Summarised consolidated income statement continued
for the year ended 31 March
Summarised consolidated statement
of comprehensive income
for the year ended 31 March
Per share information related to continuing operations
Core headline earnings for the year (US$’m)
Core headline earnings per N ordinary share (US cents)
Diluted core headline earnings per N ordinary share (US cents)
Headline earnings for the year (US$’m)
Headline earnings per N ordinary share (US cents)
Diluted headline earnings per N ordinary share (US cents)
Earnings per N ordinary share (US cents)
Diluted earnings per N ordinary share (US cents)
Net number of shares issued (’000)
– at period-end
– weighted average for the year
– diluted weighted average
Note
(1) Relates to the impact of adopting IFRS 15.
2019
US$’m
2018
Restated(1)
US$’m
%
change
26
25
26
123
122
126
(63)
(63)
3 000
694
680
3 719
860
846
976
961
2 388
553
540
1 670
387
374
2 604
2 585
432 200
432 202
434 060
432 126
431 635
433 003
Refer to basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
77
2019
US$’m
6 921
(455)
(1 529)
11
169
918
(24)
2018
Restated
US$’m
11 299
1 742
996
(4)
(98)
835
13
6 466
13 041
6 452
14
6 466
13 026
15
13 041
Profit for the year
Total other comprehensive income, net of tax, for the year(1)
Translation of foreign operations
Net fair-value gains/(losses)(2)
Cash flow hedges
Share of other comprehensive income and reserves of equity-accounted investments(3)
Tax on other comprehensive income
Total comprehensive income for the year
Attributable to:
Equity holders of the group
Non-controlling interest
Notes
(1) All components of other comprehensive income may subsequently be reclassified to profit or loss except for fair-value gains of US$10.8m and gains of
US$752.4m (2018: US$361.0m) included in the share of equity-accounted investments’ direct reserve movements .
(2) Previously referred to as available-for-sale investments in terms of IAS 39 Financial Instruments: Recognition and Measurements. Following the application
of IFRS 9 Financial Instruments in 2019, fair value gains or losses on these investments will no longer be reclassified to the income statement in future
reporting periods.
Includes fair-value changes on financial assets at fair value through other comprehensive income (previously referred to as available-for-sale investments)
of equity-accounted investments. Following the application of IFRS 9 Financial Instruments in 2019, fair-value gains or losses on these investments will no
longer be reclassified to the income statement in future reporting periods.
(3)
Refer to basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Summarised consolidated statement
of changes in equity
for the year ended 31 March
Summarised consolidated statement
of financial position
as at 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 and other reserve movements
Dividends paid to Naspers shareholders
Distribution in specie(1)
Changes in non-controlling interest(2)
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
2019
US$’m
25 692
(20)
–
2018
Restated
US$’m
13 142
(64)
85
6 452
13 026
(157)
720
(436)
(59)
(196)
(3 828)
14
(116)
65
(48)
(195)
–
125
(262)
–
15
(153)
21
28 131
25 692
4 945
23 793
1 698
(1 127)
–
760
(2 070)
132
28 131
4 965
20 133
1 460
(1 847)
(106)
1 679
(761)
169
25 692
Notes
(1) Relates to MultiChoice Group which was distributed to shareholders during the current period.
(2) Current-year change includes the derecognition of non-controlling interest of US$79.8m related to MultiChoice Group which was distributed to shareholders.
Refer to the basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Investments in associates
Investments in joint ventures
Other investments and loans
Other receivables
Derivative financial instruments
Deferred taxation
Current assets
Inventory
Programme and film rights
Trade receivables
Other receivables and loans
Derivative financial instruments
Short-term investments
Cash and cash equivalents
Assets classified as held for sale
Total assets
Refer to the basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
78
2019
US$’m
23 133
191
2 120
877
19 746
96
74
7
1
21
2018
Restated
US$’m
22 386
1 638
2 607
1 143
16 666
78
115
21
1
117
10 552
13 065
209
–
172
518
4
7 298
2 284
10 485
67
33 685
231
240
452
762
11
–
11 369
13 065
–
35 451
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Summarised consolidated statement
of financial position continued
as at 31 March
Summarised consolidated statement
of cash flows
for the year ended 31 March
EQUITY AND LIABILITIES
Capital and reserves attributable to the group’s equity holders
Share capital and premium
Other reserves
Retained earnings
Non-controlling interest
Total equity
Non-current liabilities
Capitalised finance leases
Liabilities – interest bearing
– non-interest bearing
Other non-current liabilities
Post-employment medical liability
Derivative financial instruments
Deferred taxation
Current liabilities
Current portion of long-term debt
Trade payables
Accrued expenses and other current liabilities
Derivative financial instruments
Bank overdrafts
Liabilities classified as held for sale
Total equity and liabilities
Net asset value per N ordinary share (US cents)
2019
US$’m
2018
Restated
US$’m
27 999
4 945
(739)
23 793
132
28 131
3 973
5
3 237
9
538
21
33
130
1 581
23
287
1 258
3
8
1 579
2
33 685
6 478
25 523
4 965
425
20 133
169
25 692
5 623
1 086
3 202
22
867
30
157
259
4 136
280
564
3 162
129
1
4 136
–
35 451
5 906
Cash flows from operating activities
Cash generated from operating activities
Interest income received
Dividends received from investments and equity-accounted companies
Interest costs paid
Taxation paid
Net cash generated from/(utilised in) operating activities
Cash flows from investing activities
Acquisitions and disposals of tangible and intangible assets
Acquisitions of subsidiaries, associates and joint ventures
Disposals of subsidiaries, businesses, associates and joint ventures
Acquisition of short-term investments(1)
Cash movement in other investments and loans
Net cash (utilised in)/generated from investing activities
Cash flows from financing activities
Proceeds from long- and short-term loans raised
Repayments of long- and short-term loans
Outflow from equity-settled share-based compensation transactions
Additional investments in existing subsidiaries
Dividends paid by the holding company and its subsidiaries
Other movements resulting from financing activities
Net cash utilised in financing activities
Net movement in cash and cash equivalents
Foreign exchange translation adjustments on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Refer to the basis of presentation and accounting policies for details of the group’s adoption of new accounting
pronouncements during the year.
Note
(1) Relates to short-term cash investments with maturities of more than three months from date of acquisition.
79
2019
US$’m
2018
US$’m
322
244
344
(252)
(248)
410
(152)
(1 402)
1 460
(7 230)
(2)
(7 326)
62
(51)
(119)
(1 610)
(317)
(8)
(2 043)
(8 959)
(133)
11 368
2 276
141
81
251
(240)
(391)
(158)
(138)
(1 957)
9 941
–
7
7 853
1 124
(827)
(22)
(219)
(344)
(100)
(388)
7 307
58
4 003
11 368
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements
for the year ended 31 March
80
General information
Naspers Limited (Naspers or the group) is a global consumer internet group and one of the largest technology investors in
the world. Operating and investing in countries and markets across the world with long-term growth potential, Naspers builds
leading companies that empower people and enrich communities. The group operates and partners a number of leading
internet businesses across the Americas, Africa, Central and Eastern Europe, and Asia in sectors including online classifieds,
food delivery, payments and fintech, travel, education, health, and social and internet platforms.
IFRS 9 Financial Instruments
IFRS 9 replaced IAS 39 Financial Instruments: Recognition and Measurement (IAS 39). The group has applied IFRS 9 from 1 April
2018 and elected not to restate comparative information on transition, with the impact of adoption recognised as an adjustment
to the opening balance of retained earnings as at 1 April 2018. The initial application of IFRS 9 did not have a significant impact
on the group. The specific impacts relating to classification and measurement, impairment allowances and hedge accounting
are outlined below.
Basis of presentation and accounting policies
The summarised consolidated financial results for the year ended 31 March 2019 are prepared in accordance with the
JSE Limited (JSE) Listings Requirements (the JSE Listings Requirements) relevant to summarised financial statements and the
provisions of the Companies Act No 71 of 2008. The JSE Listings Requirements require provisional reports 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 financial results 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 financial results were derived, are consistent with those applied in the previous consolidated annual financial
statements, except as set out below.
The group has adopted all new and amended accounting pronouncements issued by the IASB that are effective for financial
years commencing 1 April 2018. The group has initially applied IFRS 15 Revenue from Contracts with Customers (IFRS 15),
IFRIC 22 Foreign Currency Transactions and Advance Consideration (IFRIC 22) and IFRS 9 Financial Instruments (IFRS 9) from
1 April 2018. A number of other pronouncements were also effective from 1 April 2018 however these pronouncements
did not have a significant impact on the summarised consolidated financial results.
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 non-operating items. We believe it is a useful measure of the group’s operating performance.
However, this is not a defined term under IFRS and may not be comparable with similarly titled measures reported by
other companies.
The impact of adoption of new accounting pronouncements during the year is set out below.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 replaced IAS 18 Revenue. The group has applied IFRS 15 on a retrospective basis and has restated the comparative
information contained in the summarised consolidated financial results. Apart from providing additional and more detailed
disclosure around revenue recognition, IFRS 15 did not have a significant impact on the group’s existing revenue recognition
practices and summarised consolidated financial results.
The cumulative net impact of adopting IFRS 15 for the year ended 31 March 2018 was a reduction in consolidated revenue
of US$3m and an increase of US$1m in profit for the year. The impact of adoption related to the group’s Video Entertainment
segment which has been presented as a discontinued operation, as the initial application of IFRS 15 did not have a significant
impact on the group’s other operations.
Classification and measurement
The group recognised an increase in retained earnings of US$838m, as a transfer from other reserves, relating to the impact
of IFRS 9 on its associate Tencent Holdings Limited. The impact relates to cumulative net gains on investments classified as
available-for-sale financial assets in terms of IAS 39 that are now accounted for as financial assets at fair value through profit
or loss in terms of IFRS 9.
In terms of IAS 39, the group previously classified equity investments as available-for-sale investments with changes in fair
value recognised in other comprehensive income. On disposal or impairment, cumulative fair-value changes recognised in
other comprehensive income were reclassified to the income statement. Furthermore, certain available-for-sale investments
were measured at cost as their fair value could not be measured with sufficient reliability. These investments are, however,
not significant to the summarised consolidated financial results and their remeasurement to fair value on transition to IFRS 9
was insignificant. The group has classified these investments as financial assets at fair value through other comprehensive
income in terms of IFRS 9. IFRS 9 does not permit the reclassification of cumulative fair value changes to the income statement
on disposal or impairment. Further, IFRS 9 no longer permits cost measurement where fair value cannot be measured with
sufficient reliability. The group, following the adoption of IFRS 9, accordingly no longer reclassifies cumulative fair value changes
on these investments to the income statement on disposal or impairment but transfers such cumulative changes to retained
earnings on disposal of an investment.
Impairment
The adoption of IFRS 9’s impairment model resulted in an increase in impairment allowances on trade receivables due to the
requirement to consider forward-looking information when determining impairment allowances. The cumulative net impact
on the group was an increase of US$14m in impairment allowances on trade receivables and a corresponding decrease of
US$14m in retained earnings. The impact of adoption related primarily to the group’s Video Entertainment business, which
has been presented as a discontinued operation, as the application of IFRS 9 did not have a significant impact on the group’s
other operations.
Hedge accounting
IFRS 9 did not have a significant impact on the group’s hedge accounting practices and accordingly previously applied hedging
practices continued unaffected.
IFRIC 22 Foreign Currency Transactions and Advance Consideration
IFRIC 22 clarifies that non-monetary assets and liabilities arising from the payment/receipt of advance consideration
(eg, prepaid expenses and deferred revenue) are not retranslated to the entity’s functional currency after initial recognition.
The group applied IFRIC 22 on a prospective basis, with the impact of adoption recognised as an adjustment to the opening
balance of retained earnings as at 1 April 2018.
The impact of adoption was an increase in prepaid expenses of US$10m, a decrease in deferred revenue of US$4m and
a corresponding increase of US$14m in retained earnings. The adoption impact related primarily to the group’s Video
Entertainment business, which has been presented as a discontinued operation, as the initial application of IFRIC 22 did not
have a significant impact on the group’s other operations.
The impact of the adoption of the above accounting standards during the current period is shown in the following tables.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Basis of presentation and accounting policies continued
Income statement (extract)
Statement of comprehensive income (extract)
31 March 2018
Previously
reported
US$’m
Change in
accounting
policy(1)
US$’m
Restated
US$’m
Represented by:
Continuing
operations
US$’m
Discontinued
operations
US$’m
(3)
6 657
2 985
3 672
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
(1 728)
(1 054)
Attributable to:
Revenue from contracts
with customers
Selling, general and administration
expenses
Operating loss
Profit before taxation
Profit for the year
Profit attributable to:
Equity holders of the group
Non-controlling interests
Core headline earnings for
the year
Core headline earnings per N
ordinary share (US cents)
Basic
Diluted
Earnings for the year
Earnings per N ordinary share
(US cents)
Basic
Diluted
Headline earnings for the year
Headline earnings per N
ordinary share (US cents)
Basic
Diluted
Note
(1) Represents the impact of adopting IFRS 15.
6 660
(2 786)
(198)
11 658
11 298
11 357
(59)
11 298
2 507
581
568
11 357
2 631
2 612
1 794
416
403
4
1
1
1
1
–
1
1
–
–
1
–
–
1
–
–
(2 782)
(197)
11 659
11 299
11 358
(59)
11 299
2 508
(659)
11 179
11 109
11 245
(136)
11 109
2 388
581
568
553
540
11 358
11 245
2 631
2 612
1 795
416
403
2 604
2 585
1 670
387
374
462
480
190
113
77
190
120
28
28
113
27
27
125
29
28
Equity holders of the group
Non-controlling interests
Note
(1) Represents the impact of adopting IFRS 15.
Statement of financial position (extract)
EQUITY AND LIABILITIES
Capital and reserves attributable to the group’s equity holders
Share capital and premium
Other reserves
Retained earnings
Non-controlling interests
TOTAL EQUITY
Non-current liabilities
Current liabilities
Accrued expenses and other current liabilities
TOTAL EQUITY AND LIABILITIES
Note
(1) Represents the impact of adopting IFRS 15.
81
31 March 2018
Change in
accounting
policy(1)
US$’m
Restated
US$’m
1
–
1
1
–
1
11 299
1 742
13 041
13 026
15
13 041
Previously
reported
US$’m
11 298
1 742
13 040
13 025
15
13 040
As at 31 March 2018
Previously
reported
US$’m
Change in
accounting
policy(1)
US$’m
Restated
US$’m
25 522
4 965
425
20 132
169
25 691
5 623
4 137
3 163
35 451
1
–
–
1
–
1
–
(1)
(1)
–
25 523
4 965
425
20 133
169
25 692
5 623
4 136
3 162
35 451
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Basis of presentation and accounting policies continued
Income statement information of discontinued operations
Adjustments to the opening balances of the statement of financial position
(extract)
ASSETS
Non-current assets
Current assets
Trade receivables
Other receivables and loans
TOTAL ASSETS
EQUITY AND LIABILITIES
Capital and reserves attributable to the group’s equity holders
Share capital and premium
Other reserves
Retained earnings
Non-controlling interests
TOTAL EQUITY
Non-current liabilities
Current liabilities
Accrued expenses and other current liabilities
TOTAL EQUITY AND LIABILITIES
As at 1 April 2018
Change in
accounting
Restated(1)
US$’m
policy(2)
US$’m
Restated
US$’m
22 386
13 065
452
762
35 451
25 523
4 965
425
20 133
169
25 692
5 623
4 136
3 162
35 451
–
(4)
(14)
10
(4)
–
–
(838)
838
–
–
–
(4)
(4)
(4)
22 386
13 061
438
772
35 447
25 523
4 965
(413)
20 971
169
25 692
5 623
4 132
3 158
35 447
Notes
(1)
IFRS 15 has been adopted on a retrospective basis and accordingly the 31 March 2018 statement of financial position has already been restated
for its impact.
(2) Represents the impacts of adopting IFRS 9 and IFRIC 22 as of 1 April 2018.
Profit from discontinued operations
The group concluded the disposal of its subsidiary MultiChoice Group Limited (MultiChoice Group) in February 2019.
The assets and liabilities of MultiChoice Group were classified as held for sale in September 2018. The results and cash
flows of the group’s Video Entertainment segment have been presented as discontinued operations in these consolidated
annual financial statements. Discontinued operations also include the group’s subscription video-on-demand service
in Poland which was closed at the end of January 2019.
Revenue from contracts with customers
Expenses
Profit before tax
Taxation
Profit for the year
Gain on disposal of discontinued operation
Profit from discontinued operations
Profit from discontinued operations attributable to:
Equity holders of the group
Non-controlling interest
Revenue from contracts with customers
Revenue from discontinued operations comprises:
Subscription revenue
Advertising revenue
Hardware sales and maintenance revenue
Technology revenue
Sublicense and reconnection fee revenue
Other revenue
Revenue from contracts with customers
Cash flow statement information of discontinued operations
Net cash generated from operating activities
Net cash utilised in investing activities
Net cash generated from financing activities
Cash generated by discontinued operations
Note
(1) Represents the impact of adopting IFRS 15.
82
31 March
2019
US$’m
3 321
(2 851)
470
(200)
270
2 489
2 759
2 683
76
2 759
2018
Restated(1)
US$’m
3 672
(3 192)
480
(290)
190
–
190
113
77
190
2 750
2 982
211
171
98
63
28
239
192
128
71
60
3 321
3 672
344
(63)
20
301
245
(60)
102
287
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Profit from discontinued operations continued
Per share information of discontinued operations
Headline and core headline earnings
Core headline earnings for the year (US$’m)
Core headline earnings per N ordinary share (US cents)
Diluted core headline earnings per N ordinary share (US cents)
Headline earnings for the year (US$’m)
Headline earnings per N ordinary share (US cents)
Diluted headline earnings per N ordinary share (US cents)
Earnings per N ordinary share (US cents)
Diluted earnings per N ordinary share (US cents)
Net number of shares issued (’000)
– at year-end
– weighted average for the year
– diluted weighted average
31 March
2019
US$’m
2018
US$’m
308
71
71
216
50
50
621
618
120
28
28
125
29
28
27
27
432 200
432 202
434 060
432 126
431 635
433 003
Net profit attributable to shareholders
Adjusted for:
– impairment of property, plant and equipment and other assets
– impairment of goodwill and other intangible assets
– loss on sale of assets
– gains on acquisitions and disposals of investments
– remeasurement of previously held interest
– dilution losses on equity-accounted investments
– remeasurements included in equity-accounted earnings
– impairment of equity-accounted investments
Total tax effects of adjustments
Total adjustment for non-controlling interest
Headline earnings
Adjusted for:
– equity-settled share-based payment expenses
– initial recognition of tax losses from previous years
– amortisation of other intangible assets
– fair-value adjustments and currency translation differences
– retention option expense
– business combination related losses
Core headline earnings
83
31 March 2019
Continuing
operations
US$’m
Discontinued
operations
US$’m
4 218
2 683
1
7
2
21
3
1
(1 621)
(2 489)
(7)
182
695
88
3 565
175
(21)
3 719
561
(36)
295
(1 570)
11
20
3 000
–
–
–
–
219
–
(3)
216
13
–
2
77
–
–
308
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$47m relating to the future dilutive impact of potential ordinary shares issued by
equity-accounted investees and subsidiaries.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Headline and core headline earnings continued
Net profit attributable to shareholders
Adjusted for:
– impairment of property, plant and equipment and other assets
– impairment of goodwill and other intangible assets
– gain on sale of assets
– losses on acquisitions and disposals of investments
– remeasurement of previously held interest
– dilution gains on equity-accounted investments(1)
– 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
– amortisation of other intangible assets
– fair-value adjustments and currency translation differences
– retention option expense
– business combination related losses
Core headline earnings
Note
(1)
Includes the gain recognised on the disposal of a 2% interest in Tencent Holdings Limited.
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$49m relating to the future dilutive impact of potential ordinary shares issued by
equity-accounted investees and subsidiaries.
84
31 March
2019
US$’m
1 481
2018
US$’m
1 245
623
308
159
159
27
229
45
145
115
491
255
142
115
53
241
59
284
100
3 291
2 985
Revenue from contracts with customers
31 March 2018
Continuing
operations
US$’m
Discontinued
operations
US$’m
11 245
113
Online sale of goods revenue
Classifieds listings revenue
Reportable segment(s)
where revenue is included
Classifieds and Etail
Classifieds
Payment transaction commissions and fees
Payments and Fintech
Mobile and other content revenue
Other ecommerce
Food-delivery revenue
Travel package revenue and commissions
Advertising revenue
Food Delivery
Travel
Various
Comparison shopping commissions and fees
Other ecommerce
Printing, distribution, circulation, publishing and
subscription revenue
Other revenue
Media
Various
24
4
–
95
(21)
(9 216)
(526)
46
1 651
20
(1)
1 670
425
187
79
7
20
2 388
15
–
(1)
–
–
–
2
–
129
(2)
(2)
125
10
3
(19)
1
–
120
Revenue is presented on an economic-interest basis (ie including a proportionate consolidation of the revenue of
associates and joint ventures) in the group’s segmental review and is accordingly not directly comparable to the above
consolidated revenue figures.
Finance (costs)/income
Interest income
– loans and bank accounts
– other
Interest expense
– loans and overdrafts
– other
Other finance income/(cost) – net
– net foreign exchange differences and fair-value adjustments on derivatives
– remeasurement of written put option liabilities
31 March
2019
US$’m
2018
US$’m
284
283
1
(205)
(201)
(4)
130
77
53
52
49
3
(197)
(193)
(4)
(379)
(127)
(252)
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
85
Profit before taxation
Equity-accounted results
In addition to the items already detailed, profit before taxation has been determined after taking into account, inter alia,
the following:
The group’s equity-accounted investments contributed to the summarised consolidated financial results as follows:
Depreciation of property, plant and equipment
Amortisation
– other intangible assets
– software
Impairment losses on financial assets measured at amortised cost
Net realisable value adjustments on inventory, net of reversals(1)
Other (losses)/gains – net
– (loss)/gain on sale of assets
– impairment of goodwill and other intangible assets
– impairment of property, plant and equipment and other assets
– dividends received on investments
– fair-value adjustments on financial instruments
– other
Gains on acquisitions and disposals
– gains/(losses) on disposal of investments
– remeasurement of contingent consideration
– acquisition-related costs
– remeasurement of previously held interest
Note
(1) Net realisable value writedowns relate primarily to general inventory writedowns in the etail segment.
31 March
2019
US$’m
2018
US$’m
35
111
94
17
18
28
(38)
(2)
(7)
(1)
4
(27)
(5)
1 609
1 618
3
(19)
7
31
111
97
14
15
8
(32)
1
(4)
(24)
1
(6)
–
(93)
(91)
(5)
(18)
21
Share of equity-accounted results
– sale of non-current assets
– gains on acquisitions and disposals
– impairment of investments
Contribution to headline earnings
– amortisation of other intangible assets
– equity-settled share-based payment expenses
– fair-value adjustments and currency translation differences
Contribution to core headline earnings
Tencent
Mail.ru
MakeMyTrip
Delivery Hero
Other
31 March
2019
US$’m
3 410
–
(126)
799
4 083
236
535
(1 499)
3 355
3 587
15
(49)
(55)
(143)
2018
US$’m
3 285
2
(692)
162
2 757
135
385
(224)
3 053
3 288
37
(76)
(17)
(179)
The group applies an appropriate lag period in reporting the results of equity-accounted investments, where the
year-ends of investees are not coterminous with that of Naspers Limited.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
86
Goodwill
Commitments and contingent liabilities
Goodwill is subject to an annual impairment assessment. Movements in the group’s goodwill for the year are
detailed below:
Commitments relate to amounts for which the group has contracted, but that have not yet been recognised
as obligations in the statement of financial position.
Goodwill
– cost
– accumulated impairment
Opening balance
– foreign currency translation effects
– acquisitions of subsidiaries and businesses
– disposals of subsidiaries and businesses
– transferred to assets classified as held for sale(1)
– impairment
Closing balance
– cost
– accumulated impairment
31 March
2019
US$’m
2018
US$’m
2 961
(354)
2 607
(292)
105
(7)
(287)
(6)
2 120
2 360
(240)
2 790
(348)
2 442
41
124
–
–
–
2 607
2 961
(354)
Note
(1) Assets classified as held for sale include those assets of MultiChoice Group that were classified as held for sale in September 2018 and subsequently
distributed to shareholders.
Commitments(1)
– capital expenditure
– programme and film rights
– network and other service commitments
– operating lease commitments
– set-top box commitments
31 March
2019
US$’m
327
19
–
26
282
–
2018
US$’m
3 537
17
2 906
104
327
183
Note
(1) The group is subject to commitments which occur in the normal course of business. The group plans to fund these commitments out of existing facilities
and internally generated funds. Prior-period commitments for programme and film rights and set-top boxes related to MultiChoice Group which was
distributed to shareholders during the current year.
The group operates across a large number of jurisdictions and pays tax in the countries in which it operates. In certain
jurisdictions uncertainty exists as to whether certain transactions or payments are subject to tax. In these countries
the group continues to seek relevant advice and works with its advisers to identify and/or quantify tax exposures.
Our current assessment of possible tax exposures, including penalties and interest, amounts to approximately
US$22.0m (2018: US$226.1m). No provision has been made as at 31 March 2019 (and 2018) for these possible
exposures. The current-year reduction in possible tax exposures relates primarily to the distribution of MultiChoice
Group to shareholders.
Furthermore, the group has a contingent asset of US$177.0m (2018: US$nil) related to amounts receivable from
tax authorities.
Disposal groups classified as held for sale
The group distributed its shareholding in MultiChoice Group Limited (MultiChoice Group) to shareholders during the
year. As a consequence of this transaction, equity-compensation plans and other group entities that held Naspers
Limited N ordinary shares (as treasury shares) at the time of distribution received MultiChoice Group shares. The group
has classified a portion of these MultiChoice Group shares with a fair value of US$50.7m as held for sale as at 31 March
2019 as it has committed to dispose of these shares within 12 months from the end of the current reporting period.
The portion of MultiChoice Group shares not classified as held for sale are presented as part of “Other Investments
and loans” on the statement of financial position.
The assets and liabilities of the group’s subsidiary Netrepreneur Connections Enterprises, Inc. (Sulit) were also classified
as held for sale during the year as the group signed an agreement to contribute this investment to Carousell Private
Limited (Carousell) in exchange for an equity interest in Carousell.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Disposal groups classified as held for sale continued
The assets and liabilities classified as held for sale as at 31 March 2019 are detailed in the table below:
Assets classified as held for sale
Goodwill and other intangible assets
Investments at fair value through other comprehensive income
Trade and other receivables
Cash and cash equivalents
Liabilities classified as held for sale
Accrued expenses and other current liabilities
31 March
2019
US$’m
2018
US$’m
67
13
51
2
1
2
2
–
–
–
–
–
–
–
Business combinations, other acquisitions and disposals
In August 2018 the group invested US$60m for a 100% effective and fully diluted interest in the issued share capital of Zooz
Mobile Limited (Zooz), a management and optimisation payment provider based in Israel. The transaction was accounted
for as a business combination with an effective date of August 2018. The purchase price allocation: cash and deposits
US$2m; trade and other receivables US$1m; intangible assets US$22m; trade and other payables US$1m; loan liabilities
US$1m; deferred tax liability US$5m; and the balance of US$42m to goodwill. The main intangible assets recognised in
the business combination were technology and customer relationships.
In December 2018 the group invested US$36m for a 69% effective interest (65% fully diluted) in the issued share capital of
Aasaanjobs Private Limited (Aasaanjobs), an online recruitment marketplace based in India. The transaction was accounted
for as a business combination with an effective date of December 2018. The purchase price allocation: cash and deposits
US$23m; trade and other receivables US$1m; intangible assets US$5m; trade and other payables US$3m; deferred tax
liability US$2m; and the balance of US$13m to goodwill. The main intangible assets recognised in the business combination
were customer relationships and tradenames.
Since the acquisition dates of the above business combinations, revenue of US$1m and net losses of US$9m have been
included in the income statement. Had the revenue and net losses of the above business combinations been included
from 1 April 2018 group revenue from continuing operations and group net profit from continuing operations would
have amounted to US$3.29bn and US$4.15bn respectively.
The main factor contributing to the goodwill recognised in these acquisitions was the acquirees’ market presence.
The goodwill that arose is not expected to be deductible for income tax purposes. Total acquisition-related costs
of US$2m were recorded in “(Losses)/gains on acquisitions and disposals” in the income statement regarding the
abovementioned acquisitions.
In April 2018 the group acquired the share capital held by non-controlling shareholders of its subsidiary Dubizzle Limited
(Dubizzle) for US$190m. The transaction resulted in the settlement of a written put option recognised by the group over
the non-controlling interest in Dubizzle and the derecognition of the non-controlling interest in this business. Following the
acquisition, the group holds a 100% effective and fully diluted interest in Dubizzle.
87
In August 2018 the group’s subsidiary Letgo Global B.V. (previously named Ambatana Holdings B.V.) acquired the share
capital held by non-controlling shareholders of Letgo USA B.V. for US$189m. The transaction resulted in the settlement of
a written put option recognised by the group over the non-controlling interest in the business and the derecognition of the
related non-controlling interest. Following a US$150m funding round in June 2018, the group’s shareholding in Letgo Global
B.V. increased from an effective 73.4% at 31 March 2018 to 80% (77% fully diluted) at 31 March 2019.
In January 2019 the group acquired the share capital held by non-controlling shareholders of its subsidiary Avito AB
(Avito) for US$1.16bn. The transaction resulted in the settlement of a written put option recognised by the group over
the non-controlling interest in Avito and the derecognition of the non-controlling interest in this business. Following the
acquisition, the group holds a 100% effective interest (99.5% fully diluted) in Avito.
In March 2019 the group acquired an additional interest in its subsidiary Silver Indonesia JVCo B.V. (Silver Indonesia) from
non-controlling shareholders for US$46m. Following the acquisition, the group holds a 66% effective interest in Silver
Indonesia.
The following relates to the group’s investments in its equity-accounted investees:
In May 2018 the group invested US$35m for a 16% effective interest (15% fully diluted) in Honor Technology, Inc. (Honor)
a comprehensive home-care company for older adults in the US. The group accounts for its interest as an investment in
an associate.
In May 2018 the group invested US$89m in Frontier Car Group, Inc. (Frontier Car Group), an online car marketplace
headquartered in Berlin and currently operating in eight countries, for a 36% effective (35% fully diluted) shareholding.
The group accounts for its interest as an investment in an associate. The group also entered into a collaboration with
Frontier Car Group in India during February 2019 through an investment of US$25m in the group’s subsidiary India
Used Car Group B.V.
In July 2018 the group invested an additional US$12m in PaySense Private Limited (PaySense), a technology platform
providing Indian consumers with access to credit lines based on an alternative-data decisioning model. Following this
investment, the group holds a 19% effective interest (17% fully diluted) in PaySense. The group now accounts for its
interest in PaySense as an investment in an associate.
The group invested an additional US$79m in Bundl Technologies Private Limited (Swiggy), a leading online food-ordering
and delivery platform in India, during July 2018, followed by a further investment of US$637m in January 2019. Following
these investments, the group holds a 39% effective interest (35% fully diluted) in Swiggy. The group continues to account
for its interest as an investment in an associate.
In December 2018 the group invested US$383m in Think & Learn Private Limited (BYJU’S) for a 12% effective (12% fully
diluted) shareholding in India’s largest education company and the creator of India’s largest personalised learning app.
The group accounts for its interest as an investment in an associate.
The following relates to significant disposals by the group during the reporting period:
During May 2018 the group announced the disposal of its 12% effective interest (11% fully diluted) in Flipkart Limited –
its equity-accounted etail investment in India – to US-based retailer Wal-Mart International Holdings, Inc. for US$2.2bn
(inclusive of applicable withholding taxes and amounts held in escrow). Amounts held in escrow following the disposal have
been included as part of “Other receivables and loans” in the statement of financial position. The transaction was concluded
in August 2018 following regulatory approval. A gain on disposal of US$1.6bn has been recognised as part of “Gains/(losses)
on acquisitions and disposals” in the income statement. This gain includes the reclassification of a foreign currency translation
reserve of US$97m to the income statement. Related income tax expenses of US$177m have been included as part of
“Taxation” in the income statement.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Business combinations, other acquisitions and disposals continued
In September 2018 the group concluded the sale of its 52% interest in Tek Travels Private Limited, its online business-to-
business (B2B) travel distribution business, for US$37m. A gain on disposal of US$6m has been recognised as part of
“Gains/(losses) on acquisitions and disposals” in the income statement.
Following its listing on the JSE in February 2019, the group distributed its shares in its Video Entertainment business,
MultiChoice Group Limited (MultiChoice Group), to shareholders as a pro rata distribution in specie (the distribution).
MultiChoice Group and, accordingly, the group’s Video Entertainment segment, have been presented as a discontinued
operation in these consolidated annual financial statements. The group recorded a gain of US$2.49bn as part of “Profit
from discontinued operations” in the income statement following the distribution, being the difference between the fair
value of MultiChoice Group shares distributed, measured using its listed share price, and the book value of the net assets
derecognised. The gain recognised is presented net of the reclassification of reserves (primarily foreign currency translation
and hedging reserves) of US$546m (losses) to the income statement following the distribution. The distribution reduced
retained earnings by US$3.83bn being the fair value of the distributed MultiChoice Group shares. The group calculated
the gain on distribution based on the fair value of MultiChoice Group as at the date of distribution. In calculating the fair
value, the group determined that the share price of MultiChoice Group for the first 15 days of trading did not represent
an orderly transaction on account of the trading volumes during this period and the fact that there was no exposure to
the market before the measurement date. Consequently, the group used the 15-day volume-weighted average share
price of MultiChoice Group and excluded the first 15 days of trading as this was considered more representative of the
fair value of MultiChoice Group in an orderly transaction. This is consequently a level 2 fair value measurement.
88
Financial instruments
The fair values of the group’s financial instruments that are measured at fair value at each reporting period are
categorised as follows:
Fair-value measurements at 31 March 2019 using:
Quoted prices
in active
markets for
identical
assets
or liabilities
(level 1)
US$’m
Carrying
value
US$’m
Significant
other
observable
inputs
(level 2)
US$’m
Significant
unobservable
inputs
(level 3)
US$’m
Assets
Financial assets at fair value through other
comprehensive income(1)
122
73
Foreign exchange contracts
Derivatives embedded in leases
Liabilities
Foreign exchange contracts
Earn-out obligations
Cross-currency swap
Note
(1)
Includes assets classified as held for sale.
4
1
3
7
33
–
–
–
–
–
3
4
–
3
–
33
46
–
1
–
7
–
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
89
Financial instruments continued
Fair-value measurements at 31 March 2018 using:
The group discloses the fair values of the following financial instruments as their carrying values are not a reasonable
approximation of their fair values:
Quoted prices
in active
markets for
identical
assets
or liabilities
(level 1)
US$’m
Carrying
value
US$’m
Significant
other
observable
inputs
(level 2)
US$’m
Significant
unobservable
inputs
(level 3)
US$’m
35
9
1
2
162
58
124
33
–
–
–
–
–
–
2
9
–
–
162
–
124
–
–
1
2
–
58
–
Assets
Available-for-sale investments
Foreign exchange contracts
Derivatives embedded in leases
Currency devaluation features
Liabilities
Foreign exchange contracts
Earn-out obligations
Interest rate and cross-currency swaps
There have been no transfers between levels 1 or 2 during the reporting period, nor were there any significant changes
to the valuation techniques and inputs used in measuring fair value.
Currency devaluation features related to clauses in content acquisition agreements within the Video Entertainment
business that provided the group with protection against significant currency devaluations. The group distributed the
MultiChoice Group to shareholders during the current year. The fair value of currency devaluation features was
measured through the use of discounted cash flow techniques.
For earn-out obligations, current forecasts of the extent to which management believes performance criteria will be met,
discount rates reflecting the time value of money and contractually specified earn-out payments are used.
Changes in these assumptions could affect the reported fair value of these financial instruments.
The fair value of level 2 financial instruments is determined with the use of exchange rates quoted in active markets
and interest rate extracts from observable yield curves.
Financial liabilities
31 March 2019
Publicly traded bonds
31 March 2018
Capitalised finance leases(1)
Publicly traded bonds
Carrying
value
US$’m
3 200
1 158
3 200
Fair
value
US$’m
3 350
1 125
3 357
Note
(1) Related primarily to MultiChoice Group which was distributed to shareholders during the current year.
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.
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
In April 2019 the group contributed 100% of the issued share capital of its subsidiary Netrepreneur Connections
Enterprises Inc. (Sulit) as well as cash with an aggregate value of US$56.1m to Carousell Private Limited (Carousell)
in exchange for a 12% (10% fully diluted) interest in Carousell, one of Asia’s largest and fastest-growing classifieds
marketplaces. The companies will merge their operations in the Philippines, a process that is expected to conclude
in the second half of the 2019 calendar year. The group will classify its interest in Carousell as an investment in an
associate on account of its representation on the board of Carousell.
In April 2019 the group announced the exchange of its 43% interest in its online travel associate MakeMyTrip Limited
for an approximate 6% interest in Ctrip.com International Limited (Ctrip), a well-known provider of online travel
and related services headquartered in China. The transaction is expected to be finalised in the second half of the
2019 calendar year and is subject to regulatory approval. The group will classify its interest in Ctrip as an investment
at fair value.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Notes to the summarised consolidated financial statements continued
for the year ended 31 March
90
Events after the reporting period continued
In April 2019 the group signed an agreement to invest US$70m for a 100% effective and fully diluted interest in Wibmo,
Inc. (Wibmo) a digital payment company providing payment security, mobile payment solutions and processing services
in India. The transaction is subject to regulatory approval. The group will account for the acquisition of its interest in
Wibmo as a business combination and will classify the investment as an investment in a subsidiary.
In May 2019 the group announced the sale of its 100% effective interest in its subsidiary BuscaPé Company Informaçao
e Technologia Limitada. The transaction is subject to regulatory approval.
In June 2019 the group signed an agreement to invest approximately US$131m for a 85% effective interest (79% fully diluted)
in İyzi Ödeme ve Elektronik Para Hizmetleri Anonim Şirketi (Iyzico), a leading payment service provider in Turkey.
The transaction is subject to regulatory approval. The group will account for the acquisition of its interest in Iyzico as
a business combination and will classify the investment as an investment in a subsidiary.
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 following tables. 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 year ended 31 March 2019. The following methodology
was applied in calculating the pro forma financial information:
1. 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 (relative to the US dollar) used for the group’s most significant functional currencies, were: South African rand
(2019: 0.0723; 2018: 0.0774), Polish zloty (2019: 0.2684; 2018: 0.2794), Russian rouble (2019: 0.0153; 2018: 0.0173),
Chinese yuan renminbi (2019: 0.1485; 2018: 0.1517), Indian rupee (2019: 0.0143; 2018: 0.0155), Brazilian real (2019:
0.2622; 2018: 0.3097), Angolan kwanza (2019: 0.0035; 2018: 0.0056), and Nigerian naira (2019: 0.0028; 2018: 0.0028).
2. 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.
For mergers, the group composition adjustments include a portion of the prior year results of the entity with which
the merger took place. 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:
Year ended 31 March 2019
Transaction
Basis of accounting
Reportable segment
Acquisition/Disposal
Continuing operations
Dilution of the group’s interest
in Tencent
Disposal of the group’s interest
in Flipkart
Effect of merger of ibibo with
MakeMyTrip
Associate
Associate
Associate
Acquisition of the group’s interest
in Delivery Hero
Associate
Acquisition of the group’s interest
in Swiggy
Associate
Acquisition of the group’s interest
in Frontier Car Group
Associate
Social and internet
platforms
Ecommerce
Disposal
Disposal
Ecommerce
Acquisition and disposal
Ecommerce
Acquisition
Ecommerce
Acquisition
Ecommerce
Acquisition
Disposal of the group’s interest
in Souq
Disposal of the group’s interest
in Tek Travels
Joint venture
Ecommerce
Subsidiary
Ecommerce
Disposal
Disposal
Acquisition of the group’s interest
in Takealot
Subsidiary
Distribution of the group’s interest
in Novus to shareholders
Subsidiary
Discontinued operations
Distribution of MultiChoice Group
to shareholders
Subsidiary
Ecommerce
Acquisition
Media
Disposal
Video Entertainment
Disposal
Disposal of the group’s interest in
MWEB
Subsidiary
Video Entertainment
Disposal
The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2019
amounted to a negative adjustment of US$1.4bn on revenue and a negative adjustment of US$181m on trading profit.
An assurance report issued in respect of the pro forma financial information, by the group’s external auditor, is available
at the registered office of the company.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the summarised consolidated financial statements continued
for the year ended 31 March
Pro forma financial information continued
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial
information are presented in the table below:
Year ended 31 March
2018
A
2019
B
2019
C
2019
D
2019
E
2019
F(2)
2019
G(3)
2019
H(4)
Group
compo-
sition
disposal
adjust-
ment
US$’m
Group
compo-
sition
acquisition
adjust-
ment
US$’m
Restated
IFRS(1)
US$’m
Foreign
currency
adjust-
ment
US$’m
Local
currency
growth
US$’m
Local
currency
growth
% change
IFRS(1)
US$’m
IFRS
% change
CONTINUING
Revenue
Internet
Ecommerce
– Classifieds
– Payments and Fintech
– Food Delivery
– Etail
– Travel
– Other
Social and internet
platforms
– Tencent
– Mail.ru
Media
Corporate segment
Intersegmental
Economic interest
DISCONTINUED
Video Entertainment
Group economic
interest
15 863
3 582
628
294
166
2 060
211
223
12 281
12 024
257
507
2
(20)
16 352
(1 248)
(493)
(1)
(1)
–
(476)
(15)
–
(755)
(753)
(2)
(145)
–
(1 393)
3 677
(373)
20 029
(1 766)
324
324
85
25
149
53
–
12
–
–
–
–
–
324
4
328
(663)
(277)
(67)
(40)
(33)
(102)
(1)
(34)
4 402
798
230
82
95
312
39
40
18 678
3 934
875
360
377
1 847
234
241
(386)
3 604
14 744
(348)
(38)
(22)
–
1
(684)
3 534
14 457
70
287
(14)
–
3
4 391
326
2
(16)
18 990
(195)
211
3 324
(879)
4 602
22 314
30
26
37
28
57
20
20
18
31
31
27
(4)
–
29
6
25
18
10
39
22
>100
(10)
11
8
20
20
12
(36)
–
16
(10)
11
Notes
(1) Figures presented on an economic-interest basis as per the segmental review.
(2) A + B + C + D + E.
(3) E/(A + B) x 100.
(4)
(F/A) – 1 x 100.
Refer to the segmental review and basis of presentation and accounting policies for details of the group’s adoption of
new accounting pronouncements during the year.
91
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial
information are presented in the table below:
Year ended 31 March
2018
A
2019
B
2019
C
2019
D
2019
E
2019
F(2)
2019
G(3)
2019
H(4)
Group
compo-
sition
disposal
adjust-
ment
US$’m
Group
compo-
sition
acquisition
adjust-
ment
US$’m
Restated
IFRS(1)
US$’m
Foreign
currency
adjust-
ment
US$’m
Local
currency
growth
US$’m
Local
currency
growth
% change
IFRS(1)
US$’m
IFRS
% change
CONTINUING
Trading profit
Internet
Ecommerce
– Classifieds
– Payments and Fintech
– Food Delivery
– Etail
– Travel
– Other(5)
Social and internet
platforms
– Tencent
– Mail.ru
3 013
(713)
(114)
(64)
(30)
(270)
(61)
(174)
3 726
3 675
51
(142)
88
2
–
–
93
(7)
–
(230)
(230)
–
(108)
(108)
(14)
(20)
(56)
(9)
–
(9)
–
–
–
(49)
26
–
(2)
12
11
–
5
(75)
(72)
(3)
625
94
128
43
(97)
25
31
(36)
531
556
(25)
3 339
(613)
2
(43)
(171)
(150)
(37)
(214)
3 952
3 929
23
22
15
>100
67
>(100)
14
46
(21)
15
16
(49)
11
14
>100
33
>(100)
44
39
(23)
6
7
(55)
–
–
2
5
7
(4)
(26)
–
(14)
(21)
(168)
2 994
3
(22)
Media
Corporate segment
Group economic
interest
DISCONTINUED
Video Entertainment(6)
Economic interest
Notes
(1) Figures presented on an economic-interest basis as per the segmental review.
(2) A + B + C + D + E.
(3) E/(A + B) x 100.
(4)
(F/A) – 1 x 100.
(5) The group historically allocated a portion of its corporate costs to the Video Entertainment segment. Following the distribution of MultiChoice Group to
512
3 816
410
3 404
(94)
(136)
16
(152)
79
(29)
101
729
24
22
3 304
(108)
(42)
628
22
(30)
(18)
10
25
12
>(100)
5
shareholders in the current year, and the consequent presentation of the Video Entertainment segment as a discontinued operation, corporate costs are now
allocated to the ecommerce business. The group views these corporate costs as primarily relating to the support of the ecommerce business. In line with
IFRS 8 Operating Segments the group has accordingly presented the comparative information contained in the segmental review on a similar basis.
Includes an adjustment for depreciation and amortisation which the group ceased recognising on classification of MultiChoice Group as held for sale
at 30 September 2018 in terms of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations up to the date of distribution to shareholders.
(6)
Refer to the segmental review and basis of presentation and accounting policies for details of the group’s adoption of
new accounting pronouncements during the year.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 92
Notes to the summarised consolidated financial statements 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 pro forma financial
information are presented in the table below:
Year ended 31 March
2018
A
2019
B
2019
C
2019
D
2019
E
2019
F(1)
2019
G(2)
2019
H(3)
Group
compo-
sition
disposal
adjust-
ment
US$’m
Group
compo-
sition
acquisition
adjust-
ment
US$’m
IFRS
US$’m
Foreign
currency
adjust-
ment
US$’m
Local
currency
growth
US$’m
Local
currency
growth
% change
IFRS
US$’m
IFRS
% change
284
–
–
(42)
80
322
28
13
Other metrics
reported
Consolidated
Avito revenue
Core headline earnings, calculated on a constant-currency basis, amounted to US$3.0bn.
Notes
(1) A + B + C + D + E.
(2) E/(A + B) x 100.
(3)
(F/A) – 1 x 100.
Refer to the segmental review and basis of presentation and accounting policies for details of the group’s adoption of
new accounting pronouncements during the year.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Naspers integrated annual report 2019
Introduction
Group overview
Performance review
Governance
Financial statements
Further information
93
93
Further
information
Notice of annual
general meeting ��������������������������� 94
Form of proxy ����������������������������100
Notes to the form of proxy ����� 101
Shareholder and
corporate information �������������� 102
Analysis of shareholders
and shareholders’ diary ����������� 103
Naspers’s voting
control structure �����������������������104
We’re ensuring the
highest standards
of data privacy
across Naspers ...
It’s at the heart of how we create
value by improving people’s lives
Read more on pages 64 to 66
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 94
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 105th
annual general meeting of Naspers
Limited (the company or Naspers) will
be held on the 2nd floor, Daisy Room,
Cape Town International Convention
Centre 2 (CTICC2), corner of
Heerengracht and Rua Bartholomeu
Dias, Foreshore, Cape Town, South
Africa on Friday 23 August 2019 at 11:15.
Record date, attendance and voting
The record date for the meeting
(being the date used to determine
which shareholders are entitled to
participate in and vote at the meeting)
is 16 August 2019.
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 their place.
A proxy need not be a shareholder of
the company.
Before any person may attend or
participate in a shareholders’ meeting,
they 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
proxy for a shareholder, has been
reasonably verified. Forms of identification
include valid identity document, driver’s
licence and passport.
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. Completing a form of proxy
will not preclude that shareholder from
attending and voting (in preference to
their 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.
A shareholder may appoint a proxy at
any time. For practical purposes, 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,
19 Ameshoff Street, Braamfontein 2001
or PO Box 4844, Johannesburg 2000)
by no later than 11:15 on Wednesday
21 August 2019 to allow time to process
the proxy. Should you hold Naspers
A ordinary shares, the signed proxy
must reach the registered office of
the company by 11:15 on Wednesday
21 August 2019 to allow for processing.
A form of proxy is enclosed with this
notice. The form of proxy may also be
obtained from the registered office of
the company or on the company website
as a separate pdf download in the 2019
integrated annual report available under
investors. All other proxies must be
handed to the company secretary
before the start of the meeting.
Purpose of meeting
The purpose of the meeting is to:
• present the directors’ report and
audited annual financial statements
of the company for the immediate
preceding financial year, an audit
committee report and the social
and ethics committee report
• consider and, if approved, adopt
with or without amendment,
resolutions set out below, and
• consider any matters raised by
shareholders of the company, with or
without advance notice to the company.
Electronic participation
Shareholders entitled to attend and
vote at the meeting or their proxies
will 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, they should
advise the company by 09:00 on Friday
16 August 2019 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 their title to the
dematerialised shares. On receipt
of the required information, the
shareholder will be given a secure code
and instructions to access electronic
communication during the annual
general meeting. Shareholders must
note that access to the electronic
communication will be at their expense.
Integrated annual report
The integrated annual report of the
company for the year ended 31 March
2019 is available on www�naspers�com
or on request during 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
For the ordinary resolutions below to
be adopted, the support of a majority
of votes exercised by shareholders
present or represented by proxy at
this meeting is required. Ordinary
resolutions numbers 10 and 11 require
the support of at least 75% of the
total number of votes exercised by
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 2019 and the
reports of the directors, auditor,
audit committee, and social and
ethics 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 2019 can be obtained
from www�naspers�com or on
request during 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.
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
Mrs V Myburgh 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 appointment of
Mr F L N Letele as non-executive
director from 27 February 2019. His
abridged curriculum vitae appear on
page 56 of the integrated annual
report. The board unanimously
recommends approval of the
appointment of the director
in question.
5. To elect Messrs J P Bekker,
S J Z Pacak, J D T Stofberg,
B J van der Ross 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 on pages 56 and 57
of the integrated annual report.
The board unanimously
recommends that the re-election
of directors in terms of resolution
number 5 be approved by
shareholders of the company.
The appointments of the director in
ordinary resolution number 4 and
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 audit committee
members as required in terms of
the Act and as recommended by
the King Report for Corporate
Governance for South Africa 2016
(King IV ) (Principle 8).
The board and 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. Collectively, they have a
comprehensive understanding of
financial reporting, internal financial
controls, risk management and
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notice of annual general meeting
continued
governance processes in 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 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 on pages 56
and 57 of the integrated annual
report. The appointment of
members of the audit committee
will be conducted by way of a
separate vote for each individual.
7. To endorse the company’s
remuneration policy, as set out
in the 2019 remuneration report
on pages 14 to 20, by way of a
non-binding advisory vote.
8. To approve the implementation
of the remuneration policy as set
out on pages 21 to 30 of the 2019
remuneration report, by way of a
non-binding advisory vote.
9. To place the authorised but unissued
share capital of the company under
the control of directors and to grant,
until the conclusion of the next
annual general meeting of the
company, an unconditional authority
to directors to allot and issue at their
discretion (but subject to the
provisions of the Act and the 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,
and 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.
10. Subject to a minimum of 75% of the
11. To approve amendments to the
trust deed constituting the Naspers
Restricted Stock Plan Trust (the
trust deed) and the share scheme
envisaged by such trust deed (the
scheme), as laid before the meeting,
with effect from the date of this
resolution.
Reason for and effect of ordinary
resolution 11
Schedule 14 of the JSE Listings
Requirements (Schedule 14) governs
share option schemes and share
incentive schemes involving the issue of
equity securities by issuers to, or for the
benefit of, employees and other
persons involved in the business of the
Naspers group (the group) and which
result in a dilution of the shareholding of
equity securities holders in the issuer.
This includes the issue of equity
securities from the issuer’s authorised,
but unissued, share capital, as well as
the use of equity securities held as
treasury shares. Schedule 14 is
applicable to the scheme and the trust
deed. The scheme and the trust deed
were originally approved in terms of
Schedule 14.
In order to bring the scheme in line with
market standards, the board proposes
certain amendments to the scheme and
the trust deed. These amendments will
be effective on and as from the date on
which they are approved by
shareholders.
votes of shareholders of the company
present in person or by proxy at the
annual general meeting and entitled
to vote, voting in favour, the directors
be 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 the
opportunity arises, subject to the
requirements of the JSE, including:
• This authority will 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
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% (21 932 802) 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 JSE Listings Requirements,
and not to related parties.
95
The trust deed currently contemplates
the granting of awards to defined
employees in the group, being
conditional rights awarded to
employees to the delivery or
distribution of Naspers N ordinary
shares in the company (or cash in lieu
thereof) from the trust. Subject to the
provisions of the trust deed (including
applicable leaver provisions) such
awards vest in four equal tranches over
a four-year period and is not subject to
the satisfaction of any performance
conditions (such awards hereinafter the
RSU awards). It is proposed that the
trust deed be amended to allow for a
second type of award to be awarded to
employees (such proposed awards
hereinafter the PSU awards). PSU
awards will be the same as existing RSU
awards in all respects, except for the
following differences:
(i)
(ii)
Performance condition: PSU
awards will have a performance
condition attached to them, being
a condition which is specified by
the board in the relevant award
letter (RSU awards are not
subject to the satisfaction of any
performance conditions).
Vesting: subject to the provisions
of the trust deed (including
applicable leaver provisions), PSU
awards will vest on the vesting
date as set out in the relevant
award letter or, if later, the date on
which the board determines
whether or not the performance
condition for the relevant
measurement period has been
satisfied (in whole or in part), and
only to the extent that the
performance condition is satisfied
(subject to the provisions of the
trust deed (including applicable
leaver provisions) RSU awards
vest in four equal tranches over a
four-year period).
(iii)
(iv)
(v)
Annual awards limit: a separate
aggregate maximum will apply
in respect of the number of
PSU awards that may be
granted in any financial year of
the company, namely such
number as determined by the
board in its discretion (the current
aggregate maximum number of
RSU awards that may be granted
in any financial year will continue
to apply).
Individual limit: a separate
individual limit (being the
aggregate maximum number
of shares at any time allocated in
respect of unvested awards to
any one employee) will apply in
respect of PSU awards, namely
400 000 N ordinary shares in the
company, subject to adjustments
made in terms of the trust deed
(the individual limit in respect
of RSU awards will continue
to apply).
Leaver provisions: death, ill health
and disability: if the employment
of a beneficiary under a PSU award
terminates prior to the vesting date
due to any of these reasons, the
vesting of such PSU award will be
accelerated on the termination
date assuming at target
achievement of any performance
condition and, if following the end
of the period over which the
performance condition is
measured, the board determines
that the performance condition
has been satisfied above target,
an additional amount (payable in
cash or shares) will be due to the
beneficiary or his/her heirs equal to
the difference in value between at
target and actual achievement of
the performance condition (in such
instances under the RSU awards,
vesting will also be accelerated but
no additional amount will be due
based on the satisfaction of any
performance condition).
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 96
The trust deed will be made available
for inspection by shareholders during
normal business hours at the
company’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) for a period of not less
than fourteen (14) days prior to the
annual general meeting.
Notice of annual general meeting
continued
(vi)
Leaver provisions: other event,
matter, fact or circumstance as
determined by the board: if the
employment of a beneficiary
under a PSU award terminates
prior to the vesting date due to
any of these reasons, the board
may determine that all or only a
portion of the relevant PSU award
will vest on the termination date,
subject to the achievement of
any performance condition as
determined by the board (in such
instances under the RSU awards,
the same provisions regarding
vesting will apply, provided that
such vesting will not be subject
to the achievement of any
performance condition).
(vii) Leaver provisions: jurisdictional
issues, retrenchment, retirement,
transfer of employment pursuant
to a transaction entered into by
an employer company: if the
employment of a beneficiary
under a PSU award terminates
prior to the vesting date due to
any of these reasons, the PSU
award will be accelerated and will
vest on the termination date, but
on a pro rata basis based on the
proportion of the period between
the award date to the vesting date
that the relevant beneficiary has
worked as at the termination date,
subject to the achievement of any
performance condition as
determined by the board (in such
instances under the RSU awards,
the portion of the beneficiary’s
RSU award which would have
vested on the next vesting date
will be accelerated and vest on the
termination date, but on a pro
rata basis based on the year that
the relevant beneficiary has
worked as at the termination
date).
(viii) Leaver provisions: employer
company ceases to form part of
the group: if, prior to the vesting
date of a PSU award, an employer
company ceases to form part of
the group, then the vesting of
the relevant PSU award will be
accelerated on a pro rata basis
based on the proportion of
the period between the award
date to the vesting date that the
employer company remained
part of the group, subject to the
achievement of any performance
condition as determined by the
board (in such instances under
the RSU awards, unless the
board continues to designate
the relevant company as an
employer company, in respect
of each beneficiary who has been
granted RSU awards from such
company, the vesting of the
unvested awards in the year that
the employer company ceases
to form part of the group will
be accelerated on a pro rata
basis on the date on which the
employer company ceases to
be part of the group, based on
the proportion of the year that
the employer company remained
part of the group, provided that
the accelerated portion to be
vested will only be that portion
of the RSU award which would
have vested on the following
vesting date).
Furthermore, the trust deed does not
currently provide for the acceleration
of awards where a change of control or
demerger is implemented in respect of
the company. It is proposed that the
trust deed be amended to provide that
in the case of a demerger or if control
of the company passes to a person or
persons acting in concert in whom
control did not vest before, the RSU
awards and PSU awards will vest on
the date control is obtained or the
demerger is implemented, but on a
pro rata basis based on the proportion
of the period between the award date
to the vesting date that the beneficiary
has worked as at the date control is
obtained or the demerger is
implemented and subject to the
achievement of any performance
condition, as determined by the board,
in the case of PSU awards. For this
purpose, a demerger is a restructure
of the company that results in the
segregation of its business activities into
one or more components which are
under the same control immediately
before and after the segregation, and
control is the beneficial ownership of
more than 50% of the combined voting
power of the issued voting securities
of the company.
This ordinary resolution number 11 will
only be effective if passed by a majority
of 75% or more of the votes cast by all
shareholders present or represented by
proxy, excluding any votes exercised in
respect of any treasury shares held by
the group and any shares held by share
schemes of the group.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notice of annual general meeting
continued
Special resolutions
The special resolutions set out below require the support of at least 75% of
votes exercised by shareholders present or represented by proxy at this meeting
to be adopted.
Special resolutions numbers 1.1 to 1.13
The approval of the remuneration of non-executive directors for the year ending
31 March 2021 (up to 5% increase on fees for 31 March 2020 already approved
by shareholders at the annual general meeting on 24 August 2018), as follows:
Board
1.1
1.2
Chair(2)
Member
31 March 2021(1)
(proposed up to 5%
increase year on year)
2.5 times member
US$209 297
All members: Daily fees when travelling to and
attending meetings outside home country
US$3 500
Committees
Audit committee:
Chair
Risk committee:
Human resources and
remuneration committee:
Member
Chair
Member
Chair
Member
2.5 times member
US$51 566
2.5 times member
US$30 629
2.5 times member
US$36 236
Nomination committee:
Chair
2.5 times member
Member
US$19 530
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
Social and ethics committee: Chair
2.5 times member
1.12
Other
Member
US$26 805
1.13
Trustee of group share schemes/
other personnel funds
R56 448
Notes
(1)
Inthe2020financialyear,subjecttotheproposedlistingofProsusonEuronextAmsterdam,Naspers
non-executivedirectorswillserveontheboardsofbothcompanies.Asaresultofthenon-executivedirectors
assumingthesedualresponsibilities,goingforward,theproposedfeeswillbesplitbetweenNaspersandProsus,
ona30/70basis.
ThechairofNaspersdoesnotreceiveadditionalremunerationforattendingmeetings,orbeingamember
oforchairinganycommitteeoftheboard.
(2)
97
The reason for and effect of special
resolution 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 resolution numbers
1.1 to 1.13, in respect of the proposed
31 March 2021 remuneration, will be
considered by way of a separate vote.
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 interrelated
company, subject to (ii) below, or to
a related or interrelated company
or corporation, or to a member of
a related or interrelated corporation,
pursuant to the authority hereby
conferred upon the board for these
purposes. This authority shall: (i) 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 on pages 150 to 152 in
the annual financial statements) 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 interrelated 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
interrelated company, or for the
purchase of any securities of the
company or a related or interrelated
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; and (ii) be limited, in
respect of directors and prescribed
officers, to financial assistance in relation
to the acquisition of securities
as contemplated in (i).
Thereasonforandeffectofspecial
resolutionnumber2istoapprove
generallytheprovisionoffinancial
assistancetothepotentialrecipients
assetoutintheresolution.
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 interrelated company or corporation,
or to a member of a related or
interrelated corporation, pursuant to
the authority hereby conferred upon
the board for these purposes.
Thereasonforandeffectofspecial
resolutionnumber3istoapprove
generallytheprovisionoffinancial
assistancetothepotentialrecipients
assetoutintheresolution.
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 (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 will be effected through the
order book operated by the JSE
trading system and done without any
prior understanding or arrangement.
• This general authority will be valid
until the company’s next annual
general meeting, provided that it
will not extend beyond fifteen (15)
months from the date of passing of
this special resolution.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
98
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 its behalf.
• 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
start of the prohibited period.
• Authorisation for the repurchase is
given by the company’s memorandum
of incorporation.
A resolution has been passed by the
board authorising the repurchase, and
confirming that the company and its
subsidiaries passed the solvency and
liquidity test and that, from the time
that the test was done, there have been
no material changes to the financial
position of the group. 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:
Directors’ responsibility statement
The directors, whose names appear
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 information required by the
applicable JSE Listing Requirements.
• 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.
Material changes
Other than the facts and developments
disclosed in the integrated annual
report and annual financial statements,
except for the purposes of the group’s
share-based incentive schemes, there
have been no material changes in the
affairs or financial position of the
company and its subsidiaries between
the date of signature of the audit report
to the date of this notice.
Additional information on 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.
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.
Thereasonforandeffectofspecial
resolutionnumber4istograntthe
companytheauthorityintermsofthe
ActandJSEListingsRequirementsfor
theacquisitionbythecompany,ora
subsidiaryofthecompany,ofthe
company’sNordinaryshares.
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 (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.
Thereasonforandeffectofspecial
resolutionnumber5istograntthe
companytheauthorityintermsofthe
Actfortheacquisitionbythecompany,
orasubsidiaryofthecompany,ofthe
company’sAordinaryshares.
Special resolution number 6
That the company be and is hereby
specifically authorised, for a period of
fifteen (15) months from the date of
adoption of this resolution, to acquire
up to 10% of the number of issued N
ordinary shares immediately following
the implementation of the proposed
capitalisation issue by the company
(announced on 25 March 2019),
through structured repurchase
mechanisms implemented by or on
behalf of the company, including
through a modified Dutch auction
process and/or reverse bookbuild
process (as described below), from
holders of N ordinary shares at the time
of implementing any such repurchase
(including any director or prescribed
officer of the company or any person
related to any director or prescribed
officer of the company) but not
exclusively from a single Naspers
shareholder or related party (as
envisaged in the JSE Listings
Requirements) at a price to be
determined through such structured
repurchase mechanisms but which price
shall not exceed the higher of: (i) 10%
above the weighted average of the
market value of the N ordinary shares
for the five (5) trading days immediately
preceding the date on which the
structured repurchase mechanism is
implemented; and (ii) 10% above the
spot price of the N ordinary shares on
the date on which the structured
repurchase mechanism is implemented
(Specific Repurchase Authorisation).
Any repurchase under the Specific
Repurchase Authorisation will be
implemented in accordance with the
JSE Listings Requirements applicable to
specific repurchases, which
requirements currently require, inter
alia, that:
• Authorisation for the repurchase is
given by the company’s memorandum
of incorporation.
• If the company has announced that
it will make a specific repurchase, it
must pursue the proposal, unless
the JSE permits the company not to
do so.
• The company or a subsidiary may
not repurchase securities during a
prohibited period (as defined in the
JSE Listings Requirements) unless
they have in place a repurchase
programme where the dates and
quantities of securities to be traded
during the relevant period are fixed
(not subject to any variation) and has
been submitted to the JSE in writing
prior to the commencement of the
prohibited period. The company must
instruct an independent third party,
which makes its investment decisions
in relation to the issuer’s securities
independently of, and uninfluenced
by, the company, prior to the
commencement of the prohibited
period to execute the repurchase
programme submitted to the JSE.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review 99
Notice of annual general meeting
continued
The company will comply with the
applicable provisions of the Act and
the JSE Listings Requirements prior
to implementing any repurchase in
terms of the Specific Repurchase
Authorisation. In particular, the
board will comply with the applicable
requirements of section 48 of the Act
read with section 4 of the Act and the
board will, in its approval of any
repurchase that is to be implemented
under the Specific Repurchase
Authorisation, confirm that:
• The company and the Naspers group
will be able in the ordinary course
of business to pay their debts for a
period of twelve (12) months after
the date of any such board approval.
• The assets of the company and the
Naspers group will be in excess of
the liabilities of the company and
the Naspers group for a period of
twelve (12) months after the date
of any such board approval.
• The share capital and reserves of the
company and the Naspers group will
be adequate for ordinary business
purposes for a period of twelve (12)
months after the date of any such
board approval.
• The working capital of the company
and the Naspers group will be
adequate for ordinary business
purposes for a period of twelve
months after the date of any such
board approval.
Additional information in respect
of the major shareholders, share
capital of the company and directors’
interests in the company appear in the
integrated annual report and annual
financial statements of the company and
is provided in terms of the JSE Listings
Requirements for purposes of the
Specific Repurchase Authorisation.
The company has not incurred any
preliminary expenses as envisaged
in the JSE Listings Requirements in
relation to the Specific Repurchase
Authorisation as at the date hereof.
Material changes
Other than the facts and developments
reported on in the integrated annual
report and annual financial statements,
except for the purposes of the group’s
share-based incentive schemes, 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.
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 6 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 6
contains all information required by the
applicable JSE Listings Requirements.
Thereasonandeffectofspecialresolution
number6istograntthecompanythe
authority,intermsoftheJSEListings
RequirementsandtheAct,asapplicable,
toacquireNordinarysharesthrough
structuredmechanismsonanexpedited
basis(despitetheSpecificRepurchase
Authorisationbeingvalidforfifteen(15)
monthsfromthedateonwhichitis
granted),includingthroughamodified
Dutchauctionprocessand/orareverse
bookbuildprocess.TheSpecific
RepurchaseAuthorisationisintended
toprovidethecompanywithadditional
flexibilityandthusenabletheboard
todriveshareholdervalue.
Shouldtheboarddeterminetoimplement
anystructuredrepurchaseintermsofthe
SpecificRepurchaseAuthorisation,any
structuredrepurchaseimplementedwill
involvethecompanyannouncingthe
ambitofanyproposedstructured
repurchaseincludingthenumberofN
ordinarysharestobeacquiredinterms
ofsuchstructuredrepurchasewithinthe
parameterssetintheSpecificRepurchase
Authorisation.Thestructuredrepurchase
willthenbeopenforaperiodoftimefor
allholdersofNordinarysharestotender
sharesintermsofthestructured
repurchaseproposed,whichofferperiod
willbeopenforsufficienttimetoallowall
holdersofNordinarysharestoparticipate
inthestructuredrepurchase.Thereafter,a
clearingpricewillbedeterminedbythe
companyforanysuchstructured
repurchasehavingregardtotenders
receivedthatallowsthecompanyto
acquirethenumberofNordinaryshares
proposedtoberepurchased.
TheSpecificRepurchaseAuthorisation
isseparatefromandinadditiontothe
generalauthorityproposedforapproval
inspecialresolutionnumber4andany
repurchasemadeunderthisSpecific
RepurchaseAuthorisation(ifgranted)
willnotaffectanyauthoritygranted
underspecialresolutionnumber4.
Ordinary resolution
12. Each of the directors of the
company or the company secretary
is hereby authorised to do all
things, perform all acts and sign all
documentation necessary to effect
the implementation of the ordinary
and special resolutions adopted at
this annual general meeting.
Other business
To transact such other business
as may be transacted at an annual
general meeting.
By order of the board
G Kisbey-Green
Companysecretary
19 July 2019
Cape Town
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Form of proxy
Naspers Limited
Incorporated in the Republic of South Africa
Registration number: 1925/001431/06
ISIN: ZAE000015889 LSE share code: NPSN
(the company)
ISIN: US 6315121003
JSE share code: NPN
105th annual general meeting of shareholders
For use by holders of certificated shares or ‘own name’ dematerialised shareholders at the 105th annual general meeting
of shareholders of the company to be held on the 2nd floor, Daisy Room, Cape Town International Convention Centre 2
(CITCC2), corner of Heerengracht and Rua Bartholomeu Dias, Foreshore, Cape Town, South Africa on Friday 23 August
2019 at 11:15.
I/We (please print)
of
being a holder of
‘own name’ dematerialised
shares of Naspers and entitled
to (see note 1)
1.
2.
3.
certificated
shares or
votes, hereby appoint
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 2nd floor, Daisy Room, Cape Town International Convention
Centre 2 (CITCC2), corner of Heerengracht and Rua Bartholomeu Dias, Foreshore, Cape Town, South Africa
on Friday 23 August 2019 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, 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.
5.
5.1
5.2
Acceptance of annual financial statements
Confirmation and approval of payment of dividends
Reappointment of PricewaterhouseCoopers Inc. as auditor
To confirm the appointment of F L N Letele as a
non-executive director
To re-elect the following directors:
J P Bekker
S J Z Pacak
100
In favour of
Against
Abstain
5.3
5.4
5.5
6.
6.1
6.2
6.3
7.
8.
9.
10.
11.
12.
J D T Stofberg
B J van der Ross
D Meyer
Appointment of the following audit committee members:
D G Eriksson
B J van der Ross
R C C Jafta
To endorse the company’s remuneration policy
To approve the implementation report of the
remuneration report
Approval of general authority placing unissued shares
under the control of the directors
Approval of general issue of shares for cash
Approval of amendments to the Naspers Restricted
Stock Plan Trust
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 2021:
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
Board: Chair
Board: Member
Audit committee: Chair
Audit committee: Member
Risk committee: Chair
Risk committee: Member
Human resources and remuneration committee: Chair
Human resources and remuneration committee: Member
Nomination committee: Chair
1.10 Nomination committee: Member
1.11
1.12
1.13
Social and ethics committee: Chair
Social and ethics committee: Member
Trustees of group share schemes/other personnel funds
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Form of proxy
continued
Notes to the form of proxy
101
In favour of
Against
Abstain
Special resolution number 2
Approve generally the provision of financial assistance in terms
of section 44 of the Act
Special resolution number 3
Approve generally the provision of financial assistance in terms
of section 45 of the Act
Special resolution number 4
General authority for the company or its subsidiaries to acquire
N ordinary shares in the company
Special resolution number 5
General authority for the company or its subsidiaries to acquire
A ordinary shares in the company
Special resolution number 6
Granting the Specific Repurchase Authority
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 …………………………….………..2019
Signature……………………………… Assisted by (where applicable) ………………………………….……….………
1. 1 The following provisions apply to proxies:
1.1 A shareholder of the company may appoint any individual (including an individual who is not a shareholder
of the company) as a proxy to participate in, speak and vote at the annual general meeting of the company.
1.2 A shareholder may appoint two or more persons concurrently as proxies and may appoint more than one
proxy to exercise voting rights attached to different securities held by the shareholder.
1.3 A proxy instrument must be in writing, dated and signed by the shareholder.
1.4 A proxy may delegate the proxy’s authority to act on behalf of the shareholder to another person, subject to
any restrictions set out in the instrument appointing the proxy.
1.5 A copy of the instrument appointing a proxy must be delivered to the company, or to any other person on
behalf of the company, before the proxy exercises any rights of the shareholder at the annual general meeting.
1.6 Irrespective of the form of instrument used to appoint the proxy: i) if the appointment is suspended at any time
and to the extent that the shareholder chooses to act directly and in person in exercising any rights as a
shareholder; ii) the appointment is revocable unless the proxy appointment expressly states otherwise; and iii)
if the appointment is revocable, a shareholder may revoke the proxy appointment by cancelling it in writing or
making a later inconsistent appointment of a proxy and delivering a copy of the revocation instrument to the
proxy and the company.
1.7 The proxy is entitled to exercise, or abstain from exercising, any voting right of the shareholder without
direction, except to the extent that the memorandum of incorporation of the company, or the instrument
appointing the proxy, provides otherwise.
2. A certificated or ‘own name’ dematerialised shareholder may insert the names of two alternative proxies of their
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 will 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. A shareholder may appoint a proxy at any time. For practical purposes, 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, 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 21 August 2019, 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 start 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 appointed proxy.
6. An instrument of proxy will 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 will 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.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Notes to the form of proxy
continued
Shareholder and corporate information
102
7. A vote cast or act done in accordance with the terms of a form of proxy will be deemed to be valid despite:
• the death, insanity, or any other legal disability of the person appointing the proxy, or
• revocation of the proxy, or
• transfer of a share for which the proxy was given, unless notice on any of the above-mentioned matters has 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.
Administration and corporate information
Company secretary
Gillian Kisbey-Green
MultiChoice City
144 Bram Fischer Drive
Randburg 2194
South Africa
Companysecretariat@naspers.com
Tel: +27 (0)11 289 3032
ADR programme
Bank of New York Mellon maintains a Global
BuyDIRECTSM plan for Naspers Limited.
For additional information, 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:
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
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
Webber Wentzel (in alliance with Linklaters)
PO Box 61771
Marshalltown
Johannesburg 2107
South Africa
Werksmans Inc.
PO Box 1474
Cape Town 8000
South Africa
Investor relations
Eoin Ryan
InvestorRelations@naspers.com
Tel: +1 347-210-4305
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Analysis of shareholders and shareholders’ diary
Number of
shareholders
Number of
N ordinary shares owned
Volume
Price
PRICE AND VOLUME
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
61 516
23 238
3 212
694
1 490
90 150
GEOGRAPHIC DISPERSION
SHAREHOLDER TYPES
2 064 873
R4 500.00
7 084 794
7 026 933
R4 000.00
5 047 256
R3 500.00
417 432 203
438 656 059
I
E
C
R
P
R3 000.00
R2 500.00
R2 000.00
8
1
r
a
M
Volume
8
1
r
p
A
8
1
y
a
M
Price
8
1
n
u
J
8
1
l
u
J
8
1
g
u
A
8
1
p
e
S
8
1
t
c
O
8
1
v
o
N
8
1
c
e
D
9
1
n
a
J
9
1
b
e
F
9
1
r
a
M
The following shareholders hold 5% or more of the N ordinary issued share capital of the company:
103
Shareholders’ diary
Annual general meeting
August
Reports
Interim for half-year to September
November
Announcement of annual results
Annual financial statements
June
July
Dividend
Declaration
Payment
Financial year-end
August
September
March
6
5
4
3
2
1
0
V
O
L
U
M
E
(
M
)
SOUTH AFRICA
UK
EUROPE (excluding UK)
NORTH AMERICA
ASIA
REST OF THE WORLD
OTHER
%
41.78
12.87
6.77
30.26
6.34
1.20
0.94
FOREIGN INSTITUTIONS
%
54.43
DOMESTIC INSTITUTIONS
29.10
PRIVATE STAKEHOLDERS/INVESTORS 6.64
DOMESTIC BROKERS
3.51
EMPLOYEES, ETC
UNKNOWN
OTHER
2.74
2.80
0.94
Name
% of
N ordinary
shares held
Number of
N ordinary
shares owned
Public Investment Corporation of South Africa
13.33
58 484 062
Public shareholder spread (N ordinary shares)
To the best knowledge of the directors, the spread of public shareholders under section 4.25 of
the JSE Listings Requirements at 31 March 2019 was 96.95%, represented by 90 138 shareholders
holding 425 285 532 N ordinary shares in the company. The non-public shareholders of the company
comprising 12 shareholders representing 13 370 527 N ordinary shares are analysed as follows:
Category
Naspers share-based incentive schemes
Directors
Group companies
Number of
N ordinary
shares
3 023 498
6 914 703
3 432 326
% of
N ordinary
issued share
capital
0.69%
1.58%
0.78%
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review
Naspers’s voting control structure
Structure
The issued share capital of Naspers
comprises two classes of shares:
• N class ordinary shares that have one
vote per share and are listed on the
JSE Limited (JSE). As at 31 March 2019,
there are 438 656 059 N ordinary
shares in issue
• Unlisted A class ordinary shares,
that have 1 000 votes per share, but
have relatively insignificant economic
participation. (The dividends declared
to A ordinary shareholders are equal
to one fifth of the dividends per share
to which N ordinary shareholders
are entitled.) As at 31 March 2019,
there are 907 128 A ordinary shares
in issue.
For more information visit www�
naspers�com/about/control-structure
Aim
The aim of the Naspers voting control
structure is to ensure the continued
independence of the group. When
entering foreign countries in the broad
media or communications spheres, and
when dealing with regulators, it is critical
that we give an assurance of our
continuity of identity: in other words,
that we will not, after we have entered
a territory or secured a licence, be
taken over by unknown entities with
whom the country or regulator may
be uncomfortable. We believe that
this assurance of independence and
continuity is critical for our entry into,
and operation in, many markets.
International
Differentiated voting rights and control
structures are commonly used in the
media and internet sectors to secure
independence and deter raids and
efforts to seize control. Many
international media and technology
companies have differentiated rights or
control structures. Some well-known
examples include: Schibsted and Tele2
in Norway, Altice in The Netherlands,
MTG in Sweden, Daily Mail and General
Trust in the United Kingdom, JD.Com
and Alibaba in China, and Alphabet
(Google), Facebook, LinkedIn, 21st
Century Fox, News Corporation,
Discovery, Liberty Global, Snap Inc,
Zillow and Zynga in the United States.
Recently, many internet and tech
companies in particular have
implemented similar structures.
104
A majority of A class ordinary shares is held by two companies that together comprise the control structure of Naspers.
The effective voting interests of these two companies are shown below:
Keeromstraat(1)
6%
0.38%
2
0.7
7
%
Nasbel(2)
.
3
3
1
4
%
49%
100 %
Heemstede(3)
History
The voting control structure has been in place since the
original listing of the Naspers group on the JSE more than
two decades ago. It was approved by Naspers shareholders
and the JSE and is entrenched in the Naspers memorandum
of incorporation.
Keerom(1) and Nasbel(2) hold such A class ordinary shares that
together they control over 50% (currently 53%) of the voting
rights in Naspers. These two companies exercise such rights
in consultation with one another. No other entities are part
of the control structure.
Keerom has 2 846 shareholders and its constitutional
documents provide that no shareholder is entitled to exercise
more than 50 votes regardless of shareholding.
Nasbel has 2 614 shareholders, one of which is Heemstede(3)
(a subsidiary of Naspers) that holds 49% of the shares
in Nasbel.
The board of directors of Keerom and the board of directors
of Nasbel operate independently.
IntroductionGroup overviewGovernanceFinancial statementsFurther informationNaspers integrated annual report 2019Performance review Designed and produced by MerchantCantos
www.merchantcantos.com
Naspers head office
+27 (0)21 406 2121
40 Heerengracht
Cape Town
8001
South Africa
www.naspers.com