To build shareholder

by operating

that bring content, services

and communication to paying users;

to sell related technologies and be useful

to the communities we serve

2 financial highlights

2005

R’m

13 518

2 538

Operating profit

2 469

Net attributable profit

2 385

Cash flow from operating activities

2 368

14 043

Current assets

7 204

Shareholders’ equity

5 093

Non-current liabilities

2 968

Current liabilities

5 982

38

Earnings per N ordinary share (cents)

860

277 294

Newspapers – Beeld, City Press, Daily Sun, Die Burger, Gauteng Business, NaweekSon, Rapport, Soccer Laduuuuuma!, Son, Sunday Sun, The Witness, Volksblad and community newspapers

Magazines – Baba & Kleuter, Bicycling, blunt, COSMOPOLITAN, dit, DRIVE OUT, DRUM, Eat In, Eat Out, FAIRLADY,FAIRLADY Bride, FHM, FINWEEK, Golf Digest, heat, home, HUISgenoot, Insig, Kick Off, Landbouweekblad, Lééf met hart & siel, Men’s Health, Move!, NATIONAL GEOGRAPHIC kids, Reader’s Digest, Real Simple, RUNNER’S WORLD, Saltwater GIRL, Saltwater GIRL Surf, SARIE, SARIE Bruid, Sports Illustrated South Africa, seventeen, SHAPE, SHAPE Fit Pregnancy, SHOP!, the wisden cricketer, TimeOut, TRUE LOVE, TRUE LOVE Bride, tuis, tvplus, VISI, Weg!, Woman’s Value, YOU, YOUR baby, Your Child, YOUR PREGNANCY, zigzag

Printing – Paarl Gravure, Paarl Media, Paarl Print, Paarl Print Labels, Paarl Web, Paarl Web 
Gauteng

Distribution – NLD, NND24

Publishers and Agents – Book Promotions/Horizon Collegium Botswana, Jonathan Ball Publishers, Lux Verbi.BM,Nasou Via Afrika, NB Uitgewers, Van Schaik Uitgewers

Trade and Distribution – Afribooks, Leisure Books, Leserskring, Lux Verbi Retail, On the Dot, Van Schaik Bookstore

Private Education – Educor: International Colleges Group: Academy of Mathematics and Science, DamelinCorrespondence College, ICG Learning Solutions, ImagingDataSolutions, INTEC College, Lyceum College; Damelin Education Group: City Varsity, Damelin, Midrand Graduate Institute, Milpark Business School; The Graduate Institute of Management and Technology

Pay Television – AfricaMagic, Big Brother, MultiChoice Africa, MultiChoice Hellas, NetMed, Nova, SuperSport

Internet – Sanook!, MWEB (Thailand), QQ, Tencent

Technology – Entriq, Irdeto Access, MediaZone

Newspapers – Beijing Youth Daily, Goal!

Magazines – Drum East Africa, Kick Off Nigeria, True Love East Africa, True Love West Africa, TV24, Veja

Pay Television– Action X, Big Brother, Carte Blanche, Channel O, DStv, go, Idols, K-World, kykNET, M-Net, M-Net Movies 1 and 2, M-Net-on-Demand, M-Net Series, SuperSport, SuperSport Travel, SuperSport United Football Club, SuperSport Wheelchair Basketball

Internet– commerceZONE, MWEB Business, MWEB home, polka

Media24 Digital– 24.com, Fin24, Food24, Health24, Images24, Kalahari.net, News24, Property24, Subscribe24,Wheels24, Women24

chairman’s and managing director’s report

8

South Africa
The South African operation refl ected some growth,
increasing by a net 103 000 to 1,25 million
subscribers. The lower-priced bouquet aimed at the
emerging market (DStv Compact) grew to 42 000
households. MultiChoice launched the personal
video recorder (PVR) in October 2005, selling some
28 000 units. In the coming year we intend to make
a substantial investment in the development of a
DVB-H platform in South Africa, which may not be
profi table for some years.

Sub-Saharan Africa
The sub-Saharan Africa subscriber base grew by
50 000 to 385 000, primarily from expansion in the
Angolan market. Our businesses in sub-Saharan
Africa continue to be subject to regulatory pressures
and processes.

Mediterranean
This base increased by 10 000 to 374 000
subscribers. Migration from analogue to digital
continues, with 69% of subscribers now using
digital services. During the year ten new channels
were added to the Nova platform. Seasonal churn
remains an issue.

chairman’s and managing director’s report (continued)

All our South African

companies have combined

their buying power and

established a centralised

procurement company,

MWEB’s commerceZONE.

Formulae in the codes are

being employed to evaluate

the performance of suppliers in black economic

empowerment.

Although we are still negotiating for the best

possible price and quality, the rand value of

purchases awarded to bona fide black

companies has grown significantly in recent

times. We are also proud of the community

service provided by our various publications,

channels and platforms.

Naspers and its operating companies regard

employment equity as a strategic priority and

are monitoring progress closely in this regard.

The group will focus on the elimination of

discrimination and create a culture in which

diversity is welcomed and utilised.

Naspers focuses on media businesses in

growing markets in which it can develop

strong, sustainable market positions. We

have identified the BRICSA countries

specifically as growth

areas. Content, brands and

distribution channels are

used to grow businesses.

Naspers has integrated

the internet into most of

its businesses to better

reach customers and to

increase the value of its

content.

The group has a two-

pronged growth strategy:

Firstly, focusing on our existing businesses to

develop their full potential.

Secondly, investigating new ventures within our

field of expertise, especially in the BRICSA

countries.

We hope, but cannot guarantee, that this

approach will deliver growth in future.

Naspers is a multinational media group with

operations in Africa, Asia, Europe, the USA and

South America. Its primary listing is on the

JSE Limited (JSE). It also has a secondary listing

on The NASDAQ Stock Market (NASDAQ) in

New York.

chairman’s and managing director’s report (continued)

18 financial review

OVERVIEW OF GROUP RESULTS

Last year we reported headline earnings of

R2,02 billion and indicated to shareholders

that this figure was artificially boosted by the

creation of deferred tax assets of R470 million

and fair value adjustments relating to

The group balance sheet remains sound. The

group generated free cash flow of R1,9 billion

(2005: R1,4 billion) in the current year.

3 190

69

14

– profit on sale of property, plant and equipment

(17)

(7)

– (profit)/loss on sale of investments

(64)

1

– discontinuance of operations

(1 032)

–

– dilution profits

–

(368)

(42)

(470)

– amortisation of intangible assets

48

40

– IAS 39 fair value adjustments

(145)

(360)

– profit from discontinued operations

(32)

(49)

group and partly the creation of deferred tax

assets last year of R470 million, which

reduced the net tax charge in that year.

An accounting profit of some R1 billion was

recorded on the sale of our interest in UBC

(the pay-television operator in Thailand) and

MKSC (a Thai ISP business) and is reflected as

a profit arising on the discontinuance of

operations.

foreign exchange contracts of R360 million.

As expected, neither of these items recurred to

this extent in the current year. As a consequence,

headline earnings for this year reflect a modest

growth of 6% to R2,14 billion.

Core headline earnings, which we believe reflects

true, sustainable earnings performance, grew by

67% to R1,97 billion. An analysis of core headline

earnings is shown below.

financial review (continued)

review of operations

22

review of operations(continued)

 

Newspapers benefi ted from robust economic

conditions.

Daily Sun, its circulation growing to more

than 440 000 per day, became the biggest

local daily. Readership increased to 3,2 million,

making this publication the widest-read print

media product in Africa with audited fi gures.

Son, the Afrikaans weekly tabloid, launched

a daily edition in the Western Cape, recording a

circulation of 50 000 copies per day. An

experimental tabloid for yuppies, Nova, failed

to take root in Gauteng.

Soccer Laduuuuuma! reached record

circulation numbers exceeding 288 000, while

Sunday Sun and City Press, both Sunday titles,

recorded steady growth.

Additional community newspapers were

introduced, including an enlarged portfolio of

City Vision products for emerging markets.

In response to general growth in volumes,

additional printing presses were installed.

NLD24, the community newspaper and

pamphlet distributor, extended its national

reach and introduced Infopac, a technological

innovation in pamphlet distribution. The new

editorial software platform, Eidos, is

progressing.

Several of our newspapers received

prestigious peer recognition awards, including

the Frewin (Die Burger) and McCall (The

Witness) trophies for printing and typography.

The winner of the Joel Mervis trophy, awarded

for excellence in the urban, weekly newspaper

category, was also a print customer of

Media24, while eight of the 12 fi nalists were

from the group or were printed by our

presses. Many Media24 journalists received

individual awards.

In the past year Themba Khumalo was

appointed editor of Daily Sun and in May

2006 Henry Jeffreys, previously senior

deputy editor at Beeld, became the

new editor of Die Burger.

Media24 launched a project to

replace the circulation systems for

all publications, which is expected to

take more than two years to

complete.

Magazines
On the back of a sound economy and strong
advertising support, magazines recorded a
satisfactory financial year.

Media24 launched a number of new titles in
South Africa, including Real Simple, Your Child,
Shop!, Lééf met hart & siel and Men’s Health
Living. Media24 also acquired the Reader’s Digest
licence. The financial weeklies, Finance Week and
Finansies & Tegniek, were successfully combined
into Finweek/Fin Week, with a close tie-up to
the internet site Fin24.

Travel magazine Weg continued to perform,
recording the highest circulation figures in its
category within 18 months. The combination
home-décor titles, home (English) and tuis
(Afrikaans), became the biggest-circulating
magazine in this sector.

Media24 magazines won several annual Pica
awards, including the Rossie trophy for best
consumer magazine (Insig). Other category
winners included VISI, Woolworths Taste, Heart,
Front Cover, Zigzag Surfing Magazine, Weg, Baba
& Kleuter, Shape, Finance Week, seventeen,
Sarie, dit and Sarie Bruid.

A new printing plant, Paarl Web Gauteng,

was commissioned and is performing to

expectations. Empowerment partner Kurisani

was introduced into Paarl Web Gauteng, as well

as into Paarl Print.

Via Afrika performed satisfactorily. Publishers

and agents continued their improvement. In

particular, NB Uitgewers (publishers) and the

school-book publisher Nasou Via Afrika (NVA)

recorded solid performances. NVA acquired the

school-book publishing imprint and book lists

of Juta Ace Gariep.

During the year we sold the ticketing

business Computicket. Van Schaik book stores

acquired a number of academic book outlets,

MultiChoice Africa (MCA) services some 385 000

subscribers in 47 countries across the continent

and adjacent Indian Ocean islands. This subscriber

base grew by 50 000 for the year, with the best

growth in the Angolan market.

MCA offers various services via English,

French, Asian and Portuguese bouquets.

While the Portuguese bouquet subscriber

base added 25 000 homes to end the

year on 84 000, the Asian and French

bouquets experienced slower growth.

Public broadcast and commercial

channels from Nigeria, Zambia, Kenya,

Uganda, Namibia and Botswana are

included on the DStv service.

Irdeto provides content security solutions

across any electronic delivery platform.

Irdeto’s tough security strategy has

paid off, with its smart cards entering

their sixth year without piracy. This led

to record shipments of almost six

million client devices (smart cards, surface-

mounted devices, and others) and

continued growth in the number of new clients.

In April 2006 Irdeto acquired a competitor, Philips

CryptoTec, which brought expert staff and market

share, including major accounts in Turkey, Austria

and Germany.

In the rapidly emerging mobile TV segment,

Irdeto integrated 28 mobile devices for DVB-H,

terrestrial-digital multimedia broadcasting

(T-DMB) and satellite-digital multimedia

broadcasting (S-DMB) operators.

 

Tencent is the pioneer

instant-messaging

platform in China, and

one of the leaders in this

category worldwide. In

terms of peak

simultaneous users the

business has grown to

over 19,6 million

accounts.

Currently it processes

more than three billion

messages daily. Tencent is

also the premier casual

games portal in China.

During the year

multiple new services

were launched including

auction, search, virtual

pets, advanced games,

and a massive multiplayer

 

We focus on print media opportunities in the
BRICSA countries (Brazil, Russia, India, China
and the rest of sub-Saharan Africa). The group
explores potential investments where it
identifies an opportunity to add value by
contributing its proprietary skills and expertise.

MIH has a 9,9% interest in the non-editorial
components of Hong Kong-listed Beijing Media
Corporation (BMC), which operates the market
leader Beijing Youth Daily. BMC noted a drop in
property advertising due to regulatory actions in
China to cool that sector. This also affected
many other newspapers. MIH is assisting BMC
to develop new business opportunities and
increase efficiency.

in India is creating unreasonable valuation

expectations at present, we believe the print media

industries in India and Russia present opportunities.

In Africa, we continue to develop Drum (East

Africa), Kick Off (West Africa) and True Love (East

and West Africa). We also recently launched TV24,

a Portuguese TV listings magazine, in Angola, and

Goal, a new weekly soccer newspaper, in Nigeria.

Distribution networks are also being established

in Nigeria and Kenya.

Subsequent to the year-end, MIH acquired a

30% stake in the major Brazilian media company,

Abril S.A..

Abril is the largest magazine publisher in Brazil and

one of the largest media companies in Latin America.

It has a 54% share of magazine circulation and 58%

of magazine advertising revenues in Brazil. It

publishes fi ve of the top ten magazine titles in Brazil.

Its fl agship news weekly, Veja, is the fourth-highest

selling weekly in the world, with a weekly circulation

of some 1,1 million and average readership of

8 million. This makes it the largest magazine globally

not owned by a US-based group. In addition, Abril

manages the country’s leading educational book

publisher and a pay-television network.

This transaction will establish a presence in Brazil

– an attractive market where strong economic

growth is expected to drive media growth.

Further opportunities in emerging markets are

being pursued. MIH has identifi ed India and Russia

as growth markets, and during the year business

development offi ces were established in New Delhi

and Moscow. Good progress was made in analysing

these markets. Although an infl ated equity market

Our black economic empowerment (BEE)

contribution in prior years includes:

· Phuthuma – M-Net’s fi rst BEE share scheme,

which enabled some 8 000 disadvantaged

South Africans to acquire shares in M-Net

in 1995

· Phuthuma Futhi – M-Net’s second scheme was

implemented in 1998, making additional

M-Net/SuperSport shares available for 32 258

participants. The scheme came to a successful

close in April 2004

· Welkom Trust – launched in 1998. This enabled

some 17 000 previously disadvantaged

individuals to acquire shares in Naspers. We

hope this scheme will close at a substantial

profi t for participants in September 2006.

Paarl Media also confi rmed its commitment to

empowerment by introducing Kurisani as a 26%

empowerment partner in Paarl Web Gauteng, as

well as in Paarl Print. Kurisani is responsible for the

loveLife campaign, which promotes a healthy

lifestyle among young people to combat HIV/Aids.

41

42

empowerment, transformation and corporate citizenship (continued)

MultiChoice, as a founder member of Mindset,

is committed to this partnership, which provides

modern technology and training to educators in

rural and disadvantaged communities, benefi ting

many thousands of educators and learners with

ICT training and materials. It is augmented by the

Mindset Learn channel on the DStv platform.

The MultiChoice VUKA! programme was created

to broaden the scope of public service announce-

ments in order to address a wider range of social

and economic issues. The programme promotes

innovation, emerging talent and excellence in

film-making. It is a call for fi lm-makers to wake

up (VUKA!) and do something that is creative and

meaningful, while alerting audiences to the chal-

lenges of life in our contemporary southern Africa.

The project, which began in 1998 with just

15 public service announcements, has already

grown to more than 200 announcements in 2005.

The MultiChoice VUKA! Film Skills Development

Programme is operated in partnership with the

Department of Labour and the National Film and

Video Foundation (NFVF). It is an initiative of the

VUKA! Awards programme aimed at building skills

in the South African television and fi lm industry.

MultiChoice also supports the development of

media in Africa through a partnership with CNN,

with the CNN MultiChoice African Journalist Awards.

M-Net promoted a number of community

events in the year under review, including:

the M-Net Book Prize, in collaboration with Via

Afrika. This aims to encourage writing in

indigenous languages. Categories were

expanded to include short-format writing and

poetry.

Cansa Shavathon, which was supported for the

second year after the record-breaking efforts

of the previous year. Thousands of heads

were coloured or shaved in support of cancer

research and more than R8 million raised.

KTV Market Day, which continues to grow.

This year's event (the tenth) attracted a record

number of participants. The event aims to

encourage young entrepreneurs.

New Directions, which is aimed at promoting

young fi lm directors and provides funding for

fi lm initiatives. The project spans the entire

continent and has boosted the careers of

several young directors.

Various projects are supported by SuperSport.

These include the Let’s Play initiative in which

SuperSport, in conjunction with the Department of

Sport, prods children to participate in sport and to

acquire a healthier lifestyle.

As a founding member of the Sports Trust,

SuperSport contributes all advertising revenue from

Wednesday night programming to a fund that

distributes sports equipment to disadvantaged

communities. Support for disabled sport, such as

wheelchair basketball, is also a SuperSport initiative.

Other causes include the Chris Burger/Pedro Jackson

fund for injured rugby players and the SuperSport

youth soccer academy.

Media24’s projects focus on its fi elds of

The Daily Sun franchise system for newspapers

Media24 assists with computer rooms at two

Some of the community project benefi ciaries

Media24’s various titles aim to be useful to

Social

information and awareness campaigns

voluntary free testing

free counselling

comprehensive medical treatment programmes.

Regular organisational, health and safety risk

control audits are conducted by operational

entities and appropriate improvements are

implemented as required.

Several wellness programmes are operated by

the group’s subsidiaries to provide a

preventative approach to employee health.

These include programmes to assist employees

to stop smoking. Free eye-testing is also

offered. Professional and independent

psychosocial support is provided for staff in

many of the group’s businesses.

safety, health and the environment (continued)

INTRODUCTION

corporate governance overview continued)

The board has adopted a charter setting out its

responsibilities. Among other obligations, it:

determines the company’s mission, provides

strategic direction to the company and is

responsible for the adoption of strategic

plans and the implementation of values that

support this

approves the annual business plan and

budget drafted by management

retains full and effective control over the

company and monitors management on the

implementation of the approved annual

budget and business plan

appoints the managing director, who reports

to the board, and ensures that succession is

planned

approves the company’s financial

statements, interim and provisional reports,

as well as the Form 20-F filing required by

the SEC, and is responsible for their integrity

and presentation

evaluates the viability of the company and

the group on a going-concern basis

determines the company’s communication

policy

determines director selection, orientation

and evaluation

ensures that the company has appropriate

risk management, internal control and

regulatory compliance procedures in place

and that it communicates adequately with

shareholders and other stakeholders

establishes board subcommittees with clear

terms of reference and responsibilities as

appropriate

defines levels of authority for specific

matters, and delegates required authority to

board subcommittees and management

monitors non-financial aspects pertaining to

the business of the company

considers and, if appropriate, declares the

payment of dividends to shareholders

regularly evaluates performance and

effectiveness of the board and its

subcommittees.

The board meets regularly, at least every

quarter, as well as when circumstances require.

The executive committee will attend to urgent

matters that cannot await the next meeting, as

delegated by the board. The board held five

meetings during the past financial year. The

company secretary acts as secretary to the

board and its subcommittees and attends all

meetings. Details of attendance at the meetings

are provided in the table on page 62 of this

annual report.

While the board remains accountable and

responsible for the performance and affairs of

the company, it delegates to management

and board subcommittees certain functions

to assist it to properly discharge its duties.

Appropriate structures for those delegations

are in place, accompanied by monitoring and

reporting systems. During the past financial

year the board dissolved the specialist budget

committee, and set aside a full day for the

board as a whole to review the annual

business plan and budget of the group.

Each subcommittee acts within agreed, written

terms of reference. The chair of each

subcommittee reports at each scheduled meeting

of the board and minutes of subcommittee

meetings are provided to the board.

The chair of each subcommittee is a non-

executive director and is required to attend

annual general meetings to answer questions

raised by shareholders. The established board

subcommittees are as follows:

This committee comprises a majority of non-

executive directors, one being the chair of the

board, who also serves as the chair of the

executive committee, and two executive directors.

The executive committee acts on behalf of the

board with regard to the management of urgent

issues when the board is not in session, subject to

statutory limits and the board’s limitations on

delegation. This committee met once during the

past financial year. All other matters put to the

committee were dealt with on a round-robin

basis.

The members of this committee are all

independent. Both Boetie van Zyl and Adv Fran

du Plessis fulfil the requirements of a financial

expert as defined in the NASDAQ and SEC

regulations. Boetie van Zyl was the chair of the

committee for the past financial year. All

members are financially literate, with the

majority of the committee members possessing

substantial business and financial expertise.

After a self-assessment of the key competencies

required for the effective functioning of the

committee was performed, Ton Vosloo was

appointed as an additional member of the

committee.

The committee held four meetings during the

past financial year. Details of attendance of the

members of this subcommittee are provided in

the table on page 63 of this annual report.

Both the internal and the external auditors

have unrestricted access to the committee. The

external auditors may also report their findings to

the committee with members of executive

management not in attendance.

The managing director and the financial

director attend the audit and risk management

committee meetings by invitation.

The scope of this committee includes risk

management, as well as compliance with the JSE,

NASDAQ and SEC requirements. Among others,

the main responsibilities of the audit and risk

management committee are to:

review and recommend to the board for

approval the company’s annual reports, interim

and provisional reports, as well as the Form

20-F filing required by the SEC

receive the external auditors’ reports

review and make recommendations to the

board relating to the viability of the companies

concerned and the group itself on a going-

concern basis

evaluate and approve the external auditors’

plans, findings and reports

evaluate the effectiveness of the internal

auditing function, including its activities, scope,

adequacy and costs, and approve the annual

internal audit plan and any material changes

thereto

evaluate procedures and systems (including,

without limitation, internal controls,

disclosure controls and procedures and

information systems) introduced by

management

review and approve the activities, scope,

adequacy and effectiveness of the company’s

risk management and regulatory associated

procedures

evaluate legal matters that may affect the

financial statements

establish procedures for the treatment of

complaints received by the company

regarding accounting, internal control or

auditing matters

determine the principles for the use of the

external auditors for non-audit services

evaluate the effectiveness of the committee.

This committee, chaired by Ton Vosloo, now

comprises only non-executive directors. Two

executive directors, Koos Bekker and

Steve Pacak, are ex officio members. This

committee met five times during the financial

year. Details of attendance of the members of

this subcommittee are provided in the table on

page 63 of this annual report.

Among others, the main responsibilities of

the human resources and nominations

committee are to:

determine the company’s general policy on

remuneration

annually review and approve remuneration

packages of executive directors, including

bonus incentive schemes and increases

annually appraise the performance of the

managing director

regularly review the company’s code of

business ethics and the effectiveness of the

business ethics management programme

annually review the general level of

remuneration for directors of the board, as

well as its committees, and recommend

proposals to the board for final approval by

shareholders in general meeting

fulfil delegated responsibilities in respect of

the Naspers share schemes

approve appointments and promotions of

top executives

annually review the effectiveness of the

corporate governance guidelines and charter

of the board

evaluate cases of unethical business

behaviour by senior managers and executives

of the company

make recommendations to the board on the

structure, size and composition of the board

evaluate the performance of the board,

subcommittees of the board, directors and

the chair

review employment equity and skills

development plans

make recommendations to the board on the

appointment of new directors.

The board has determined that all the

subcommittees discharged their responsibilities

for the year under review in compliance with

their terms of reference.

corporate governance overview

or delays in obtaining or renewing regulatory

approvals could influence the availability of our

services to our customers. The Naspers group

aims to comply with applicable laws and

regulations. To achieve this, the group

cooperates and consults with the various

regulators in the countries in which it operates.

Furthermore, the group participates in the

regulatory processes in the various territories,

sometimes in conjunction with partners that

are local experts.

Political instability in any of the countries in

which the group operates could cause us

damage. The group undertakes an initial risk

assessment before entering new territories and

monitors current risks in countries in which we

are active.

Satellite failure: most of the group’s pay-

television services are delivered to subscribers

via satellite transmission. Satellites are subject

to damage or destruction, which may disrupt

the transmission of our services. Some

procedures are implemented to secure the

availability of our services, ranging from back-

up capacity in some cases to built-in

redundancy. The cost of these measures are

considered against the impact and likelihood of

the risk occurring and consequently, in some

cases, satellites remain unprotected or only

partially protected.

Printing facilities: damage or malfunction in

the printing environment would disrupt

circulation of print media and decrease the

revenue of the printing business. This risk is only

partially mitigated by insurance cover.

Internal control systems provide management

and the board with comfort regarding the

financial position of the company, safeguarding

assets (including information) and compliance

with regulatory requirements. Risk managers

and the internal auditors monitor the

functioning of the internal control systems and

make recommendations to management and

to the audit and risk management committee.

External auditors consider elements of the

internal control systems as part of their audit

and communicate deficiencies when identified.

All internal control systems do, however,

have shortcomings, including the possibility of

human error and the evasion or flouting of

control measures. Even the best internal

control system may provide only partial

assurance. The group’s internal controls and

systems are designed to provide reasonable,

and not absolute, assurance as to the integrity

and reliability of the financial statements; to

safeguard, verify and maintain accountability

of its assets; and to detect fraud, potential

liability, loss and material misstatement, while

complying with applicable laws and

regulations.

The board expects that compliance with

Sarbanes-Oxley Section 404 will further

strengthen the internal control environment.

An external whistle-blower hotline has also

corporate governance overview

 

 

directorate

 

Naspers Limited Annual Report 2006

1925/001431/06

PricewaterhouseCoopers Inc.

1 – 100 shares

27 648

639 142

101 – 1 000 shares

11 279

4 485 575

1 001 – 5 000 shares

2 872

6 097 756

5 001 – 10 000 shares

460

3 344 773

More than 10 000 shares

1 210

300 546 454

South Africa

69,4

North America

21,8

United Kingdom

6,9

Rest of Europe

1,4

Asia Pacific/Middle East

0,5

The following shareholders hold more than 5% of the issued share capital of the company:

Coronation Fund Managers (Proprietary) Limited

35 908 938

Old Mutual Asset Managers (OMAM)

29 432 031

Allan Gray Limited

18 026 961

RMB Asset Management (Proprietary) Limited

17 196 646

Investec Asset Management (Proprietary) Limited

16 848 833

Directors

6 643 104

2,1

Share trusts

19 127 848

6,0

Associates

4 794 679

1,5

August

November

Announcement of annual results

June

Annual financial statements

August

August

Payment

September

March

consolidated and company annual financial statements

The annual financial statements of the group and the
company are the responsibility of the directors of Naspers Limited. In discharging this responsibility, they rely on the management of the group to prepare the annual financial statements presented on pages 69 to 180 in accordance with International Financial Reporting Standards and the South African Companies Act. As such, the annual financial
statements include amounts based on judgements and
estimates made by management. The information given is comprehensive and presented in a responsible manner.

The directors accept responsibility for the preparation,
integrity and fair presentation of the annual financial
statements and are satisfied that the systems and internal financial controls implemented by management are effective.

The directors believe that the company and group have adequate resources to continue operations as a going concern in the foreseeable future, based on forecasts and available cash resources. The financial statements support the viability of the company and the group.

The independent auditing firm PricewaterhouseCoopers
Inc., which was given unrestricted access to all financial

records and related data, including minutes of all meetings of shareholders, the board of directors and committees of the board, has audited the annual financial statements. The directors believe that all representations made to the independent auditors during their audit were valid and appropriate. PricewaterhouseCoopers Inc.’s audit report is
presented on page 68.

The annual financial statements were approved by the board of directors on 23 June 2006 and are signed on its behalf by:

I, George Meiring Coetzee, being the company secretary of Naspers Limited, certify that the company has, for the year under review, lodged all returns required of a public company with the Registrar of Companies, and that all such returns are, to the best of my knowledge and belief, true, correct and up to date.

23 June 2006

independent auditors’ report

directors’ report to shareholders

directors’ report to shareholders

31 March

2005

Notes

R’000

6 838 739

Property, plant and equipment

5

3 444 663

Goodwill

6

859 034

Other intangible assets

7

367 343

Investments in associates

8

837 688

Investments and loans

8

393 160

Programme and film rights

9

47 558

Derivative financial instruments

36

32 572

Deferred taxation

10

856 721

7 203 821

Inventory

11

383 467

Programme and film rights

9

719 006

Trade receivables

12

1 412 573

Other receivables

13

410 247

Related party receivables

14

66 911

Investments and loans

8

8 111

Derivative financial instruments

36

169 710

Cash and deposits

34

4 033 796

14 042 560

4 865 965

Share capital and premium

15

5 391 151

Other reserves

16

(2 417 691)

Retained earnings

17

1 892 505

227 328

5 093 293

2 967 890

Post-retirement medical liability

18

161 298

Long-term liabilities

19

2 275 648

Interest-bearing capitalised finance leases

19

1 723 656

Interest-bearing concession liabilities

19

15 489

Interest-bearing loans

19

423 160

Non-interest-bearing programme and film rights

19

53 925

Non-interest-bearing loans

19

59 418

Cash-settled share-based payment liability

38

36 158

Provisions

20

17 057

Derivative financial instruments

36

9 642

Deferred taxation

10

468 087

5 981 377

Current portion of long-term debt

19

917 516

Provisions

20

82 015

Post-retirement medical liability

18

–

Trade payables

1 133 246

Accrued expenses and other current liabilities

21

2 792 581

Related party payables

14

86 394

Taxation

250 310

Derivative financial instruments

36

285 976

Bank overdrafts and call loans

34

433 339

14 042 560

31 March

2005

Notes

R’000

23

13 517 847

Cost of providing services and sale of goods

24

(7 725 819)

Selling, general and administration expenses

24

(3 311 485)

Other (losses)/gains – net

25

(11 702)

2 468 841

Finance costs – net

26

(217 004)

Share of equity-accounted results

8

88 597

Profit/(loss) on sale of investments

(311)

Dilution profits

368 036

2 708 159

Taxation

27

(256 462)

2 451 697

Profit from discontinued operations

28

50 042

Profit arising on discontinuance of operations

28

–

2 501 739

Equity holders of the group

2 384 762

Minority interest

116 977

2 501 739

Earnings per N ordinary share (cents)

Basic

29

860

Fully diluted

29

814

Headline earnings per N ordinary share (cents)

Basic

29

730

Fully diluted

29

690

Dividend paid per A ordinary share (cents)

7

Dividend paid per N ordinary share (cents)

38

Proposed dividend per A ordinary share (cents)

14

Proposed dividend per N ordinary share (cents)

70

 

 

 

 

 

 

Share capital movements

–

760 985

Treasury share movements

–

38 137

Share-based compensation movements

–

–

Foreign currency translation effect

–

–

 

 

Share in equity-accounted direct reserve movements

–

–

 

Net fair value gains

–

–

 

 

– Fair value adjustment to available-for-sale investments, gross

–

–

 

– Fair value adjustment to available-for-sale investments, tax portion

–

–

 

Cash flow hedges

–

–

 

– Net fair value gains, gross

–

–

 

– Net fair value gains, tax portion

–

–

– Derecognised and added to asset, gross

–

–

 

– Derecognised and added to asset, tax portion

–

–

 

– Derecognised and reported in income when recognition criteria failed, gross

–

–

 

 

– Derecognised and reported in income when recognition criteria failed, tax portion

–

–

 

Other movements

–

–

 

Release of fair value reserve

–

–

 

Transactions with minorities and successive acquisitions

–

–

 

 

Other

–

–

 

Profit for the year

–

–

 

Dividends

–

–

 

Other minority interest movements

–

–

 

 

14 243

5 376 908

 

Share capital movements

–

69 723

 

Treasury share movements

–

64 537

Share-based compensation movements

–

35 909

Foreign currency translation effect

–

–

 

Transactions with minorities and successive acquisitions

–

–

 

Sale of existing subsidiary

–

–

 

 

Net fair value gains

–

–

 

– Fair value adjustment to available-for-sale investments, gross

–

–

 

 

– Fair value adjustment to available-for-sale investments, tax portion

–

–

 

– Realisation of fair value on sale of available-for-sale investments, gross

–

–

 

 

– Realisation of fair value on sale of available-for-sale investments, tax portion

–

–

 

 

Cash flow hedges

–

–

 

– Net fair value gains, gross

–

–

 

– Net fair value gains, tax portion

–

–

 

– Derecognised and added to asset, gross

–

–

 

– Derecognised and added to asset, tax portion

–

–

 

 

– Derecognised and reported in income, gross

–

–

 

 

– Derecognised and reported in income, tax portion

–

–

 

 

Profit for the year

–

–

Dividends

–

–

 

Other minority interest movements

–

–

 

 

Share capital movements

–

760 985

–

–

–

–

–

–

–

760 985

Treasury share movements

–

38 137

–

–

–

–

–

–

–

38 137

Share-based compensation movements

–

–

–

–

–

–

28 591

–

–

28 591

Foreign currency translation effect

–

–

(5 984)

–

–

–

–

–

1 652

(4 332)

Share in equity-accounted direct reserve movements

–

–

568

1 024

–

–

5 818

–

–

7 410

Net fair value gains

–

–

–

47

12 846

–

–

–

–

12 893

– Fair value adjustment to available-for-sale investments, gross

–

–

–

66

18 095

–

–

–

–

18 161

– Fair value adjustment to available-for-sale investments, tax portion

–

–

–

(19)

(5 249)

–

–

–

–

(5 268)

Cash flow hedges

–

–

–

20 108

–

–

–

–

2 429

22 537

– Net fair value gains, gross

–

–

–

(4 642)

–

–

–

–

2 429

(2 213)

– Net fair value gains, tax portion

–

–

–

1 346

–

–

–

–

–

1 346

– Derecognised and added to asset, gross

–

–

–

11 690

–

–

–

–

–

11 690

– Derecognised and added to asset, tax portion

–

–

–

(3 390)

–

–

–

–

–

(3 390)

– Derecognised and reported in income when recognition criteria failed, gross

–

–

–

21 273

–

–

–

–

–

21 273

– Derecognised and reported in income when recognition criteria failed, tax portion

–

–

–

(6 169)

–

–

–

–

–

(6 169)

Other movements

–

–

–

–

27 895

(68 728)

–

(813)

(42 782)

(84 428)

Release of fair value reserve

–

–

–

–

27 895

–

–

–

–

27 895

Transactions with minorities and successive acquisitions

–

–

–

–

–

(68 728)

–

–

–

(68 728)

Other

–