Chairman’s report




Working with the recommendations of King III and global best practice, we present our second integrated annual report to stakeholders.



This report aims for a balanced view of our economic, social, environmental and governance performance for the year to 31 March 2012. Encouragingly, and in line with our aim to continuously improve our disclosure, we present more detailed information in this report than ever before.

Results for the year reflect an increase in consolidated revenues of 19% and core headline earnings of 15%. The slower pace of earnings growth compared to revenue growth is largely due to more emphasis on developing our businesses organically. This trend is expected to continue in the year ahead. Throughout one of the most challenging periods in our industry, the group has grown both managed revenues and trading profits at a compounded annual rate of some 25% over the past seven years. Managed revenues and trading profits include the group’s share of associates’ results.

Internet remains our fastest-growing segment. The pay-television operations continue to increase their subscriber numbers and are focused on expanding into online services and the delivery of digital terrestrial television
services. Margins remain under pressure in the face of higher expenses for sports rights
and the costs of acquiring new subscribers. The improved performance of our print media
businesses largely reflects cost savings and commercial print contracts.


Governance and sustainability are essential for our stakeholders.
The board conducts the group’s business with integrity, applying
appropriate corporate governance policies and practices across
the group.

Several Naspers subsidiaries are governed by independent boards
of directors, all with their own governance practices and committees
that comply with the necessary requirements.

A disciplined reporting structure ensures the holding company board is apprised of subsidiary activities.

Detailed strategies and business plans are regularly reviewed, strongning the financial and non-financial elements of each company’s business, and performance against targets underpins management’s remuneration.

Naspers evaluates areas where governance at corporate and subsidiary level can be strengthened. The impact of the new Companies Act in South Africa, as well as the King III Code on Corporate Governance, remained a focus over the past year. The extent of applying King III in the governance frameworks of Naspers, MIH, MultiChoice and Media24 is outlined here.

Environment in which we operate

Globally, over the past year, prospects for economic growth have remained uncertain. While it is still unclear how some fundamental problems will be solved, the process will clearly be protracted.

The broader regulatory environment in South Africa continues to evolve. Naspers currently has various pay-television and communications services and network licences, which enable it to provide pay-television, online and internet services. These licences are subject to conditions that may change over time as they are reviewed. Newspapers and magazines are subject to some regulatory risks. Naspers’s two main South African units, MultiChoice and Media24, are complying with black economic empowerment requirements. In sub-Saharan Africa, countries are now increasing broadcasting regulation and new competition legislation is being introduced.

Elsewhere in the world regulation of the internet is also starting to increase.