Integrated annual report, IIRC Framework, King IV Report on Corporate Governance

Naspers Limited – Annual report – 31 March 2018

Industry: media

About this report

The Naspers integrated annual report assesses our performance for the year to 31 March 2018, focusing on the value we created for our key stakeholders. The aim is to provide a picture of our progress and impact.

naspers1

Listing information

Naspers has its primary listing on the JSE Limited (the JSE) (NPN.SJ) 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. International investors are therefore able to buy and sell Naspers securities through the OTC market, on the LSE or JSE (details on page 4). Naspers’s direct wholly owned subsidiary, Myriad International Holdings B.V. (MIH BV), also has three bonds listed on the Irish Stock Exchange (ISE).

Scope and boundary of reporting

Financial and non-financial reporting

The report extends beyond financial reporting. It reflects on non-financial performance, opportunities, risks and outcomes attributable to or associated with key stakeholders, which have a significant influence on our ability to create value.

It includes the financial performance of Naspers Limited and its subsidiaries, joint ventures and associates (the group). The scope of reporting on non-financial performance is indicated in this report. Some South African subsidiaries publish separate integrated reports (www.multichoice.co.za and http://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 the group operates, and the impact of currency volatility on our financial results, this report mostly excludes financial targets or forward-looking statements other than as explained on page 6.

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 IFRS. Refer to page 107 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.

The legislation and frameworks that inform our reporting

The 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), which creates and sustains value for our stakeholders.
  • South African Companies Act 71 of 2008, as amended (the Companies Act).
  • King IV™ Report on Corporate Governance for South Africa, 2016 (King IV™).
  • International Financial Reporting Standards (IFRS).

Materiality and material matters

We apply the principle of materiality in assessing what information is to be included 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 all 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 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.

Assurance

Financial information extracted from the audited Naspers Limited consolidated annual financial statements for the year ended 31 March 2018 and presented in this report was audited by PricewaterhouseCoopers Inc. (PwC) (refer to page 93 for the PwC report). PwC also performed specific procedures on the material non-financial information contained in this report. South African broad-based black economic empowerment (BBBEE) information was assured by EmpowerLogic (Naspers,MultiChoice and Media24).

The group has a combined assurance model for internal use. Our combined assurance model is designed and implemented to cover the key risks through a combination of assurance service providers and functions as is appropriate for Naspers.

An overview of combined assurance per key risk is reported for consideration by the joint audit and risk committees.

Our group internal audit and risk support function has all controlled assets in scope. 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 or data analytics experts. Other external assurance providers are enlisted on an as-needed basis. In our more regulated businesses (like PayU), regulatory inspectors visit on a periodic, ongoing basis.

The audit committee appoints the external auditor, reviews the auditor’s independence annually and oversees the external audit. The audit committee makes recommendations to the board in this regard and assists the board in ensuring the integrity of external reports. The annual chief executive/CFO signoff process also covers financial reporting.

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, customers, 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 the 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 2018 and its operations for this period. 

On behalf of the board

Koos Bekker        Bob van Dijk

Chair                    Chief executive

Cape Town

22 June 2018

 

 

 

 

 

 

 

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