Share capital and premium Other non-distributable reserves Retained earnings

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1 COMPANY STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2013 Notes ASSETS Non-current assets Investments in subsidiaries Loans to subsidiaries Property, plant and equipment Investments and loans Deferred taxation Current assets Current portion of long-term loans Other receivables Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES Shareholders' equity Share capital and premium Other non-distributable reserves Retained earnings Non-current liabilities 2 2 Post-employment medical liability Current liabilities Amounts owing in respect of investments acquired Accrued expenses and other current liabilities Taxation 5 5 Dividends payable 10 9 TOTAL EQUITY AND LIABILITIES The accompanying notes are an integral part of these company annual financial statements. 97

2 COMPANY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2013 Notes Revenue Selling, general and administration expenses 14 (208) (213) Other gains/(losses) - net Operating loss 33 (107) Interest received Interest paid 15 (2) Other finance income/(costs) - net Profit before taxation Taxation 16 (60) (134) Profit/(loss) for the year 268 (73) Other comprehensive income Total comprehensive income for the year 268 (73) Attributable to: Equity holders of the company 268 (73) Non-controlling interest 268 (73) The accompanying notes are an integral part of these company annual financial statements. COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2013 S hare capital and premium S hare-based compensation Valuation Retained A shares N shares reserve reserve earnings Total Balance at 1 April Total comprehensive income for the year (73) (73) Share capital issued Share-based compensation reserve movement Dividends (1 052) (1 052) Balance at Balance at 1 April Total comprehensive income for the year Share capital issued Treasury shares movement Share-based compensation reserve movement Dividends (1 324) (1 324) Balance at The accompanying notes are an integral part of these company annual financial statements. 98

3 COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 2013 Note Cash flows from operating activities Cash utilised in operations 17 (130) (79) Finance income Dividends received Taxation paid (64) (32) Net cash generated from operating activities Cash flows from investing activities Preference dividends received Loans repaid by subsidiaries Net cash generated from investing activities Cash flows from financing activities Proceeds from share issue Dividend paid by holding company (1 311) (1 042) Net cash utilised in financing activities (1 172) (1 026) Net increase in cash and cash equivalents Forex translation adjustments on cash and cash equivalents 6 3 Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year The accompanying notes are an integral part of these company annual financial statements. 99

4 1. PRINCIPAL ACCOUNTING POLICIES The annual financial statements of the company are presented in accordance with, and comply with, International Financial Reporting Standards ( IFRS ) and International Financial Reporting Interpretations Committee ( IFRIC ) interpretations issued and effective at the time of preparing these financial statements and the South African Companies Act No 71 of 2008, as amended. The accounting policies for the holding company are the same as those of the group, where applicable (refer to note 2 of the consolidated financial statements). Investments in subsidiaries are accounted for in the company s financial statements at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes directly attributable costs of investment. 2. INVESTMENTS IN SUBSIDIARIES The following information relates to Naspers Limited s direct interest in its significant subsidiaries: Functional Effective percentage Direct investment in Country of Name of subsidiary currency interest* shares Nature of business incorporation % % UNLISTED COMPANIES M edia24 Holdings Proprietary Limited ZAR Investment holding South Africa Heemstede Beleggings Proprietary Limited ZAR Investment holding South Africa M IH Holdings Proprietary Limited ZAR Investment holding South Africa Naspers Properties Proprietary Limited ZAR Properties holding South Africa Intelprop Proprietary Limited ZAR Investment holding South Africa * The effective percentage interest shown is the effective financial interest, after adjusting for the interests of any equity compensation plans treated as treasury shares. During the current financial year, the loans to the Media24 group were restructured. Naspers Limited ceded its rights and contributed its claims of R1 077m to the Media24 group for no consideration. 3. LOANS TO S UBS IDIARIES Media24 Holdings Proprietary Limited group M IH Holdings Proprietary Limited group Naspers Properties Proprietary Limited Intelprop Proprietary Limited Less : Current portion (1 105) The loans to subsidiary companies do not have any fixed repayment terms. All the loans to subsidiary companies at 2013 are interest free, except for R180m (2012: R180m) of the Naspers Properties Proprietary Limited loan account bearing interest at a rate of prime plus 1% (2012: prime). As at 2012, R510m of the Media24 group loans were interest bearing at a rate of prime less 3,5%. Loans to subsidiaries, which are interest free, are seen as a long term source of additional capital, and are seen as part of the interest in subsidiaries, which is carried at cost. 100

5 4. PROPERTY, PLANT AND EQUIPMENT Office Total Total equipment Cost Opening balance Acquisitions Closing balance Accumulated depreciation Opening balance (1) (1) (1) Depreciation Closing balance (1) (1) (1) Cost Accumulated depreciation (1) (1) (1) Net book value INVESTMENTS AND LOANS Loans and receivables Welkom Yizani preference shares Less : Short-term accrued dividends on preference shares (12) (12) Long-term portion of loans and receivables Preference dividends are calculated at a rate of 65% (2012: 65%) of the prime interest rate. See note 7 in the consolidated annual financial statements for further details concerning this investment. 6. RELATED-PARTY TRANSACTIONS AND BALANCES Loans and interest For details on related-party loans, interest and dividends received refer to notes 3, 13 and 15. Directors' emoluments R 000 R 000 Executive directors Paid by other companies in the group Non-executive directors Fees for services as directors Fees for services as directors of subsidiary companies Refer to note 13 of the consolidated financial statements for disclosure on executive directors remuneration. 101

6 7. DEFERRED TAXATION Secondary taxation on companies (STC) has been replaced with dividends taxation (DT) with effect from 1 April 2012 at a rate of 15%. Unutilised STC credits can be utilised to reduce the DT on dividends payments after 1 April 2012, but expire 1 April The unutilised STC credits at 2012 amounted to R376,5m and was fully utilised during the September 2012 dividend cycle. Deferred taxation balances Charged to Charged to 1 April 2011 comprehensive income 1 April 2012 comprehensive income 2013 Provisions and other current liabilities STC credits 110 (110) Prepaid expenses (1) (1) (1) 113 (110) OTHER RECEIVABLES Accrued Welkom Yizani preference dividends Other receivables S HARE CAPITAL AND PREMIUM Authorised A ordinary shares of R20 each N ordinary shares of 2 cents each Issued A ordinary shares of R20 each (2012: ) N ordinary shares of 2 cents each (2012: ) Share premium Less : N ordinary shares held as treasury shares (2012: N ordinary shares) (1 679) (1 804) Number of Number of N shares N shares Movement in N ordinary shares in issue during the year Shares in issue at 1 April Shares issued to share incentive trusts and companies Shares in issue at Movement in N ordinary shares held as treasury shares during the year Shares held as treasury shares at 1 April Shares issued to the Naspers equity compensation plan Shares acquired by participants from the Naspers equity compensation plan ( ) ( ) Shares held as treasury shares at

7 9. SHARE CAPITAL AND PREMIUM Voting and dividend rights The A ordinary shareholders are entitled to votes per share. The Naspers memorandum of incorporation was finalised and both N and A ordinary shareholders shall be entitled to nominal dividends, but the dividends declared to A shareholders will always be limited to one-fifth of the dividend to which N ordinary shareholders are entitled. In respect of all other rights, the A ordinary shares rank pari passu with the N ordinary shares of the company. Share premium Opening balance at 1 April Share premium on share issues Balance at Capital management, unissued shares and valuation reserve See notes 14 and 15 of the consolidated financial statements for the group s capital management policy and more details regarding the nature of the valuation reserve 10. POST-EMPLOYMENT MEDICAL LIABILITY The company operates a post-employment medical benefit scheme. The obligation of the company to pay medical aid contributions after retirement is no longer part of the conditions of employment for new employees. A number of pensioners, however, remain entitled to this benefit. The company provides for post-retirement medical aid benefits on the accrual basis determined each year by an independent actuary. The directors are confident that adequate provision has been made for future liabilities. Balance at 1 April 2 3 Provisions charged to income statement (1) Balance at 2 2 Refer to note 17 of the consolidated annual financial statements for additional information including the actuarial assumptions. 11. AMOUNTS OWING IN RESPECT OF INVESTMENTS ACQUIRED On 24 March 2004 the last conditions precedent relating to schemes of arrangement under section 311 of the South African Companies Act, 1973, were satisfied, in terms of which Naspers Limited acquired an additional 19,62% financial interest in Electronic Media Network Proprietary Limited and SuperSport International Holdings Proprietary Limited respectively (which was sold to MultiChoice Africa Proprietary Limited during 2005). An amount of R816m was due to the non-controlling shareholders on Some of these non-controlling shareholders have not surrendered their share certificates and claimed payment for their shares, therefore an amount of R11m was still outstanding as at 2013 (2012: R12m). 12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses 9 10 Bonus accrual 6 6 Other current liabilities

8 13. OTHER GAINS/(LOSSES) - NET Subsidiaries Dividends - unlisted shares Media24 Holdings Proprietary Limited MIH Holdings Proprietary Limited 121 Total other gains /(losses) - net EXPENSES BY NATURE Operating expenses includes the following items: Staff costs As at 31 M arch 2013 the company had 12 (2012: 28) permanent employees. The total cost of employment of all employees was as follows: Salaries, wages, bonuses, retirement benefit costs, medical aid fund contributions, post-employment benefits and training costs Share-based compensation charges Total staff costs Fees paid to non-employees for administration, management and technical services Auditor's remuneration Audit fees FINANCE INCOME / (COSTS) - NET Interest paid Other (2) (2) Interest received Loans and bank accounts Subsidiaries Other finance income/(costs) - net Net gain from foreign exchange translation of assets 5 3 Preference dividends (BEE structures) Finance income/(costs) - net

9 16. TAXATION Normal taxation South Africa Current year Prior year overprovision (3) (3) Income taxation for the year Deferred taxation Current year Total tax per statement of comprehensive income Reconciliation of taxation Taxation at statutory rates Adjusted for: Non-deductible expenses Non-taxable income (73) (37) Prior year adjustments (3) (3) Other taxes 110 Taxation provided in statement of comprehensive income CAS H UTILIS ED IN OPERATIONS Profit before tax per statement of comprehensive income Adjustments: - Non-cash and other (460) (135) Expenses paid by subsidiary Finance income - net (295) (168) Investment income (238) (106) Share-based compensation charges Other (5) - Working capital 2 (5) Cash movement in trade and other receivables (1) Cash movement in payables, provisions and accruals 3 (5) Cash utilised in operations (130) (79) 18. CAS H AND CAS H EQUIVALENTS Cash at bank and on hand Short-term bank deposits

10 19. FINANCIAL RISK MANAGEMENT Foreign exchange risk See note 37 of the consolidated financial statements for the group s risks. Foreign currency sensitivity analysis The company s presentation currency is the South African rand, but as it operates internationally, it is exposed to the US dollar and the euro. The sensitivity analysis below details the company s sensitivity to a 10% decrease (2012: 10% decrease) in the rand against the US dollar and the euro. These percentage decreases represent management s assessment of the possible changes in the foreign exchange rates at the respective year-ends. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period-end for the above percentage change in foreign currency rates. A 10% decrease (2012: 10% decrease) of the rand against the US dollar and the euro would result in a profit after tax of R2,5m (2012: R2,1m profit after tax). Credit risk Refer to note 37 of the consolidated financial statements for the group s credit risks. The company has guaranteed various revolving credit facilities of R18,5bn (2012: R15,3bn) and an offshore bond of R6,5bn (2012: R5,4bn) in MIH B.V. of which the undrawn balance is available to fund future investments. The guarantees have also been disclosed as part of the company s liquidity risk below. Liquidity risk Refer to note 37 of the consolidated financial statements for the group s liquidity risks. In terms of the memorandum of incorporation of the company, no limitation is placed on its borrowing capacity. The following analysis details the company s remaining contractual maturity for its non-derivative financial liabilities. The analysis is based on the undiscounted cash flows of financial liabilities based on the earliest date at which the company can be required to pay. The analysis includes both interest and principal cash flows. Carrying amount Contractual cash flows months Non-derivative financial liabilities - Amount owing in respect of investments acquired Accrued expenses and other current liabilities Dividends payable Financial guarantees Carrying amount Contractual cash flows months Non-derivative financial liabilities - Amount owing in respect of investments acquired Accrued expenses and other current liabilities Dividends payable Financial guarantees Interest rate risk See note 37 of the consolidated financial statements for the group policy. 106

11 19. FINANCIAL RISK MANAGEMENT Interest rate sensitivity analysis The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the statement of financial position date and the stipulated change taking place at the beginning of the next financial year and held constant throughout the reporting period in the case of instruments that have floating rates. The company is mainly exposed to interest rate fluctuations of the South African, American and European repo rates. The following changes in the repo rates represent management s assessment of the possible change in interest rates at the respective year-ends: o South African repo rate: increases by 100 basis points (2012: increases by 100 basis points) o American, European and London Interbank rates: increases by 100 basis points each (2012: increases by 100 basis points each). If interest rates change as stipulated above and all other variables were held constant, specifically foreign exchange rates, the company s profit after tax for the year ended 2013 would increase by R52,2m (2012: increase by R38,6m). 20. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values together with the carrying values, net gains and losses recognised in profit and loss, total interest income, total interest expense and impairment of each class of financial instrument are as follows: 2013 Carrying value Fair value Net gains recognised in profit and loss Total interest income Assets Loans to subsidiaries Investments and loans Other receivables Cash and cash equivalents Total Liabilities Amounts owing in respect of investments acquired Accrued expenses and other current liabilities Dividends payable Total Carrying value Fair value Net gains recognised in profit and loss Total interest income Assets Loans to subsidiaries Investments and loans Other receivables Cash and cash equivalents Total Liabilities Amounts owing in respect of investments acquired Accrued expenses and other current liabilities Dividends payable 9 9 Total Refer to note 38 of the consolidated financial statements for details regarding the calculation of the fair values of financial instruments. 21. EQUITY COMPENSATION BENEFITS Please refer to note 40 of the consolidated financial statements for details regarding the Naspers Limited share incentive plan. 107