03 Prosus annual report 2020 Group overview Performance review Sustainability review Governance Financial statements Further information Group overview Contents 04 About this report 06 Directors’ report 12 Statement of responsibility by the board of directors 13 Group overview 14 Responding to Covid-19 16 Backing local; building global 17 Building long-term partnerships 18 Building positive impact around the world 19 Delivering sustainable value throughout the year 19 Our business model 20 Value creation this year 21 Chair’s review 23 Chief executive’s review 26 The world around us 29 Engaging our stakeholders 32 Capital allocation strategy We partner with entrepreneurs to empower people and enrich communities 04 Prosus annual report 2020 Group overview Performance review Sustainability review Governance Financial statements Further information About this report This annual report assesses our performance for the financial year ended 31 March 2020. We aim to provide a picture of our progress and impact on society. Our purpose Who we are Our approach Managed on Creating a Sustainability Reporting From India to Russia, We are a global We think global but strong foundations positive impact We are committed Central and Eastern Europe, consumer internet group often back local teams. We understand the risks Delivering performance to operating as a In line with best practice the Middle East, Africa and one of the largest We rigorously manage we take and try to manage and value for all sustainable business for integrated reporting, and Brazil – well over technology investors our assets and capital these to minimise their our stakeholders. that makes a lasting we report on the six a billion people around in the world. We are allocation for growth. impact on our businesses. positive contribution to the capitals that together the world use some service committed to investing We understand the Our strong governance world. We focus our efforts provide a true picture of we provide. Billions more in entrepreneurs and importance of making is integral to the way we where we can make the value across the group. are within our reach. technologies that improve a positive impact think and make decisions. greatest impact and to This way of telling people’s daily lives. on society. this end we are working a comprehensive, on refining and evolving connected story fits our sustainability strategy. well with our holistic view of value and our focus on creating sustainable value for long-term good. Financial Human Manufactured Intellectual Social and Natural relationship Chief executive’s Group overview Business model Governance Value creation Sustainability review Chief executive’s STI achievements Read more on page 23 Read more on page 13 Read more on page 19 Read more on page 79 Read more on page 20 Read more on page 60 05 Prosus annual report 2020 Group overview Performance review Sustainability review Governance Financial statements Further information The legislation and frameworks statements are typically identified by circumstances after the date of the About this report continued that inform our reporting the use of forward-looking terminology report or to reflect the occurrence of This annual report was prepared such as “believes”, “expects”, “may”, unanticipated events. We cannot give against local and global standards, “will”, “could”, “should”, “intends”, any assurance that forward-looking How it all fits together It includes the financial performance including: “estimates”, “plans”, “assumes” or statements will prove correct and “anticipates”, or the negative thereof, investors are cautioned not to place We measure our performance by of Prosus and its subsidiaries, joint • Framework of the International evaluating how we create value for ventures and associates (the group). or other variations thereon or undue reliance on any forward-looking Integrated Reporting Council (IIRC): comparable terminology, or by statements. our key stakeholders, taking account of The scope of reporting on non- this principles-based approach the six capitals(1), as well as progress financial performance is indicated in discussions of strategy that involve promotes the concept of the six risks and uncertainties. These against our strategy, and by regularly this report. Group reporting standards capitals(1), which considers material measuring returns on invested capital. are continually being developed to forward-looking statements and other inputs and resources required to statements contained in this report We understand the risks we take and make disclosure meaningful and create and sustain value in the long manage these to minimise their measurable for stakeholders. Given regarding matters that are not term. We describe key components of historical facts involve predictions. impact on our business and results. the highly competitive environment in the Prosus value chain (business which we operate, this report mostly We pursue growth by building leading model) that creates and sustains No assurance can be given that such excludes financial targets or value for our stakeholders. future results will be achieved. Actual companies that empower people and forward-looking statements other than enrich communities. • We support the United Nations’ events or results may differ materially as explained on page 5. Sustainable Development Goals as a result of risks and uncertainties Listing information (SDGs) and, like many other facing us and our subsidiaries. Such Prosus has a primary listing on businesses, we have identified which risks and uncertainties could cause Euronext Amsterdam (AEX:PRX) and a Where relevant, we have adjusted of those goals our business aligns actual results to vary materially from secondary listing on the JSE Limited’s amounts and percentages for the with. We discuss this alignment and the future results indicated, expressed stock exchange (XJSE:PRX), and is effects of foreign currency, as well our activities in support of the SDGs or implied in such forward-looking majority owned by Naspers. It also as acquisitions and disposals. in this report. statements. has American Depository Receipts Such adjustments (pro forma • Dutch law (including the Dutch Civil (ADRs) which trade on an over-the- financial information) are quoted Code (Burgerlijk Wetboek). There are a number of factors that counter (OTC) basis in the United in brackets after the equivalent • Dutch Corporate Governance could affect our future operations and States (US). International investors are metrics reported under Code, 2016. could cause those results to differ therefore able to buy and sell Prosus International Financial Reporting • IFRS-EU. materially from those expressed in the securities on Euronext Amsterdam, JSE Standards as adopted by the forward-looking statements including (details on page 2) and the OTC European Union (IFRS-EU). Refer Materiality and material matters (without limitation): (a) changes to IFRS market. Prosus also has bonds listed to “Other information – Non-IFRS We apply the principle of materiality in and associated interpretations, on the Euronext Dublin (ISE). financial measures and alternative assessing what information to include applications and practices as they performance indicators” on page in our annual report. This report apply to past, present and future Scope and boundary of reporting 230 for a reconciliation of these focuses particularly on those issues, periods; (b) ongoing and future Financial and non-financial metrics with the equivalent opportunities and challenges that acquisitions, changes to domestic and reporting amounts reported under IFRS-EU. impact materially on the group as well international business and market This report constitutes the annual Financial commentary and as on its ability to be a sustainable conditions such as exchange rate and report as defined in terms of Dutch segmental reviews are prepared business that delivers value to key interest rate movements; (c) changes in law and extends beyond financial on an economic-interest basis stakeholders, including our domestic and international regulatory reporting. It reflects on non-financial (which includes consolidated shareholders. and legislative environments; performance, opportunities, risks and (d) changes to domestic and subsidiaries and a proportionate Forward-looking statements outcomes attributable to or share of associated companies international operational, social, associated with key stakeholders who This report contains forward-looking economic and political conditions; and joint ventures), unless statements as defined in the United have a significant influence on our otherwise stated. (e) labour disruptions and industrial ability to create value. States Private Securities Litigation action; and (f) the effects of both Reform Act of 1995 concerning our current and future litigation. The financial condition, results of forward-looking statements contained operations and businesses. These in the report speak only as of the date forward-looking statements are subject of the report. We are not under any to a number of risks and uncertainties, obligation to (and expressly disclaim many of which are beyond our control any such obligation to) revise or and all of which are based on our update any forward-looking current beliefs and expectations about statements to reflect events or future events. Forward-looking (1) As identified in the framework of the International Integrated Reporting Council: financial, human, intellectual, manufacturing, social and