Integrated Annual Report 2018
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MultiChoice South Africa Holdings Proprietary Limited Integrated annual report 2018 Integrated annual report to the shareholders of Phuthuma Nathi Investments (RF) Limited for the year ended 31 March 2018 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Contents Overview About this report 4 Statement of directors’ responsibility 5 Our business 6 Our performance at a glance 8 Our social investment 10 Value-added statement 11 Review Executive chair’s review 14 Our strategic priorities 20 Risk management report 21 Our stakeholders 30 Our material matters Our operations 36 Our people 44 Our customers 50 Our regulatory environment 54 Corporate social responsibility 58 Corporate governance review Our approach to governance 64 Our board 67 Remuneration report 77 Report of the audit committee 86 Financial review Independent auditor’s report 93 Summarised consolidated annual financial statements 95 MULTICHOICE SOUTH AFRICA IS A LEADING VIDEO-ENTERTAINMENT COMPANY WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Phuthuma Nathi Investments (RF) Limited Corporate governance review Board of directors 100 Report of the audit committee 101 Directors’ report 103 Financial review Report of the independent auditor 107 Summarised financial statements 108 Shareholder information for MultiChoice and Phuthuma Nathi Investments (RF) Limited MultiChoice South Africa Holdings Proprietary Limited Notice of annual general meeting 116 Form of proxy 121 Notes to the form of proxy 122 Phuthuma Nathi Investments (RF) Limited Notice of annual general meeting 123 Form of proxy 133 Notes to the form of proxy 134 Administration and corporate information IBC MultiChoice South Africa Holdings Proprietary Limited Integrated annual report 2018 1 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Overview 22 Golden Horns scooped R7bn core headline earnings MultiChoice South Africa Holdings Proprietary Limited 2 Integrated annual report 2018 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Level 1 BBBEE status 6,9m customers MultiChoice South Africa Holdings Proprietary Limited Integrated annual report 2018 3 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Overview About this report Reporting boundary Our material matters MultiChoice South Africa Holdings Proprietary We determine our material issues by Limited (MultiChoice) was incorporated in considering the business’s strategies, May 2006. The scope of this report includes risks, operations (executive agenda) and MultiChoice and its subsidiaries (the group). stakeholder concerns. We assess the impact In addition to financial results, we include these have on the business and our ability to corporate information on the two MultiChoice create shareholder value. In doing so, we broad-based black economic empowerment identified the following themes that capture (BBBEE) shareholding schemes – Phuthuma our material issues: Nathi (PN) and Phuthuma Nathi 2 (PN2) Our operations (together Phuthuma Nathi). The sole Our people investments of these schemes are the Our customers shares held in MultiChoice. Our regulatory environment Our corporate social responsibility We present our integrated report for the financial year from 1 April 2017 to Basis of preparation 31 March 2018 (referred to as 2018) to The structure of this report has been illustrate how we create value for our developed against the framework of the stakeholders. International Integrated Reporting Council (IIRC) and due consideration has been given The content of this report focuses on key to the recommendations of the King IVTM developments and material issues in our Report on Corporate Governance in South business environment. We believe integrated Africa 2016 (King IVTM). and balanced reporting on our strategic objectives, material issues and how we are Our aim is to constantly enhance our governed, provides a comprehensive view of reporting and disclosure to improve our our financial and non-financial performance stakeholders’ understanding of the group. and the sustainability of our business. Feedback on the report is welcomed and can be communicated to [email protected]. Determining materiality In determining content to report, we focused Assurance providers on issues that drive the executive agenda and Independent assurance has been provided are material to our stakeholders. These issues on certain material information presented in are discussed by the board and continually this report. addressed. MultiChoice South Africa Holdings Proprietary Limited 4 Integrated annual report 2018 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Overview (continued) Statement of directors’ responsibility Connect with us on: Financial information: For the integrated The audit committee has reviewed and annual report, summarised financial recommended the integrated annual report information for the group and Phuthuma for approval. The report was approved by the Nathi, extracted from the group’s audited board on 8 June 2018. The integrated annual consolidated annual financial statements report and financial statements fairly reflect, and the Phuthuma Nathi annual financial in our opinion, the true financial position of statements for the year ended the group at 31 March 2018, and that of its 31 March 2018, have been reflected operations during this period as described correctly. The full financial statements appear in the report. on the MultiChoice and Phuthuma Nathi websites (www.multichoice.co.za and On behalf of the board www.phuthumanathi.co.za) and are available for inspection at our registered offices from the company secretary. Nolo Letele Executive chair Financial information in this report was 8 June 2018 reviewed by the audit committee and approved by the board. Refer to page 93 On behalf of the audit committee for the auditor’s report on the group’s summarised annual consolidated financial statements and to page 107 for the report on the Phuthuma Nathi summarised annual financial statements. Don Eriksson Audit committee chair and independent Non-financial information: EmpowerLogic non-executive director has verified all BBBEE information in the report. 8 June 2018 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 other important factors could cause actual developments and results to differ materially from our expectations. The key factors that could cause our actual results performance, or achievements to differ materially from those in the forward-looking statements include, among others, changes to IFRS and the interpretations, applications and practices subject thereto 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 the domestic and international regulatory and legislative environments; changes to domestic and international operational, social, economic and political conditions; the occurrence of 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 contained 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 to be correct and investors are cautioned not to place undue reliance on any forward-looking statements contained herein. MultiChoice South Africa Holdings Proprietary Limited Integrated annual report 2018 5 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Overview (continued) Our business MultiChoice is certified as South Africa’s 10th most valuable brand The business we are building South Africa’s first-choice and leading video-entertainment destination. Our most popular BRANDS MultiChoice is home to a variety of well-known brands that deliver exceptional content across a range of platforms. Our brands are constantly evolving to ensure our customers receive the very best in relevant and unique entertainment and services. Household brands in our portfolio include MultiChoice, DStv, DStv Now, BoxOffice, DStv Catch Up, Showmax, M-Net, Mzansi Magic, Africa Magic, Mzansi Wethu, Carte Blanche, kykNET and SuperSport. MultiChoice, through its DStv services, offers sport, movies, series and general entertainment channels. M-Net delivers premium channels which includes exclusive content, sourced from international content owners or specifically commissioned (our local productions). This entertainment is distributed to DStv customers on selected packages. MultiChoice South Africa Holdings Proprietary Limited 6 Integrated annual report 2018 WorldReginfo - 9d9b8cf1-ecc5-49ac-95fb-bb04b37e9513 Overview (continued) WHO WE ARE A dynamic, South African-based video-entertainment group providing world-class sports, international and local entertainment