Risk management is integral to the day-to- day operations of our businesses. As an international multimedia group with activities in 131 countries, the group is exposed to a wide range of risks that may have serious consequences. The diversified nature of the group, despite adding complexity, assists in spreading exposure.

RISK PHILOSOPHY

The group is committed to identifying and managing risk in line with international best corporate governance practice and applying the relevant rules and regulations.

The board is responsible for the governance of risk and is satisfied with the effectiveness of the risk management process. The risk committee (page 105), at which risk management plans and processes are presented, discussed and approved, was established during the year. Risk registers of significant risks facing the group are discussed, as are management’s actions to control these risks within board-approved ranges of tolerance.

The diversified nature of the group helps to spread risk, particularly in relation to global political and economic instability, market development and currency fluctuations. Identifying risk and developing plans to manage risks are part of each business unit’s business plan. These are assessed by the board annually.

RISK POLICY

The group’s risk profile is based on a structured, formal and planned approach to risk management. The identification, management and reporting of risks are embedded in business activities and processes.

The group’s revised risk policy applies to all operations where Naspers has more than 50% ownership and management control.

The board adopted a top-down road map for the first-year implementation of the risk plan, with areas of focus for the 2011 reporting year spanning:

• Naspers corporate
• MIH corporate
• Media24
• MultiChoice South Africa
• MultiChoice Africa (Nigeria)
• BuscaPé, and
• Allegro

We plan to roll out the policy to other entities in the next financial year.

The policy applies to risks the group faces in executing its strategy, operations, reporting and compliance activities, and will be reviewed annually. Some group companies have specific risk management functions and the Naspers risk committee is responsible for reviewing these.

Risk management support advises on, formulates, oversees and manages the risk management system and monitors the group’s risk profile, ensuring major risks are identified and reported at the appropriate level in the group.

RISK FRAMEWORK

The Naspers enterprise-wide risk management (ERM) framework is designed to ensure significant risks and related incidents are identified, documented, managed, monitored and reported in a consistent and structured manner across the group. It is modelled on the COSO ERM¹ framework as well as the COBIT² framework for information technology.

Material issues and how we manage these
Some material risks are outside our control and other factors, besides those listed, may affect the overall performance of the business. In spite of our structured approach to risk identification, some risks may be unknown at present and other risks, currently regarded as immaterial, may become material. An internal control oversight forum monitors the system of internal control.

Naspers has operations in 131 countries, each facing a unique set of risks, particularly regarding regulation.

1	COSO ERM: The Committee of the Sponsoring Organisations of the Treadway Commission Framework for Enterprise-wide Risk Management.
2	COBIT: Internationally accepted framework for IT governance.