Chairman's report

Chairman's report
Ton Vosloo - Chairman
 

OVERVIEW

In line with the recommendations of the King Report on Governance for South Africa 2009 (King III) – revised guidelines on corporate governance in South Africa and aligned with global best practice – this is the fi rst Naspers integrated annual report to stakeholders. We aim to present a balanced view of our economic,
social, environmental and governance activities for the year to 31 March 2011.

As a board we oversee the strategic direction of the company. We are pleased to report that our results reflect an increase in consolidated revenues by 18% and core headline earnings by 13%. Major areas of growth were the internet and pay-television businesses. Our print media business has shown some recovery, while the technology business improved margins.

The internet industry continued its robust growth during the year, particularly in emerging markets, Naspers’s strategic area of expertise. The resilience of our pay-television operations underscores the importance of quality content, although the rising cost of acquiring subscribers and sports rights is placing pressure on margins. In line with global peers, revenues in our print media businesses continued to be subdued.
 

Operationally we have made good progress in increasing local content and skills in key pay-television markets such as South Africa and Nigeria (page 56). Importantly, in countries facing educational challenges, Naspers has steadily expanded the scope of its educational and literacy initiatives. We are also supporting the development of industries with potential to create employment and develop skills, such as film-making and journalism. The MIH Media Lab sponsors top students in the field of new media at postgraduate level. This programme fostersthe development of entrepreneurs and increases the size of the talent pool. Electrical power is key to these initiatives and in countries where supply is compromised, we have secured alternative power sources.

GOVERNANCE

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

Several Naspers subsidiaries are governed by independent boards of directors, all with their own governance practices and subcommittees that comply with the necessary governance and regulatory requirements. A disciplined reporting structure ensures the holding company board is apprised of subsidiary activities, risks and opportunities.

Detailed strategies and business plans are kept under constant review, spanning the financial and non-financial elements of each company’s business, and performance against targets underpins management remuneration.

Naspers continually 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, was a focus over the past year.

The board approved an implementation plan to roll out King III across our global operations in 2009. Good progress was made and the extent of applying King III in the governance frameworks of Naspers, MIH, MultiChoice and Media24 is outlined in the corporate governence section of this report.