Naspers Integrated Annual Report 2017

Integrated annual report for the year ended 31 March 2017 CONNECTING PEOPLE GLOBALLY WHO WE ARE We are a global internet and entertainment group and one of the largest technology investors in the world Operating in over 120 countries and markets with long-term growth potential, Naspers runs platforms that package content to create communities. We connect people by distributing media products and conducting ecommerce. Our products and services play a developmental role in societies where we operate by employing people, improving quality of life and stimulating the economy. For more than 100 years we have grown by investing in, acquiring and building leading companies with sustainable competitive advantages. We typically focus on large consumer trends where we try to identify changes early, adapt suitable business models for the high-growth markets on which we are focusing and leverage our position to build great businesses that have scale, are profitable and generate healthy cash flows. Links to further related information within this report and respective websites. Click to view the corporate video. Naspers: A diversified global, multinational company A GLOBAL TECHNOLOGY OPERATOR Geographic footprint of people 18% globally use 73% products and services of revenue on an economic- companies that Naspers interest basis derived has built, acquired or from internet segment, invested in 36% consolidated revenue We employ nearly 80% Five 25 000 revenue on an times people directly and economic-interest dividends tens of thousands basis generated paid in outside South Africa, indirectly as suppliers taxes to 53% consolidated governments across the world revenue 1 Naspers Limited integrated annual report 2017 ABOUT THIS REPORT Contents l About this report l The Naspers group Forward-looking statements 2 Scope of this report and assurance 4 (1) Developing content 4 Assurance 6 29% increase in revenue on an economic- Statement of the board of directors on the integrated annual report 6 interest basis to $14.6bn Strategic focus areas 8 What we do 8 Forward-looking statements What we look for 9 How we organise our portfolio 10 This report may contain forward-looking statements as Allocating capital 12 defined in the United States Private Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate”, Investment criteria 12 “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” Group priorities for the year ahead 12 and similar expressions are intended to identify such Stakeholder engagement 14 forward-looking statements, but are not the exclusive Integrated thinking 18 means of identifying such statements. While these Value-added statement 19 forward-looking statements represent our judgements and 2017 at a glance 20 future expectations, a number of risks, uncertainties and How we’ve performed across our types of capital 20 other important factors could cause actual developments Global presence 22 and results to differ materially from our expectations. Business model 24 These include key factors that could adversely affect our How we manage risk 26 businesses and financial performance. We are not under Our operating environment 27 any obligation to (and expressly disclaim any such Technology trends 28 obligation to) update or alter our forward-looking statements whether as a result of new information, future Chair and chief executive’s report 30 events or otherwise. Investors are cautioned not to place Our board 36 undue reliance on any forward-looking statements Attendance at board meetings 38 contained herein. Note (1) Represents year-on-year growth in local currency excluding M&A. 2 Naspers Limited integrated annual report 2017 l Review of our performance l Governance for against our six types of capital a sustainable business 75m 601 000 users make use of OLX group’s mobile apps children involved in the Let’s Play School monthly in 40 countries around the world Physical Education Challenge Financial review 40 How we govern our business 88 Summarised consolidated annual How we integrated governance into our business 88 financial statements 42 Application and approach to King III 90 Products and services 63 Focus areas for 2018 90 Internet 63 Human resources and remuneration Video entertainment 69 committee report 91 Media 71 Remuneration report 93 Review of sustainability capital 72 Nomination committee report 105 Human capital 73 Social and ethics committee report 106 Our people 73 Audit committee report 108 People development 74 Risk committee report 110 Occupational health and safety 74 Transformation and diversity 75 l Shareholder and corporate Employment equity 76 Broad-based black economic empowerment information equity schemes 77 Administration and corporate information 112 Social and relationship, and intellectual capital 78 Analysis of N ordinary shareholders at Our communities 78 31 March 2017 113 Local economic and community development 80 Shareholders’ diary 113 Responsible content 81 Notice of annual general meeting 114 Privacy and data security 81 Form of proxy 121 Digital inclusion 82 Notes to form of proxy 123 Customer satisfaction 83 Natural capital 84 Environment 84 3 Naspers Limited integrated annual report 2017 ABOUT THIS REPORT About this report Scope of this report and We monitor key metrics in managing We describe key components of the assurance our businesses, and engagement Naspers value chain (business model) The Naspers integrated annual report processes are in place to regulate the that creates and sustains value for our assesses our performance against six relationships with our key stakeholders. stakeholders. In creating value, we types of capital (detailed on page 5) for Their feedback is provided to leadership consider the requirements of the year 1 April 2016 to 31 March 2017 to ensure stakeholder views and Companies Act regulation 43 (social for a full understanding of our group’s concerns inform strategic and ethics committee), as well as performance. Understanding that decisionmaking. King III, which are incorporated into integrated reporting is an evolving the six types of capital. discipline, we have concentrated on Developing content incrementally improving our disclosure. The integrated annual report was This report includes the financial prepared against local and global performance of Naspers and its Naspers has its primary listing on the standards, including: subsidiaries, joint ventures and Guidelines of the Global Reporting JSE Limited’s stock exchange (JSE) • associates (the group). The scope Initiative (GRI G4). (NPN.SJ) in South Africa, where it of reporting on non-financial • King III Report on Corporate performance is indicated in this report. forms part of the Top 10 index and Governance for South Africa, 2009 where most of its shares trade. It also (King III), also taking into account Some South African subsidiaries publish has a level 1 American Depository guidelines contained in the King IV separate integrated reports Receipt (ADR) programme listing on Report on Corporate Governance (www.multichoice.co.za , the London Stock Exchange (LSE) for South Africa, 2016 (King IV) with www.media24.com and (NPSN) and trades on an over-the- a view to reporting on King IV for www.novus.holdings ). counter (OTC) basis. International the financial year 2018. investors are therefore able to buy and • South African Companies Act 71 of Group reporting standards are sell Naspers securities either through 2008, as amended (Companies Act). continually being developed to make International Financial Reporting the appropriate OTC market, on the • disclosure meaningful and measurable Standards (IFRS). LSE or JSE (details on page 112). for stakeholders. Given the highly • Framework of the International competitive environment in which the Naspers’s indirect wholly owned Integrated Reporting Council (IIRC): subsidiary, Myriad International Holdings this principles-based approach group operates, and the impact of B.V. (MIH BV), also has three bonds promotes the concept of the six currency volatility on our results, this listed on the Irish Stock Exchange (ISE). capitals, which considers material report mostly excludes financial targets inputs and resources required to or forward-looking statements other create and sustain value in the than as explained on page 2. long term. 4 Naspers Limited integrated annual report 2017 Where relevant, we have adjusted under IFRS. Refer to page 42 of and segmental reviews are prepared amounts and percentages for the the summarised consolidated on an economic-interest basis effects of foreign currency, and annual financial statements for a (including consolidated subsidiaries acquisitions and disposals. Such reconciliation of these metrics with and a proportionate consolidation adjustments (pro forma financial the equivalent amounts reported of associated companies and joint information) are quoted in brackets under IFRS. Financial commentary ventures), unless otherwise stated. after the equivalent metrics reported We have used these icons throughout this report to indicate links between our strategy, material issues and the six capitals. South African Companies Act Integrated reporting framework Corporate governance Social and ethics committee Our six types of capital King III code Ethical leadership Good corporate citizenship Financial and corporate citizenship Labour and employment Board and directors* Social and economic development Human Audit committees* Consumer relationships Social and relationship Governance of risk* Environmental, health

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