Naspers Limited – Annual report – 31 March 2022
About this report
This integrated annual report assesses our performance for the financial year ended 31 March 2022. We aim to provide a picture of our progress and impact on society.
We measure our performance by evaluating how we create value for our key stakeholders by taking account of the six capitals. We also report on the 11 material issues identified by our stakeholders in our first materiality assessment as well as progress made against our strategy. We regularly measure returns on invested capital. We understand the risks we take and manage these to minimise their impact on our business and results. 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.
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.
Our subsidiaries, associates and investees are required to comply with applicable law and regulation. The group also encourages its associates and investees to adopt appropriate governance standards (for example, codes of business ethics and conduct, and policies relating to anti-bribery and anti-corruption, competition compliance, privacy and sanctions and export controls).
It includes the strategy and financial performance of Naspers and its subsidiaries, joint ventures and associates (the group). The scope of reporting on non-financial data (GHG emissions), is included as an appendix ‘Boundaries and scope of our GHG accounting’ to this report. 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 1.
References to appendices and links to the website are not considered part of this integrated annual report but are included for additional information.
Non-IFRS financial measures and alternative performance measures
In presenting and discussing our performance, we use certain alternative performance measures not defined by IFRS referred to as non-IFRS financial measures, Alternative performance measures or APMs. Such measures include economic-interest basis information; trading profit; adjusted EBITDA; headline earnings; core headline earnings; and growth in local currency, excluding acquisitions and disposals.
Segmental reviews in this report are prepared showing revenue on an economic-interest basis (which includes consolidated subsidiaries and a proportionate share of associated companies and joint ventures), unless otherwise stated. Numbers included in brackets represent the equivalent measure on the basis of growth in local currency, excluding acquisitions and disposals.
The group provides APMs because the board believes these provide investors with additional information to measure its operating performance. These APMs should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used as supplementary information in conjunction with the most directly comparable IFRS measures. APMs do not have a standardised meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Their usefulness is therefore subject to limitations.
- Note 22 ‘Segment information’ of the consolidated financial statements for a reconciliation to the nearest IFRS measure of the following alternative performance measures used in the segment information: revenue on an economic-interest basis; adjusted EBITDA; and trading profit or loss.
- Note 23 ‘Earnings per share’ of the consolidated financial statements for a reconciliation to the nearest IFRS measure of headline earnings.
Legislation and frameworks that inform our reporting
We are guided by the following standards in preparing this integrated annual report:
- 2013 Framework of the International Integrated Reporting Council (IIRC) (now part of the Value Reporting Foundation/SASB): this principles-based approach promotes the concept of the six capitals1, 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.
- We have aligned our climate change approach and our integrated reporting to the framework of the Task Force on Climate-related Financial Disclosures (TCFD).
- To meet the needs of investors and analysts and provide financially material information for all our stakeholders, we base our disclosures where possible with the Industry Standards of the Sustainability Accounting Standards Board (SASB).
- We support the United Nations Sustainable Development Goals (UN SDGs) and, like many other businesses, have identified which of the goals closely align with our business.
- South African Companies Act 71 of 2008, as amended (Companies Act).
- King IV Report on Corporate Governance for South Africa (King IVTM)2.
1 As identified in the framework of the International Integrated Reporting Council: financial, human, intellectual, manufactured, social and natural capitals.
2 The Institute of Directors in Southern Africa NPC (IoDSA) owns all copyright and trademarks for King IVTM.
Materiality and material matters
We apply the principle of materiality in assessing what information to include in our integrated annual report. This report focuses particularly on those issues, opportunities and challenges that impact materially on the group and its ability to be a sustainable business that delivers value to key stakeholders, including our shareholders.
Financial information in this report extracted from the audited Naspers Limited consolidated annual financial statements for the year ended 31 March 2022 was audited by PricewaterhouseCoopers Inc. (PwC) (refer to page 153 for its report). In addition, PwC performed limited assurance on our scope 1 and scope 2 carbon footprint (refer to pages 48 and 49). South African broad-based black economic empowerment (BBBEE) information (for Naspers and Media24) was assured by EmpowerLogic.
The group has a combined assurance model for internal use. This model is designed to cover key risks through a combination of assurance service providers and functions as appropriate for Naspers.
An overview of combined assurance per key risk is reported for consideration by the 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, such as forensic specialists or data analytics experts, support the internal audit function. Other external assurance providers are enlisted as needed. In our more regulated businesses (like PayU), regulatory inspectors visit periodically.
The audit committee recommends the appointment of the external auditor to shareholders, reviews the auditor’s independence annually and oversees the external audit. The audit committee makes recommendations to the board and assists the board in ensuring the integrity of external reports.
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, customers, 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 for the year ended 31 March 2022 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 and its operations at 31 March 2022.
On behalf of the board
Koos Bekker Bob van Dijk
Chair Chief executive
25 June 2022