Afrikaans Annual Financial Statements
Naspers
 

SUMMARISED ANNUAL FINANCIAL STATEMENTS

IN THIS SECTION

SUPPLEMENTARY INFORMATION

for the year ended 31 March 2014

Download (EXCEL)

 

 

  31 March
2014
R’m
  31 March
2013
(Restated)
R’m
 
Interest received 606   443  
– loans and bank accounts 456   408  
– other 150   35  
Interest paid (2 466)   (1 495)  
– loans and overdrafts (1 717)   (1 044)  
– transponder leases (356)   (231)  
– other (393)   (220)  
Other finance income/(cost) – net (267)   (258)  
– net foreign exchange differences and fair value adjustments on derivatives (344)   (383)  
– preference dividends received 77   125  
Share of equity-accounted results 10 835   8 778  
– sale of assets (19)    
– sale of investments (2 929)   (2 648)  
– impairment of investments 532   348  
– gains on acquisitions and disposals   (8)  
Contribution to headline earnings 8 419   6 470  
– amortisation of intangible assets 897   692  
– equity-settled share scheme charges 987   675  
– business combination costs   13  
– special dividend income   (423)  
– taxation adjustment   (191)  
– fair value adjustments and currency translation differences (181)   (61)  
– reversal/(recognition) of deferred tax assets 35   (195)  
Contribution to core headline earnings 10 157   6 980  
Tencent 9 724   6 652  
Mail.ru 911   652  
Abril (110)   (69)  
Other (368)   (255)  
Depreciation of property, plant and equipment 1 942   1 493  
Amortisation 898   1 146  
– intangible assets 711   996  
– software 187   150  
Other gains/(losses) – net (1 320)   (735)  
– profit/(loss) on sale of property, plant and equipment and intangible assets 58   (17)  
– impairment of goodwill and intangible assets (1 461)   (588)  
– impairment of property, plant and equipment and other assets (112)   (97)  
– insurance proceeds   2  
– fair value adjustment on financial instruments 195   (35)  
Gains/(losses) on acquisitions and disposals 751   (53)  
– profit on sale of investments 44   68  
– losses recognised on loss of control transactions   (44)  
– remeasurement of contingent consideration 48   13  
– acquisition-related costs (41)   (73)  
– remeasurement of previously held interest 700    
– other   (17)  
Goodwill        
– cost 24 077   19 610  
– accumulated impairment (2 484)   (1 873)  
Opening balance 21 593   17 737  
– foreign currency translation effects 3 226   2 103  
– acquisitions 2 003   2 423  
– disposals (18)   (164)  
– impairment (993)   (506)  
Closing balance 25 811   21 593  
– cost 29 405   24 077  
– accumulated impairment (3 594)   (2 484)  
Investments and loans 50 675   35 195  
– listed investments 44 194   29 157  
– unlisted investments and loans 6 481   6 038  
Commitments 22 417   18 073  
– capital expenditure 740   1 064  
– programme and film rights 17 701   13 559  
– network and other service commitments 1 530   1 158  
– transponder leases 424   399  
– operating lease commitments 1 413   1 333  
– set-top box commitments 609   560  

 ISSUE OF LISTED BOND AND REPAYMENT OF EXISTING FACILITIES

The group issued a seven-year US$1bn international bond in July 2013. The bond matures in July 2020 and carries a fixed interest rate of 6% per annum. The proceeds were used to partly pay down an offshore revolving credit facility.

BUSINESS COMBINATIONS AND OTHER ACQUISITIONS

In June 2013 the group’s subsidiary, MIH Global Internet Limited (MIH India), acquired a 100% interest in redBus, an Indian online ticketing platform. The fair value of the total purchase consideration was R1bn in cash. The purchase price allocation: property, plant and equipment R4m; intangible assets R354m; cash R29m and restricted cash R96m; trade and other receivables R27m; trade and other payables R41m; deferred tax liability R114m and the balance to goodwill.

During June 2013 the option to subscribe for new shares in MIH India held by Tencent Holdings Limited expired. MIH India operates ecommerce platforms under the ibibo brand. In terms of IFRS 10, the group exercised control over MIH India from the date that the option expired. The group previously accounted for MIH India as a joint venture. The fair value of the total deemed purchase consideration was R321m, being the acquisition date fair value of the interest held in MIH India. A gain of R274m has been recognised as a result of remeasuring to fair value the existing interest in MIH India. The purchase price allocation: property, plant and equipment R5m; intangible assets R162m; cash R71m; trade and other receivables R64m; trade and other payables R78m; deferred tax liability R51m; and the balance to goodwill.

In July 2013 the group acquired an additional interest of 28,6% in Dubizzle, an online classifieds platform centred on Dubai. The group’s total interest in Dubizzle increased to 53,6% and the group now accounts for Dubizzle as a subsidiary. The fair value of the total purchase consideration was R939m, consisting of R477m in cash for the additional interest and R462m being the acquisition date fair value of the existing interest held in Dubizzle. The purchase price allocation: property, plant and equipment R2m; intangible assets R381m; cash R231m; trade and other receivables R16m; trade and other payables R37m; and the balance to goodwill. A non-controlling interest of R252m was recognised at the acquisition date. A gain of R231m has been recognised as a result of remeasuring to fair value the group’s existing interest in Dubizzle before the acquisition of the additional interest.

The main factor contributing to the goodwill recognised in these acquisitions is their market presence. This goodwill is not expected to be deductible for income tax purposes. The non-controlling interest was measured using the proportionate share of the identifiable net assets.

The group made various smaller acquisitions with a combined cost of R270m. Total acquisition-related costs of R41m were recorded in “Gains/(losses) on acquisitions and disposals” in the income statement. Had the revenues and net results of redBus and Dubizzle been included from  1 April 2013, it would not have had a significant effect on the group’s consolidated revenue and net results.

The following investments in associated companies and joint ventures were made:

In June 2013 the group acquired an additional 6,1% interest in Souq Group Limited, an online retailer, marketplace and payment platform business, with operations in the UAE, Saudi Arabia, Egypt and Kuwait for R296m in cash. During March 2014 the group acquired a further interest of 11,8% in Souq Group Limited for R911m in cash.The group now has a 47,6% interest in Souq Group Limited.

In July 2013 the group acquired an additional 8,6% interest in Flipkart Private Limited, a leading ecommerce site in India, for R1 376m in cash. During May 2014 the group invested a further R543m in cash in Flipkart. The group now has a 17,7% interest in Flipkart on a fully diluted basis.

In February 2014 the group acquired 26,1% in SimilarWeb Limited, an online analytics provider for R155m in cash. The group has a 22,5% interest in SimilarWeb on a fully diluted basis.

During February 2014 the group acquired a 30,7% interest for R200m in cash in Neralona Investments Limited, trading as eSky.ru, an online children’s goods retailer in Russia.

The above acquisitions were primarily funded through the utilisation of existing credit facilities.

FINANCIAL INSTRUMENTS

The information below analyses the group’s financial instruments, which are carried at fair value at each reporting period, by level of the hierarchy as required by IFRS 7 and IFRS 13.

  Fair value measurements at
31 March 2014 using:
 
  Quoted prices in
active markets for
identical assets
or liabilities
(Level 1)
R'm
Significant other
observable inputs
(Level 2)
R'm
Significant
unobservable inputs
(Level 3)
R'm
 
Assets        
Available-for-sale investments 120  
Foreign exchange contracts 210  
Interest rate swaps 1  
Liabilities        
Foreign exchange contracts 66  
Shareholders' liabilities 806  
Earn-out obligations 263  
Interest rate swaps 332  

There have been no transfers between level 1, 2 or 3 during the period, nor were there any significant changes to the valuation techniques and inputs used to determine fair values.

Financial instruments for which fair value is disclosed:

  Carrying
value
R’m
Fair value
R’m
Level 1
R’m
Level 2
R’m
Level 3
R’m
 
Financial liabilities            
Loans from non-controlling shareholders 480 478 478  
Capitalised finance leases 7 277 7 074 7 074  
Publicly traded bonds 17 784 19 706 19 706  

The fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments at the reporting date.

Reconciliation of level 3 financial liabilities

The following table presents the changes in level 3 instruments for the period ended 31 March 2014:

  Shareholders’
liabilities
R'm
Earn-out
obligations
R'm
 
Opening balance at 1 April 2013 704 185  
Total gains in profit or loss (145) (13)  
Issues 284 155  
Settlements (82) (91)  
Foreign currency translation effects 45 27  
Closing balance at 31 March 2014 806 263  

The fair value of shareholders’ liabilities is determined using a discounted cash flow model. Business specific adjusted discount rates are applied to estimated future cash flows. For earn-out obligations, current forecasts of the extent to which management believe performance criteria will be met, discount rates refecting the time value, of money and contractually specified earn-out payments are used. Changes in these assumptions could affect the reported fair value of these financial instruments. The fair value of level 2 financial instruments is determined with the use of exchange rates quoted in an active market and interest rate extracts from observable yield curves.

eVENTS AFTER THE REPORTING PERIOD

Subsequent to year-end, the group invested a further R543m in cash in Flipkart.