Improving
everyday life
forbillions of people through technology
Annual report 2022
Forward-looking statements
This report contains forward-looking statements as defined in the United States Private
Securities Litigation Reform Act of 1995 concerning our financial condition, results of
operations and businesses. These forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond our control and allof which are based
on our current beliefs and expectations about future events. Forward-looking statements
are typically identified by the use of forward-looking terminology such as ‘believes’,
‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’ or
‘anticipates’, or associated negative, or other variations or comparable terminology, or by
discussions of strategy that involve risksand uncertainties. These forward-looking
statements and other statements contained in this report on matters that are not historical
facts involve predictions.
No assurance can be given that such future results will beachieved. Actual events
orresults may differ materially as a result of risks and uncertainties implied insuch
forward-looking statements.
A number of factors could affect our future operations and could cause those results to
differ materially from those expressed in the forward-looking statements, including
(without limitation): (a) changes to IFRS and associated interpretations, applications and
practices asthey apply to past, present and future periods; (b) ongoing and future
acquisitions, changes to domestic and international business and market conditions such
as exchange rate and interest rate movements; (c) changes in domestic and international
regulatory and legislative environments; (d) changes to domestic and international
operational, social, economic and political conditions; (e) labour disruptions and industrial
action; and (f) the effects of both current and future litigation. The forward-looking
statements contained in this report apply only as of the date of the report. We are not
under any obligation to (and expressly disclaim any such obligation to) revise or update
any forward-looking statements to reflect events or circumstances after the date of the
report or to reflect the occurrence of unanticipated events. We cannot give any assurance
that forward-looking statements will prove correct and investors are cautioned not to
place undue reliance on any forward-looking statements.
Statement on European Single Electronic Format (ESEF)
This document is the PDF/printed version of the 2022 annual report of Prosus N.V. The
2022 annual report was made publicly available pursuant to section 5:25c of the Dutch
Financial Supervision Act (
Wet op het financieel toezicht
), and was filed with the
Netherlands Authority for the Financial Markets in European single electronic reporting
format (the ESEF package).
The ESEF package is available on the company’s website at
www.prosus.com
and includes
a human-readable XHTML version of the 2022 annual report. In any case of discrepancies
between this PDF version and the ESEF package, the latter prevails. The independent
auditor’s report included in this PDF/printed version relates only to the ESEF package.
Group overview
4
Group overview
5
Segment overview
6
Chair’s review
8
Chief executive’s review
10
The world around us
12
Our strategy
14
How we create value
15
The value we created this year
Sustainability review
17
Our approach
21
Engaging with our stakeholders
25
Human capital
25
People
28
Digital inclusion
29
Manufactured capital
29
Innovation
30
Intellectual capital
30
Artificial intelligence
33
Cyber-resilience
35
Data privacy
38
Social capital
38
Business culture, ethics and integrity
41 Community investment
43
Natural capital
43
Climate action
49
The EU Taxonomy Regulation
Performance review
51
Our performance
55
Classifieds
59
Food Delivery
62
Payments and Fintech
66
Edtech
69
Etail
72
Other: Ventures
75
Other: Naspers Foundry
77
Social and Internet Platforms
79
Tax
82
Choosing the right opportunities
and balancing risks
85
Monitoring key risks
Governance
92
Group structure
95
Overview of governance
99
Our board
102
The board and its committees
107
Report of the audit committee
109
Report of the risk committee
110
Report of the sustainability committee
111
Report of the nominations committee
112
Report of the human resources and remunerationcommittee
113
Remuneration report
142
About this report
Financial statements
146
Consolidated financial statements
153
Notes to the consolidated financial statements
249
Company financial statements
253
Notes to the company financial statements
272
Other information – Independent auditor’s report
282
Other information to the company financial statements
Other information
284
Shareholder and corporate information
285
Analysis of shareholders and shareholders’ diary
286
Non-IFRS financial and alternative performance measures
294
Glossary
Contents
01
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Prosus annual report 2022
Group
overview
4
Group overview
5
Segment overview
6
Chair’s review
8
Chief executive’s review
10
The world around us
12
Our strategy
14
How we create value
15
The value we created this year
02
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
We are a global consumer internet
group andone of the larger technology
investors in the world
What we do
We build leading companies that empower people and enrich communities.
How we do it
Our values underpin our culture.
We build
At heart, we’re entrepreneurs.
We build leading companies
that empower people and
enrich communities,
improving the daily lives of
billions of people. We back
local entrepreneurs and
teams and we operate and
invest in businesses in many
of the most exciting markets
in the world. Our focus on
long-term value creation
means that our group is a
great place for people to
build their careers. We work
hard to connect, learn and
grow to be the best we
canbe.
We deliver
We push for excellence in
everything we do. We move
fast, adapting quickly to seize
opportunities. We agree on
clear and ambitious goals
and regularly discuss how
to beatthem. Our reward is
hardwired to performance,
and depends not just on
what we deliver, but also on
how we deliver it. Pushing for
excellence is good for growth
– growth in our business,
growth in our skills, experience
and career, andgrowth for
our many stakeholders. It
keeps us moving forward.
We’re responsible
We matter to the customers
and communities that we
serve. We strive to maximise
our positive impact on society
and the planet. Wherever we
operate, we hold ourselves to
the highest standards, which
we set out in our code of
business ethics and conduct.
We’re all responsible for the
impact we deliver.
We value each other
We believe diversity in our
teams and in our thinking
delivers better outcomes for
all. We work hard to build
aculture where everyone’s
welcome and encouraged
tocontribute. We create
supportive and flexible
environments so we can
perform at our best. Ourviews
and ideas are considered,
and our professional growth is
supported. We’re empowered
to make decisions about our
work because we’re trusted to
do a great job.
Our purpose
Improving everyday life for billions of people through technology.
As a group, we build useful products for more than two billion customers and help their communities thrive.
We empower our teams to develop their skills and build meaningful careers. We create long-term value for
our shareholders and our many other stakeholders.
We enable people and
businesses to buy and
sell things quickly,
conveniently and safely…
and boost the circular
economy by giving items
multiple lives
We open up a world of
learning…
helping millions of people
learn where, when and
how they want
We bring foodand more
to people’s doors…
and more customers to
restaurants’ kitchens
We put the power
tomake fast, secure
payments in people’s
hands…
and give them credit
options too, often for
thefirst time
03
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Group overview
We are a global consumer internet group operating across a variety of platforms
and geographies; and are also one of the larger technology investors in the world.
Our group includes some of the best-loved, local consumer
internet companies in around 100 countries around the world,
spanning the Americas to Asia, Europe to South Africa.
We pursue growth by building leading companies that empower
people and enrich communities, across our four core segments
of Classifieds, Food Delivery, Payments and Fintech, and Edtech
–plus other online businesses including Etail. From Food Delivery
to Classifieds, we invest in and build online platforms where small
and medium-sized businesses can reach their customers online,
often for the first time.
In addition, our Ventures team continually searches for new waves
of growth for the group, backing entrepreneurs who are finding
new ways to improve lives through technology. We are also a
long-term investor in Tencent, one of the world’s leading social
and internet companies.
We think global and act local
We aim to build leading companies that create value by
empowering people and enriching communities. We have grown
by investing in, acquiring, and building leading companies. We
typically focus on emerging large consumer trends that are linked
to disruptive innovation where we try to identify changes early,
invest in and adapt proven business models for the high-growth
markets we focus on, and leverage our skills, local knowledge
and position to build businesses that are scalable and benefit
from local network effects. We believe that our platforms offer
customers fast, intuitive and secure environments in which to
communicate and conduct transactions. We focus on several
markets that we believe present above-average growth
opportunities (when compared to mature markets) due to their
economic growth prospects, scalability and fast-growing, mobile
internet penetration levels.
Our businesses and investments primarily operate in China,
India, Central and Eastern Europe, North America, Latin America,
Southeast Asia, Africa and the Middle East. We have developed
strong brands in these markets. We believe that those global
and local brands are an important way for our businesses to
differentiate themselves from their competitors, thereby driving
organic growth through consumer word-of-mouth. However,
we are impacted by the laws and regulations of the various
jurisdictions within these markets, including competition and
consumer protection laws, foreign investment restrictions and
screening, labour laws, data protection and security regulations,
online content and platform regulations, intellectual property (IP)
laws and regulations, company and corporate laws, tax laws and
regulations, financial services legislation, anti-money-laundering
legislation, anti-bribery and anti-corruption laws and sanctions
and export controls.
During FY22, we had exposure to Russia through our minority
interest in VK and our subsidiary Avito. We announced on
20May2022 our decision to exit the Russian businesses.
We are both an operator and an investor
We believe that this combination is complementary and enables
enhanced value creation. As an operator, we are able to make
smarter investment decisions; as an investor, we support our
businesses with the right combination of capital, market knowledge
and know-how to succeed. As we operate locally, we benefit from
the insights of our local operations and their markets. We gain
early views on new emerging models and, as a result, are better
positioned to drive organic and inorganic growth and support
entrepreneurial and seasoned business leaders.
Concentrating on customers, on thinking about their lives and how
best to meet their needs, is a central part of what we do – our
purpose to improve everyday lives of billions of people through
technology. Across our portfolio, we are building ecosystems
with multiple customer touchpoints to improve our customers’
experience and retain their loyalty. We align technology and
data with key customer needs such as convenience, ease of
use, reliability and safety. As with many other key aspects of our
business, this is a long-term game. It takes ongoing investment
to build the end-to-end capabilities that enable closer, stronger
relationships with customers across the ecosystems of our core
segments. But in turn, it delivers long-term gain – not least,
customer loyalty and more lasting value creation.
The leaders of our businesses are compensated directly on
the performance of their divisions, fostering a strong culture of
entrepreneurship within our group. We are not tied to a rigid
investment philosophy and have the ability to take a long-term
view. This means that we are able to support our businesses at
every stage of their life cycle and focus on creating value over
the long term.
As an investor, we benefit from access to attractive opportunities
globally. We have long-standing and successful relationships with
prominent internet businesses such as in one of our largest
markets, China, through our investment in Tencent.
Currently, the adoption curve for our consumer internet businesses
is generally lower in the growth markets (when compared to
mature markets). This creates an opportunity for us. Overall, we
estimate that approximately one fifth of the world’s population
uses products and services of businesses that we have built,
acquired or invested in. Many of these users use the products
and services of more than one of these businesses.
Growth opportunities
We believe that our consumer internet businesses have significant
potential for future growth and offer opportunities for an enhanced
range of internet transactions and services in the markets in which
we operate, as well as possible expansions into new markets. We
believe that the increase in demand for our products and services
will be driven by several underlying trends, including growth in the
following: gross domestic product (GDP); the population growth in
the younger demographics and the middle class; and continued
growth in mobile and high-speed internet penetration as well as
the increasing adoption of new internet-based business models
that are disrupting existing traditional business models across a
range of different industries.
04
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Segment overview
We focus on high-growth markets and business models that we know well.
Classifieds
Our brand OLX, including 15 other brands, are
successful players in more than 20 core markets
and make it easy to connect people to buy, sell
or exchange used goods and services.
Read more on page 55
Revenue
1,2
US$3.0bn
up 86% (93%)
Trading profit
1,2
US$25m
up >100% (down
59%
Employees
2
11 375
99.00% 99.00%
39.04% 39.85%
62.54% 27.28%
32.72%
Food Delivery
Our portfolio of food delivery businesses includes
iFood, Delivery Hero and Swiggy, allowing
customers to place orders for their favourite food
both online and via apps to be conveniently
delivered wherever they are.
Read more on page 59
Revenue
1
US$3.0bn
up 100% (77%)
Trading loss
1
US$724m
down >100%
(84%)
Employees
5 468
Payments and Fintech
PayU is one of the largest online payment
services platforms in the world and a leading
payment gateway for merchants in high-growth
markets and large international companies.
PayU operates in 20 markets and offers more
than 400 payment options.
Read more on page 62
Revenue
1
US$796m
up 38% (45%)
Trading loss
1
US$60m
down 12% (13%)
Employees
3 246
100%
Iyzico
91.13%
100% 22.75%
82.60% 74.09%
100%
Edtech
We reach 90% of the Fortune 100 companies
across our corporate learning companies,
including Stack Overflow, Skillsoft, GoodHabitz,
Udemy and Codecademy. In addition, we have
built a strong presence in K–12 (kindergarten
tograde 12), with brands including Brainly
andBYJU’S.
Read more on page 66
Revenue
1
US$425m
up >100% (55%)
Trading loss
1
US$117m
down >100%
(>100%)
Employees
663
37.55% 9.81%
100% 12.27%
62.30% 14.93%
13.18% 18.46%
42.13%
Etail
eMAG is an ecommerce leader in Central
andEastern Europe.
Read more on page 69
Revenue
1
US$2.3bn
up 0% (3%)
Trading loss
1
US$34m
down >100%
(>100%)
Employees
8 230
79.57%
Other Ecommerce
Included is our Ventures arm which partners with
entrepreneurs tobuild prominent technology
companies, with theambition to fuel the next
wave of growth forthegroup.
Read more on page 72
Revenue
1
US$378m
up 86% (>100%)
Trading loss
1
US$200m
down <-100%
(<-100%)
Employees
1 244
13.71% 94.03%
13.83% 22.63%
Social and Internet Platforms
Prosus also holds an investment in Tencent,
China’s largest and most-used internet
servicesplatform.
Read more on page 77
Revenue
1
US$25.8bn
up 15% (16%)
Trading profit
1
US$6.3bn
up 3% (4%)
28.81%
1 Presented on an economic-interest basis.
2 Includes Avito.
05
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Koos Bekker
Chair
Creating value in a world of change
Two years after the start of the Covid-19 pandemic, the world
looksdifferent.
Digitisation has advanced further, and a larger part of our
livesislived online. Technological advances are accelerating
thistransition.
As a consumer internet group and one of the larger technology
investors in the world, we are helping to bring the benefits of a
digital world to our customers. This happens particularly in our core
segments of Classifieds, Food Delivery, Payments and Fintech, and
Edtech, where we hope to build useful ecosystems.
At the same time, uncertainty abounds: rising inflation and supply
chain disruptions; pressures on natural resources; mounting
geopolitical tensions; and conflicts like the war in Ukraine.
Focusing on sustainability
We aspire to be a sustainable business. One that invests in
tech-led ventures in many countries, building them into successful
enterprises that contribute to local job creation and prosperity.
Sometimes these services create more environmentally friendly
alternatives to traditional bricks-and-mortar solutions. They can
besocially transformative, too.
During FY22, we built on the materiality assessment carried out
lastyear to sharpen our focus. We identified 11 issues as most
material: financial performance; business culture, ethics and
integrity; responsible investing; data privacy; human capital;
cyber-resilience; innovation; community investment; digital inclusion;
climate action; and artificial intelligence. We will implement
improvement programmes, measure performance and
communicate our progress.
Doing the right things in the right way
Our values are reflected in the updated code of business ethics
and conduct. Also, see the Governance section on page 92.
At an extraordinary shareholders’ meeting in July 2021,
shareholders approved a share exchange offer through which
Naspers shareholders could tender their shares for Prosus shares.
We appreciate the support received from shareholders.
Our annual general meeting on 24 August 2021 was again held
virtually as a result of measures related to the Covid-19 pandemic.
The annual general meeting approved, among others, the
appointment of Angelien Kemna, a financially experienced
business leader. Her understanding of the investment industry and
corporate governance practices strengthens our board.
We are nominating Sharmistha (Shar) Dubey as a new
independent non-executive director. Shar brings in-depth
knowledge of information technology and digital service
businesses. Her competencies will be of great value to our board.
Emilie Choi stepped down from the board with effect from
26August 2021. Ben van der Ross retired from the board on
1April2022, having served the group in varied and valued
capacities for more than 23 years. We thank them both for
theirextensive contributions.
Dividend
The board recommends that shareholders receive a gross
payment in the form of a capital repayment, of 14 euro cents per
listed ordinary share N. Holders of ordinary shares B will receive
0.000014 euro cents per share. Holders of ordinary shares A1 will
receive an amount per share equal to the outcome of the formula
set forth in article 30.4 of the articles of association. Furthermore,
the board recommends that those holders of N ordinary shares as
at 2 September 2022 (the Dividend Record Date) who do not wish
to receive a capital repayment, can choose to receive a dividend
instead. A choice for one option implies an opt-out from the other.
If confirmed by shareholders at our annual general meeting on
24August 2022, elections to receive a dividend instead of a capital
repayment will need to be made by holders of N ordinary shares
by 19 September 2022.
Capital repayments and dividends will be payable to shareholders
recorded in our books on the Dividend Record Date and paid on
27 September 2022. Capital repayments will be paid from share
capital for Dutch tax purposes. No dividend tax will be withheld on
the amounts of capital reductions paid to shareholders. However,
ifholders of ordinary shares N instead elect to receive a dividend
from retained earnings, dividends will be subject to the Dutch
dividend tax rate of 15%.
Chair’s review
In a world of change and challenge, we want to improve the everyday lives of billions of people
through technology. We also hope to create long-term value for our stakeholders.
06
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Dividends payable to holders of ordinary shares N who elect to
receive a dividend and who hold their listed N ordinary share
through the listing of the company on the JSE will, in addition to
theDutch dividend withholding tax, be subject to South African
dividend tax at a rate of up to 20%. The amount of additional South
African dividend tax will be calculated by deducting from the 20%
such tax otherwise due, a rebate equal to the Dutch dividends tax
paid in respect of the dividend (without right of recovery). Those
shareholders, unless exempt from paying dividend tax or entitled
to a reduced withholding tax rate in terms of an applicable tax
treaty, will be subject to a maximum of 20% dividend tax.
At 25 June 2022, the issued ordinary share capital was
2 003 817 745 ordinary shares N, 4 456 650 ordinary shares A1,
and 1 128 507 756 ordinary shares B. Distributions to Naspers
areregulated by the cross-holding agreement between Naspers
and Prosus. In turn, Prosus waives its right to distributions by
Naspers that originate from Prosus, on the Naspers shares that
Prosus holds.
Looking ahead
In the financial year ahead, we will no doubt face challenges. We
will navigate these as best we can. Hopefully, new opportunities
will also open up.
On behalf of the board, I thank all contributors. We look forward
tocontinued growth and success as a global consumer internet
company dedicated to improving people’s lives around the world.
Koos Bekker
Chair
25 June 2022
‘ We have a history of rapidly
adapting to change. Also some
resilience. These qualities will
berequired again.’
Chair’s review
continued
07
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Bob van Dijk
Chief executive
Using technology to improve everyday life for billions of people
creates sustainable value for the customers and communities we
serve, our group, and our many stakeholders. This is something
we have dedicated ourselves to in recent years, and we are
building companies that today serve more than 2 billion
customers. We believe there is much more to come.
Improving everyday life
Our approach is rooted in our multi-generation track record of
innovation, adaptation, and reinvention. We understand the
opportunity and importance of solving everyday problems for
customers, and that local entrepreneurs are often best placed to
do this. That’s why we continually search for and back innovative
and ambitious local entrepreneurs. We believe in nurturing and
supporting the companies we invest in, because in our experience
this is the best way to build sustainable businesses that stand the
test of time. It is this long-term approach, together with access to
our operating experience and global scale, that entrepreneurs
find attractive – offering more than funding is important in today’s
fast-moving and competitive world.
We typically progressively grow our capital commitments as we
learn and scale, which ensures a disciplined approach to capital
allocation, intrinsically linked to future returns.
Progress this year
Despite the turbulence in the past 12 months, we have made
goodprogress on strategy to build valuable businesses across
thegroup.
By aligning technology and data with key customer needs, we are
able to increase convenience, frequency of use, reliability and safety.
This is a long-term game. It takes ongoing investment to build the
end-to-end capabilities that enable closer and stronger relationships
with customers across the ecosystems of our core segments. We
believe that our patience will pay off, and we are encouraged by
the accelerated growth we are delivering through our investments.
To help fuel our growth ambitions, in April 2021, we sold 6.48% of
our shareholding in Tencent (being 2% of the issued share capital),
improving our financial flexibility and reinforcing our balance sheet.
The sale generated proceeds of US$14.6bn and reduced our
holding to 28.9%. We have been investors in Tencent for over
20years, with the only prior disposal being 2% in 2018.
Performance
We detail our performance on pages 51 to 78.
In summary, group revenue grew 24% to US$35.6bn (on an
economic-interest basis). Group trading profit reduced by 10% (6%)
to US$5bn on an economic-interest basis, reflecting investment to
expand the market opportunity for each segment. We have
achieved scale in several markets, and this brings potential to
grow further, faster.
Classifieds emerged from the pandemic stronger, with healthy
growth at its core. We are amplifying that by playing a larger role
in customer transactions. For example, OLX Autos is merging online
and offline car-buying and financing with the ambition to build the
most trusted one-stop shop for transacting in cars.
Food Delivery’s performance remained strong. The scale achieved
over the past two years has expanded the opportunity beyond
delivering food from restaurants to include convenience and
grocery delivery. We participated in further funding rounds in
Swiggy and iFood, stepped up our investment in Delivery Hero,
and invested in Flink and Oda, two young, growing European
e-grocery (online grocery orders) businesses.
In Payments and Fintech, we recently announced our intended
acquisition of BillDesk in India. Subject to regulatory approval,
theintegration of BillDesk and PayU will substantially increase
ourscale in India, one of the fastest-growing consumer internet
markets, and create a top-10 online payments company globally
by total payment volume. The combined business would create
aplatform to expand our digital banking capabilities.
Edtech, our newest segment, grew well. The portfolio expanded
with the acquisition of a minority stake in Skillsoft and its
simultaneous listing, and the acquisitions of Stack Overflow
andGoodHabitz. Our Edtech investments currently reach more
than 500 million users and we see great potential ahead. We
haveestablished a solid foothold in a sector being transformed
bydigital.
Etail delivered a robust performance. In Central and Eastern Europe,
eMAG is building its presence, developing an ecosystem that
includes offering repair services for products and food delivery.
Our Ventures arm had a strong year, investing more capital than
before and cultivating a healthy pipeline of prospects for the
coming year. Ventures is our engine for growing into new segments
and markets. This year, our Edtech segment graduated from
Ventures, and before that, so did our Food Delivery segment.
Chief executive’s review
Prosus is at the heart of exciting change in the world –
change that is driven by the power of technology.
08
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
We remain committed to creating sustainable value by
implementing strategies that improve material efficiency, driving a
systemic transition to a circular economy and low-carbon growth.
Though the nature of material environmental impacts, and how to
define them, varies between our businesses, we have established
a groupwide climate transition plan. As an important first step,
ourgroup companies achieved carbon-neutrality this year,
anddeveloped a thorough practice of carbon measurement
andreporting, which is an important step to defining their
net-zeropathway.
We are committed to setting groupwide, multiyear greenhouse
gasemissions reduction targets that will drive our climate
transitionplan.
Responding to the crisis in Ukraine
The appalling war in Ukraine is first and foremost a human
tragedy. Ahead of the invasion, our OLX business prepared for a
worsening situation, setting up accommodation for our teams and
their families in the west of the country, advancing wages, and
putting in place regular contact with everyone. When the invasion
came, we offered relocation to safer areas in the country and
alsooutside of Ukraine. Some employees and their families were
relocated. The war has brought the OLX business in Ukraine to
astandstill.
We hold a minority, non-controlling stake in VK, a social and
internet platform in Russia. Following international sanctions
placed on the CEO and indirect shareholders of VK Group, we
asked our own directors on the VK board to resign their positions.
VK shares on the London Stock Exchange have ceased trading
and we have written down the full carrying value of the VK asset.
Our OLX Group also ceased all involvement in Avito, its Russian
operation. Shortly thereafter, work began to decouple Avito from
OLX Group, which now operates independently within an overall
governance framework that applies to all our subsidiaries and is
an independent Russian entity run by a local management team
and governed by its own board of directors.
Following completion of this operational separation, Prosus has
now decided to exit the Russian business. We have started the
search for an appropriate buyer for our shares in Avito.
In addition to the support already in place for our employees and
customers, we are contributing US$10m to assist humanitarian aid
efforts in Ukraine. Our Ukrainian and Polish employees are
involved in the selection of suitable registered and established
charities to receive this support. At the onset of the war, we also
made a US$350 000 donation to the International Committee of
the Red Cross.
Looking forward
We always remember that we are here to create value. We aim to
increase value over the coming years on the back of the fast-
growing businesses we are building. We have big ambitions and
are clear on what we need to do to achieve them.
The board continues to work hard at executing measures that will
reduce the consolidated discount to NAV and to grow the NAV per
share of the group through actions like the share exchange in
August 2021 and the repurchase of US$10bn in shares over the
past two years. With the significant volatility currently affecting the
global capital markets, there are many factors that have led to an
increase in the discount. Some of these factors are within the
control of the group while others are not.
We acknowledge that the discount has risen to an unacceptable
level and that taking action to reduce it while still executing the
group’s strategy, should be a top priority. To that end, we are
committed to taking action on controllable uses across three areas
of focus. Firstly, we will explore ways to further improve the structure
of the group by leveraging the benefits of the Prosus listing and
subsequent share exchange. Secondly, we will identify options for
value crystallisation in our Ecommerce portfolio to better evidence,
in a systematic and repeatable way, the significant value that has
been created through our investments and operations over a
sustained period of time. Thirdly, we will endeavour to drive
increased understanding of our strategy through greater
transparency and disclosure. We believe that these three steps
arethe right approach and will generate tremendous value for
ourshareholders over a sustained period of time. We remain
committed and incentivised to continue on this journey for the
long-term value creation of the group.
Given the potential we have identified, we are investing to keep
growing and to expand our reach and impact. We will continue
toinvest in our platforms and ecosystems, particularly in autos
transactions, credit and digital banking, as well as food and
grocery delivery. At the same time, we are driving profitability and
cash generation in more mature businesses. And through our
Ventures arm, we continue to focus on the next wave of business
models – potential segments of the future.
Bob van Dijk
Chief executive
25 June 2022
Chief executive’s review
continued
‘ Our businesses delivered solid
growth. Our progress is reflected
inour Ecommerce portfolio and, to
capture the significant opportunity
ahead, we stepped up investments
in our asset-light, low-carbon
segments. We continue to build
innovative products that make
adifference in people’s lives.’
09
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Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
We have identified the key trends relevant to our business across
the macro environment, technology and society, and investor
landscape. Despite the risks and uncertainties of recent times, we
believe these key trends are broadly favourable for our business.
Their implications have been distilled into three strategic priorities
for the group (covered in ‘Our strategy’ on the following pages).
Macro environment
We see a world recovering from Covid-19 that must now face new
and rising risks, not least from Russia’s invasion of Ukraine. The
outlook is uncertain, and the implications of the war across the
world are likely to be uneven.
China and India look to be particularly strong prospects for the
long term and, as the world’s two largest internet audiences,
areboth markets in which we have good exposure.
A fast, but fragile, V-shaped economic recovery,
with new risks and uncertainties
The Covid-19 pandemic profoundly disrupted the world and
everyone’s lives. Its impacts continue to loom large, albeit in a
world where innovative life-changing tech in the form of rapid
vaccine development has created a way forward. As the
vaccinesrolled out, economies restarted and the recovery
wasfast, but uneven.
Inequality in the world has worsened since the pandemic. From
1990 until 2020, there was a consistent and fairly rapid decline in
extreme poverty, but with Covid-19, this trend reversed. Increasing
poverty combined with rising business prosperity points to greater
inequality in the world – undermining social cohesion, happiness
and stability.
The key characteristics throughout much of FY22 were a recovery
in consumer confidence and spending, the continued availability
of low-cost debt capital and strong corporate performance.
However, in the final quarter of FY22, we entered a new phase of
uncertainty marked by rapidly increasing inflation, rising interest
rates, tightening credit, continued supply-chain problems,
tempered growth projections and the shortage of tech talent.
Russia’s invasion of Ukraine has caused an additional shock to the
global economic system – driving inflation even higher, prompting
commercial loss for businesses in the region and disrupting
financial flows. The human toll and social impact of mass
migration of Ukrainians across Europe are also significant.
Unsurprisingly, we have also seen a significant market correction,
with a sharp decline in the prices of public equities around the
world. The decline has been particularly pronounced in the
technology sector, and our core segments have all been affected.
The world around us
We believe that technology has the power to transform how people live
their lives in every corner of the world, creating significant value for all.
Our world is changing rapidly
and we have a role to play
Changes in capital markets
Investors are demanding and integrating environmental
and social data into investment decisions. ESG-based
investing is no longer an exception but thenorm.
Rapid digitisation
As a digital technology investor and operator we have
bothopportunity and a responsibility.
Future of business
Growth and profit are not enough – ever-increasing public
scrutiny for corporates to demonstrate value beyond
financials.
Increased pressure on natural resources
High-growth markets have the largest vulnerable
populations and resource disparities.
Global developments
Climate change and rising inequalities are shared global
challenges that demand action from all sections of society.
7+ billion people andincreasing
Our footprint is in high-growth markets.
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Performance review
Governance
Financial statements Other information
Diverging prospects across countries – China and India
remain strong
Post-pandemic prospects differ markedly between countries
across the globe. While China continues to grapple with the
effects of the pandemic, long-term China is becoming increasingly
dominant on the world stage. This is set to continue, with China
increasingly dominant on the world stage. While in 2000, the US
was the most important trading partner for the vast majority of
theworld, by 2020 it was replaced by China.
In terms of tech and innovation, the centre of gravity has shifted,
too. India and China now have five times the number of
smartphone users as the US. In addition, the volume of venture
funding in the rest of the world now exceeds the US, with India
playing a big part in this switch. India is rapidly becoming the
third-largest country in the world for large tech start-ups. In 2021
alone, India saw the birth of more than 20 unicorns (start-up
companies rapidly reaching a valuation of US$1bn).
Tech and society
The pandemic has changed people’s lives forever – accelerating
the use of tech and the growth in tech titans, and in turn leading
to a countertrend of anti-tech sentiment and rising regulation. As a
responsible tech operator and investor, we are well positioned to
navigate our changing world – contributing to it and creating
value for our stakeholders.
Pandemic patterns persist: We are changed forever
Covid-19 has had a lasting impact on people. People have
redefined how they work, interact, shop and play, moving much
ofthis everyday activity online. Throughout the pandemic,
ecommerce sales rose swiftly and digital communication took
over. At the same time, with mounting evidence of the climate
crisis, sustainability became a bigger concern. As well as
movingonline, people are also going green and they
increasinglyexpect companies to play their part.
The rise of a tech-enabled world
Technology is at the heart of this transformation and, with it,
thetech titans, which surged in value throughout the pandemic.
While recent macroeconomic effects have suppressed the rise in
tech stock market valuations, the changes that we’ve seen are
foundational and are expected to outlast the pandemic. The way
we live our lives, the way companies operate and market their
products – people and businesses have become more reliant
ontechnology. Even amid one of the most punishing economic
downturns on record, spending surged on computers,
videogames, online retail, cloud-computing services and
digitaladvertising.
A worldwide crackdown on big-tech
While the technology sector has significant further growth
potential, there are challenges. The world’s view on the tech
sector is increasingly critical, political and, in some cases, hostile.
Correspondingly, regulation around this is on the increase. This is
not unexpected, as historically all new sectors have typically
seenincreased oversight as they grow. Sweeping technological
advancements pose significant challenges for regulators who
strive to maintain a balance between fostering innovation,
protecting consumers, and addressing the unintended
consequences of digital disruption at scale. Regulators must
balance their responsibility to protect citizens with encouraging
innovation in new technologies and businesses. Inherent is the
riskof overregulation.
Investor landscape
Tech investment activity and valuations hit all-time highs in 2021
and significant global capital was placed extremely quickly on a
broad range of investments. While we have seen a drop-off from
this level at the end of FY22, we believe that our long-held focus
remains true. We are confident that disciplined investment in
exceptional entrepreneurs with outstanding tech-led businesses
stands us in good stead to create long-term value.
A new high for tech investing
Supported by Covid-19 tailwinds, global venture capital funding hit
an all-time high in 2021. According to PitchBook, global venture
investment was on track to reach US$580bn by the end of the
year – nearly 50% more than was invested in 2020, and about
20times that in 2002.
Moreover, tech investing has taken a rapid swing towards
later-stage funding. Fewer early-stage deals are happening, while
the share of growth deals (larger than US$30m) is accelerating.
US$100m deals now represent over half of all venture capital
investments in the US. The type of tech investor has also changed
dramatically, with hybrid private equity/venture capital investors
being the most active in FY22.
We intend to remain disciplined technology investors, creating
sustainable value in our own distinctive way.
Responding to the trends
In the past two years, powerful macro, geopolitical, technology,
regulatory and investor forces have shaped the world and
created a broadly positive environment for businesses such as
ours that are focused on improving lives through technology.
However, towards the end of FY22, the world shifted to a new era
of broad-based inflation, rising interest rates, falling asset prices,
and the shocks from the war in Ukraine.
Despite the challenges, we remain well positioned to capitalise
onopportunities that arise in this time of dislocation. We are
thoughtful, focused, and have an ‘operator’s edge’ in assessing
and optimising investments. Our global network is strong and our
differentiation as patient, company-building capital is distinctive.
We have several well-established businesses in our portfolio
andalso several assets that can deliver meaningful capital as
weneed it.
Now, as ever, we are determined to create increased sustainable
value for our shareholders and stakeholders. To this end, and
given the trends outlined here, we have set three key strategic
priorities for the group (refer to page 13).
The world around us
continued
11
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Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
•
We are building four core segments:
•
In FY22, the bulk of our investment has gone into these core segments.
•
In Etail, we will continue to build strong local ecommerce ecosystems with eMAG.
•
We will continue to explore new opportunities through Ventures and potential
new segments over time.
•
We will strive for returns well above our cost of capital.
•
We are both an operator and active investor.
How we add value through our strategy
We pursue growth by building leading companies that empower people and enrich communities.
Build global technology
leaders to…
…address big
societal needs…
…in high-
growth markets…
…where we can
build sustainable
leading positions.
Our focus areas
Read more about how we operate responsibly on pages 17 to 19
We do this through a rigorous process: test, invest, scale
Active
Bring more than
money
Focused
Invest in a
targeted way
Long-term focus
Build sustainable
businesses
Disciplined
Play to win,
progressively
Responsible
Do the right thing
Our core and sustainable approach
Our operating model
Global outlook Local entrepreneurs Investor Operator
Our strategy
Our core strategy
We partner with local entrepreneurs to build global technology
leaders. We operate at the intersection of high-growth markets
and technology to address major societal needs at scale. Above
all, we pursue a simple goal: to build sustainable leadership
positions. This is the key to reaching scale and profitability –
mostof our platforms are companies with a strong market
presence.
Active, focused, long term, disciplined
We take a distinctive approach to building global technology
leaders. We are active participants in our investments and
operations. We believe that to be successful we have to bring
much more than just money. We are focused. We invest where we
can make a difference, based on deep industry insights in areas
that we know. We think long term. We aim to build sustainable
businesses, not driving for short-term liquidity events or paper-
value increases. We are disciplined. We play to win, but
progressively grow our capital commitments as we learn and
scale. We are responsible – acting like owners and doing the
right thing for the long term, for all our stakeholders.
Our strategy for building long-term value continues to be relevant and differentiated.
12
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Sustainability review
Performance review
Governance
Financial statements Other information
Global and local; investor and operator
In addition, we combine our global presence and outlook with
the dynamism and insights of local entrepreneurs. In building
great companies that improve everyday life for people, we both
operate and invest as we seek to create the greatest long-term
value. As an investor, we take a disciplined and systematic
approach to capital allocation and we have a responsible,
long-term approach to operating. Our aim is to help, support
and encourage entrepreneurs and businesses.
Our three strategic priorities
Building on our core strategy and the implications of key trends
inthe world around us, we have set three strategic priorities for
the group:
1. Drive organic growth in our core businesses.
2. Expand local ecosystems.
3. Be a force for good for our stakeholders.
Priority 1: Drive organic growth in our core businesses
We see tremendous opportunity in technology globally. At the
same time, we know that certain markets will thrive more than
others.
Backing winning segments
We will continue to focus on our core segments and drive organic
growth in these. While tech has done well across the board,
wehave invested in some of the biggest and best-performing
segments and we believe there is plenty of room for more growth
in these sectors.
Targeting high-growth markets around the world
We will also continue to focus on high-growth markets.
While regulatory change has recently curbed investor enthusiasm
in China, we believe China remains one of the most attractive
internet markets in the world, and Tencent is well positioned here.
We also believe that regulation is ultimately healthy for any
industry or market – in time, businesses will adjust and investor
appetite will return.
India is a top priority, and we are strengthening our teams and
investments there. Our proposed acquisition of BillDesk would be
our biggest deal to date, taking us to the next level in Payments
and Fintech. We have also stepped up investment in Meesho,
which is focused on social commerce, andin healthtech platform
PharmEasy. We will focus on backing local entrepreneurs to make
sure we align well with India’s domestic priorities.
We want to invest more in Southeast Asia. We see opportunity
there – growth is strong and smartphone adoption is rising
rapidly. We have made several smaller investments and have a
good pipeline ahead.
In Brazil, we see strong opportunity for iFood. Again, we are
focused on organic growth, particularly in fintech and convenience
retail, which we believe will strengthen iFood’s ecosystem and
deliver substantial incremental value.
We will continue to monitor Western markets for opportunities and
be selective in our approach, prioritising the biggest opportunities.
Priority 2: Expand local ecosystems
Within our segments, our businesses are building ecosystems with
a strong local presence.
As an example, in Classifieds, our OLX Autos business now offers
a full end-to-end sales process, building beyond what used to be
merely facilitating car transactions. In FY22, OLX Autos scaled
volumes across key markets, and increased revenue by 158%
(173%). Our plan is to grow OLX Autos in size and to build
ecosystems, providing our customers with large offline
components and significant financing and insurance activities.
Similarly, our Food Delivery businesses are building on their
sizeable delivery operations to extend into adjacent delivery
verticals, such as convenience and grocery. These moves create
more value for customers and more value for our businesses.
Expanding into convenience and grocery is key – bringing a major
offline component into the businesses, providing a much broader
set of products for customers.
We are also expanding our Payments and Fintech platform in
India to create a broader ecosystem. We launched a credit-led
digital-banking offering in India and aim to scale it.
We are also building valuable local ecosystems around local
market heroes, such as eMAG in Central and Eastern Europe.
eMAG is growing food delivery rapidly and challenging
incumbents, building Romania’s largest last-mile delivery platform
and expanding into grocery.
Priority 3: Be a force for good for our stakeholders
Expectations of companies are growing. Shareholders, regulators
and many other stakeholders are increasingly interested in how
seriously we take our responsibilities as a global technology
group: how well we look after our people and our customers; the
kind of role we play in society; and of course, the impact of our
businesses on the planet.
We have a strong heritage of acting responsibly as a group. But
much of this good work has been implicit – a natural, unspoken
consequence of fundamentals such as being disciplined about
long-term value creation, backing entrepreneurs who share our
values, and focusing on improving people’s everyday lives through
technology. We believe it has now become essential that we do
business with the stated goal of being a positive force for the
world around us. We will, therefore, ensure we are all clear on our
role in the world, and on the expectations we have of each other.
To this end, we are increasing our focus on sustainable investment
themes, such as agtech (agriculture technology) and healthtech,
which are both on the radar of our Ventures arm.
We have also formalised and articulated our approach to
responsible investing. You can find out more on pages 17 to 19.
We are all united by our shared purpose – to improve everyday
life for billions of people through technology – and our shared
values.
Our strategy
continued
13
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
How we create value
We are driven by our purpose
To improve everyday lives for billions of people through technology
The resources we need
The value we create
How we measure the value we create
• Achieve revenue target
(on an economic-
interest basis and
excluding M&A).
• Achieve core headline
earnings at target,
including Tencent.
• Achieve core headline
earnings at target,
excluding Tencent.
• Achieve free cash
outflow at target.
• Meaningful IRR ahead
of cost of capital.
• Increase focus
on diversity and
inclusion throughout
the group, measured
through employee
engagement survey.
• Extend access to
digital products and
services, promote
digital literacy and
support information
technology
infrastructure.
• Continue to build
our AI capabilities
by increasing the
number of ML
(machine learning)
modules in production.
• Apply strict discipline
to capital allocation,
and act with integrity
to promote ethical
business principles.
• Throughout the
investment life cycle,
we strive to ensure that
the scientific and
technical standards
informing design and
research in AI products
and services are
sound, robust and of
high quality. We assess
this on an ongoing
basis.
• Number of people
impacted within the
Naspers Inclusive
Development
Framework.
•
Number of
beneficiaries
supported through
community investment
programmes.
• Targets to cascade
human rights statement
across subsidiaries.
• Increase ESG
performance and
implement a climate
transition plan.
We prioritise our approach based on the material matters for our stakeholders
Financial
We deliver long-term
shareholder value
through disciplined
capital allocation and
robust financial
performance.
Human
We create workplaces
with a fair and inclusive
culture. Development
opportunities.
Manufactured
We provide innovative
platforms and services
to customers globally.
Intellectual
Through our intellectual
property, we drive
change and innovation
within the industry.
Social
We treat our partners
fairly and drive high
social value in our
operations.
Natural
We seek to protect
natural resources
through our operations
and the low-carbon,
asset-light business
models.
How we add value through our strategy
We pursue growth by building leading companies that empower people and enrich communities.
Active
Bring more than just money
Focused
Invest in a targeted way
Long-term focus
Build sustainable businesses
Disciplined
Play to win, progressively
Responsible
Do the right thing
Build global technology
leaders to…
…address big
societal needs…
…in high-
growth markets…
…where we can build sustainable
leadership positions.
Read more about how we operate responsibly on pages 17 to 19
We do this through a rigorous process: test, invest, scale
Our focus areas
Our operating model
Our core and sustainable approach
Global outlook
Investor
Local entrepreneurs
Operator
Financial
Financial funds and
assets used to invest and
develop our operations.
Human
Skills owned by
our employees.
Manufactured
All investments
in facilities and
technologies
across thegroup.
Intellectual
Ideas, source code,
domains, know-how and
knowledge we create,
own and protect.
Social
Trust we build in
thecommunities where
weoperate.
Natural
We use natural resources
in every aspect of our
business and operations,
including both downstream
and upstream in our
value chain.
performance
investments
People
Digital inclusion
Innovation AI
Data privacy
Business culture,
ethics and integrity
investment
Climate action
14
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Group overview
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Performance review
Governance
Financial statements Other information
The value we created this year
•
US$6.3bn invested to further
accelerate growth: Food Delivery,
Edtech, Payments and Fintech, and
Classifieds.
Investing behind
Ecommerce growth
US$6.3bn
•
Capital structure change,
completing the voluntary share
exchange offer.
Share repurchase programme
of Prosus ordinary shares N
US$5bn
•
+50% Ecommerce revenue growth.
•
17% increase in trading profit from
profitable businesses.
•
Continued focus on growing both
NAV and NAV per share over the
long term.
Strong revenue
1
growth
with profitability at the core
of each business
US$35.6bn
•
Employee feedback is a great
indicator of the impact and
progress we are making in the
workplace.
We achieved a score of
88%
favourable responses to
our diversity and inclusion question
•
Highest scoring newcomer award,
Transparency Benchmark for
sustainability reporting 2021.
•
Continued integration of
sustainability initiatives into our
strategy.
Significant progress on
sustainability
initiatives
•
We develop or adopt tools and
practices designed to check the
quality and representativeness of
data and to detect bias in decisions
based on the models.
Number of AI models in production
year on year:
+124%
Revenue
1
2021
2022
2020
Trading profit
1
2021
2022
2020
Strong financial performance
•
We are committed to setting
groupwide, multiyear greenhouse
gas emissions reduction targets that
will drive our climate transition plan.
Committing to being
carbon-neutral
•
Prosus FLIGHT aims to create a
network of female graduates who
can become role models for other
young women.
•
Human rights statement cascaded
to all our group companies.
Prosus FLIGHT supports
750
women and girls to acquire
skills to participate in
India’s digital economy
•
Edtech grew revenue by 270% (55%).
•
We made several investments and
acquisitions leading to trading
losses increasing to US$117m from
US$14m.
New Edtech segment
gathers momentum with revenue
1
of
US$425m
1 Presented on an economic-interest basis.
15
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Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Sustainability
review
17
Our approach
21
Engaging with our stakeholders
25
Human capital
25
People
28
Digital inclusion
29
Manufactured capital
29
Innovation
30
Intellectual capital
30
Artificial intelligence
33
Cyber-resilience
35
Data privacy
38
Social capital
38
Business culture, ethics and integrity
41 Community investment
43
Natural capital
43
Climate action
49
The EU Taxonomy Regulation
16
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Three pillars of responsible investment
Mitigate value impairment Drive value creation
1.
Embed ESG in
investment
due diligence
2.
Enhance ESG
performance
of portfolio
companies
3.
Increase
investments in
inclusive and
sustainable
businesses
Our approach
We create sustainable value by investing in companies that improve everyday life for
billions of people through technology. By creating supportive environments for visionary
tech entrepreneurs insome of the world’s most exciting markets, we believe our
businesses can deliver significant positive impact on society and the planet.
Our portfolio of businesses enables a wider systemic transition
tothe circular economy, more financial inclusion, and improved
access to better livelihoods and education. We are building a
portfolio of asset-light, low-carbon business models that enable us
to combine our global reach with specialist and local expertise.
We actively engage in the environmental, social and governance
(ESG) performance of our portfolio companies. We continue to
explore investment opportunities aligned with our core purpose of
improving everyday life for billions of people through technology.
Technological advances make it possible to deliver digital
products and services that contribute meaningfully to the
economic and social development of local communities.
Sustainable development is contingent on economic growth, but
we recognise that growth and profit are not enough. By
integrating ESG criteria into our decision-making, our commitment
to creating sustainable value extends across our portfolio, from
our own operations to our investees.
Our locally owned and built businesses are not only driving
innovation in key areas of life – from finance to education – but
are creating jobs and helping to transform social and economic
inequalities. We provide financial and non-financial support to
ourinvestees, and we help them address their barriers to scale
and growth. Software-led business models can better reduce
environmental impact and extend access compared to old-
schooleconomy sectors. Digital financial services, for example,
support awider reach to people underserved by bricks-and-
mortar infrastructure.
We support the United Nations Sustainable Development Goals
(UN SDGs) and, like many other businesses, have identified which
of the goals closely aligned with our business. We identify this
alignment and our activities in support of the SDGs in this report
and on our website.
As an investor in pioneering technologies, we seek out and
partner with local entrepreneurs to create global leaders.
Activityat group level is closely focused on delivery, growth
andperformance. We embed ethics and responsibility in the
application of fast-moving technologies, such as AI and ML.
Three pillars of responsible investment
Our portfolio is focused principally on consumer internet services
in sectors that address societal needs: classifieds, food delivery,
payments and fintech, education technology (edtech) and etail.
We also have significant interests in other listed internet assets.
We apply strict discipline to capital allocation, and act with
integrity to promote ethical business principles across our group
ofcompanies.
This year, we are articulating our approach to responsible
investing forour stakeholders. Responsible investment for us is
founded onthree pillars. Firstly, prior to any investment, we screen
for ESG factors and trigger enhanced due diligence during the
investment process, if required. Secondly, we manage for
performance: ourinvestees share our entrepreneurial instincts and
are motivated by a commitment to delivery. Thirdly, we are
committedto increasing our exposure to sustainability-driven
business models across the portfolio.
Pillar 1: ESG in investment due diligence
ESG integration is embedded in our investment philosophy, as
weproactively exclude opportunities in a set of predefined
controversial sectors.
Before investing, we screen prospective investees according to
their potential to achieve significant scale, high stakeholder impact
and sustainable value at an efficient cost of capital. Across our
portfolio, we impose limits on direct or indirect exposure to any
activities and sectors that we define as controversial and have
limited appetite for. We apply a pragmatic approach to defining
factors that would trigger enhanced due diligence when
necessary. These include the size of the equity stake that would
define the level of control we would exert.
United Nations SDGs
17
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Value creation: Demonstrative impact on society and planet
Core segments
Impact on the planet
Impact on societyClassifieds
Powering the circular economy Enabling responsible consumption
Payments and Fintech
Net positive impact of digital transformation of
financialservices
Financial inclusion
Edtech
Net positive impact of digital learning
Learning for all
Food Delivery
Positive impact of deploying best-in-class operating models
New livelihood opportunities
Low carbon High social impact
Physical services
Digital services
Empower people and enrich communities
Our approach
continued
Acquiring a controlling interest in a company implies a higher
level of accountability and influence with a consequent cascading
of our business values and our ESG principles. In this scenario,
ourinvestment team not only looks at financial indicators but
alsofactors in non-financial considerations in our company
evaluation, such as their data privacy, security controls and
environmental impact.
Pillar 2: Enhance ESG performance of portfolio companies
The social and environmental impact of our businesses is central
to our understanding of sustainable value. While the nature of
material environmental impacts, and how to define them, may
vary between companies, we apply consistent ESG principles
across material topics and systemically cascade them to our
subsidiaries, to drive performance. These include data privacy
and cybersecurity, human rights, business ethics and compliance,
and climate action.
As we have a large number of subsidiaries, associates and
investees, we monitor our subsidiaries and those in which we have
a significant minority. In cases where we have a board seat, we
leverage that engagement opportunity. To drive best practice,
wealso proactively invite subsidiaries and significant minorities
toengage on key climate topics through the Sustainability
Accelerators Network.
For subsidiaries, environmental impact is managed under the
governance framework. Action aligned to our climate goals is
arequirement across the portfolio, with performance standards
set at a group level. Where we hold a minority stake, our
boardmembers provide corresponding levels of direction
andinfluence. Please see our website at www.prosus.com/
sustainability for a discussion of our sustainability framework.
We invest in platforms that lead the evolution of the on-demand
platform sector and empower and improve the lives of the millions
of people that make this sector possible. We endeavour to
empower and protect the rights of workers whose livelihoods
depend on our businesses. While each company is solving their
own local needs, we share our guiding principles as a basis to
implement in their operations.
An example of this is how diligently our food delivery portfolio
companies have worked in partnership with Fair Work, the world’s
leading research project that seeks to improve the conditions and
treatment of on-demand workers, as evidenced by the material
year-on-year improvements to the scores achieved by our portfolio
companies. Additionally, we work in close collaboration with our
food portfolio subsidiaries
to review their ongoing engagement
ofon-demand workers (including on topics such as pay, benefits
and safety).
Prosus is committed to improving transparency and reporting
standards. We provide all subsidiaries with a carbon data
management tool and support our businesses with data-driven
analysis to define a baseline and set company-specific targets for
greenhouse gas (GHG) emissions. We consolidate and disclose
the direct and indirect footprint at group level, annually. We
received a B score for our first detailed disclosure on the CDP
(formerly Carbon Disclosure Project) platform. We also received
the highest-scoring newcomer award from the Netherlands’
Transparency Benchmark for our sustainability reporting in 2021.
We encourage open learning across the group, and support
investees
by identifying technology and partnerships for low-
carbon growth and material efficiency. Our sector-specific forums
share expertise and best practices on topics such as carbon
emissions, plastics, e-waste and electric vehicles. A growing
network of ‘sustainability accelerators’ enables the transfer
innovations across the group.
We maintain standards and set targets at a group level, while
encouraging flexibility among investees to tailor their business
strategies to local conditions. The diversity of our portfolio
makesa one-size-fits-all approach impractical. As investors,
ourinfluence among investees varies, but the principles that
guideus are consistent.
18
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
In our corporate operations, we exercise full control of our
sustainability strategy. We work closely with subsidiaries to ensure
management embeds our principles for all material issues,
adapted for factors such as business model, operations, employees
and geography, resources, and the complexity of their activities.
Pillar 3: Increase investments in inclusive and sustainable
businesses
We are committed to increasing our exposure to sustainability-
driven business models.
We will identify and invest in innovations that drive the systemic
transition towards a low-carbon consumption economy, software
opportunities where digital services are transforming the
environmental footprint and social impact of traditional business
sectors, or asset-light digital services that can deliver on our group
purpose to improve everyday life for half of the planet’s people.
For example, this year our Ventures arm invested in several
companies such as DeHaat, Aruna and Biome Makers, which
apply sustainable digital solutions in agtech (see pages 73 and
74) by using soil biology analytics and AI-based tools to determine
the most sustainable solutions for crops, and address specific
climate and social inclusion challenges. These priorities are
consistent with our support for circular economy innovations to
mitigate and reduce the environmental footprint of the service and
its users.
We intend to quantify the positive environmental and social (E&S)
impact of our businesses in the context of highlighting revenues
derived from sustainability-driven models within our wider
portfolio. This is to structurally evidence and report the non-
financial value that we create in the communities we operate in.
In our Classifieds, Edtech, and Payments and Fintech portfolios, for
example, as a pilot, we will measure the net environmental impact
of the transition to digital services. For example, our Food Delivery
portfolio companies create economic opportunities for over a
million on-demand workers as a part of their value chain. A study
connected by FIPE (Fundação Instituto de Pesquisas Econômicas)
in 2020, researched the socio-economic impact of iFood’s
operations in Brazil.
An analysis was carried out on the evolution of employment
overthe period 2014 to 2021 in 12 Brazilian cities, including
790sub-regions within these cities. FIPE observed that the
presence of iFood in the sub-regions is positively related to both
the employment volume and its growth rate. About 730 000 jobs
(formal and informal), equivalent to 0.72% of the employed
population in 2020, were created as part of iFood’s value chain.
FIPE further concluded that iFood drivers receive an hourly wage
compatible with what they would receive if they were employed
inthe formal sector. This is consistent with our efforts to
enhancetransparency while increasing our exposure to
sustainability-led revenues.
Our approach
continued
19
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Sustainability governance
As an established investor in high-growth markets, we are
committed togood governance. Ultimate oversight of our
sustainability policy and the implementation thereof vest in
theProsus board.
The board assesses the overall sustainability of the group, and its
financial solvency and liquidity. Assisted by specialist committees,
including a risk committee and a sustainability committee, the
board oversees our processes to manage sustainability risks and
opportunities, compliance with applicable reporting regulations,
their disclosures across the portfolio and external reporting. This
year, multiple sessions were conducted for the board to deepen
its understanding of the implications of climate change and wider
social and environmental issues for long-term corporate
performance. The key topics included in these ESG sessions
ranged from setting science-based targets to ESG in capital
markets.
Our sustainability policy is aligned with the six capitals model.
Theboard considers the influence on and effects of our business
activities in relation to the six types of capital, namely: financial,
manufactured, intellectual, human, social and natural.
Implementation of our group sustainability plan is delegated to
the management team, which conducts a biannual review of our
progress against published targets. The chief executive and the
executive management team develop our strategy that feeds into
the business plan, applying the six capitals framework in the
context of the most material issues for our stakeholders.
Identifying sustainability risks and opportunities is led by the
global head of sustainability, who is responsible for managing
implementation of the group sustainability plan. The global
headof sustainability reports to the group general counsel, a
member of the executive management team, who reports to the
chief executive.
Across the portfolio, we have appointed sustainability
championsto raise awareness and lead implementation of
thesustainability plan.
The Prosus sustainability policy, detailing our sustainability
framework and principles, is available on our website at
www.prosus.com/sustainability
.
Reporting and disclosure
Our performance and progress on sustainability issues are assessed
by outside experts, in line with our commitment to raising standards
of disclosure and transparency. Internal audits inform the process of
benchmarking across our portfolio. We regularly publish updates
onour progress on the sustainability sections of our website and in
our interim and annual results. Our ESG performance is rated by
industry analysts with the results being published and benchmarked
against peers.
Prosus is committed to annual disclosures under the framework of
the GHG protocol. For the coming year, each of the group
companies has set a target to further improve on their GHG
inventory disclosures by including material scope 3 categories along
with their scope 1 and scope 2 reporting. The effort towards
achieving this goal varies significantly across the various companies,
due to their very diverse operating sectors and extended value
chain that constitutes their scope 3 categories. While each company
applies the GHG protocol to define their own operational and
organisational boundaries, the nature of their extended upstream
and downstream value chain will be unique. For relevant and
consistent GHG accounting and reporting, we encourage the
companies to develop a best fit methodology reflective of their own
commercial and operational realities. For example, for our Etail
companies to pivot from enabling the trade of goods to selling
goods on their platform can have meaningful impact on their
emissions profile.
For all subsidiaries, an internal audit of their controls on the carbon
data reporting process was conducted, findings of which were
reviewed at board level. Separately, EY performed a readiness
review for data disclosures on scope 1 and scope 2 to prepare for
an external limited assurance.
In the longer term, this will enable the group to forecast and set
meaningful reduction targets towards a net-zero pathway relevant to
each of the companies. Significantly, Tencent has joined the Science
Based Targets initiative (SBTi) and published its carbon-neutrality
target and roadmap in February 2022.
Our approach
continued
External benchmarking of our ESG performance
Rating agencies
2020 score 2021 score
23.8
Medium risk
17.8
Included in the AEX ESG Index
26
44
Included in DJSI Europe Index
A
AA
1.8/5
3.3/5
Included in the FTSE
Responsible Investment Index
DISCLO
SU
RE INS
IGHT ACTIONF
B
NA
73
Highest-scoring newcomer award
20
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Stakeholder relationships
To support the board in fulfilling its governance role, the
sustainability committee retains oversight of stakeholder
management across the group. To balance the needs, interests
and expectations of a diverse group of stakeholders, we take an
inclusive approach.
Identifying material issues
In addition to our stakeholder dialogue, over the past two years
we have performed a materiality assessment. This helps us map
and prioritise areas that are of high importance to our
stakeholders, as well as where we can have a positive impact
within our business and operations. We then focus on these
material areas and proactively communicate our position and
performance on them.
Material issues
We focus on the issues that matter most to our businesses and
their stakeholders. In FY22, we improved the depth and relevance
of our materiality assessment. On these issues, we aim
progressively to mitigate harm, do good by contributing to positive
change, and to lead by example in creating sustainable value.
Building on work done in FY21, we have completed an internal
review followed by external consultation to sharpen our focus on
the most important issues for our stakeholders. From a list of 15
issues, we identified 11 as most material.
Our review introduced one new material issue for FY22:
community investment. This may be driven by enhanced
geopolitical instability and disruption of communities, both by the
pandemic and as a consequence of the war in Ukraine. We also
observed a shift in the prioritisation of the material topics, owing
to an enhanced understanding and appreciation of our capital
allocation activities in driving sustainable transitions. As a result,
customer centricity was removed as a material issue.
Engaging with our stakeholders
To create sustainable value for our stakeholders, we actively engage with them to inform
ourdirection and strategic choices. We value the input they provide and build constructive,
long-term relationships to enable ongoing dialogue.
We have the following key stakeholder
groups:
1
Customers and users
We want to help customers and users improve their
everyday lives. Customers are indirectly represented
through our investee companies.
2
Employees
Our employees are at the heart of our success. Their
commitment and entrepreneurial drive make all the difference.
3
Investors and shareholders
We are a for-profit organisation committed to growing.
4
Business partners
We aim to work closely with our business partners, including
suppliers and consultants.
5
Industry bodies
We aim to be an industry leader, playing an active part
inprogress.
6
Society
We are committed to making alasting positive impact for
society and the world we live in.
7
Media
We report transparently and aim to build constructive
relationships with themedia.
8
Government and regulators
We recognise how important it is to work with governments
and regulators as many of our businesses have a big
impact on people’s lives.
Materiality results
Importance for stakeholders
Impact of the company on economic,
environmental and social matters
Financial
performance
Culture, ethics
and integrity
Responsible
investments
Community
investment
Climate
action
Digital inclusion
People
Innovation
Data privacy
Cyber-resilience
AI
21
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Engaging with our stakeholders
continued
We will continue to define and articulate our approach for each
material issue. We will implement improvement programmes to
manage and measure our performance, and report transparently
to communicate our progress. In future, we aim to apply a double
materiality lens, namely to map both the ‘outside-in’ impact of
material issues on our businesses, and ‘inside-out’ impact on
people and the environment.
11 material issues within the six capitals
Each of these material issues is covered in detail on the
pagesindicated.
Financial capital
Financial performance
We create value by increasing our revenues and market shares,
and by increasing our exposure to financial revenue from
sustainable business models. Our understanding of sustainable
value creation applies strict discipline to capital allocation and
performance management. See page 95.
Responsible investing
We are a responsible investor. We apply ESG factors in the
selection and assessment of new prospects and apply these
criteria in managing the performance of businesses and
investments across our portfolio. See pages 17 to 19.
Human capital
People
We help people achieve their potential and be their best. We
work to realise this aspiration for our employees and across the
value chain of our businesses, including for the many thousands of
people who work on our platforms around the world. See pages
25 to 28.
Digital inclusion
Digital inclusion underpins our business strategies. We extend
access to digital products and services, promote digital literacy
and support information technology infrastructure. See page 28.
Manufactured capital
Innovation
We find, nurture and scale innovative technology to create new
ways of doing business. Our investments in sustainable value
creation contribute to positive and systemic change by developing
solutions to societal needs. See page 29.
Intellectual capital
Artificial intelligence
We invest in pioneering technologies, guided by our group
principles for the responsible application of AI. In building
software-led business models, we aim to create value, and to
engage in external advocacy for the ethical development of AI.
See pages 30 to 32.
Cyber-resilience
We take cybersecurity seriously. Across our group, we protect the
information technology infrastructure of businesses, governments
and households against increasingly disruptive, frequent and
sophisticated cybercrimes that could result in economic damage,
financial loss, geopolitical tensions and social instability. See page
33.
Data privacy
We create and adhere to the right policies and frameworks to
control and secure our business, customers’ and employees’ data.
See pages 35 to 37.
Social capital
Business culture, ethics and integrity
We embed our group goals, purpose and values in all business
activities and operations. While our influence on investees varies
across our portfolio and supply chain, we are committed to
effective communication and engagement with all our
stakeholders. See pages 38 to 40.
Community investment
We invest for real and sustainable impact in the communities
where we live and work, applying the principle that local actors
know best how to deliver meaningful change in local contexts.
See pages 41 and 42.
Natural capital
Climate action
Reducing GHG emissions and energy consumption is a high
priority for all our operations and investments. See pages
43 to
48.
Materiality within the six capitals
Financial
•
Financial performance
• Responsible
investments
Human
•
Human capital
•
Human rights
Manufactured
• Innovation
•
IT infrastructure
breakdown
Intellectual
• AI
•
Data privacy
•
IT governance
• Cyber-resilience
Social
•
Community investment
•
Geopolitical stability
•
Business culture, ethics
and integrity
•
Digital inclusion
•
Customer centricity
Natural
•
Climate action
The resources we need
Eleven material issues
performance
investments
People
Innovation
AI
Cyber-resilience
ethics and integrity
investment
22
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Engaging with our stakeholders
continued
What matters to them
Positive experience – safety, fast
delivery, return and feedback
Competitive pricing and range
of products
Content preference
Data privacy
Customers and users
How we engage
•
Call centres, showrooms and client relationship managers.
•
Electronic communication (email, SMS, apps, web and
socialmediaplatforms).
•
Workshops and events.
•
Surveys and market research.
Our response and impact
•
We work to continuously improve our product ranges and the
customerexperience, and ensure that we fairly price our offerings.
•
We undertake a range of customer-focused initiatives, from investing
inand developing AI and ML to improve convenience and safety, to
developing new services such as home delivery of groceries.
What matters to them
Support with the challenges of
Covid-19, particularly ensuring
health and safety, working from
home and wellbeing
Providing jobs with meaning
and a sense of purpose
Recruitment, retention and
development of talent
Culture, including diversity and
inclusion, employee wellbeing
and engagement
Employees
How we engage
•
Ongoing dialogue with our people is embedded in our work practices.
•
Formal and informal channels to engage and encourage open
communication, from leadership and CEO updates by email and video
to face-to-face gatherings and online collaboration and content-
sharing.
•
Continuous learning and development through our online learning
platform MyAcademy, and through live education programmes.
•
Employee forums.
Our response and impact
•
We undertake ongoing investment in developing our people, including
creating and supporting professional development opportunities.
•
We recognise great work through fair and competitive rewards.
•
We focus on building an inclusive, empowered and supportive culture.
•
We care for our people through various health and wellbeing initiatives.
What matters to them
Our response to Covid-19 and
support for communities
Social impact investment to
supportmeaningful impact
Minimising our
environmentalimpact
Local employment and value
creation, including supporting
local businesses
Adherence to local laws
andpaying taxes due
Society
How we engage
•
Community investment programmes.
•
Employment offering and service providers.
•
Website content and public announcements on material issues.
Our response and impact
•
Our businesses focus on maximising positive impact in
localcommunities.
•
Our groupwide aim is to develop products and services that
meetsocietal needs.
•
We contribute to enabling and encouraging conscious consumerism.
•
We focus on hiring local employees and growing local talent,
includinginvesting in local businesses.
•
Safety of our employees is of paramount importance,
for example, our efforts in Ukraine.
•
Our group legal compliance programme is tailored to the
unique risksand local laws that apply to each business.
•
We adopt a responsible approach to tax.
What matters to them
Our response to Covid-19
Our investment strategy
and performance
Requests for comment on
rumour and speculation, notably
on potential acquisitions and
divestitures
Requests for comment on
reputational risk issues, such as
cybersecurity and privacy
Our focus on geographies
andour view on key industry
segments
How we work across our
groupcompanies
Media
How we engage
•
Press releases, editorials and articles.
•
Interviews and reactive comment.
•
Reporting through company website.
•
Events.
Our response and impact
•
We invest time in regularly engaging with key journalists and editors
tobuild relationships and understanding.
•
We proactively schedule media interviews to provide briefings
onstrategic updates and significant news.
•
We build announcement plans to maximise coverage.
•
We respond to requests for comment in line with communications
andinvestor relations policies.
•
We are quick to correct inaccurate commentary or articles
asappropriate.
performance
investments
People
Digital inclusion
Innovation AI
Data privacy
Business culture,
ethics and integrity
investment
Climate action
Material issues
23
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Engaging with our stakeholders
continued
What matters to them
Continued supply of
productsand services
Awareness of relevant
developments in the business
Understanding and recognising
our partners’ rights, specifically
on changing procurement
processes, pricing, content,
platform use, privacy
andsecurity
Business partners
How we engage
•
Structured meetings, calls and electronic communication.
•
Informal day-to-day communication.
Our response and impact
•
We have strong relationship management systems to ensure regular
communication between key management and business
representatives.
•
Our structured grievance processes to ensure that, in the event of a
dispute, there is timely action to find a resolution.
•
Through active negotiations, we ensure mandates clearly lay out the
relationship and agreement terms and requirements.
•
Business approaches are reviewed regularly to ensure they align with
international norms.
What matters to them
Clear communication
ofmaterial issues
Engagement around increasing
meaningful and positive impact
How to ensure a positive sector
experience, for example
through the regulation and
culture of the sectors
Industry bodies
How we engage
•
Membership of selected and appropriate bodies.
•
Cooperating with selected partners on projects addressing
legislativeinitiatives.
Our response and impact
•
We take the lead in responding to industry consultations on proposed
regulations and legislation.
•
To build understanding and engagement across the industry, we share
our approach and examples of action on specific topics, such as how
we align to changing legislation.
•
We produce thought leadership and position papers.
What matters to them
ESG integration in investment
decisions
Holding-company discount and
internal rates of return
Tax consequences of Naspers’s
ownership of Prosus, tax on
distribution and tax due to
saleof assets
Capital allocation: Further
buybacks or investment in
coreassets
Remuneration policy
and disclosure
Path to profitability and
cashflow generation
M&A: Industry consolidation
orbigger deals
Strategy for Food Delivery,
andPayments and Fintech
segments, and how we are
investing for growth
Competition across
core segments
Response to Covid-19
Investors and
shareholders
How we engage
•
Investor meetings and teleconferences.
•
Conference participation.
•
Interim and annual reports.
•
Financial results presentations and investor days.
•
Business deep-dives.
•
Press and stock exchange releases.
•
Reporting via corporate website.
•
Dedicated email address for inbound queries and
distributingannouncements.
•
Instructive videos.
Our response and impact
•
Management engages more often with shareholders and investors.
•
Our reporting includes focused messaging on the path to profitability
for our core segments.
•
We provide biannual updates on our internal rate of return for the total
portfolio and ecommerce.
•
We are implementing measures to reduce the holding-company
discount.
What matters to them
Sustainable development
Innovation and entrepreneurship
Competition policy
Investments and
international trade
Data protection and privacy
Private-public partnerships,
international and other
collaborations
Intermediary liability
Financial services legislation
Copyright and intellectual
property (IP)
Tech policy, including
ecommerce
Societal contribution, including
employment and social policy
Governments
and regulators
How we engage
•
Direct participation in advisory committees, meetings and
publicconsultations.
•
Formal one-on-one meetings and round tables.
•
Response to sector and company-specific enquiries.
•
Indirectly through sector and industry associations.
•
Participation in international events, such as BRICS (Brazil, India,
Chinaand South Africa) summits and membership of the World
Economic Forum in Davos.
•
Site visits, including hosting official delegations.
•
Annual report.
Our response and impact
•
We are transparent and have implemented a programme to ensure
compliance with all applicable laws and regulations.
•
We make formal representations and written submissions to
expressviews.
•
We provide information to policy-makers in the form of expert advice,
based on our global experience as well as technology and sector
expertise.
performance
investments
People
Digital inclusion
Innovation AI
Data privacy
Business culture,
ethics and integrity
investment
Climate action
Material issues
24
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Human capital
People
Our employee value proposition
Our people seek meaningful jobs with line-of-sight to business
outcomes and the opportunity to learn and grow professionally.
We enjoy working in a purpose-driven environment, where we are
recognised for a job well done and are fairly paid in line with
personal and company performance. We care for and connect
with our people, particularly in times of need.
Interesting work for our people
Our people are at the heart of our business – they create our
success.
We are dedicated to helping our people be their best by
enabling a culture built on diversity, inclusion, and learning.
We are facing the challenge of the global shortage of digital
talent every day. The best people have many choices about how
and where they work, and who they work for, so our employee
value proposition is critical to attract talent that ensures the
continued growth and success of our business.
To this end, we focus on creating the following experience:
•
To offer meaningful jobs with a sense of purpose in a company
committed to deploying technology to address big societal
needs and to enrich the communities in which it operates.
•
To deliver career-enhancing professional development and
ongoing opportunities to network, learn and collaborate
internally and externally.
•
To recognise excellent work with fair and competitive rewards,
enabling us to compete for talent with global and regional/local
consumer internet players.
•
To put positive, engaging and inclusive culture and leadership at
the heart of everything we do, in an environment where many
different types of people feel happy and are able to do their
best work.
Opportunity to learn and grow
Groupwide learning and development through MyAcademy
We make learning accessible everywhere, at any time.
MyAcademy – our online learning hub connecting our people to
learning materials – is available on demand to everyone across
the group.
Our people development programmes focus on these three
keyareas:
•
Reinforcing the leadership pipeline and accelerating the
growthof top talent.
•
Driving a performance culture.
•
Supporting the ongoing development and growth of our
businesses by equipping our people with core consumer internet
and digital media skills.
Over the past 12 months, we invited 29 leaders from all our core
segments to the INSEAD International Director programme, a
certification that is a global standard in the upskilling of board
members. It aligned extremely well with our need to develop a
talent pool of skilled board members who can represent Prosus
on the boards of our portfolio companies.
We have curated the very best learning experiences from
providers around the world, including our own education partners.
The flexibility of the MyAcademy web-based technology allows
rapid and efficient deployment across the group.
Limitless learning
We care deeply about providing equal learning opportunities to
our people, especially in geographies where access to learning
isscarce due to the lack of local infrastructure and resources.
Thesplit of our learning hours consumption by geographies
demonstrates the positive impact we are making in our emerging
countries.
Most of our learning programmes are digital, which allowed us
tocontinue investing in the development of our people during
thepandemic.
Our people are at the heart of our business – they make all the difference to our success.
We are dedicated to helping our people be the best they can be by creating a diverse,
inclusive and learning organisation.
Learning hours over the past 12 months
Europe
36 539 11%
India
83 842 26%
34 246 11%
46 865 15%
the rest of the world
120 211 37%
Total 321 703 100%
Employee value proposition
Competitive
pay and
benefits
Opportunity to
learn and grow
Great
leadership
and culture
Interesting
work
Employee
wellness
25
Prosus annual report 2022
Overview
Sustainability review
Performance review
Governance
Financial
Other information
Human capital
continued
For example, we supported the group effort in cybersecurity by
launching our school of cybersecurity. Our programmes in that
area equip people with an understanding of cybersecurity threats
and risks. This year, we also began offering our engineers the
opportunity to study cybersecurity nanodegrees to help develop
skills that are very scarce in the talent market.
We also explored learning formats that more closely resemble
face-to-face training sessions by developing and expanding on
our live digital training offering. Our new AI For Impact
programme, which brings groups of learners together for two
half-days, is a good example of this initiative.
Strengthening our capabilities on topics critical for growth
Technology training is one of the most popular development
areas on MyAcademy but we also use the platform to accelerate
and strengthen our capabilities on other topics critical to our future
growth – from leadership and management skills to personal
development and cross-cultural training.
Our live education programmes focus on leadership,
management, business development, artificial intelligence (AI)
and machine learning (ML). These sessions bring people together
from across the group, giving them the opportunity to learn from
each other, share best practice and interact with the best trainers
and facilitators in their field. We will continue to introduce our
leaders to the latest innovations so they can translate them into
practical business initiatives.
MyAcademy is also a critical element in our AI and ML
transformation plan. We use it to train people who are not in
engineering roles in AI and ML, through our AI For Everyone
course. MyAcademy has enabled 101 technology colleagues to
earn AI nanodegrees, and initiate a newcareer path in AI and
ML. In addition, our AI For Growth programme equips business
leaders with the skills and knowledge they need to build AI-centric
businesses. See page 30 for more information on AI and ML.
Great leadership and culture
Cultivating a strong groupwide culture
We’re a diverse group of global companies, but our values, which
are described in detail on page 3, are consistent for our people
regardless of where we operate.
Building a diverse and inclusive workplace
Building a diverse and inclusive workplace is a key element of our
future business growth and success strategy. Throughout the year,
we placed a big focus on diversity and inclusion in our internal
and external activities. This year, our prototyping inclusion
workshop for leaders has been cascaded across the group.
Given the scarcity of talent in the consumer internet industry and
our focus on growth markets, we face the ongoing challenge of
attracting and retaining talented and qualified candidates. We
are proactively addressing this challenge with talent sourcing and
acquisition strategies designed to attract a diverse range of people
who, in turn, represent the full diversity of our customer base.
Our approach is based on these three main pillars, which are
closely intertwined and depend on each other to be successful:
•
Top leadership support: The commitment from the leadership
team is to support and champion these initiatives. Our
leadership’s commitment to diversity and inclusion started
several years ago. This is one of our business strategic priorities,
and included as a measurable goal for management teams. For
more information, see pages 102 and 103.
•
Employee experience: This refers to all the different experiences
an individual can have during their journey with our group.
•
Shared responsibility: To ensure we create a truly inclusive
workplace, and that we have the right impact on society, we all
have a responsibility to encourage diversity and inclusion.
Attracting and recruiting diverse talent
We are developing different approaches to increase diversity in
our recruitment projects and help us hire a more diverse team in
terms of gender and ethnicity in specific countries.
We evaluate our preferred vendors, ensuring they share our
commitment to diversity and inclusion and can help us tap into a
diverse group of candidates.
Employee experience
Focusing on gender diversity
While our commitment to create an inclusive workplace that is
attractive to many kinds of people is broad, we face the same
specific challenge as our consumer internet competitors in
attracting and retaining female talent, especially for product and
technology roles. Our initiatives to address diversity in general
and gender diversity specifically, span the employee journey and
all levels of the organisation.
We track gender representation at every stage in our recruitment
process, and use data to ensure that our recruitment pipeline is
more balanced. We review our job descriptions and our
communications with candidates to ensure the language we use is
inclusive, and also ensure that there is a diverse interview panel.
26
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Other information
Human capital
continued
From board to senior management and the general employee
population, we are encouraged to see an upward trend in hiring
women, with the last four additions to the board being women.
There is also an increase in the number of women being recruited
into management roles across the group. In the group, we have
hired more women than men, from director to vice president levels
during this financial year.
We take the gender balance of our board members seriously and
are committed to maintaining a minimum of one third of board
members who are female. We have a board diversity policy in
place, which we cover in the Governance section on pages 102
and 103.
Involving our employees
We assess our progress in building an inclusive workplace by
asking all our people for their feedback, as part of our annual
engagement survey. Monitoring the results enables us to
understand if we are making the positive impact we want, and the
results this year show great progress. We also include the topic of
building an inclusive workplace in our leadership development
programmes to reinforce its importance.
We are committed to creating working environments that are free
from harassment of any kind. We have provided training and
education to all our employees on our zero-tolerance approach to
harassment, as well as guidance about how to raise any
concerns.
In our March 2022 employee engagement survey, we reached a
global score of 86% favourable responses to our gender diversity
question. We achieved a score of 88% favourable responses to
our inclusion question, stated as: ‘I feel respected at my company’.
We see no difference in results between genders for these
questions. We strongly believe our employee feedback is a great
indicator of the impact and progress we are making towards
greater diversity and inclusion in the workplace.
Inclusion awareness training for leaders
We work to bring the topic of diversity in hiring to all our teams.
Assuch, we have developed two specific training programmes for
leaders on unconscious bias and inclusive hiring. The goal is to
raise awareness and train our people to be better equipped to
hire diverse teams and consider inclusion in all they do.
Competitive pay and benefits
Fair pay
Equality and consistency are embedded in our pay practices
across the group as we continue to build diverse and inclusive
workplaces. We operate in high-growth economies where
socio-economic disparity can be large and societal fairness is
very important to us. We ensure that our pay practices around the
world are fair, competitive and above minimum wage standards.
Our commitment to pay for performance and alignment with
shareholder value creation drives all our reward activities and
supports the ownership mentality and spirit of entrepreneurship in
our teams around the world. We believe in a level playing field for
our people.
We have fair remuneration systems in place that are:
•
Equitable: Free from discrimination.
•
Relevant: Linked to personal and company performance.
•
Rational: Easy to explain.
We strive to pay fairly and responsibly. As far as possible, the
structure of our pay is consistent, regardless of the seniority of the
employee, ensuring equality of pay across all our businesses.
We are committed to ensuring that the companies we invest in
have fair pay and working conditions for delivery partners,
irrespective of the classification of their engagement, which varies
across the globe.
In our food delivery businesses:
•
Full-time drivers for iFood and Swiggy earn above the prescribed
minimum wage, on average, in the country where they operate.
•
Our companies generally provide health insurance/life insurance
benefits and access to driver education, as well as low-cost
access to safety equipment (such as helmets and protective
clothing).
1 Numbers are reflected as at 31 March 2022 and include employees of controlled entities.
Headcount by region
1
America
687
3 969
and Africa
16 854
8 903
Total
30 413
30 413 (2021: 23 390) permanent employees in some 80 countries
and markets
Headcount by segment
1
Classifieds
11 375
Corporate
187
Edtech
663
Etail
8 230
5 468
Other
1 244
3 246
Total
30 413
FY22 Prosus employee demographics
1
Male
Female
17 703
12 705
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Human capital
continued
Ensuring pay equality
We believe in equitable pay for performance – to reward people
fairly for performance aligned to shareholder outcomes. As such,
reward is designed to incentivise achieving strategic, operational
and financial objectives, in both the short and long term. In
addition, we design our reward system to help us attract and
retain the best diverse talent around the world in a fair and
responsible way.
To ensure equality, we offer similar pay, bonus and long-term
incentives for similar jobs and performance levels, make fair and
consistent pay decisions and apply objective and measurable
pay differentiation. We do this regardless of race, gender, sexual
orientation, religion, colour, nationality or disability. We ensure
equality at every step, from hiring to placement to progression.
Maintaining pay equality is embedded in our ways of working,
and through regular analyses we compare compensation levels of
groups of people, for example, women versus men, performing in
similar jobs. We conduct calibrations across the group as a
standard process before (annual) reward decisions are taken,
working towards closing unjustified pay gaps, should they exist.
•
Our reward approach is reiterated with our human resources
team and people managers, at the time of making (annual)
reward decisions and with new hires.
•
We run regular pay equality analyses, for example, in relation to
new hires, so we can identify any unintended or possibly biased
differentiation in pay.
•
We perform calibration exercises across the group as a
standard process before we make reward decisions so that we
can proactively redirect if needed.
Employee wellbeing
We encourage positive engagement
We believe happy and engaged employees create satisfying
customer experiences. It is important in a competitive global
market that we provide our people with a compelling reason to
work for Prosus. We continue to measure employee engagement
across the group and ask our people for feedback on their
experience of working at our various group companies. Our
businesses actively encourage participation in our employee
engagement survey, address issues raised and share best
practices.
In our last engagement survey in March 2022, we had a
participation rate of 83% and an engagement score of 76%. These
results are in line with external benchmarks and we continue to
focus on positive employee engagement across the group.
Stats
Engagement survey had a
participation rate of
83%
Engagement score of
76%
Supporting our employees in Ukraine
Our OLX Europe business employs 350 people in Ukraine and
their safety is of paramount importance. As news of the invasion
broke, we took appropriate action to support our colleagues. We
arranged accommodation for employees and their families
wishing to relocate from the east of Ukraine into the west, and to
leave Ukraine where possible. Colleagues in neighbouring
countries offered their support to Ukraine-based employees and
their families. We also advanced salaries and provided additional
financial support to those in need. We have additionally made
contributions to humanitarian aid agencies providing support to
local communities in Ukraine.
Digital inclusion
The digital divide remains in many of the countries where we
operate, and we are committed to investing in and scaling digital
services and technologies to address global challenges at a local
level.
As a global consumer internet group, we champion the benefits of
widespread digital access. Our family of digital services
companies is removing physical barriers to ecommerce, food
delivery, financial services and education.
We build companies with a strong market presence that use
digital technology to improve the daily lives of billions of people.
Businesses across the group offer access to online services that
enable financial transactions, buying and selling of goods, food
delivery and education.
Companies across the group also support targeted inclusion of
underserved individuals in the community through community
investment initiatives.
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Manufactured capital
Innovation
Our core segments – such as Payments and Fintech, and Edtech
– include global leaders in the delivery of virtual essential
services, with an improved environmental footprint and lower
emissions than traditional bricks-and-mortar businesses. We are
deepening our understanding and quantifying how digitisation
helps the world transition to a low-carbon society. In FY23, we will
undertake life cycle analysis projects, to help us quantify the
impact of digital services compared to offline, analogue and
physical services.
Our strategy for digital services places particular emphasis on
software-led innovation. We are rigorous in our capital-allocation
process while actively searching for exceptional entrepreneurs to
develop scalable, sustainable technologies with breakthrough
potential to address serial global challenges.
Product innovation is a critical priority. With the support of a
dedicated product and growth operations team, our companies
build solutions based on proven agile software development
principles, quantitative and qualitative user research, iterative
usability design, and extensive A/B testing and experimentation.
Within Edtech, BYJU’S has established a state-of-the-art innovation
hub, BYJU’S Lab, that leverages cutting-edge technology such as
augmented reality, AI, computer vision, and gamification to ensure
that tech-enabled education can reach the largest number of
people. Our development teams measure the results of their
innovation via increased consumer engagement (eg time spent,
long-term retention) and improved customer satisfaction (eg net
promoter score).
Innovating through artificial intelligence
AI is at the heart of much of our innovation. Across the group, we
work constantly to find new ways to innovate our business
platforms, processes, products and services. Some key examples
are highlighted in the Performance review on page 57.
In our Classifieds segment, OLX Autos has developed a new
camera ray feature for sellers to quickly carry out an inspection of
their cars. Camera ray takes high-quality photographs and
captures relevant information to establish a fair price for each
vehicle, taking account of its condition and specifications – good
for the seller, good for the buyer.
In our Payments and Fintech segment, AI-enabled innovation can
extend digital inclusion. In India, LazyPay has deployed AI-
enabled risk assessment to offer more people access to credit
and financial services, often for the first time.
Innovation for a circular economy
We recognise the role of innovators in tackling social and
environmental issues, both within our group and in partnerships.
One of our companies is finding sustainable ways to fight hunger
and food insecurity in Brazil. Across the group, we encourage
investees to forge partnerships that foster innovation and tackle
shared societal challenges.
Packaging innovation is critical to sustainable business. In pursuit
of our circular economy ambitions, iFood is pioneering new forms
of returnable and reusable packaging for meal deliveries. In
partnership with XPRIZE, a non-profit organisation that hosts public
competitions to encourage creative technologies that help
humanity, iFood supported a challenge in which participants
develop biodegradable, bio-based alternatives to food
packaging.
Looking ahead
As the pace of innovation continues to accelerate, the group will
remain focused on finding, developing and applying new ways to
deliver on our purpose.
Building the evidence base to demonstrate how our technology
investments can generate net benefits for the planet and its
people is a central strategic objective. Accordingly, we will ramp
up our initiatives to communicate this impact to all stakeholders,
and to seize opportunities to advocate effectively on the basis of
our experience.
In tandem with our policy on climate action and the new
environmental programme, we will embed processes for supplier
selection and screening according to ESG factors. In FY23, our
emphasis will shift from the current focus on risk assessment
towards embedding ESG criteria in our procurement and
spending.
Enhanced environmental disclosure is a key element of our
commitment to net zero, and a demonstration of the importance
we attach to climate stewardship across the group. The group’s
commitment to achieve net-zero emissions is embedded in the key
performance indicators for our group chief executive and the
segment CEOs who report directly to him.
We will continue to make meaningful investments in the local
communities where our businesses operate, in ways that improve
lives by nurturing systemic and sustainable change.
The group is working continuously to increase exposure to
financial revenues from sustainable business models while
enhancing disclosure and reporting standards across our
portfolio. Understanding the environmental and societal impact of
our businesses is fundamental to guide investment and decision-
making at all levels.
We anticipate that our data-driven sustainability strategy and
transparent approach will bring new opportunities for investment,
driving innovation and the discovery of breakthrough technologies
in the years ahead.
Promoting innovative technology to create new ways of conducting business
and promoting solutions to societal needs.
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Artificial intelligence
As a global tech business, AI is essential for us. So, we make sure
we develop and deploy it as quickly as possible throughout the
group to support business growth, to innovate, and to improve our
competitive ability. And we always seek to do this in the right way
– by design, ethically and responsibly.
Embedding AI across the group
Led by the Prosus AI team, we are embedding AI across the
group. The central team works side by side with AI teams in group
companies on multiple initiatives. These include organisational
changes to support the adoption of data science at scale; talent
and leadership development programmes; actively engaging with
the global research and development (R&D) community; adopting
ML platforms in engineering; developing deliberate data
strategies; and investing in companies that increasingly place AI
at their core.
Applying AI to improve everyday life
Across the group, we apply data science and AI in hundreds of
ways to add value for customers, partners and the business and
to fulfil our purpose of improving everyday life for billions of
people through technology. This includes better product
recommendation, fraud prevention, content moderation, logistics
optimisation and more. We also use AI to develop new products
and concepts across our segments, such as easy and reliable
automatic car self-inspections in Classifieds and content search
and optimisation in Edtech.
Our guiding principles
The following three principles guide how we develop and deploy
AI:
•
Deploy AI wherever it makes business sense.
•
Develop AI-by-design for innovation in products and services.
•
Develop and deploy AI ethically and responsibly.
Deploying AI everywhere
Across the group, AI has become part of the fabric of our
operations, how we innovate and keep improving. At the scale we
now operate across our core segments, AI is essential. iFood, for
example, added over 20 million orders per month while reducing
the unit costs of delivery without impacting delivery times. That
was only possible through its widespread use of data science,
automation and algorithmic decision-making. And iFood is not
alone. Across our segments, companies are mature in their use of
AI and increasingly apply deep tech at scale for business success.
Developing AI-by-design
We are focusing more and more on AI-by-design – using the
technologies and expertise we have, not only to make operational
improvements but to create radical changes to the way we do
business. It is all about both future-proofing and innovating –
building AI into the earliest stages and making it core to the
whole process of exploring, designing, developing, deploying and
improving platforms, products and services.
Allied to this, we have a systematic way of exploring emerging
technologies and accelerating them through the group. This is
afour-step process. Firstly, we discover what is out there and
understand it completely, from a technical and scientific point of
view. Secondly, we experiment inside the group – overlapping the
technology with different use cases. For example, in Edtech there
is the potential to use AI language models to automatically
summarise an entire learning course, making it quicker and easier
to search. Thirdly, we demonstrate and educate across the group,
to get the necessary buy-in. And fourthly, we adopt and invest with
confidence in specific areas for impact.
The aim is to push these technologies forward through the group
while de-risking them – to get more value, faster.
Using AI responsibly
Robust, unbiased, transparent
Our models must be robust, so that they operate predictably
within known boundaries of reliability. They must be unbiased,
sothat they do not discriminate, for instance, on gender.
Andtheymust be transparent, so that their outputs, for
examplean AI-based credit decision, can be clearly explained
and understood.
Embedding ethical and responsible AI
We have developed a framework to proactively include the social
and ethical dimensions of AI in the development process. The
framework revolves around the following four key principles:
•
Govern: Anchor AI to core values, ethical guidelines and
regulatory constraints, for example, specifying principles for the
development of fair and responsible AI.
•
Design: Design for privacy, security, transparency, bias,
robustness. For example, engineering training on how to make
models more robust and explainable.
•
Monitor: Auditing for accountability, bias and cybersecurity, such
as adopting tools for bias check as part of model-development
practices.
•
Train: Prepare and equip human capital to take full advantage
of AI and the new workstyles. This includes upskilling
engineering teams on robustness validation as part of the
testing process.
We are gradually deploying the framework across the group.
Programme stats
Size of data science teams:
>400
scientists now part of the Prosus
AI community
Number of AI models in production
year on year:
+124%
increase
Intellectual capital
As a data-rich group, we have the fundamental capital to really make
the most of technology’s strengths and potential.
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Intellectual capital
continued
Operationalising ethical and responsible AI
We take an operational approach to ethical and responsible AI,
focused on adopting best practices across the group’s data
science community. We develop or adopt tools and practices
designed to check the quality and representativeness of data, to
detect bias in decisions based on the models, and to trace back
the cause of the bias, among others.
We have adopted specific tools for this purpose. We focus on
raising awareness through demonstrations and technical
education to ensure these tools are adopted and used effectively.
In the coming year, we will articulate our ‘Ethical AI at Prosus’
statement, which describes our approach to the use of AI across
the businesses we invest in. We will also continue the ongoing
training of ‘Ethical and Responsible AI for Leaders’ and
‘Engineering and Product Management Training on Ethical and
Responsible AI’.
Educating leadership on ethical and responsible AI
In the second half of 2021, we launched a rolling programme
designed to educate leadership across the group on ethical and
responsible AI. Called AI For Impact, it looks at what AI means in
practice and how it can be used to reflect and embed the values
of an organisation in the way AI models are developed and
deployed. Throughout the programme, leaders can see the
potential of AI to implement their company’s ambitions while
developing fair, robust and transparent AI. Ethical and responsible
AI thereby becomes an opportunity for positive impact, not just an
element ofmanaging risks.
Training engineers in AI
We have also introduced highly specialised training on several AI
themes for engineers and product managers. Themes include
model deployment, ML pipelines, ML operations and natural
language processing.
Providing guidelines and sharing best practice
We have established internal privacy guidelines for our AI teams
to ensure compliance with the requirements of the EU’s General
Data Protection Regulation (GDPR). In addition, our AI ethics
working group meets monthly to manage workstreams designed
to advance ethical and responsible AI across the group and help
integrate ethics best practices into projects. In particular, we have
brought greater focus on developing tools and processes to
prevent bias in our ML models and are piloting methods for
betterbias detection.
Advancing our AI knowledge and capabilities
Increasing our AI community
Throughout the year, we continued to increase our community of
datascientists across the group. The Prosus AI community now
includes hundreds of data science and AI engineers. This is a
valuable platform for growing and sharing knowledge and
capabilities across the group. We organise technical and scientific
workshops for this community, connect data scientists working on
similar initiatives, share practices, tools and lessons learned
across businesses.
In 2021, we organised the second global Prosus AI Marketplace
for Knowledge. This three-day event for the AI community enabled
us to identify and share areas of excellence and best practice.
Accelerating the positive impact of new technologies: Example of large language models
Augment edtech course
information to enhance
personalisation
Understand product
attributes from item
description
Augment dish information to
improve order flow and
recommendation
Experiment: A sample of use cases at Prosus
Classify
Detect what a start-up does based on its website description
Predict
Predict ingredients given a dish name
Dialogue
Q&A support to automate customer support
Summary
Summarise text from company descriptions
Translate
Translate product documentation
Decode
Identify product attributes from descriptions
Understand and discover Experiment inside Prosus Demonstrate and educate Adopt and invest
2019
2020
2021
GPT-2 released
GPT-3
released
Evaluate use
cases at
Prosus
Leadership
engagement
Technical
tutorials
Applications
across the
group
Invest
Adopt: Sample of deployments at Prosus
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Intellectual capital
continued
Investing in seed-stage AI companies
We continue to invest in seed-stage AI companies pioneering
AI-first innovations in areas such as robotics, language and vision.
As such, we are collaborating with the Creative Destruction Lab,
aglobal network of universities that are accelerators for these
early-stage companies. We have invested in four AI-native
businesses so far. By taking small stakes in the companies
exploring these and other advances, we are able to buy into
early-stage innovation, extend our network of expertise, advance
our knowledge, and see the business potential for our group that
much sooner. Getting in early enables us to both accelerate and
de-risk our AI innovation.
Partnering for positive impact
We are members of the Netherlands AI Coalition, a public–private
partnership set up to substantiate and stimulate AIactivities in the
Netherlands.
We are also part of Amsterdam Data Science, a network
ofacademic and industrial partners that has established a strong
data science and AI ecosystem in Amsterdam. Our contribution
includes organising knowledge-sharing events such as workshops
and meet-ups.
Supporting data science for social good
We engage with a number of data-science-for-social-good
initiatives, dedicated to adopting AI in projects with a positive
social impact.
We contribute to a network of academic institutions and non-profit
organisations for developing data-science-for-social-good
education schools, including Imperial College London, Warwick
University and Carnegie Mellon University. The education
programmes are designed to train promising young scientists to
apply their skills to problems for a positive social impact, for
example, reducing unemployment, increasing access to education
and improving environmental quality in urban areas.
Looking forward
We will continue to develop and deploy AI to drive improvements
throughout the group. The opportunities are endless, not least
because of the improvement focus at the heart of AI and ML. As
models are deployed ever-more widely, as they progressively
learn and evolve, they tend to get better in their understanding
and decisions, with the critical proviso that they are designed
anddeveloped ethically and responsibly for positive impact.
This remains our focus going forward. AI is core to what we do
and how we do it, and we are determined to use it as widely
andas well as possible – making better and better use of AI,
toimprove everyday life for billions of people around the world.
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Intellectual capital
continued
Cyber-resilience
Ensuring cyber-resilience
We are committed to ensuring that our businesses are sustainable
and resilient, so that they can keep operating long term and
recover fast if disrupted. This is vital for our customers,
shareholders, for the group as a whole and for the businesses
themselves.
To this end, we focus on two key areas of cyber-resilience. Firstly,
we implement and maintain strong cybersecurity, so attacks are
thwarted and any breaches are quickly tackled with the minimum
impact. Secondly, we enhance the resilience of our platforms and
systems, so they are available 24/7, provide consistent levels of
service and give businesses the scope to scale and innovate as
they like.
Platforms
Platforms are our consumer products. Without the platforms,
noneof our businesses can operate. These platforms are often
complex, handle millions of transactions and grow rapidly with
ourbusinesses.
Our businesses operate in fiercely competitive industries and
markets, requiring continuous innovation to thrive. Technology sits
at the heart of their growth.
Business IT
Our businesses also use technology to run their internal processes.
This technology is often not customer-facing and the primary
usersare employees. Output from these business IT (BIT) systems
is used for operational and strategic decision-making, monitoring
performance, managing risks and preparing information for
external stakeholders. We work with the internal departments
toensure these systems are secure and reliable.
Our four focus areas
We focus on these four key areas to build and maintain
sustainable and resilient platforms and systems:
•
Availability of the platforms.
•
Quality and innovation of the platforms.
•
Security and safety of the platforms.
•
Security and reliability of BIT.
We encourage all subsidiaries in the group to assess and report
on their risks across these four areas, so we can gain a clear,
coherent view and, in turn, analyse, respond andadvise
effectively.
At group level, we now report against these areas as part of
ourongoing risk management.
Our cybersecurity policy
The board sets our groupwide cybersecurity policy, which has four
key parts: good governance, good protection, good detection
and good response. This is the backbone of our robust approach.
In line with the governance framework, we cascade the policy
through the segments to the underlying businesses, giving them
ultimate responsibility for ensuring they implement strong
cybersecurity in line with their own operations and challenges.
Forexample, we expect each business to have the right level of
incident management and crisis management to ensure a good
response to any security incidents.
Supporting from the centre
Our central cybersecurity team provides expert help and support
to the segments and businesses. As part of our risk and audit
function, the team’s approach is to help develop a competent,
agile community of cyber- and risk professionals, based on the
following three guiding principles:
•
Cyber is an enabler, not a blocker.
•
Help manage risk, not spread fear, uncertainty and doubt.
•
Every employee is a cyber-warrior.
Every month, the head of cyber hosts a round table for the
securityheads from the different subsidiaries. It is anopportunity
to share updates at a group level and for thebusiness leads to
discuss key initiatives and issues, such as thenature of the latest
cyberthreats or developments on the darkweb.
Creating a strong cybercommunity
As a decentralised group, it is important that we cultivate a strong
cybercommunity, therefore, we have established an online
workspace forpeople. It is a very popular and effective way for
all security professionals to stay in touch, discuss the latest security
trends andrisks and coordinate responses to incidents. Other
initiatives include an online cyber-academy, where every month or
so, the community gets together and shares the latest insights and
best practice. We also host an annual cyberconference – the
focus forFY22 was on the dark web, particularly ransomware.
Teams from across the group gathered together, and we invited
outside experts to share insights on potential attacks and threats
to ourbusinesses.
Cybersecurity policy
Secure
development
Log
management
Continuous
monitoring
Threat
intelligence
Incident
and crisis
management
Backup
management
Risk
management
Asset
management
Security
awareness
Identity
and access
management
V
i
g
i
l
a
n
t
Cybersecurity
R
e
s
i
l
i
e
n
t
S
e
c
u
r
e
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Assessing cyber-resilience
The cybersecurity team undertakes about 70 advisory and
assurance projects each year to ensure cybersecurity and
technology risks are managed by our businesses.
Our advisory projects for group companies include hiring hackers
to break in (ethical hacks), forensic work to investigate breaches,
and cloud assessments to improve cloud set-up and solutions.
We also conduct formal internal audits – independent
assessments of a company’s security and resilience for assurance.
In FY22, we increased our collaboration with BugCrowd, a
foremost responsible disclosure programme. We make BugCrowd
available to all group companies, so they can tap into a
community of around 200 000 responsible hackers who identify
and report any vulnerabilities they find, for the company to
address.
Governance and reporting
The cybersecurity team reports to the risk and audit committees
four times per year, sharing updates across the five technology
risk categories. On two occasions, it presents an extended report
on how well the businesses are doing against the policy.
Reports for the risk committee give a comprehensive overview,
including key risks, greatest challenges and any major incidents.
This is also where any major issues are escalated. Formal audit
reports are provided for the audit committee.
In addition, every quarter, the head of cyber meets with the head
of risk and audit and the group CFO to discuss the most important
cybersecurity and technology issues, where to focus in the months
ahead and any notable incidents.
In FY22, we also introduced risk dashboards. They enable the
group to monitor how quickly and effectively businesses are
addressing and resolving risks identified by the central team. This
in turn forms part of the report provided to the risk and audit
committees, per segment and per business.
Key cyber-resilience services
Our central cybersecurity team provides a range of services to
subsidiaries. These include risk-driven process reviews; data-driven
deep dives; security testing; resilience exercises; and managed
services.
Focusing on critical issues
Throughout the year, the team helped the business focus on
several critical issues.
As people continued to work from home through the ongoing
pandemic, making sure they could do so securely was a priority.
So, end-point security rose to the top of the cyber-resilience
agenda, and we worked with businesses to check and ensure this
was in place and robust.
Ransomware prevention and response preparation was a major
focus area. This included updating our cybersecurity policy with a
ransomware addendum; creating a group playbook setting out
how we would respond to a ransomware attack; and undertaking
ransomware simulations, so we could further refine our resilience
to this growing threat.
As the platforms our businesses use grow in size and complexity, it
can be hard to predict how these systems will behave in different
situations. To help our businesses, we make use of chaos
engineering. Here, we conduct well-controlled experiments that
deliberately stress the platforms in production to see whether they
will react in the way we expect them to. The central team advises
on these projects that are carried out by the different businesses.
In FY22, for example, iFood, OLX Autos, OLX EU and PayU India
payments undertook chaos engineering projects to test and
enhance the resilience of their platforms.
Key performance indicators
At a group level, we focus on two cyber-resilience key
performance indicators (KPIs): breaches and awareness.
Breaches
Our procedure requires subsidiaries to notify us about numerous
categories of incidents (eg ransomware; user, employee or SDLC
error; cyberattack; etc). We report to our risk committee about
these when they are material, in particular noting the nature of
incidents, the risk of financial losses, and whether notifications to
regulators or investigative bodies have been made. We make
recommendations for corrective actions where appropriate. In
FY22, we had no breaches of subsidiaries that had a material
operational or financial impact (ie above US$10m).
Awareness
Every new group function employee now has security awareness
aspart of the induction, and we do a monthly phishing simulation
at corporate. We saw good results from the last rounds of
phishing simulations.
Eleven phishing simulations were done over the past year. In this
period, the number of employees that ignored the phishing email
reduced from 77% to 33%, and the number of employees that
reported the phishing email using the right channels increased
from 18% to 49%.
Looking forward
We will continue ensuring the availability, quality, security and
safety of the platforms and systems our businesses rely on.
Ransomware remains a significant threat and we will increase our
focus there. We will also continue constructively testing and
stressing the resilience of the platforms, to give businesses greater
understanding and confidence that they have the tech foundation
they need to keep improving people’s lives around the world.
Intellectual capital
continued
Programme stats
11
phishing simulations
Cybersecurity team undertakes
70
advisory and assurance
projects each year
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Intellectual capital
continued
Data privacy
Our commitment
Public trust is a precondition to pursuing our purpose to improve
everyday life for billions of people through technology, and good
data privacy is essential for gaining and retaining that trust. If
privacy is compromised, trust evaporates and along with it, the
opportunity to advance technology’s benefits. So, the stakes are
high, and the threats and pressures are sizeable and getting
bigger by the day. Regulation is increasing, as is enforcement.
Moreover, cyber-attacks with privacy implications have been rising
around the world. This, in turn, means that ensuring strong data
privacy is both more urgent and more difficult for us as a group
and for our portfolio companies. We do not shy away from this
challenge. Indeed, we are rigorous in our response so we can live
up to our responsibilities.
A groupwide policy
Our policy on data privacy governance sets out responsibilities,
principles and our programmatic approach to ensuring data
privacy is implemented in each company of the group. It is
designed to define and document how data privacy is managed;
to promote best practice; to accommodate the different business
models, resources, culture and legal requirements across the
group; and to support trust in our businesses’ products and
services. We regularly review our policy that is available on our
website at
www.prosus.com/about/policies
.
Clear accountability
We give clear accountability to individual businesses. Each
business is directly responsible for managing data privacy in its
organisation.
This responsibility rests ultimately with the CEOs of each business
– they lead in implementing the group’s policy and are directly
accountable for the data protection programmes and privacy
standards in their organisations.
This approach to data privacy aligns with our model of
decentralised governance and broader belief in encouraging
great leaders and businesses to excel. We believe that setting the
right shared principles, and giving businesses the direct
responsibility to enact them, is the best way to have a greater
long-term positive impact. More broadly, we are fostering a
culture of data privacy and looking to businesses to ensure
privacy by design – where privacy becomes part of the fabric of
day-to-day work rather than an add-on.
These are the key inputs for ensuring robust data privacy across
the group:
Data privacy principles
Widely recognised internationally and benchmarked to fair
information privacy principles, they are guidelines for the
responsible use of data. Critically, they are both universal and
able to be applied to the different businesses in the group – from
established global players to start-ups in jurisdictions that may not
yet have a data privacy law.
Seven overarching privacy
principles at Prosus
1
Notice
We offer appropriate notice about our data
privacypractices.
2
Individual control
We honour data subjects’ choices about their personal
datawithin bounds of technical feasibility and reasonability.
3
Respect for context
We recognise that data subjects’ expectations about
fairand ethical use of their personal data are informed
bythe context in which their data was first collected.
4
Limited sharing
We limit unnecessary personal data sharing with
thirdparties.
5
Retention
We retain personal data only for as long as we need it.
6
Security
We ensure appropriate security.
7
Governments
We engage with governments responsibly.
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Data privacy programme
To help businesses put the principles into practice, our data
privacy programme is designed to scale to their needs and
circumstances. This programme ensures that our core data privacy
commitment and approach are followed in ways that really work
for our businesses, which benefits both individual businesses and
the group as a whole. It also assures that businesses fully comply
with applicable data protection laws. Personal data is stored and
processed ethically and in compliance with applicable privacy
laws, such as the GDPR in Europe.
The programme is available to all companies in the group,
including investees. This reflects our broad commitment to sharing
best practice and expertise in key areas such as data privacy,
cybersecurity and AI across the portfolio. This is one of the main
ways we add value and help build the companies we invest in.
This is our programmatic approach to ensuring robust data
privacy across the group.
Supporting and monitoring
The group’s data privacy office supports and monitors the
businesses. Help includes guidance on implementing the data
privacy programme; a secondment programme that develops
and trains future privacy leaders nominated by companies in the
group; and advice on any data privacy implications of mergers
and acquisitions. In turn, on a quarterly basis, the companies
report to the group privacy office on their progress in maturing
each aspect of their privacy programme, identifying key risks, and
notifying us about incidents and interactions with government
authorities, customers and their partners.
One of the structures we have put in place at group level to assist
businesses with their data privacy compliance is an intra-group
data transfer agreement. It is designed to streamline how our
companies navigate the complexities and risks involved in
international data transfers among affiliated companies, to ensure
they comply with the latest regulations in this area.
Prosus privacy in M&A playbook
Over time, we have built up considerable strength and expertise
on the privacy issues surrounding M&A and, as a responsible
investor, we want to share this know-how. So, the group privacy
team created the Prosus privacy in M&A playbook, jointly
published with the International Association of Privacy
Professionals – the largest organisation of its kind in the world.
This is an example of sharing our thought leadership as widely as
possible to help promote data privacy best practices across the
transactional ecosystem.
Advocacy of privacy legislation
We closely follow developments in data protection, data strategy,
AI ethics and other key issues. We actively advocate for better
standards, practices and legislation across the world of data,
working to ensure that our companies stay at the forefront of
discussions that impact the use of data in their businesses. This
includes advocacy and thought-leadership work in support of
relevant legislation in diverse jurisdictions, including India, Brazil,
South Africa and the European Union.
Governance and reporting
The board has direct oversight of data privacy, including
subsidiaries. The group encourages associates and investees to
participate in the data privacy programme.
It is one of the strategic topics directors review regularly through
the risk committee. Twice a year, the group data privacy office
submits a detailed report to the risk committee. It aggregates the
group risk assessment together with recommendations for focus
areas in the segments, and detailed segment-level reporting. The
responsibilities for executing this board oversight and strategy sit
with the group data privacy office, led by the global head of data
privacy. The remaining execution happens in the segments.
Intellectual capital
continued
Seven key elements of our privacy programme
1 2 3 4 5 6 7
Executive buy-in
Senior management
should emphasise the
importance of data
privacy and its
relationship to trust,
brand, growth, risk
and compliance to
their teams. The CEO
should designate a
data protection lead
or team of individuals
responsible for data
protection.
Know your data
The business should
know what personal
data it holds and
for what purposes it
processes that
data.
Policy-setting
Certain policy
documents should
be adopted to
support
implementation of
privacy principles at
a minimum:
– Consumer privacy
policy.
– HR privacy policy.
– Security policy.
– Data breach/
incident response
plan.
Training
employees
Privacy training that
informs employees
about company
policies, the
principles, and how
their roles are
impacted by
data privacy
requirements,
should be part of
onboarding and/or
annual training.
Vendor and
third-party
management
Where personal
data sharing is to
be permitted, third
parties should be
appropriately
scrutinised.
We require
confidentiality and/
or data-processing
agreements to
ensure an
adequate level of
protection for any
data shared. We
audit vendors on
risk-based criteria.
Legal compliance
Legal advisers
should support the
business by helping
to ensure that
applicable laws
and their specific
requirements are
met.
Reporting
Each business
should be able to
demonstrate its
compliance with the
principles, the data
privacy programme
elements, and with
applicable data
protection laws.
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Three KPIs
To monitor the data privacy outputs that flow from our companies
in line with the inputs we provide as a group, we have set three
KPIs.
Investing in expertise
The first KPI reflects our requirement that companies have their
own privacy lead and team. We track the level of investment in
data protection officers, deputies, regional privacy leads, privacy
managers and other experts. The more we grow our network of
data privacy and protection experts across the group, the
stronger our capabilities will be. When new data protection laws
come into force, we commonly observe increased investment in
this area to accommodate the mandatory designation of data
protection officers or similar roles within companies. Looking
ahead, we can expect a significant increase in the need for
qualified data privacy experts in our companies in India, with the
forthcoming adoption of data protection legislation there.
In our subsidiaries, we have a diverse team of 33 data privacy
roles in a variety of jurisdictions across the globe.
Auditing companies
As a group, we also require that companies are regularly audited,
so this forms our second KPI. We routinely conduct audits that
focus on aspects of data governance as part of our overall risk
management. Guided by the privacy team, our internal audit
team schedules and performs various types of privacy controls,
verifications and audits on subsidiaries. These audits are a
valuable way to provide both assurance and guidance. They are
welcomed by group companies, as they help identify opportunities
to strengthen privacy and data protection.
During the year, we conducted 35 audit activities with data
governance components, assessing issues specific to privacy,
software development life cycle, security, data management and
broader risk management.
Focusing on privacy by design
The third KPI relates to our increasing focus on data privacy by
design, another key group commitment, which has both
quantitative and qualitative components.
We are developing broader and deeper capabilities across the
group to execute privacy by design: incorporating privacy at the
design phase of product and technology deployment. As a result,
privacy should be embedded in our solutions and services from
the outset, rather than considered later.
Our focus on privacy by design has two dimensions: people and
automation. To train our people, we have a dedicated
development programme, the Prosus Privacy Technologist
Programme, on MyAcademy. Open to employees from any of our
subsidiaries, it is designed to enable group companies to develop
their own capabilities to implement privacy by design. Since its
launch in September 2020, over 250 employees have signed up
for the programme on MyAcademy or with the International
Association of Privacy Professionals (IAPP). Additionally, we
conduct a mix of in-person and remote topical privacy trainings
throughout the year for all of our employees, including as part of
onboarding of new employees. In our MyAcademy learning
environment, we host more than 30 modules of diversified privacy
training content in different languages, allowing functions such as
HR, Marketing, IT, AI, and others to find dedicated privacy
learning opportunities relevant for their daily work.
Automation can be another critical element in implementing
privacy by design. It is increasingly being used across our
segments to extend and improve privacy programmes.
Automation services can, for example, streamline the work of
privacy offices in companies, through automated questionnaires,
aggregation tools and data discovery tools. To support the
increasing use of such tools, we maintain a group-level licence for
industry-leading privacy management software that allows
companies to automate many of the privacy reviews undertaken
across the group. As a result of this offering, hundreds of records
of processing activities, data protection impact assessments,
vendor questionnaires and data discovery activities that were
once managed manually are now being automated by the
segments.
Looking forward
To further enhance data privacy across the group, we have
created the Prosus maturity model for privacy programmes. It is
designed to evaluate the respective level of privacy maturity
across segments and within them. We are mapping the relevant
maturity levels of all our companies, and aim to use this as a
springboard for them to set appropriate goals and measure
progress for FY23.
This enables us not only to do internal benchmarking and
company-specific goal-setting, but to identify broader trends. As a
result, we can see where the big privacy issues lie and adapt our
support and guidance accordingly, to keep improving as a group.
Data privacy risks continue to increase, notably as a result of
greater regulation. International data transfer is undoubtedly a
highly sensitive issue – hence our creation of the groupwide
intra-group data transfer tool. In addition, the Data Protection Act
in India will bring much change in a market where we are deeply
invested. There are also novel data privacy issues for our Food
Delivery and Edtech segments – notably around children,
personalisation, location and AI.
While major challenges remain, we are committed to ensuring
strong groupwide data privacy, so our companies can keep
improving everyday life for people around the world.
Intellectual capital
continued
Programme stats
Range of functions: Engineering,
technology and products, risk
management, finance, human
resources, customer support, legal
and project management
Number of IAPP members:
269
in 2022
(246 in 2021; 30 in 2020)
Holding
65
IAPP certifications (CIPP-E, CIPT,
CIPM, CIPP-A)
33
data privacy
roles in
11
countries globally
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Business culture,
ethicsandintegrity
Creating long-term value the right way
It starts at the top. The board ensures that a culture of business
ethics and conduct, aimed at long-term value creation, is
promoted to underpin the group’s activities as a responsible
corporate citizen. This includes adopting values and a code of
business ethics and conduct (the code), leading by example, and
monitoring implementation.
Sharing a strong culture
Over the years we have built a diverse, dynamic and collaborative
culture across the group. This is a culture that keeps us moving
forward and changing for the better. Above all, it encourages us
to keep learning and adapting, with the objective of continuing to
develop, change and grow to find new ways to improve everyday
life for people around the world.
Our culture comes to life through the things we do and the way we
do them. Our group values guide our culture:
•
We build.
•
We deliver.
•
We’re responsible.
•
We value each other.
These values, and the code, are the guiding principles for our
actions as an organisation.
Ethics and compliance
Honesty and integrity are the foundations of our reputation and
for the trust of our stakeholders: it is crucial we guard that
reputation and preserve that trust.
We are required to comply with many laws and regulations that
apply in the countries in which we operate, including anti-bribery
and anti-corruption and other similar laws. Failing to comply with
these laws and regulations could expose the group to legal
liability and affect our impact, reputation, business, financial
condition and the communities in which we operate. We are
therefore committed to conducting business in compliance with
the law and behaving ethically. This means that we apply laws
and rules, codes and standards with integrity and with regard for
ethical business practices in a way that supports good corporate
citizenship.
The board sets the tone at the top, guiding business values and
promoting the culture of ethics and compliance. The board and,
more specifically, the risk, audit, human resources and
remuneration, and sustainability committees exercise oversight of
ethics and compliance and the management of ethics and
compliance-related risks across the group. The board has
approved all our ethics and compliance policies, including the
code and the Speak Up policy. The code sets out what we as a
group expect from all employees and stakeholders and the Speak
Up policy encourages and provides channels for individuals to
report actual, or potential, breaches of the code, other group
policies or any other laws orregulations.
Group management is responsible for creating a culture aimed at
long-term value creation for the group and for ensuring that
ethical business standards are integrated into the group’s
strategies and operations.
Group ethics and compliance is responsible for executing effective
and demonstrable ethics and compliance risk management,
specifically relating to the code, anti-bribery and anti-corruption,
competition/anti-trust, sanctions and export controls, and anti-
money-laundering and counter-terrorism financing. Group ethics
and compliance is also responsible for the end-to-end Speak Up
process, including the policy, operating the actual service and
ensuring reports are followed up, investigated (where necessary)
under the direction of the Speak Up investigation committee, and
remediated appropriately.
Approach
Group ethics and compliance has developed and communicated
an ethics and compliance framework that sets out minimum
standards required throughout the group. Based on this
framework, subsidiaries are required to implement an ethics and
compliance programme that is fit for purpose and takes account
of any additional ethics and compliance risks specific to their
business.
For example, if a subsidiary operates in a country that may
present increased corruption risks (ie one with potentially weak
legal institutions or lack of transparency) and interacts with
government entities/officials in that country, we would expect it to
have implemented a robust anti-bribery and anti-corruption
compliance programme covering the following risk areas:
•
Interactions with government officials.
•
Gifts, hospitality, travel and entertainment.
•
Conflicts of interest.
•
Charities/charitable donations, political contributions and
sponsorship activities.
•
Third-party vetting and due diligence.
•
Accurate books and records.
To ensure proper design and implementation of ethics and
compliance programmes, 36 ethics and compliance officers have
been appointed across the group. Group ethics and compliance
monitors the design and implementation of these programmes
and reports to the board quarterly.
Social capital
Over the years we have built up a distinctive culture across the group.
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Social capital
continued
We understand that, from time to time, employees or other
stakeholders may come across a situation or behaviour that
concerns them. As part of our ethics and compliance culture,
weencourage individuals to speak up if they encounter issues.
Various Speak Up channels are available, including local options
(eg line managers, human resources, ethics and compliance
officers), as well as the Speak Up service, which is operated by an
independent third party, and is available 24/7 in at least five
different languages. The Speak Up service allows for confidential
and, if legally permitted, anonymous reporting. Retaliation against
individuals for speaking up is not tolerated and will be treated as
a violation of our code.
Progress in FY22
During FY22, we updated and enhanced a number of key group
policies, including the code and the Speak Up policy. The code
and this policy are pillars of a robust ethics and compliance
programme. We updated them to enhance awareness and
usability, making it easier for people to understand what we
believe is important and what behaviour is (or is not) appropriate.
The code reflects our commitment to doing business in an ethical,
legal and socially responsible way: it is designed to help us meet
that responsibility and explains how we expect our people to
conduct business. The principles that underpin our code support
full compliance with applicable laws and reflect the practical
ways in which we demonstrate our commitment to the code. We
believe that when we apply ethical principles to business
decisions, we are positioned for success.
The Speak Up policy that we adopted this year informs
employees and third parties of the various Speak Up channels,
and encourages them to raise concerns internally, which gives us
the opportunity to identify and manage potential risks at an early
stage. This policy replaces the whistleblower policy and is
consistent with the EU Whistleblower Directive (effective from
December 2021). The Speak Up policy also sets the standard for
how reports are managed and investigated in the group, and
underlying procedures have been implemented to support the
policy.
We have rolled out training across the group, to help everyone
who will need to play a role in Speak Up to understand their
responsibilities, and to set out how we can work together to
ensure that the code and the Speak Up policy are successfully
implemented.
The code and Speak Up policy are available in six languages
and posted on our external group website. On the basis of these
documents, group ethics and compliance has developed an
e-learning module which further explains the documents and how
they apply to employees. The e-learning is available in English
and will be translated into additional languages for use by
subsidiaries in training and creating awareness. This e-learning
has been rolled out to the group and, in FY22, 100% of the group
functions completed the training.
In FY22, 305 Speak Up cases were logged (including
whistleblowing cases). Of these cases:
•
161 were substantiated (fully or partially) and remediated, as
required
•
120 were not substantiated, and
•
24 are still under investigation.
In this financial year, group ethics and compliance was separately
notified about four
potential ethics and compliance-related
incidents (allegations relating to competition and other topics in
scope of the ethics and compliance framework). Of these
incidents:
•
one was substantiated (fully or partially) and remediated, as
required
•
two were not substantiated, and
•
one is still under investigation.
Overall, based on our continuous monitoring activities, we note
that businesses have continued to make good progress in
implementing and adapting the ethics and compliance framework
locally. Group ethics and compliance monitors the design and
implementation of the programmes in various ways, including
quarterly and biannual reporting, ethics and compliance reviews
and ongoing touchpoints with subsidiaries. Notably, the quarterly
and biannual reporting process provides valuable insights into the
progress made by subsidiaries in implementing ethics and
compliance policies and related controls. The information
obtained is used by subsidiaries and the group to ensure that
potential issues are remediated appropriately and programmes
are fit-for-purpose and operating effectively.
Looking forward
We continue to develop our ethics and compliance strategy to
take account of observations from our monitoring activities,
emerging risks, regulatory changes and best practices. We also
recognise the importance of ensuring that a strong ethics and
compliance base is embedded in our subsidiaries (allowing for
growth and change).
Over the coming year, we will continue to drive the
implementation of the ethics and compliance framework in the
subsidiaries. This will include ensuring that subsidiaries have
strong ethics and compliance foundations, and further
implementing the code and Speak Up policy. Related e-learning
will be rolled out to the remaining subsidiaries in local languages.
Group ethics and compliance, in collaboration with the
subsidiaries, will monitor the completion of this mandatory training.
Through the revised Speak Up policy and enhanced processes,
systems and data, we aim to improve board oversight of ethics
and compliance further, and to ensure that, as a group, we
address the relevant ethical issues by taking the right actions and
developing mitigation and prevention strategies.
Programme stats
36
ethics and compliance officers
100%
of group functions completed code
and Speak Up e-learning
305
Speak Up cases were logged
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Social capital
continued
Upholding human rights
Human rights give us the freedom to choose how we live, how we
express ourselves, and the freedom of political affiliation and are
fundamental to our ability to meet our basic needs, such as food,
housing, and education. Conflict, poverty, climate change,
inadequate access to education and inequitable access to
resources are some of the underlying issues that contribute to a
world where human rights continue to be challenged in both
mature and emerging economies. The global breadth of the issue
has been brought into sharp focus by growing discussion around
systemic racism and violence following the rise of the Black Lives
Matter movement. In turn, public dialogue has increased around
broader topics of diversity, equity and inclusion.
Our commitment
As an employer, investor and operator our actions touch the lives
of millions of people around the world. By setting appropriate
standards at a group level, we can create far-reaching positive
impact. Therefore, our approach to human rights begins with our
own operations and extends through our value chain.
As a signatory to the UN Global Compact, we welcome our role
in supporting and respecting the protection of internationally
proclaimed human rights, and in ensuring our business is not
complicit in human rights abuse. We operate in diverse
geographies, each with its own historical legacies, social
demographic configurations, and populations. Our approach to
human rights sets out standards and principles that can be
applied to the specific issues and challenges of each field of
operation.
Human rights in our operations
Our approach to human rights begins with the area where we
have the most influence: our own operations. As an employer, we
respect the fundamental dignity of our workforce and are
committed to providing a respectful, safe and secure workplace
that is free from any form of human rights abuse. This commitment
extends to the board and everyone who works in the group.
Our human rights statement is available on our website and is
communicated to internal and external stakeholders. It describes
our approach to topics, including remuneration, dignity at work,
privacy and employee confidentiality, forced labour, and health
and safety. It also details the reporting and governance
framework in place to uphold these standards. The human rights
statement is overseen by the board, with the assistance of the
sustainability committee and the human resources and
remuneration committee. After publishing our human rights
statement, we set a target to cascade it to all our subsidiaries this
year: 100% of these entities have now adopted and or published
their own human rights statement.
We address human rights further in our human capital and social
relationship capital frameworks, which outline our response to
specific risks relating to human rights across our business.
Companies we invest in
Since 2021, all subsidiaries have adopted our human rights
statement and are required to uphold this standard, along with
applicable laws and regulations. We track their performance in
this area as part of our third-party ESG performance assessment
process, which maps how each company addresses ESG topics,
including human rights.
We invest in diverse business segments, each with its own
particular nuances and challenges. As a result, each company’s
approach to human rights is influenced by its operating context
and business model, while maintaining the underlying principles.
For example, food delivery businesses work with a large pool of
drivers who are, in many cases, also external contractors. In this
case, we have introduced a groupwide on-demand platform
worker statement for subsidiaries, which outlines principles around
pay, social protection, fair working conditions and flexibility.
Human rights in our supply chain
We recognise our opportunity to influence our supply-chain
partners through our supplier and purchase decisions. As such, we
require a commitment to minimum human rights standards that is
compatible with our own commitments by companies that seek to
qualify as a Prosus supplier.
In 2021, we implemented a third-party supplier assessment tool,
which provides a broad view of our supply-chain risk across four
risk areas identified by the UN Global Compact, including human
rights. This screening system helps identify individual risks and
allows us to continuously assess and improve the profile of our
vendor ecosystem.
Building supplier sustainability
We are committed to building a more sustainable supply chain
through our purchase decisions.
At a corporate level, we have implemented an integrated
vendor-screening tool. We aim to screen the majority of vendors
across a range of material issues to help identify any areas of
concern. The tool will be continuously deployed across our current
and future portfolio of vendors.
Looking forward
Looking forward, we will continue to embed and enhance our
responsible business culture throughout the group.
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Community investment
In line with our purpose to improve the everyday life of billions of
people through technology, community investment is anatural
focus for the group to do what we do best – helping promising
entrepreneurs to make a lasting impact in the area ofaccessibility.
Although conditions vary, we believe that local action by local
companies is key to addressing societal challenges through
scalable innovation.
Across our portfolio, our businesses implement corporate social
responsibility initiatives that meet the specific needs of local
communities. We encourage businesses to align the design and
delivery of their social impact strategies to their core business
activities. This enables them to extend their strengths for positive
local impact.
Our community investments are designed to help underserved
members of society. In India, the Prosus Social Impact Challenge
for Accessibility and Prosus FLIGHT are meaningful examples of
support for growing highly impactful sectors that are underfunded
by the investment community.
Humanitarian relief
Support for Ukraine
Russia’s invasion of Ukraine created the largest humanitarian crisis
Europe has seen in decades. According to the UN refugee
agency, 10 million people, or about a quarter of the population,
were displaced. Nearly 4 million of these people have fled to
neighbouring countries, with Poland alone receiving millions of
refugees at the border.
To support Ukrainian refugees coming to Poland, World Central
Kitchen runs meal-service sites that served up to 400 000 meals
per day. This food is provided in disposable packaging, and
meant that thousands of pieces of packaging waste are
generated daily. This volume of waste warranted an urgent and
reliable sustainable alternative to packaging.
We have provided funding support to a pilot run by Ozarka, a
reusables-as-a-service company to replace the single-use
packaging with reusable containers at one of the World Central
Kitchen refugee centres in Poland. Assuming the use of 4 000 units
of disposable food packaging waste per day, the pilot project
could result in preventing up to 700 000+ units of disposable
food-packaging waste over six months. Through the
implementation of this pilot over the summer of 2022, we seek to
learn if reusables are a feasible solution to reducing single-use
plastic waste in humanitarian contexts.
In early March 2022, humanitarian aid has been volunteered on
behalf of OLX Ukraine and US$350 000 was donated to the Red
Cross. Furthermore, Prosus is contributing US$10m to support
humanitarian aid efforts in Ukraine. Donations will be made
directly to registered and established charities to ensure the
funding reaches those people most in need, and our Ukrainian
and Polish employees will be involved in the selection of the
charities. We expect to complete the US$10m of donations over
the next six months.
Prosus social impact challenge – India
The Prosus Social Impact Challenge for Accessibility (SICA) was
launched in 2020, in partnership with Invest India and Startup
India (government agencies), Social Alpha (supported by Tata
Trusts), and the World Health Organization (WHO).
The challenge identifies the most innovative Indian start-ups
working on assistive technology. The challenge aims to foster
long-term societal progress in an area of social need and
technology innovation while bridging two flagship government
initiatives, Digital India and Accessible India.
Assistive technology solutions can help people with disabilities to
lead independent lives. Many are among the most excluded
members of society, disproportionately affected by low rates of
literacy, social stigma and lack of opportunities to participate
more fully in the economy and society.
Winners
The top three start-ups (in order) for the second year of the
programme, were Trestle Labs (Bangalore), SignAble
Communications (Bangalore) and Lifespark Technologies
(Mumbai):
•
Trestle Labs creates real-time content for the visually impaired
community to enable more inclusive education and employment.
Its Kibo software translates and digitises printed, audio,
handwritten and digital content in 60 global languages,
including 12 Indian languages. The Kibo app has been adopted
by over 40 000 users in 15 countries, including India, Pakistan,
Indonesia, Nigeria and Bangladesh.
•
SignAble Communications has developed video remote
interpretation software to enable live interpretation in Indian Sign
Language (ISL) via a mobile app. The app addresses speech
and language disabilities with live, on-demand services by
human interpreters – for anyone, anytime, anywhere, affordably,
and at the touch of a button.
•
Lifespark Technologies is a healthcare technology company
building a platform for continuous, optimal therapy in chronic
neurodegenerative disorders such as Parkinson’s disease (the
fastest-growing neurological disease). Its wearable device,
linked to a digital platform, provides sensory cue-based therapy
to improve walking, reduce falls and enhance quality of life. The
app sends emergency alerts to caregivers, and generates data
for physicians and therapists.
Social capital
continued
41
Prosus annual report 2022
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Performance review
Governance
Financial
Other information
The winners received grants of INR25000000, INR18000000
and INR12000000 respectively, intended to help scale their
businesses to help more people with disabilities to lead more
independent, empowered lives.
Advisory and mentorship
The winners joined the Prosus SICA mentorship programme
alongside two runners-up: TinkerTech Labs, which works on
hearing impairment issues, and Visioapps Technology, a start-up
focused on visual impairment.
Mentees can access a global network of strategic advisers from
Prosus, technical advisers from WHO, assistive technology experts
from Social Alpha, and the support of knowledge and
partnership-building specialists from Startup India and Invest
India. They are eligible for opportunities to seek follow-on funding,
with an opportunity to join Social Alpha’s start-up incubator.
Social capital
continued
Prosus FLIGHT – India: Access to education and employment
for young women
Prosus FLIGHT is an initiative to fund education and skills training
for marginalised women and girls in India. Launched in March
2021, in partnership with UN Women, this initiative aspires to
support economic growth by advancing women’s equality and
participation in an economy where many lack opportunities for
decent, dignified work.
Breaking barriers
Obstacles to education and skills training in India are numerous.
Girls and young women often find it hard to continue their
education beyond high school. For those who attend college,
many struggle to stay enrolled until graduation.
Prosus FLIGHT supports 750 women and girls in higher education
to earn a formal degree or certification, and to acquire
employable skills to participate in India’s digital economy. The
initiative helps young women aged between 17 and 25 in the
state of Maharashtra, where Prosus FLIGHT aims to create a
network of female graduates who can become role models for
other young women.
42
Prosus annual report 2022
Overview
Sustainability review
Performance review
Governance
Financial
Other information
Natural capital
Climate action
In FY22, we developed a climate transition plan that provides the
foundation for setting multiyear, science-based targets in the
coming year. To achieve these targets, we will invest in
partnerships and scalable technology for low-carbon growth,
improved material efficiency and environmental stewardship.
To implement our climate transition plan, we follow a three-step
approach:
Firstly, we understand the environmental impact of our operations
and extended value chain. Each company conducts a materiality
assessment and an ESG performance assessment, while also
undertaking a deep-dive exercise into mapping and defining their
organisational boundaries for the purpose of carbon accounting.
Data from this analysis informs both group and company-specific
environmental programmes to drive systemic change.
Secondly, we apply the highest industry standards and targets,
guided by global best practice and science-based frameworks.
Thirdly, we identify scalable technology, partnerships and
strategies to reduce environmental impact and improve
performance.
Given the diversity of our group companies, not only in terms of
business sector and geography, but also the relative maturity of
each entity, the nature of a company’s material environmental
impacts, and how to define them, will vary. Mapping the
environmental impact of individual businesses reflects our
emphasis on ‘solving for local needs’.
In our Classifieds segment, for example, OLX Group has
committed extensive resources to establish a methodology for
calculating how reusing consumer products reduces consumption
of materials, water and other resources, and the corresponding
reduction in greenhouse gas (GHG) emissions, thereby
contributing to creating a circular economy. Outcome of this is
published in the OLX impact report (refer to
www.olxgroup.com/
impact
).
We work closely with our subsidiaries to build a diligent GHG
emissions inventory accounting and reporting process. We
support all subsidiaries to onboard their GHG inventory (ESG data
management tool) to create a repository of all their upstream and
downstream environmental data. This enables our businesses to
adopt a data-driven analysis and define a baseline that
underpins company-specific targets to reduce emissions.
Our GHG accounting and reporting, ultimately, is about creating
transparency and appointing responsibility for taking action to
reduce emissions and realise GHG targets. Our GHG accounting
needs to be in support of our company’s climate ambition and at
the same time follow the leading standards and guidance on
accounting and reporting.
The process of GHG data reporting is very operational, company
and market specific. Compared to the financial accounting
processes of listed and non-listed companies, we observe that
carbon accounting is still in a nascent stage for private
companies. This is illustrated through the lack of carbon data
management in our new acquisitions, regardless of size, sector or
geography. Helping our companies to get started on the climate
action journey begins with deep engagement and training. During
the first 12 to 24 months after acquisition, we start with building
awareness of the need for climate action and helping them with
the tools to define their boundaries and start their GHG
accounting journey. Continual improvement in the quality of their
data collection and analysis is key to the development of their
environmental programme. Designated ‘environmental champions’
are supported with training and knowledge-sharing to develop
and implement emissions reduction plans.
Electricity used in buildings, fuel consumption by company cars
and generators and IT hardware are some of the assets that
need to be reviewed for their generation of GHG emissions.
Oversight over these assets and the implementation of solutions
for GHG reduction activities is operationalised at individual
company level. We want to ensure that our GHG accounting and
reporting approach is reflective of this reality and allows us to set
targets that can be delivered on by the entities that carry the
ability to do so.
Our climate commitments
In early FY22, we committed to becoming carbon-neutral. The
scope of this commitment included direct and indirect emissions
resulting from our corporate operations, including business travel
and extending to the footprint of our subsidiaries that offset their
scope 1 and 2 emissions.
In the years to come, we intend to shift our investments in carbon
offsets to strategic GHG reduction programmes.
For the Prosus corporate entity, we have fully compensated
historical GHG emissions arising from its own operations since its
listing in September 2019. Our offsets are procured from certified
projects around the world that help drive social, economic, and
environmental progress in local communities.
Next steps: Science-based targets towards net zero
We are now working on setting groupwide, multiyear GHG
reduction targets that will drive our net-zero pathway, aligned with
the 2015 Paris Climate Agreement goal of keeping global
warming to 1.5°C.
We have established FY20 as our baseline for our emissions-
reduction targets feeding into our climate transition plan. Sphera,
our carbon data management tool, enables the evolution and
integration of group ESG performance targets into company-
specific ESG plans and targets.
We seek to minimise our impact on the environment and to play our part in addressing issues,
including climate change and the responsible use of natural resources.
43
Prosus annual report 2022
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Performance review
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Financial
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This process facilitates effective, groupwide collation of consistent,
high-quality and comparable data for evaluation and reporting.
For the new financial year, our climate targets are embedded into
the STI-linked KPIs for our chief executive and include:
1. Absolute reductions in our scope 1 and scope 2 corporate
footprint (Prosus corporate).
2. Reductions in material scope 3 categories. (Prosus corporate).
3. Setting a science-based target (Prosus corporate).
4. Reporting of full scope emissions of all portfolio companies
where we have a controlling interest.
We intend to publish our science-based targets in the coming
year. Our ambitions will focus on two aspects that are in
alignment with the level of control we exercise over our group:
•
Reduction of our corporate footprint (scope 1, 2 and selected
categories of scope 3).
•
Engagement of our portfolio companies to ensure they also set
their own science-based targets.
Systemic change is contingent on collaboration across sectors
and value chains. By working through sectoral, industry and other
policy forums, Prosus aspires to create enabling conditions for
collective global action by businesses to reduce environmental
impact.
We participate in initiatives and programmes most relevant to the
operations of our businesses. We have joined the BoardNow
coalition of companies committed to sustainable air travel: we
invest in sustainable aviation fuel that is the only short-term
solution to decarbonise air travel and that is supportive of the
development of a low-carbon pathway for air travel. We will
continue to invest in electrification of our delivery fleets, renewable
energy, and innovative collaborations to enhance environmental
performance.
There is tremendous opportunity in the food segment to use
electric bikes, scooters, motors and other vehicles to reduce the
environmental impact of food delivery. Across the diverse range of
food delivery companies in our portfolio, we have learnt that
successful implementation comes with many challenges. While
there can be both carbon and cost efficiencies in the long term,
key barriers to the adoption of electric delivery vehicles range
from awareness, infrastructure and financing.
iFood, Swiggy and Delivery Hero are deeply involved in pilots to
learn where the bottlenecks are and what solutions can be
created. The shared ambition involves removal of fossil fuels from
the supply chain, which will reduce GHG emissions, reduce
reliance on the supply of these fuels and continue to support
livelihoods.
Swiggy has learnt from conducting a few pilots that the offering of
electric two-wheelers for its delivery partners has to match, if not
improve, the existing two-wheelers on critical elements of battery
capacity (range), engine capacity and costs to improve adoption.
Solutions to these elements require a mix of new infrastructure of
charging or battery swapping stations and reliable high-quality
two-wheelers that are affordable to operate. Swiggy is now
working with several players, like manufacturers, leasing
companies, infrastructure providers and more to stimulate
adoption of the scooters to realise its target of approximately
0.5million miles driven electrically by 2025.
But, to disrupt a highly developed system of transportation based
on fossil fuels – reliable new and used motors, petrol stations,
garages, technical experts – and replace it with an equally
reliable system of affordable scooters, charging stations, sufficient
battery range, etcetera, requires the collaboration and
entrepreneurship of many different parties, including a supportive
government. As an investor in several food companies across the
globe, Prosus recognises how each market has its challenges to
make electric transport a viable investment, and that we can play
a role to enable sector innovation and cross-learning to help
remove barriers and speed up the transition.
Packaging and waste is a material topic for a significant
proportion of our portfolio companies, in particular for our Etail
and Food Delivery segments. As in all sustainability topics, we are
focused on scalable and systemic responses. Each of the
companies will continue to explore opportunities to reduce the
environmental impact of plastic packaging by implementing steps
to understand and manage this impact. One of the strategies
being implemented by iFood, Delivery Hero and Swiggy, is to
offer customers an opt-out feature for cutlery when placing their
food orders.
Further details of our climate strategy, including risks and
opportunities such as decarbonisation of mobility and powering
the circular economy, can be found on our website at
www.prosus.com/sustainability/overview
.
Task Force on Climate-related Financial Disclosures
We have been embedding Task Force on Climate-related
Financial Disclosures (TCFD) guidelines into our business to ensure
transparency of our understanding and management of climate-
related risks. Our full TCFD disclosure is provided online at
www.
prosus.com/investors/annual-reports
and is summarised on the
next page.
As we mature on our sustainability journey, we are guided by
reporting frameworks like the TCFD and Sustainability Accounting
Standards Board (SASB) standards for communicating our position
and progress on key ESG indicators. The TCFD framework helps us
to communicate consistently on climate-related risks and
opportunities to meet the needs of investors and other
stakeholders for disclosures on our role in creating a low-carbon
and climate-resilient economy. In the coming year, we will continue
to further align our ESG reporting to other commonly accepted
standards that stakeholders know and trust, defining and
enhancing broader performance measures and reporting
progress against them.
Natural capital
continued
Total energy
consumption (GJ)
%
renewable
energy
%
non-renewable
energy
Prosus corporate
895.63 51% 49%
PayU
10 395.11
0% 100%
Movile
1 710.95
0% 100%
iFood
2 728.85
0% 100%
eMAG
27 3687.16
5% 95%
OLX
38 308.98
4% 96%
44
Prosus annual report 2022
Overview
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Performance review
Governance
Financial
Other information
Natural capital
continued
Approach
Progress
Next steps
Governance
At our highest governance level, two board
committees (risk committee and sustainability
committee) along with the governance committee
comprising of executive leadership are charged
with overseeing the implementation and execution
of the group sustainability strategy and climate
transition plan.
The committees must meet at least twice every
year and retain oversight to provide steer on the
sustainability risks and opportunities for the group.
Identification of sustainability risks and
opportunities at group level is led by the global
head of sustainability, who is responsible
for managing implementation of the group
sustainability plan. The global head of
sustainability reports to the group general counsel,
a member of the executive management team,
who reports to the CEO.
Action on climate is a requirement across
our portfolio of companies, with performance
standards set at the group level. Implementation
and results are monitored by the sustainability
committee whose members include our CEO, CFO
and board directors.
To ensure our board is informed of and
aware of all climate-related reporting and
standards, the board received multiple
trainings this year on specific environmental
programme management, including GHG
accounting, setting of science-based targets
and climate action.
Climate action targets have been integrated
in the group financial planning, and included
in the CEO’s and CFO’s KPIs and their short-
term incentive plans. Targets are aimedat:
•
Absolute reductions of our corporate
footprint.
•
Developing a science-based net-zero
pathway.
•
Disclosure of audited emissions of all
portfolio companies where we have a
controlling interest.
We have successfully trained and grown a
broad network of sustainability champions
across all controlled portfolio companies.
These champions are responsible for
the implementation of the environmental
programme, setting boundaries for GHG
accounting within their business and
collecting and reporting carbon data on our
group reporting tool.
An internal audit of our controls on the
carbon data reporting process and tool,
findings of which were reviewed at board
level. Our GHG data received a readiness
review conducted by E&Y.
Trainings for a broader group
of executive management on
climate change and climate-
related risks and opportunities.
Further support sustainability
champions in our portfolio
companies to expand and
improve GHG inventorisation,
and set absolute reduction
targets.
Explore ISO certification of our
GHG data and environmental
programme as Environmental
Management System.
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Natural capital
continued
Approach
Progress
Next steps
Strategy
We play a leading role in digitisation of traditional
business sectors enabling the transition to a low-
carbon economy. When compared to analogue,
offline delivery of services and digital solutions are
material efficient and reduce the need for physical
infrastructure and mobility.
We continue to explore investment opportunities in
climate across a wide range of verticals, including
but not limited to clean energy, sustainable food
and agriculture, next-generation materials and the
circular economy.
We have assessed the climate-related risks
and opportunities for the group, which resulted
in an identification of some clear opportunities
to enhance the ESG profiles of our portfolio
companies and thereby increase our ability to
raise capital, enhance the valuations of these
companies and reduce their operational risks.
Opportunities in green transport, resource
efficiency and circular economy, operational
efficiency and digitisation with positive impact
on our segments are substantive and pursued
through the employment of management
programmes and investment programmes.
This year, first, we onboarded all subsidiaries
on a carbon data management tool.
Next, our businesses harnessed this data to
define a baseline and set company-specific
reduction roadmaps.
We have articulated our responsible
investment approach to ensure clarity for
all stakeholders about integration of ESG
in our capital allocation decisions and our
engagement with portfolio companies.
We made several investments in
sustainable businesses this year, such as
Fashinza (
https://www.prosus.com/news/
fashinza-raises-100m-series-b-to-create-
sustainable--supply-chain-for-global-
fashion-industry/
), sustainable fishery
platform Aruna (
https://www.prosus.com/
news/indonesias-fisheries-platform-aruna-
secures-series-a-funding-of-us-35-million/
)
and agtech Biome Makers (
https://www.
prosus.com/news/biome-makers-raises-
15m-in-series-b-funding-to-secure-position-
as-a-global-leader-in-biological-soil-
analysis/#:~:text=%E2%80%9CProsus%20
Ventures%20invests%20in%20industries,to%20
the%20fresh%20food%20supply
).
Acknowledging our corporate footprint
includes emissions from air travel, we are
committed to contributing to structurally
decarbonise the aviation sector. We
have joined the BoardNow programme
(
https://boardnow.org/
) and will purchase
sustainable aviation fuel (SAF) credits from
the first dedicated SAF production facility,
operated in the Netherlands by SkyNRG.
We participate in initiatives and programmes
most relevant to the operations of our
businesses, such as:
•
eMAG investing in ecological carbon
offsetting (
https://www.carpathia.org/
conservation-carpathia-and-emag-join-
forces-to-protect-the-fagaras-mountains/).
•
iFood partnering to identify and innovate
towards new packaging solution with
Xprize (
https://news.ifood.com.br/
xprize-competicao-promete-resolver-
desafios-mundiais/).
•
OLX measuring the avoided environmental
impact from the trade of used goods on its
platforms (
https://www.olxgroup.com/
impact).
The next steps are to support the
companies in their journey to set
and achieve net-zero targets by
identifying scalable technology
and partnerships to enable
low-carbon growth and material
efficiency.
We are deepening our
understanding and quantifying
how digitalisation helps the
world transition to a low-carbon
society. In FY23, we will conduct
a comparative assessment (LCA)
to help us quantify the impact
of digital payment services
compared to offline, analogue
and physical financial services.
We are also implementing
a project at OLX to further
understand and substantiate the
opportunity for digital platforms
for used-car trade to contribute
to reduction of GHG emissions
from cars.
These projects will contribute
to deeper understanding of the
environmental benefits of digital
platforms, which will feed into the
classification of our investment
activities as sustainable.
46
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Performance review
Governance
Financial
Other information
Natural capital
continued
Approach
Progress
Next steps
Risk management
Management and the board are accountable
for the choices and decisions we make, how
we execute on these, for delivering value in its
broadest definition of the six capitals model,
and to maintain the risk profile regarded as
acceptable. Risk tolerance levels are set top-
down, and management is accountable to the
board for implementing and monitoring the
processes of risk management and for integrating
this into day-to-day activities.
Particularly focusing on data privacy,
cybersecurity, sustainability (including climate risk),
tax and intellectual property.
An ongoing enterprisewide risk assessment
process supports the group. This ensures risks are
adequately identified, evaluated and managed
at the appropriate level in each business and that
their individual and joint impact on the group is
considered.
Given the diversity of our investment portfolio,
in terms of sectors and geography, but also the
relative maturity of each company, the nature of a
company’s material environmental impacts – and
how to define them – can vary for every company.
All our businesses are required to assess the
extent to which natural capital may significantly
affect current or future operations.
These and other potential risks vary according
to each company’s business model, sector and
geography, among other factors. Applying our
principle of ‘solving for local needs’, we support
our portfolio companies to identify and manage
risks and pursue opportunities in the context of
local operating environments.
Further details on the finding of this analysis can
be found in our full TCFD report on our website at
www.prosus.com/investors/annual-reports
and the
Natural Capital risk section in our annual report.
Opportunities arising from the transition
to a low-carbon economy are plenty for
our businesses, which also de-risk their
operations.
Companies in our Food Delivery and Etail
segments have continued to pilot the
use of electric vehicles for delivery and
transportation to curb emissions.
Investing in pilots for reusable and
biodegradable packaging to reduce
packaging waste.
Our Etail platforms invest in proprietary
renewable-energy capacity to power their
warehouses and other sites.
eMAG has invested in refurbishment
capacity for phones to help customers
extend the life of their devices, reducing the
need for new virgin materials and products
(
https://www.prosus.com/news/romanian-
startup-flip-lands-15m-from-prosus-owned-
emag-plans-cee-leadership-in-refurbished-
products/
).
Our Classifieds operations have
consolidated the network of car inspection
centres under their GHG accounting and are
identifying opportunities to reduce energy
consumption and to install renewable-energy
capacity.
Packaging and waste is a
material topic for our food
delivery and etail companies.
Through a specialised working
group, we are focused on
identifying scalable and systemic
responses. Over the year, this
group will pilot solutions and
exchange best practice.
Metrics and targets
We require all our portfolio companies, regardless
of the sector they operate in, to take climate
action as a central pillar of their ESG performance.
GHG accounting, reporting and tracking of results
against targets is monitored by our CEO and the
segment CEOs reporting to him.
All subsidiaries have committed to being carbon-
neutral since FY22. For us, this is an important
driver for our portfolio companies to develop a
thorough practice of carbon measurement and
accounting that underpins the setting of net-zero
targets.
For this year, the below targets are set on GHG
emissions:
•
Reduce corporate scope 1 and scope 2
emissions by 100%.
•
Reduce corporate scope 3, category 1 emissions
by 1%year on year.
•
Reduce corporate scope 3, category 6 emissions
by 6%year on year.
•
Set a science-based GHG reduction target for
corporate.
•
All subsidiaries report their audited full
scopeemissions.
GHG inventory and footprinting for all
scopes for FY20 were performed for
corporate and subsidiaries. This is now the
benchmark year for further climate action
across the group.
We have established the baseline and GHG
accounting and reporting processes that are
the foundations for completing our climate
action plan and science-based targets.
Carbon-neutrality was achieved for both our
corporate and our subsidiaries through the
purchase of credits from high-quality energy
efficiency and renewable-energy projects.
Associate Tencent announced its
commitment to a net-zero pathway and will
publish its science-based targets in the near
future.
We are committed to supporting
the transition to a net-zero
economy in accordance with the
2015 Paris Climate Agreement
to keep global warming to 1.5
degrees Celsius.
Our science-based targets will
be published in FY23, when also
implementation commences.
Our ambitions will focus on two
aspects, in alignment with the
level of control we exercise over
our group:
•
Reduction of our corporate
footprint (scope 1, scope 2
and selected categories of
scope3).
•
Engagement of our portfolio
companies to ensure they also
set their own science-based
targets.
From next year onwards, we will
disclose progress made against
this target.
We will fine-tune our GHG
accounting and reporting
framework to match the reality
of a long- term investor with our
financial accounting.
47
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Overview
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Performance review
Governance
Financial
Other information
Natural capital
continued
Prosus and portfolio companies scope 1 and scope 2 emissions
Prosus corporate offices
1
*tCO
2
e
Scope 1 emissions from direct operations (use of fossil fuels and refrigerants)
15.46
Scope 2 emissions from purchased electricity (market-based)
35.74
Scope 3 (C6) emissions from corporate air travel
418.30
Portfolio companies:
OLX
Scope 1
(tCO
2
e)
Emissions from use of fossil fuel
389.08
Emissions from use of refrigerants
0
Total scope 1
389.08
Scope 2
(tCO
2
e)
Emissions from purchased electricity 4 077.93
Movile
Scope 1
(tCO
2
e)
Emissions from use of fossil fuel
0
Emissions from use of refrigerants
0
Total scope 1
0
Scope 2
(tCO
2
e)
Emissions from purchased electricity (market-based)
49.62
iFood
Scope 1
(tCO
2
e)
Emissions from use of fossil fuel
1.89
Emissions from use of refrigerants
0
Total scope 1
1.89
Scope 2
(tCO
2
e)
Emissions from purchased electricity (market-based)
78.40
eMAG
Scope 1
(tCO
2
e)
Emissions from use of fossil fuel 12 860.71
Emissions from use of refrigerants
114.78
Total scope 1 12 975.49
Scope 2
(tCO
2
e)
Emissions from purchased electricity (market-based) 4 417.12
PayU
Scope 1
(tCO
2
e)
Emissions from use of fossil fuel
239.07
Emissions from use of refrigerants
92.38
Total scope 1
331.45
Scope 2
(tCO
2
e)
Emissions from purchased electricity (market-based) 1 189.12
The carbon emissions data was prepared in line with the following criteria for scope 1 and scope 2 emissions and can be accessed on our website at
https://www.prosusreport2022.com/downloads.html
.
*
tCO
2
e:
tonnes of CO
2
equivalent.
1 Prosus corporate offices include the Unites States (Ventures), Belgium, and Hong Kong offices.
Scope 1 emissions
Prosus corporate
(tCO
2
e)
15.46
Portfolio companies
(tCO
2
e)
13 697.91
Total
(tCO
2
e)
13 713.37
Scope 2 emissions
Prosus corporate
(tCO
2
e)
35.74
Portfolio companies
(tCO
2
e)
9 812.20
Total
(tCO
2
e)
9 847.94
Scope 3 emissions (C6 emissions from
corporate air travel)
Prosus corporate
(tCO
2
e)
418.30
48
Prosus annual report 2022
Overview
Sustainability review
Performance review
Governance
Financial
Other information
The EU Taxonomy Regulation
(the regulation)
The regulation came into force on 12 July 2020 and establishes an
overarching classification system of conditions that economic
activities must meet in order to qualify as environmentally
sustainable. The regulation is designed to support the
transformation of the EU economy to meet its European Green
Deal objectives, including the 2050 climate-neutrality target. In so
doing, the regulation seeks to fulfil its environmental objectives of
(i) climate change mitigation; (ii) climate change adaptation; (iii)
sustainable use and protection of water and marine resources; (iv)
transition to a circular economy; (v) pollution prevention and
control; and (vi) protection and restoration of biodiversity and
ecosystems.
The regulation also expands the scope of non-financial
information that needs to be disclosed by large companies such
as Prosus. It requires to what extent the company’s activities are
associated with economic activities that qualify as environmentally
sustainable. Based on secondary legislation, the disclosure
requirements of the regulation will be phased over several years.
As of the date of this annual report for the financial year ended 31
March 2022, only the Climate Delegated Regulation applies,
concerning 90 activities contributing to the objectives of climate
change mitigation and climate change adaptation. We need to
provide information on the proportion of taxonomy-eligible and
taxonomy non-eligible economic activities in our total activities
with regard to turnover, capital expenditure and operating
expenditure.
In the Climate Delegated Regulation the EU prioritises activities in
sectors with high greenhouse gas emissions such as energy,
transportation and manufacturing because these can make the
largest contributions towards carbon-neutrality.
On the basis of the current eligible activity list and in accordance
with the legislation, we have undertaken a review of the group’s
turnover, capital expenditure and operating expenditure to identify
the extent of any eligible activities within our business. We
concluded that the current Climate Delegated Regulation does not
list activities that are material to our core business segments that
we invest in and operate.
Turnover disclosure
The proportion of taxonomy-eligible turnover was calculated by
the net turnover derived from products and services associated
with taxonomy-eligible economic activities (numerator) divided by
the net turnover (denominator), for the financial year ended 31
March 2022. Reportable taxonomy-eligible turnover for the
financial year is 0% of total turnover, with non-eligible turnover at
100%.
CAPEX disclosure
The proportion of taxonomy-eligible CAPEX is calculated by the
CAPEX (numerator) of assets and processes associated with
taxonomy-eligible activities divided by total CAPEX (denominator),
for the financial year ended 31 March 2022. Reportable taxonomy-
eligible CAPEX for the financial year is <2% of total capital
expenditure, with non-eligible CAPEX >98%. The CAPEX additions
to property, plant and equipment are detailed in our consolidated
financial statements on pages 146 to 248.
OPEX disclosure
The proportion of taxonomy-eligible OPEX is calculated by the
OPEX (numerator) of direct, non-capitalised costs associated with
taxonomy-eligible activities divided by total OPEX (denominator),
for the financial year ended 31 March 2022. Reportable taxonomy-
eligible OPEX for the financial year is <0.1% of total OPEX, with
non-eligible OPEX >99.9%.
While climate action is one of our material topics, the activities
included in the current taxonomy are not material to our core
business models. We did not record enabling activities relevant to
our businesses, such as the sourcing of renewable energy, as it is
not included in the current taxonomy.
Taxonomy disclosures
Turnover
CAPEX
OPEX
Taxonomy eligible
activities (%)
0%
< 2% < 0.1%
Taxonomy non-
eligible activities
(%)
100%
> 98%
>99.9%Total
100% 100% 100%
We followed the same accounting principles as in our financial
statements.
We will continue to monitor legislative developments and adapt
our disclosures as and where needed.
49
Prosus annual report 2022
Overview
Sustainability review
Performance review
Governance
Financial
Other information
51
Our performance
55
Classifieds
59
Food Delivery
62
Payments and Fintech
66
Edtech
69
Etail
72
Other: Ventures
75
Other: Naspers Foundry
77
Social and Internet Platforms
79
Tax
82
Choosing the right opportunities and balancing risks
85
Monitoring key risks
Performance
review
50
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
In presenting and discussing our performance, we use certain
alternative performance measures not defined by IFRS, referred
to as non-IFRS-EU financial measures, alternative performance
measures or APMs. Such measures include economic-interest basis
information; trading profit; adjusted EBITDA; headline earnings;
core headline earnings; and growth in local currency, excluding
acquisitions and disposals. Segmental reviews in this report are
prepared showing revenue on an economic-interest basis (which
includes consolidated subsidiaries and a proportionate share of
associated companies and joint ventures), unless otherwise stated.
Numbers included in brackets represent the equivalent measure
on the basis of growth in local currency, excluding acquisitions
and disposals. For a further explanation of the use of APMs we
refer to ‘Governance – About this report’.
Operating review
In a year marked with continued global turmoil and uncertainty,
which has made for a turbulent operating environment, financial
year 2022 was a year of progress for Prosus. We remained
focused on executing our long-term strategy and delivering strong
operational growth across our core segments. At the same time,
we made strategic investments and laid the foundation for future
growth across the portfolio.
Despite a strong operational performance across the portfolio,
the group, like many technology companies, faced significant
macroeconomic and geopolitical headwinds, leading to highly
volatile capital markets in the latter part of the financial year.
The combination of the war in Ukraine, higher inflation and
rising interest rates drove up the cost of capital and increased
uncertainty. Valuations of global peer group companies in tech
and internet sectors declined sharply in recent months as the
level of risk appetite reduced significantly. These forces drove,
for the first time in many years, a decline in the group’s net asset
value. The discount to the group’s sum of the parts increased to
an unacceptable level. Taking substantive action to reduce the
discount is a priority. To navigate these turbulent times, we will
prioritise capital towards supporting our existing businesses
and prudent balance sheet management, sustaining adequate
financial liquidity.
We invested US$6.3bn to increase our stakes in existing investments
and in new assets where we see substantial opportunity for future
value creation. This investment was weighted largely to the first
half of the year, in our Food Delivery and Edtech segments.
While Delivery Hero’s stock has declined in value since the last
investment, we remain confident in the company’s future and in
our continued ability to generate a return from it. In August, we
also committed US$4.7bn to acquire BillDesk, the leading
bill-payment-processing company in India. The transaction
is under review by the Competition Commission of India.
In the second half of the year, we invested heavily through
our income statement. We focused on maintaining growth
and customer engagement, while leveraging increased scale to
develop opportunities in adjacent products and services. We are
building ecosystems with multiple customer touchpoints to improve
not only their experience but also retention. We aligned technology
and data with key customer needs such as convenience and ease
of use. We will need to continue to invest organically to build
on the strong progress we have made in autos in Classifieds,
convenience in Food Delivery and India credit in Payments and
Fintech segments. Our plans will recognise the uncertainty and
volatility and the need to preserve capital.
Throughout the year, the group continued to crystallise returns
and return capital to shareholders. In February 2022, we
completed a second US$5bn share purchase programme that
followed the US$5bn share buyback programme in 2021. This
generated a meaningful enhancement to net asset value per
share. Repurchased Prosus shares will be cancelled in the
following financial year. In total, Prosus has allocated US$50bn
in capital over the past six years, with approximately 57% of
that capital being invested into the business and new growth
opportunities, approximately 25% returned to shareholders in
the form of share repurchases and dividends, and approximately
18% being held in cash.
Against the backdrop of deteriorating geopolitical and economic
conditions, our ecommerce businesses were resilient, growing
revenues 56% (50%) in the second half of the year and, in many
cases, significantly outperforming global peers.
Within our Ecommerce portfolio, all segments made good
progress against their financial and strategic objectives. Classifieds
demonstrated healthy growth at its core, well ahead of global
peers. OLX Autos experienced strong triple-digit growth this year
as it creates a differentiated customer experience. Our Classifieds
business has been deeply impacted by Russia’s invasion of Ukraine.
We are appalled by the war in Ukraine and we continue to do all
we can for our Ukrainian employees and the people of Ukraine.
Consequently, in March 2022, we announced the separation of the
Russian classifieds business Avito from our OLX Group. Following
completion of this operational separation, in May 2022 we
announced our intention to exit the Russian business. We have
started the search for an appropriate buyer for our shares in Avito.
Food Delivery’s performance remained strong, as it addresses
a major consumer need that is being fundamentally transformed
by technology. We are leveraging our logistics network and
capabilities as well as our strong customer relationships to pursue
this opportunity with a real competitive advantage. The online food
and convenience industry is still in its early stages of development,
and we are excited by its long-term prospects and we believe it
will ultimately yield a good return on investment.
In Payments and Fintech, our growth momentum continued
globally. We increased our scale in India, one of the fastest-
growing consumer internet markets and, the closing of the
acquisition of BillDesk will create further opportunity to expand
into credit and digital banking. Outside of India, the business
continued to grow strongly.
Our performance
Operating and investing in countries and markets across the world with long-term growth potential,
building leading companies that empower people and enrich communities.
51
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Our performance
continued
Edtech’s performance remained strong and we made substantial
progress in expanding the portfolio with acquisitions of market
leaders in our areas of focus. During the year, we took a
substantial stake in Skillsoft, which is now public, while acquiring
Stack Overflow and GoodHabitz. This positions us well within the
key enterprise education market. Our Edtech investments currently
reach over 500 million users and cover the full span of the sector
from kindergarten through to grade 12 (K–12), and beyond, into
third- and enterprise-level education.
In April 2021, to improve our financial flexibility and reinforce our
balance sheet, we sold 2% of Tencent’s issued share capital,
generating proceeds of US$14.6bn and reducing our holding to
28.9%. Proceeds were used to fund our strategic ambitions and two
share buyback programmes that enhanced net asset value per
share. Tencent’s has been impacted by regulatory action and the
economic impact of Covid-19, which has resulted in slower growth
and a tough macroeconomic environment. We are firm believers
that the company will recover from this and generate significant
value for shareholders and remain committed long-term investors
in Tencent.
The group remains focused on building on the strong momentum
in our Ecommerce portfolio. We will continue to invest in our
platforms and to grow the opportunity set within each segment.
We aim to build on the underlying strength of each business
through the creation of customer ecosystems, particularly in autos
transactions, credit and digital banking, and food, convenience
and grocery delivery. At the same time, we are driving profitability
and cash generation in more mature core businesses. Our goal is
to build an Ecommerce portfolio that will deliver sustainable value
creation over the long term for all stakeholders. Furthermore, the
group will endeavour to take further steps to crystallise the value
we have created over time.
Financial review
Revenue
On a consolidated basis, total revenue increased by US$1.8bn, or
34% (39%), from US$5.1bn in FY21 to US$6.9bn in FY22, with strong
contributions from all the segments.
The group delivered strong results for FY22. Group revenue,
measured on an economic-interest basis, grew 24% (24%) to
US$35.6bn. This was driven by Ecommerce revenues, which grew
58% (51%). Our economic-interest share in Tencent’s revenue grew
14% (16%) off a sizable base.
The weakening of certain currencies against the US dollar in FY22
negatively affected our year-on-year performance by US$186m, or
4%, due to the translation impact, specifically in the Classifieds, and
Payments and Fintech businesses.
Total revenue for the year ended 31 March 2022 (US$’m)
3 805
1 008
commissions and fees
703
71
986
86
Edtech
83
124
Online sale of goods revenue represented 55% and 56% of our
total revenue in FY22 and FY21 respectively.
Revenue by geographic market (US$’m)
2022 2021
Other
39
66
North
America
205
647
Latin
America
1 266
1 834
Russia
423
642
Western
Europe
58
100
Eastern
Europe
2 027
2 108
Central
Europe
678
768
Asia
420
701
Costs of providing services and sale of goods
The costs of providing services and sale of goods increased by
US$1.3bn, or 39%, from US$3.5bn for FY21 to US$4.8bn for FY22.
Platform/website hosting, warehousing costs and costs of goods
sold on those platforms increased by US$832m, from US$2.6bn
in FY21 to US$3.4bn in FY22. This increase primarily relates to
Classifieds, in particular OLX Autos, which is refocusing the autos
transaction business towards the direct-to-consumer (B2C)
segment and consumer financing, while reshaping the core
Classifieds business towards accelerating pay-and-ship services
and strengthening our overall tech talent capabilities. iFood in
our Food Delivery business invested substantially in the grocery
delivery business.
Delivery service costs increased from US$390m in FY21 to
US$639m in FY22. This increase primarily related to logistics costs
in the Food Delivery and Etail businesses on the back of increased
gross merchandise value (GMV)
1
of 41% and 3% respectively.
Payment facilitation transaction costs increased by US$231m from
US$379m in FY21 to US$610m in FY22. The increase primarily
related to the Payments and Fintech business, particularly in
India, due to the increased transaction volumes with merchants.
In addition, following the growth in the Food Delivery business,
payments facilitation costs increased accordingly.
Selling, general and administrative costs
Selling, general and administrative costs increased by US$145m,
or 6%, from US$2.6bn in FY21 to US$2.8bn in FY22.
General business administrative cost increased by US$161m from
US$363m in FY21 to US$524m in FY22, primarily due to cost
increases across all the segments as they scale.
Staff costs decreased by US$191m, or 11%, from US$1.8bn in FY21
to US$1.6bn in FY22, primarily due to a decrease in share-based
compensation costs. This was partially offset by an increase in the
1 GMV represents the value of all successfully closed transactions between users on a
platform. GMV provides a measure of the overall volume of transactions through a platform,
both through first-party and third-party transactions.
52
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Our performance
continued
number of permanent staff to support the rapid pace of business
expansion, as well as increased salaries, wages and bonuses
resulting from annual increases.
Average number of employees
for the year ended 31 March 2022
Classifieds
10 430
4 560
2 120
Etail
7 402
Edtech
509
1 129
Corporate
183
The number of permanent staff increased from 23 874 at
31March2021 to 30 413 at 31 March 2022. Staff increased
particularly in the Classifieds segment as OLX Autos scales its
operations. In addition, iFood increased its workforce as the
business continues to scale. The iFood and Etail segments
also increased their headcount as the businesses expanded,
particularly in grocery deliveries. Headcount is expected to
continue to expand in line with the expansion of our businesses,
both organically and through acquisitions. For further information
regarding headcount, refer to the People section on page25.
Retention option expenses for the year decreased US$15m
compared with US$62m in the prior period. Share-based
compensation costs decreased by US$546m due to changes
in valuation assumptions, including share prices and volatility,
as well as the impacts of allocations made and vesting of options.
Depreciation and amortisation
Depreciation and amortisation in selling, general and
administration expenses increased by US$23m, or 10%,
from US$229m in FY21 to US$252m in FY22. The increase in
depreciation expenses primarily related to the acquisitions of
property, plant and equipment, notably computer and office
equipment, following growth in our Classifieds, Food Delivery
and Etail businesses. Amortisation increased on the back of
acquired intangible assets related to business combinations.
Finance income/(costs)
Net finance costs increased by US$426m from US$2m in FY21 to a
finance cost of US$428m in FY22.
Interest expense increased by US$141m, or 54%, from US$262m in
FY21 to US$403m in FY22, as a result of the issuance of new
publicly traded bonds during the current period.
Interest income decreased by US$25m, or 30%, from US$83m in
FY21 to US$58m in FY22, due to a drop in US dollar interest rates
and lower average cash balances.
Interest expense relates primarily to interest on the publicly traded
bonds. Interest income includes interest earned on bank accounts
and short-term investments.
Other finance losses decreased from a finance income of
US$177m for FY21 to a loss of US$83m for FY22. This relates
primarily to a US$217m cost incurred on the early settlement of
the 2025 and 2027 bonds, as well as foreign exchange differences
related to the foreign exchange impacts on the translation of
assets and liabilities and the fair value of derivative instruments,
which include forward exchange contracts, and derivatives
embedded in lease agreements. The cross-currency interest
rate swap accounted for the increase in other finance income.
Net (losses)/gains on acquisitions and disposals
Losses on acquisitions and disposals of US$1 130m were
recognised in FY22, compared with a gain of US$309m in FY21.
A loss of significant influence of US$1 137m was recognised on VK
as a result of the resignation of our non-executive directors from
the VK board. This relates primarily to the reclassification of a
portion of the group’s foreign currency translation reserves related
to VK from other comprehensive income to the income statement.
Impairment of goodwill and equity-accounted investments
Impairment losses of US$246m recognised on goodwill related to
Stack Overflow primarily as a result of the current market
conditions and the increase in risk-free rates which resulted in an
increase in the discount rate.
Equity-accounted investments were impaired by US$584.1m of
which US$474m related to the impairment of VK. The group fully
impaired the carrying value of the investment in VK for FY22 due
to the significant decline in its share price immediately prior to
the loss of significant influence.
Gain on partial disposal of equity-accounted investments
A gain of US$12.3bn was recognised on the partial disposal of 2%
of Tencent’s total issued share capital.
Taxation
Our tax expense increased by US$164m, or 245%, from a tax
credit of US$67m in FY21 to a tax expense of US$97m in FY22.
This was as a result of the receipt of a once-off tax receivable
amount of US$170m related to a disposal of a business in 2021.
Share of equity-accounted results
Our equity-accounted results in equity-accounted companies
increased by US$2.2bn, or 31%, from US$7.1bn in FY21 to US$9.3bn
in FY22. This growth was driven by Tencent, which reported
improved profitability during the period.
This was partially offset by reduced profitability of VK and
Delivery Hero whose results were impacted by the acquisition of
investments during the period. In addition, the inclusion of Skillsoft,
Flink and PharmEasy for the first time in the current period also
negatively affected the equity-accounted results.
53
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Our performance
continued
Trading loss/profit
On a consolidated basis, trading losses expanded from US$163m
to US$547m as we continue to invest in organically building out
customer ecosystems across our segments. This is mostly driven
by investment in Food Delivery, a decrease in profitability in the
Etail segment and acquisitions in Edtech.
Group trading profit on an economic-interest basis reduced
10% (6%) to US$5bn, reflecting investment on the back of core
strength to expand the market opportunity for each segment
and strengthening the underlying customer ecosystems of our
underlying businesses.
Headline and core headline earnings
Headline earnings decreased by US$2.8bn to US$3.1bn. This
is mainly due to the increase in trading losses recognised, the
increase in net finance cost (US$426m) and the decrease in
contribution to headline earnings from associates of US$2.8bn.
This was partially offset by the decrease in the share-based
compensation expenses of the group (US$475m).
Core headline earnings were US$3.7bn, a reduction of 23% (20%),
impacted by our sale of 2% interest in Tencent and Tencent’s
reduced contribution to core as a result of increased losses
from its associates.
Refer to ‘Other information – Non-IFRS financial measures
and alternative performance indicators’ in this report for
a reconciliation of non-IFRS financial measures.
Cash and debt position
We ended the year with a strong and liquid balance sheet
comprising US$13.6bn in cash and cash equivalents (including
short-term cash investments) and interest-bearing debt of
US$15.7bn (excluding capitalised lease liabilities). We also hold
an undrawn US$2.5bn revolving credit facility. This sound financial
position will enable us to deliver on our strategy to scale our
businesses and, over time, deliver significant and sustainable
profitability and cash flow generation. Overall, we recorded a
net interest expense of US$345m for the year, elevated from the
prior year given new bond issuances and an additional US$217m
related to early settlement of the 2025 and 2027 bonds.
During the year, we issued new US dollar and euro notes in July
2021 and January 2022, raising additional capital of US$9.25bn.
Some of the net proceeds were used to settle US$1.6bn 2025 and
2027 notes. Lively investor demand for these offerings resulted in
attractive pricing, reduced average funding cost and extension
ofour maturity curve. The group has no debt maturities due until
2025, and 87% of our debt is due after five years and just under
60% due in the next 10 years.
Consolidated free cash outflow was US$562m, a decrease on
theprior year’s free cash inflow of US$126m. We stepped up
operational working capital and capital expenditure investment
across our businesses. Working capital requirements have
increased as we invest in OLX Autos and the Payments and
Fintech segment. In autos, we are taking on more inventory as
thebusiness expands and moves towards a consumer-facing
business. In Payments and Fintech, we accelerated the pace to
scale our Indian credit initiatives resulting in increased receivables
outstanding at year-end. The increased capital expenditure was
mainly driven by distribution centre equipment and expansions
ateMAG. This was offset by increased dividends from Tencent
ofUS$571m (FY21: US$458m). Tencent dividends remain a
meaningful and stable contributor to our cash flow. After year-
endin June 2022, we received our annual cash dividend of
US$565m from Tencent for FY23.
In addition, Tencent paid a special interim dividend in the form
ofa distribution in specie of JD.com shares. The group received
131873 028 JD.com shares in March 2022, representing a 4%
effective interest in JD.com valued at US$3.9bn at 31 March 2022.
Subsequently, the group disposed of its full stake in JD.com for
proceeds of approximately US$3.6bn.
There were no new or amended accounting pronouncements
effective 1 April 2021 with a significant impact on the group’s
consolidated financial statements.
The following segmental reviews are prepared on an economic-
interest basis (which includes consolidated subsidiaries and a
proportionate consolidation of associates and joint ventures),
unless otherwise stated.
Segmental review
Ecommerce
Ecommerce revenue of US$9.8bn for the year grew 58% (51%).
Strong growth was seen across all our core segments.
Each segment reported strong growth and profitability at the
coreand during the period we increased our level of investment
on the back of that strength to expand the market opportunity for
each segment and strengthen the underlying ecosystems of each
underlying businesses. This increased investment resulted in
aggregated trading losses increasing to US$1 111m, from
US$429m in the prior year.
Based on the data-driven unit economics, we are steadfast in
ourbelief that growth expansion from the autos transaction
businesses in Classifieds, a broader on-demand delivery
ecosystem in Food Delivery, credit and digital banking in
Payments and Fintech, and new investments in Edtech will
deliver significant value for the group. Classifieds as well as
core Payments and Fintech
1
remain profitable, and during the
year we saw substantial improvement in the profitability trends
at the core of our Food Delivery businesses
2
, with iFood’s food
delivery in Brazil remaining profitable.
1
Core Payments and Fintech is India payments and GPO.
2
Core Food Delivery is iFood’s restaurant food delivery business in Brazil.
54
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Building leading marketplace ecosystems
enabled by tech, powered by trust, and
lovedbyourcustomers.
OLX Group continues to perform with strong momentum across all
its business units. The segment made further strategic progress
during the period, refocusing the autos transaction business
towards the direct-to-consumer (B2C) segment and consumer
financing, while reshaping the core Classifieds business
2
towards
accelerating pay-and-ship services and strengthening overall tech
talent capabilities.
Classifieds revenue of US$2.98bn grew 86% (93%) from US$1.6bn
in the prior year. This growth was a large acceleration and
significantly ahead of peers. The growth was largely driven by
OLX Autos, which grew 158% (173%) year on year. Despite
continued investment in the autos transaction business, pay-and-
ship, and people and technology to build capacity for the next
growth phase, trading profit was maintained at last year’s level
and the segment reported a trading profit of US$25m (FY21:
US$9m).
In our core Classifieds business we continue to record growth
across our key markets with the monthly app user-base rising
7%to 124 million and active listings growing 11% to 174 million.
Additionally, we saw continued momentum from engaged
monetised users as the group reported 11% additional monthly
paying listers. Revenue grew 40% (38%) to US$1.36bn with an
improvement of 128 basis points in margin yielding and a trading
profit of US$189m.
Despite a strong performance across the group for most of the
year, we are not immune to macroeconomic challenges. At the
outset of the Russia–Ukraine conflict in February 2022, we
witnessed an immediate drop in key operational metrics, mainly
in Ukraine. We continue to operate our platform in the country to
serve the local community and we have observed recovery in
traffic and listing metrics, while still behind pre-conflict levels. We
also observed some decline in other European countries, mainly
in Poland and Romania, during the initial days of the crisis,
however, metrics have already stabilised and are now tracking
ahead of pre-conflict levels. During these challenging times, we
have prioritised the safety and wellbeing of our employees,
providing immediate support, including safe housing and financial
assistance.
Performance highlights
2021 2022
Revenue
1
US$1.6bn US$3.0bn
Trading profit
1
US$9m US$25m
Europe, of which OLX Poland represents over 60%, delivered a
strong performance and generated revenues of US$432m with a
growth rate of 27% (24%). Trading profit reduced to US$95m from
US$118m a year ago due to a step-up in investment to scale
pay-and-ship services across Poland, Ukraine, and Romania, with
over 2 million delivery transactions on average per month during
the second half of the year. Our horizontal platforms in Europe
grew at 26% (28%), driven by the continued acceleration in
pay-and-ship and a surge in the jobs and services categories.
Thiswas partially offset by lower performance in the autos
verticals, mainly Otomoto in Poland, impacted by supply
constraints in the autos industry market. OLX Poland recorded
revenue and trading profits of US$258m (PLN1 020m) and
US$65m (PLN252m), representing revenue growth of 28% (26%)
and a trading profit margin of 25%, given the pay-and-ship
investment and tailwinds noted above. Furthermore, as we
continue to support our customers in Ukraine with prolonged
listing duration and other discounts, we recorded negligible
revenues during March and business is expected to recover
slowly.
In Russia, Avito reported revenues of US$631m (RUB48.2bn), and
trading profits of US$220m (RUB16.3bn), representing growth of
52% (55%) and 31% (32%) respectively.
In March 2022, OLX Group made the decision to cease all
involvement in its Russian operations and, following a separation
process, the group decided to exit the Russian business. The
search for an appropriate buyer for the group’s share in Avito is
underway.
OLX Autos reported revenues of US$1.6bn for FY22, up 158%
(173%) on the prior period and an 8 percentage point
improvement in trading margin despite strategic investments to
build the base for the next phase of growth. The US, which
represents more than 35% of OLX Autos revenues, performed
exceptionally well as it more than tripled revenue and became
profitable. In our other markets, we have made outstanding
progress in executing our strategy through a relentless focus on
accelerating B2C and consumer financing.
Classifieds
1 Presented on an economic-interest basis.
2 Core Classifieds business is Avito, OLX Europe and OLX corporate.
55
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Group overview
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Governance
Financial statements Other information
Our autos transaction business scaled its operations, transacting
175 000 cars compared with 98 000 cars in the prior year. The
second half was a strong finish to a year of record growth, where
monthly volumes exceeded 22 000 cars (twice pre-Covid-19 levels)
in March 2022. OLX Autos sold an average of 14 600 cars (FY21:
8 100) per month at an average selling price of US$9 300 (FY21:
US$6 900) with a gross profit per unit of US$895 (FY21: US$746).
Monthly volumes in the US and India exceeded 7 000 and 5 500
cars respectively at year-end, far ahead of their previous peaks.
Finally, in the markets with B2C presence, we reached a 29% mix
of total cars sold versus 13% in the prior year. We continue to
make steady progress in consumer financing across Chile, Mexico
and Colombia, with 12 000 loans disbursed during the year,
exceeding assets under management of US$100m with
significantly lower delinquency rates than industry standards.
Scaling our autos transaction business requires higher working
capital than core classifieds, especially in inventories, where we
have invested adequately to support the growth in the business.
We will continue to invest to scale this business line, focusing on
consolidating leadership in the markets we operate.
OLX Brasil, a 50% joint venture with Adevinta, continued its growth.
Our share of revenue increased 73% (27%) given the full-year
consolidation of ZAP results in the current period, to US$76m
(BRL399m) and trading profit increased to US$4m (BRL24m). The
business expanded its autos vertical by digitalising consumer
journeys with a focus on business clients and offering transactional
services such as in-platform financing and insurance and also
rolled out pay-and-ship services across general categories.
Over the past year, in line with our strategy to invest in our core
scalable markets, we successfully divested non-strategic assets
across the group. This includes Aasaanjobs, Tradus, Properati, the
OLX platform in South Africa and autos transaction business in
Nigeria, Kenya, and Ghana. These markets were not profitable
with a lack of product-market fit and capacity to disrupt the
industry. As a result, OLX Group is now leaner and focused on
growing operations in our key markets, where we have clear
plans to deliver strong growth and build leading market positions.
The opportunity
Last year, we highlighted four trends for the Classifieds segment:
firstly, consumers demanding a more convenient and trusted
experience; secondly, increased competition from global digital
players entering our markets; thirdly, the increasingly critical role
ofAI to deliver new user experiences; and fourthly, stakeholders
requiring greater focus on sustainability.
While these trends remain, the pace and extent continue to be
affected by the pandemic. In particular, consumer preferences for
end-to-end digitally enabled journeys accelerated, along with
more calls for action to combat climate change. Data science and
AI capabilities created new business models and opportunities as
internet usage surged and consumers increasingly turned to
online solutions.
Essentially, these trends reinforce our aim to be deeper and more
widely involved in transactions at the heart of people’s everyday
lives. People are looking for more trust, more safety, more
convenience, more help. They want seamless online-to-offline
experiences, with more support along the transaction chain. And
they want ever-more sustainable ways to transact. We want to be
at the core of making this possible for people.
We are building an ecosystem of platforms that reinforce each
other, especially between our classifieds and autos transaction
businesses. In Indonesia, for example, more than a third of the
consumers who bought cars from us were already classifieds
users. More encouragingly, while it’s early days in our transition to
B2C, in Turkey, more than a third of the cars we sold were sourced
from our classifieds users.
Classifieds
continued
The multiple layers of our ecosystems
Consumer-
to-consumer
(C2C) trade
Autos
Support along
the full journey
Goods
Jobs and
services
Real
estate
Digital journey
Wallet
Marketplace
Price suggestions
Reports on quality
Financing
CRM services
Source of truth
on RE market
Pay-and-ship
Instant cash
Verticalised
experience
Applicant
tracking tools
Staffing/
Blue collar
56
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Group overview
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Performance review
Governance
Financial statements Other information
OLX Group
Present in
>20
core markets
1.7m
monthly average pay-and-ship
transactions in Europe
Wide network of
7 000+
dealers for vehicle transactions
124m
monthly active app users
4.1m
paying listers
174m
active listings
Delivering on our strategy
In FY22, we successfully delivered on our strategy. We executed
two separate but complementary business models – firstly, to
build the next generation of online classifieds and, secondly, to
consolidate and grow our autos transaction business. It was a
breakthrough year on both fronts and, in turn, we accelerated our
growth and delivered revenue and trading profit higher than
expected.
Advancing next-generation classifieds
We are building the next generation of online classifieds, going
deeper into the transaction and providing the full ecosystem of
value-added services to our users. We now offer pay-and-ship on
many products, alongside services such as financing, car history,
pricing estimation, and job application tracking. Our platforms
enable person-to-person or business-to-person trade across
multiple categories, including real estate, cars, household goods,
electronics, fashion, jobs and services.
Our core classifieds businesses outperformed expectations
throughout the year, allowing us to reinvest in robust vertical
propositions, for example, to broaden coverage of pay-and-ship
offerings and increase marketing in jobs and services.
In Europe, in FY21, we strengthened our vertical ecosystems. This
included, in jobs, launching a candidate section with roles and
recommendations and an applicant tracking system; and in real
estate, strengthening content in the primary market through the
acquisition of Obido.
We also scaled pay-and-ship across European markets, including
Poland, Ukraine and Romania, reaching 20.8 million transactions
in December2021.
Expanding autos transactions
In our autos transaction business, we buy used cars from
individuals and the trade, inspect them virtually (on their
driveways, or in one of our 528 offline inspection centres) and
resell them directly to our consumers at attractive prices, offering
financing, extending guarantees, insurance options, free trials, and
full transparency on the car history and condition.
In FY22, we organised our global autos transaction business
under a unified OLX Autos business unit – to speed up decision-
making and innovation and develop a single technology platform.
Our autos transaction businesses continued to develop well as we
accelerated our plans in our key markets of India, Indonesia,
Turkey and Mexico on the back of a new common online platform,
scalable business processes and improving unit economics. OLX
Autos scaled volumes across key markets, and increased revenue
by 158% (173%).
As planned, a larger share of revenue is coming from
transactions, including the trading margin on cars and transaction
fees from pay-and-ship in Classifieds.
We rolled out our new global scalable tech platform that enables
us to accelerate our development and innovation, and increase
our efficiency across our different markets through one flexible
shared platform.
Within OLX Autos, we successfully pivoted to B2C trading, building
significant supply inventory to fuel demand. We also grew the
financing business in Latin America, with lower-than-expected
default rates.
In Europe, we strengthened our vertical ecosystems. This included,
in autos, launching Otomoto Klik, a fully digital used-car-buying
experience.
Making ever-greater use of AI and ML
Throughout FY22, we made strong strides in accelerating and
scaling up the application of AI and ML and, in turn, the use of
data to drive the business forward. We continued the expansion
of our data platform and portfolio of tools, which are used as the
foundation for the majority of our products and business.
We also successfully completed our new ML platform, FrejaML,
which will enable us to accelerate the development and
deployment of ML models and, importantly, to share them across
business units.
In addition, across the various business units, we have put into
production a number of new models on pricing, search and
relevance, trust and safety, and self-inspection of used cars, with
significant measurable impact.
Increasing the pace and impact of innovation
We have updated our process for aligning and collecting metrics,
and are working across the business units to have a strong
understanding of the key business drivers, together with strong
automation of measurement, tracking and reporting. This will
enable faster experimentation, development and innovation
across our product lines. Experimentation has grown over 60%
across the group. In FY22, we ran our first OLX Group hackathon,
which led to several innovation projects being sponsored in each
business unit.
In India, for example, the launch of a pricing engine has offered
abetter experience for users, resulting in a 36% increase in the
rate of conversion from prospect to customer.
In Europe, we are innovating to move more deeply into
transactions and offer more for our users. This involves focusing on
trust and safety. Technology helps us keep illegal and
inappropriate content off our platforms. Deep learning algorithms
now review some 8 million images every day, catching and
removing around 68000 bad listings before they reach buyers.
We are also innovating to provide increasingly personalised
customer experiences, for example, to improve customer
recommendations and search functionalities.
Classifieds
continued
57
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
The idea: Green Teams
Within each office, anything
goes! We want
your ideas,
knowledge and know-how
to come alive locally.
Create a
movement
where
your ideas
inspire and
activate
other countries,
other colleagues and
partners!
Each country will have a
self-elected lead (and a
co-lead) who will arrange
agroup of
green
teammates
.
Activate, energise and
charge the way
to work on
reducing our climate impact
in the offices!
Focusing on sustainability
Across OLX Group, our sustainability mission is to amplify
conscious consumption and champion the circular economy to our
customers and communities – encouraging everyone to reuse,
refurbish and recycle. As such, in FY22, following a materiality
assessment and under the leadership of a new cross-functional
sustainability steering committee, we focused on three core
sustainability areas: reducing our climate impact, fuelling the
circular economy, and unleashing employee innovation.
Reducing our climate impact
We measure and reduce our direct and indirect contribution to
climate change. In FY22, we became carbon-neutral in our direct
operations, offsetting scope 1 and scope 2 emissions in our
corebusiness.
Fuelling the circular economy
Our secondhand trade platforms make an increasingly positive
contribution to the circular economy. The larger our platforms, the
more items are reused, in turn lowering the need to recycle
discarded items or produce new ones. This helps us attract talent
and consumers and, increasingly, to comply with the needs of
external investors.
In FY22, as in FY21, we measured the impact of our platforms in
eight categories: mobile phones, tablets, laptops, TVs, cars,
motorcycles, books and fashion.
Unleashing employee innovation
To harness the passion, innovation, energy and enthusiasm of our
people for sustainability, we launched the employee sustainability
hackathon – the shackathon. Many great ideas have been
shared, from alternative packaging for pay-and-ship to solar
paneling for auto inspection centres. This in turn generates
employee workstreams with executive sponsors to explore
andaddress scalable strategic sustainability missions in
ourbusinesses. In addition, we hired our first dedicated full-time
sustainability expert to orchestrate initiatives, coordinate employee
teams and execute programmes.
Subsequent to year-end, we also began educating our employees
on sustainability topics and our role in the circular economy, with
an external global speaker to raise company intelligence and
increase employee engagement on the topic. To further enhance
employee engagement, we now have local Green Teams to help
us with our global sustainability initiatives, but also look for local
initiatives. The Green Teams also measure, identify and find ways
to reduce energy consumption and carbon emissions inour
workplaces.
We will continue to focus on increasing sustainability throughout
our business.
Looking forward
Building on the success of our strategy in FY22, we will increase
our commitment to grow across our new-generation classifieds
ecosystem and our autos transaction business.
Above all, we will look for new and better ways to get closer to
our users and their transactions, so they can carry them out more
quickly, easily and safely. Rather than simply providing a great
place for buyers and sellers to meet, we are actively helping to
facilitate great transactions for buyers and sellers. Whether that is
by offering smart technology to make self-inspecting and selling
acar super easy, or providing attractive financing options to
facilitate such transactions. There are many different ways to
unlock the hidden value in everything, and we aim to explore
them all.
Classifieds
continued
58
Prosus annual report 2022
Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Improving the way people eat.
The Food Delivery portfolio companies continued to benefit
fromeconomies of scale and delivered strong growth. Total
orders and gross merchandise value (GMV) grew 53% and
60%(59%) respectively, translating into US$3.0bn or 101% (77%)
growth in revenue.
Given this momentum and the growing importance of convenience
in people’s daily lives, we believe the food delivery opportunity is
broader than originally envisaged. Over the past year, online
grocery delivery has experienced a surge in demand from offline
to online and new business models have unlocked underserved
segments of the market. The segment’s quick commerce
businesses grew orders by 109% and GMV by 254% (207%). Our
Food Delivery portfolio companies have capitalised on these
trends by building grocery delivery businesses on their restaurant
delivery platforms. While restaurant delivery platforms are either
profitable or nearing breakeven, the investment in adjacencies
and growth initiatives has contributed to the increase in the Food
Delivery segment’s trading losses from US$355m in FY21 to
US$724m in FY22. As was the case with the segment’s investment
to expand the market opportunity by investing in 1P delivery in
2018, we believe this investment represents a similar opportunity
to grow the market and our position in it.
The opportunity
We identified food delivery early as an attractive long-term
investment for the group. Four key factors underpinned
ourconfidence.
Large total addressable market (TAM):
Global restaurant
service spend is projected to reach US$3.4tn by 2024 (US$11.5tn
in 2024
2
, including groceries) and food delivery constitutes an
opportunity to address tangible human needs, especially in
emerging economies where food accounts for a relatively high
share of total consumer spending.
Low online penetration with room for growth:
We have been
on the cusp of a tech-enabled paradigm shift in dining habits, with
more and more meals being delivered rather than home cooked
or consumed on-site in restaurants. That said, online food delivery
still accounts for only 7.7% of global food-service spending.
Compelling user behaviour:
Given the high-frequency use
patterns and growing importance of convenience in customers’
daily lives, on-demand food delivery aggregators have
demonstrated strong customer retention and engagement metrics.
Hyperlocal operations:
Food delivery is an inherently local
business with impact felt locally, which is in line with our
philosophy of partnering with local entrepreneurs that deeply
understand their geographies. The hyperlocal nature makes the
food delivery space slightly less susceptible to the potential fully
fledged entry of big-tech players, compared to the other sizable
verticals such as social networks or travel.
Building a global leader in food delivery
We are building a global leader in on-demand food delivery.
Weare present in 57 markets through direct stakes in three
coreplatforms – iFood, Swiggy and Delivery Hero – plus other
investments such as Oda, Norway’s largest (by GMV) online
grocery business, and Flink, the Berlin-based quick commerce
pioneer. In addition, we invested in Foodics, a major cloud-based
technology and payments platform for restaurants in the MENA
region. We also have indirect investments in Meituan, Delivery
Club, Takeaway, Rappi and Glovo.
In August 2021, we invested a further BRL1bn (US$200m) in Movile,
the owner of iFood, a food delivery business with strong market
presence in Brazil, bringing our stake in iFood to c. 62%.
Looking after the wellbeing of drivers
Our Food Delivery segment continues to guide and support the
wellbeing of the key stakeholders in our ecosystem. The
leadership in the food delivery ecosystem (LIFE) initiative provides
quarterly segment updates, and Prosus group leadership updates,
on driver wellbeing, compensation and non-financial benefits for
our segment companies. Our companies pay significantly above
the local legal minimum wages, and provide benefits beyond pay,
including insurance, educational opportunities and more.
Performance highlights
2021 2022
Revenue
1
US$1.5bn US$3.0bn
Trading loss
1
-US$355m -US$724m
Food Delivery
1 Presented on an economic-interest basis.
2
Growing from US$9.5tn in 2019 (including restaurant service and grocery).
59
Prosus annual report 2022
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Performance review
Governance
Financial statements Other information
iFood
iFood revenues grew 35% (29%) to BRL5.2bn (US$991m), driven
largely by expanded restaurant selection and entry into additional
cities in Brazil. Orders increased 37% to over 750 million and GMV
grew 47% (41%) to BRL39bn (US$7.4bn). At year-end, iFood Brazil
platform hosted 317 000 merchants across 1 780 cities.
During the second half of the year, iFood realised significant gains
in the profitability of its core restaurant food delivery business by
optimising consumer discounts and introducing new revenue
streams. The significant overlap between the customers of
restaurant delivery and grocery delivery, and the operational
synergies across the two businesses make grocery delivery a
natural fit for the iFood ecosystem. iFood’s grocery business has
quickly become an important player in Brazil’s significant grocery
industry, which is estimated to have sales of US$55bn in 2022
according to Euromonitor. iFood’s grocery and dark store model
has already reached 4 million average monthly orders and
BRL380m of GMV in just over a year, and its growth is outpacing
the rest of the market. The restaurant food delivery business
reached breakeven in the second half of the year. For the full year,
iFood generated trading losses of US$206m, including substantial
investments in the grocery delivery business.
Playing an essential part in Brazilians’ everyday lives
iFood wants to play an increasingly essential part in Brazilians’
everyday lives. In order to do this, in FY22, iFood focused on
increasing sustainability and strengthening the iFood ecosystem.
Increasing sustainability
iFood stepped up its sustainability commitment in FY22.
Thisfocused on three key areas – the environment, inclusion,
andeducation.
Environment
iFood wants to use its presence in Brazil to support the
acceleration to greener economies. iFood is centring its
environmental sustainability strategy on energy and waste
management. iFood is committed to becoming carbon-neutral,
making 50% of its deliveries non-polluting by 2025, and also
ending plastic pollution from its deliveries by 2025.
iFood has been carbon-neutral on its deliveries since July 2021
and has set further goals to reduce, and not just offset, its
emissions. To boost emission-free deliveries, for example, it has
partnered with Tembici to provide electric rental bikes to couriers.
It has also started a pilot for electric motorcycles for longer-
distance deliveries, which includes an innovative battery rental
scheme, so drivers don’t have to invest in the expense of buying
batteries themselves. By the end of FY22, iFood had delivered
37million zero-emissions orders by bike, e-bikes, electric
motorcycles and drones.
iFood was the first food-tech company in Brazil to sign the UN
Global Compact. The company estimates that Brazil produces
11.1million tons of disposable plastics annually, including items
such as plates, cups, cutlery, plastic bags and non-recyclable
disposable straws. There is no national or public sector recycling
plan for items such as these, so they end up in a landfill or in the
environment. Given its role in the food ecosystem, iFood believes
it can play a pivotal role in improving Brazil’s waste management.
In FY22, iFood committed to the #DeLivreDePlástico initiative,
driven by the United Nations Environment Program (UNEP), to
eliminate plastic pollution from deliveries from the iFood platform
by 2025. To this end, iFood is enabling the ‘no cutlery, straws, or
napkins’ option in the app, as well as encouraging restaurants not
to send these items by default (only when requested). iFood has
arestaurant participation target of 90% by December 2023.
Moreover, it aims to ship 80% of orders without these disposable
items by 2025.
Inclusion
The iFood ecosystem includes a diverse group of millions of
people across Brazil – restaurant owners, delivery partners and
consumers. iFood is committed to ensuring its employees are
representative of the community it serves across Brazil. By 2023,
iFood aims to increase the number of women in leadership
positions to 50%; increase the number of women in senior
leadership positions to 35%; increase the number of management
positions held by black people to 30%; and have 40% of
employees overall represented by black people.
Education
iFood is actively investing in the local communities it serves
beyond providing direct economic opportunities from its food
delivery business. Within education, iFood is setting a goal to
provide training and employment opportunities for 25 000
low-income individuals. It also wants to use technology to help
train more than 5 million additional Brazilians by reskilling,
upskilling and fostering entrepreneurship to help them find better
employment. And finally, iFood is also utilising technology
platforms to help foster science, technology, engineering and
maths (STEM) skills among 5 million students across Brazil.
In addition to these initiatives, iFood is committed to helping
people and organisations across the country that its consumers
are passionate about. Through the iFood app, users can choose
to donate to seven partner NGOs. With over 15 million people
across Brazil using the iFood app, this is a very powerful, yet
simple, way to make a positive difference. By the end of FY22,
800000 users had donated over US$4m to these seven NGOs.
Food Delivery
continued
iFood
>317 000
merchant partners
iFood order growth:
37%
1P (logistics) business orders in
March 2022:
26m
Around
1 780
Brazilian cities covered
Around
70m
orders in March 2022, including
restaurant and grocery
36%
own-delivery orders
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Prosus annual report 2022
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Sustainability review
Performance review
Governance
Financial statements Other information
Finally, as a food platform, iFood is committed to fighting hunger
across Brazil. iFood has developed the ‘all at the table’ initiative,
partnering with other companies such as Coca-Cola Brazil and
Unilever to donate food to individuals directly and through
organisations, including Sefras, CUFA and InCor.
Strengthening the iFood ecosystem
iFood continued to expand its ecosystem through FY22 in a
number of different ways, including scaling its grocery delivery
business to become a leader in Brazil, and launching and scaling
the quick commerce business. By year-end, iFood Brazil had
delivered 42 million grocery orders from over 29 000 stores across
1 780 cities, representing order growth of 220% year on year. In
addition, iFood introduced new products in financial services,
including meal vouchers and credit for restaurant partners.
Swiggy
Swiggy has seen a full recovery from the impact of the pandemic
by focusing its efforts on reactivating users, increasing monthly
frequency, and returning user conversion to pre-Covid-19 levels.
This strategy paid off as Swiggy has more than 195 000 active
restaurants on its platform (+110% of pre-Covid-19 level), achieved
55% growth in daily orders; and 76% growth in GMV to US$2.3bn.
Our share of Swiggy’s revenue was US$212m (FY21: US$135m), up
57% (68%) from the prior year
3
driven by higher average order
values compared with pre-pandemic periods and higher revenues
from delivery fees and advertising sales. Swiggy also focused on
expanding its quick commerce Instamart business, which
performed well, increasing daily orders 10 times year on year. This
resulted in accelerated growth in the groceries vertical coupled
with continuous growth in the restaurant food delivery business
vertical.
Swiggy currently delivers food, groceries, meat, and runs its
concierge service (Genie) using its network of around 300 000
delivery riders.
iFood, Swiggy and Delivery Hero – our core food delivery
businesses are leading businesses in their respective regions and
have plenty of room to grow further, both in scale and in the
breadth and depth of their ecosystems. In addition, we have
promising additional investments in Flink, Oda and Foodics.
We will continue to invest organically to both improve the core
food delivery offering but also to expand the overall opportunity
set by building out scaled capabilities in quick commerce and
grocery, and additional adjacencies in the food delivery
ecosystem.
Swiggy has also continuously grown its users in the past year,
along with subscription programme innovations across categories,
such as Swiggy One (formerly ‘Super’ which catered to food
delivery only), with focused investments in infrastructure, product
and technology. Swiggy currently delivers food, groceries and
meat, and runs its concierge service (Genie) using its network of
around 300 000 delivery riders.
We believe Swiggy is well funded to capitalise on recent
momentum and well positioned to improve its platform’s
competitiveness by investing in product and technology, and
reinforcing its artificial intelligence capabilities.
Food Delivery
continued
Delivery Hero
4
Delivery Hero continued to deliver strong growth, accelerating
both organic investment in quick commerce and by pursuing M&A
opportunities. For the year to 31 December 2021, Delivery Hero
reported order growth of 57% and GMV growth of 62% to €35.4bn.
Our share of Delivery Hero’s revenues and trading losses was
US$1.8bn and US$343m respectively.
By the end of March 2022, Delivery Hero operated over 1 122
Dmarts (small Delivery Hero-owned warehouses in strategically
relevant locations for quick commerce delivery), catering to
evolving customer needs with an increased focus on convenience
and speed of delivery.
Looking forward
iFood, Swiggy and Delivery Hero – our core food delivery
businesses are leading businesses in their respective regions and
have plenty of room to grow further, both in scale and in the
breadth and depth of their ecosystems. In addition, we have
promising additional investments in Flink, Oda and Foodics.
We will continue to invest organically to not only improve the core
food delivery offering but also to expand the overall opportunity
set by building out scaled capabilities in quick commerce and
grocery, and additional adjacencies in the food delivery
ecosystem.
Looking forward, we will play an ever-increasing part in leading
the food delivery revolution for consumers, restaurants and
delivery partners around the world.
Food Delivery
Delivery Hero
US$7.5bn
invested in food delivery
Present in
49
markets
1.3m
restaurant partners and local
stores
1 122
Dmarts at 31 March 2022
>49%
own-delivery orders for 2021
Swiggy
Around
550
cities covered
~
300 000
own-delivery partners
>195 000
restaurant partners
>97%
own-delivery orders
3 All metrics aligned to December 2021, reporting basis three-month lag.
4 Delivery Hero numbers included are on a pro forma basis, which consolidated Woowa
group and excluded DHK from 1 January 2021. Historical data has been adjusted
accordingly.
61
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Performance review
Governance
Financial statements Other information
Building the ecosystem for a world without
financial borders where everyone can prosper.
The Payments and Fintech segment continued to benefit from the
shift to digital payments. Revenue grew 38% (45%) to US$796m
driven by strong performance in the India payment business and
a strong recovery in the credit business. The segment’s overall
trading loss margin improved to negative 8% as trading losses
reduced from US$68m in the prior year to US$60m, on account of
increased profitability of core payment service provider (PSP)
business, partially offset by investments in credit and new
initiatives such as consumer banking in India. The core PSP
business reported revenue of US$643m, up 29% (37%) and a
trading profit of US$28m, reflecting a 2 percentage point
improvement in margin over last year. Total payments volume
(TPV) reached US$78.5bn, up 43% (47%) over the prior period as
faster digitisation across markets continue to benefit PayU. This
was supported by a 36% increase in the number of transactions.
India, our largest market, grew TPV 65% (66%) to US$43.8bn,
representing a compounded annual growth rate (CAGR) of 50%
(54%) over the past two years. This translated into revenue growth
of 48% (49%) to US$304m driven by diversification of our merchant
portfolio into segments such as financial services, ecommerce and
bill payments, which compensated for lower volumes from
categories impacted by Covid-19. As markets have opened up,
travel and hospitality sectors have seen some recovery in India.
The contribution of revenue from new segments such as
omnichannel, Bharat Bill Payment System, Wibmo, data science
and new products such as Affordability, Merchant Cash Advance,
and Multi-currency has increased from 20% in the prior period to
29% in this financial year, demonstrating our continued focus on
diversification of business.
Our global payments operations (GPO) business has maintained
its growth trajectory with TPV growing 22% (30%) to US$34.7bn for
the year, supported by a 28% increase in the number of
transactions. GPO reported a revenue of US$341m, up 16% (29%)
from the prior period. GPO has also witnessed strong growth in
payment volumes from ecommerce, financial services and
over-the-top (OTT) entertainment platforms to compensate for
lower volumes from categories impacted by Covid-19. Travel in
most GPO markets is gradually recovering as economies stabilise
and borders re-open. Turkey, which constituted 17% of GPO’s
revenue, continued to see strong momentum and grew
revenue73%.
Performance highlights
2021 2022
Revenue
1
US$577m US$796m
Trading loss
1
-US$68m -US$60m
In our credit business, following deliberate conservative issuances
in the first half of the year, India has witnessed a strong recovery
as we picked up momentum in personal loan dispersals in the
second half of this financial year. With a preapproved base of
62million users and over 46 000 active merchant base,
transactional credit continued to see good traction and, loan
cohorts are resilient and performing well, while collections have
maintained a strong trend across all credit products. Our new
initiatives to ramp up personal loans such as Xpress loans
(cross-sell to buy-now-pay-later users) have also seen good
traction and are expected to further drive loan disbursals and
enhance revenue.
In December 2021, we launched the first version of LazyCard
(Indian credit card offering) as part of our consumer banking
strategy. With over 320 000 users onboarded in just three months,
LazyCard is seeing strong traction in the market. Our consumer
banking initiative is mainly targeted towards serving the Indian
mass market through innovative financial products focusing on
saving and spending for young tech-savvy consumers. We
continue to leverage our existing base of LazyPay users to further
scale the cards business.
Total loan disbursals in India credit and LazyCard for the year
totalled US$586m, representing growth of 337% (338%) and
reporting a loan book of US$151m at the end of the year.
Revenueis recognised over the term of these loans, however, we
are required to expense the expected loss rate upfront, resulting
in elevated losses at present as we are at the start of the journey
to scale the credit business. The investment portfolio of our
Payments and Fintech segment continues to perform well. In
September 2021, Remitly raised US$300m from its public listing
onNasdaq Stock Market. Remitly will utilise this fund to
accelerategrowth through innovation and further expansion into
digital banking. Remitly reported a send volume of US$20bn,
representing 70% growth for its financial year ended
31December2021.
Payments and Fintech
1 Presented on an economic-interest basis.
62
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Performance review
Governance
Financial statements Other information
Payments and Fintech
continued
The acquisition, subject to pending regulatory approvals, of
BillDesk, one of the leading payment businesses in India, for
US$4.7bn, marks a major step forward in this growth story. PayU
and BillDesk are complementary businesses, where PayU is a
preferred payment service provider (PSP) for ecommerce, while
BillDesk is a leader in bill payments. Together, they have the
potential to create a fintech ecosystem and provide solutions for
the changing payment needs of digital consumers. It reinforces
PayU’s ambition to be a leading payment solutions brand for
merchants in high-growth markets.
India remains a highly attractive strategic market for PayU. The
Reserve Bank of India reports 44 billion digital transactions
processed in 2020 and forecasts 200 million new users expected
to adopt digital payments over the next three years, with average
annual transactions per capita rising tenfold.
Outside India, our core payments business maintained its growth.
With the acquisition of Iyzico in 2020, Turkey is now the third-
largest revenue contributor to the core payments business and
one of the fastest-growing markets.
Accelerating our credit business
We have been investing in building our credit business, LazyPay,
for the past three years.
We are using our data, AI and ML models, and our relationships
with merchants to provide easy, convenient, and responsible
credit services to underserved consumers in India. We are there
for a new generation of consumers who are open to the tech-
enabled credit services we can indeed provide. In many cases,
these consumers have not been able to access credit before we
made it available to them. This, in turn, supports the government’s
Digital India agenda to accelerate the adoption of digital
products across the country.
The opportunity
Payments and Fintech is one of the fastest-growing segments
worldwide, accelerated by the pandemic-fuelled move online.
Global payments revenues have grown from US$1.9tn in 2018 to
aprojected US$2.7tn by 2023, with 60% of relative growth coming
from high-growth markets. In addition, online payments are
expected to increase at double the rate of offline payments.
We see five key trends in payments and fintech, which all play to
our strengths:
•
Scale continues to drive consolidation at a global level.
•
Open-banking trend continues to accelerate.
•
BNPL is an increasingly key credit category.
•
The India fintech landscape continues to grow in scale and
breadth of services.
•
Cryptocurrencies are going mainstream.
Strategic priorities
To capitalise on these trends, we have set three strategic priorities:
•
Continue to grow our core payments business.
•
Accelerate our credit business in India.
•
Build a financial ecosystem and invest across fintech adjacencies
and AI.
Advancing on three fronts
In FY22, in line with our strategy, our Payments and Fintech
segment advanced on three fronts: our core payments business,
our credit business, and our fintech ecosystem investments.
Continuing to grow our core payments business
Our core payments business, PayU, consolidated its premier position
as a payments company for merchants in high-growth markets,
including India, Poland, Turkey and Colombia. The move to digital
payments as a result of Covid-19 has clearly helped, but PayU’s
strong growth reflects substantial focused investment in the business
in recent years. In FY22, we have processed more than US$75bn in
total payments volume, an increase of 47% over last year.
Scaling our credit business and building our ecosystem
Laying the groundwork
•
Repositioning and scaling in India:
Merchant payments focus (no to
wallet), Citrus acquisition
•
Global payments operator
restructuring (South Africa and Poland)
Restructuring and
repositioning payments
(F Y17
–
18)
M&A to accelerate scale
and build credit
•
Payments: Local consolidation (lyzico),
geographic expansion (Red Dot), and
vertical integration (Wibmo)
•
Credit: Preparing for the scale-up:
Secured India non-banking financial
company licence, acquisition of
PaySense and consolidated PaySense
with LazyPay
Consolidation of payments
and laying credit foundation
(FY19
–
20)
Bringing together
all building blocks
•
Doubling down and scaling India
payments
•
Scale up India credit business
•
Build digital banking in India
•
Build fintech ecosystem
Digital bank and
ecosystem builder
(FY21
–
22)
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Performance review
Governance
Financial statements Other information
Amid the second wave of Covid-19 in India at the start of FY22,
wetook a conservative approach to disbursing credit to manage
risks. But the fundamentals are strong and, looking at FY22 overall,
our credit business accelerated. By the end of the year, there were
some 850 000 monthly active users, adding an average of some
150 000 users per month. LazyPay is becoming an increasingly
popular brand with consumers across India. LazyPay is now active
with 45 000 merchants.
During the year, we increased the range of LazyPay products –
from the original BNPL service to checkout finance, and express
personal loans and others. In December 2021, we also launched
a card solution for Indian consumers called LazyCard. Within three
months, the business issued over 300 000 cards, taking the first
step in forming a digital-banking solution inIndia. Our consumer-
banking initiative is mainly targeted towards serving the Indian
mass market through innovative financial products focusing on
saving and spending for young tech-savvy consumers. We
continue to leverage our existing base of LazyPay users to further
scale the cards business.
Investing to strengthen our fintech ecosystem
While over 70% of our capital investment has been in our core
business of payments and credit, we continue to invest
strategically in other fast-growing fintech segments and AI-driven
innovative companies.
We look for leaders in their spaces that fit well with our strategy.
For example, we have invested in Fisdom and Dot, two prominent
companies respectively in the wealth management and
omnichannel spaces in India. We aim to build a common
distribution and data platform to strengthen our access to
alternative data sources and develop new products that are
notjust transactional, for example credit scores. In addition, we
will invest in AI-led companies with unique data access and
capabilities.
Remittances pioneer Remitly has been one of our key fintech
investments. In September 2021, Remitly Inc.’s shares listed on the
Nasdaq Stock Market, raising US$300m. Remitly aims to make the
most of sharp growth in revenues and funding from its initial public
offering (IPO) to accelerate growth through innovation and further
expand into digital banking. Remitly reported a send volume of
US$20bn, representing 70% growth for its financial year ended 31
December 2021.
Overthe years, we were pleased to offer strategic guidance
onRemitly’s path to growth.
Removing financial borders and enabling broader access
As a leader in payments and fintech in high-growth markets and
one of the world’s top investors in this space, we contribute to
amore inclusive future of finance. We build customer-centric
products and services that enable sustainable prosperity in our
markets and communities and broaden access to finance. We
strive to equip merchants and their customers with the latest
payments solutions. In FY22, for example, we invested in CELO, a
global payments infrastructure that makes financial tools
accessible to anyone with a mobile phone, to integrate stable
coin offerings for our clients and partners.
Using data, AI and ML in the right way
We are committed to using data, AI and ML in a responsible and
ethical way. As such, PayU has instituted targeted model
governance and responsible AI frameworks. The framework was
included in the Prosus audit plan for FY22 with encouraging results
and opportunities to further enhance existing strengths.
PayU’s global personal data governance policy focuses on
accountability and the responsible use of personal data. In FY22,
PayU carried out global training and awareness-raising, including
a global privacy survey. PayU also launched its privacy
technologist training for employees across the group.
The privacy team worked with security, product and engineering
to create PayU’s privacy and security-by-design policy and toolkit.
These will be used to embed robust privacy and security
requirements throughout the business. The team also developed
abenchmarking and privacy control engine and worked closely
with the Wibmo team to obtain the ISO 27001 and 27701 (privacy)
certifications.
Enhancing resilience and security
We are committed to ensuring the resilience and security of
ourPayments and Fintech platforms and business applications.
This is a top priority – essential for maintaining the trust of
allstakeholders.
Throughout FY22, PayU focused on enhancing security awareness
among employees, including training and support related to
working from home.
Given the fast-evolving threats, PayU continues to strengthen its
security capabilities, including increased use of AI, automation
and advanced endpoint detection and response.
Having an ever-more positive impact on the environment
Our core business model enables the transition to a lower-carbon
financial services infrastructure. We extend this environmental
action to our own operations by measuring and managing our
carbon emissions and defining a clear emissions reduction
pathway for ourselves.
In FY22, we implemented carbon accounting practices, setting the
basis for our carbon reduction strategy. Overall, the carbon
footprint of our own operations is relatively small, given our fintech
business model. The most important categories are data and
cloud services as well as business travel (both value chain-related,
ie scope 3).
Payments and Fintech
continued
PayU
+40m
loan transactions in FY22
PayU operates in
20
high-growth markets, five of which
are in the top-10 growing markets
>US$78bn
processed payment volume, up
47%year on year (in local currency,
excluding M&A), 56% contributed
byIndia
>2bn
transactions (excluding Wibmo)
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Performance review
Governance
Financial statements Other information
Based on our reduction pathway, we offset the remaining
emissions. We are scope 1, 2 and 3 carbon-neutral for FY22. PayU
aims to become carbon net positive. As a further step in this
direction, we will set science-based net-zero targets to be
implemented and achieved over three years and submit this to
the SBTi.
Championing diversity and inclusion
Led by its diversity and inclusion council, PayU champions this
issue across the company to make it part of the culture. There is
diversity and inclusion accountability at all levels in the
organisation, and all PayU people managers committed to
related goals in FY22. PayU also launched a diversity and
inclusion chatbot ‘June’ to help create awareness and educate all
PayUneers on a variety of diversity and inclusion topics.
In recent years, PayU has focused on hiring and developing
female talent. Initiatives include launching Return.Reset.Reimagine,
a programme to bring women back into the workforce in India;
the Women in Tech career fair partnership to attract more female
talent; mentoring programmes focused on career growth for
female talent in India and EMEA; and launching a female
leadership programme with training partner BeNext. In Turkey,
PayU launched the Iyzico women entrepreneurship support
programme with more than 70 applicants.
In FY22, PayU expanded beyond gender with a focus on
LGBTQIA+ and disability inclusion. Key LGBTQIA+ initiatives
included global pride month celebrations; LGBTQIA+ sensitisation
and allyship training for all employees; and panel discussions and
talks by external speakers. PayU also undertook many initiatives
focused on disability, for example completing an accessibility
audit of our offices and LazyPay app in India.
Focusing on wellness
In 2020, PayU launched the Uthrive wellness programme for its
people. The work continued in FY22, with various wellbeing
initiatives globally ranging from wellness Wednesdays to sessions
on motivation, meditation and more. PayU periodically monitors
the effectiveness of the initiatives, and held two surveys in FY22,
which have informed targeted improvements.
Making a difference in society
We are committed to the societies we operate in. We leverage
our entrepreneurial DNA to partner with start-up initiatives that
enable sustainable digital and financial inclusion. In FY22, we
further developed our social impact strategy and worked on
identifying the best structure for implementation and achieving
objectives.
In India, Prosus, PayU and OLX have partnered with GiveIndia to
help families and communities through the pandemic. In just days,
we implemented a fundraising product and payment links, with
domestic and international card acceptance.
PayU India also created the Covid-19 warriors volunteering
platform for employees and the broader community. Over 130
volunteers signed up in FY22 to become, for example, logistics
warriors, community warriors and wellbeing warriors.
Looking forward
We will continue to scale and extend our payments and fintech
ecosystem across core payments, credit and complementary
areas of investment. And we will look to build on our success to
be an important presence in India and in our other high-growth
markets.
Sustainability is a core part of this journey and becomes a key
element of our positioning as a leader in fintech in high-growth
markets. FY22 was an important year to further strengthen some
of our foundations, including building our carbon accounting
capabilities as a basis for subsequent strategy development. For
FY23 and beyond, we are defining ambitious targets seeking a
net positive impact in everything we do or influence on all ESG
dimensions. To underpin this ambition, we aim to become a
certified B-Corp as one of the first fintech companies in our
markets.
The future for Payments and Fintech is to become ever-more
empowering, inclusive and sustainable, to build a world without
financial borders where everybody can prosper.
Payments and Fintech
continued
65
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Performance review
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Financial statements Other information
Transforming the way people learn,
throughtechnology.
From April 2021, Edtech became our newest core segment,
graduating from our Ventures arm.
Edtech grew revenue by 270% (55%) to US$425m. Following M&A,
most notably the acquisition of a controlling stake in Stack
Overflow and M&A within the BYJU’S group, trading losses
increased to US$117m from US$14m in the prior year.
Education remains a significant and high-potential sector with
compelling secular tailwinds such as population growth in
emerging markets, improving education levels worldwide and
workforce reskilling and upskilling on the back of digital economy
transformation trends.
Investing early in the edtech opportunity
Through Ventures, we have been investing in edtech businesses
since 2016, including Brainly, Codecademy and Udemy. As early
investors in the sector, we believed in the potential of edtech to
deliver improvements in accessibility, personalisation, impact and
enjoyment. Not everybody learns at the same pace or wants to
learn the same content in the same way. Edtech can cater to
these differences, transform how much people can learn, improve
the experience and efficacy of learning, and increase the number
of people able to learn.
Continuing to grow and transform
From the start, our Edtech investments performed well, growing
year after year. Covid-19 accelerated growth exponentially. The
massive increase in working and studying from home that came
with the pandemic was an accelerator, with people turning to
online learning like never before. The pandemic has revealed
aneven greater societal need for technology innovation and
ahigher willingness to pay for tech-enabled education. The
education sector will be a US$7.3tn global opportunity by
2025and we see a lot of room for further growth with the
transformation of the sector with technology. The global edtech
market is now forecast to grow at 16% per year to reach
approximately US$404bn by 2025.
Taking a big step forward
FY22 saw us taking a big step forward – investing more in edtech
in that year than we had in all previous years put together. This
included two major acquisitions: Stack Overflow and GoodHabitz.
To date, we have invested over US$3.8bn in 12 businesses to
become one of the leading edtech investors globally.
Within edtech, we have built a significant presence in enterprise
education, with a focus on the future of workplace learning.
We reach 90% of the Fortune 100 companies across our
enterprise learning companies, including Stack Overflow, Skillsoft,
GoodHabitz, Udemy, Platzi, EduMe and Codecademy. People
look for lifelong learning and their job satisfaction depends on
theskills, experiences and knowledge they gain. So, workplace
learning is growing in importance and value, with revenue
opportunities to match. Global corporate e-learning spend is
estimated at US$22bn and is forecast to increase to US$28bn
by2025.
In addition, we have built a strong presence in K–12 (kindergarten
to grade 12), with Brainly now reaching 300 million+ users a
month, GoStudent serving customers in 23 countries, and BYJU’S
quickly expanding from India into the West. We want to be part of
the foundational edtech of future generations.
Focusing on workplace learning
Stack Overflow
Since acquisition in August 2021 for US$1.7bn, Stack Overflow has
grown total bookings by 62% year on year, excluding the legacy
talent business which was discontinued ahead of the acquisition.
Stack Overflow, one of the 50 most popular websites in the world,
has built a global, highly engaged developer and technologist
community over the past 13 years and now serves more than 100
million people across the world every month.
Since acquisition, the business has contributed revenue and
trading losses of US$54m and US$34m respectively, driven by
growth in Stack Overflow for Teams, which enables organisations
to build their own communities on top of the open platform. By
March 2022, Stack Overflow had more than 1 000 paying teams,
generating an annual recurring revenue (ARR) of US$42m, and
representing growth of 61% compared with the prior period.
Trading losses for the year increased, reflecting increased
investment in engineering and product development initiatives,
sales headcount and marketing programme expenses and
general and administrative costs associated with growing
thebusiness.
Performance highlights
2021 2022
Revenue
1
US$115m US$425m
Trading loss
1
-US$14m -US$117m
Edtech
1 Presented on an economic-interest basis.
66
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Financial statements Other information
Skillsoft
During the year, we concluded a US$500m investment for 38% of
Skillsoft, a global leader in digital workplace learning. Skillsoft is
listed on the New York Stock Exchange on 11 June 2021 (SKIL.N)
and was a rare Edtech investment opportunity that combined
scale and profitability.
For the year to 31 January 2022, Skillsoft grew bookings by 7%,
meaningfully above original guidance, returning the company to a
revenue positive growth of 1%. Skillsoft’s client base is centred on
large, blue-chip enterprises, representing over 75% of Fortune
1000 companies and its services are used by almost 90 million
learners globally across 160 countries. Prosus started equity-
accounting Skillsoft results from 1 October 2021, given a three-
month lag period for reporting financial information. Accordingly,
six months of equity-accounted results for Skillsoft are included in
the current financial year. In April 2022, Skillsoft acquired
Codecademy, which was an investment within Prosus’s Edtech
portfolio, to accelerate growth for both companies and strengthen
technology and product development to drive incremental topline
growth and value creation.
More information on Skillsoft is available at
https://investor.skillsoft.com
.
GoodHabitz
In June 2021, we invested US$258m for a 62% interest in
GoodHabitz, a fast-growing European provider of online training
for corporates and small and medium-sized enterprises.
GoodHabitz offers over 1 100 courses in 12 different languages to
nearly 2 260 enterprise customers. GoodHabitz continues to
expand beyond its home market of the Netherlands, and is now
operational in 12 other European countries.
For the year, GoodHabitz contributed revenue of US$29m and a
trading loss of US$6m to segment results, reflecting the business’s
investment to scale. GoodHabitz is focusing on strengthening the
European position via existing and new countries. Furthermore,
there are investments in new countries outside Europe, focusing on
Latin America, India and Indonesia. Finally, GoodHabitz is heavily
investing in add-ons in the current course library, in new product
market combinations and up- and cross-sell possibilities via the
introduction of new and additional online services.
Udemy
We first invested in Udemy in 2016. Udemy is a global education
marketplace for lifelong learners that gives over 52 million
learners access to more than 196 000 courses in 75 languages.
Udemy listed on the Nasdaq Stock Market (UDMY) in October
2021. The platform offers courses that can be accessed through
the direct-to-consumer or Udemy Business offering, which has over
11600 enterprise customers at 31 December 2021.
For its year ended 31 December 2021, Udemy reported strong
revenue growth of 20% to US$516m with consumer revenue
totalling US$329m, up 1% and Udemy Business revenue reaching
US$187m, up 81% compared with the prior year. Our share of
Udemy’s revenue was US$70m and a trading loss of US$5m.
More information on Udemy is available at
https://investors.udemy.com
.
Edtech
continued
Key Edtech investments
90m+
learners across the world
470+
programmes in partnership with
68 universities
11600
enterprise customers in Q1 2022
300m+
students, parents and teachers
from across the world
Codecademy
Codecademy is one of the foremost online interactive platform for
coding education that has taught over 40 million people globally
to code. We have invested US$40m in Codecademy since 2016.
Codecademy was acquired by Skillsoft in April 2022 and 100% of
our Codecademy shares were rolled into Skillsoft.
Eruditus
Eruditus provides executive education and short, private, online
courses globally in partnership with the world’s leading
universities. The company makes high-quality education more
accessible by offering over 470 programmes in partnership with
68 universities to a global audience covering the US, Latin
America, Asia, the MENA region and Europe. We invested
US$197m in Eruditus since October 2020. Our current stake is 13%.
Platzi
Platzi is a coding platform in Spanish and Portuguese that offers
training in tech skills, interpersonal skills and language training,
and hosts a vibrant community where learners network with peers
who help them land their next job or build a business with their
new skills. Platzi has produced a content library of over 1 000
courses ranging from coding, web design and marketing, to
English. We invested US$50m in Platzi in late 2021 and our current
stake is 19%.
eduMe
eduMe is a mobile-based training platform for the deskless
workforce, used by modern companies in more than 60 countries
worldwide. By providing their workforce with seamless access to
relevant knowledge, eduMe’s customers are enabling their people
to achieve Workforce Success. eduMe is headquartered in
London, UK, with offices in Palo Alto and Santa Monica, USA. We
invested US$12m in eduMe and our current stake is 13%.
SoloLearn
SoloLearn is the world’s largest online learning platform where
over 50 million coders learn, create and share programming
content with their peers. We have invested US$8m since 2018. Our
current stake is 19%.
67
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Performance review
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Financial statements Other information
Focusing on K
–
12
Brainly
Brainly is one of the world’s leading social-learning platforms,
serving more than 300 million students, parents and teachers from
all across the world. Students use Brainly to strengthen their skills
across core subjects such as maths, history, science and social
studies. The platform allows them to connect with their peers,
subject-matter experts and professional educators to discuss
subjects and seek answers to tricky questions. We first invested in
Brainly in April 2016 and, to date, we have invested US$77m with
a current stake of 42%.
GoStudent
GoStudent is one of the leading online tutoring providers in
theworld. Founded in 2016, GoStudent is currently serving
customers in 23 countries, providing paid, one-on-one, video-
based tutoring to primary, secondary and college-aged
students in 30+ subjects. In March 2022, we invested US$226m in
GoStudent for an 8% stake.
BYJU’S
BYJU’S is a leader in personalised learning programmes for
students in India. The country’s most valuable start-up continues its
rapid growth in building global operations. It targets students in
grades K–12 and those taking competitive exams such as GMAT.
During the year, BYJU’S expanded its offering beyond K–12 with
over US$2.5bn in acquisitions in India and abroad. These include
Aakash Network, one of the largest coaching institutes for high
school students; US-based Epic, an online reading platform for
children; a kids’ coding platform called Tynker; Great Learning,
one of India’s leading edtech companies for professional and
higher education; Toppr, an after-school learning app that
provides learning courses and entrance-exam tutoring; and online
test-preparation platform, BYJU’S Exam Prep (formerly Gradeup).
BYJU’S revenue grew by almost 90%, mainly off the back of these
acquisitions and from enhanced offerings such as BYJU’S
FutureSchool, which offers one-on-one learning for coding and
maths for kids.
We have invested US$536m in BYJU’S since 2018 and hold a
10%stake.
Looking forward
We will continue to play an active role in helping our portfolio
businesses to grow and innovate so that more people around the
world can enjoy the benefits of tech-enabled learning. We will
also look for additional opportunities to expand and strengthen
our Edtech segment.
In Edtech, as in all our core segments, we are interested in real
improvement for people’s everyday lives, long-term impact, and
sustainable value creation – fundamentally changing the world of
learning for the better.
Edtech
continued
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Financial statements Other information
Building a leading ecommerce ecosystem for
customers across Central and Eastern Europe.
In the face of a strong offline recovery and global supply chain
disruption, both GMV and revenue for eMAG, our leading
ecommerce platform in Central and Eastern Europe, maintained
scale and grew 3%, representing revenue of US$2.3bn. Successful
initiatives such as eMAG’s Genius loyalty subscription programme
and Easybox lockers improved the overall customer experience
and contributed to the growth. Genius subscriptions topped 335
000 from just 201 000 at September 2021 and now account for
nearly one third of eMAG’s sales in Romania. The business also
deployed around an additional 1 500 Easybox lockers, totalling
around 2 500 by March 2022 in Romania.
eMAG’s core etail business delivered a trading profit of US$17m
for the period. eMAG is taking advantage of its scale and
momentum and investing to build the largest and fastest delivery
network and to expand into online food and grocery delivery with
its new verticals Tazz and Freshful.
Tazz, eMAG’s food delivery service, is scaling fast and has quickly
become one of the top players in the highly competitive Romanian
market, growing orders fourfold compared with a year ago. The
business has made significant investments to build its brand and
customer base and is now focused on expanding to new cities
and integrating into eMAG’s Genius programme.
eMAG also launched Freshful to serve the under-penetrated and
high-growth online grocery sector as a natural extension of
eMAG’s core etail business. By leveraging eMAG’s brand,
purchasing scale and delivery capabilities, Freshful is well
positioned to delight customers and become a leader in the
grocery space.
Given the additional investment, overall, eMAG reported a trading
loss of US$34m for the year.
The opportunity
The etail opportunity across Central and Eastern Europe is
substantial. The pandemic boosted previous low levels of etailing,
spurring growth across the region. Pre-pandemic ecommerce
penetration in Romania was just 7% compared with 15% in the US
and 26% in China. Rates in Hungary (5%) and Bulgaria (3%) were
even lower. The ecommerce sector is expected to grow by 7%
annually in Romania, 16% in Bulgaria and 2% in Hungary.
Succeeding in Central and Eastern Europe
eMAG is dedicated to becoming Central and Eastern Europe’s
one-stop ecommerce platform. The group operates a structured
first-party/third-party (1P/3P) business-to-consumer (B2C)
ecommerce platform in Romania, Hungary and Bulgaria under the
eMAG brand, as well as the fashion-shopping destination in
Romania under the Fashion Days brand. In addition, the company
operates Sameday (courier delivery services); Tazz (on-demand
food and multi-vertical delivery); Freshful (specialises in fresh food
delivery); PC Garage (specialised online retailer focused on
gamers); Depanero (repair service); and Conversion Marketing
(performance marketing).
Giving customers the best etail experience
To fulfil its mission of giving customers the best etail experience,
eMAG focuses on four key pillars: delivering convenience, helping
customers make the right decisions, delivering on its promise,
andmaking the difference in society and engaging customers
onthis journey.
Increasing consumer engagement
In addition, eMAG grew customer engagement. The biggest
business, eMAG Romania, increased orders 14% year on year.
Therefore, while purchases of some high-priced items were lower
than expected, there was a material increase in engagement on
the platform overall. This is a key positive long-term trend for
eMAG, given its commitment to play an ever-bigger role as a
one-stop ecommerce shop for people’s everyday needs across
Central and Eastern Europe.
In addition, Genius, eMAG’s premium subscription service for
customers, delivered well, meeting its targets for the year of
achieving 335000 subscriptions from just 201 000 at September
2021. Genius subscribers double their business with eMAG after
they join and also buy more broadly. This again fits well with
eMAG’s long-term ambitions. eMAG aims to build on the
strengthof Genius with a loyalty system that spans across all
theirplatforms.
Performance highlights
2021 2022
Revenue
1
US$2.2bn US$2.3bn
Trading profit/(loss)
1
US$80m -US$34m
Etail – eMAG
1 Presented on an economic-interest basis.
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Group overview
Sustainability review
Performance review
Governance
Financial statements Other information
Growing Sameday
eMAG continued to build its Sameday courier business, which
aims for a 99% on-time delivery rate. During the year, Sameday
grew 40%, meeting increased demand for deliveries from eMAG
and other businesses in Romania and Hungary. Sameday has
grown rapidly to consolidate its important presence in Romania,
and aims to improve this further.
Fulfilling orders for third-party partners
The company continues to invest in and grow its Fulfilment by
eMAG programme, where it manages delivery logistics for 3P
partners. This enables eMAG to ensure delivery quality for
customers and deepen relationships with merchants.
Expanding the Easybox network
Sameday’s automated Easybox lockers remain popular – 65% of
Genius orders are delivered via Easybox, for example. They give
customers 24/7 service, pick-up flexibility and over 99% on-time
delivery rates. Moreover, they are cost-effective to operate and
more environmentally friendly as they reduce the need to deliver
to multiple individual addresses.
Sameday continued to expand the Easybox network in Romania,
from 1000 to 2500 lockers by the end of FY22. The Easybox
network in Hungary grew to 450 lockers.
The Easybox service has also been enhanced. Customers can, for
example, return items when they like via the lockers. The moment
they close the locker door, their money is electronically refunded.
Called ‘magic return’, this is quicker, safer and greener – a good
example of improving everyday life.
In addition, the 2 000th locker was given its own solar panels –
making the service even more environmentally friendly. The plan is
to roll out more lockers powered by the sun.
Going from strength to strength in food delivery
Tazz, eMAG’s food delivery service, is scaling fast and has quickly
become one of the top players in the highly competitive Romanian
market, growing orders four times compared with a year ago. The
business has made significant investments to build its brand and
customer base and is now focused on expanding to new cities
and integrating into eMAG’s Genius programme. eMAG has plans
to grow and extend this service further in FY23.
Launching Freshful by eMAG
In October 2021, eMAG launched its e-grocery business, Freshful,
to serve the under-penetrated and high-growth online grocery
sector as a natural extension of eMAG’s core etail business. It
offers a comprehensive range of 20000 items, with a focus on
local produce for fresh food. Unlike alternatives in the market, it
combines a dedicated warehouse with a refrigerated delivery
fleet so that customers can be sure of getting exactly what they
want, quickly and conveniently. The business scaled fast to 33000
orders per month by year-end. Reflecting the range and quality of
groceries on offer and the reliable ordering and delivery service,
customer satisfaction is high for this new eMAG service. Available
initially in Bucharest, the plan is to expand Freshful city by city.
By leveraging eMAG’s brand, purchasing scale and delivery
capabilities, Freshful is well positioned to delight customers and
become a leader in the grocery space.
Introducing financial services
eMAG has launched a partnership with PayU to offer customers
flexibility by postponing a payment or paying in instalments for all
categories of eMAG products or for products sold by sellers
active on eMAG Marketplace. Options include the following:
•
Buy now pay later (BNPL), where the shopper postpones
payment for 30 days without any costs.
•
Payment in four equal monthly instalments (Slice it), where the
first instalment is paid at transaction date and the balance over
three calendar months.
These services are currently being piloted in Romania and reflect
eMAG’s commitment to developing ecommerce infrastructure
services to offer customers a high-quality, reliable experience
across the ecosystem – one that truly delivers value and improves
their everyday lives.
Investing in Flip
In 2021, eMAG invested in Flip, a Romanian start-up focused on
refurbishing and reselling secondhand mobile phones. It was a
natural move, given eMAG’s plans to help build the circular
economy in the region. It is early days, but eMAG is exploring
how to build this offer to give a second life to other products such
as laptops.
Offering circular services
FY22 saw sales of ‘second chance’ resealed products on eMAG’s
platform increase by 26%. With this service, eMAG checks and
repackages returned products, extending their life cycle and
offering them to customers at a reduced price. In addition, eMAG
offers a buy-back programme where customers can return used
home appliances in exchange for a voucher towards a new
appliance, and eMAG takes care of the correct recycling. This
service also gives customers the opportunity to replace their old
devices with new, energy-efficient appliances. These are two more
Etail – eMAG
continued
Key strategic initiatives
1
eMAG Genius
Loyalty programme
2
eMAG Easybox
Automated lockers
3
Sameday
Inhouse courier service
4
Fulfilled by eMAG
Fulfilment for 3P merchants
5
Tazz by eMAG
Food and
multi-vertical delivery
6
Fintech solutions
Consumer credit solutions
7
Advertising solutions
Sponsored merchant listings
8
Freshful by eMAG
Large basket grocerydelivery
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Performance review
Governance
Financial statements Other information
examples of how eMAG is acting for the benefit of customers and
the environment by extending the life cycle of the products offered
on its platforms.
Repairing products
Working towards a circular economy is at the heart of eMAG’s
repair service, Depanero. In FY22, 205000 products in Romania
were repaired by Depanero, 14000 in Bulgaria and 8400 in
Hungary.
Achieving carbon-neutrality
As in FY21, eMAG also achieved carbon-neutrality in FY22 for
scope 1 and scope 2 emissions, by reducing carbon emissions
and offsetting the remaining emissions that could not have been
avoided.
To reduce carbon emissions, eMAG has, for example, increased
the use of electric vehicles. Sameday continued to invest in its
green delivery fleet, replacing conventional fuel vehicles with
electric ones. The growth of the Easybox network also made akey
difference. eMAG estimates that delivering a parcel to anEasybox
generates on average 14g of CO
2
, a 95% reduction on the 300g
generated delivering a parcel to acustomer’s home.
Ensuring sustainability
eMAG has ensured that its new DC2 logistics centre, which
opened in October 2021, is not only state of the art in terms of
automation and logistics, but also sustainable. It is powered by
green energy via its rooftop 1MW photovoltaic panel grid. eMAG
has opted for a 100% green energy contract for its other
warehouse – reducing carbon emissions from purchased
electricity.
The new centre received an ‘excellent’ rating under the BREEAM
1
design stage certification programme. The DC1 warehouse and
the Sameday warehouses have also been certified by BREEAM
inFY22.
In line with its long-term commitment to sustainability, eMAG has
partnered with Foundation Conservation Carpathia (FCC). FCC is
creating a wilderness reserve in the Romanian Carpathians by
purchasing land and hunting rights to protect the area from
deforestation and promote biodiversity. Its plan is to return the
land to the public domain and promote sustainable tourism in the
area. Forest conservation projects such as these play a crucial
role in combating global warming.
Improving gender diversity
eMAG has prioritised improving gender diversity in the company.
In FY22, eMAG’s total gender diversity score rose from 43.35% to
43.60% female employees. In the technology team, the score
increased from 28.8% to 29.5%, well above the benchmark of
23.2% for the Romanian tech industry.
Respecting human rights
eMAG is committed to respecting human rights and protecting the
dignity of its workforce and has adopted the Prosus human rights
statement. This commitment can be seen, among other ways, in
how eMAG compensates its workers. For example, compensation
for eMAG’s warehouse workers exceeds the minimum wage.
Investing in the We Care Foundation
eMAG continues to invest in the We Care Foundation (formerly
eMAG Foundation) to deliver on its commitment to social
responsibility. The foundation focuses on three pillars: community
support for teachers and students, the We Care programme for
children at risk of dropping out of school, and the 140 Beats per
Minute programme to encourage physical activity for children. For
the 2021/22 school year, We Care established 52 performance
centres, and reached over 5 500 students and 377 teachers.
Looking forward
eMAG will continue its growth by extending the Genius loyalty
programme, expanding financial services, rolling out more
Easybox lockers, repairing more products, increasing the delivery
of food and groceries, and doing more to support the circular
economy. eMAG’s mission remains the same: givingcustomers
across Central and Eastern Europe the best retailexperience.
Looking forward, the group is set to broaden anddeepen this
experience and provide it in ever-more sustainable ways.
Etail – eMAG
continued
eMAG
Maintained scale and grew 3%,
representing revenue of
US$2.3bn
2 950
eMAG lockers throughout Romania
and Hungary
1 BREEAM stands for Building Research Establishment Environmental Assessment Method,
awidely used sustainability assessment certification developed by the UK-based Building
Research Establishment.
71
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Group overview
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Performance review
Governance
Financial statements Other information
Identifying and investing in the next wave
ofgroup growth.
Performance highlights
FY22 was a standout year for Ventures, with a record number of
transactions. We invested US$900m in 50 closed transactions
across 34 companies, compared with US$163m in FY21.
During the year, we made investments in India in agtech,
ecommerce, logistics, health, personal services and more, closing
transactions with an aggregate investment of US$600m.
Nurturing the next wave for the group
Ventures partners with innovative entrepreneurs around the world
to build leading technology companies in high-growth markets.
We act as the group’s incubator for new investment areas, which
in turn can become new core segments once they reach scale.
Our current core Food Delivery segment was born out of Ventures
in 2019. In April 2021, Edtech became our newest core segment,
after being cultivated in Ventures since 2016.
By 31 March 2022, excluding Edtech and Food Delivery, Ventures
had invested over US$1bn in 44 investments in key geographies
around the world such as India, and across Southeast Asia, Latin
America, Europe and the US, covering exciting sectors, including
logistics, agtech and sustainability, healthtech, B2B, SaaS, fintech
and blockchain.
Investing in future winners
We believe there are many opportunities for entrepreneurs with
bright ideas and disruptive technologies to improve everyday life
for people around the world. With nimble teams and the agility
toimplement fast-changing technology, start-ups have an
increasing edge over established industry leaders across sectors.
These new ideas are reimagining and remaking markets. We
aimto invest in these disruptors, the next generation of tech-
enabled industry titans which are being founded and funded now.
What we look for
With Ventures, as with the group as a whole, we invest in
adisciplined, focused way. We look for the following three
keycriteria:
•
We back businesses in areas of large total addressable markets
(TAMs) that are addressing big societal needs in high-growth
regions, and where we can really make an impact as an
investor.
•
We focus on sectors of the economy where technology can lead
to meaningful change in consumer behaviour and economics.
•
We invest in world-class entrepreneurs who want to build
leading technology companies.
Focusing on greater impact
Across the range of opportunities, Ventures focuses on key areas,
including India and other new markets, logistics, fintech and
blockchain, agtech and sustainability, and healthtech. We are also
focusing on the Software as a Service (SaaS) and B2B sectors, as
these are large and attractive segments where Prosus currently
has a limited presence.
India
India remains a high-focus area, given the vast opportunity for
growth in the market across a number of sectors, and the
competitive edge we have built there as an investor over a
number of years. Several of our companies, including PharmEasy,
Meesho, Urban Company and ElasticRun, have joined the ranks of
Indian unicorns recently.
API Holdings/PharmEasy
API Holdings owns India’s largest integrated digital healthcare
platforms. In total, we have invested US$220m and currently own
a 13% stake. API Holdings also owns PharmEasy, a healthtech
start-up offering services such as teleconsultation, medicine
deliveries, and diagnostic test sample collection. Recently,
PharmEasy acquired diagnostics chain Thyrocare and cloud-
based hospital supply-chain management start-up Aknamed.
PharmEasy is considering an IPO.
Meesho
Meesho operates as an online commerce platform that also
enables anyone to start a business without investment. It has so
far helped to create over 17 million entrepreneurs across India by
enabling individuals to build their own small businesses.
Homemakers and women on career breaks make up more than
70% of these entrepreneurs. Meesho provides these entrepreneurs
with products, logistics and payment tools to start and grow their
business and invests in training and mentoring these
entrepreneurs. The company has also created online and offline
communities that allow these entrepreneurs to connect, share and
learn with their peers.
Meesho has seen tremendous growth in the past year with its
strategy shift to add a B2C business line in addition to its original
reseller-based model. Over the past two years, we have invested
US$162m in Meesho, including a follow-on round in August 2021
and a secondary transaction in November 2021. We currently hold
a 14% stake. As of March 2022, Meesho had average daily orders
of approximately 2.8 million, 3.5 times the number in March 2021.
Monthly app users in March 2022 reached 123 million, an 811%
increase year on year.
Other: Ventures
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Performance review
Governance
Financial statements Other information
ElasticRun
ElasticRun is a commerce platform that enables businesses to
reach kiranas (small local stores) in the deep rural parts of India.
The company acts as an extended arm of fast-moving consumer
goods (FMCG) companies’ direct distribution networks in the rural
areas to generate new customers for these companies. ElasticRun
also helps ecommerce companies reach their customers in
far-flung areas through its network of kirana stores and brings
banks and financial institutions closer to a new set of
underserviced small and medium-sized enterprise customers from
its rural kirana network.
Since October 2019, we have invested US$120m in ElasticRun
(latest investment in series E funding in February 2022) and
currently hold an effective stake of 22%. The company has
performed well in its ecommerce delivery business and has
rapidly scaled up its FMCG distribution business.
DeHaat
We have invested US$27m in DeHaat and currently hold an
11%stake. DeHaat is a technology-based platform offering
full-stack (end-to-end) agricultural services to farmers, including
distribution of high-quality agricultural inputs, customised farm
advisories, access to financial services and market linkages for
selling produce.
New markets
Since 2020, we have invested in a number of new markets where
we see strong growth opportunities. We’ve since significantly
expanded our presence in areas such as Southeast Asia, Latin
America, Europe and the US, with new market investments in
Egypt and Bangladesh.
In particular, we’ve grown investments in Mexico, Europe and
Indonesia. In Indonesia, our investments include Shipper, a
tech-enabled logistics platform; Aruna, a sustainable fisheries and
marine platform; and Ula, a B2B ecommerce marketplace.
Indonesia
Shipper is a tech-enabled logistics platform in Indonesia offering
a one-stop logistics solution, from a multi-courier shipping platform
to distribution warehousing and a fulfilment network. Despite the
massive size of the logistics market in Indonesia, it is still extremely
inefficient. In tier 2 and tier 3 cities, shipping costs can often add
up to 40% of ecommerce basket sizes, becoming a major barrier
to mass ecommerce adoption in the country. Shipper aims to
solve three major problems in Indonesia’s logistics: a confusing
plethora of different warehousing and shipping options; lack
ofprice transparency; and below-average trackability. In total,
wehave invested US$36m in Shipper and currently own a
16%stake.
Egypt
Thndr is an Egyptian digital investment platform simplifying
investment in the MENA region through its digital, multi-language
app, educating and empowering investors to make their own
investment decisions. Launched in late 2020, Thndr is creating
investors out of members of the population who previously had
limited equity market exposure. In fact, as of 2021, 87% of Thndr’s
user base are first-time investors and 40% of users come from rural
areas. We have invested a total of US$5m in the company and
currently own an 8.4% stake.
Mexico
In Mexico our broad theme this year was ‘access’. Our investments
include Klar; 99 Minutos, a last-mile ecommerce delivery platform;
and Kovi, a start-up that is disrupting car access in Latin America.
We also invested in Azos, which is expanding access to life
insurance in Brazil.
Klar is a 100% digital, transparent, free and secure alternative to
traditional debit and credit services in Mexico. Ageing, archaic
architecture has made it difficult for traditional banks to serve the
needs of the growing middle class in that country, with only 10% of
adults owning credit cards. Klar has built a new banking
infrastructure core that aligns with the financial needs of
consumers and allows it to service a massive segment of the
population in Mexico that previously did not have access to
financial services. We have invested US$20m in Klar and currently
own a 21% stake.
Europe
We have been active investors in the region, and our Ventures
team in Europe is hyper-focused on what’s next. We’ve invested in
several companies including: BUX, Europe’s fastest-growing
neo-broker (subject to customary regulatory approval); merXu, an
online B2B trading platform; and Collective Benefits, a benefits
marketplace for independent workers.
Logistics
The logistics industry has experienced significant growth in
ecommerce with rapidly changing consumer expectations and
trends during the pandemic, including a surge in last-mile and
same-day deliveries. We have invested in three companies in this
space: Shipper, ElasticRun and, most recently, 99 Minutos.
Ventures
continued
Ventures
DeHaat
Serves
>1m
farmers providing access to over
3 200 agricultural inputs
>6 000
DeHaat centres
>300
commodity bulk buyers, including
retail chains, ecommerce players,
FMCG giants, and SME food
processors
Active
in key agricultural regions of India
ElasticRun
Covers
>80 000
villages across 26 states in India
>400
brands on the platform receive
access to 50 000+ kirana shops
99 Minutos
60
markets across Mexico, Colombia,
Chile and Peru
Handles
>15m
packages per year
Shipper
220
large fulfilment centres
12 000
retail points
>20 000
online sellers
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Performance review
Governance
Financial statements Other information
99 Minutos
In total, we have invested US$36m in 99 Minutos and currently
own a 23% stake. The company offers last-mile logistics services to
ecommerce vendors in major markets in Latin America.
Blockchain
Blockchain is beginning to disrupt and revolutionise a number of
key industries. Our investments in the sector include DappRadar
and Republic.
DappRadar
DappRadar is a leading global platform for discovering and
analysing blockchain-based decentralised applications (dapps).
We have invested a total of US$5m in the company and currently
own a 31.28% stake.
Republic
Republic is a foremost investment platform that provides access to
start-up, real estate, crypto and gaming investments for both retail
and accredited investors. We acquired US$2.6m worth of the
Republic note, a profit-sharing digital security meant to align the
incentives of the community with activity on the Republic platform.
Agtech and sustainability
Agtech and sustainability is a growing focus area for us. As
climate regulation remains top of the global agenda and
consumers become increasingly climate conscious, we expect
more growth, innovation and adoption in this area. Our
investments in this space include: Aruna, DeHaat and Biome
Makers.
Aruna
Aruna is a leading fisheries and marine platform in Indonesia. Its
vision is to transform Indonesia’s fisheries and marine supply chain
and cater to growing global demand for fishery products through
technology innovation. As the fisheries vertical is highly
fragmented, Aruna’s tech-enabled platform serves as a one-stop
shop and end-to-end supply chain aggregator, streamlining the
process for the country’s fishermen. We have invested a total of
US$14.2m in the company and currently own a 10.77% stake.
Biome Makers
The company has developed a patented technology integrating
DNA sequencing and ecological computing technologies using
one of the more complex biomarkers: the soil microbiome. Biome
Makers has distinguished itself as one of the foremost global
agtech leaders, having spent the past few years building
proprietary products to promote sustainable farming practices
using soil biology standard analytics. We have invested a total of
US$8m in the company and currently own a 20% stake.
Healthtech
We have invested US$58.5m in Honor and currently hold a 14%
stake. Honor is a senior-care network and technology platform
that offers personalised care to improve the in-home care
experience. In August 2021, Honor acquired Home Instead, the
largest network of independently owned and operated franchise
owners for home care, significantly expanding its reach.
Looking forward
We will continue with our disciplined long-term approach,
investing with conviction aggressively – but never recklessly –
across sectors and markets. This allows us to continue backing the
next generation of great entrepreneurs, ideas and technologies,
changing everyday lives for the better.
Ventures
continued
Ventures
Aruna
100
communities of fishermen with over
26 000 registered fisherfolks
5 000
job opportunities in the rural
areas of Indonesia
Operates in
27
provinces in Indonesia
(70% of the country)
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Performance review
Governance
Financial statements Other information
Investing early in South Africa’s tech
entrepreneurs to boost the digital economy
andhelp address big societal needs.
Performance highlights
Since its launch in 2019, Naspers Foundry has invested in 12 South
Africa-focused tech businesses, deploying close to R700m of
capital. The majority of these investments were made in FY22 and
the team has a healthy pipeline of prospects for the coming year.
Backing the future of tech in South Africa
Naspers Foundry is a R1.4bn investment vehicle that backs
talented local entrepreneurs by investing in early-stage tech
companies with high-growth potential that solve big societal
needs and improve the quality of people’s daily lives.
Its mission is to boost the South African early-stage technology
and venture capital (VC) ecosystem, creating a lasting impact on
the broader South African economy.
Investing in key sectors
Naspers Foundry invests in sectors aligned to the group’s core
segments, including payments and fintech, edtech and
marketplaces. In line with the group’s Ventures segment, Naspers
Foundry also looks to invest in other sectors that address big
societal needs, such as agtech and healthtech.
Capitalising on a much bigger ecosystem
During the review period, the South African tech ecosystem grew
significantly, from around US$259m in calendar 2020 to over
US$832m in calendar 2021 (source: 2021 Africa Tech Venture
Capital Report by Partech Africa). Both the quantity and quality of
investable opportunities are increasing and, to ensure that
Naspers Foundry is best positioned to participate, we have
bolstered the team. We have added capacity and functional
expertise, and optimised processes so that we can increase both
the volume and speed of our investment while continuing to give
the same level of support to our portfolio companies.
The growth in the local tech ecosystem is in line with Naspers
Foundry’s mission, and the team continues to play a key role as
South Africa’s largest homegrown early-stage tech investor.
Asalong-term dedicated tech investor with local presence and
global links, Naspers Foundry is valued both by entrepreneurs
and investment partners. The investments we make help the
businesses grow and encourage more investment into the
ecosystem from other global investors. It is a long-term gain
where everybody wins – from the entrepreneurs to Naspers
Foundry, the group as a whole and the broader South African
economy.
Making new investments
In FY22, Naspers Foundry added a number of companies to
itsportfolio.
WhereIsMyTransport
In June 2021, Naspers Foundry invested R42m (US$3m) in mobility
technology company WhereIsMyTransport. The company maps
formal and informal public transport networks in emerging
markets and uses this data and technology to improve the public
transport experience for millions of consumers in high-growth
megacities globally.
Ctrl
In July 2021, Naspers Foundry invested R34m (US$2m) in Ctrl – a
short-term insurance marketplace connecting consumers, brokers
and insurers on a single platform.
Naked Insurance
In August 2021, Naspers Foundry invested US$8.2m (R120m)
primary funding into Naked Insurance at a valuation of US$23.86m
(R350m). The company conducts a digital personal-lines short-term
insurance business in South Africa. This is a digital insurance
platform, offering consumers comprehensive and instant cover for
cars, homes, contents and standalone items. Its business model
aims to make insurance more accessible and trustworthy.
Planet42
In January 2022, Naspers Foundry invested US$4m (€3m) in
Planet42. Planet42 operates a rent-to-buy secondhand car
platform in South Africa and has now expanded into Estonia and
Mexico. To date, Planet42 has helped more than 7 000 South
African families get access to cars.
Floatpays
In January 2022, Naspers Foundry invested in Floatpays – an
on-demand wage-access platform that helps employees access,
spend, save and manage their money. The investment is still
subject to successful regulatory approval.
LifeCheq
In February 2022, Naspers Foundry invested R40m (US$3m) in
LifeCheq – a technology platform offering end users access to
holistic, personalised financial advice across different product
categories.
Nile.ag
In March 2022, Naspers Foundry invested R40m (US$3m) in Nile.
ag – a B2B marketplace that enables direct trade between buyers
and sellers of fresh produce and supports the flow of goods sold
between regions.
Valenture Institute
In March 2022, Naspers Foundry invested R108m (US$7m) in
Valenture Institute – a global private online high school – offering
a curriculum that is recognised and endorsed by the world’s
leading universities, broadening access to quality and affordable
education to students in emerging markets like South Africa.
Other: Naspers Foundry
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Performance review
Governance
Financial statements Other information
Helping existing investments to grow
In line with the group, Naspers Foundry takes a long-term view –
backing businesses and helping them grow and succeed through
a highly collaborative approach and active portfolio management.
In FY22, the team played a key part in helping portfolio companies
raise additional funding to support their growth ambitions.
The Student Hub
In November 2020, Naspers Foundry invested R45m (US$3m) in
The Student Hub, a fast-growing business that is having a big
social impact through the way it is helping to transform student-
learning at tertiary level. The Student Hub partners with public
technical and vocational education training (TVET) colleges to
provide two bespoke solutions – a comprehensive online platform
that supports the on-campus learning activities of students and
lecturers at physical colleges; and a fully fledged digital learning
solution for remote students who would otherwise not have been
able to enrol due to physical infrastructure constraints at colleges.
The company makes TVET education more cost effective and
accessible. It also enhances outcomes, with a marked increase in
pass rates at colleges employing its solution. There are more than
30 000 students registered on its platform. In FY22, Naspers
Foundry helped The Student Hub raise additional capital and
provided follow-on funding to continue its strong growth trajectory.
SweepSouth
In June 2019, Naspers Foundry invested R30m in SweepSouth,
Africa’s first online home-cleaning-services marketplace, which
connects clients to vetted domestic cleaners who benefit from
flexibility and receive fair pay. SweepSouth has 5 000 domestic
cleaners on its platform and has provided employment
opportunities for over 20 000 women to date. Having weathered
the challenges of the pandemic, SweepSouth continues to grow.
In December 2021, SweepSouth acquired the Egyptian start-up
Filkhedma. Filkhedma is Egypt’s home services marketplace
operating across three cities and serving tens of thousands of
customers with cleaning, maintenance, and beauty services, while
empowering over 2 000 service providers through technology with
consistent incomes and professional development.
Looking forward
The ecosystem is set to continue growing, and Naspers Foundry
will maintain its path – investing in exciting new tech-enabled
businesses and helping portfolio companies to keep on growing
and, in turn, having an ever-bigger impact on the economies
andsocieties.
Naspers Foundry
continued
Naspers Foundry
Naspers Foundry is a
R1.4bn
investment vehicle
76
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Connecting people in everyday life through
innovative technology.
Tencent
Tencent achieved stable growth in a challenging year of 2021,
thanks to the strength of its diversified portfolio of products,
businesses and investments. For the year ended 31 December
2021, Tencent’s revenue grew 16% to RMB560bn. Non-IFRS profit
attributable to shareholders (Tencent’s measure of normalised
performance) grew 1% to RMB124bn.
The opportunity
China achieved 8.1% annual gross domestic product (GDP) growth
in 2021, amid global supply chain disruptions due to the
coronavirus pandemic. The World Bank estimates China’s GDP will
grow at 5% in 2022
2
. China is the world’s largest consumer internet
market and continues to grow ahead of many other large internet
markets. There were 1 032 million internet users in China in
December 2021 (989 million in December 2020), 99.7% of whom
were mobile users. With a highly mobile-penetrated population,
growing middle class and increased investment in the digital
transformation of industries – the opportunity in the China internet
industry remains vast.
The pandemic established and accelerated certain industry and
user trends, including enterprise digitalisation, online healthcare,
and social and video commerce. These trends will have a
sustained impact in 2022 and beyond, presenting Tencent with
ample opportunities in consumer and industrial internet verticals.
The China internet industry is also shifting from a short-term
growth-focused paradigm to a new paradigm that seeks
sustainable growth via user value, technological innovation and
balanced benefits for all stakeholders.
Long-term sustainability reinforced amid changes
The regulatory environment of China’s internet industry continues
to evolve, reflecting the expanding economic and social
importance of the industry. Tencent embraced the market
challenges and regulatory changes by managing costs,
increasing efficiency, sharpening its focus on key strategic areas,
and repositioning itself for sustainable long-term growth.
Continuing to lead
Tencent is a leading internet and technology company in China.
Weixin, the largest mobile community in China, continues to play a
pivotal role in the daily lives of over 1.2 billion users via
transformative innovation with a focus on user experience.
Revenues from value-added services increased by 10% to
RMB292bn, with domestic games growing 6% to RMB129bn,
international games increasing 31% to RMB46bn and social
networks rising 8% to RMB117bn. Revenues from fintech and
business services increased 34% to RMB172bn, and revenues from
the online advertising business rose 8% to RMB89bn.
The combined monthly active users (MAU) of Weixin and WeChat
increased 3.5% to 1.27 billion. Weixin’s in-app short video services,
Video Accounts, doubled its per-user time spent and total video
views in the prior year. The Weixin Mini Programs ecosystem
continued to grow, with daily active users (DAU) passing 450
million and independent merchants’ annual transaction volume of
physical goods more than doubling from the prior year.
Tencent sustained its domestic game-industry leadership as it
cultivated its key IP franchises more deeply and broadly. In 2021,
Tencent Games also achieved notable progress in global markets,
developing and operating five of the top 10 mobile titles by DAU
outside China. League of Legends World Championship remained
the world’s most popular eSports tournament, with 74 million peak
concurrent viewers on its finals. Level Infinite, a new international
game publishing brand, was launched to target international
gamers.
Performance highlights
2021 2022
Revenue
1
US$22.5bn US$25.8bn
Trading profit
1
US$6.2bn US$6.3bn
1 Presented on an economic-interest basis.
2 Based on the latest China Economic Update by the World Bank.
Social and Internet Platforms
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Tencent continued to enhance its differentiated advertising
solutions, with Weixin’s daily active advertisers growing by over
30% year-on-year in the fourth quarter of 2021. Subscriptions for
fee-based registered value-added services increased by 8% in
2021 to 236 million. Tencent maintained its leading position in
long-form video with 124 million subscriptions.
Tencent’s mobile payment platform continued to benefit from
expanded use cases and increased transactions. Weixin Pay
strengthened its support to small and medium merchants and
deepened its cooperation with the Peoples’ Bank of China and
UnionPay.
For communication and collaboration SaaS, Tencent upgraded the
integration among WeCom, Tencent Meeting and Tencent Docs to
provide enhanced solutions for enterprises. Tencent has also
enabled differentiated CRM functions in WeCom via deepened
connection with Weixin.
Tencent will continue to adhere to its strategy of delivering
superior experiences to users, assisting enterprises to digitalise
their operations and contributing to the society at large.
Looking forward
Tencent will continue to adhere to its strategy of delivering
superior experiences to users, assisting enterprises to digitalise
their operations and contributing to society at large.
Tencent is listed on the Hong Kong Stock Exchange. Further
information is available on its website at
www.tencent.com
.
Social and Internet Platforms
continued
Weixin, the largest mobile
community in China, has over
1.2bn
users
Tencent’s online advertising
business rose to
RMB89bn
VK Company Limited
Since the outbreak of the Russia–Ukraine conflict, international
sanctions have been imposed on many Russian entities and
individuals. These include sanctions on the CEO and controlling
shareholders of the online platform VK Group (VK) (previously
Mail.ru), in which Prosus holds a minority stake. As a consequence
of these sanctions, Prosus asked its directors on the VK board to
resign their positions.
We have also written down the full carrying value of the VK asset
in the current reporting period.
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Paying taxes is a normal consequence of doing business. We
support the establishment of a harmonised international tax
system where there is a level playing field and all players pay
their fair share of taxes in the jurisdictions where they operate.
To understand our approach to paying taxes and interpret the
taxes-paid information, it is important to understand our operating
model. As a global technology investor, our portfolio of businesses
is well diversified by sector and geography. We operate on a
decentralised basis in numerous countries. The businesses are
based in the countries where their operations, their users and
consumers are. All our subsidiaries, associates and investees pay
taxes locally, in the jurisdictions where our companies operate
and our products and services are consumed. We regard paying
taxes as an integral part of our business operations. Overall, our
aim is to improve the lives of the people who live in the countries
where we operate. Paying taxes locally is an extension of our
commitment to the improvement of our customers’ lives through
technology. Our businesses directly improve people’s lives.
Indirectly, through the taxes paid locally, people’s lives are further
improved. Locally paid taxes assist governments to fund the
needs of the populations in their countries.
Prosus shows a meaningful normalised effective tax rate of 23.6%
for the 2022 financial year (24.4% for the 2021 financial year).
The group accounts for its share of the results of its equity-
accounted investments net of the taxation recognised by those
investments. In order to provide a more comparable effective tax
rate, the tax recognised as part of the group’s share of the results
from equity-accounted investments is included, for purposes of the
calculation of the normalised effective tax rate. Furthermore,
exceptional items like tax-free capital gains on the sale of
subsidiaries are excluded from the profit before tax to arrive at the
normalised effective tax rate of 23.6%.
Compliance
As a family of essentially local businesses, the principles we apply
across our portfolio are consistent. We take tax compliance
seriously. This is embedded in the culture of our group and is an
element of the KPIs of finance and tax team members.
Our tax team comprises experienced and effectively equipped
tax specialists. Regular training ensures that all tax team members
Tax
Being a responsible global citizen sits at the core of everything we do. We consider
paying taxes as an important economic contribution to the societies in which we
operate. This also underpins our approach to managing and paying taxes.
maintain their optimal tax skill sets. Subsidiaries, associates and
investees are accountable for managing tax and adhering to our
group policy of zero tolerance for non-compliance.
Compliance with laws and regulations in the countries where we
do business is essential to the integrity of our businesses and all
our actions. Ensuring that we are compliant with tax legislation in
the territories where we operate is non-negotiable. We have to be
– and we want to be – fully compliant: no exceptions. This is how
we do business and why our stakeholders can have confidence in
the integrity of our actions.
All tax planning is decided and effected in the context of the
business: the tax consequences flow from the business operations.
Business structures and operational models dictate our tax
strategy, not vice versa.
Of course, we ensure that we manage our tax costs, as we
manage any other business costs, as efficiently as possible. This is
part of our responsibility to our shareholders and our businesses.
But we do not seek to abuse opportunities to unreasonably
reduce the tax cost of the business. All tax planning, whether
driven due to acquisitions, rationalisations, disposals or
disinvestments, operational restructuring or legislation changes, is
carried out in line with our tax policy and our approach to tax.
Where relevant, we will take into account the intention and
objective of the tax legislation or policy in how we apply the
legislation. Our appetite for tax risk is low. When this causes a
dilemma, the business prevails and it is the business that sets the
boundaries for tax planning.
We do not engage with tax authorities to obtain special
dispensations. When obtaining advance tax rulings we do this via
standard, transparent dispensations available to all taxpayers, to
create certainty as to the application and tax consequences of
business transactions. In line with our commitment to tax
transparency, we support making any ruling contents publicly
available.
Operating a decentralised model means that transfer pricing is
not the most significant factor in our tax management. To the
extent that it does apply, we ensure that there is adherence to the
arm’s length principle at all times.
Taxes paid in FY22
In FY22 Prosus paid US$1.4bn in direct and indirect taxes globally. Details of taxes paid in our geographies are set out below:
Region/Country
Corporate
income and
withholding
Taxes
Payroll taxes
and social
security
contributions
Other
direct
taxes
Total
direct
taxes
VAT, service
and
consumption
taxes
Other
indirect
taxes
Total
indirect
taxes
Total tax
contribution
Europe
108 201
8
317
2843
287 604
The Netherlands
156 43
0
199
(12)0
(12) 187
Americas
168 188 61
417
1050
105 523
Middle East and Asia
17 29
0
47
200
20 67
Other
8 4 0 0
12
77
18
Total
457 465 69 992 404
3
4071 399
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Prosus has grown organically and by acquisition. In the course of
these acquisitions, we inherited a number of legacy structures,
including some companies located in low tax jurisdictions. These
structures are under constant review and most have been
eliminated. In FY22, four companies in low or no tax jurisdictions
(two in the British Virgin Islands and two in Mauritius) were
liquidated. Some further legacy companies are either in the
process of being liquidated or have been identified for liquidation.
Presence in such jurisdictions is retained only in exceptional cases
where business reasons dictate our presence in that particular
location. We do not attempt to engineer tax advantages by
creating business entities in low tax or no tax jurisdictions in which
Prosus does not operate or have business substance.
Further guidance regarding how we manage taxes is publicly
available in our group tax policy.
Governance
We attach the highest priority to fairness, integrity and
transparency – in short, doing the right thing. This approach is
built on the following elements:
•
Board accountability through the group CFO and audit and risk
committee for tax.
•
A clear tax risk matrix.
•
A tax control framework with robust controls.
•
Experienced tax professionals with the right skills.
•
Training and regular communication and engagement between
everyone with responsibility for tax.
•
Use of technology to automate tax processes.
Ultimate responsibility for tax is vested in our group CFO who is
accountable to the Prosus board with oversight from the audit and
risk committees. Our group tax policy is reviewed annually by the
audit and risk committees, approved by the board and published
on our website.
Maintaining a tax risk matrix assists us to identify and monitor
where tax risks may arise. This guides our decision-making, by
focusing our activity on actions required to manage and mitigate
tax risks efficiently and effectively.
Tax risks, tax challenges, interactions with revenue authorities and
other issues are under constant review and reported regularly to
our group CFO and the audit and risk committees. We aspire to a
‘no surprises’ approach in managing taxes: that is, there should
be no tax surprises at any level – whether in relation to tax costs
to a business, accounting to revenue authorities or supplying
relevant information to stakeholders.
Our tax control framework sets out the operational details for
managing tax risk in accordance with the criteria established in
our tax policy. We implement this framework consistently across
our controlled portfolio and operations, to ensure tax compliance
in all the jurisdictions where we operate. Our tax control
framework is also shared with relevant tax authorities.
All group tax professionals are appropriately skilled for their roles
and are provided with ongoing training. These tax team members
are assisted by reputable external advisers with specialist tax
expertise who provide input for all significant and many other tax
matters, advise on the tax consequences of transactions, review
tax filings and support the group tax team wherever necessary.
The process for the disclosures of any improper conduct or
concerns of wrongdoing is outlined in the group whistleblower
policy and available to all regarding any matter, including tax
behaviours.
Technology
Efficient tax management is enhanced by the use of technology.
As the requirement by tax authorities and other regulators to
report substantive data increases, it is essential to harness the
power of technology for data extraction, gathering and collation.
Technology is paramount to eliminate human errors that can arise
in the collation of tax-relevant data and the tax compliance
process. Where possible, we have automated tax processes such
as the controlled foreign company compliance and country-by-
country reporting. Automation contributes to enhanced data
integrity and reduces the man-hours involved in these processes.
We will continue to expand the reach of automation and
technology in our tax management processes, where we are
confident of increased efficiency and integrity of information.
Thisfocus is included in the KPIs of our tax team members.
At the same time, we recognise there are, and always will be,
many areas in tax that require the ongoing attention of and input
by skilled tax professionals. Where technology can be
implemented to enhance data collection and collation, and to
share tax-relevant information with tax authorities, we believe a
reduction in man-hours required for these tasks can enable our
group tax specialists to spend their time more effectively.
We will continue to invest time in assessing how technology can
assist in streamlining processes to effectively manage our taxes
and tax compliance.
Transparency
It is one of our KPIs to at all times constructively engage, in a
transparent manner, with all our stakeholders, both external and
internal. These stakeholders include investors, customers,
employees, regulatory authorities, governments and tax
authorities.
We regard tax authorities as significant stakeholders. Like with all
other stakeholders, it is important for us and our companies to
engage proactively and transparently with tax authorities. Our
approach, wherever possible, is to follow the principle of
cooperative compliance. We engage regularly with tax authorities
to explain our business model and we are proactive in sharing
information with tax authorities. While recognising that at times our
views and those of the tax authorities may differ in relation to the
application of specific tax rules and legislation, we aspire to a
relationship of mutual trust. This, at times, creates a dilemma. But
our aim remains for stakeholders, including revenue authorities, to
have confidence in the integrity of our actions, in the way we do
business and in the information we provide.
Disclosure of taxes paid is an important step in tax transparency.
We are supportive of this initiative to demystify and reduce the
stigma that may be attached to tax contributions by companies,
particularly multinationals. We believe that the move towards
public country-by-country reporting is a positive development. In
our view, disclosure demonstrates responsible corporate
citizenship and facilitates meaningful engagement with
stakeholders in the regions and countries where we operate.
We will continue to take proactive steps to enhance the scope of
tax information relevant to our stakeholders. Our intention is for all
stakeholders, including revenue authorities, to have confidence in
the integrity of our actions and the information we provide.
Regulatory risk
Managing tax efficiently means effectively managing risk. This
important focus area is another KPI of tax team members. As we
operate in many jurisdictions, tax policy and legislative changes
are an ongoing risk. We need to be aware of impending policy or
legislative changes and be ready to implement these when they
arise. But this also means that we need to constructively engage
Tax
continued
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Tax
continued
with policy-makers and legislators to ensure that our messages
are heard when policies or legislation is changed. Our reputation
as a responsible corporate citizen contributes to us being heard
by these bodies. Where we are able to build relationships of trust,
we do so. We believe that this gives us credibility and will further
enhance our reputation as a taxpayer with integrity.
Prosus continues to provide constructive and reliable feedback to
tax policy-makers and other stakeholders through submissions to
public consultations or direct engagement at national and
international levels.
Level playing field
As a global investor, we subscribe to certain tax policy
fundamentals: we believe it is in the interest of every jurisdiction to
establish a level playing field in which local, regional and global
companies are subject to the same taxes in the countries where
they operate.
In our view, taxes should be fair, balanced and uniform. To create
a level playing field, we believe that taxation of profits and local
tax systems should be governed by a harmonised international
framework. We actively support international efforts led by the
OECD/G20 Inclusive Framework on Base Erosion and Profit
Shifting to develop a global policy to modernise and remove
imbalances from the international tax system. These align with our
approach to where taxes should be paid.
The level playing field will ensure that each business is subject to
the same taxes, irrespective of whether it operates globally,
regionally or locally. We engage in discussions where we believe
we can contribute to ensuring that this harmonised global tax
system with a level tax playing field is created.
Certainty, transparency, fairness, integrity and doing the right thing
– these are fundamentals in our approach to tax management at
Prosus. We want to ensure that we, at all times and in all
jurisdictions, pay the correct and appropriate amount of tax
commensurate with the business operations in that geography
and that we can openly demonstrate this to our stakeholders.
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Our success is driven by our culture in which people – within
clearly defined authority levels – are encouraged to take
decisions that are right for the business and our stakeholders.
Weacknowledge that success also depends on how well we
understand and manage risks, so that we can accept them
responsibly: weighing risk for reward.
We are committed to applying principles and best practices
ofgood governance. Our governance structures, policies and
processes are designed to accomplish this.
Refer to note 40 “fair value of financial instruments” on pages 238
to 243.
How we select the right opportunities and optimise for the
risks we accept
To understand how we create sustainable stakeholder value, we
consider the six capitals transformation model useful. Per the
model, business processes consummate and produce specific
capitals interactively, which capitals are thus transformed through
strategy execution. Value is created (and, created value is
preserved) in a sustainable manner when processes, in
transforming the capitals involved, deliver an overall net positive
outcome.
Sustainability elements, being included in the six capitals, are a
primary consideration in setting our strategic priorities. We aim
toachieve net positive capitals transformation both directly,
andindirectly, by strengthening our business to secure our
futureperformance.
Uncertainty being a given, goal-setting in any business introduces
the element of risk, while unexpected opportunities to benefit from
may also arise. We seek to grow our existing businesses and from
time to time we acquire interests in those with potential for future
growth, which involves a constant evaluation of risks and
opportunities. We expect management to apply a methodical
approach to manage these. At the same time, we promote a
culture in which risk is also well considered in any ad hoc decision
to be made in the day-to-day management of operations. We
proactively manage broader sustainability risks from both an
investor and an operator perspective. Our policies, governance
guidelines and statements on ESG-related issues, responsible
investment considerations and human rights are guiding principles
that govern our practices.
Applying the six capitals transformation model, risks we
identifyand assess present themselves as either potential
overconsumption or underproduction against plan of any of
thecapitals in the process of transformation. In contrast, while
executing on our strategy we may also discover opportunities
forincreasing efficiency (ie use less than anticipated) or
improvingeffectiveness (ie produce more than planned) in any
ofthe capitals and, therefore, by responding well to these exceed
in our performance against priorities and objectives.
How we define roles and responsibilities and monitor risks
Plans and parameters to create value for our stakeholders are
approved and monitored by our board of directors and
Choosing the right opportunities
and balancing risks
At heart, we are entrepreneurs. We seek to create sustainable value by investing in and
operating leading technological companies that empower people and enrich communities.
Sustainable value
Financial
Human
Manufactured
Intellectual
Social
Natural
The six capitals
Key
Materialised risks
Seized opportunities
Sustainable
value
Strategy
execution
Net positive
capitals
transformation
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supporting governance committees (refer to overview of
governance on page 95). We acknowledge that our success
depends for a large part on our ability to be agile and move fast.
Therefore, our structure and processes are designed to drive
accountability and to support responsible and sustainable
decision-making at the level in the organisation closest to the
respective issues. Policies, standards and guidelines govern our
risk management and compliance processes.
Significant risks are evaluated at the appropriate level against
tolerance levels considered acceptable and, together with any
noteworthy developments in the business, reported to the board.
The risk committee assists the board to ensure that risks and
opportunities are governed as intended to achieve desired
outcomes against key priorities and objectives.
Management and the board are accountable for the choices and
decisions we make, how we execute on these, for delivering value
in its broadest definition of the six capitals model, and to maintain
the risk profile regarded as acceptable. Risk tolerance levels are
set top-down, and management is accountable to deliver results
while managing risk within these levels.
The responsibility for managing risk lies with the owner of risk: in
most cases operational management, assisted by the finance
function and, where considered useful in our businesses,
specialised risk management and support functions. Internal audit
is housed centrally to provide management and the board with
independent assurance over risk management processes and
controls.
Review of key events in relation to risks and opportunities
Over the past year, several key events and developments have
demanded our close attention.
1. Absorbing the Russia–Ukraine conflict shock
The invasion of Ukraine by Russian military forces has caused
unprecedented local and global turbulence. We were primarily
concerned with the safety of our Ukraine OLX staff and their
families. We have done everything we can to provide logistical
and financial support on the ground and to facilitate
evacuations. Shortly thereafter, work began to decouple Avito
from OLX Group, which now operates independently within an
overall governance framework that applies to all our
subsidiaries and is an independent Russian entity run by a local
management team and governed by its own board of directors.
Following completion of the operational separation, Prosus has
now decided to exit the Russian business. We have made
public announcements on the measures that we have taken in
that respect. These measures, however necessary, are having a
meaningful impact on our finances, which is explained
elsewhere in this annual report, and we have been working
since to absorb the impact and adjust our plans based on the
new realities. At the same time, indirect consequences on the
global economy such as rising inflation and interest rates are
increasing risk levels for our businesses, which we are
navigating.
2. Engineering financial capital
Over the year we have taken advantage of capital markets
tailwinds and, ahead of markets turning, successfully raised over
US$9bn of debt to fund our ambitions. We have continued to
invest meaningful amounts in our businesses to support growth
opportunities and announced several financial investments and
acquisitions, the largest ones being our US$4.7bn acquisition of
BillDesk in India (subject to regulatory approval) and Stack
Overflow (US$1.7bn – in August 2021). We have also completed
our consecutive share repurchase programmes to return cash to
our shareholders. Hardening economic conditions towards the
end of the financial year resulting from the Russia–Ukraine
Choosing the right opportunities and balancing risks
continued
Applying a methodical approach
Our key established success factors and primary objectives
steer us in understanding, managing, and monitoring risks.
We assess and evaluate the potential impact of identified
risk factors and decide, based on our goals, if we can
accept (and tolerate) these, both individually and combined,
or, alternatively, if we move to reduce our vulnerability and/
or apply risk mitigation strategies. We then monitor the
effectiveness of our actions and correct them if necessary.
Wherever we find a risk we cannot manage within
acceptable levels, we consider ways to avoid the risk
altogether, for example, by declining an opportunity or by
choosing an exit strategy.
In managing our overall risk profile, we take full advantage
of our (global) scale and diversified portfolio: we are thus
well positioned to spread uncorrelated risks in many ways
and by doing so we achieve effective risk reduction overall.
Depending on the importance and the type of the risks,
active management – optimisation – thereof takes various
shapes and varies in extent:
Control:
We implement and operate (automated) control
and monitoring measures that either prevent or detect the
materialisation of a risk at the earliest stage. Whenever
direct controls are considered insufficient, we seek to
operate compensating ones.
Mitigate:
Where we can, we seek ways to boost our
resilience to potential risk events (eg by reducing supplier-
related risks and value-chain dependencies, and by
deploying smart cyber-risk mitigating measures). We
furthermore consider ways to share or transfer risk (eg
through contractual arrangements and by buying insurance
cover for insurable risks).
Optimise
Avoid Accept
Control
Mitigate
Assess
Action
Monitor
Decide
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conflict (see above), as well as evolving shareholder
expectations, intensified our risk awareness and caution in
allocating capital. In this respect, we have also seen that
various developments have caused the discount to grow
between our market capitalisation and the sum of the parts of
the value of our businesses. We consider this a key risk that
comes with many complexities, and this has become a primary
focus for us.
3. Dealing with regulation
Ever-increasing global regulation presents both risks and
opportunities. Some regulation and increased activity by
regulators may impact on our operations and growth ambitions
in various territories, particularly in the fields of anti-trust and
foreign direct investment restrictions. Industry regulation by
Chinese authorities has depressed investors’ outlook on
Tencent’s growth prospects. The result of that has been a
considerable drop in its share price and, consequently, in ours.
Notwithstanding, we remain confident in our investment in
Tencent and its outlook.
We have welcomed the recent regulatory developments at the
OECD on the taxing of digital services. We expect this will level
the competitive landscape and will work to our advantage due
to our localised operations and correspondent tax structure.
4. Navigating the Covid-19 pandemic aftermath
While in some territories Covid-19 is still a disruptive problem
causing the health and safety of our people to be at risk, on a
global scale, the pandemic is becoming increasingly
manageable. For many of our businesses, this meant that
throughout the year we had to navigate between employees
working from home and organising a transitional return to the
office, while hybrid ways of working and shifting expectations
from employees about remote working have become a trend.
Particularly in the field of technological engineering, people
have embraced the working-from-anywhere concept during the
Covid-19 restrictions, and this has become a factor in recruiting
and retaining scarce technical talent. While we continue to
practice the view that, in general, productivity, innovation and
effective collaboration, employee wellbeing, inclusion and
health, and a shared positive culture are best fostered in an
office environment, we also acknowledge that some changes
compared to pre-Covid-19 will be permanent and are adapting
to that reality and its challenges.
Going forward, we have welcomed and used the opportunity to
support climate action and uphold important reductions in
business travel compared to pre-Covid-19, and, with that, our
contribution to CO
2
emissions. Further to this, we have
announced our carbon-neutrality ambitions, which have become
a primary goal, and risks associated with that are closely
managed. Our sustainability efforts are discussed elsewhere in
this report.
Choosing the right opportunities and balancing risks
continued
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Monitoring key risks
Financial
capital
At heart, we are entrepreneurs. Within the parameters set by the board, we continuously pursue growth and set ourselves ambitious goals
that create sustainable value for our stakeholders. We actively seek opportunities to improve and strive to preserve the value created within
our existing businesses.
We aim to
•
Focus on investments in business models and technologies that hold promise for future growth and have the potential to scale globally and
align with global sustainable development agendas.
•
Benefit the countries we operate in by creating business for local suppliers, employing people and giving governments their dues via taxes
and levies.
•
Manage our assets and liabilities with regard to the interests of our investors and other stakeholders and in accordance with board-
approved risk appetite.
•
Comply with relevant company law and securities exchanges regulations.
•
Report accurately on our financial position and performance in accordance with applicable accounting standards and regulated disclosure
requirements.
•
Avoid obsolescence of products and services.
•
Minimise our investments in working capital.
Key risks
•
Global and political market disruptions.
•
Insufficient funding to realise our ambitions.
•
Unexpected changes in the value of our assets.
•
Currency exchange fluctuations as well as navigating applicable exchange controls.
•
Failing to compete effectively.
•
Credit and counterparty risk.
•
Fraud-related crimes and theft.
•
Financial misstatement and/or failure to accurately disclose in our public reports.
•
Most of our businesses are subject to extensive laws and regulations – legal or regulatory developments, including changes in tax laws, may
have an adverse impact on our businesses. A number of new laws and regulations around consumer protection and privacy have been
passed globally.
•
In recent years investors’ awareness of ESG issues, such as climate change, pushes them to invest in funds that benefit society in addition to
generating returns. The continued focus on ESG performance scores will mean that businesses that do not meet certain ESG-based criteria
will not attract investment.
•
Our capital allocation disciplines underlying our investment strategy may not deliver the (above-average) sustainable return our investors seek
in return for the risk they appreciate. We may not find investment opportunities that fit our strategy and deliver an expected return more than
our cost of capital. Portfolio risk may prove to be higher than we assumed to accept, which could negatively impact internal rate of return and
lead to a decline in the valuation of Prosus.
•
Some of our businesses increasingly engage in the provision of credit services to customers.
Measures
to respond to
opportunities and
manage risk
•
We do not tolerate risk levels that impose an immediate threat to the group as a going concern. We tolerate currency translation risk as it is
uncontrollable and, while short- and mid-term movements may be volatile, in the long run, they are expected to be less impactful.
•
We promote the operation of an effective internal control environment (no major failings have occurred to the knowledge of the directors) in
our businesses, and the audit committee oversees that the overall assurance sourced from various providers is sufficient to be based on the
board’s assessment of key risks in the overall risk profile, including the risk of fraud-related crimes.
•
We allocate significant resources to analyse market developments and invest in early-stage opportunities to stay ahead.
•
We act early to ensure we have the funds and resources to realise our ambitions over the longer term and we manage the balance sheet
conservatively. We currently have a large cash position and spread the maturity of debt facilities.
•
We invest funds and manage our cash and currencies in accordance with our group treasury policy, which, among other aspects, sets
minimum standards to mitigate risk of counterparty default.
•
In exercising our business strategy, we perform regular country and business reviews. We periodically perform and report on impairment of
our investments.
•
Leading advisers are used for reviewing markets or businesses, including due diligence processes, and legal and/or compliance-related risks
are managed in consultation with external lawyers and specialist advisers within specific legal jurisdictions.
•
We perform regular reviews of tax compliance and specific risk areas and apply responsible corporate citizenship as taxpayers while
operating within tax control frameworks.
•
We execute on a communication strategy for our shareholders and other stakeholders. Published segmental results enable the investment
community to form an opinion of the valuation of the individual businesses in the group.
•
We comply with IFRS-EU accounting standards.
•
The audit committee and our external auditors (PwC) rigorously apply regulations around audit independence. Regular reviews of the
effectiveness of auditors and their independence are performed.
•
Both at group level and at individual business level, we operate insurance programmes for various classes of risk and place cover with
reputable underwriters.
•
We engage with investors and ESG analysts on our ESG ratings and investor expectations and focus on enhancing our ESG performance.
•
Any investments we make are carefully considered, including responsible investment elements, and significant ones require board approval in
accordance with delegation of authorities.
•
Corrective action is taken if an investment deviates materially from the business plan and financial targets, including options to divest.
•
We closely manage and monitor credit risk within tolerable loss ratio parameters.
Changes to risk
to be considered
Global market disruptions and economic downturn with rising inflation and interest rates, mainly as a result of the war in Ukraine and global
political tensions, may impact our ability to grow our businesses and deliver returns for our financial capital providers. In addition, we have
lost the benefits of our Russia-based businesses and operations and have fully impaired our investment in VK.
As entrepreneurs, our effectiveness in identifying and responding to opportunities
and risks is key toour success.
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Sustainability review
Performance review
Governance
Financial statements Other information
Monitoring key risks
continued
Human
capital
We acknowledge that our employees’ competencies, capabilities and experience, as well as their drive and engagement, are key to our
success.
We aim to
•
Protect our employees and promote social cohesion.
•
Foster a safe and healthy working environment where people feel cared for, heard and supported in their ambitions.
•
Provide financial and operational support to those employees (and their families) affected by war violence.
•
Attract and retain high-calibre individuals to execute on strategy and build sustainable businesses.
•
Back entrepreneurs and local teams by providing them with resources to accelerate growth.
•
Provide our employees with focused career development and training.
•
Benefit the economies and societies in which we operate by creating employment opportunities.
•
Reinforce the leadership pipeline and accelerate the growth of top talent.
•
Support the ongoing development and growth of our businesses and equip our people with new skills for tomorrow.
•
Develop core business skills in the segments we invest in.
•
Be fair and responsible in our remuneration practices and have a pay-for-performance remuneration strategy.
•
Encourage diversity in our teams and thinking and build inclusive workplaces.
•
Comply with relevant labour laws in the countries where we operate.
Key risks
•
Human rights violations, including unfair treatment and remuneration, or engaging in practices that may adversely affect humans in any of the
six capitals.
•
Global shortage of high-calibre (digital) talent.
•
Employees are actively seeking out employers that reflect a higher sense of purpose and choose to be part of a company that contributes
positively to society.
•
Non-compliance with applicable occupational health and safety (OHS), and labour and economic empowerment laws.
•
Our food delivery businesses use a large pool of drivers that in many cases are also external contractors. Due to shifting public opinion and/
or regulation, our businesses are increasingly expected to take responsibility for the safety of drivers (and the general public) and provide
increased benefits.
•
Societal restrictions related to the Covid-19 pandemic have subdued but have taken their toll on employee wellbeing, which is yet to be fully
overcome. In some territories, health and safety in the work environment is still an issue.
•
Shifting habits and expectations around hybrid working models demand adaptation and need to be settled.
Measures
to respond to
opportunities and
manage risk
•
Provide ongoing support to our Ukraine-based staff and their families.
•
We respect human rights and protect the fundamental dignity of our workforce. We are committed to providing a respectful, safe and secure
environment that is free from any form of human rights abuse. We expect everyone to behave in a way that supports this commitment
wherever they work, and in all situations directly related to work.
•
This commitment extends to the board and all people who work at Prosus and Naspers, including temporary and permanent employees,
contractors, consultants, agents, trainees and/or job applicants. Where an individual is employed by an operating company, this group
commitment supports any local policies that may be in place.
•
Our food delivery businesses apply specific procedures to the hiring and monitoring of independent contractors.
•
Strategies to develop employees and attract talent to meet the business’s objectives, including learning and development initiatives, training,
and employee wellness initiatives across the group. A global talent function focuses on attracting, retaining, developing and engaging people
with key skills and rewarding exceptional performance.
•
We prepare and table succession plans annually to the human resources and remuneration committee.
•
We benchmark our remuneration practices and structure them to attract and retain critical talent necessary to achieve our objectives. These
practices are overseen by the human resources and remuneration committee.
•
Human resources policies and procedures to address talent attraction, management and retention, development, succession planning, fair
and responsible remuneration, working conditions, grievance procedures and diversity, among other aspects, to protect employees from
human rights violations. We monitor labour legislation in the various countries we operate in and ensure we comply.
•
Our businesses increasingly put insurance programmes in place to cover relevant drivers’ (health) liabilities. The insurance markets are,
however, still in development in this respect. Our businesses are closely monitoring the development of regulations and our compliance
withthem.
Covid-19 (aftermath)
•
During the pandemic, our priority has been to maintain the health and safety of our people, and to act responsibly.
•
We have managed risks and adhered to government requirements by moving knowledge workers to work predominantly from home, closing
offices where required and limiting occupancy where offices remain open. Where not possible, we have taken additional measures and
maintained social distancing protocols.
•
Support materials have been provided to people managers and individuals on working effectively from home.
•
We have put restrictions on business travel. We continue to maximise technology and alternative ways of collaboration to reduce pre-Covid-19
travel intensity meaningfully and sustainably.
•
Through our employee assistance programme, our people and their families have access to confidential support/counselling for emotional,
legal and financial problems.
•
Our business continuity protocols have proved effective during the current pandemic and we have meaningfully limited negative business
impact.
•
Where possible, we are now carefully managing a return to the office, with consideration of shifted employee habits and preferences.
Changes to risk
to be considered
The Ukraine war has caused direct safety threats to our local staff and their families. The effect of the global Covid-19 pandemic outbreak
has subdued.
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Performance review
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Financial statements Other information
Monitoring key risks
continued
Manufactured
capital
Manufactured capital is key to our services and operations. Across the group, manufactured capital may include:
•
Office, service centre and warehouse buildings and equipment.
•
Information and technology infrastructure and equipment.
•
Distribution networks (such as customer service centres, retail outlets and courier services).
•
Public infrastructure such as roads for delivering goods.
• Vehicles.
• Inventory/stock.
We aim to
•
Ensure that office buildings, warehouses, retail outlets, vehicles and equipment are efficient, well maintained and adequately insured against
relevant risks.
•
Maintain and/or occupy buildings and facilities with low-carbon impact and green-certified, where possible.
•
Ensure our operations do not negatively impact on the societies in which we operate.
•
Operate and/or source green fleet solutions.
•
Operate a secure and resilient technological infrastructure.
•
Manage our outsource partners to deliver on agreed service levels.
•
Avoid obsolescence of products and services held for sale by procurement and inventory management.
Key risks
•
Natural or human-induced disaster and political risk.
•
Most of our businesses have buildings (eg offices, outlets, warehouses) and various types of IT equipment, office furniture, vehicles and other
assets. Failure to operate these assets efficiently and/or to maintain these adequately could result in service interruption or write-offs and
affect profitability. Furthermore, such assets are subject to potential theft and damage, which could result in losses should they not be
appropriately insured.
•
Service-availability risks such as failure of software, systems, or infrastructure (eg due to technical failures or cyber-attacks) could disrupt
continuous services to our customers, affecting satisfaction. The risk is higher in some of the countries that we operate in where the energy
grid infrastructure may fail to provide consistent and reliable levels of power supply.
•
Certain business segments operate in locations that are likely to be impacted by physical climate-related hazards such as floods and
sea-level rise in the longer term (eg in Mumbai). More broadly, logistics (upstream from suppliers and downstream to customers) of some of
our companies might be impacted due to storms and localised risks.
•
Some of our businesses, especially in the Etail segment, carry significant inventory. Our Classifieds segment engages in car trading and may
hold meaningful investments in cars for sale at points in time. Such inventory is subject to a wide range of risks, such as obsolescence,
shrinkage and theft (including robbery of warehouse premises) and damage.
Measures
to respond to
opportunities and
manage risk
•
The group’s subsidiaries are required to act in line with the group’s good governance guidelines, which, among other aspects, aim to ensure
effective management of IT- (and cyber-) related risks across the group. This includes risks of data/information security breach and business
interruption, for instance by implementing and testing disaster recovery plans as part of their overall business continuity planning.
•
Robust business planning, including working capital.
•
We maintain adequate short-term insurance cover for our assets and loss of income due to business interruption.
•
Asset maintenance programmes.
•
Contracting with and regular performance evaluations of our service providers (including service-level agreements with outsourcing parties).
•
We run SAP in most of our Etail businesses and invest in other support systems to optimise our inventory planning and management and to
ensure efficient warehouse operations.
•
Our warehouse operations and procedures include strict access control, separate storage of high-value goods, camera observation, and
other security measures.
•
As part of their overall business continuity planning in territories where continuous power supply is a risk, our businesses have contingency
backup in the form of generators.
•
We conducted a groupwide assessment of climate-related transition and physical risks to help assess vulnerabilities and be better prepared
to respond. The outcome was that most of these risks are located in specific operations and countries and are unlikely to disrupt the
operations of businesses as a whole.
Changes to risk
to be considered
Moving our IT operations to the cloud makes us asset-lighter and more resilient against cyber-attacks but increases our dependency on
outsourced services suppliers.
Cybercrime remains and requires significant focus and investment to protect our data and manage cybersecurity risks.
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Performance review
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Financial statements Other information
Monitoring key risks
continued
Intellectual
capital
Intellectual capital (knowledge-based intangibles) includes IP such as patents, copyrights, trademarks, domain names, confidential
information, as well as institutional knowledge, systems, procedures and culture.
We aim to
•
Use intellectual capital to drive customer-focused development and innovation strategies.
•
Strategically protect our intellectual capital and take reasonable steps to avoid infringing or misappropriating third-party rights.
•
Cultivate positive, innovative, ethical cultures within the group, including measures like adoption of groupwide IP guidelines and open-source
software guidelines to educate employees on appropriate protection and use of IP rights.
•
Build intellectual capital through continuous investment in our people and knowledge-sharing programmes throughout the group.
•
Maintain adequate cybersecurity programmes commensurate to business size and workforce.
Key risks
•
Cybersecurity risks: Our systems and the data they store are subject to various IT security threats, which target sensitive information, integrity
and continuity of our services and the reputation of our businesses.
•
Data privacy risks: A failure in or breach of our operational or security systems or those of third parties with which we do business could
disrupt our businesses, result in the disclosure or misuse of personal, confidential, or proprietary information, damage our reputation, increase
our costs, and cause losses.
•
Failure to properly protect and enforce our businesses’ IP rights against any unauthorised use or infringement by third parties may lead to
loss of market share, revenue opportunities and reputation.
•
Ineffective response, including insufficient innovation, to meet our customers’ changing demands and consumption patterns.
Measures
to respond to
opportunities and
manage risk
•
Consistent with global group policies and in-country legislation, individual businesses directly manage cybersecurity risk and IT operations.
Management teams ensure cyber-risk resilience is on their agenda, that adequate crisis (and communication) plans are implemented and
tested and that disaster recovery plans are in place. Annually, in-business CEOs and CFOs sign off on this.
•
The group, through the central risk and audit function, periodically checks the security fitness of the businesses and requires semi-annual and
security status reports from the risk function, the CTOs, and heads of security. The reports are aggregated and shared with the group
executives, and the risk committee.
•
Insofar as economically justifiable, the group expects the business to procure adequate cyber-insurance, which is in place for our larger
businesses and at corporate level.
•
Legal functions provide legal advice on cybersecurity and data privacy, communicate legal requirements to internal stakeholders, and
establish a privacy framework and relevant policies for implementation.
•
Through risk and audit working together with human resources and through businesses’ own initiatives, around the group we run security
awareness programmes (eg by way of phishing awareness campaigns) and deploy training sessions on security in the workplace.
•
Our businesses comply with in-country data-protection laws, and where applicable, Payment Card Industry – DIGITAL Security Standards form
part of management’s responsibilities.
•
Our policy on data privacy governance sets out the responsibilities, principles and programmes to manage data privacy across the group.
•
We have appointed a group head of data privacy, who has implemented a data protection and privacy programme that incorporates
incident response, training and assigning responsibilities to resources within the businesses to ensure capacity to report and coordinate on
incidents with relevant regulatory bodies.
•
We have appointed a group head of IP, who developed our IP strategy designed to provide freedom to operate and grow our businesses.
•
The strategy focuses on the creation of critical IP assets – trademarks, domain names, patents and copyrights – to protect what we know and
what we create.
•
Any relationships with employees, consultants or third parties where IP is created or used – our business agreements include terms to ensure
ownership of or licences to any necessary IP rights for our companies.
•
We extensively monitor internet and social media platforms for infringement of our trademarks and copyrights that may be an indication of
competitors attempting to unfairly trade on our companies’ goodwill to develop their own business, or bad actors attempting to misuse the
trust our businesses have earned for dishonest or illegal purposes.
•
When we discover third-party use of our IP rights that is deemed to be improper or unauthorised, we quickly take remedial measures such as
initiating a takedown of the infringing activity by working with the platform operator. In the case of bad actors who carry out organised and
widespread infringement of our brands for criminal purposes (eg phishing), we work with the authorities to determine whether they can
eliminate the threat at the source.
•
Research and development spend strategies are linked to value creation. We hold regular strategy and operations reviews, also to assess
product and service development.
Changes to risk
to be considered
Increasing investments in online service platforms and data-driven technologies and heightened risk of technology obsolescence or falling
short in building AI/ML solutions for our service and product offering.
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Performance review
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Financial statements Other information
Monitoring key risks
continued
Social
capital
We acknowledge that we are required to act in line with our values and code of business ethics and conduct, and carefully manage both
internal and a wide array of external stakeholder relationships.
We aim to
•
Respect human rights.
•
Safeguard the health, safety and wellness of our people.
•
Cultivate an ethical culture.
•
Comply with relevant company and other applicable laws.
•
Meet the requirements of regulatory and financial authorities (including securities exchanges) and participate in the development of policies
beneficial to societies and markets in which we operate.
•
Build trust and maintain the businesses’ licences to operate, our brands and reputation.
•
Engage with our stakeholders and respond to legitimate and reasonable issues raised.
•
Benefit the countries we operate in by investing in local entrepreneurs, creating business for local suppliers, employing people, and giving
governments their dues via taxes and levies.
•
Focus on hiring local employees and growing local talent.
•
Give our people meaningful jobs with the opportunity to learn and grow professionally in a purpose-driven environment where they are
recognised for a job well done and are paid fairly in line with personal and company performance.
•
Create a diverse and inclusive workplace. We think about diversity and inclusion broadly and respect the dignity and human rights of
individuals and communities where the group operates in the world. We promote safe reporting of feedback or issues with our people,
processes and practices.
•
Articulate a social impact framework and strategy for Prosus.
•
We encourage our employees to contribute to the sustainability and innovation initiatives in the group.
Key risks
•
Infringement on human rights contrary to the group’s human rights statement.
•
Unethical behaviour in breach of our code of business ethics and conduct.
•
Loss of consumer trust, for example, failing to deliver on our service promise, data security breaches, non-compliance and inferior product offerings.
•
A breach in customer-, employee- or business partner-sensitive data resulting in identity theft, discrimination or possible financial losses.
•
Non-compliance with laws and regulations in the countries where we operate, specifically, but not limited to company law, data privacy,
anti-bribery and anti-corruption, taxes and duties, licence conditions, consumer protection, anti-money-laundering and international sanctions.
•
Non-compliance with the rules of the Euronext Amsterdam, JSE, A2X Markets or Euronext Dublin stock exchanges could result in the suspension
of Prosus shares and bonds from trading.
•
Negative impact as a result of our business operations or products in societies in which we operate.
•
Regulatory requirements in relation to governance are well established globally and regulation of environmental and social topics is on the rise.
•
A listed company is expected to demonstrate responsible business conduct in line with stakeholder expectations of its ability to impact and
be impacted by material issues. Lack of transparency and information in the public domain on topics important to stakeholders can lead to
reputational damage.
•
Digital inclusion is a global risk and prevalent in the countries in which we operate. As a global technology investor and operator, we are
exposed to markets where information and communications technology (ICT) is slow to develop, and uptake as well, due to specific in-country
constraints.
•
Perception of inaction on community investments for social impact can lead to reputational damage.
Measures
to respond to
opportunities and
manage risk
•
Our associates and investees are required to comply with applicable laws and regulations.
•
Mindful of the opportunity that we have to influence our supply chain partners through our supplier and purchase decisions, we expect a
commitment to minimum human rights standards, that is compatible with our own commitments, by companies who seek to qualify as a
supplier to Prosus and Naspers.
•
Management is committed to setting the right tone at the top and we communicate our values as per our code of business ethics and
conduct and through ethics awareness initiatives.
•
Anti-bribery and anti-corruption training and programmes as part of the legal compliance programme.
•
We make our Speak Up facility available to employees to report suspected unethical behaviour.
•
Measuring and monitoring strength of customer relationships (such as Net Promoter Score) and strategy to ensure customer satisfaction.
•
The group actively manages stakeholder relationships and responds to legitimate and reasonable issues raised by major stakeholders. We
strive to provide increasing transparency, primarily through our annual report and various stakeholder meetings, presentations and leadership
interviews throughout the year.
•
We continue to strengthen our public policy teams, increase engagement with regulators and invest in corporate affairs, government relations
and communication while operating a robust legal compliance programme.
•
Adopting measures to protect customers (including frameworks and policies in place, and training and awareness) and ensuring customer
privacy and data security are managed and monitored. This includes measures to protect against cyberthreats.
•
Data privacy is managed by our data privacy team and measures are taken to protect sensitive data, including compliance with laws per
territory. We further ensure our platforms conform to data privacy requirements.
•
Corporate social investment programmes that benefit the community and the business, such as providing learning and internship
opportunities to students, contributing to the community and improving employment in the country, but also contributing to the human,
intellectual and financial capitals of the business in the long term. We have a number of social responsibility and social impact projects that
aim to uplift communities in which we operate – these projects are based on the needs identified per territory.
•
The company secretary manages compliance with stock exchanges’ rules where Prosus securities are traded, including required submissions
of reports and updates.
•
The group’s tax department proactively engages with tax authorities and has developed a tax control framework to enhance transparency
and respond to increased scrutiny from tax authorities.
•
We periodically survey employee engagement and take corrective action where needed.
•
Selection, onboarding and evaluation of drivers and running safety (awareness) programmes.
•
Management of our businesses runs crisis-simulation exercises from time to time.
•
The sustainability team monitors applicable requirements and assists businesses where required – for example measurement of footprint and
carbon tax assessment.
•
We proactively engage with stakeholders to identify topics that are important to them that can have an impact on and be impacted by our
business and strategy.
•
Our sustainability policy provides the guidelines for responsible business conduct in our role as an investor and as an operator, allowing for
the diversity of business models, resources, culture and legal and regulatory requirements across the group.
•
Proactively addressing climate-related issues, including by setting and publicly communicating strategy and progress made for the company,
as well as subsidiaries.
•
Our business models are aligned with promoting digital inclusion, by virtue of using our products and services.
•
All entities in our group currently fall below the threshold of a carbon tax and tend to be relatively low impact in terms of the carbon footprint
of their direct operations. However, if the world is to meet its 2050 climate targets, eventually some of our businesses may be affected.
•
We develop and use AI, among other aspects, to counter fraud and platform abuse.
•
We operate a legal compliance programme, focusing, among other aspects, on bribery and corruption and anti-money-laundering. We
implement specific controls, such as diligent know-your-customer (KYC) processes and fraud detection.
•
Consistent and robust disclosures on outcomes of social impact programmes.
Changes to risk
to be considered
No change.
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Sustainability review
Performance review
Governance
Financial statements Other information
Monitoring key risks
continued
Natural
capital
The environmental impact of our businesses is central to our ability to create sustainable value.
As a digital technology group, our businesses are software-driven, asset-light and low-carbon, reflecting the carbon profile of this sector.
Applying our principle of ‘solving for local needs’, we support our portfolio companies to identify and manage risks and pursue opportunities
in the context of local operating environments.
However, overall, the group’s global exposure to climate-related policy and legal, market, technology and reputation risk is low; and the
analysis revealed opportunities for the group to differentiate in local markets by being proactive with a strong position on climate change.
Further details on the finding of this analysis can be found in our full TCFD report on
www.prosus.com/investors/annual-reports
.
We aim to
•
Enhance the environmental performance of our businesses by applying a standardised approach.
•
Take climate action by reducing our corporate and group GHG footprint and decouple our operations and businesses from fossil fuel use.
•
Minimise our impact on the environment, and address emission hot spots such as delivery transportation and packaging waste.
•
Comply with laws and regulations that relate to the environment.
•
Invest in high-growth markets and credible sustainable products and services that may offer new revenue streams.
Key risks
•
We assess the potential risks from factors, including: legal or regulatory processes; fees, such as emission fees; financial impact, such as
insurance terms and conditions; reputational damage, company image and relationships with stakeholders; and changing customer and
employee preferences.
•
Many of our businesses operate in high-growth markets and regions that are most vulnerable to the physical risks presented by climate
change. These include extreme weather events ranging from drought to flooding, triggering climate disasters on an increasing frequency.
These could adversely impact from our employees to our customers in the communities where our businesses operate.
•
For instance, floods in South Africa impacting communities, to high temperatures disrupting the work of our delivery partners in Brazil and
India.
•
The IT sector is poised to exceed 2% of global GHG emissions, driven by data centre reliance.
•
Our food delivery and etail businesses are navigating rising concerns about waste and pollution from packaging with a lack of uniform
regulatory environment to create a level playing field across boundaries.
•
Growing body of disclosure regulations and standards.
•
Increasing scrutiny and changing expectations from investors, lenders, regulators and other market participants on ESG brings additional
disclosure obligations and risks of adverse reputational impact that could limit access to capital.
•
Expansion of the OLX business to include used-car trade on the platform can lead to a perception of a significant increase in the carbon
footprint of the business.
•
Substantial increase in pricing of carbon credits (doubled in 12 months).
Measures
to respond to
opportunities and
manage risk
•
Continue to keep asset-light, digital businesses at the heart of our investment thesis, which reduces physical risks to operations and builds
climate-resilient companies with a lower carbon footprint compared with traditional business sectors.
•
All our businesses are required to adhere to our group sustainability policy and assess the extent to which natural capital may significantly
affect current or future operations.
•
Setting a science-based net-zero target that will drive the reduction of our operational footprint and engaging with our portfolio companies to
set their own science-based targets.
•
Implementation of carbon reduction initiatives, through the use of energy-efficient offices, operations and fleets. Continue to maximise
technology and alternative ways of collaboration to reduce pre-Covid travel intensity meaningfully and sustainably.
•
On issues such as waste, water and biodiversity, we review investees’ activities on a case-by-case basis for issues and potential remedies
relevant to their specific business model and operating context.
•
Deepen our understanding by quantifying how digitisation can help users transition to low carbon consumption patterns. In FY23, we will
conduct a comparative assessment (LCA) to help us quantify the impact of digital payment services compared with offline, analogue and
physical financial services.
•
Our food delivery businesses are committed to addressing packaging waste through reducing single-use plastic and promoting sustainable
packaging.
•
Call for a comprehensive, circular global policy response to ensure scalable solutions for single-use plastic.
•
Advocate for responsible selection of suppliers for cloud services and discourage ownership of inefficient data centres by group companies.
•
We are also implementing a project at OLX to further understand and substantiate the opportunity for digital platforms for the used-car trade
to contribute to the reduction of GHG emissions from cars.
•
Continuously monitor for upcoming ESG regulations.
•
Compliance with environmental laws and regulations.
•
See our TCFD report and CDP submission for detailed disclosures of risk and opportunities associated with climate-related risks.
•
Shifting approach from offsetting emissions to absolute reductions will mitigate risk of price increases in the carbon market.
Changes to risk
to be considered
•
Though climate risk is low for the group, with the rapidly evolving market expectations on climate action and disclosures there may be a
movement on either regulation/policy or physical risks to operations.
•
The nature of material environmental impacts, and how to define them, can vary between companies, leading to changes in the level of risk
in their own business and operating models. For example, there is a higher physical risk to the food delivery business in India with extreme
temperatures disrupting delivery operations.
90
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Sustainability review
Performance review
Governance
Financial statements Other information
Governance
92
Group structure
95
Overview of governance
99
Our board
102
The board and its committees
107
Report of the audit committee
109
Report of the risk committee
110
Report of the sustainability committee
111
Report of the nominations committee
112
Report of the human resources and remunerationcommittee
113
Remuneration report
142
About this report
91
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Sustainability review
Performance reviewGovernance
Financial statements Other information
Shareholding structure
1
Group structure
Introduction
Prosus N.V. is a public limited liability company incorporated
under the laws of the Netherlands in 1994 as a private limited
liability company. On 16 May 2019, it was converted into a public
limited liability company.
The company is governed by Dutch corporate and securities laws,
in particular the Dutch Civil Code (
Burgerlijk Wetboek
) and the
Financial Supervision Act (
Wet op het Financieel Toezicht
), its
articles of association and various internal policies approved by
the board of directors. Furthermore, the Dutch Corporate
Governance Code (dated 8 December 2016) applies to the
company. A code of business ethics and conduct (the code) and
related internal policies that apply to its employees have also
been implemented. The documents referred to are published on
the company’s website.
In this section, the main elements of the corporate governance
structure and how Prosus applies the principles and best practices
of the Dutch Corporate Governance Code are discussed.
Information required by the Dutch Decree on Corporate
Governance (
Besluit inhoud bestuursverslag
) and the Dutch
Decree on Article 10 Takeover Directive (
Besluit artikel 10
overnamerichtlijn
) are also reported on.
Share capital
The authorised share capital of Prosus amounts to four hundred
and one million euros (€401 000 000), eight billion tenmillion
tenthousand (8 010 010 000) shares, of which:
•
ten million (10 000 000) are ordinary shares A1 with a nominal
value of 5 euro cents (€0.05) each
•
ten thousand (10 000) are ordinary shares A2 with a nominal
value of 50 euro (€50) each
•
three billion (3 000 000 000) are ordinary shares B with a
nominal value of 5 euro cents (€0.05) each, and
•
five billion (5 000 000 000) are ordinary shares N with a nominal
value of 5 euro cents (€0.05) each.
As at 31 March 2022, the issued share capital of Prosus comprises
three classes of shares:
•
4 456 650 unlisted ordinary shares A1 that have one vote per
share and entitled to one fifth (1/5) of the amount of a
distribution made on each ordinary share N, multiplied by the
free-float percentage
•
1 128 507 756 unlisted ordinary shares B that have one vote per
share and each ordinary share B is entitled to one millionth
(1/1000 000) of the amount of a distribution made to each
ordinary share N. All ordinary shares B in issue are held by
Naspers Limited, and
•
2 073 643 605 listed ordinary shares N that have one vote per
share. Naspers Limited holds 1 180 250 012 ordinary shares N.
Right to hold and transfer shares
Prosus‘s constitutional documents place no limitations on the right
to hold or transfer ordinary shares A1 and A2 and ordinary shares
N. Other than in relation to a transfer of ordinary shares B by
Naspers to any of its wholly owned subsidiaries or vice versa, a
transfer of ordinary shares B can only take place with respect to
all, and not part, of the ordinary shares B held by the holder of
such ordinary shares B.
1 Economic interest shown in brackets where different from voting interest. Voting interest calculated in accordance with the South African Companies Act, 2008.
2 This includes the ordinary shares B held by Naspers.
Prosus N.V.
Free float of
listed shares
Naspers
Beleggings
(RF) Limited
Heemstede
Beleggings
Proprietary
Limited
Naspers
Limited
Keeromstraat
30 Beleggings
(RF) Limited
Free float of
unlisted shares
Free float of
listed shares
0.03%
(0.00%)
13.80%
(0.01%)
15.36%
(49.86%)
73.60%
2
(42.29%)
15.44%
(50.11%)
26.26%
(57.69 %)
0.04%
(0.01%)
21.20%
(0.01%)
100%
33.82%
(0.02%)
49%
0.07%
(0.01%)
0.39%
6.11%
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Delegated authorities
On 24 August 2021, Prosus shareholders designated the board as
the competent body to issue shares in Prosus, and to grant the
rights to subscribe for shares. In addition, the board was
authorised to issue shares and rights to subscribe for shares up to
10% of the issued capital for a period of 18 months.
Prosus shareholders also designated the board as the competent
body to acquire fully paid-up shares in its own capital, up to a
maximum of 10% of the total issued share capital.
On 14 March 2022, the board of directors decided to cancel
69825 860 ordinary shares N that Prosus held in its own capital.
This cancellation was effected on or around 12 June 2022.
Listing and regulatory environment
Since 11 September 2019, Prosus has had a primary listing on
Euronext Amsterdam (ISIN NL0013654783 and ticker symbol PRX)
and a secondary listing on the JSE Limited, Johannesburg’s stock
exchange. Since December 2020, the ordinary shares N are also
listed on A2X Markets in South Africa. It is, therefore, primarily
regulated by the Netherlands Authority for the Financial Markets
(
Stichting Autoriteit Financiële Markten, AFM
).
Prosus has a level 1 American Depository Receipt (ADR)
programme. This ADR programme does not create new capital in
the US but provides an opportunity to develop and expand the US
shareholder base. Level 1 ADRs are traded in the US on an
over-the-counter (OTC) basis. The ratio between ordinary share N
and ADR is 1:5. The symbol for the Prosus ADR is PROSY, CUSIP
number 74365P108.
The Prosus shares are included in a number of leading indices,
including the AEX, EURO STOXX 50, STOXX 600 and MSCI Pan
Euro.
Significant shareholders
As at 31 March 2022, Naspers holds 56.92% of the ordinary shares
N and 100% of the ordinary shares B, which on a combined basis
represents 73.60% of the voting rights of Prosus. As a result of the
cross-holding between Prosus and Naspers, the economic interest
attributable to Naspers is 42.29%. Naspers has significant control
over our management and affairs and controls all matters
requiring approval by our shareholders, including the election or
removal of directors and approval of any significant corporate
transaction.
Protection structure
The aim of the Prosus protection structure is to ensure the
continued independence of the group.
The protection structure has not been activated as Naspers
currently controls approximately 73.60% of Prosus. The protection
structure would only be activated if Naspers makes, or is obliged
to make, a filing with the AFM that it ceases to be entitled to
exercise at least 50% plus one vote of the total number of voting
rights that may be exercised at a general meeting. In such event,
the A1 ordinary shares, carrying one vote per share, automatically
convert to ordinary shares A2 carrying 1 000 votes per share.
Keeromstraat 30 Beleggings (RF) Limited (Keerom) and Naspers
Beleggings (RF) Limited (Nasbel) hold such ordinary shares A1
that, if the protection structure was activated, together they would
control more than 50% of the ordinary shares A and the ordinary
shares N. These two companies exercise such rights in
consultation with one another in accordance with a voting pool
agreement. No other entities are part of the protection structure.
To provide shareholders with a complete understanding of how
the group’s continued independence is ensured, we set out an
outline of the Naspers voting control structure.
Naspers voting control structure
Naspers also has two classes of shares, being (listed) N ordinary
shares carrying one vote per share and (unlisted) A ordinary
shares carrying 1 000 votes per share. Nasbel and Keerom hold
such A class ordinary shares that together they control more than
50% (55% as at 31 March 2022) of the voting rights in Naspers.
These two companies exercise such rights in consultation with one
another in accordance with a voting pool agreement. If they vote
together, then they can vote the majority of the voting rights in
Naspers, including in respect of any takeover offer. No other
entities are part of the voting control structure. Heemstede
Beleggings Proprietary Limited, a subsidiary of Naspers, holds
49% of the shares in Nasbel.
Relationship with Naspers
Following the implementation on 16 August 2021 of an exchange
offer in which holders of Naspers N ordinary shares could
exchange these shares for Prosus ordinary shares N, as at
31March 2022, Naspers holds a 73.60% voting interest in Prosus,
representing a 42.29% economic interest. Prosus holds a 15.36%
voting interest in Naspers, representing a 49.86% economic
interest.
Cross-holding agreement
Naspers and Prosus entered into a cross-holding agreement in
terms of which Naspers limits its economic interest in Prosus and
Prosus waives its rights to dividends declared by Naspers which
are received as a result of a distribution by Prosus. The cross-
holding agreement gives shareholders certainty that the full extent
of Prosus’s free-float shareholders’ economic interest in the
underlying Prosus portfolio in distributions will be paid directly and
efficiently at the Prosus level.
In terms of this cross-holding agreement, Prosus’s free-float
shareholders’ economic interest in the underlying Prosus portfolio
(the Prosus free-float’s economic interest) is 57.69% (larger than the
39.72% Prosus free-float direct holding of Prosus ordinary shares
N). The Naspers free-float shareholders’ economic interest in the
underlying Prosus portfolio (the Naspers free-float’s economic
interest) is 42.29%.
To ensure efficient and effective ongoing interaction between
Prosus and Naspers, distributions are made on a ‘terminal
economic value’ basis. This provides shareholders with certainty
that the full extent of the Prosus free-float’s economic interest in
distributions is paid directly and efficiently at the Prosus level. The
term ‘terminal economic value’ refers to a terminal (ieeffective)
economic value distribution that requires that both Naspers and
Prosus free-float shareholders receive distributions based on their
ultimate underlying interests in the group as if a distribution had
been made continuously a number of times through the cross-
holding.
Group structure
continued
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A terminal (ie effective) economic value distribution requires that
both Naspers and Prosus free-float shareholders receive their
ultimate underlying interests. This means that Naspers will
automatically distribute any distribution it receives from Prosus
under the cross-holding agreement to its free-float shareholders
and Prosus waives in advance any entitlement to the onward
distribution declared by Naspers.
General meeting of shareholders
The general meeting of shareholders holds all powers that have
not been granted to other company bodies. The annual general
meeting will be held within six months after the end of the
financial year. The annual general meeting is authorised to
appoint directors to the board and to dismiss them. It also adopts
the financial statements, releases directors from liability, adopts
distribution proposals, appoints an external auditor and approves
the remuneration policy for directors. Other general meetings will
be held when the board of directors deems necessary.
Furthermore, certain decisions are subject to the approval of the
general meeting of shareholders, including decisions entailing a
significant change in the identity or character of the company or
its business and corporate matters, such as amendments to the
company’s articles of association, a (de)merger or the dissolution
of the company, and the issuance of shares or reduction of the
issued capital of the company.
Within four months of the end of every fiscal year, the board of
directors must prepare the financial statements. The financial
statements are put to the annual general meeting for adoption.
The board of directors sets the agenda for the general meetings
of shareholders. Shareholders who individually or collectively
represent at least 3% of the issued capital are entitled to propose
items for the agenda, within the boundaries of the law. Every
shareholder is entitled to attend a general meeting. Subject to
certain exceptions provided by Dutch law and/or the articles of
association, resolutions of the general meeting of shareholders
are passed by an absolute majority of votes cast and do not
require a quorum.
General meetings are convened by public notice via the
company’s website, and registered shareholders are notified by
letter or by electronic means of communication at least 42 days
prior to the day of the relevant meeting. Shareholders who wish to
exercise the rights attached to their shares in respect of a
shareholders’ meeting are required to register for such meeting.
Shareholders may attend a meeting in person, vote by proxy (via
an independent third party) or grant a power of attorney to a third
party to attend the meeting and vote on their behalf.
Pursuant to Dutch law, the record date for the exercise of voting
rights and rights relating to shareholders’ meetings is set at the
28th day prior to the day of the relevant meeting. Shareholders
registered on such date are entitled to attend the meeting and to
exercise the other shareholder rights (at the relevant meeting),
notwithstanding any subsequent sale of their shares after the
record date.
The 2022 annual general meeting of Prosus shall be held on
24August2022. As questions asked tend to focus on business-
related matters, governance and the remit of our board
committees, the chair, chief executive and the chief financial
officer and the chairs of our board committees shall attend the
annual general meeting. In accordance with provision 4.1.8 of the
Dutch Corporate Governance Code, we also require all directors
up for re-election to (virtually) attend the annual general meeting.
The external auditor is welcomed to the annual general meeting
and is entitled to address the meeting.
Further information can be found in the notice of annual general
meeting, available on our website.
Amendment to articles of association
At the annual general meeting of Prosus, a resolution may be
passed to amend the articles of association of Prosus, but only on
a proposal from the board.
A resolution made at the annual general meeting amending the
articles of association of Prosus such that rights attributable to
ordinary shares A or ordinary shares N are adversely affected, is
subject to approval by holders of the relevant class of shares.
The resolution can be adopted by an absolute majority of votes
cast, until the ownership of Prosus shares by Naspers falls below
50%. Then, a resolution made at the annual general meeting
amending the articles of association requires a majority of at least
75% of the votes that may be cast at the annual general meeting.
More detailed information can be found in Prosus’s articles of
association at
www.prosus.com
.
Group structure
continued
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Financial statements Other information
Governance structure
The governance structures of Prosus and Naspers substantially
mirror each other. Prosus and Naspers have an identical one-tier
board structure of executive and non-executive directors. Executive
directors are responsible for the group’s day-to-day management,
which includes formulating its strategies and policies and setting
and achieving its objectives. Non-executive directors supervise
and advise executive directors. Each director has a duty to the
company to properly perform their assigned responsibilities and
to act in its corporate interest. Under Dutch law, Prosus’s corporate
interest extends to the interests of all its stakeholders, including its
shareholders, creditors and employees.
The audit and risk committees of the board monitor compliance
with the Financial Supervision Act, Dutch Civil Code and the Dutch
Corporate Governance Code, and the Euronext Dublin
requirements applicable to the Prosus bonds listed on that
exchange.
The board’s projects, audit, risk, human resources and
remuneration, nominations, and sustainability committees fulfil key
roles in ensuring good corporate governance.
The group uses independent external advisers to monitor
regulatory developments, locally and internationally, to enable
management to make recommendations to the board on matters
of corporate governance.
Long-term value creation and strategy
The board ensures that a culture of business ethics and conduct
aimed at long-term value creation is promoted to underpin the
group’s activities as a responsible corporate citizen. This includes
adopting values and a code of business ethics and conduct,
leading by example, and monitoring implementation to make the
required disclosures on incorporation, compliance and
effectiveness. In this regard, the board is responsible for group
performance by steering and providing strategic direction to the
company, taking responsibility for the adoption of a view on
long-term value creation and aligned strategy and plans (such
strategies and plans to originate in the first instance from
management). The board must approve the annual business plan
and budget compiled by management, for implementation by
management, taking cognisance of sustainability aspects in
long-term planning.
How we integrate governance into our business
We recognise the value of an integrated approach to assurance
and compliance. The adopted governance, risk and compliance
framework is the basis for how we manage governance.
This framework illustrates how we achieve a sustainable business
integrated with governance, assurance, risk management and
compliance, in line with legislated requirements and Dutch
Corporate Governance Code recommendations and reported
through the relevant structures.
Our subsidiaries, associates and investees are required to comply
with applicable laws and regulations. A risk-based legal
compliance programme (including anti-bribery and anti-corruption)
has been implemented as per this framework in all subsidiaries.
In applying our capital allocation strategy, we look very carefully
at the risks relating to the countries and sectors in which we invest.
We undertake a review of potential investees and their founders
and/or major shareholders; it is important for us to know with
whom we are doing business. Our traditional due diligence looks
at the commercial and financial position of the investee, but also
covers legal (including IP, privacy and litigation) and tax aspects
of their business. This is supplemented by contact between our
team and the founder(s) and their management teams that help
us to understand the culture of the investee. More recently, for
acquisitions of majority ownership stakes in larger businesses, we
formally assess the investee’s ethics and legal compliance
framework and HR policies against our own framework and
policies to see what actions (if any) will need to be taken for the
investee to meet our minimum requirements, if we require them to
do so. The governance frameworks of investees differ depending
on their scale and maturity: some are simply too small or at too
early a stage to have a fully built and mature governance and
compliance framework. In each case, however, we believe that
our contact with the founders and management team and our
additional due diligence help us to understand the purpose and
culture of the company. For a discussion of our approach to
responsible investments, please see pages 17 to 19.
Our largest associates, many of which are of significant size, have
adopted their own appropriate governance standards. A number
of these companies have listings on leading stock exchanges and,
therefore, need to comply with both local law and the
requirements of the relevant exchange and this is reflected in the
standards that they adopt. If members of our team serve on the
boards of investees, they are sometimes able to help shape the
investee’s governance standards. They do this by sharing the
governance standards that we have adopted on relevant topics
and offering support to the associates through training or
workshops and generally sharing our knowledge and expertise.
Periodically, teams of employees of the company and associates
meet to discuss governance standards and share their
experiences.
Group governance framework
The board is the focal point for, and custodian of, the group’s
corporate governance systems.
It conducts the group’s business with integrity and applies
appropriate corporate governance policies and practices in the
group.
The board, its committees, and the boards and committees of
subsidiaries, are responsible for ensuring the appropriate
principles and practices of the Dutch Corporate Governance
Code are applied and embedded in the governance practices of
group companies.
A disciplined reporting structure ensures the board is fully
apprised of subsidiary activities, risks and opportunities. All
subsidiaries in the group are required to subscribe to the
principles of the Dutch Corporate Governance Code. Business
and governance structures have clear approval frameworks.
Overview of governance
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The group has a governance committee comprising the segment
chief executive officers, chief financial officers of Naspers and
Prosus as well as the group company secretary, group general
counsel, group head of risk and audit, global head of
sustainability, global head of governance and global ethics and
compliance lead. The committee was tasked to ensure the group’s
governance structures and framework are employed across the
consolidated entities in the group during the financial year.
Governance and progress are monitored by the audit and risk
committees and reported to the board.
As the companies in our group are diverse and at different
maturity stages, a one-size-fits-all approach cannot be followed in
implementing governance practices. All good governance
principles apply to all types and sizes of companies, but the
practices implemented by different companies to achieve the
principles may be different. Practices must be implemented as
appropriate for each company, in line with the overarching good
governance principles.
Improved chief executive and financial director assurance
process
We recognise the value of an integrated approach to assurance
and compliance. The adopted governance, risk and compliance
framework is the basis for how we manage governance.
As part of this framework, this year we continued to strengthen our
CEO/CFO certification in order to ensure that business practices
and procedures are aligned to what the group expects of its
subsidiaries. This revised process ensures that assurance can be
obtained from the businesses and segments in the group
regarding the manner and extent to which they comply with the
group’s governance standards.
The CEO/CFO certification broadly covers areas such as financial,
tax, culture of ethics and compliance, sustainability, risk
management, health and safety, technology and information
governance, assurance, internal audit, internal controls,
stakeholders and remuneration – each of these being key areas
of focus for the group.
Details of choosing the right opportunities and balancing risks
(including principal risks) appear on pages 82 to 90 of the annual
report. Furthermore, the board’s responsibility statement on risk
management appears on page 143.
Our approach to applying Dutch Corporate Governance
Code and statement by the board
Prosus is required to report its application of the principles of the
Dutch Corporate Governance Code. The board, to the best of its
knowledge, believes the group has satisfactorily applied the
principles of the Dutch Corporate Governance Code.
The group considers proportionality when we apply corporate
governance. This means we apply the practices needed to
demonstrate the group’s governance as appropriate across the
group.
As required, Prosus regularly assesses the independence of the
non-executive directors for purposes of the Dutch Corporate
Governance Code, considering all the relevant facts (including
whether or not the protection structure has been activated). A
director’s independence for purposes of the Dutch Corporate
Governance Code may not necessarily correspond with their
independence for purposes of the South African King Code, which
provides different criteria for determining independence.
As at 31 March 2022, Prosus does not comply with best practice
provisions 1.3.1, 1.3.2, 2.1.9, 5.1.3, 2.2.1, 2.2.2 and 4.1.3. Our
Corporate Governance Statement and explanation of the
deviations from Dutch Corporate Governance Code, 2016, can be
found at
www.prosus.com/news/investors-annual-reports
.
For reference purposes, the full text of the Dutch Corporate
Governance Code is available on their website at
www.mccg.nl/dutch-corporate-governance-code
.
Decree article 10 EU Takeover Directive
According to the Decree Article 10 EU Takeover Directive, we are
required to report on, among other things, our capital structure;
restrictions on voting rights and the transfer of securities; significant
shareholdings in Prosus; the rules governing the appointment and
dismissal of members of the board of directors and the
amendment of the articles of association and the powers of the
board of directors.
The information required by the Decree Article 10 EU Takeover
Directive is included in this Corporate governance section and
remuneration report.
Overview of governance
continued
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Financial statements Other information
Internal controls, risk and audit
Internal control systems
Our system of internal controls aims to prevent or detect material
risks and to mitigate material adverse consequences. The system
provides reasonable assurance on achieving company objectives.
This includes the integrity and reliability of the financial statements;
safeguarding and maintaining accountability of its assets; and to
detect fraud, potential liability, loss and material misstatements
while complying with regulations. The directors representing
Prosus on boards of entities where the company does not have a
controlling interest, seek assurance that significant risks are
managed and systems of internal control are effective.
Management, with assistance from risk and audit, regularly
reviews risks and the design and operating effectiveness of
internal controls, seeking opportunities for improvement.
The board reviewed the effectiveness of controls on key risks for
the year ended 31 March 2022. This assurance was obtained
principally through a process of management self-assessment,
including formal confirmation via representation letters by
executive management. Consideration was also given to other
input, including reports from risk and audit, compliance and the
risk management process. Where necessary, programmes for
corrective actions have been initiated and progress is being
monitored.
While we work towards continuous improvement of our processes
and procedures regarding financial reporting, no major failings
have occurred to the knowledge of the directors and, therefore,
directors are of the opinion that these systems provide reasonable
assurance that the financial reporting does not contain material
inaccuracies.
Risk and audit
A central risk and audit function is in place for the group and
provides independent, objective assurance and risk support
services in relation to the system of risk management and internal
control to help management preserve and create sustainable
value. The head of risk and audit reports to the chair of the audit
committee, with administrative reporting to the financial director.
The function’s core competency lies in risk-based technology and
business process assurance work. Through its specialised
cybersecurity team, risk and audit also supports our businesses to
continuously enhance their technology and cyber-capabilities to
ensure resilient and secure platforms in response to evolving
cyber-risks.
The risk and audit function operates in conformance with the
International Professional Practice Framework of the Institute of
Internal Auditors and, in line with these, submits itself regularly to
an external quality review.
Among other aspects, risk and audit is responsible for providing a
statement annually on the effectiveness of the group’s governance,
risk management and control processes to the board of directors
and, to the audit committee specifically, of the results of its review
of financial controls.
Overview of governance
continued
Focus areas this year
Focus areas for the 2022 financial year included additional
reporting to our board committees and board on how we
implement good corporate governance in the group in light
of the Dutch Corporate Governance Code and improved
corporate governance disclosures in the annual report.
Governance of information and technology, particularly
data privacy and cybersecurity, remained focus areas
along with sustainability.
We updated and enhanced multiple key group policies,
including the code and the Speak Up policy.
Following approval at a special general meeting in July
2021, the voluntary share exchange offer by Prosus to
Naspers shareholders was implemented. More detail
regarding the structure of the group following the share
exchange offer can be found on page 155.
Following this, Prosus launched a repurchase programme
of up to US$5bn to buy back ordinary shares N from its
free-float shareholders.
In addition, Prosus priced US dollar and euro notes in an
aggregate principal amount totalling US$5.25bn equivalent
under its global medium-term note programme on 11 and
12 January 2022 respectively. These issuances consist of
US$1bn 3.257% notes due 2027, US$1bn 4.193% notes due
2032, US$1.25bn 4.987% notes due 2052, €500m 1.207%
notes due 2026, €600m 2.085% notes due 2030, and €650m
2.778% notes due 2034.
Prosus made an offer that started on 6 July 2021 for any
and all of the US$1.2bn 5.500% notes due 2025 and the
US$1bn 4.850% notes due 2027, each issued by Prosus and
guaranteed by Naspers for cash. The terms and conditions
of the offer are described in an offer to purchase.
Long-term value creation and strategy
The board ensures that a culture of business ethics and
conduct aimed at long-term value creation is promoted to
underpin the group’s activities as a responsible corporate
citizen. This includes adopting values and a Code, leading
by example, and monitoring implementation to make the
required disclosures on incorporation, compliance and
effectiveness. In this regard, the board is responsible for
group performance by steering and providing strategic
direction to the company, taking responsibility for adopting
a view on long-term value creation and aligned strategy
and plans (such strategies and plans to originate in the first
instance from management). The board must approve the
annual business plan and budget compiled by
management, for implementation by management, taking
cognisance of sustainability aspects in long-term planning.
For more information on the group’s strategic approach,
please refer to page 12.
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Financial statements Other information
Overview of governance
continued
Non-audit services
The group’s policy on non-audit services provides guidelines on
dealing with audit, audit-related, tax and other non-audit services
that may be provided by the independent auditor to group
entities. It also sets out services that may not be performed by the
independent auditor.
The audit committee preapproves audit and non-audit services to
ensure these do not impair the auditor’s independence and
comply with legislation. Under our guiding principles, the auditor’s
independence will be deemed impaired if the auditor provides a
service where they:
•
function in the role of management of the company, or
•
audit their own work, or
•
provide services that are prohibited under applicable
independence standards, or
•
serve in an advocacy role for the company.
Relations with shareholders and investors
Investor relations
Prosus‘s investor relations policy (refer to
www.prosus.com
)
describes the principles and practices applied in interacting with
shareholders and investors. Prosus is committed to providing
timely and transparent information on corporate strategies and
financial data to the investing public. In addition, we consider the
demand for transparency and accountability in our non-financial
(or sustainability) performance. We recognise that this
performance is based on the group’s risk profile and strategy,
which includes non-financial risks and opportunities.
The company manages communications with its key financial
audiences, including institutional shareholders and financial (debt
and equity) analysts, through a dedicated investor relations unit.
Presentations and conference calls take place after publishing
interim and full-year results.
A broad range of public communication channels (including stock
exchange news services, corporate websites, press agencies,
news wires and news distribution service providers) are used to
disseminate news releases. These channels are supplemented by
direct communication via email, conference calls, group
presentations and one-on-one meetings. Our policy is not to
provide forward-looking information. Prosus also complies with
legislation and stock exchange rules on forward-looking
statements.
Closed periods
Prosus would typically be in a closed period on the day after the
end of a reporting period (30 September or 31 March) until
releasing results.
General investor interaction during this time is limited to
discussions on strategy and/or historical, publicly available
information.
Analyst reports
To enhance the quantity and quality of research, Prosus maintains
working relationships with stockbrokers, investment banks and
credit-rating agencies – irrespective of their views or
recommendations on the group.
Prosus may review an analyst’s report or earnings model for
factual accuracy of information in the public domain but, in line
with regulations and group policy, we do not provide guidance or
forecasts.
The board encourages shareholders to attend the general
meeting where shareholders have the opportunity to put questions
to the board, management and chairs of the various committees.
The company’s website provides the latest and historical financial
and other information, including financial reports.
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P*
H
N
Koos Bekker
69, male, South African and Dutch
Non-independent non-executive chair
Date of first appointment 14 August 2019
Start and end of current term AGM 2019 – AGM 2022
Koos Bekker is the non-independent non-executive
chair of the board. He led the founding team of
M-Net/MultiChoice pay-television and later its
international expansion. He was a founder of MTN,
the African mobile telecoms group. From 1997, as
chief executive of Naspers, he headed the group’s
transition to the internet. In 2019 he was appointed
chair of the board. He holds a BAHons and honorary
doctorate in commerce from Stellenbosch University,
an LLB from the University of the Witwatersrand and
an MBA from Columbia University, New York.
P
R
S
Bob van Dijk
49,
male, Dutch
Chief executive and executive director
Date of first appointment
16 May 2019
Start and end of current term
Not applicable
Bob van Dijk is our chief executive and an executive
director. He was appointed chief executive of Naspers
in April 2014. He joined the group as Allegro group
chief executive officer in August 2013 and was
promoted to chief executive officer of global
transactions ecommerce in October 2013. He has
over 15 years of general management experience in
online growth businesses globally, spanning the online
marketplaces, online classifieds and etail segments.
Prior to that, he was a founder of an online financial
derivatives marketplace. In June 2020, Bob was
appointed to the board of Booking Holdings Inc. He
started his career at McKinsey & Company, focusing
on mergers and acquisitions, and media. He holds
anMBAHons from Insead and MSc (cum laude) in
econometrics from Erasmus University, Rotterdam.
P
R
S
Basil Sgourdos
52,
male, South African and Greek
Financial director and executive director
Date of first appointment
16 May 2019
Start and end of current term
Not applicable
Basil Sgourdos is our financial director and an
executive director. He was appointed financial
director of Naspers in July 2014. He worked at
PricewaterhouseCoopers Inc. from 1989 to 1994.
Hethen joined Naspers as finance manager of the
South African operations division in MultiChoice
before being appointed chief financial officer of
Naspers’s investment in United Broadcasting
Corporation plc, listed on the stock exchange of
Thailand, where he remained for 10 years. He then
spent two years in Amsterdam as general manager
ofvideo-entertainment business development globally
before becoming financial director of MIH Holdings
Proprietary Limited in January 2009. He held this
position until his appointment as financial director of
Naspers. He is a qualified South African chartered
accountant and holds a BCom from the University of
the Witwatersrand and BAccHons from the University
of South Africa.
Sharmistha Dubey
51,
female, American
Independent non-executive director
Proposed for appointment at AGM
Sharmistha Dubey is currently a board member and
member of the compensation committee and
nominations and governance committee for Fortive
Corporation. She is also a board member for Match
Group. Sharmistha has recently stepped down as
CEO and president for Match Group, where she was
responsible for overseeing growth of the portfolio of
brands including Tinder, Match, Meetic, OkCupid,
Hinge, Pairs, Plenty of Fish, and OurTime. Sharmistha
holds an undergraduate degree in engineering from
the Indian Institute of Technology and an MSc in
engineering from Ohio State University, USA (1996).
N
Hendrik du Toit
60,
male, South African and British
Non-executive director and lead
independentdirector
Date of first appointment 14 August 2019
Start and end of current term AGM 2021 – AGM 2024
Hendrik du Toit is a non-executive director and our
lead independent director. He is founder and chief
executive officer of Ninety One. He entered the asset
management industry in 1988 and joined Investec
Group in 1991, founding Investec Asset Management
which rebranded to Ninety One in 2020. He also
served as joint chief executive officer of the Investec
Group from October 2018 until the demerger and
listing of Ninety One in March 2020. Hendrik is a
World Benchmarking Alliance ambassador. Previously,
he served as a non-executive director of the Industrial
Development Corporation of South Africa. He has also
served on the advisory boards of the Sustainable
Development Solutions Network, the expert board
ofHM Treasury’s Belt and Road Initiative, the UN
Business and Human Security initiative, the Impact
Investing Institute and commissioner of the Business
and Sustainable Development Commission. Hendrik
holds an MPhil in economics and politics of
development from Cambridge University and
anMCom in economics (cum laude) from
StellenboschUniversity.
R
H
Emilie Choi
43, female, American
Resigned
Date of first appointment 14 August 2019
Resigned with effect from 26 August 2021
Emilie Choi is an independent non-executive director.
She serves as chief operating officer at Coinbase Inc.,
the world’s largest regulated cryptocurrency
exchange. She oversees operations in seven countries
across three continents. Since joining Coinbase in
early 2018, she has overseen more than 10
acquisitions and 50 venture investments. Prior to that,
she spent over eight years at LinkedIn Corporation as
vice president of corporate development and led all
M&A deals in the company’s history, including its
biggest deal to date, Lynda, as well as leading
anumber of joint ventures in China. She has also
worked in corporate development and strategy
rolesat Warner Bros Entertainment Inc. and Yahoo
Inc. She serves on the board of ZipRecruiter Inc.,
amarketplace for jobseekers and employers.
Sheholds an MBA from the Wharton School of the
University of Pennsylvania and a BA in economics
from Johns Hopkins University.
Our board
A
Audit committee
R Risk committee
S Sustainability committee
P Project committee
N Nominations committee
H Human resources and remuneration committee
Executive
Non-executive
*
Chair
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H*
N
Craig Enenstein
53, male, American
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2021 – AGM 2024
Craig Enenstein is an independent non-executive
director. He is also the chief executive officer of
Corridor Capital LLC, an operationally intensive
private equity firm focused on the lower-middle
market. Founded by Craig in 2005, Corridor Capital
isbased in Los Angeles, USA. He is a member of the
Wharton School of the University of Pennsylvania
executive board. He holds an MBA in finance from
theWharton School of Business, an MA in
international studies from the Lauder Institute,
University of Pennsylvania and a BAfrom the
University of California, Berkeley.
A
Manisha Girotra
52,
female, Indian
Independent non-executive director
Date of first appointment 1 October 2019
Start and end of current term AGM 2020 – AGM 2023
Manisha Girotra is an independent non-executive
director. She is the chief executive officer of Moelis
India. She has over 30 years of investment banking
experience, with cross-border M&A expertise across a
range of industries. Prior to Moelis & Company, she
was chief executive officer and country head of UBS
AG in India, managing its investment bank,
commercial bank, markets, equity research and
wealth management divisions. Before that, she was
head of North India of Barclays Bank plc. She began
her investment banking career at ANZ Grindlays in
London. She serves on the boards of Ashok Leyland
Limited and Mindspace REIT. She holds a BAHons in
economics from St Stephen’s College, India and a
masters in economics from the Delhi School of
Economics.
P
N*
S
R
Rachel Jafta
61,
female, South African
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2020 – AGM 2023
Rachel Jafta is an independent non-executive director.
She is a professor in economics at Stellenbosch
University. She joined Naspers as a director in 2003
and was appointed a director of Media24 in 2007.
She is a member of the South African Economic
Society, chair of the Cape Town Carnival Trust,
member of the management committee of the
Bureaufor Economic Research at Stellenbosch
University and member of the international advisory
board of Fondação Dom Cabral Business School,
Brazil. She was appointed chair of the Media24
boardin April 2013 and chairs its nominations
committee. She is also a director of Naspers
Beleggings (RF) Limited. She holds an MEcon and
aPhD from the University of Stellenbosch.
A
R
Angelien Kemna
64,
female, Dutch
Independent non-executive director
Date of first appointment 24 August 2021
Start and end of current term AGM 2021 – AGM 2024
Angelien Kemna is an independent non-executive
director. She is an independent board member and
chair of the audit committee of Friesland Campina,
senior independent board member of AXA Investment
Managers and independent director and member of
the audit committee of AXA Group and independent
board member and chair of the risk committee of
NIBC Holding. She was previously a member of the
executive board of APG Group in the Netherlands,
first as chief investment officer and then chief finance
and risk officer. In addition, she was part-time
professor in corporate governance at Erasmus
University, Rotterdam. She holds an MSc in operations
research and a PhD in finance from Erasmus
University. She was a visiting scholar at Sloan School
MIT (Boston, USA).
S
Nolo Letele
72, male, South African
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2021 – AGM 2024
Nolo Letele is an independent non-executive director.
He joined M-Net in 1990 and pioneered MultiChoice’s
expansion into Africa. In 1999, he led MultiChoice as
chief executive officer for 11 years, and then as
executive chair for another 10 years. He stepped
down as chair with effect from 1 December 2021. He
pioneered the highly successful Phuthuma Nathi
scheme, which has brought financial empowerment to
black people. He has won several awards, the most
notable being the Lifetime Africa Achievement Prize
for media development in Africa (Millennium
Excellence Foundation). He is a chartered engineer
and member of the IEE. He holds a BScHons in
electronic engineering from the University of
Southampton.
Debra Meyer
55, female, South African
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2019 – AGM 2022
Debra Meyer is an independent non-executive
director. She is a professor of biochemistry and
executive dean of the faculty of science at the
University of Johannesburg. She has completed
modules in media strategy and academic leadership
at Harvard University and the Gordon Institute of
Business Science, University of Pretoria, and regularly
contributes to several newspapers and magazines.
She serves as a trustee or board member for a
number of organisations. She is also a director of
Naspers Beleggings (RF) Limited. She holds an MSc in
biochemistry from the University of Johannesburg and
a PhD in biochemistry and molecular biology from the
University of California, Davis, which she attended as
a Fulbright scholar.
Our board
continued
S*
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H
N
Roberto Oliveira de Lima
71, male, Brazilian
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2021 – AGM 2024
Roberto Oliveira de Lima is an independent
non-executive director. He developed his career at
companies like Accor S.A., Rhone Poulenc S.A. (now
part of Sanofi S.A.) and Compagnie de Saint-Gobain
S.A. in the information technology and finance areas.
He was chair and chief executive officer of Credicard
Group (a Citigroup company), chief executive officer
of Vivo S.A., the largest mobile telecommunications
company in Brazil (a Telefónica SA and Portugal
Telecom company), chair of Publicis Brazil and
president of Natura S.A. He was previously a board
member of Edenred S.A. in France, Pão de Açúcar
S.A. (Casino), Natura S.A. and BR Distribuidora
(Petrobras company) in Brazil. He is a board member
of RNI Negócios Imobiliários S.A. and AES Tietê S.A.
InApril 2019, he left the board of Telefônica Brasil S.A.
after 14 years, having served six of those years as
president and chief executive officer and eight years
as a board member as well as quality and services
committee member. He holds a BA and MA in
business management from Fundação Getúlio Vargas
in Brazil and an MA from Institut Superieur des Affaires
at Jouy en Josas, France.
P
A*
R*
Steve Pacak
67,
male, South African
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2019 – AGM 2022
Steve Pacak is an independent non-executive director.
He began his career with Naspers at M-Net in 1988
and has held various executive positions in
theNaspers group. He was appointed an executive
director of Naspers in 1998 and non-executive
director in January 2015. He retired as Naspers’s
financial director in June 2014 and remained on the
Naspers board as non-executive director. He is a
qualified South African chartered accountant and
holds a BAcc from the University of the Witwatersrand.
P
Mark Sorour
60, m
ale, South African
Non-independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2020 – AGM 2023
Mark Sorour is a non-independent non-executive
director. He joined the Naspers group in 1994,
leading business development and corporate finance
globally. After assignments in Hong Kong and
Amsterdam, he was responsible for all global
investment activities as the Naspers group chief
investment officer. In March 2018, he retired after
over20 years with the Naspers group but remained
on the board as a non-executive director. He is a
qualified South African chartered accountant and
holds a BCom and DipAcc from the University of
KwaZulu-Natal.
S
Cobus Stofberg
71, m
ale, South African
Independent non-executive director
Date of first appointment 14 August 2019
Start and end of current term AGM 2019 – AGM 2022
Cobus Stofberg is an independent non-executive
director. He was a member of the founding team of
the M-Net/MultiChoice pay-television business in
1985. He served as chief executive officer of the group
from 1997 to 2011 and has been instrumental in the
expansion of the Naspers group. Prior to joining
M-Net, he was a partner at Coopers & Lybrand
(nowPricewaterhouseCoopers Inc.). He is a qualified
South African chartered accountant and holds a
BComLaw and LLB from Stellenbosch University
andBComptHons from the University of South Africa.
S
Ben van der Ross
75, male, South African
Independent non-executive director
Date of first appointment 14 August 2019
Resigned with effect from 1 April 2022
Ben van der Ross is an independent non-executive
director. He was chair of Strategic Real Estate
Management Proprietary Limited, managers of the
Emira Property Fund. He served on the boards of,
among others, Distell Limited, FirstRand Limited, Lewis
Group Limited, Pick n Pay Holdings Limited and MMI
Holdings Limited. He is also a director of Naspers
Beleggings (RF) Limited. He is an attorney of the High
Court of South Africa and holds a diploma in law from
the University of Cape Town.
Ying Xu
58, female, Chinese
Independent non-executive director
Date of first appointment 18 August 2020
Start and end of current term AGM 2020 – AGM 2023
Ying Xu is an independent non-executive director. She
is the president of Wumei Technology Group (Wumei
or Wumart), a technology-driven retailer in China.
Deeply engaged in the retail business for 15 years,
she has strong insight and knowledge of consumers in
China, especially in online and offline retail. Prior to
joining Wumei, she was vice president of LG (a joint
venture) at Tianjin International Trust & Investment. She
holds a BA in English from Tianjin University, China
and an MBA from Meinders School of Business,
Oklahoma City University.
Our board
continued
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Appointment and dismissal
Directors are appointed at the annual general meeting. A director
will be appointed either as an executive director or as a non-
executive director.
Each non-executive director will be appointed for a term of not
more than three (3) years.
The board may nominate one or more candidates for each
vacancy. A resolution of the annual general meeting to appoint a
director, other than in accordance with a nomination by the board,
may only be adopted by an absolute majority of the votes cast by
shareholders representing more than one third of the issued
capital of Prosus.
A director may be removed at the annual general meeting at any
time, subject to the applicable laws and regulations. A resolution
to suspend or remove a director, other than on the proposal of the
board, may only be adopted at the annual general meeting with
an absolute majority of the votes cast, representing more than
one third of the issued capital of Prosus.
The board and its committees
Composition
Details of directors at 31 March 2022 are set out on pages 99 to
101.
Prosus has a unitary board, which provides oversight and control.
The board charter sets out the division of responsibilities. The
majority of board members are independent non-executive
directors and are independent of management. To ensure that no
one individual has unfettered powers of decision-making and
authority, the roles of chair and chief executive are separate.
The independence of each director is evaluated annually in
accordance with the Dutch Corporate Governance Code.
Although Prosus deviates from best-practice provisions 2.1.9 and
5.1.3 of this code, the board is of the opinion that the chair’s
experience and industry knowledge benefit Prosus and its
shareholders and outweigh any perceived disadvantage of
non-independence. The board believes that it is in the best
interests of the group and its shareholders that the governance
structures of Naspers and Prosus mirror each other.
Tenure as a director
3
1
1
12
2
0
3 The average tenure of directors is two years.
Nationalities
3
10
Dutch
2
US
1
Brazilian
1
Indian
1
Chinese
1
Gender diversity
Female
2021
2022
4
5
5
2020
Male
2021
2022
13
12
11
2020
Directors’ classification
1
1
2
non-executive director
1
non-executive director
12
1
Determined in accordance with the Dutch Corporate Governance Code.
Age of directors
2
1
5
6
4
2 There is a standard deviation of 8.3 years between the ages of directors.
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The board and its committees
continued
The board diversity policy addresses the Dutch Corporate
Governance Code for all listed companies to have a policy on
how they address gender diversity at board level. The board is
satisfied that its composition reflects the appropriate mix of
knowledge, skills, experience, diversity and independence.
As set out in the board diversity policy, the board aims to achieve
30% female (and male) representation. Over the past three years,
all new appointments of directors have been women, bringing the
female representation on the board to over 30% as at 31 March
2022. Subject to shareholders approving the appointment of
Sharmistha Dubey as new director, over one third of directors will
be women. This demonstrates the board’s ongoing commitment to
transformation in line with its board diversity policy.
The group recognises and embraces the benefits of having a
diverse board and sees diversity at board level as an essential
element in maintaining a competitive advantage. A diverse board
will include and make good use of differences in the skills,
geographical and industry experience, background, race, gender,
and other distinctions between members of the board.
These differences will be considered in determining the optimum
composition of the board and, when possible, will be balanced
appropriately. All board appointments are made on merit, in the
context of skills, experience, diversity, independence and
knowledge, that the board as a whole requires to be effective.
The nominations committee reviews and assesses board
composition on behalf of the board and recommends the
appointment of new directors. This committee also oversees the
annual review of board effectiveness.
Roles and responsibilities
The board
The board is responsible for the continuity of the company and its
affiliated enterprises. The board focuses on long-term value
creation of the company and its affiliated enterprises and
considers the stakeholder interests that are relevant in this context.
The board serves as the focal point and custodian of corporate
governance and is responsible for the corporate governance of
the company, including: (i) determining what business we are
building, what we offer users and key objectives; and (ii) ensuring
and monitoring that a culture of business ethics and conduct
aimed at long-term value creation is promoted to underpin the
group’s activities as a responsible corporate citizen. This includes
adopting values and a Code, leading by example, and monitoring
implementation to make the required disclosures on incorporation,
compliance and effectiveness.
The board acknowledges that the group’s core purpose, its risks
and opportunities, strategy, business model, performance and
sustainable development are all inseparable elements of the
value creation process. In this regard, the board is responsible for
the group performance by steering and providing strategic
direction to the company and ongoing oversight of the
implementation of the strategy and business plan.
A charter setting out its responsibilities can be found at
www.prosus.com/about/policies
.
The chair
The chair, Koos Bekker, is a non-independent non-executive
director who previously served as an executive director of the
company.
The responsibilities of the chair are set out in the board charter
and include, among others:
•
Providing overall leadership to the board without limiting the
principle of collective responsibility for board decisions, while at
the same time being aware of individual duties of board
members.
•
Ensuring a culture of openness and accountability within the
board.
•
In conjunction with the chief executive, representing the board in
respect of communication with shareholders, other stakeholders
and, indirectly, the general public.
•
Monitoring how the board works together and how individual
directors perform and interact at meetings. The chair meets with
directors annually to evaluate their performance.
The chief executive
The chief executive reports to the board and is responsible for the
day-to-day business of the group and implementing policies and
strategies approved by the board. Chief executives of the various
businesses assist him in this task. Board authority conferred on
management is delegated through the chief executive, against
approved authority levels. The board is satisfied that the
delegation of authority framework contributes to role clarity and
the effective exercise of authority and responsibilities.
Bob van Dijk is the appointed chief executive. He has no other
professional commitments outside the group, except for his
appointment to the board of Booking.com.
Succession planning for the chief executive is considered annually.
The functions and responsibilities of the chief executive are set out
in the board charter and include, among others:
•
Developing the company’s strategy for consideration,
determination and approval by the board.
•
Developing and recommending to the board yearly business
plans and budgets that support the company’s long-term
strategy.
•
Monitoring and reporting to the board about the performance of
the company.
Lead independent director
Hendrik du Toit was appointed to act as lead independent
director in all matters where there may be an actual or perceived
conflict.
The responsibilities of the lead independent director are set out in
the board charter and include, among others:
•
Dealing with shareholders’ concerns where contact through the
normal channels has failed to resolve them, or where such
contact is inappropriate.
•
Strengthening independence of the board if the chair is not an
independent non-executive member of the board.
•
Chairing discussions and decision-making by the board on
matters where the chair has a conflict of interest.
Independent advice
Individual directors may, after consulting with the chair or chief
executive, seek independent professional advice, at the expense
of the company, on any matter connected with discharging their
responsibilities as directors.
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Company secretary
The group company secretary, Lynelle Bagwandeen, and David
Tudor, group general counsel (and legal compliance officer), are
responsible for guiding the board in discharging its regulatory
responsibilities.
Directors have unlimited access to the advice and services of the
persons noted above whose functions and responsibilities include
(as appropriate):
•
Playing a pivotal role in the company’s corporate governance
and ensuring that, in line with pertinent laws, the proceedings
and affairs of the board, the company and, where appropriate,
shareholders are properly administered.
•
Monitoring directors’ dealings in securities and ensuring
adherence to closed periods.
•
Attending all board and committee meetings.
The performance and independence of the company secretary
are evaluated annually.
T
he board has determined that the company secretary, an
admitted attorney with over 10 years of JSE-listed-company
experience, has the requisite competence, knowledge and
experience to carry out the duties of a secretary of a public
company and has an arm’s length relationship with the board. The
board is satisfied that arrangements for providing corporate
governance services are effective.
Board meetings and attendance
The board meets at least four times per year or more as required.
The projects committee attends to matters that cannot wait for the
next scheduled meeting. Non-executive directors meet at least
once annually without the chief executive, financial director and
chair present, to discuss the performance of these individuals.
The company secretary acts as secretary to the board and its
committees and attends all meetings.
Board rotation
All non-executive directors are subject to retirement and re-
election by shareholders every three years. A director’s term of
office will lapse in accordance with the rotation schedule drawn
up by the board.
Neither the chief executive nor the financial director has a fixed
appointment term.
Indemnification
The Prosus articles of association include provisions regarding the
indemnification of current and former directors against liabilities,
claims, judgements, fines and penalties (claims) incurred by such
director as a result of any expected, pending or completed
action, investigation or other proceeding, whether civil, criminal or
administrative, of or initiated by any party other than Prosus itself
or a group company, in relation to any acts or omissions in or
related to his capacity as an indemnified person. However, there
shall be no entitlement to reimbursement if the act or failure to act
of the person concerned may be characterised as wilful
misconduct (
opzet
) or intentionally recklessness
(bewuste
roekeloosheid)
. The company has also taken out liability insurance
for the persons concerned.
Board committees
While the whole board remains accountable for our performance
and affairs, it delegates to committees and management certain
functions to assist it to properly discharge its duties. Appropriate
structures for those delegations are in place, accompanied by
monitoring and reporting systems to ensure integrated thinking.
The board has constituted six committees from among the
directors to assist it to discharge its duties: an audit committee, a
risk committee, a sustainability committee, a nominations
committee, a human resources and remuneration committee and
a projects committee.
Each committee acts within agreed, written terms of reference.
The chair of each committee reports at each scheduled board
meeting. The terms of reference of each of the board committees
can be found at
www.prosus.com/about/policies
.
The chairs of the audit, risk, sustainability, human resources and
remuneration, and nominations committees are non-executive
directors and are required to attend annual general meetings to
answer questions.
The established board committees in operation during the
financial year are set out below and the names of the members
who were in office during the financial year, as well as details of
the committee meetings attended by each of the members, are
shown in the table on page 106.
Audit committee
The audit committee seeks to support the board in assessing the
integrity of the group’s financial reporting and by providing
constructive challenges and oversight of the group’s activities and
of its audit functions. It comprises a majority of independent
non-executive directors and is chaired by Steve Pacak, an
independent director.
Risk committee
The purpose of the risk committee is to assist the board to
discharge its responsibilities regarding the governance of risk
through formal processes, including an enterprisewide risk
management process and system. The committee is chaired by
Steve Pacak.
The board and its committees
continued
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Sustainability committee
The primary objective of the sustainability committee is overseeing
and reporting on business ethics and sustainability, taking into
account best practice, specific requirements of regulators and
environmental, social and governance reporting standards and
frameworks; and assisting the board to develop and supervise the
implementation of a long-term value creation strategy, by bringing
to the board’s attention relevant sustainability matters.
The committee comprises a majority of independent non-
executive directors, the chief executive and the financial director
(alternate member). It is chaired by Debra Meyer.
Nominations committee
The nominations committee assists the board to determine and
regularly review the size, structure, composition and effectiveness
of the board and its committees, in the context of the company’s
strategy.
The committee comprises a minimum of three non-executive
directors, the majority of whom are independent. It is chaired by
Rachel Jafta.
Human resources and remuneration committee
The main objective of the human resources and remuneration
committee is to fulfil the board’s responsibility for the strategic
human resources issues of the group, particularly focusing on the
appointment, remuneration and succession of the most senior
executives. The committee comprises a majority independent
non-executive directors. It is chaired by Craig Enenstein.
Projects committee
The projects committee is an ad hoc committee acting on behalf
of the board in managing urgent issues when the board is not in
session, subject to statutory limits and the board’s limitations on
delegation. The majority of the projects committee are non-
executive directors. It is chaired by Koos Bekker.
Evaluation
The nominations committee carries out the evaluation process,
which is not externally facilitated, on an annual basis in
accordance with the Dutch Corporate Governance Code.
As part of the review, the performance of the board and its
committees, as well as the performance of the chair of the board,
is considered against their respective mandates in terms of the
board charter and the charters of its committees. The committees
perform self-evaluations against their charters for consideration by
the nominations committee and the board.
For the FY22 annual formal inhouse self-assessment, the
performance of each director was evaluated by the other board
members, using an evaluation questionnaire. The chair of the
board discussed the results with each director and agreed on any
training needs or areas requiring attention by that director. Where
a director’s performance is not considered satisfactory, the board
will not recommend their re-election.
A consolidated summary of the evaluation was reported to and
discussed by the board, including any actions required. The lead
independent director leads the discussion on the performance of
the chair, with reference to the results of the evaluation
questionnaire, and provides feedback to the chair.
The board is satisfied that the evaluation process improves its
performance and effectiveness.
The formal annual evaluation process showed that the board and
its committees had functioned well and discharged their duties as
per the mandates in their charters. The results of the board
evaluation indicated that board members, collectively and
individually, effectively discharged their governance roles. There
were no remedial actions identified.
Induction and development
An induction programme is held for new members of the board
and key committees, tailored to the needs of individual
appointees. This involves industry and company-specific
orientation, such as meetings with senior management to facilitate
an understanding of operations. Board members are exposed to
the main markets in which the group operates as well as relevant
evolving trends in technology and business models.
The company secretary assists the chair with the induction and
orientation of directors and arranges specific training if required.
The company will continue with directors’ development and
training to build on expertise and develop an understanding of
the businesses and main markets in which the group operates.
Conflicts of interest
Potential conflicts are appropriately managed to ensure
candidates and existing directors have no conflicting interests
between their obligations to the company and their personal
interests. All directors are required to declare personal interests
annually. Declaration of directors’ interests is a standing item on
the board’s agenda. Directors who believe there may be a
conflict of interest on a matter are to advise the company
secretary and are recused from the deliberation and the decision-
making process. Directors must also adhere to a policy on trading
in securities of the company.
If the conflict of interest concerns all directors, the declaration
must be made to the annual general meeting as well. We confirm
that there have been no conflicts of interests that need to be
reported at this time. Furthermore, there have been no
transactions with shareholders that need to be disclosed.
Other than the share exchange offer between Prosus and
Naspers that was approved by shareholders on 9 July 2021, there
have not been material transactions in the 2022 financial year
between any member of the board or with Naspers that involved
any conflicts of interests, or any transactions that would be
considered related party transactions in the meaning of Dutch
law.
Best practice provisions 2.7.3, 2.7.4 and 2.7.5 of the Dutch
Corporate Governance Code have been complied with.
The board and its committees
continued
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The board and its committees
continued
Directors
Board
Audit committee
Risk committee
Sustainability
committee
Nominations
committee
Human resources
and remuneration
committee
Projects committee
JP Bekker
10*
4 5
–*
B van Dijk
10
5 3 –
V Sgourdos
10
4 3 –
EM Choi
1
7 1 3
HJ du Toit
10
4
CL Enenstein
10
4
5*
DG Eriksson
2
– – – –
M Girotra
7 3
RCC Jafta
3
10
1 5 3
4*
–AGZ Kemna
4
1 3 4
FLN Letele
10
2
D Meyer
9
3*
R Oliveira de Lima
10
4 5
SJZ Pacak
5
10
4*
5*
–
MR Sorour
10
–
JDT Stofberg
10
3
BJ van der Ross
6
10
– – 3
Y Xu
10
Total meetings
10
4 5 3 4 5 –
* Chair
1 Resigned as a director with effect from 26 August 2021.
2 Retired as a director with effect from 1 April 2021.
3 Resigned from the audit committee with effect from 25 August 2021.
4 Appointed as a director and to the audit committee with effect from 24 August 2021 and
appointed to the risk committee with effect from 9 September 2021.
5 Appointed as chair of the audit committee with effect from 1 April 2021.
6 Retired as a director with effect from 1 April 2022.
Related party transactions
In the course of its ordinary business activities, the group’s
members regularly enter into agreements with other companies
inthe group. These agreements mainly relate to the rendering of
intra-group services, such as the provision of support services in,
among others, the areas of artificial intelligence and machine
learning, mobile, accounting, internal audit and risk, legal,
mergers and acquisitions, company secretarial, data privacy,
share scheme administration, human resources, tax, information
technology, communications, software and treasury. Prosus
believes that all transactions with subsidiaries, associates and
joint ventures are negotiated and executed on an arm’s length
basis and that the terms of these transactions are comparable to
those contracted with unrelated third-party suppliers and service
providers.
To protect relevant stakeholders’ interests, the audit committee
monitors all related party transactions and, depending on the size
of the transaction, may be required to give approval to these
transactions, or refer matters above certain thresholds to the
board for approval. Naspers and Prosus have also undergone a
cost-allocation exercise. This will ensure that both companies’
interests are adequately protected.
Refer to note 41 ‘Related party transactions and balances’ on
page 244 of the consolidated financial statements, which sets out
the details of all related party transactions and balances.
Discharge of responsibilities
The board is satisfied that the committees properly discharged
their responsibilities over the past year.
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Report of the audit committee
I am pleased to present the report of the audit committee for the
year ended 31 March 2022.
The committee assists the board of directors in fulfilling its
supervisory responsibilities for, among others, ensuring the quality
and integrity of the company’s financial statements, reviewing the
company’s internal controls and risk management.
Composition and attendance
This committee comprises independent non-executive directors.
Don Eriksson retired as a board member with effect from 1 April
2021 and Steve Pacak was appointed as chair of this committee.
All members are financially literate and have business and
financial acumen. The committee held four meetings during the
past financial year. The chief executive and financial director
attend committee meetings by invitation.
The names of members in office during the financial year and
details of meetings attended by each member are shown on
page 106.
The committee has unrestricted access to company information
falling within its mandate and will liaise with management on the
information it requires to carry out its responsibilities. Both internal
and external auditors have unrestricted access to the committee.
The internal and external auditors also have the opportunity at
two meetings per year to report to the committee in the absence
of management, or when appropriate to do so.
The chair of the board is not a member of the committee but may
attend meetings by invitation. Board members are entitled to
attend committee meetings as observers. However, non-
committee members are not entitled to participate without the
consent of the chair, do not have a vote and are not entitled to
fees for attendance.
Responsibilities
The functions and responsibilities of the committee are set out in
the audit committee charter and include, among others:
•
Review and approve for presentation to and approval by the
board, the company’s annual report, including non-executive
director reports, financial statements, interim reports and
consolidated financial statements, and any other company press
releases with material financial or internal control impacts.
•
Annually review external audit and disclose the committee’s
views on the quality of the external audit and independence,
when required, with reference to audit quality indicators such as
those that may be included in inspection reports issued by
external audit regulators.
•
Based on the information provided by the various assurance
providers, evaluate the effectiveness of internal financial controls.
Members of the committee
•
SJZ Pacak (chair)
1
•
M Girotra
•
RCC Jafta
2
•
AGZ Kemna
3
1 Appointed as the chair of the committee with effect from 1April 2021.
2 Resigned with effect from 25 August 2021.
3 Appointed with effect from 25 August 2021.
Key focus areas during the year
During the financial year, the committee focused on:
•
Discharging its functions in terms of its charter.
•
Assessing the impact of the changes to accounting standards.
•
Mandatory audit firm rotation.
•
Ensuring group reporting meets the Dutch Civil Code (
Burgerlijk
Wetboek
) and the Financial Supervision Act (
Wet op het
Financieel Toezicht
) requirements as supervised by the Authority
for the Financial Markets (AFM) and to the extent required, JSE
Listings Requirements.
•
Considering a reported deviation from the provision of services
by independent auditor policy and assessing the impact of the
independence of PricewaterhouseCoopers Accountants N.V.
•
Assessing the economic impact of the war in Ukraine on the
group.
•
Reviewing and approving the new US dollar and euro bonds
issued in both July 2021 and January 2022.
•
Continued implementation of the Dutch Corporate Governance
Code recommendations.
Financial statement reporting matters
The committee’s main responsibility for the group’s financial
reporting is to review, with both management and the external
auditor, the appropriateness of the group’s financial statements
with its primary focus on the following:
•
The quality and acceptability of accounting policies and
practices.
•
Material areas where significant judgements have been made,
along with any significant assumptions or estimates, or where
significant issues have been discussed with or challenged by the
external auditor.
•
An assessment of whether the financial statements, taken as a
whole, are fair, balanced and understandable and provide the
information necessary for stakeholders to assess the group’s
position and performance, business model and strategy.
The significant judgements and matters and conclusions reached/
actions taken by the committee in relation to the consolidated
financial statements are outlined on page 154. Each of these
matters was discussed with the external auditor and, where
appropriate, has been addressed as a key audit matter in the
report of the audit of the consolidated and company financial
statements on page 272.
Internal audit
The committee has oversight of the consolidated and company
financial statements and reporting process, including the system
of internal financial control. It is responsible for ensuring that the
group’s risk and audit function is independent and has the
necessary resources, standing and authority in the organisation to
discharge its duties.
The committee oversees cooperation between internal and
external auditors, and serves as a link between the board of
directors and these functions. The head of risk and audit reports
functionally to the chair of the committee and administratively to
the financial director. An assessment of the effectiveness of the
risk and audit function, as well as the head of risk and audit, is
performed annually by the committee. Based on the assessment,
the committee is of the opinion that the risk and audit function, as
well as the head of risk and audit, is effective.
Independence and effectiveness of the external auditor
PricewaterhouseCoopers Accountants N.V. (PwC) was
reappointed as auditor of the company until the next annual
general meeting. The committee believes that the auditor has
observed the highest level of business and professional ethics.
The committee is satisfied that the auditor has at all times acted
with unimpaired independence.
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Details of fees paid to the external auditor are disclosed in
note14 to the consolidated financial statements on page 181.
All non-audit services were approved by the committee during the
current financial year in accordance with the board-approved
policy on non-audit services performed by the external auditor.
The partner responsible for the audit is required to rotate every
five years. The committee meets with the auditor independently
ofsenior management.
A breach of the independence rules pertaining to a non-audit
service provided by a PricewaterhouseCoopers member-firm in
Bulgaria was outlined to the committee. The service consisted of
an unsigned tax advisory memorandum provided to an entity
within the Payments and Fintech segment. The fee value was not
billed and is less than 0.05% of PwC’s audit fees for the financial
statements for 2022. Following a detailed review of the matter, the
audit committee concluded that the deviation from the provision of
services by independent auditor policy did not compromise PwC’s
independence. It was confirmed that the controls and processes
around adherence to the provision of services by independent
auditor policy are being enhanced and reviewed in conjunction
with the governance team.
During the year, the audit committee reviewed the representations
by the external auditor and, after conducting its own review,
confirmed the independence of the auditor. The quality of the
external audit was reviewed, focusing on a range of factors
considered relevant to audit quality and feedback from PwC on
their performance against their own objectives, and the
committee concluded the external audit to be satisfactory.
It was confirmed that no unresolved issues of concern exist
between the group and the external auditor.
Auditor rotation
Following an extensive tender process under leadership of the
committee, the company announced its proposal to appoint
Deloitte as the company’s new auditor for a term of four years
starting 1 April 2023.
At the start of the tender process, a number of selection criteria
were defined, including: the proposed audit team, the
organisation of the audit team, the technical consultation process,
the audit approach, fee structure, flexibility and ability to respond
to a changing environment, the transition plan, reputation and
credentials and ability to mobilise relevant expertise and
resources. The tender process included site visits to the most
important markets and workshops with the group functions and
business groups, which provided the opportunity to evaluate who
the next auditor should be. These impressions, together with a
comparison of the written tender offers, followed by presentations
to the executive directors, senior management and members of
the committee, led to a decision by the board to propose and
recommend the appointment of Deloitte to the shareholders.
The decisive factors to recommend Deloitte were the consistent
strong performance of the proposed team, the best perceived
integrated audit approach and competitive fee proposal. The
company’s current auditor will remain in function until the
conclusion of the audit for the 2023 financial year.
The committee held confidential meetings between its committee
members and the internal and external auditors during the year.
The committee held four meetings with the internal and external
auditors.
Expertise and experience of the financial director and the
finance function
The committee has satisfied itself that the financial director has
appropriate expertise and experience. In addition, the committee
satisfied itself that the composition, experience and skill set of the
finance function met the group’s requirements.
Based on an assessment performed annually, the committee is of
the opinion that the finance function, as well as the financial
director, is effective.
Discharge of responsibilities
The committee determined that, during the financial year under
review, it had discharged its legal and other responsibilities as
outlined in terms of its remit. The board concurred with this
assessment.
Key focus areas going forward
The committee’s key focus for the 2023 financial year includes the
following:
•
Discharging its functions in terms of its charter.
•
Assessing the impact of changes to accounting standards.
•
Ensuring group reporting is in accordance with Dutch corporate
and securities law, including the Dutch Civil Code (
Burgerlijk
Wetboek
) and the Financial Supervision Act (
Wet of het
Financieel Toezicht
).
•
Ongoing compliance with the Dutch Corporate Governance
Code.
•
Overseeing the mandatory audit firm rotation process.
•
Focusing regularly on the group’s working capital requirements
and ensuring that the group and its subsidiaries continue to
operate as going concerns.
•
Reviewing and monitoring the accounting for potential mergers,
acquisitions and disposal and the conduct of impairment tests.
Steve Pacak
Chair: Audit committee
25 June 2022
Report of the audit committee
continued
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Report of the risk committee
Management is accountable to the board for implementing and
monitoring the processes of risk management and for integrating
this into day-to-day activities. The PayU risk advisory committee
reports to the risk committee to ensure that PayU management
receives external independent advice and acts as an
independent guardian to the risk committee on PayU-related
matters.
An ongoing enterprisewide risk assessment process supports the
group. This ensures risks are adequately identified, evaluated and
managed at the appropriate level in each business and that their
individual and joint impact on the group is considered.
Risk and audit assists in evaluating the effectiveness of the risk
management process and comments on this in its own
assessment report.
Key focus areas during the year
Recognising material risks to which the group is exposed and
ensuring that the culture, policies and systems are implemented
and functioning effectively.
•
Implementing and monitoring the processes of risk management
and for integrating this into day-to-day activities.
•
Assessed the impact of the invasion of Ukraine by Russia on the
group and adjusted the heat map and risk register accordingly.
•
Ensuring risks are adequately identified, evaluated and
managed at the appropriate level in each business, and that
their individual and joint impact on the group is considered via
the enterprisewide risk management process.
•
Particularly focusing on data privacy, cybersecurity, sustainability,
tax and IP.
Details of how we manage, govern and monitor information and
technology, and compliance appear on pages 30 to 37.
Details of how risk, compliance, and information and technology
are managed to result in the objectives recommended by the
Dutch Corporate Governance Code are explained on page 88.
Key focus areas going forward
An ongoing focus on the management of changes in the risk
environment, particularly for legal compliance, tax, sustainability
and information, and technology-related risks such as
cybersecurity, data privacy (specifically the implementation of the
EU’s General Data Protection Regulation) and the use of data-
driven technologies.
Discharge of responsibilities
The committee determined that, during the financial year under
review, it had discharged its responsibilities as outlined in terms of
its remit.
The board concurred with this assessment.
The committee has presented the risk summary on pages 82 to
90.
Steve Pacak
Chair: Risk committee
25 June 2022
Members of the committee
•
SJZ Pacak (chair)
1
•
EM Choi
2
•
RCC Jafta
•
AGZ Kemna
3
•
V Sgourdos
•
B van Dijk
1 Appointed as the chair of the committee with effect from 1April 2021.
2 Resigned with effect from 26 August 2021.
3 Appointed with effect from 9 September 2021.
I am pleased to present the risk committee’s report for the year
ended 31 March 2022.
Composition and attendance
The committee comprises a minimum of three independent
non-executive directors, as well as the chief executive and
financial director. The chair of the board may be a member of the
committee and may serve as chair of this committee. Don
Eriksson, previously chair of the committee, retired as a board
member with effect from 1 April 2021 and Steve Pacak was
appointed as chair of this committee. Board members are entitled
to attend committee meetings as observers. However, non-
committee members are not entitled to participate without the
consent of the chair; do not have a vote; and are not entitled to
fees for attendance.
The names of members in office during the financial year and
details of meetings attended by each member are shown on
page 106.
Unless expressly noted, all members served on the committee for
the full financial year. The committee held four meetings during the
past financial year.
The committee has unrestricted access to company information
falling within its mandate and will liaise with management on the
information it requires to carry out its responsibilities.
Members of the committee have risk management skills and
experience.
Responsibilities
The functions and responsibilities of the committee are set out in
the risk committee charter and include, among others:
•
Review and approve a risk management policy and plan
developed by management and recommend such policy and
plan to the board for approval. The risk policy and plan must be
reviewed annually.
•
Monitor the implementation of the risk management policy and
plan, ensuring that an appropriate enterprisewide risk
management system and process is in place with adequate and
effective risk management processes that include strategy,
ethics, operations, reporting, compliance, IT and sustainability.
•
Make recommendations to the board concerning risk indicators,
levels of risk tolerance and risk appetite (namely the board’s
propensity to take appropriate levels of risk) as well as the limit
of the potential loss that the group has the capacity to tolerate.
The committee assists the board in recognising material risks to
which the group is exposed and ensuring that the culture, policies
and systems are implemented and are functioning effectively.
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Report of the sustainability committee
Key focus areas during the year:
•
Stakeholder interests and relevant sustainability aspects and
matters relating to business ethics and culture and the Speak Up
policy.
•
Training on sustainability.
•
Skills and other development programmes aimed at the
educational development of employees.
•
Employment philosophy and how it is founded on promoting
equality and preventing unfair discrimination.
•
Labour practices and policies, and how these compare to the
International Labour Organization on decent working conditions.
•
Corporate social investment programmes, including details of
donations and charitable giving.
•
The progress of addressing the principles of the UN Global
Compact and OECD guidelines.
•
Consumer relationships, including the company’s advertising,
public relations and compliance with consumer protection laws.
Key focus areas going forward
The committee recognises that the areas within its mandate are
evolving and that management’s responses will also adapt to
changes in the ESG agenda.
Management will continue to improve reporting techniques in how
it reports to the committee on responsible corporate citizenship
and sustainability, using reporting frameworks such as the six
capitals reporting framework and the United Nations Sustainable
Development Goals (UN SDGs). Accordingly, the group will
continue to enhance the way it reports on corporate citizenship
and sustainability to its stakeholders in the annual report.
Conclusion
The committee is of the view that the group takes its ethics, social
and governance responsibilities seriously.
Appropriate policies, plans and programmes are in place to
contribute to management and governance of an ethical business
culture, stakeholder relationships, social and economic
development and good corporate citizenship.
No substantive non-compliance with legislation and regulation, or
non-adherence with codes of best practice, relevant to the areas
within the committee’s mandate has been brought to its attention.
Based on its monitoring activities to date, the committee has no
reason to believe that any such non-compliance or non-adherence
has occurred.
The committee determined that, during the financial year under
review, it had discharged its legal and other responsibilities as
outlined in terms of its remit, details of which are included on
page 105. The board concurred with this assessment.
Debra Meyer
Chair: Sustainability committee
25 June 2022
Members of the committee
•
D Meyer (chair)
1
•
RCC Jafta
•
FLN Letele
•
V Sgourdos
•
JDT Stofberg
•
B van Dijk
•
B van der Ross
2
1 Appointed chair with effect from 16 April 2021.
2 Retired with effect from 1 April 2022.
I am pleased to present the sustainability committee’s report for
the year ended 31 March 2022, where we outline how the
committee has discharged its responsibilities as set out in the
committee charter.
This committee comprises a majority non-executive directors, the
chief executive officer and the financial director.
The committee held three meetings during the past financial year.
The names of the members who were in office during the financial
year and the details of the committee meetings attended by each
of the members are shown on page 106.
Responsibilities
The functions and responsibilities of the committee are set out in
the sustainability committee charter and include, among others:
•
Overseeing and reporting on business ethics and sustainability,
taking into account best practice, specific requirements of
regulators and environmental, social and governance (ESG)
reporting standards and frameworks.
•
Assisting the board to develop and supervise the
implementation of a long-term value creation strategy, by
bringing to the board’s attention relevant sustainability matters,
matters relating to business ethics and culture and
whistleblowing (including in both instances those matters
recommended by the Dutch Corporate Governance Code 2016)
and other relevant stakeholder interests.
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Report of the nominations committee
Key areas of focus going forward
Focus areas for the committee going forward will include the
following:
•
Assessment of the composition of the board to execute its duties
effectively.
•
Evaluation of the board, including structure, size, composition,
balance of skills, experience and diversity of the board and its
committees.
•
Ensuring there is a succession plan in place for the position of
the chair of the board.
Conclusion
Following the review by the committee for the year ended
31March 2022, the committee is of the view that, in all material
respects, it has fulfilled its remit for the financial year.
The board concurred.
Rachel Jafta
Chair: Nominations committee
25 June 2022
Members of the committee
•
RCC Jafta (chair)
•
JP Bekker
•
HJ du Toit
•
CL Enenstein
•
R Oliveira de Lima
I am pleased to present the nominations committee’s report for
the year ended 31 March 2022. The committee has a charter
approved by the board.
Membership and meetings attendance
The committee comprises a minimum of three directors, the
majority of whom are independent. All members of the committee
must be non-executive directors, the majority of whom are
independent.
The committee held four meetings during the past financial year.
The chair is an independent non-executive director.
The names of members in office during the financial year and
details of meetings attended by each member are on page 106.
Board members are entitled to attend committee meetings as
observers.
However, non-committee members are not entitled to participate
without the consent of the chair; do not have a vote; and are not
entitled to fees for attendance.
This committee has unrestricted access to company information
falling within its mandate and will liaise with management on the
information it requires to carry out its responsibilities.
Responsibilities
The functions and responsibilities of the committee are set out in
the nominations committee charter and include, among others:
•
Review annually the structure, size and composition of the board
and, where appropriate, make recommendations to the board in
respect thereof.
•
Make recommendations to the board with regard to the
appointment of new directors.
•
Identify and nominate candidates to fill board vacancies.
Key focus areas during the year
During the financial year, the committee focused on the following:
•
Assessment of the composition of the board to execute its duties
effectively, inclusive of the changes made during the year.
•
Assessment of compliance with the committee’s charter.
•
Assessment of the impact of the newly enacted gender diversity
legislation in the Netherlands.
•
Assessment of the effectiveness of the board, its members and
the committees through a board evaluation process.
•
Evaluation of the performance and independence of the
company secretary.
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Report of the human resources
and remuneration committee
Key focus areas during the year
Please refer to the remuneration report to see key focus areas of
the committee during the financial year.
Key focus areas going forward
Key focus areas for the year ahead include the following:
•
Continued engagement with shareholders on remuneration
topics.
•
Ongoing monitoring of market developments to ensure our
remuneration structure allows us to compete globally for talent
and that our offering is compelling, fair and responsible.
•
Achieving an appropriate mix of longer-term incentives, including
those to which performance conditions are attached.
Remuneration report
Having achieved its objectives for the financial year, the
committee sets out the remuneration disclosure in the
remuneration report, comprising our overarching remuneration
policy for executive directors and non-executive directors and
commentary on how it has been implemented during the year.
The remuneration report is prepared in accordance with the
requirements of the Dutch Corporate Governance Code and
Dutch law. It is divided into three sections (background statement,
remuneration policy and implementation) and is detailed on
pages 113 to 141.
Craig Enenstein
Chair: Human resources and remuneration committee
25 June 2022
Members of the committee
•
CL Enenstein (chair)
•
JP Bekker
•
EM Choi
1
•
R Oliveira de Lima
1 Resigned with effect from 26 August 2021.
I am pleased to present the human resources and remuneration
committee’s report for the year ended 31 March 2022. The
committee’s main objective is to fulfil the board’s responsibility for
strategic human resources and remuneration aspects of the
group.
The committee has a charter that encompasses Dutch Corporate
Governance Code recommendations and is approved by the
board.
Composition and attendance
The committee comprises a minimum of three directors. All
members must be non-executive directors, the majority of whom
are independent.
Board members are entitled to attend committee meetings as
observers.
However, non-committee members are not entitled to participate
without the consent of the chair; do not have a vote; and are not
entitled to fees for attendance.
The chair of the committee is an independent non-executive
director. The committee held five meetings during the past
financial year.
The names of members in office during the financial year and
details of meetings attended by each member are on page 106.
The committee has unrestricted access to company information
falling within its mandate and will liaise with management on the
information it requires to carry out its responsibilities.
Responsibilities
The functions and responsibilities of the committee are set out in
the human resources and remuneration committee charter and
include, among others:
•
Every four years, submit a clear and understandable proposal to
the board of Prosus of a remuneration policy for directors of
Prosus.
•
Review and approve annually the remuneration packages of the
most senior executives, ensuring they are appropriate and in line
with the remuneration policy.
•
Review annually the company’s code of business ethics and
conduct.
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Craig Enenstein
Chair: Human resources and remuneration committee
‘ We aim to attract, motivate and retain
the best people to create sustainable
shareholder value.’
Members of the committee
•
CL Enenstein (chair)
•
JP Bekker
•
EM Choi
1
•
R Oliveira de Lima
Dear Shareholder
On behalf of the board, I am pleased to present our remuneration
report, covering the 2022 financial year (FY22).
Despite a year of global turmoil and uncertainty, the past financial
year has seen a solid operational performance at the group. We
have focused on building strong momentum in our Ecommerce
portfolio and investing in our businesses to capture the significant
market opportunities that we see.
Business performance
2
The group has delivered a solid set of financial results for FY22.
Group revenue, measured on an economic-interest basis, grew
24%(24%) to US$35.6bn. The Ecommerce segment revenue grew
strongly, increasing 58% (51%)
to US$9.8bn. Tencent’s contribution
togroup revenue grew 14% (16%). Group trading profit reduced
10% (6%) to US$5.0bn, reflecting investment to expand the market
opportunity for each segment and strengthen the customer
ecosystems of our businesses. Tencent’s contribution to the group’s
trading profit improved 2% (4%). Consolidated free cash outflow
was US$562m, a decrease on the prior year’s free cash inflow of
US$126m, as we stepped up operational and working capital,
andcapital expenditure investment across our businesses. Core
headline earnings were US$3.7bn, a reduction of 23% (20%),
whichreflects ongoing investment in our Ecommerce portfolio
anda period of slower growth at Tencent.
Major transactions
In April 2021, we trimmed our shareholding in Tencent, selling 2% of
Tencent’s issued share capital, raising US$14.6bn and reducing our
holding to 28.9%. Proceeds were used to support our investment
programme and two US$5bn share buyback programmes that
enhanced our net asset value (NAV) per share.
In August 2021, Prosus completed an exchange offer for 45.8% of
Naspers N ordinary shares. This transaction has created a capital
structure that, over time, is designed to allow the inherent value of
the group to be better reflected in the share prices of Naspers
andProsus.
Global markets
Despite a solid operational performance across our portfolio,
likemany technology companies, we have faced significant and
growing macroeconomic and geopolitical headwinds, particularly
in the second half of the year. Weakening global markets, faced
with higher inflation and rising interest rates, were plunged into
turmoil when Russia invaded Ukraine. The combination of the
appalling war in Ukraine, slowing growth and increased global
uncertainty, has led to valuations of global technology companies
declining sharply as investors’ risk appetite has reduced.
Discount to net asset value
On the back of a confluence of negative factors, the discount in
theProsus and Naspers trading value relative to a sum-of-the-parts
valuation grew to its highest level in FY22. While we continue to
believe in focusing a material portion of executive directors’
incentives on the non-Tencent portions of the group over the long
run, we recognise there is a critical benefit to applying attention to
reduction of the discount.
Key focus areas during the year
•
Reflecting the business performance in the FY22
remuneration decisions.
•
Ensuring correct pay-for-performance mix is applied.
•
Setting short-term incentive (STI) targets, including
environmental, social and governance (ESG) goals that
are measurable, sufficiently stretched and linked to the
group’s strategy.
•
Establishing high weighting of performance share units
(PSUs) in the long-term incentive (LTI) mix for executive
directors, ensuring alignment between executive
remuneration and shareholder outcomes.
•
Improving disclosure of executive remuneration in the
annual report, in a bid for greater transparency.
•
Continued engagement with shareholders on
remuneration topics.
•
Ongoing monitoring of market developments to ensure
our remuneration structure allows us to compete globally
for talent, and that our offering is compelling, fair and
responsible.
•
Considering independent external advice on non-
executive directors’ fees.
Remuneration report
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For FY23, we are materially increasing the CEO’s and CFO’s
short-term variable compensation exposure to the reduction of the
discount. Given the potential of value creation for shareholders
through discount reduction, we have designed a special incentive,
focused exclusively on reduction of the discount. At the same time,
we have very materially reduced the balance of annual
compensation in order to emphasise the importance of this
discount-centric incentive and align remuneration with shareholder
performance. Where this requires a change in our remuneration
policy, we will present this to shareholders for review and approval.
We believe strongly that discount reduction is fundamental to
maximising shareholder returns and desire to ensure the CEO’s
and CFO’s incentives are aligned with those of our shareholders. It
is in this light that the committee decided not to award LTIs for
FY23.
Details of the FY23 remuneration for the executive directors can be
found on page 134 of this report.
Vesting of first PSU awards
Performance share units (PSUs) were awarded for the first time in
FY20 and were introduced following feedback from our
shareholders, to better incentivise long-term value creation in our
underlying internet businesses, as well as close the discount to
NAV. The first PSU awards were due to vest in June 2022 and will
be settled in Naspers shares
3
, based on the set number of shares
at the time of grant. The performance condition as defined for the
PSUs, measures the three-year CAGR valuation of the Ecommerce
portfolio against a basket of global peers. Given the
announcement of our intention to decouple Avito operationally
from the group prior to the end of the financial year and the
subsequent announcement of our intended sale of Avito, the board
cannot yet determine the achievement of the PSU performance
condition until the sale of that business has been concluded, even
though the Avito business represents only a limited percentage of
the Ecommerce valuation. We will inform shareholders as soon as
practicable of the impact on the FY20 PSUs. The vesting for
participants will be delayed until such time.
Disclosures
We have made considerable effort in improving disclosure of
executive remuneration, in a bid for greater transparency. We have
disclosed the STI goals and achievements for FY22. Showing our
competitors details of the STI targets before the end of the financial
year is not in the best interests of our shareholders, but from FY23
onwards, we will be disclosing these targets retrospectively.
Our stakeholder engagement
We engage openly and frequently and take extensive input from
our investors and advisers, including meetings directed specifically
to discussing remuneration with shareholders, to clearly
demonstrate the link between Prosus’s strategy, business
Remuneration report
continued
Structure of report
In compliance with article 2:135b of the Dutch Civil Code,
theEuropean Shareholder Rights Directive (SRD II) and the
Dutch Corporate Governance Code, this report is split into
the following sections:
1. Background and policy: Provides a detailed overview of
our approach to remuneration and information on the
components of our executive pay packages.
Read more on page 115
2. Implementation of the remuneration policy: Sets out
information on how we implemented our policy for FY22.
Read more on page 123
We conclude with an Additional information section on
page140.
It is noted that all remuneration is presented at 100%,
including the cost that is apportioned to Naspers.
1 Emilie Choi resigned as member of the Prosus and Naspers board, effective 26 August 2021.
2 In presenting and discussing our performance, we use certain alternative performance
measures not defined by IFRS, referred to as non-IFRS-EU financial measures, alternative
performance measures or APMs. Such measures include economic-interest basis information;
trading profit; adjusted EBITDA; headline earnings; core headline earnings; and growth in
local currency, excluding acquisitions and disposals. Numbers included in brackets represent
the equivalent measure on the basis of growth in local currency, excluding acquisitions and
disposals.
3 Includes the Prosus shares linked to Naspers PSUs as a result of the Prosus capitalisation
issue in 2019.
performance and our remuneration philosophy. The results of the
prior year’s advisory vote and the feedback from investor meetings
were taken into account and debated by the remuneration
committee, leading to a number of changes in remuneration
design and disclosure, including adding a discount-linked STI as
well as being committed to disclosing retrospective STI targets
starting in 2023.
We strive for a higher level of N shareholder support for the
remuneration resolutions and in that spirit, we will continue to make
appropriate changes to our remuneration design and disclosures.
We will continue to engage with our shareholders on a frequent
basis.
I thank you for your feedback and support and look forward to our
future interactions.
Craig Enenstein
Chair: Human resources and remuneration committee
25 June 2022
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Background and policy
Our philosophy
Our remuneration philosophy underpins our group’s strategy and
enables us to achieve our business objectives. Our commitment to
pay for performance and alignment with shareholder value
creation drives all our remuneration activities and supports the
ownership mentality and spirit of entrepreneurship in our teams
Five key principles to guide our remuneration approach
Paying for
performance
We believe in pay
for performance: we
are comfortable with
bigger rewards for
those that make the
highest contribution.
Shareholder
alignment
Remuneration must
be aligned with
shareholder
outcomes.
Incentivisation
Remuneration must
incentivise the
achievement of
strategic,
operational,
sustainability and
financial objectives,
in both the short and
longer term.
Consistency
We are consistent:
our reward package
elements are
broadly the same,
regardless of
seniority*.
Attracting and
retainingtalent
Our reward systems
must help us attract
and retain the best
talent around the
world in a fair and
responsible way.
Fair
•
Equitable: Free from discrimination
•
Relevant: Linked to personal and company performance
•
Rational: Easy to explain
Responsible
•
Independent: With oversight, top-down via the board
•
Managed: All employee pay decisions are properly
overseen
•
Considered: Judgement is applied; we shy away from
solely formulaic appraisals that could lead to
unacceptable outcomes
•
Sustainable: Remuneration designed with sustainability
inmind
We strive to deliver fair and consistent remuneration across all
our business operations and this includes permanent and
temporary employees, contractors, consultants and trainees.
Maintaining pay equality is embedded in our ways of working,
and through regular analyses we compare compensation levels
of groups of people, for example women versus men,
around the world. We believe in a level playing field for our
people. We strive to pay fairly and responsibly. As much as
possible, the structure of our pay is consistent, regardless of the
seniority of the employee, ensuring equality of pay structures
across all employees. In the committee’s view, the remuneration
policy achieved its stated objectives in the year under review.
performing in similar jobs. We conduct calibrations across the
group as a standard process before (annual) reward decisions
are taken, working towards closing unjustified pay gaps, should
they exist.
* LTI is an important part of compensation for most employees, except those in junior roles.
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Background and policy
continued
Our competitive environment
fortalent
A global market for talent
We are a global rather than a Dutch company, operating in
ahighly competitive international environment. Most of our
Making executive pay decisions
Attract and
retain talent
Fair and responsible
Shareholder
alignment
Longer term
Market situation – benchmarking
Scenario analysis
Peer group
Pay decision
1 Amazon, Alphabet, Meta, PayPal Holdings, Netflix, Uber, Booking Holdings, Snap, Adyen, Twitter, Doordash, eBay, Wayfair Inc, Zillow Group, Zalando SE, Expedia Group Inc, Ocado Group, IAC/
InterActiveCorp, Just Eat Takeaway.com, Adevinta and Auto Trader Group.
We partner with local data
providers in the countries in
which we operate and with
these two global providers
of benchmarking
information. Survey
coverage is specifically
strong in the US, Western
Europe and in high-growth
markets. We access its
general industry and
high-tech surveys (including
media and technology).
Where appropriate and
available, we look at
publicly disclosed data that
are more or less
comparable in the
ecommerce, consumer
internet, food delivery and
social media sector. The
peer companies for
remuneration benchmarking
are referenced below
1
.
The committee undertakes
athorough assessment to
ensure that targets on
variable incentives are
sufficiently stretched in the
context of potential
remuneration delivered, and
applies judgement so that
the remuneration policy
continues to achieve its
objectives of aligning pay
with the long-term
performance of Prosus and
shareholder outcomes.
INPUTS
OUR PAY PRINCIPLES
OUPUTS
Committee deliberation
Pay for
performance
Achieve the business
plan
When making executive pay
decisions, we consider the
individual’s performance
and the performance of the
business.
competitors are not listed in Amsterdam or included in the AEX
index. Our remuneration practices are aligned within a global
technology landscape and may differ from what is customary in a
Dutch context. Executive talent comes from other international,
often leading US-listed companies in the consumer internet sector,
which forms the basis of our executive remuneration benchmarking.
Business
performance
Individual
performance
as per STI
AON Radford
data high-tech
sector
Willis Towers
Watson
(WTW) data
high-tech
sector and
general industry
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Background and policy
continued
Our remuneration structure: Pay for performance
Remuneration for our executive directors consists of base salary, STI, LTI, pension and other benefits.
The approach is similar for the CEO’s other direct reports.
FY22 Pay elements
Our pay design links to our pay principles
Pay for performance
Shareholder alignment
Incentivisation
Consistency
Attract and
retain talent
Fixed
remuneration
•
Base salary reflects the contribution of the individual and market value of the role.
•
Paid monthly in cash.
•
May be reviewed annually; any increase is typically effective from 1 April each year.
•
Benefits typically include pension, medical insurance, and life and disability insurance.
STI –
Annual
performance-
related
incentive
•
Discretionary annual performance-related incentive with performance measures that are tailored to the
executives’ roles and responsibilities.
•
At least 50% of the bonus opportunity is based on delivery of financial performance ahead of the board-
approved business plan.
•
Strategic and operational goals include an objective to address the holding company discount and additional
financial performance metrics for the underlying businesses.
•
Environmental and sustainability goals are set for the short and longer term. Target and maximum bonus
opportunity are the same (no payout for over-performance against the target), and the standard STI is set at
100% of base salary for both the CEO and CFO.
•
The committee undertakes a thorough assessment to ensure that targets are rigorous and sufficiently stretched.
STI payout is typically below the maximum 100% opportunity.
•
Any STI payout is made in cash.
•
The committee may apply judgement with discretion to make appropriate adjustments to the annual bonus.
LTI –
Performance
share units
(PSUs)
•
PSUs are designed to incentivise the increase in the value of internet businesses (excluding Tencent*), and
deliver superior returns to shareholders.
•
Three-year cliff-vesting, subject to the achievement of the performance condition.
•
Performance condition is the three-year compound annual growth rate (CAGR) of the Global Ecommerce SAR
scheme*, relative to a group of industry peers.
•
Vested PSUs are settled in shares.
•
Further details are available on page 118.
* It is noted that VK never was part of our Global Ecommerce SAR Plan. We announced in March our intention to write down the full carrying value of
the VK asset.
LTI – Share
appreciation
rights (SARs)
•
SARs incentivise the growth in value of the business units or an aggregation of underlying assets. See page 120
for details on the valuations process and the valuation performance of the Ecommerce portfolio linked to the
SARs plan.
•
Any value upside delivered by individual businesses is offset by any value downside delivered by other
businesses, thus ensuring that senior executives’ remuneration is negatively affected should individual businesses
not perform.
•
The change in value is measured over a four-year period to ensure focus on the longer-term delivery of
shareholder value.
•
Any gains are settled in cash.
LTI – Share
options (SOs)
•
SOs: Any gains are based on the growth in share price over a four-year period.
•
Performance hurdle: Value is only delivered to participants if there is an increase in the share price.
•
Any gains are settled in shares.
Malus and clawback provisions apply to STI and LTI.
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Executive director participation in
LTIplans
The committee reviews three key elements before conducting the
scenario analyses, to determine the size of any award of PSUs,
SARs or SOs:
•
Strong short-term (annual) personal performance leading to
adecision to grant an LTI.
•
Superior business performance over the time of the executive’s
tenure, leading to value creation in the scheme and for the
shareholder.
•
Industry benchmarking of executive compensation in consultation
with external advisers WTW and FW Cook.
LTI awards represent a significant portion of total compensation
and are designed to incentivise the delivery of sustainable
longer-term growth and provide alignment with our shareholders.
The entirety of our executive directors’ LTI is determined by the
performance of the company and growth in the valuation of the
underlying assets and, as such, is deemed ‘at risk’. LTI is only
delivered to the executive directors, providing the PSU
performance conditions are met and the share price of SARs or
SOs have increased in value, ensuring strict alignment with our
wider stakeholder interests.
Detailed scheme rules provide for the operation and governance
by trustees of each scheme.
A blend of LTI
Our executive pay is heavily weighted towards longer-term
performance, typically delivered in PSUs, SARs, and SOs. Each
element of the LTI programme plays a distinct part in delivering a
remuneration approach that drives business performance for the
longer term and is fair, responsible, aligned with shareholder
outcomes and relevant to the talented executives we need to
attract and retain (as shown in the table on page 134).
In the past year we have made significant progress in shifting
LTItowards compensating executive management on the
performance of the Global Ecommerce portfolio, excluding
Tencent. In FY22, the PSU plan and the SARs plan together
madeup 92.5% of the LTI allocation.
PSUs
– measures the three-year CAGR valuation of the
Ecommerce portfolio against a basket of global peers.
SARs
– measures the value creation of directly controllable factors
in the Global Ecommerce portfolio.
Background and policy
continued
PSUs
Achievement of the performance condition will be assessed by
thehuman resources and remuneration committee, based on the
share price of the Global Ecommerce SAR Plan (in absolute and
relative terms), validated by the valuations subcommittee as per
the valuations process described on page 120.
The level of achievement relative to the performance condition at
the end of the three-year performance period drives the number of
shares that ultimately will vest:
•
At threshold performance: 50% of the allocated shares would be
awarded if the performance is at the 25th percentile of the peer
group.
•
At target performance: 100% of the allocated shares would be
awarded if the performance is at the median of the peer group.
•
At maximum performance: 200% of the allocated shares would
be awarded if the performance is at the 75th percentile of the
peer group.
The PSU threshold level of achievement is deliberately set at the
25th percentile, as it is positioned against a highly competitive set
of comparator companies, as shown below. If the threshold level of
performance is not achieved, no shares will be awarded to the
participant. If more than the maximum performance is achieved,
no more than 200% of the allocated shares would be awarded.
Peer group for PSU performance condition
For the performance condition underpinning the FY22 PSU grant,
the peer group consists of Amazon, Alphabet, Meta, PayPal
Holdings, Netflix, Square, Booking Holdings, Snap, Adyen, Twitter,
eBay, Wayfair Inc, Zillow Group, Zalando SE, Deliveroo, Expedia
Group Inc, Ocado Group, IAC/InterActiveCorp, Just Eat Takeaway.
com, Adevinta, Auto Trader Group, and Qurate Retail.
The board remains committed and incentivised to continue on this
journey for the long-term value creation of the group. To emphasise
that intent, the FY23 remuneration will be adjusted accordingly.
Further details can be found on page 134 of this report.
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Background and policy
continued
FY22 Blend of LTI (% in FY22 mix)
PSU (60%)
Global Ecommerce SAR (32.5%)
SOs (7.5%)
Plan characteristics
A performance share award
thatis transferred to participants
after time restrictions have
passed, subject to the
performance condition
beingmet.
Cliff-vesting at the end of three
years.
A right to benefit from any
increase in value of the business
unit over which an award
ismade.
Vests over four years.
A right to buy a company share
at a pre-agreed price.
Vests over four years.
Performance
Three-year performance
condition of the Global
Ecommerce SAR scheme CAGR
relative to a high-performing
industry peer group
1
.
Any potential gains are driven
by achieving value growth in
theunderlying consumer internet
assets (excluding Tencent).
Embedded with a performance
hurdle as there is no value to be
gained unless there is an
increase in share value in the
underlying, unlisted consumer
internet businesses (excluding
Tencent) between grant and
vesting/exercise.
Embedded with a performance
hurdle as there is no value to be
gained unless there is an
increase in share value between
grant and vesting/exercise.
Settlement
Depending on the achievement
against performance condition,
between 0% and 200% of the
awarded PSUs may vest and
Prosus or Naspers
2
shares are
delivered
3
on vesting.
Gains, if any, are settled in cash. Upon exercise, SOs are settled
in Naspers or Prosus shares
2,3
.
Focus on longer-term value
creation
Value driven by longer-term
outcomes.
Valuation (by third party) driven
by longer-term projections
4
.
Market cap represents longer-
term value.
Alignment with shareholder
interests
Performance condition
incentivises creating value in the
underlying internet business,
closing discount to NAV.
Incentivises value creation in
underlying internet business
(excluding Tencent).
Aligned with shareholders
incentivising executive
management to reduce the
discount to NAV.
1 Please see page 118 for the current PSU peer group.
2 The issue of PSU and SO awards, if any, will gradually be rebalanced between Prosus and Naspers shares, aligned with the free-float ownership in Prosus and Naspers.
3 Shares are purchased on the market for cash to avoid shareholder dilution as a result of the company settling its LTI award obligations.
4 Please see page 120 for further detail on the valuation process.
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Background and policy
continued
Valuations
The Global Ecommerce portfolio
The performance of SARs and PSUs is determined by year-on-year
changes in the per-share valuation of the group’s Global
Ecommerce portfolio. This made up 92.5% of the 2022 LTI allocation
and excludes the performance of Tencent.
Methodology
The valuation is an amalgamation of a number of individual
schemes and assets that are valued annually by an external
valuer. In determining the company value and the scheme share
value, the valuer shall use the appropriate application of
reasonable valuation methods, including, without limitation, the use
of comparable peer multiples, precedent transactions and
discounted cash flow (DCF) valuations. Importantly, the
methodology deployed in valuing the ecommerce schemes has
remained consistent since inception, which is essential both for the
legitimacy of the valuation and for transparency for the scheme
participants.
Where predominantly employing a DCF methodology, the valuer is
using assumptions for future cash generation, discount rates and
long-term growth. These valuations assess the pathway to value
creation and should serve as a critical component of a
comprehensive compensation vehicle designed to align
management performance and compensation, excluding Tencent,
with shareholder outcomes. It is also important to note that funding
is initially dilutive to value and many of our companies are early
stage or loss-making, meaning that the schemes are diluted by
short-term investment and acquisitions.
The Global Ecommerce portfolio scheme is made up of underlying
schemes, each of which has a different set of assumptions.
2022 valuation outcome
During this financial year, the group’s assets continued to
outperform their plans and grow revenue strongly, with Ecommerce
segment revenue accelerating meaningfully to 58% (51%) growth
year on year versus 46% (54%) growth in the previous year. With
this increased scale, each of the group’s consolidated assets has
achieved profitability at the core of their businesses and has
identified additional investment areas to expand their overall
opportunity sets. Despite this significantly improved performance,
adecline in the value of the portfolio will reflect the de-rating of all
our listed assets, including Delivery Hero in particular, and to a
lesser extent a decline in the value of our unlisted assets. Although
private markets have not declined as significantly, the valuation
approach applied by the valuer includes a weighting to public-
comparable companies with the overall result being a decline in
our private portfolio.
Figure 1
–
Governance of our valuation process
Valuation process
Underlying business submits
10-year business plan and
annual budget.
Prosus reviews the 10-year
business plans for each
underlying business and
provides them to the
external valuer.
Independently from
management, the valuer
values the underlying assets
at 31 March annually and
additionally, whenever a
significant change occurs.
The valuer issues a report
detailing the valuation for
each of the underlying
operations.
Segment schemes and the ecommerce schemes are a ‘basket of assets’
representing the valuations of the underlying operations
Governance
1
REPORT ISSUED
2
REVIEW
3
SUBMISSION
4
APPROVAL
The external valuer
1
issues a
report with the respective
share scheme valuations.
1 Currently Deloitte. The group has
appointed KPMG as the new external
valuer, conducting the valuations for the
group’s unlisted assets from FY23
onwards, as Deloitte has been appointed
as the new auditor effective 1 April 2023.
The valuations subcommittee
of the human resources and
remuneration committee
reviews the valuations before
recommending the values for
approval to the human
resources and remuneration
committee. The subcommittee
consists of members of the
board: Craig Enenstein (chair)
and Steve Pacak.
Reports from the valuer and
the valuations subcommittee
are submitted to the human
resources and remuneration
committee as part of their
approval process.
Once the human resources
and remuneration committee
approves the valuations and
resultant share prices, the
share prices will be updated
and participants can exercise
their SARs or SOs at these
updated prices in
accordance with the
trading-in-securities policy.
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Background and policy
continued
It is noted that, given the announcement of our intention to
decouple Avito operationally from the group prior to the end of the
financial year and the subsequent announcement of our intended
sale of Avito, the board cannot yet determine the FY22 Global
Ecommerce share price for the purpose of settling and issuing
awards, until the sale of that business has been concluded. We will
inform shareholders as soon as practicable. Until such time, the
SARs plan remains closed.
Figure 1
Ecommerce portfolio and SARs performance 2019 to 2021
2019
2020
2021
Ecommerce valuation
(US$’m)
18 844 22 149 39 109
Ecommerce valuation
growth
30.7% 17.5% 76.6%
SAR share price
(US$’m)
35.95 41.47 64.28
Notional shares
13 102 799 13 351 913 15 210 390
Governance
Recruitment policy
On the appointment of a new executive director, their package will
typically be in line with our remuneration policy. Tofacilitate
recruitment, it may be necessary to ‘buy out’ remuneration forfeited
on joining the company. This will be considered on a case-by-case
basis and cash or LTI may be used.
Termination policy
Payments in lieu of notice may be made to executive directors,
comprising salary for the unexpired portion of the notice period.
Such payments may be phased. On cessation, there is no
entitlement to an annual performance-related incentive (STI).
However, the committee retains the discretion to award a bonus to
a leaver during the financial year, taking into account the
circumstances of their departure, considering pro-rating for time
and actual performance achieved. There is no entitlement to a
particular severance package provided for in the executive
directors’ contracts.
Malus and clawback
Malus and clawback provisions apply to the STI and LTI awarded
to executive directors and the direct reports of the CEO, such that
all or part of the unpaid STI may be modified or cancelled and all
or part of the unvested LTI may be modified or cancelled and all
or part of the vested LTI may be claimed back. Malus and
clawback provisions may be invoked in case of certain material
events, including cases of material financial misstatement or gross
misconduct on the part of the executive director or directs of the
CEO. In the financial year ended 31 March 2022, no malus and/or
clawback was applied to any remuneration of the executive
directors or any of the CEO’s direct reports.
Service contracts
Executive directors’ contracts comply with terms and conditions in
the relevant local jurisdiction.
Bob van Dijk
Basil Sgourdos
Date of
appointment
atthe group
1 August 2013 1 August 1995
Date of
appointment to
current position
1 April 2014 1 July 2014
Employer
noticeperiod
Six months
Three months
Other non-executive roles
At 31 March 2022, Bob van Dijk was a non-executive director of
Booking Holdings Inc.
Basil Sgourdos does not hold any board positions outside of the
Prosus and Naspers groups.
Shareholding requirement for the CEO
To reflect the balance of the underlying value of the economic
interests between Naspers and Prosus, the CEO is required to
maintain a Naspers shareholding of four times his annual salary
and a Prosus shareholding of six times his annual salary. He has a
requirement of rebalancing his current holding of 10 times annual
salary in Naspers shares by the end of FY23 while maintaining an
overall combined holding in Naspers and Prosus shares of 10
times annual salary.
121
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Background and policy
continued
Non-executive directors’
remuneration policy
The fee structure for non-executive directors has been designed to
ensure we attract, retain and appropriately compensate a diverse
and internationally experienced board of non-executive directors,
given the highly competitive markets in which we operate, and the
global competition we face.
Non-executive directors receive an annual fee as opposed to a fee
per meeting, which recognises their ongoing responsibility for
effective control of the company. They may also receive an
additional fee for group board committees and subsidiary boards,
to reflect the additional responsibilities and associated time
commitment. Remuneration is reviewed regularly and is not linked
to the company’s share price or performance. Non-executive
directors do not qualify for share allocations under the group’s
incentive schemes.
The remuneration of non-executive directors is determined
following regular benchmarking that primarily considers
international comparators in the consumer internet and media
sectors, as well as top 10 AEX-listed and JSE-listed companies.
Dual responsibilities
Non-executive directors receive no additional compensation for
their dual responsibilities to Naspers and Prosus. However, the
aggregate cost of their compensation is currently allocated 70% to
Prosus and 30% to Naspers. The split was determined based on
the underlying assets and the amount of time required to ensure
that sufficient time is allocated to assume the dual responsibilities.
Non-executive directors’ terms of appointment
The board has procedures for appointing and orienting directors.
The nominations committee periodically assesses the skills
represented on the board and determines whether these meet the
company’s needs. Annual self-evaluations are done by the board
and its committees. Directors are invited to give their input in
identifying potential candidates and we frequently engage the
services of a reputable search firm. Members of the nominations
committee propose suitable candidates for consideration by the
board. A fit-and-proper evaluation is performed for each
candidate.
Retirement and re-election of non-executive directors
The governance structures of Prosus and Naspers substantially
mirror each other. Prosus and Naspers have an identical one-tier
board structure of executive and non-executive directors.
All non-executive directors are subject to retirement and re-election
by shareholders every three years. The names of non-executive
directors submitted for election or re-election are accompanied by
brief biographical details to enable shareholders to make an
informed decision on their election. The reappointment of
non-executive directors is not automatic.
Shareholder engagement
During the 2022 financial year, we engaged with our shareholders
by way of regular (online) roadshows, and there are frequent
discussions with our major shareholders, including on the topic of
remuneration. We continue to engage with investors on
remuneration topics.
We have outlined the committee’s decision process on
remuneration on page 116. A remuneration section is included on
our Investor pages on our website at
www.prosus.com
, including a
questions-and-answers video with the chair of the human resources
and remuneration committee, Craig Enenstein.
For the full remuneration policy, refer to
www.prosus.com/about/
policies
.
122
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
Aligning remuneration to our strategy and performance
In this section we outline how our remuneration policy for executive directors has been implemented during FY22 and how we intend to
operate it during FY23. All decisions in relation to executive remuneration have been made in line with our remuneration policy for this
financial year, reflecting our business performance and with the global impact of the pandemic in mind.
Our strategy
•
We partner with local entrepreneurs to build global technology leaders.
•
We operate at the intersection of high-growth markets and technology to address major societal needs
at scale.
•
Build sustainable leadership positions in high-growth markets.
•
Build businesses with big potential to address societal needs.
Our business priorities
•
Classifieds
•
Food Delivery
•
Edtech
•
Payments and Fintech
•
Etail
•
Ventures
•
Social and Internet
Platforms
Our financial
highlights
1
(all figures from
continuing operations)
•
Revenue: US$35.6bn, up 24% (24%).
•
Trading profit: Down 10% (6%) to US$5.0bn.
•
Core headline earnings, the board’s measure of sustainable operating performance: Down 23% (19%) on
last year at US$3.7bn.
Our operating
highlights
1
•
Ecommerce revenue of US$9.8bn for the year grew 58% (51%). Strong growth was seen across all our
core segments. Each segment reported strong growth and profitability at the core and during the period
we increased our level of investment on the back of that strength to expand the market opportunity for
each segment and strengthen the underlying ecosystems of underlying businesses. This increased
investment resulted in aggregated trading losses increasing to US$1 111m, from just US$429m in the
prioryear.
•
Classifieds: OLX Group revenue of US$2.98bn grew 86% (93%) from US$1.6bn in the prior year. This was
largely driven by OLX Autos, which grew 158% (173%) year on year. Despite continued aggressive
investment in the autos transaction business, pay-and-ship, and people and technology to build capacity
for the next growth phase, trading profit was maintained largely at last year’s level as the segment
reported a trading profit of US$25m (FY21: US$9m).
•
Food Delivery portfolio companies continued to benefit from economies of scale and delivered strong
growth. Total orders and gross merchandise value (GMV) grew 53% and 60% (59%) respectively,
translating into 101% (77%) growth in revenue to US$3bn in the current year. While restaurant delivery
platforms are nearing breakeven, the investment in adjacencies and growth initiatives has contributed to
the increase in the Food Delivery segment’s trading losses from US$355m in FY21 to US$724m in FY22.
•
The Payments and Fintech segment continued to benefit from the shift to digital payments. Revenue grew
38% (45%) to US$796m driven by strong performance in the India payment business and a strong
recovery in the credit business. The segments’ overall trading loss margin improved to negative 8% as
trading losses reduced from US$68m in the prior year to US$60m.
•
Edtech grew revenue by 270% (55%) to US$425m. During the financial year, we made several investments
and acquisitions, most notably the acquisition of a controlling stake in Stack Overflow and acquisitions
within the BYJU’S group, leading to trading losses increasing to US$117m from US$14m in the prior year.
Education remains a significant and high-potential sector with compelling secular tailwinds such as
population growth in emerging markets.
•
Etail: eMAG reported a trading loss of US$34m for the year. eMAG group revenues increased by 3%
representing revenue of US$2.3bn. eMAG in Bulgaria performed particularly well.
Remuneration
outcome FY22
•
We have largely met the targets set in our business plans, including financial performance, except for
achieving core headline earnings including Tencent. With the significant volatility currently effecting the
global capital markets, there are many factors that have led to an increase in the discount. Some of
these factors are within the control of the group, while others are not. We acknowledge that the discount
has risen to an unacceptable level and that taking action to reduce it while still executing the group’s
strategy, should be a top priority. To that end, we are committed to taking action on controllable uses.
The next page contains information on the annual change of CEO compensation linked to the
performance of the company, as well as the FY22 remuneration for the CEO and CFO as shown in the
single-figure table. The outcomes of STI linked to all group financial goals and strategic, operational and
ESG goals are disclosed on pages 126 and 127.
1 In presenting and discussing our performance, we use certain alternative performance measures not defined by IFRS, referred to as non-IFRS-EU financial measures, alternative performance
measures or APMs. Such measures include economic-interest basis information; trading profit; adjusted EBITDA; headline earnings; core headline earnings; and growth in local currency, excluding
acquisitions and disposals. Numbers included in brackets represent the equivalent measure on the basis of growth in local currency, excluding acquisitions and disposals.
123
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Aligning remuneration to our strategy
Compensation is substantially ‘at risk’ and longer term
Executive directors’ remuneration is designed to drive the long-term
success of the company. In FY22, the CEO remuneration comprised
91% variable pay and for the CFO that was 88%.
Of the executives’ FY22 LTI awards, 92.5% was geared towards
PSUs and SARs, which incentivise core-business-value growth,
excluding Tencent.
Figure 1
Fixed salary, STI and LTI for each executive as at 31
March 2022
Business performance and remuneration outcomes
Figure 2
Executive directors’ remuneration versus company
performance
FY22 %
FY21 %
FY20
4
%
CAGR
5
%
CEO remuneration
Cash
1
year-on-year change
(13)
5 9 0
LTI
2
year-on-year change
(2)
3
28
9CFO remuneration
Cash
1
year-on-year change
(9)
5
13
3LTI
2
year-on-year change
(2)
17
26
13
Company performance
Organic revenue growth
3
24
33
23 25
Organic revenue growth
3
(excluding Tencent)
50
51
32
39
Ecommerce share price growth
footnote 6
55
15
n/a
1 Base salary + benefits + actual bonus payout, using the currency in which the CEO (in €) and
CFO (in US$) are paid.
2 Fair value at grant, using the currency (US$) in which we grant LTIs.
3 Metric, excluding impact of foreign exchange (FX) and M&A.
4 FY20 growth measured from date of listing. It is noted that all remuneration is presented on
a full-year basis and at 100%, including the cost that is apportioned to Naspers.
5 Period CAGR is between FY20 and FY22.
6 Given the announcement of our intention to decouple Avito operationally from the group
prior to the end of the financial year and the subsequent announcement of our intended sale
of Avito, the board cannot yet determine the FY22 Global Ecommerce share price for the
purpose of settling and issuing awards, until the sale of that business has been concluded.
Bob Van Dijk
%
9
9
82
Basil Sgourdos
%
12
12
76
Single-figure table FY22 remuneration
Table 1 shows a single figure of remuneration and the implementation of the remuneration policy in FY22 for the executive directors.
€’000
Variable remuneration
Pension
Other
benefits
4
Total
remuneration
5
Proportion of
fixed and
variable
remuneration
Executive director
Base salary
STI
1
LTI
2,3
PSUs
SARs
SOs
Bob van Dijk, CEO
1 296 3 778
810
6 642873 85 41
13 52510%/90%
Basil Sgourdos, CFO
1 085 2 239
781
3 936517 85 13
8 65613%/87%
US$’000
Variable remuneration
Pension
Other
benefits
4
Total
remuneration
5
Proportion of
fixed and
variable
remuneration
Executive director
Base salary
STI
1
LTI
2,3
PSUs
SARs
SOs
Bob van Dijk, CEO
1 435 4 499 1 029
897
7 88494 45
15 8839%/91%
Basil Sgourdos, CFO
1 200 2 666
864
4 672610 94 15
10 12212%/88%
1 Actual payout over FY22 performance; achievement of STI goals is shown on page 125 of this remuneration report.
2 Represents the grant date fair value in accordance with IFRS 2 of awards made during FY22, assuming on-target vesting for PSUs. The actual value accruing to the executive will depend on the
real value created over the time of the award. PSUs and SOs will be partly settled in Naspers shares (approximately 72.5%) and partly in Prosus shares (approximately 27.5%), aligned with the
free-float ownership in Naspers|Prosus at time of grant. The figures disclosed in the 2021 remuneration report were estimated and therefore differ slightly from the figures reported in this table.
3 The IFRS 2 expense recognised for unvested and vested but unexercised LTI awards as at 31 March 2022 is -US$27m (-€23.3m) for the CEO and US$4.3m (€3.7m) for the CFO and does not reflect
the impact of the non-adjusting subsequent event regarding the intended sale of Avito. The total IFRS 2 expense is shown in note 41 – Related party transactions and balances (executive directors
remuneration) of the consolidated financial statements.
4 Medical insurance, life and disability insurance.
5 Executive directors are executive directors of both Naspers and Prosus. The costs of their remuneration as executive directors of these entities are split 10/90 between Naspers and Prosus. The
remuneration paid to the executive directors reconciles with the executive directors’ remuneration as disclosed in note 41 of the consolidated financial statements. In there, we show base pay, STI,
pension and benefits at 90% of the aggregate cost as tabled in this remuneration report, plus the full IFRS 2 expense of the LTI per this footnote 3, minus the FY22 LTI awards in fair value at grant,
as shown in this single-figure table.
124
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
CEO’s remuneration in comparison to average employee
remuneration
As we operate in high-growth economies where socio-economic
disparity can be large, societal fairness is very important to us. We
take our responsibilities in that respect seriously and ensure that
our pay practices around the world are fair and competitive and
well above minimum wage standards. Pay is an important aspect,
but not the only consideration. In general, our people join us
because of the opportunity to do meaningful work where they can
make a difference and can learn and grow.
When reviewing the CEO’s remuneration, the human resources and
remuneration committee takes into account the employee
remuneration globally across the group.
As a consumer internet company we have a wide geographical
footprint. Most of our activities and employees are based in
high-growth countries, including India, Brazil, Central and Eastern
Europe, Russia
1
and South Africa. On a global level, the CEO pay
ratio versus employees (including LTI) would be 340:1 (FY21: 316:1,
FY20: 311:1. The increase versus last year is due to the now fully
amortised relatively lower historical LTI grant). However, we do not
consider the pay ratio to be an appropriate measure of fairness
given the widely different pay levels that are observed in the
countries where we operate. If we compare CEO pay versus
employees in the Netherlands it shows a ratio of 40:1 (FY21: 19:1,
FY20: 22:1. (Note: the increase for the Dutch ratio versus last year
relates to the more junior employee profile in our recently acquired
GoodHabitz business).
Also, as shown on page 124 of this remuneration report, the
pay-at-risk portion for the CEO and, within that, more specifically
LTI, weighs heavily in our total executive remuneration mix, as is
typically found within the consumer internet and technology sector
in which we compete for talent. For completeness sake we have,
therefore, also reviewed the pay ratios excluding LTI, showing a
ratio of 71:1 (FY21: 75:1. FY20: 72:1) globally and 14:1 (FY21: 6:1,
FY20: 8:1) for the Netherlands.
The ratios are obtained by dividing the FY22 total remuneration for
the CEO by the FY22 average total remuneration of all other
employees. This includes salaries, wages, on-target bonus, pension
and benefits for employees, excluding contractors and CEO
remuneration. It also excludes training and development that we
offer to our employees. Details of the staff costs can be found in
note 14 on page 181 of the consolidated financial statements.
Competitive pay – knowledge workers
We review the pay levels of our staff at least annually and in
relation to pay in the markets and countries that we operate in, our
reward levels are competitive. We see the effectiveness of our
reward philosophy and practices confirmed via our formalised
employee engagement surveys. Most employees find that they are
paid fairly, relative to similar jobs in other companies, reporting a
high satisfaction level that is above external benchmarks.
Fairness
We strive to deliver fair and consistent remuneration across all our
business operations and this includes temporary and permanent
employees, contractors, consultants and trainees. Irrespective of
the classification of the engagement, we ensure that our pay
practices around the world are fair, competitive and above local
minimum wage standards. We ensure that critical benefits and
protection for our entire workforce are in line with the markets in
which we operate.
1
As announced before the end of our financial year, we have decoupled from our Russian
businesses.
Pay equality
Maintaining pay equality is embedded in our ways of working,
where we compare compensation of groups of people, for
example women versus men, performing in similar jobs. We
conduct calibrations across the group as a standard process
before (annual) reward decisions are taken, working towards
closing unjustified pay gaps, should they exist.
Remuneration – response to the ongoing Covid-19 pandemic
When we entered the pandemic in 2020, we took prudent
executive remuneration decisions. Executive directors and the
directs of the CEO did not receive a pay increase for FY21 and LTI
awards were deferred to September 2020. During FY21, competing
in a sector that performed exceptionally well, we exceeded our
business plan and delivered financial performance ahead of the
budget as originally set pre-Covid-19. This performance was
reflected in our remuneration decisions for FY22 and the CEO and
CFO were granted LTI awards at similar levels as in FY21.
For employees below the executive directors and the directs of the
CEO, pay reviews took their regular course during FY22, allowing
us to address the demands of increasingly scarce technology
talent.
STI – FY22 goals and achievements
STI is based on financial, strategic, operational and sustainability
performance targets that are tailored for each role.
The minimum STI payout was 0% of base salary. The target and
maximum STI opportunity are the same at 100% of base salary, in
other words, there is no opportunity to overachieve on bonus
payout.
All STI awards are paid out in cash.
Measurements for bonus achievement were based on the business
plan for FY22.
We disclose the STI goals and achievements for FY22. STI goals
are reflective of the annual business plan and many goals are
representative of a multiyear effort, for example, to win new
markets or increase our customer base. We believe that showing
our competitors details of the goal targets before the financial year
in order to support greater transparency, is not in the best interests
of our shareholders. However, at the end of the new financial year
we will be disclosing the FY23 targets in retrospect. Clearly, we
have highlighted in the annual report metrics or developments for
FY22 and FY23 that were included in the STI of the executive
directors.
Strategic, operational and sustainability performance measures for
both executive directors accounted for 50% of the total bonus
opportunity. Strategic and operational performance measures
include financial objectives on the underlying business’
performance.
The assessment of the financial goal achievement excludes M&A.
FY20 PSU award vesting – delayed
The first PSU awards were due to vest in June 2022 and will be
settled in Naspers shares
1
, based on the set number of shares at
the time of grant. The performance condition as defined for the
PSUs, measures the three-year CAGR valuation of the Ecommerce
portfolio against a basket of global peers. Given the
announcement of our intention to decouple Avito operationally
from the group prior to the end of the financial year and the
subsequent announcement of our intended sale of Avito, the board
cannot yet determine the achievement of the PSU performance
condition until the valuation of that business has been concluded.
We will inform shareholders as soon as practicable of the impact
to the FY20 PSUs. The vesting for participants will be delayed until
such time.
125
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Investing for long-term value creation
Across our consumer internet businesses, we compete against both
local and global ‘tech titans’. Reaching scale relatively quickly, in
terms of consumer numbers and markets served, is of paramount
importance in this environment. It requires significant investment
and often involves incurring losses in the early years. We make a
deliberate choice to invest in these businesses, knowing that
short-term profitability and free cash flow may be negative. As
such, the financial architecture is quite different to that of traditional
business models. The diversity in our portfolio allows us to sustain
this investment phase. It is, therefore, appropriate to incentivise
management to strike the right balance between investing to grow
the business and outpace the competition in the long term and
driving free cash flow generation and to not sacrifice the former for
the short-term benefit of the latter.
Further details can be found in the 2022 annual report on
page126.
Outcomes of STIs
The outcomes as shown in figure 1 on this page and figure 1 on
page 127 resulted in annual bonus payout levels of €810 253 or
62.5% of base salary for Bob van Dijk and US$864 246 or 72% of
base salary for Basil Sgourdos.
In FY22, a portion of the CEO’s and CFO’s STIs was associated with
developing executable solutions to reduce the discount. Although
the voluntary share exchange programme was developed and
implemented, the discount increased during FY22, and therefore
the committee used its discretion to determine that this objective
has not been achieved.
All financial, strategic, operational and ESG goals are measurable
and validated.
Bob van Dijk
Maximum STI opportunity: 100% base salary
Figure 1
– FY22 goals and achievements
Group financial goals
Weighting
%
Description
Further information can be
found in the annual report
on page
Outcome
Actual
payout
Revenue
10.0
Achieve revenue target
(on an economic-interest basis and
excluding M&A)
52
€0
Core headline earnings
(including Tencent)
1
10.0
Achieve core headline earnings
attarget, including Tencent
54
€0
Core headline earnings
(excluding Tencent)
1
20.0
Achieve core headline earnings
attarget, excluding Tencent
54
€259 281
Free cash flow
10.0
Achieve free cash outflow at target54
€129 641
50.0
€388 922
Strategic, operational and ESGgoals
Weighting
%
Description
Further information can be
found in the annual report
on page
Outcome
Actual
payout
Classifieds
10.0
Deliver organic topline growth and
organic trading profit growth at target
55
€129 641
Food Delivery
10.0
Deliver organic topline growth and
manage organic trading loss at target
59
€129 641
Payments and Fintech
5.0
Deliver organic topline growth and
manage organic trading loss at target
62
€64 820
B2C
5.0
Deliver organic topline growth and
organic trading profit at target
69
€0
Edtech
5.0
Deliver organic topline growth and
manage organic trading loss at target
66
*
€32 410
Holding company discount
10.0
Take structural action to address the
holding company discount to NAV
8
€0
Sustainability: Diversity and
inclusion
2.5
Promote diversity and inclusion in the
company and ensure high employee
engagement
25
€32 410
Sustainability: Climate
sustainability
2.5
Be carbon-neutral on scope 1 and
scope 2 emissions at the group level
by year-end FY22
43
€32 410
50.0
€421 332
1 Core headline earnings is an alternative performance measurement. Please refer to ‘Other information – Non-IFRS financial measures and alternative performance indicators’ on page 142 of the
annual report.
* The following target for Edtech was achieved: Organic topline revenue growth.
Achieved Not achieved
126
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Figure 1
– FY22 goals and achievements
Basil Sgourdos
Maximum STI opportunity: 100% of base salary
Group financial goals
Weighting
%
Description
Further information can be
found in the annual report
on page
Outcome
Actual
payout
Core headline earnings
(including Tencent)
1
8.0
Achieve core headline earnings at
target, including Tencent
54
US$0
Core headline earnings
(excluding Tencent)
1
17.0
Achieve core headline earnings at
target, excluding Tencent
54
US$204 058
Free cash flow
25.0
Achieve free cash outflow at target54
US$300 085
50.0
US$504 143
Strategic, operational and ESGgoals
Weighting
%
Description
Further information can be
found in the annual report
on page
Outcome
Actual
payout
Holding company discount
15.0
Take structural action to address the
holding company discount to NAV
8
US$0
Taxation
12.5
Prudent and optimal tax management
structure
79
US$150 043
Investor relations
10.0
Ensure the IR programme is effective
and impactful
98
*
US60 017
Group finance
5.0
Develop finance team to drive
excellent delivery
25
US$60 017
Governance, internal audit
and risk management
2.5
Ensure that effective systems of internal
control are operated throughout the
group’s controlled entities
97
US$30 009
Sustainability: Diversity and
inclusion
2.5
Promote diversity and inclusion in the
function and ensure high employee
engagement
25
US$30 009
Sustainability: Climate
sustainability
2.5
Be carbon-neutral on scope 1 and
scope 2 emissions at the group level
by year-end FY22
43
US$30 009
50.0
US$360 102
1 Core headline earnings is an alternative performance measurement. Please refer to ‘Other information – Non-IFRS financial measures and alternative performance indicators’ on page 126 of the
annual report.
* The investor relations target is partly achieved.
127
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
LTI over FY22
LTI awards represent a significant portion of total compensation
and are designed to incentivise the delivery of sustainable
longer-term growth and provide alignment with our shareholders.
The entirety of our executives’ LTIs is determined by the
performance of the company and growth in the valuation of the
underlying assets and, as such, is deemed ‘at risk’. In table 1 below
and table 1 on page 130, we have set out information on unvested
LTIs, including awards made during FY22 as well as awards that
have vested
4
during FY22. Details of the group’s LTI schemes
settlement are disclosed in note 36 on page 215 of the
consolidated financial statements on our website at
www.prosus.
com
.
It is noted that, given the announcement of our intention to
decouple Avito operationally from the group prior to the end of the
financial year and the subsequent announcement of our intended
sale of Avito, the board cannot yet determine the FY22 Global
Ecommerce share price for the purpose of settling and issuing
awards, until the sale of that business has been concluded. The
trading of SARs and vesting of PSUs will be delayed until such time.
Table 1 – Overview of LTI awards for Bob van Dijk
Main conditions of share plans
Number of unvested awards
1
Value in US$
Bob van Dijk
Performance
metric
Award
date
Vesting
date(s)
Expiry date
Strike
priceof
option/SAR
Opening
balance
1April 2021
(unvested)
Awarded
during
theyear
Vested
during
theyear
Closing
balance
31March
2022
(unvested)
Potential
gain of
awards
vested
during
theyear
atvesting
date
2
Fair
valueof
unvested
awards
31March
2022
3
Naspers
Performance
Share Units
(PSUs)
Three years
cliff – TSR
09/09/2019
footnote 4
n/a
– –
24 527
–24 527
– 4 219 279
21/09/2020 21/09/2023 n/a
– –
48 302
–48 302
– 5 630 946
21/06/2021 21/06/2024 n/a
– –
27 796
–27 796
– 3 240 399
Subtotal
72 829 27 796
–
100 625–
13 090 624 Prosus
Performance
Share Units
(PSUs)
Three years
cliff – TSR
26/08/2021 26/08/2024 n/a
– –
26 993
–26 993
– 1 497 523
Subtotal
–
26 993
–26 993
– 1 497 523
Naspers
Global
Ecommerce
Share
Appreciation
Rights (SARs)
Four-year
measurement
of value
growth of
ecommerce
business units
15/08/2017 15/08/2021 15/08/2027 27.25
146 789
–
(146 789)–
5 523 670 –
15/08/2017 15/08/2022 15/08/2027 27.25
146 789
– –
146 789–
4 409 542 08/09/2017 08/09/2021 08/09/2027 27.60
35 051
–
(35 051)–
1 370 845 –
08/09/2017 08/09/2022 08/09/2027 27.60
35 055
– –
35 055–
1 040 783 25/06/2018 25/06/2021 25/06/2028 33.57
104 608
–
(104 608)–
3 184 268 –
25/06/2018 25/06/2022 25/06/2028 33.57
104 610
– –
104 610–
2 481 349 16/07/2019 16/07/2021 16/07/2029 36.70
109 208
–
(109 208)–
3 163 756 –
16/07/2019 16/07/2022 16/07/2029 36.70
109 208
– –
109 208–
2 248 593 16/07/2019 16/07/2023 16/07/2029 36.70
109 208
– –
109 208–
2 248 593 21/09/2020 21/09/2021 21/09/2030 41.98
62 571
–
(62 571)–
1 470 419 –
21/09/2020 21/09/2022 21/09/2030 41.98
62 571
– –
62 571–
957 962 21/09/2020 21/09/2023 21/09/2030 41.98
62 571
– –
62 571–
957 962 21/09/2020 21/09/2024 21/09/2030 41.98
62 572
– –
62 572–
957 977 21/06/2021 21/06/2022 21/06/2031 63.89
–
39 092
–39 092
– –
21/06/2021 21/06/2023 21/06/2031 63.89
–
39 092
–39 092
– –
21/06/2021 21/06/2024 21/06/2031 63.89
–
39 092
–39 092
– –
21/06/2021 21/06/2025 21/06/2031 63.89
–
39 092
–39 092
– –
Subtotal
1 150 811 156 368 (458 227) 848 952 14 712 956 15 302 760
128
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Main conditions of share plans
Number of unvested awards
1
Value in US$
Bob van Dijk
Performance
metric
Award
date
Vesting
date(s)
Expiry date
Strike
priceof
option/SAR
Opening
balance
1April 2021
(unvested)
Awarded
during
theyear
Vested
during
theyear
Closing
balance
31March
2022
(unvested)
Potential
gain of
awards
vested
during
theyear
atvesting
date
2
Fair
valueof
unvested
awards
31March
2022
3
Naspers N
Share
Options
(SOs)
Four-year
share price
growth
05/07/2016 05/07/2021 05/07/2026
2 056.88 49 302
–
(49 302)–
7 035 031 –
08/09/2017 08/09/2021 08/09/2027
2 755.72 12 932
–
(12 932)–
1 089 707 –
25/06/2018 25/06/2021 25/06/2028
3 100.99 15 285
–
(15 285)–
1 295 283 –
25/06/2018 25/06/2022 25/06/2028
3 100.99 15 287
– –
15 287–
–
16/07/2019 16/07/2021 16/07/2029
3 494.00 3 958
–
(3 958)–
230 118 –
16/07/2019 16/07/2022 16/07/2029
3 494.00 3 958
– –
3 958–
–
16/07/2019 16/07/2023 16/07/2029
3 494.00 3 961
– –
3 961–
–
21/09/2020 21/09/2021 21/09/2030
2 827.88 3 552
–
(3 552)– –
–
21/09/2020 21/09/2022 21/09/2030
2 827.88 3 552
– –
3 552–
–
21/09/2020 21/09/2023 21/09/2030
2 827.88 3 552
– –
3 552–
–
21/09/2020 21/09/2024 21/09/2030
2 827.88 3 552
– –
3 552–
–
13/07/2021 13/07/2022 13/07/2031
2 819.37
–
2 316–
2 316–
–
13/07/2021 13/07/2023 13/07/2031
2 819.37
–
2 316–
2 316–
–
13/07/2021 13/07/2024 13/07/2031
2 819.37
–
2 316–
2 316–
–
13/07/2021 13/07/2025 13/07/2031
2 819.37
–
2 316–
2 316–
–
Subtotal
118 891 9 264 (85 029) 43 126 9 650 140
–
Prosus N
Share
Options
(SOs)
Four-year
share price
growth
26/08/2021 26/08/2022 26/08/2031 71.61
–
2 295
–2 295
– –
26/08/2021 26/08/2023 26/08/2031 71.61
–
2 295
–2 295
– –
26/08/2021 26/08/2024 26/08/2031 71.61
–
2 295
–2 295
– –
26/08/2021 26/08/2025 26/08/2031 71.61
–
2 298
–2 298
– –
Subtotal
–
9 183
–9 183
– –
Total
1 342 531 229 604 (543 256) 1 028 879 24 363 096 29 890 907
1 The aggregated cash-settled liability of vested unexercised SARs is included in the aggregated cash-settled liability in note 36 of the consolidated financial statements on page 218. The share-
based compensation reserve of vested but unexercised SO is included in the aggregated retained earnings balance shown on the consolidated statement of changes in equity of the
consolidated financial statements on page 150.
2 The potential gain of awards vested in FY22 is calculated by taking the difference between the closing share price on vesting date and the offer price and multiplying that difference by the
number of SOs/SARs that vested in FY22. The value does not necessarily accrue to the individual. It is available to them should they have chosen to exercise (buy and/or sell shares) on or after the
date the SOs or SARs vested. As part of the Prosus listing and capitalisation issue, the MIH Internet Holdings B.V. and Naspers Restricted Stock Plan trusts elected to receive Prosus shares. In line
with the capitalisation issue one (1) Prosus share is linked to each SO/PSU. The value of the Prosus share is included where relevant.
3 The fair value of unvested awards on 31 March 2022 is calculated by taking the difference between the closing share price on 31 March 2022 and the offer price (if applicable) and multiplying
that difference by the number of unvested SOs/SARs/PSUs as at 31 March 2022 and assuming 100% vesting for the PSU awards. The closing share price applied for the Naspers Global
Ecommerce SAR Plan reflects the best estimate share price as at 31 March 2022 and is in line with the group’s IFRS 2 liability on page 218 of the consolidated financial statements, which does not
reflect the impact of the non-adjusting subsequent event regarding the intended sale of Avito. All impacted LTI plans, including the Naspers Global Ecommerce SAR Plan, will remain under a ban
on trade until such time as the sale of Avito is successfully concluded and, accordingly, participants will not be able to exercise their vested awards. As part of the Prosus listing and capitalisation
issue, the MIH Internet Holdings B.V. and Naspers Restricted Stock Plan trusts elected to receive Prosus shares. In line with the capitalisation issue one (1) Prosus share is linked to each SO/PSU.
The value of the Prosus share is included where relevant. The actual value accruing to the executive will depend on the real value created over the time of the award.
4 Given the announcement of our intention to decouple Avito operationally from the group prior to the end of the financial year and the subsequent announcement of our intended sale of Avito, the
board cannot yet determine the achievement of the PSU performance condition until the sale of that business has been concluded. The vesting date will be delayed accordingly.
Table 1 – Overview of LTI awards for Bob van Dijk
(continued)
129
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Table 1 – Overview of LTI awards for Basil Sgourdos
Main conditions of share plans
Number of unvested awards
1
Value in US$
Basil
Sgourdos
Performance
metric
Award
date
Vesting
date(s)
Expiry date
Strike
priceof
option/SAR
Opening
balance
1April 2021
(unvested)
Awarded
during
theyear
Vested
during
theyear
Closing
balance
31March
2022
(unvested)
Potential
gain of
awards
vested
during
theyear
atvesting
date
2
Fair
valueof
unvested
awards
31March
2022
3
Naspers
Performance
Share Units
(PSUs)
Three years
cliff – TSR
09/09/2019
footnote 4
n/a
– –
12 718
–12 718
– 2 187 825
21/09/2020 21/09/2023 n/a
– –
28 623
–28 623
– 3 336 809
21/06/2021 21/06/2024 n/a
– –
16 472
–16 472
– 1 920 271
Subtotal
41 341 16 472
–
57 813–
7 444 906 Prosus
Performance
Share Units
(PSUs)
Three years
cliff – TSR
26/08/2021 26/08/2024 n/a
– –
15 995
–15 995
– 887 374
Subtotal
–
15 995
–15 995
– 887 374
Naspers
Global
Ecommerce
Share
Appreciation
Rights (SARs)
Four-year
measurement
of value
growth of
ecommerce
business units
29/08/2016 29/08/2021 29/08/2026 20.45
32 603
–
(32 603)–
1 464 853 –
15/08/2017 15/08/2021 15/08/2027 27.25
25 353
–
(25 353)–
954 033 –
15/08/2017 15/08/2022 15/08/2027 27.25
25 354
– –
25 354–
761 634 08/09/2017 08/09/2021 08/09/2027 27.60
21 017
–
(21 017)–
821 975 –
08/09/2017 08/09/2022 08/09/2027 27.60
21 020
– –
21 020–
624 084 25/06/2018 25/06/2021 25/06/2028 33.57
53 689
–
(53 689)–
1 634 293 –
25/06/2018 25/06/2022 25/06/2028 33.57
53 692
– –
53 692–
1 273 574 16/07/2019 16/07/2021 16/07/2029 36.70
56 626
–
(56 626) –
1 640 455 –
16/07/2019 16/07/2022 16/07/2029 36.70
56 626
– –
56 626–
1 165 929 16/07/2019 16/07/2023 16/07/2029 36.70
56 627
– –
56 627–
1 165 950 21/09/2020 21/09/2021 21/09/2030 41.98
37 079
–
(37 079)–
871 357 –
21/09/2020 21/09/2022 21/09/2030 41.98
37 079
– –
37 079–
567 679 21/09/2020 21/09/2023 21/09/2030 41.98
37 079
– –
37 079–
567 679 21/09/2020 21/09/2024 21/09/2030 41.98
37 080
– –
37 080–
567 695 21/06/2021 21/06/2022 21/06/2031 63.89
–
23 165
–23 165
– –
21/06/2021 21/06/2023 21/06/2031 63.89
–
23 165
–23 165
– –
21/06/2021 21/06/2024 21/06/2031 63.89
–
23 165
–23 165
– –
21/06/2021 21/06/2025 21/06/2031 63.89
–
23 166
–23 166
– –
Subtotal
550 924 92 661 (226 367) 417 218 7 386 966 6 694 225
130
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Table 1 – Overview of LTI awards for Basil Sgourdos
(continued)
Main conditions of share plans
Number of unvested awards
1
Value in US$
Basil
Sgourdos
Performance
metric
Award
date
Vesting
date(s)
Expiry date
Strike
priceof
option/SAR
Opening
balance
1April 2021
(unvested)
Awarded
during
theyear
Vested
during
theyear
Closing
balance
31March
2022
(unvested)
Potential
gain of
awards
vested
during
theyear
atvesting
date
2
Fair
valueof
unvested
awards
31March
2022
3
Naspers
NShare
Options
(SOs)
Four-year
share price
growth
29/08/2016 29/08/2021 29/08/2026
2 323.52 3 231
–
(3 231)–
290 772–
08/09/2017 08/09/2021 08/09/2027
2 755.72 1 444
–
(1 444)–
121 678–
25/06/2018 25/06/2021 25/06/2028
3 100.99 8 277
–
(8 277)–
701 410–
25/06/2018 25/06/2022 25/06/2028
3 100.99 8 277
– –
8 277– –
16/07/2019 16/07/2021 16/07/2029
3 494.00 2 052
–
(2 052)–
119 303–
16/07/2019 16/07/2022 16/07/2029
3 494.00 2 052
– –
2 052– –
16/07/2019 16/07/2023 16/07/2029
3 494.00 2 055
– –
2 055– –
21/09/2020 21/09/2021 21/09/2030
2 827.88 2 105
–
(2 105)– – –
21/09/2020 21/09/2022 21/09/2030
2 827.88 2 105
– –
2 105– –
21/09/2020 21/09/2023 21/09/2030
2 827.88 2 105
– –
2 105– –
21/09/2020 21/09/2024 21/09/2030
2 827.88 2 105
– –
2 105– –
13/07/2021 13/07/2022 13/07/2031
2 819.37
–
1 372–
1 372– –
13/07/2021 13/07/2023 13/07/2031
2 819.37
–
1 372–
1 372– –
13/07/2021 13/07/2024 13/07/2031
2 819.37
–
1 372–
1 372– –
13/07/2021 13/07/2025 13/07/2031
2 819.37
–
1 373–
1 373– –
Subtotal
35 808 5 489 (17 109) 24 188 1 233 163
–
Prosus Share
Options
(SOs)
Four-year
share price
growth
26/08/2021 26/08/2022 26/08/2031 71.61
– –
1 360
–1 360
–26/08/2021 26/08/2023 26/08/2031 71.61
–
1 360
–1 360
– –
26/08/2021 26/08/2024 26/08/2031 71.61
–
1 360
–1 360
– –
26/08/2021 26/08/2025 26/08/2031 71.61
–
1 362
–1 362
– –
Subtotal
–
5 442
–5 442
– –
Total
628 073 136 059 (243 476) 520 656 8 620 129 15 026 503
1 The aggregated cash-settled liability of vested unexercised SARs is included in the aggregated cash-settled liability in note 36 of the consolidated financial statements on page 218. The share-
based compensation reserve of vested but unexercised SO is included in the aggregated retained earnings balance shown on the consolidated statement of changes in equity of the
consolidated financial statements on page 150.
2 The potential gain of awards vested in FY22 is calculated by taking the difference between the closing share price on vesting date and the offer price and multiplying that difference by the
number of SOs/SARs that vested in FY22. The value does not necessarily accrue to the individual. It is available to them should they have chosen to exercise (buy and/or sell shares) on or after the
date the SOs or SARs vested. As part of the Prosus listing and capitalisation issue, the MIH Internet Holdings B.V. and Naspers Restricted Stock Plan trusts elected to receive Prosus shares. In line
with the capitalisation issue one (1) Prosus share is linked to each SO/PSU. The value of the Prosus share is included where relevant.
3 The fair value of unvested awards on 31 March 2022 is calculated by taking the difference between the closing share price on 31 March 2022 and the offer price (if applicable) and multiplying
that difference by the number of unvested SOs/SARs/PSUs as at 31 March 2022 and assuming 100% vesting for the PSU awards. The closing share price applied for the Naspers Global
Ecommerce SAR Plan reflects the best estimate share price as at 31 March 2022 and is in line with the group’s IFRS 2 liability on page 218 of the consolidated financial statements, which does not
reflect the impact of the non-adjusting subsequent event regarding the intended sale of Avito. All impacted LTI plans, including the Naspers Global Ecommerce SAR Plan, will remain under a ban
on trade until such time as the sale of Avito is successfully concluded and, accordingly, participants will not be able to exercise their vested awards. As part of the Prosus listing and capitalisation
issue, the MIH Internet Holdings B.V. and Naspers Restricted Stock Plan trusts elected to receive Prosus shares. In line with the capitalisation issue one (1) Prosus share is linked to each SO/PSU.
The value of the Prosus share is included where relevant. The actual value accruing to the executive will depend on the real value created over the time of the award.
4 Given the announcement of our intention to decouple Avito operationally from the group prior to the end of the financial year and the subsequent announcement of our intended sale of Avito, the
board cannot yet determine the achievement of the PSU performance condition until the sale of that business has been concluded. The vesting date will be delayed accordingly.
131
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Executive directors’ LTI exercised in FY22
Basil Sgourdos exercised Naspers SOs in the MIH Internet
Holdings B.V. Share Trust that were due to expire on 2 July 2022
and he disposed of the Naspers shares that he received. The full
net gain after tax was reinvested back into the group in the form of
Prosus N ordinary shares, which he bought on the open market.
The pre-tax gain amounted to US$2 418 642 and includes the value
of the Prosus shares linked to his Naspers SOs as a result of the
Prosus capitalisation issue in 2019. Details of the transaction are
summarised in the table on the right.
Figure 1
–
The balance of executive directors’ unvested LTIs
(based on potential value) as at 31 March 2022:
Bob van Dijk
%
44
5
0
0
51
Total
100
Basil Sgourdos
%
50
6
0
0
44
Total
100
Figure 2
– LTI exercised in FY22 by Basil Sgourdos
Date exercised
Number of SOs/
SARs
Gross gain
(pre-tax)
Naspers N
SOs
31 January
2022
11 124
US$1 502 965
Naspers N
SOs – linked
Prosus shares
31 January
2022
11 124
US$915 677
Shares purchased in the market
Since 1 April 2018, to avoid shareholder dilution as a result of
employee LTIs, the group has been purchasing Naspers and
Prosus shares on JSE/Euronext for the purpose of issuing new
Naspers SOs, Naspers PSUs, Naspers RSUs, Prosus SOs, Prosus
PSUs and Prosus RSUs to employees and settling gains made on
all share-based incentive schemes (prior to 31 March 2020).
In FY22, the group purchased Naspers N shares to the value of
US$38m (FY21: US$48m) and Prosus N shares to the value of
US$182m (FY21: US$65m) in the market, totalling US$220m (FY21:
US$113m). Details of these Naspers and Prosus share purchases
are summarised in figure 3 below and figure 1 on page 133
respectively.
Figure 3
– Prosus shares purchased in the market
2022
2021
Number of
shares
Purchase price
(US$)
2
Average market
price range (€)
Number of
shares
Purchase price
(US$)
2
Average
purchase price
range (€)
Prosus N.V. Share Award and Option
PlanTrust
1
2 064 211 182 002 007
42.44 and
84.58
670 032
64 703 088 77.40 and
108.81
1 The Prosus N.V. Share Award Plan is used to grant Prosus RSUs to employees of the group (executive directors are not eligible to receive RSUs) and PSUs to executive directors and eligible senior
management. The Prosus N.V. Share Option Plan is used to grant Prosus options to executive directors and eligible senior management. Shares are purchased on Euronext and the Johannesburg
Stock Exchange (JSE Limited) for non-South African and South African employees respectively.
2 Purchase price in euro (€) converted to US dollar (US$) by using the exchange rate on the date of purchase.
132
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Dilutive impact of group LTI schemes
The board has determined that no more than 5% of the current N
ordinary share capital may be used for purposes of share-based
incentive schemes.
LTI costs
LTIs across the group account for 17.2% of total staff costs, and 3.6%
of overall group costs, for example the cost of providing services
and sale of goods, selling, general and administration expenses.
The LTI costs decreased due to changes in valuation assumptions,
including share prices and volatility, as well as the impact of
allocations made and vesting of options. Further details can be
found in note 36 on page 216 of the consolidated financial
statements on our website at
www.prosus.com
.
Statement of compliance
Termination payments
No termination payments were made to executive and non-
executive directors on termination of employment or office in FY22.
Malus and clawbacks
Malus and clawback provisions apply to the STI and LTI awarded
to executive directors and the directs of the CEO. In FY22, no malus
or clawback was applied to any remuneration of the executive
directors and the directs of the CEO.
CEO shareholding requirement
The CEOs shareholding requirement of rebalancing his current
holding of 10 times annual salary in Naspers shares by the end of
FY23, while maintaining an overall combined holding in Naspers
and Prosus shares of 10 times annual salary, is already met.
Figure 1
– Naspers shares purchased in the market
2022
2021
Number of
shares
Purchase price
(US$)
2
Average market
price range (R)
Number of
shares
Purchase price
(US$)
2
Average
purchase price
range (R)
MIH Internet Holdings ShareTrust
1
77 813
16 125 917 2 467.00
to
2 978.27
107 101 19 444 686 2 978.39
to
3 111.41
MIH Holdings Share Trust
1
71 096
14 545 917 1 978.64
to
2 978.27
68 718 12 285 548 3 042.13
Naspers Restricted Stock PlanTrust 2 978.27 92 918 16 612 074 3 042.13
36 939
7 712 018Total
185 848
38 383 852 268 737 48 342 308
1 The MIH Internet Holdings Share Trust is used to grant Naspers options to our non-South African employees. The MIH Holdings Share Trust is used to grant Naspers options to our South African
employees.
2 Purchase price in rand (ZAR) converted to US dollar (US$) by using the exchange rate on the date of purchase.
133
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Looking forward to FY23
Given the increase in the discount to net asset value, we
determined for FY23 to make three material changes in CEO and
CFO remuneration. First, as is also suggested for the board, there
will be no increase to base salary. Second, there will be no
issuance of LTI for the financial year. Finally, a new discount-linked
STI is being put forth to ensure intense focus is put into material
reduction of the discount to net asset value.
We believe this one-year decision is prudent and consistent with
our commitment to ensure there is proper alignment between
executive and shareholder outcomes.
The special incentive, if approved by shareholders, will be a
discount-linked STI whereby the CEO and CFO will only be paid
on successful discount reduction. The aspiration is to create an
even greater focus on discount improvement and to align the
incentives outcome directly with shareholder outcomes. Moreover,
we believe that a discount reduction only deserves CEO and CFO
remuneration if the reduction holds. The above-mentioned special
incentive will be held in reserve until 31 March 2024 and
remeasured against a claw-back provision. After the first fiscal
year, the committee will evaluate the success of the special
incentive and determine whether another similar incentive should
be implemented for the subsequent financial year.
We believe strongly that discount reduction is fundamental to
maximising shareholder returns and desire to ensure the CEO’s
incentives are aligned with those of our shareholders. It is in this
light that, although LTI continues to be an important element in our
executive compensation, the committee decided not to award LTIs
for FY23. The committee does intend to award LTI in FY24.
Implementation of remuneration policy
continued
FY23 single-figure table
EUR’000
Variable remuneration
Pension
Other
benefits
5
Total
remuneration
6
Proportion of
fixed and
variable
remuneration
Executive director
Fixed
remuneration
1
Standard STI
2
Discount-
linked STI
3
LTI
4
Bob van Dijk, CEO
1 296 1 296 3 150 22%/78%
0
85 44
5 871Basil Sgourdos, CFO
1 085 1 085 1 807
0
85 15
4 07727%/73%
FY23 single-figure table
US$’000
Variable remuneration
Pension
Other
benefits
5
Total
remuneration
6
Proportion of
fixed and
variable
remuneration
Executive director
Fixed
remuneration
1
Standard STI
2
Discount-
linked STI
3
LTI
4
Bob van Dijk, CEO
1 435 1 435 3 486
0
94 49
6 49822%/78%
Basil Sgourdos, CFO
1 200 1 200 2 000
0
94 16
4 51027%/73%
1 The executive directors will not receive an increase in base salary for FY23.
2 This is the at-target and also maximum STI as a percentage to base salary. FY23 STI goals are shown on page 135 of this remuneration report.
3 This special cash incentive, if approved by shareholders, will be a discount-linked STI whereby the CEO and CFO will only be paid on successful discount reduction. This target amount is also the
maximum amount achievable. Any achievement pay-out on this FY23 discount-linked STI will be held in reserve until 31 March 2024 and remeasured against a claw-back provision.
4 There will be no FY23 LTI award for the executive directors.
5 Medical insurance, life and disability insurance.
6 Executive directors are executive directors of both Naspers and Prosus. Their remuneration as executive directors of these entities is currently split 10/90 between Naspers and Prosus.
Discount-linked STI
The special incentive, if approved by shareholders, will be a
discount-linked STI whereby the CEO and CFO will only be paid on
successful discount reduction. The aspiration is to create an even
greater focus on discount improvement and to align the incentives
outcome directly with shareholder outcomes. Moreover, we believe
that a discount reduction only deserves CEO and CFO
remuneration if the reduction holds. The above-mentioned special
incentive will be held in reserve until 31 March 2024 and
remeasured against a claw-back provision.
134
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
FY23 STI goals
In this report, we have disclosed the STI goals and achievements
for FY22. We believe that showing our competitors details of the STI
targets before the end of the financial year, is not in the best
interests of our shareholders, but from FY23 onwards, we will be
disclosing these targets retrospectively.
Bob van Dijk
Target and maximum STI opportunity: 100% base salary (Standard FY23 STI)
Group financial goals
Weighting %
Description
Maximum payout
Core headline earnings
(including
Tencent)
19.05%
Achieve core headline earnings at target, including Tencent
€
246 965
Free cash
flow
19.05%
Achieve free cash outflow at target
€
246 965
Strategic, operational and environment,
social and governance (ESG) goals
Weighting %
Description
Maximum payout
Ecommerce
financials
14.28%
Deliver organic topline growth at target, excluding Tencent
€
185 127
14.28%
Manage trading loss at target
€
185 127
Sustainability:
Diversity
and
inclusion
16.67%
Promote diversity and inclusion in the function and ensure high
employee engagement
€
216 111
Sustainability:
Climate
sustainability
16.67%
Reduce scope 1 and scope 2 emissions to zero at group level by
year-end FY23
€
216 111
Basil Sgourdos
Target and maximum STI opportunity: 100% of base salary (Standard FY23 STI)
Group financial goals
Weighting %
Description
Maximum payout
Core headline earnings
(including
Tencent)
19.05%
Achieve core headline earnings at target, including Tencent
US$228 665
Free cash flow US$228 665
19.05%
Achieve free cash outflow at targetStrategic, operational and ESG goals
Weighting %
Description
Maximum payout
Taxation
9.52%
Execute plans to navigate the changing global tax landscape US$114 272
Governance,
internal
audit
and
risk
management
9.52%
Ensure that effective systems of internal control are operated
throughout the group’s controlled entities
US$114 272
Balance sheet
9.52%
Take action to support our debt ratings responding to macro
impacts on the balance sheet
US$114 272
Sustainability:
Diversity
and
inclusion
16.67%
Promote diversity and inclusion in the function and ensure high
employee engagement
US$200 097
Sustainability: Climate
sustainability
16.67%
Reduce scope 1 and scope 2 emissions to zero at group level by
year-end FY23
US$200 097
All financial, strategic, operational and ESG goals are measurable
and validated.
The committee undertakes a thorough assessment to ensure that
targets are sufficiently stretched in the context of potential
remunerationdelivered.
135
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Non-executive directors
Non-executive directors’ fees
Given the global scale and complexity of the businesses that the
group operates and in which it has interests, it is important that
wecan attract and retain the best globally orientated board
members. The committee conducts a regular benchmarking
exercise to ascertain whether the fees for non-executive directors
are competitive, fair and reasonable.
Implementation of remuneration policy
continued
The committee is informed by the external market when reviewing
the fee structure and levels for our non-executive directors. This
includes primarily market fee levels for the Naspers and Prosus
industry peers internationally, as well as fee levels observed in
theTop 10 AEX and JSE companies.
At the August 2021 AGM, shareholders approved a 5% increase
ofthe non-executive directors’ fees for FY22 and FY23, based ona
recent review of the external market data and inputs from our
advisory partners. However, in view of the share performance,
theboard is proposing to defer the FY23 fee increase to FY24.
Non-executive directors’ fee development
2020
%
2021
%
2022
%
2023
%
(deferring
to 2024)
2024
%
Board 5 0 5 0 5
Committees
5 0 5 0 5
Trustees of group share schemes/other personnel funds
5 0 5 0 5
All members: Daily fees when travelling to and attending meetings outside home country
0 0 0 0 0
Note: Following the listing of Prosus N.V. (Prosus) on Euronext Amsterdam in September 2019, Naspers non-executive directors serve on the boards of both companies. As a result of the non-
executive directors assuming these dual responsibilities, the fees are split between Naspers and Prosus, on a 30/70 basis. Non-executive directors do not receive variable remuneration.
No additional fees are paid to board members serving on the
projects committee or on the valuations subcommittee of the
human resources and remuneration committee. Non-executive
directors do not receive any short- or long-term incentives or equity-
based compensation.
Non-executive directors serve on the board of both Naspers and
Prosus and receive no additional compensation for their dual
responsibilities to Naspers and Prosus. Fees are split between
Naspers and Prosus on a 30/70 basis, pro-rated from the date of
listing of Prosus. The split was determined based on the underlying
assets and the amount of time required to ensure that sufficient
time is allocated to assume the dual responsibilities.
The non-executive chair does not receive additional remuneration
for attending meetings or being a member of or chairing any
committee of the board or attending Tencent board and
committee meetings.
Non-executive directors’ fees
In US$ (unless otherwise stated)
Naspers:
31 March 2022
1
Prosus:
31 March 2022
1
31 March 2022
1
31 March 2021
Board
Chair
2
156 973 366 270 523 243 498 325
Member
62 789 146 508 209 297 199 330
Daily fees when travelling to
and attending meetings
outside home country
1 050 2 450 3 500 3 500
Committees
Audit committee
Chair
38 675 90 241 128 915 122 775
Member
15 470 36 096 51 566 49 110
Risk committee
Chair
22 972 53 601 76 573 72 925
Member
9 189 21 440 30 629 29 170
Human resources and remuneration committee
Chair
27 177 63 413 90 590 86 275
Member
10 871 25 365 36 236 34 510
Nominations committee
Chair
14 648 34 178 48 825 46 500
Member
5 859 13 671 19 530 18 600
Sustainability committee
Chair
20 104 46 909 67 013 63 825
Member
8 042 18 764 26 805 25 530
Other
Trustee of group share
schemes/other personnel
funds
R16 934 R39 514 R56 448 R53 760
1 Following the listing of Prosus on Euronext Amsterdam, Naspers non-executive directors serve on the boards of both Naspers and Prosus. As a result of the non-executive directors assuming these
dual responsibilities, the proposed fees will be split between Naspers and Prosus on a 30/70 basis.
2 The chair of Prosus does not receive additional remuneration for attending meetings or being a member of or chairing any committee of the board. He receives no compensation for serving on
the board of Tencent.
136
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Non-executive directors’ fees
FY22
FY21
US$’000
Directors’ fees
1
Committee and
trustee fees
Other fees
2
Total
Directors’ fees
1
Committee and
trustee fees
Other fees
2
Total
Non-
executive
directors
Paid by
company
Paid by
subsidiary
Paid by
company
Paid by
subsi-
diary
Paid by
company
Paid by
subsidiary
FY22
Paid by
company
Paid by
subsi-
diary
Paid by
company
Paid by
subsi-
diary
Paid by
company
Paid by
subsi-
diary
FY21
JP Bekker
3
558 24
– 8 – –
590
533 22
– 7 – –
562
EM Choi
4
109
–
27 – – –
136
224
–
64
– – –
288
HJ du Toit
5
–
– – – – – – – – – – – –
–
CL Enenstein 244
–
110 – –
50 404
234
–
105– –
50
389
DG Eriksson
6
– – – – – – – –
234
–260
–494
M Girotra 234
–
52 – – –
286
234
–
49– – –
283
RCC Jafta
244 72 127 42
– –
485
234 65 150 23
– –
472
AGZ Kemna
7
160
–
54 –
– –
214
- – – –
–
-–
FLN Letele
244
–
27 –
– –
271
231
–
26
– – –
257
D Meyer
241
–
67 – – –
308
234
–
26– – –
260
R Oliveira
deLima
244
–
56 – –
50 350
234
–
53
– –
50
337
SJZ Pacak 244
–
205 – – –
449
234
–
59– – –
293
MR Sorour
8
244 139
– – –
120 503
234 150
– – –
120
504
JDT Stofberg
244
–
27 – – –
271
231
–
26– – –
257
BJ van
derRoss
9
244
–
27 – –
–
271
234
–
29
– – –
263
Y Xu 244
– – –
– –
244
177
–
– – – –
177
Total
3 498 235 779 50 4 782 3 502
–
220 237 847 30
–
220
4 8361 Following the listing of Prosus, non-executive directors serve on the boards of both Naspers and Prosus. As a result of the non-executive directors assuming dual responsibilities, the fees were split
between Naspers and Prosus on a 30/70 basis.
2 Compensation for assignments.
3 Koos Bekker elected to donate the after-tax rand equivalent of all his director’s fees to education. This year the recipient will be the primary school in Heidelberg, Gauteng, South Africa, that he
attended.
4 Emilie Choi resigned with effect from 26 August 2021.
5 Hendrik du Toit elected not to receive directors’ fees.
6 Retired with effect from 1 April 2021.
7 Appointed with effect from 24 August 2021.
8 Mark Sorour received US$14 227.13 from MIH Holdings Proprietary Limited for the period 1 April 2021 to 31 March 2022. This payment relates to the increased cost of medical aid for retired
members of the MMED medical aid scheme as a result of the unbundling of MultiChoice Group. Originally, it was noted that the company will provide an annual allowance to cover the difference
in cost for retired scheme members during FY20 and FY21 only. However, this was extended to FY22. This is not disclosed in the above table.
9 Retired with effect from 1 April 2022.
137
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
General notes
Directors’ fees include fees for services as directors, where
appropriate, of Naspers and Media24 Proprietary Limited. An
additional fee may be paid to directors for work done as directors
with specific expertise. Committee fees include fees for attending
meetings of the audit committee, risk committee, human resources
and remuneration committee, nominations committee and the
sustainability committee. Non-executive directors are subject to
regulations on appointment and rotation in terms of Naspers’s
memorandum of incorporation, Prosus’s articles of association,
Dutch legal requirements and the South African Companies Act.
As announced on 20 December 2021, the board decided to
nominate Sharmistha Dubey for appointment as a non-executive
director of Prosus. Sharmistha holds no Prosus N or A1 ordinary
shares.
The group arranges for, and pays, directors’ and officers’ liability
insurance for the directors and officers of the group.
Implementation of remuneration policy
continued
31 March 2022 31 March 2021
Prosus A1 ordinary shares
1
Prosus A1 ordinary shares
Beneficial Beneficial
Name
Direct
TotalIndirect
Direct
TotalIndirect
SJZ Pacak
–
486
486
–
383 383
JDT Stofberg
–
810
–810
639
639
Total
–
1 296 1 296
– 1 022 1 022
1 As part of the implementation of the share exchange offer approved by shareholders on 9 July 2021, additional ordinary shares A1 were issued to holders of ordinary shares A1 on a pro rata
basis on 16 August 2021.
As at the date of this report, the group has not provided any
personal loans, advances or guarantees to the executive and
non-executive directors.
Koos Bekker and Cobus Stofberg each have an indirect 25%
interest in Wheatfields 221 Proprietary Limited, which controls
168605 Naspers Beleggings (RF) Limited ordinary shares, 16 860
500 Keeromstraat 30 Beleggings (RF) Limited ordinary shares, 179
988 (2020: 179 988) Naspers A shares and 834 540 (2021: 657 609)
Prosus A1 shares.
Compliance
There were no deviations from the executive and non-executive
directors’ remuneration policy in FY22.
Figure 1
Executive and non-executive directors’ interest in Prosus
shares
The non-executive directors of Prosus had the following interests in
Prosus A1 ordinary shares on 31 March 2022:
138
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Implementation of remuneration policy
continued
Figure 1
The executive and non-executive directors had the following interests in Prosus ordinary shares N on 31 March 2022:
31 March 2022 31 March 2021
Prosus ordinary shares N Prosus ordinary shares N
Beneficial Beneficial
Name
Direct
Indirect
1
Total
Direct
TotalIndirect
JP Bekker
2
–
11 513 809
– 11 513 809
4 688 691
4 688 691
EM Choi
3
– – –
–
– –
HJ du Toit
2
5 111
–
5 111
– –
–
CL Enenstein
–
415 415
–
415 415
DG Eriksson
4
– – –
–
– –
M Girotra
– – –
–
– –
RCC Jafta
– – –
–
– –
AGZ Kemna
5
– – –
–
– –
FLN Letele
2 604
–
2 604
2 604 –
2 604
D Meyer
– – –
–
– –
R Oliveira de Lima
– – –
–
– –
SJZ Pacak
2
460 911 747 086
1 207 997
–
630 635 630 635
V Sgourdos
2, 6
110 890 102 290 98 410
213 180
32 483 130 893
MR Sorour
2
3 955 442 442
4 397
2 145 2 587
JDT Stofberg
2
415 966 141 888 141 888
557 854
183 317 325 205
BJ van der Ross
2, 7, 8
6 262 5 294 2 000
11 556
2 550 4 550
B van Dijk
2, 9
249 975 1 085 405 1 003 928
1 335 380
51 809 1 055 737
Y Xu
– – –
–
– –
Total
1 255 674 13 596 629 14 852 303 274 908 6 566 409 6 841 317
1 Prosus SOs that have been released (vested), but have not yet been exercised, are included in the indirect column:
2 Each of these directors participated in the share exchange that was approved by shareholders on 9 July 2021 and concluded on 16 August 2021. As part of this transaction, the directors traded a
portion of their Naspers N ordinary shares in exchange for Prosus ordinary shares N.
3 Resigned as a director of Prosus and Naspers on 25 August 2021.
4 Resigned as a director of Prosus and Naspers on 1 April 2021.
5 Appointed as a director with effect from 24 August 2021.
6 On 31 January 2022, Basil has exercised 11 124 Naspers and Prosus options and decided to dispose of the Naspers N ordinary shares he received and to retain the Prosus ordinary shares N. The
full net gain after tax on disposal of these shares was reinvested back into the group in the form of Prosus N.V. ordinary shares N when, on 1 March 2022, he purchased 20 000 Prosus ordinary
shares N at a volume-weighted average value per share of €56.3933.
7 On 1 October 2021, an associate of Ben van der Ross purchased 2 100 ordinary shares N at a volume-weighted average value per share of R1 185.50.
8 Resigned as a director of Prosus and Naspers on 1 April 2022.
9 On 5 January 2022, Bob van Dijk purchased 122 750 ordinary shares N in his own name at a volume-weighted average value per share of €71.8983.
139
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Graphic overview of our LTI plans
Additional information
Continued
employment
Award made:
Performance
conditions and
vesting period
specified
at grant
Achievement of
performance condition
3
rd
anniversary
of grant
(year three)
If yes
According to
number of
shares released
to participant (0%
to 200% of
awarded PSUs)
Date
The vesting of a PSU is determined not just by time. In order for an award to vest, certain business performance conditions must also be met. If the threshold level of
performance is not achieved, no shares will be awarded to the participant.
How does a performance share unit (PSU) work?
PSU
Date
Total
number of
SOs
vested
Share
option
vestings
Offered:
400 SOs, and the
closing price on
the grant date
is US$100 per
scheme share
Let’s say that two years after the grant date, the employee chooses to exercise and pay for 200 scheme shares, ie US$100 x 200 = US$20 000; if the market price of a
scheme share has increased to say US$120, and the employee decides to sell them, that is a gain of US$20 per share. This means the employee shares in the success of
the group by earning a benefit of US$4 000, ie US$20 x 200 scheme shares. If there is no increase in share value there is no gain to the participant.
How does a stock option (SO) work?
SO
Awarded:
200 RSUs
Date
Total
number
of RSUs
vested
RSU
vestings
Employee is awarded 200 RSUs on grant date. On each of the vesting dates they will automatically receive 50 shares. Let’s assume that on the first vesting date the price is
US$100 per share, the employee would then receive a benefit, at that point, to the value of US$5 000, ie 50 shares times an assumed US$100 per share.
Note: the CEO and his direct reports are not eligible to receive RSUs.
How does a restricted share unit (RSU) work?
RSU
Awarded:
10 000 SARs at
a value of
US$10
per SAR
Total
number
of SARs
vested
Percentage
of SARs
vesting
Date
After two years the employee, assuming they didn’t exercise their first 2 500 after year one, may exercise 5 000 oftheir 10 000 SARs. If the value of an SAR at this point has
increased to US$14, the employee made a gain of US$4 per SAR, giving the employee a total gain of US$20 000 (5 000 SARs x US$4 gain per SAR). So, if exercised, the
employee would be awarded a value of US$20 000. If there is no increase in share value there is no gain to the participant.
How does a share appreciation right (SAR) work?
SAR
25
%
2 500
25
%
5 000
25
%
10 000
25
%
7 500
1
st
anniversary
of grant
(year one)
2
nd
anniversary
of grant
(year two)
4
th
anniversary
of grant
(year four)
3
rd
anniversary
of grant
(year three)
25
%
100
25
%
200
25
%
300
25
%
400
1
st
anniversary
of grant
(year one)
2
nd
anniversary
of grant
(year two)
3
rd
anniversary
of grant
(year three)
4
th
anniversary
of grant
(year four)
50
25
%
100
25
%
150
25
%
200
25
%
1
st
anniversary
of grant
(year one)
2
nd
anniversary
of grant
(year two)
3
rd
anniversary
of grant
(year three)
4
th
anniversary
of grant
(year four)
140
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Additional information
continued
LTI policies
Date and price of SARs, SOs and PSUs/RSUs
Our LTI policy does not allow for the backdating of LTI awards, or
for the offer price to be adjusted so as to bring underwater SARs
or SOs ‘into the money’. There is no strike price for a PSU or an
RSU, these are full-value shares and PSUs vest only if there is an
achievement of the performance conditions determined at grant.
Offer prices may be adjusted within the rules of the scheme to take
account of material structural changes to the group, for example
when Prosus was listed in 2019, Naspers shareholders and
employees holding Naspers SOs received Prosus capitalisation/
Naspers N capitalisation shares (depending on which share trust
they participated in), linked to each option.
LTI dividend policy
Employees of the Prosus group holding unvested PSUs, RSUs or
SOs do not receive ordinary dividends. Upon vesting, then
participants are treated as per all other shareholders with regard
to ordinary dividends.
Prudent approach
Vesting periods are conservative relative to the companies with
which we compete for talent. Our LTI plans typically vest over four
years, with equal tranches vesting annually. The PSU plan has a
three-year cliff-vesting. Across the consumer internet sector, a
three- or four-year vesting period is commonly observed, with
grants often vesting monthly after the first year.
In FY22 we continued to broaden the use of RSUs as an effective
LTI for many of our employees. RSUs are a common and widely
spread LTI vehicle across the competitive consumer technology
sector. For our senior roles (excluding senior executives), RSUs will
continue to be complemented with SAR allocations on our unlisted
assets, aligning the incentive to the performance delivery and
value creation in the underlying business segments. With that, RSUs
do not come in addition to SARs, but are part of the blend of LTI
offered.
It is noted that RSUs are not available to the CEO, CFO, or other
senior executives across the group. In an exceptional case, RSUs
may be applied for a new hire, when necessary to ‘buy out’
remuneration forfeited on joining the company.
Our SO plans typically have a 10-year expiry term. This is a
common term length across the consumer internet sector where
early-stage businesses take longer to reach maturity and create
shareholder value. Effective 1 April 2022, we are limiting the expiry
period of our SARs plans to six years.
LTI scheme limits
We place limits on how much of the capitalisation (CAP) table is
available for employee compensation. In general, no more than
5% of the Prosus CAP table can be used for unvested employee
compensation. For the SARs plans that relate to our unlisted assets,
no more than 15% of the CAP table can be used for unvested
employee compensation. Depending on the life stage of the
business, the scheme limit can be lower. When the business takes
funding from Prosus, the SAR scheme is diluted as additional
shares are issued.
Offer price
Also called grant price, strike price or purchase price. The price of
the share on the date the SAR or SO was granted, at which the
participant can buy the share at a later date (or in the case of a
SAR, used to calculate a gain).
Exercise price
The price of the share at the time the participant chooses to
exercise their SARs or SOs. The value gain to the participant is
calculated by subtracting the offer price from the exercise price.
Offer date
Also called grant date. The date on which an LTI is offered to the
participant, giving that participant the right to buy or receive shares
at a date in the future.
Performance management
Pay for performance is one of the pillars of our reward philosophy.
Personal performance and business performance are the
determining factors in whether an individual receives a base salary
increase, an annual performance-related incentive payout and/or
an LTI in the form of SARs, PSUs (for executives only), RSUs (not for
executives) or SOs.
Personal goals are arrived at as an outcome of the annual
business planning process. As budgets and operating plans are
designed prior to the end of the financial year, so too are the
personal performance goals at an individual level. These goals, if
achieved, drive the accomplishment of the financial and operating
plan of the business.
Managers engage in continuous conversations with their teams
throughout the financial year to ensure that their plans are on track.
At the end of the financial year both the overall performance of the
business and the individual’s achievement of their personal goals
are considered, and this may translate into the payment of an
annual performance-related STI. While we do not force-rank
performance scores, we do expect that any performance-related
incentive payments reflect the overall performance where
appropriate. Individuals who have performed well against their
performance-related incentive goals, are eligible to be considered
for an LTI grant and a pay increase. Only strong performers are
considered for LTI awards.
141
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements Other information
Financial
•
Financial performance
• Responsible
investments
Human
•
Human capital
•
Human rights
Manufactured
• Innovation
•
IT infrastructure
breakdown
Intellectual
• AI
•
Data privacy
•
IT governance
• Cyber-resilience
Social
•
Community investment
•
Geopolitical stability
•
Business culture, ethics
and integrity
•
Digital inclusion
•
Customer centricity
Natural
•
Climate action
The resources we need
Eleven material issues
performance
investments
People
Innovation
AI
Cyber-resilience
ethics and integrity
investment
About this report
Reporting
We measure our performance by evaluating how we create
valuefor our key stakeholders by taking account of the six
capitals.We also report on the 11 material issues identified by our
stakeholders in our first materiality assessment as well as progress
made against our strategy. We regularly measure returns on
invested capital. We understand the risks we take and manage
these to minimise their impact on our business and results.
This way of telling a comprehensive, connected story fits well with
our holistic view of value and our focus on creating sustainable
value for long-term good.
Scope and boundary of reporting
Financial and non-financial reporting
This report constitutes the annual report as defined by Dutch law
and extends beyond financial reporting. It reflects on non-financial
performance, opportunities, risks and outcomes attributable to or
associated with key stakeholders who have a significant influence
on our ability to create value.
Our subsidiaries, associates and investees (non-controlled entities)
are required to comply with applicable law and regulation.
Thegroup also encourages its associates and investees to
adoptappropriate governance standards (for example, codes of
business ethics and conduct, and policies relating to anti-bribery
and anti-corruption, competition compliance, privacy and sanctions
and export controls).
It includes the strategy and financial performance of Prosus and its
subsidiaries, joint ventures and associates (the group). The scope
of reporting on non-financial data (GHG emissions), is included
asan appendix ‘Boundaries and scope of our GHG accounting’
tothis report. Group reporting standards are continually being
developed to make disclosure meaningful and measurable for
stakeholders. Given the highly competitive environment in which
weoperate, this report mostly excludes financial targets or
forward-looking statements other than as explained on page 1.
Information on our website to which we refer in this annual report
is not included by reference in this annual report and does not
form part of it.
Non-IFRS financial measures and alternative
performancemeasures
In presenting and discussing our performance, we use certain
alternative performance measures not defined by IFRS-EU,
referredto as non-IFRS financial measures, alternative performance
measures or APMs. Such measures include economic-interest basis
information; trading profit; adjusted EBITDA; headline earnings;
core headline earnings; and growth in local currency, excluding
acquisitions and disposals.
Segmental reviews in this report are prepared showing revenue
onan economic-interest basis (which includes consolidated
subsidiaries and a proportionate share of associated companies
and joint ventures), unless otherwise stated. Numbers included in
brackets represent the equivalent measure on the basis of growth
in local currency, excluding acquisitions and disposals.
The group provides APMs because the board believes these
provide investors with additional information to measure its
operating performance. These APMs should not be viewed in
isolation as alternatives to the equivalent IFRS-EU measures and
should be used as supplementary information in conjunction with
the most directly comparable IFRS-EU measures. APMs do not
have a standardised meaning under IFRS-EU and therefore may
not be comparable to similar measures presented by other
companies. Their usefulness is therefore subject to limitations.
Refer to:
—
Note 21 ‘Segment information’ of the consolidated financial
statements for a reconciliation to the nearest IFRS-EU measure
of the following alternative performance measures used in the
segment information: revenue on an economic-interest basis;
adjusted EBITDA; and trading profit or loss.
—
Note 22 ‘Earnings per share’ of the consolidated financial
statements for a reconciliation to the nearest IFRS-EU measure
of headline earnings.
—
Non-IFRS financial measures and alternative performance
measures’ included in ‘Other information’ on pages 286 to
293 in this annual report for a reconciliation to the nearest
IFRS measure of core headline earnings; (diluted) core
headline earnings per share; and growth in local currency,
This annual report assesses our performance for the financial year ended
31 March 2022. We aim to provide a picture of our progress and impact on society.
142
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Performance reviewGovernance
Financial statements Other information
excluding acquisitions and disposals. Core headline earnings
information includes adjustments to exclude certain results.
The exclusion of certain items from non-IFRS measures does
not imply that these items are necessarily non-recurring. From
time to time, the group may exclude additional items if it
believes doing so would result in more transparent and
comparable disclosure.
Legislation and frameworks that inform our reporting
This annual report was prepared in compliance with:
•
Dutch corporate law, in particular the Dutch Civil Code
(
BurgerlijkWetboek
).
•
Dutch securities law, in particular the Financial Supervision Act
(
Wet op het Financieel Toezicht
).
•
the Dutch Corporate Governance Code, 2016, and
• IFRS-EU.
In addition, we are guided by the following standards in
preparing this annual report:
•
2013 Framework of the International Integrated Reporting
Council (IIRC) (now part of the Value Reporting Foundation/
SASB): this principles-based approach promotes the concept of
the six capitals
1
, which considers material inputs and resources
required to create and sustain value in the long term. We
describe key components of the Prosus value chain (business
model) that creates and sustains value for our stakeholders.
•
We have aligned our climate change approach and our
integrated reporting to the framework of the Task Force on
Climate-related Financial Disclosures (TCFD).
•
To meet the needs of investors and analysts and provide
financially material information for all our stakeholders, we
baseour disclosures where possible with the Industry Standards
of the Sustainability Accounting Standards Board (SASB).
•
We support the United Nations Sustainable Development Goals
(UN SDGs) and, like many other businesses, have identified
which of the goals closely align with our business.
Sections of the directors’ report
This directors’ report, within the meaning of article 391 of Book 2
ofthe Dutch Civil Code, includes the following sections:
•
Group overview (pages 3 to 15)
•
Sustainability review (pages 17 to 49)
•
Performance review (pages 51 to 90)
•
Governance (pages 92 to 144)
•
Consolidated financial statements:
—
Note 23 Share capital and premium – capital management
—
Note 39 Financial risk management
—
Note 43 Subsequent events
The performance review provides information on developments
and results for the year ended 31 March 2022, as well as
providing information on cash flow and net debt. The directors’
report provides a true and fair view of the group.
Details of the voting overview and protection structure can be
found on pages 93 and 94.
On 25 June 2022, the board of directors authorised the annual
report for issue on 27 June 2022. The annual report as presented
in this report is subject to adoption by the annual general meeting
of shareholders
Under IFRS-EU, the group accounts for its associate and joint
venture investments under the equity method. Throughout the
financial review below, references to ‘total revenue’ or ‘total
trading profit’ therefore exclude the group’s share of revenue
ortrading profit from investments in associated companies and
joint ventures. The group, however, proportionately consolidates
itsshare of the results of its associated companies and joint
ventures in its segment information (referred to as economic
interest). This is considered to provide additional information on
the economic reality of these investments and corresponds to the
manner in which the chief operating decision-maker (CODM)
assesses segmental performance.
For further information, see ‘Other information – Non-IFRS financial
measures and alternative performance indicators’ and note 21 of
the consolidated financial statements.
About this report
continued
1 As identified in the framework of the International Integrated Reporting Council:
financial,human, intellectual, manufactured, social and natural capitals.
Statement of responsibility by the board of directors
forthe year ended 31 March 2022
The annual report of the Prosus N.V. group (Prosus or the
group) and the company is the responsibility of the directors
of Prosus. In discharging this responsibility, they rely on the
management of the group to prepare the annual report in
accordance with Dutch law, including the consolidated and
company financial statements presented on pages 146 to
248 and pages 249 to 271.
The consolidated and company financial statements
ofProsus for the year ended 31 March 2022, and the
undertakings included in the consolidation taken as a
whole, have been prepared in accordance with
International Financial Reporting Standards as adopted
bythe European Union (IFRS-EU) and additional disclosure
requirements for financial statements as required by
Dutchlaw.
To the best of our knowledge:
1. The consolidated and company financial statements,
including the accompanying notes, give a true and
fairview of the assets, liabilities, financial position
asat31March 2022, and of the result of our
consolidated and company operations for the
yearended 31 March 2022.
2. The directors’ report includes a fair review of the
development and performance of our businesses
andthe position of Prosus, as well as the undertakings
included in the consolidation taken as a whole, and
describes our principal risks and uncertainties.
3. The directors’ report for the year ended 31 March 2022
gives a fair view of the information required pursuant
toarticle 5:25c of the Dutch Financial Supervision Act
(Wet op het Financieel Toezicht).
4. The consolidated and company financial statements for
the year ended 31 March 2022 give a fair view of the
information required pursuant to IFRS-EU and additional
disclosure requirements as required by Dutch law.
5. The annual report includes material risks and
uncertainties that are relevant to the expectation of
thecompany’s continuity for the period of 12 months
after the preparation of the report.
143
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Sustainability review
Performance reviewGovernance
Financial statements Other information
About this report
continued
The directors are responsible for the establishment and
adequate functioning of a system of governance, risk
management and internal controls in the company.
Consequently, the directors have implemented a broad
rangeof processes and procedures designed to provide
control over the company’s operations.
These processes and procedures include measures regarding
the general control environment. All these processes and
procedures are aimed at providing a reasonable level of
assurance that we have identified and managed the significant
risks of the company. Also, that we meet the operational and
financial objectives in compliance with applicable laws and
regulations. Information regarding our internal control systems
is set out in the Governance for a sustainable business section
of the annual report.
The internal audit function monitors compliance with our
internal control systems and updates management on the
emergence of new risks. They support the annual review of the
effectiveness of the system of governance, risk management
and internal controls of the board of directors. Internal audit
provides comfort to the audit committee and board of directors
that our system of risk management and internal controls – as
designed and represented by management – are adequate
and effective. While we work towards continuous improvement
of our processes and procedures regarding financial reporting,
no major failings have occurred to the knowledge of the
directors and therefore directors are of the opinion that these
systems provide reasonable assurance that the financial
reporting does not contain material inaccuracies.
Based on forecasts and available cash resources, the
directorsbelieve that the group and company have adequate
resources to continue operations as a going concern for a
period of at least 12 months after the date of this report.
Intheir assessment, directors have taken into account the
ongoing impact of the war in Ukraine and the Covid-19
pandemic on our operations and they believe that the group
will be able to continue into the foreseeable future with some
impact to operations as set out on pages 83 and 84 of this
report. Furthermore, the group has sufficient liquidity to
meet obligations as and when they fall due. Accordingly,
thefinancial statements support the viability of the group
andthecompany.
The independent auditing firm PricewaterhouseCoopers
Accountants N.V., which was given unrestricted access to
allfinancial records and related data, including minutes
ofallmeetings of shareholders, the board of directors and
committees of the board, has audited the consolidated and
company financial statements. The directors believe that all
representations made to the independent auditors during their
audit were valid and appropriate. PricewaterhouseCoopers
Accountants N.V.’s audit report is presented on pages 272
to281.
The annual report, including the consolidated and company
financial statements, was approved by the board of directors
on 25 June 2022 for release on 27 June 2022 and signed by:
JP Bekker
B van Dijk
V Sgourdos
HJ du Toit
CL Enenstein
M Girotra
RCC Jafta
AGZ Kemna
FLN Letele
D Meyer
R Oliveira de Lima
SJZ Pacak
MR Sorour
JDT Stofberg
Y Xu
144
Prosus annual report 2022
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Sustainability review
Performance reviewGovernance
Financial statements Other information
146
Consolidated financial statements
153
Notes to the consolidated financial statements
249
Company financial statements
253
Notes to the company financial statements
272
Other information - Independent auditor’s report
282
Other information to the company financial statements
Financial
statements
145
Prosus annual report 2022
Group overview
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Performance reviewGovernance
Financial statements
Other information
Consolidated statement of financial position
as at 31 March 2022
31 March
Notes
2022
US$’m
2021
US$’m
ASSETS
Non-current assets 56 073 48 583
Property, plant and equipment
32 604 443
Goodwill
7 3 372 2 102
Other intangible assets
33 928 782
Investments in associates
9 44 457 40 556
Investments in joint ventures
10 144 158
Other investments
28 5 981 4 138
Related party loans and receivables
41 416 356
Other receivables
35 132 16
Derivative financial instruments
39 13 9
Deferred taxation
20 26 23
Current assets 15 265 7 145
Inventory
34 470 321
Trade receivables
29 276 150
Other receivables
35 867 577
Related party loans and receivables
41 17 44
Derivative financial instruments
39 27 18
Other investments
28 – 1 253
Short-term investments
27 3 924 1 211
Cash and cash equivalents 9 646 3 571
26
Assets classified as held for sale 38 –
TOTAL ASSETS 71 338 55 728
Prosus annual report 2022
146
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
31 March
Notes
2022
US$’m
2021
US$’m
EQUITY AND LIABILITIES
Capital and reserves attributable to the group’s equity holders 50 421 43 069
Share capital and premium
23 39 190 612
Treasury shares*
23
(6 411 )
(1 416 )
Other reserves
24
(40 557 ) 5 818
Retained earnings
25 58 199 38 055
Non-controlling interests 102 117
TOTAL EQUITY 50 523 43 186
Non-current liabilities 16 402 8 535
Long-term liabilities
30 15 861 8 081
Other non-current liabilities
31 162 62
Related party loans and payables
41 2 2
Cash-settled share-based payment liabilities
36 163 159
Provisions
37 4 4
Derivative financial instruments
39 2 32
Deferred taxation
20 208 195
Current liabilities 4 413 4 007
Current portion of long-term liabilities
30 188 102
Provisions
37 9 16
Trade payables 549 344
Accrued expenses
1
38 1 638 1 401
Other current liabilities
1
31 1 014 1 207
Cash-settled share-based payment liabilities
1
36 964 897
Related party loans and payables
41 8 8
Taxation payable 7 21
Derivative financial instruments
39 18 2
Bank overdrafts
26 18 9
TOTAL EQUITY AND LIABILITIES 71 338 55 728
* Refer to note 4 for details of the group’s reclassification of treasury shares during the current period.
1
are now presented separately due to their significance.
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated statement of financial position
continued
as at 31 March 2022
147
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Consolidated income statement
for the year ended 31 March 2022
31 March
Notes
2022
US$’m
2021
US$’m
Revenue from contracts with customers
13 6 866 5 116
Cost of providing services and sale of goods 3 455 )
14
(4 804 )
(Selling, general and administration expenses
14
(2 759 )
(2 614 )
Other gains/(losses) – net
15 87 )
(162 )
(Operating loss
(859 )
(1 040 )
Interest income
16 58 83
Interest expense
16 262 )
(403 )
(Other finance (loss)/income – net
16 177
(83 )
Share of equity-accounted results 9, 10 9 256 7 095
Impairment of equity-accounted investments
9, 10
(582 )
(30 )
Dilution gains on equity-accounted investments 9, 10 95 981
Gains on partial disposal of equity-accounted investments 9, 10 12 339 19
Net (losses)/gains on acquisitions and disposals
17 309
(1 130 )
Profit before taxation 18 691 7 332
Taxation
19 67
(97 )
Profit for the year 18 594 7 399
Attributable to:
Equity holders of the group 18 733 7 449
Non-controlling interests
(139 )
(50 )
Per share information for the year (US cents)
Earnings per ordinary share N
22 1 243 459
Diluted earnings per ordinary share N
22 1 232 450
The accompanying notes are an integral part of these consolidated financial statements.
Prosus annual report 2022
148
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
31 March
Notes
2022
US$’m
2021
US$’m
Profit for the year 18 594 7 399
Other comprehensive income (OCI)
Items that may be subsequently reclassified to profit or loss
Foreign exchange gains arising on translation of foreign operations
1
Hedging reserve 20 –
Recognition of cash flow hedge –
(99 )
Derecognition of cash flow hedge 119 –
Share of equity-accounted investments’ movement in OCI
(813 )
(424 )
Foreign currency translation reserve
(813 )
(424 )
Items that may not be subsequently reclassified to profit or loss
Fair-value (losses)/gains on financial assets through OCI
28 669
(1 210 )
Share of equity-accounted investments’ movement in OCI and net asset value 6 819
9
(2 699 )
Share-based compensation reserve 1 044 548
Valuation reserve
2
24
(3 743 ) 6 271
Total other comprehensive (loss)/income, net of tax, for the year
(3 111 ) 9 049
Total comprehensive income for the year 15 483 16 448
Attributable to:
Equity holders of the group 15 566 16 460
Non-controlling interests
(83 )
(12 )
1
2
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated statement of comprehensive income
for the year ended 31 March 2022
149
Prosus annual report 2022
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Performance reviewGovernance
Financial statements
Other information
Consolidated statement of changes in equity
for the year ended 31 March 2022
Share
capital
and
premium
US$’m
Treasury
shares
US$’m
Foreign
currency
translation
reserve
US$’m
Valuation
reserve
US$’m
Existing
control
business
combination
reserve
US$’m
Share-based
compensation
reserve
US$’m
Retained
earnings
US$’m
Shareholders’
funds
US$’m
Non-
controlling
interest
US$’m
Total
US$’m
Balance at 1 April 2020 606 – 214
(2 647 )
2(1 583) 1 968 30 754 29 100
29 314
Total comprehensive income for the year – – 1 525 6 938 16 460
–
548
7 449(12)
16 448Profit for the year – – – – – – 7 449 7 449
(50)
7 399Total other comprehensive income for the year – – 1 525 6 938 –
548
–9 011
38
9 049Share-based compensation movements – – – – –
(66)
1(65) (19) (84)
Share-based compensation expense – – – – –
54
–54 (19) 35
Transfers to retained earnings – – – – – – –
(42) 42
–Other share-based compensation movements – – – – –
(78) (41) (119)
–(119)
Direct equity movements 6 – – –
(1 ) (233) 136 (4) 96
–Direct movements from associates – – – – – –
(235)
–235
–Transfer of reserves as a result ofdisposals – – – –
(1 )
2111 (4) (108)
–Other direct movements 6 – – – – –
25
–(31)
–Remeasurement of written put option liabilities – – – – –
(508)
–(508)
–(508)
Other movements – – – –
(2)
–(31) (33)
–(33)
Repurchase of own shares
1, 2
(1 416 )
(1 416)
–(1 416)
Dividends paid
3
(215) (215)
–(215)
Transactions with non-controlling shareholders – – – – 1
(255)
–(254) (66) (320)
Balance at 31 March 2021 (Reclassified)
1
(1 416 ) (1 123 ) 6 707 (2 212) 2 446 38 055 43 069
11743 186
Reclassified balance at the beginning of the year
1
(1 416 ) (1 123 ) 6 707 (2 212) 2 446 38 055 43 069
11743 186
Total comprehensive income forthe year – – 722
(4 933)
–1 044 18 733 15 566
(83)
15 483Profit for the year – – – – – –
18 733 18 733
(139)
18 594Total other comprehensive loss forthe year – – 722
(4 933)
–1 044
–(3 167)
56
(3 111)Movement due to share exchangetransaction
4
(41 304)
–(2 787)
–(2 787)
Share-based compensation movements – – – – –
(107) (136) (243) (86) (329)
Share-based compensation expense – – – – –
125
–125
1126
Contributions made to Naspers share trusts – – – – –
(190)
–(190)
–(190)
Modification of share-based compensation benefits – – – – –
(6) (172) (178) (87) (265)
Transfers to retained earnings – – – – – – –
(36) 36
–Direct equity movements
(5 ) – 43 – –
(1 709)
–12 (160)
1 819Direct movements from associates – – – – – –
(1 076)
–1 076
–Realisation of reserves as a result of partial disposal of associate – – – – –
(455)
–(160) 615
–Realisation of reserves as a resultof disposals 43
(178) 12
–
123– –
Other direct movements
(5 ) – – – – – 5 – – –
Remeasurement of written putoption liabilities – – – – –
236
–236
–236
Cancellation of written put option liabilities – – – – 5
76
–81
–81
Other movements – – – – – 2
(39) (37)
–(37)
Repurchase of own shares
2
(4 995 )
(4 995)
–(4 995)
Prosus B ordinary shares issued
4
66
–66
Dividends paid
3
(238) (238)
–(238)
Transactions with non-controlling shareholders – – – –
(295) (2)
–(297) 154 (143)
Balance at 31 March 2022 39 190 3 223 58 199 50 421
(6 411 )
(358 )
65
(43 487)102
50 5231
2
3
approved on 24 August 2021 (2021: 18 August 2020) and was paid on 23 November 2021 (2021: 17 November 2020).
4
the share exchange transaction.
The accompanying notes are an integral part of these consolidated financial statements.
Prosus annual report 2022
150
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Financial statements
Other information
Consolidated statement of changes in equity
continued
for the year ended 31 March 2022
Share
capital
and
premium
US$’m
Treasury
shares
US$’m
Foreign
currency
translation
reserve
US$’m
Valuation
reserve
US$’m
Existing
control
business
combination
reserve
US$’m
Share-based
compensation
reserve
US$’m
Retained
earnings
US$’m
Shareholders’
funds
US$’m
Non-
controlling
interest
US$’m
Total
US$’m
Balance at 1 April 2020
606 214 29 314
– 2
(2 647)
(1 583 ) 1 968 30 754 29 100
Total comprehensive income for the year 6 938 – 548 7 449 16 460 16 448
– –
1 525(12 )
Profit for the year 7 449 7 449 7 399
– – – – – –
(50 )
Total other comprehensive income for the year
– – – 548 – 9 011 38 9 049
1 525 6 938
Share-based compensation movements
– – – – – 1
(66 )
(65 ) (19 ) (84 )
Share-based compensation expense
– – – – – 54 – 54 (19 ) 35
Transfers to retained earnings
– – – – – – – –
(42 ) 42
Other share-based compensation movements
– – – – – –
(78 ) (41 ) (119 )
(119 )
Direct equity movements
6 – – – –
(1) (233 ) 136 (4 ) 96
Direct movements from associates
– – – – – 235 – – –
(235 )
Transfer of reserves as a result ofdisposals
– – 2 111 (4 ) (108 ) – – –
(1)
Other direct movements
6 – – – 25 – – – –
(31 )
Remeasurement of written put option liabilities
– – – – – – –
(508 )
(508 )
(508 )
Other movements
– – – – – –
(2 )
(31 ) (33 )
(33 )
Repurchase of own shares
1, 2
– – – – – –
(1 416)
–(1 416 )
(1 416 )
Dividends paid
3
– – – – – – –
(215 ) (215 )
(215 )
Transactions with non-controlling shareholders
– – – – – 1
(255 )
(254 ) (66 ) (320 )
Balance at 31 March 2021 (Reclassified)
1
612 117 43 186
(1 416) (1 123) 6 707 (2 212 ) 2 446 38 055 43 069
Reclassified balance at the beginning of the year
1
612 117 43 186
(1 416) (1 123) 6 707 (2 212 ) 2 446 38 055 43 069
Total comprehensive income forthe year
– – – 1 044 18 733 15 566 15 483
722
(4 933 )
(83 )
Profit for the year
– – – – – – 18 733 18 733 18 594
(139 )
Total other comprehensive loss forthe year
– – – 1 044 –
722
(4 933 )
(3 167 ) 56 (3 111 )
Movement due to share exchangetransaction
4
38 517
– – – – – –
(41 304 )
(2 787 )
(2 787 )
Share-based compensation movements
– – – – –
(107 ) (136 ) (243 ) (86 ) (329 )
Share-based compensation expense
– – – – – 125 – 125 1 126
Contributions made to Naspers share trusts
– – – – – – –
(190 )
(190 )
(190 )
Modification of share-based compensation benefits
– – – – –
(6 ) (172 ) (178 ) (87 ) (265 )
Transfers to retained earnings
– – – – – – – –
(36 ) 36
Direct equity movements
(5)
– – – –
43
(1 709 ) 12 (160 ) 1 819
Direct movements from associates
– – – – – 1 076 – – –
(1 076 )
Realisation of reserves as a result of partial disposal of associate
– – – – – – –
(455 )
(160 ) 615
Realisation of reserves as a resultof disposals
43
(178 ) 12 – 123 – –
Other direct movements
(5)
– – – – – 5 – – –
Remeasurement of written putoption liabilities
– – – – 236 – – 236 – 236
Cancellation of written put option liabilities
– – – – 76 – 5 81 – 81
Other movements
– – – – – 2 –
(39 ) (37 )
(37 )
Repurchase of own shares
2
– – – – – –
(4 995)
–(4 995 )
(4 995 )
Prosus B ordinary shares issued
4
66
– – – – – – 66 – 66
Dividends paid
3
– – – – – – –
(238 ) (238 )
(238 )
Transactions with non-controlling shareholders
– – – – –
(295 ) (2 )
(297 ) 154 (143 )
Balance at 31 March 2022 65 (43 487 ) 3 223 58 199 50 421 102 50 523
39 190
(6 411)
(358)
1
2
3
approved on 24 August 2021 (2021: 18 August 2020) and was paid on 23 November 2021 (2021: 17 November 2020).
4
the share exchange transaction.
The accompanying notes are an integral part of these consolidated financial statements.
151
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Other information
Consolidated statement of cash flows
for the year ended 31 March 2022
31 March
Notes
2022
US$’m
2021
US$’m
Cash flows from operating activities
Cash from operations
18 52 )
(644 )
(Dividends received from investments and equity-accounted companies 571 458
Cash (utilised in)/generated from operating activities
(73 ) 406
Interest income received 38 106
Interest costs paid
(381 )
(248 )
Taxation paid
(189 )
(105 )
Net cash (utilised in)/generated from operating activities
(605 ) 159
Cash flows from investing activities
Property, plant and equipment acquired
(212 )
(105 )
Proceeds from sale of property, plant and equipment 8 4
Intangible assets acquired
(30 )
(16 )
Acquisitions of subsidiaries and businesses, net of cash
11
(1 896 )
(88 )
Disposals of subsidiaries and businesses
12 20 27
Acquisition of associates
6
(1 361 )
(276 )
Additional investment in existing associates
6
(1 316 )
(1 484 )
Partial disposals of associates 14 609 20
6
Disposal of associates 12 194
Acquisition of joint ventures –
(5 )
Additional investments in existing joint ventures
6
(7 )
(127 )
Acquisition of short-term investments
1
(3 922 )
(1 208 )
Maturity of short-term investments
1
Loans advanced to related parties
41 318 )
(21 )
(Cash paid for other investments 1 322 )
28
(1 477 )
(Cash received from other investments
2
Acquisition of Naspers shares
3
23
(1 287 )
(2 350 )
Cash movement in other investing activities
(24 )
(3 )
Net cash generated from/(utilised in) investing activities 4 392
(3 218 )
Cash flows from financing activities
Repurchase of own shares 1 416 )
23
(4 995 )
(Proceeds from issue of share capital –
23 66
Proceeds from long- and short-term loans raised
30 9 564 4 593
Repayments of long- and short-term loans
30 155 )
(1 619 )
(Additional investments in existing subsidiaries
4
(148 )
(270 )
Repayments of capitalised lease liabilities
30 48 )
(51 )
(Contributions made to the Naspers share trusts
41 79 )
(190 )
(Additional investment from non-controlling shareholders 140 53
Dividends and capital repayments to shareholders
(238 )
(214 )
Other movements in financing activities
5
(126 )
(15 )
Net cash generated from financing activities 2 403 2 449
Net movement in cash and cash equivalents 6 190
(610 )
Foreign exchange translation adjustments on cash and cash equivalents
(124 ) 23
Cash and cash equivalents at the beginning of the year 3 562 4 149
Cash and cash equivalents at the end of the year 9 628 3 562
26
1
2
Relates to payments for the group’s fair value through other comprehensive income investments.
3
4
5
The accompanying notes are an integral part of these consolidated financial statements.
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Financial statements
Other information
1. Nature of operations
(naamloze vennootschap)
incorporated under Dutch law, with
its registered head office located at Symphony Offices, Gustav Mahlerplein 5, 1082 MS Amsterdam, the Netherlands , (registered in the
Dutch commercial register under number 34099856). Prosus is a subsidiary of Naspers Limited
South Africa. On 11 September 2019, Prosus was listed on the Euronext Amsterdam stock exchange, with a secondary listing on the
JSELimited’s stock exchange and A2X Markets in South Africa.
investing globally in markets with long-term growth potential, Prosus builds leading consumer internet companies that empower people
and enrich communities. The group is focused on building meaningful businesses in the online classifieds, payments and fintech, food
delivery and education technology sectors in markets including Europe, India, Russia and Brazil. Through its ventures team, Prosus
actively seeks new opportunities to partner with exceptional entrepreneurs who are using technology to address big societal needs.
Every day, millions of people use the products and services of companies that Prosus has invested in, acquired or built. The group
operates and partners with a number of leading internet businesses across the Americas, Africa, Central and Eastern Europe, and
Asiain sectors including online classifieds, food delivery, payments and fintech, edtech, health, etail and social and internet platforms.
The consolidated financial statements for the year ended 31 March 2022 have been authorised for issue by the board of directors
on25June2022.
2. Basis of preparation
The consolidated financial statements for the year ended 31 March 2022 have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union (IFRS-EU), as well as the Interpretations (IFRICs) of the IFRS
Interpretations Committee (IFRS IC) and the interpretations published by the Standing Interpretations Committee (SIC) as well as the
requirements under Dutchlaw, including Title 9 of Book 2 of the Dutch Civil Code.
The principal accounting policies applied in the preparation of these consolidated and company financial statements have been
consistently applied to all years presented, unless otherwise stated.
Operating segments
The group’s operating segments reflect the components of the group that are regularly reviewed by the chief operating decision-maker
(CODM) as defined in note 21 ’Segment information’. The group proportionately consolidates its share of the results of its associates
and joint ventures in its operating segments. From 1 April 2021, the group created a new educational technology (Edtech) segment.
Thesegment includes the results of the group’s investments in edtech which have increased significantly due to the acquisitions of
subsidiaries and equity-accounted investments over the years. The equity-accounted investments presented in the ’Other Ecommerce’
segment in prior periods have been reclassified and presented as part of the new Edtech segment.
Going concern
The consolidated and company financial statements are prepared on the going-concern basis. Based on forecasts and available
cashresources, the group and company have adequate resources to continue operations as a going concern for the foreseeable
future. As at 31March 2022, the group recorded US$13.55bn in net cash, comprising US$9.63bn of cash and cash equivalents and
US$3.92bn in short-term cash investments. The group had US$15.7bn of interest-bearing debt (excluding capitalised lease liabilities)
and an undrawn US$2.5bn revolving credit facility. Refer to note 23 ’Share capital and premium – capital management’ for details
ofhow the group manages its capital to safeguard its ability to continue as a going concern.
In assessing going concern, the impact of internal and external economic factors on the group’s operations and liquidity was
considered in preparing the forecasts and in assessing the group’s actual performance against budget. The board is of the opinion
that the group has performed well during the current year and has sufficient financial flexibility to continue as a going concern in the
year subsequent to the date of these financial statements.
Foreign currencies
The consolidated financial statements are presented in US dollar (US$) which is the group’s presentation currency. However, the group
measures the transactions of its operations using the functional currency determined for that specific operating entity which is the
currency of the primary economic environment in which the operation conducts its business.
Notes to the consolidated financial statements
for the year ended 31 March 2022
Accounting framework and critical judgements
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Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Accounting framework and critical judgements
continued
2. Basis of preparation
continued
Accounting policies
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
thetransactions or the dates of the valuations where items are remeasured. Foreign exchange gains and losses resulting
fromthe settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive
income as part of qualifying cash flow hedges.
Translation differences on non-monetary financial assets and liabilities are reported as part of the fair-value gain or loss
recognised in’Other finance income – net’ in the income statement. Translation differences on non-monetary equity
investments classified at fair value through other comprehensive income are recognised in other comprehensive income and
accumulated in the valuation reserve as part of the fair-value remeasurement of such items.
The results and financial position of all foreign operations (none of which operates in a hyperinflationary economy) that have
afunctional currency that is different from the group’s presentation currency are translated into the presentation currency
asfollows:
•
Assets and liabilities are translated at the closing rate at the reporting date.
•
Income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation
ofthe cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated
at the spot rate on the dates of the transactions).
•
The nominal amount of share capital is translated at the closing rate in terms of Dutch law. Exchange differences on
translation arerecognised directly in retained earnings.
•
All other resulting exchange differences except equity are recognised in other comprehensive income and accumulated
inthe ’Foreign currency translation reserve’ in the statement of changes in equity.
Foreign operations
The group recognises foreign exchange differences relating to monetary items that form part of its net investment in its foreign
operations in other comprehensive income where settlement of the item is neither planned nor likely to take place in the
foreseeable future.
When a foreign operation is disposed of, the accumulated foreign exchange differences are reclassified to the income
statement, aspart of the gain or loss on sale.
3. Accounting judgements and sources of estimation uncertainty
The preparation of the financial statements necessitates the use of estimates, assumptions and judgements by management. These
estimates and assumptions affect the reported amounts of assets, liabilities and contingent assets and liabilities at the statement of
financial position date as well as the reported income and expenses for the year. Although estimates are based on management’s
best knowledge and judgement of current facts as at the statement of financial position date, the actual outcome may differ from
theseestimates.
Estimates are made regarding the fair value of intangible assets recognised in business combinations; goodwill impairment (refer to
note 7); impairment of financial assets carried at amortised cost and other assets (refer to note 29); the valuation and remeasurement
of written put option liabilities (refer to note 31); impairment of property, plant and equipment (refer to note 32); recognition and
impairment of other intangible assets (refer to note 33); the remeasurements required in business combinations; disposals of associates
and equity-compensation benefits (refer to note 36) and the fair value of the residual interest in the Naspers group (refer to note 4).
Where relevant, the group has provided sensitivity analyses demonstrating the impact of changes in key estimates and assumptions
onreported results.
The following accounting judgements had the most significant impact on the consolidated financial statements:
Lag periods applied when reporting results of equity-accounted investments
Where the reporting periods of associates and joint ventures (equity-accounted investments) are not coterminous with that of the group
and/or it is impracticable for the relevant equity-accounted investee to prepare financial statements as of 31 March (for instance due
tothe availability of the results of the equity-accounted investee relative to the group’s reporting period), the group applies an
appropriate lag period of not more than three months in reporting the results of the equity-accounted investees. Significant transactions
and events that occur between the non-coterminous reporting periods are adjusted for. The group exercises significant judgement
when determining the transactions and events for which adjustments are made.
Accounting for equity-accounted investments’ share of other comprehensive income and changes in net asset value
The group recognises its share of other comprehensive income and other changes in net assets of associates and joint ventures in the
statement of comprehensive income. Other changes in net assets of the associate and joint ventures include changes in their share-
based compensation reserve, transactions with non-controlling shareholders and other direct equity movements. Equity-accounted
investments’ share of other comprehensive income and changes in net asset value are accumulated in the valuation reserve.
Prosus annual report 2022
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Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Accounting framework and critical judgements
continued
3. Accounting judgements and sources of estimation uncertainty
continued
Accounting for written put option liabilities
The group accounts for all written put options as liabilities equal to the present value of the expected redemption amount payable
inthe statement of financial position. The present value is based on a discounted cash flow model, market multiples or a recent
transaction during the current year in which the equity value was determined. This applies regardless of whether the group has the
discretion to settle in its own equity instruments or cash. Written put option liabilities that are linked to a committed employment period
are accounted for as cash-settled share-based compensation benefits. The expected redemption amounts payable for these written
put options is dependent on the completion of an employment service period. Management’s judgements and estimates relate to the
inputs used in determining the present value of the expected redemption amount payable.
Accounting for share-based payment transactions
The group recognises cash and equity-settled share-based payment expenses arising from its various share incentive schemes
andexercises significant judgement when calculating these expenses. Where the group has a choice of settlement, it classifies the
share-based payment transaction as cash-settled based on management’s estimate of the most likely outcome, its settlement policy
and whether it has a present obligation to settle in cash; otherwise, it accounts for the transaction as equity settled. Expenses are
generally based on the fair values of awards granted to employees.
Fair value is measured using appropriate valuation and option pricing models, where applicable. The values assigned to the key
assumptions used in the valuation models for the group’s most significant share incentive schemes are disclosed in note 36.
The group provides funding via loan account or provides equity contributions to Naspers group share trusts to acquire Naspers or
Prosus shares on the market for settlement of Naspers group’s equity-compensation benefits. The trust provided with funding and
thetrusts that receive equity contributions from the group are controlled structured entities of the Naspers group as they administer
Naspers group share schemes for all employees and are approved by the Naspers board. The group cannot make decisions over
theNaspers group share trusts unilaterally even in the event that loan funding is provided.
Accounting judgements related to the cash flow classification for the contribution to Naspers group equity-compensation plans
The Naspers group has restricted stock units (RSUs) and performance share units (PSUs) which are accounted for as equity-settled
compensation plans. These equity-compensation benefits are provided to employees of the Prosus group. Contributions made by the
group to fund the purchase of the shares on the market by the Naspers group share trusts have been classified as financing activities
on the consolidated statement of cash flows. This is because the Prosus group has no economic interest in the shares acquired and
does not control the share trusts. The contributions are in substance a distribution to the Naspers group.
4. Significant changes in financial position and performance during the reporting period
Prosus share exchange with Naspers shareholders
In August 2021, the group completed a share exchange offer to Naspers shareholders.
This offered Naspers shareholders the opportunity to tender their existing Naspers N ordinary shares for newly issued Prosus ordinary
shares N at an exchange ratio of 1 Naspers N ordinary share for 2.27443 Prosus ordinary shares N. The share exchange offerresulted
in Prosus acquiring a 45.8% fully diluted interest in Naspers in exchange for newly issued Prosus ordinary shares N. Thisinterest,
coupled with the 3.7% shareholding Prosus previously acquired in Naspers, as part of the share repurchase programme that was
completed in June 2021, resulted in Prosus holding a 49.5%
1
fully diluted interest which represents a 49.9%
2
economic interest
inNaspers.
Furthermore, newly created 1 128 507 756 B ordinary shares were issued for €56.4m (US$66.3m) to Naspers which entitles Naspers
to one vote per share, but only to one millionth of the amount of the distribution that a holder of a Prosus ordinary share N is entitled
to. Naspers cannot list or trade these shares. These shares allowed Naspers to maintain its control as it held more than 70% of the
shareholder voting rights in Prosus. Naspers therefore continues to hold the majority of the shareholder voting rights of Prosus.
Cross-holding arrangement
A distribution agreement (hereafter referred to as the cross-holding agreement) was entered into between Naspers and Prosus,
whichbecame effective at the time of closing of the share exchange. The cross-holding agreement takes into account Prosus’s indirect
interest in itself from holding Naspers shares and deals with how distributions between the two groups will be managed. It eliminates
the need for flows back and forth between the two groups as a result of the cross-shareholding, through awaiver by Prosus of its
entitlement to distributions, that originates from Prosus, on the Naspers shares that it holds, and provides clarity to both Prosus and
Naspers free-float shareholders of their economic interest in distributions made by Prosus.
The cross-holding agreement relates to Prosus’s 49.5% fully diluted interest in Naspers and Naspers’s 57% legal ownership of Prosus
ordinary shares N. The principles of the cross-holding agreement are also incorporated in Prosus’s articles of association, and the
cross-holding agreement together with Prosus’s articles of association form the cross-holding arrangements. It does not govern
andhasno bearing on the voting rights attached to the shares held by Naspers or Prosus shareholders.
The conclusion of the share exchange and the cross-holding arrangement increases Prosus free-float’s economic interest inthe group
to 58.9%. At 31 March 2022, subsequent to the Prosus share repurchase programme, Prosus free-float’s economic interest inthe
groupis 57.7%.
1
2
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Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Accounting framework and critical judgements
continued
4. Significant changes in financial position and performance during the reporting period
continued
Prosus share exchange with Naspers shareholders
continued
The following represents the accounting of the transaction in the group’s financial statements:
Control structure of the Prosus group
Prosus is governed by a board of directors. The board of directors is appointed by the shareholders of the group. The group is
therefore controlled by the shareholder with the majority voting rights to appoint the board of directors.
Prior to the share exchange transaction, Naspers held a 73% effective interest in Prosus ordinary shares N, with the corresponding
shareholder voting rights, and was the majority shareholder giving it control of Prosus and in particular appointments of the board
ofdirectors of Prosus. Post the completion of the share exchange transaction, and despite the dilution of its effective interest in
Prosusordinary shares N, Naspers continued to maintain control of Prosus through its holding of Prosus ordinary shares N and the
newly issued Prosus B ordinary shares, with corresponding voting rights. As Naspers, through its shareholding, holds the majority
ofthe voting rights in Prosus, it controls appointments to the Prosus board of directors.
Before and subsequent to the closing of the share exchange transaction, Naspers Beleggings (RF) Limited (Nasbel) and Keeromstraat
30 Beleggings (RF) Limited (Keerom) collectively hold 55.02% of the shareholder voting rights in Naspers. Nasbel and Keerom exercise
their voting rights in consultation with one another in terms of a voting pool agreement and constitute the control structure of Naspers.
This control structure therefore provides them with the majority voting rights needed to control appointments to the board of directors
ofNaspers which then controls the appointment of the board of directors of Prosus.
Nature of Prosus’s 49.5% fully diluted investment in Naspers
Prosus’s 49.5% fully diluted interest in Naspers N ordinary shares entitles it to 15% of the shareholder voting rights in Naspers. This
15%of shareholder voting rights does not give Prosus majority rights in Naspers that would entitle it to control appointments to the
Naspers board of directors or have direct appointment rights or independent representation rights on the Naspers board of
directors. Furthermore, as Prosus is part of the Naspers group pursuant to the JSE Listings Requirements, it is considered to be
holding treasury shares from a Naspers group-level perspective, and the relevant regulations stipulate that the voting rights attached
to these ’treasury shares’ held by Prosus will not be taken into account in respect of Naspers shareholder resolutions proposed
pursuant to the JSE Listings Requirements. Consequently, Prosus’s 49.5% fully diluted investment in Naspers does not represent control
or significant influence.
Impact of the cross-holding arrangements on the accounting for the share exchange
In August 2021, on the closing date of the share exchange transaction, Prosus recognised a fair value through other comprehensive
income (FVOCI) investment amounting to US$385m representing its residual interest in the Naspers group. The corresponding entries
are the issue of Prosus ordinary shares N recognised in share capital/share premium of US$38.64bn and US$38.25bn recognised in
the’existing business combination reserve’ representing the shareholder distribution in contemplation of a capital restructure.
The previously executed share exchange resulted in the issue of the new Prosus ordinary shares N in exchange for a 45.8%
(49.5%including the share repurchase programme) fully dilutive interest in Naspers. This resulted in an increase in Prosus equity and
the recognition of a financial asset because the investment does not represent a subsidiary, an associate or a joint operation. As the
Naspers investment is not held for trading, the financial asset should be recognised at FVOCI in the same manner as the Naspers
shares acquired by Prosus through the share repurchase programme completed in June 2021.
Simultaneous to the share exchange programme the cross-holding agreement between Naspers and Prosus became effective. The
cross-holding agreement mandates that Prosus waives all rights to all distributions (including dividend flows) from its Naspers shares
held, other than the portion attributable to the residual interest in the Naspers group (primarily Takealot, Media24 and corporate
entities). Prosus is also restricted from disposing all or any portion of its Naspers shares held without the consent of Naspers. In
addition, Naspers is obligated to pass on any distributions (including dividends) it receives from Prosus to its free-float shareholders
(asProsus is subject to the waiver discussed above). Based on this arrangement, Prosus is eligible to the economic benefits generated
by the Naspers entities outside of the Prosus group.
Almost all of the value of the Naspers shares is derived from the investments in the Prosus group. Should the 49.5% fully diluted
interest in Naspers be accounted for as a financial instrument at fair value it would result in the group effectively recognising
49.5%ofits own value on the consolidated statement of financial position with fair-value changes recognised in other comprehensive
income (OCI) and accumulated in equity.
Based on the substance of the transaction the portion of the effective interest in Naspers that relates to Prosus’s underlying investments
is accounted for as a shareholder distribution. This is recognised in equity in the ’existing business combination reserve’. This portion of
the transaction is therefore treated as a transaction with shareholders in contemplation of a capital restructure. Only Prosus’s residual
interest in the Naspers group is recognised as an FVOCI investment on the condensed consolidated statement of financial position.
The FVOCI investment relating to the 3.7% Naspers N ordinary shares acquired before the share exchange was derecognised at the
date of the share exchange. The fair value of the residual interest in the Naspers group was assessed based on the sum-of-the-parts
considering the fair value of the underlying components on a marketable and controlling basis applying a consistent valuation model.
The group further applied a marketability discount (45%) to arrive at the fair value of the residual interest on a non-marketable and
non-controlling basis (unit of account). Amarketability discount factors in the indirect interest in the residual assets as Prosus cannot
directly or indirectly dispose of any Naspers shares without Naspers’s approval, and cannot direct the activities or decide on the
distributions (be it dividends or the actual shares) from theresidual interest in Naspers to its shareholders. A movement in the
marketability discount rate of 1% will result in an increase or decrease of US$4m.
Prosus annual report 2022
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Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Accounting framework and critical judgements
continued
4. Significant changes in financial position and performance during the reporting period
continued
Nature of Prosus’s 49.5% fully diluted investment in Naspers
continued
Accounting for the issue of class B ordinary shares to Naspers
In addition to the above transaction, Prosus issued newly created class B ordinary shares to Naspers for a cash consideration
of€56.4m (US$66.3m). The issue of these shares was recognised as an increase in the share capital and share premium of
thegroup.
Reclassification of treasury shares
The group made a decision to show the treasury shares separately in the statement of changes in equity as well as on the face
ofthestatement of financial position. The group considers that the change in presentation provides more relevant information about
the treasury shares held by Prosus subsequent to the share repurchase programme.
At March 2021, the group held 11 874 493 ordinary shares N as treasury shares. These shares were acquired as part of the share
repurchase programme that began in October 2020. The shares repurchased at 31 March 2021 were measured at the cost on the
date ofrepurchase and were recognised as treasury shares in ’retained earnings’ on the consolidated statement of financial position.
As at 31 March 2021, the treasury shares were recognised against retained earnings, with subsequent reclassification to treasury
shares within equity during the current period. The reclassification has no change on the group’s overall equity. However, comparative
figures on the consolidated statement of financial position have been restated for the reclassification of treasury shares between
’retained earnings’ and ’treasury shares’ which are now presented separately.
Below is a summary of the impact of the reclassification of the treasury shares between ’retained earnings’ and ’treasury shares’ on
theconsolidated statement of financial position and consolidated statement of changes in equity as at 31 March 2021.
Consolidated statement of financial position and statement of changes in equity
Year ended 31 March 2021
Previously
reported
US$’m
Reclassification
1
US$’m
Restated
US$’m
Share capital and premium
612
–
612Treasury shares
–
(1 416) (1 416)
Other reserves
5 818
–
5 818Retained earnings
36 639 1 416 38 055
Capital and reserves attributable to the group’s equity holders 43 069
–
43 0691
consolidated statement of changes in equity.
The impact of the Russia-Ukraine conflict
The group is appalled by the Russia-Ukraine conflict. It is in the world’s interest to find a solution that brings the conflict to an end and
secures long-term peace and stability.
The group operates a classifieds platform in Ukraine which is part of the OLX Group. The group has committed a broad range of
support for Ukraine, for its Ukrainian employees, and additionally, a commitment of more than US$10m funding for humanitarian efforts.
The group also has interests in Russia, mainly represented by its investments in VKontakte (VK) and Avito.
On 20 May 2022, following the earlier operational separation of Avito from the OLX Group, the group confirmed its decision to exit
Avito and start the search for an appropriate buyer for its shares in Avito.
Avito
The group first invested in Avito in March 2013 and, currently, is the leading Russian classifieds platform and one of the top eight most
visited websites in Russia. Avito is the second largest online classifieds business in the world, with 35 million unique visitors a month
and more than 100 million active listings. The group’s operations in Russia represent 9% (2021: 8%) ofthe group’s total external
consolidated revenue for the financial year ended 31 March 2022.
Due to the Russia-Ukraine conflict, the group assessed whether the goodwill recognised from Avito is impaired. The recoverable
amount was based on the value-in-use calculation that included the estimated impact of the war on the operations and the discount
rate. The impact of the Russia-Ukraine conflict did not result in an impairment of goodwill for the business.
Based on the group’s 99% effective ownership interest in Avito, its financial results are consolidated for the financial year ended
31March 2022. Following the group’s decision in May 2022 to exit Avito, the search for an appropriate buyer for its shares in Avito is
underway.
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Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Accounting framework and critical judgements
continued
4. Significant changes in financial position and performance during the reporting period
continued
The impact of the Russia-Ukraine conflict
continued
VK
VK is a Russian online social media and social networking service. Up until 3 March 2022, the group accounted for this investment as
an associate using the equity method. The group’s effective interest in VK is 27.2% (fully diluted 25.7%) with a shareholder voting interest
of 12.3%.
VK’s shares are listed on the London Stock Exchange (LSE). The LSE suspended trading of VK shares on 3 March 2022 in response
tosanctions in order to maintain orderly markets. The significant decline in the share price presented an indicator for impairment
onthe carrying value of this investment. Accordingly, the group fully impaired the carrying value of the investment in VK, of US$473.6m
for theyearended 31 March 2022.
On 4 March 2022, the group’s three directors on the VK board resigned with immediate effect and no voting rights will be exercised
under the current circumstances. The group ceased accounting for this investment as an associate and has reclassified the foreign
currency translation reserves related to VK from other comprehensive income to the income statement, amounting to a loss of
US$1.14bn.
Subsequent to the loss of significant influence, the group now accounts for this investment at fair value through other comprehensive
income.
OLX Ukraine
The financial results of OLX Ukraine are not material to the group.
The impact of Covid-19
The global Covid-19 pandemic began to affect the operations of the group towards the end of March 2020. Just over two years later,
including the rollout of vaccines across the world, the pandemic has had limited negative impact on the group’s financial position,
financial performance and cash flows presented in these consolidated financial statements for the year ended 31 March 2022.
Use of significant judgements and estimates
The group has continuously monitored the significant judgements and estimates used to support the reported assets, liabilities, income
and expenses for the year ended 31 March 2022 for any possible impacts of the pandemic.
Risk management
The annual report for the year ended 31 March 2022 describes certain risks which could have an adverse effect on the group’s
financial position and results. Those risks should be read in conjunction with these consolidated financial statements. The group has
remained resilient and performed well during the year ended 31 March 2022.
5. Accounting developments
The group has adopted all new and amended accounting pronouncements that are relevant to its operations and that are effective for
financial years commencing 1 April 2021 but these did not have a significant effect on the group’s consolidated financial statements.
The following new standards, interpretations and amendments to existing standards that are considered relevant to the group, are
notyet effective as at 31 March 2022. The group is currently evaluating the effects of these standards and interpretations, which have
not been early adopted. The estimated impact is not considered to be material at this stage for the following standards and
interpretations:
Standard/Interpretation Title/Amendment area Effective for year ending
IAS 1
Presentation of Financial Statements
(current and non-current)
March 2024
IFRS 3
Business Combinations
(assets and liabilities in a business combination)
March 2023
IFRS 9
Financial Instruments
(calculation of ’the 10% test’ for derecognition
ofa financial liability)
March 2023
IFRS 16
Leases
(treatment of lease incentives)
March 2023
IAS 37
Onerous Contracts
(cost of fulfilling a contract)
March 2023
IAS 16
Property, Plant and Equipment
(proceeds before intended use)
March 2023
IAS 12
Income Taxes
(deferred tax related to assets and liabilities arising
from a single transaction)
March 2024
IAS 1/IAS 8
Presentation of Financial Statements and Changes in Accounting
Estimates and Errors
(accounting policy disclosures and changes
inaccounting policies or in accounting estimates)
March 2024
IFRS 10/IAS 28
Sale or Contribution of Assets between an Investor and its
AssociateorJoint Venture
To be determined by the IASB
Other new standards, interpretations and amendments to existing standards not yet effective
None of the other new standards, interpretations and amendments to existing standards that are not yet effective as at 31 March 2022
are expected to have a significant impact on the group.
Prosus annual report 2022
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Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
5. Accounting developments
continued
Basis of consolidation
Accounting policies
The financial statements include the results of Prosus and its subsidiaries, associated companies and joint ventures.
Subsidiaries
Subsidiaries are entities over which the group has control. The existence and effect of potential voting rights are considered
when assessing whether the group controls another entity to the extent that those rights are substantive. Subsidiaries are
consolidated from the date on which control is obtained (acquisition date) up to the date control ceases. For certain entities,
the group has entered into contractual arrangements that allow the group to control such entities. Because the group controls
such entities, they are consolidated in the financial statements.
Intergroup transactions, balances and unrealised gains and losses are eliminated on consolidation.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in an acquisition of a
business (acquiree) comprises the fair values of the assets transferred, the liabilities assumed, the equity interests issued by
thegroup and the fair value of any contingent consideration arrangements where applicable. If the contingent consideration
isclassified as equity, it is not subsequently remeasured and settlement is accounted for within equity. Otherwise, subsequent
changes to the fair value of contingent consideration are recognised in the income statement.
For each business combination, the group measures the non-controlling interest in the acquiree at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets. Costs related to the acquisition, other than those associated with
the issueof debt or equity securities, are expensed as incurred.
Where a business combination is achieved in stages, the group’s previously held equity interest in the acquiree is remeasured
to fair value as at the acquisition date through the income statement. The fair value of the group’s previously held equity
interest forms part ofthe consideration transferred in the business combination at the acquisition date.
When a selling shareholder is required to remain in the group’s employment subsequent to a business combination, retention
agreements are recognised as employee benefit arrangements where applicable and dealt with in terms of the accounting
policy foremployee or equity-compensation benefits.
Goodwill
Goodwill in a business combination is recognised at the acquisition date when the consideration transferred and the
recognised amount of non-controlling interests exceed the fair value of the net identifiable assets of the entity acquired.
Iftheconsideration transferred is lower than the fair value of the identifiable net assets of the acquiree (a bargain purchase),
the difference is recognised in the income statement. The gain or loss arising on the disposal of an entity is calculated after
consideration of attributable goodwill.
Transactions with non-controlling shareholders
Non-controlling shareholders are equity participants of the group and transactions with non-controlling shareholders are
therefore accounted for in equity and included in the statement of changes in equity, where the transaction does not result in
the loss of control of a subsidiary. In transactions with non-controlling shareholders, the excess of the cost/proceeds of the
transaction over the group’s proportionate share of the net asset value acquired/disposed is allocated to the ’Existing control
business combination reserve’ in equity. Refer to financial assets and liabilities for the group’s accounting policy regarding
written put options over non-controlling interests.
Common control transactions
Business combinations in which all of the combining entities or businesses are ultimately controlled by the same party or
parties both before and after the business combination (and where that control is not transitory) are referred to as common
control transactions. The accounting policy for the acquiring entity would be to account for the transaction at book value in
itsconsolidated financial statements. The book value of the acquired entity is the consolidated book value as reflected in the
consolidated financial statements of Naspers. The excess of the cost of the transaction over the acquirer’s proportionate share
of the net asset value acquired in common control transactions will be allocated to the existing control business combination
reserve in equity.
The group applies the above common control accounting policy to distributions of non-cash assets that are ultimately
controlled by the same party or parties both before and after the distribution.
Associates and joint ventures
Investments in associated companies (associates) and joint ventures are accounted for in terms of the equity method.
Associates are entities over which the group exercises significant influence, but which it does not control or jointly control. Joint
ventures are arrangements in which the group contractually shares control over an activity with others and in which the parties
have rights to the net assets of the arrangement.
159
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
5. Accounting developments
continued
Basis of consolidation
continued
Accounting policies
continued
Associates and joint ventures
continued
Most major foreign associates and joint ventures do not have year-ends that are coterminous with that of the group,
andthegroup’s accounting policy is to account for an appropriate lag period in reporting their results where it is impractical
for theassociates and joint ventures to provide relevant information in time. Significant transactions and events occurring
between theinvestees’ and the group’s March year-end are taken into account.
Unrealised gains or losses on transactions between the group and its associates and joint ventures are eliminated to the
extent ofthegroup’s interest in the relevant associate or joint venture, except where the loss is indicative of impairment of
assets transferred.
For acquisitions of associates and joint ventures achieved in stages, the group measures the cost of its investment as the
sumof the consideration paid for each purchase plus a share of the investee’s profits and other equity movements. Other
comprehensive income recognised in prior periods accumulated in the valuation reserve in relation to the previously held
stake in the investee is realised and transferred to retained earnings. Acquisition-related costs form part of the investment
intheassociate or joint venture.
When the group increases its shareholding in an associate or joint venture and continues to exercise significant influence
ortoexert joint control over the investee, the cost of the additional investment is added to the carrying value of the investee.
Theacquired share in the investee’s identifiable net assets, as well as goodwill arising, is calculated using fair-value
information atthe date of acquiring the additional interest. Goodwill is included in the carrying value of the investment in
theassociate or joint venture.
Partial disposals of associates and joint ventures that do not result in a loss of significant influence or joint control are
accounted for asdilutions. Dilution gains and losses are recognised in the income statement. The group’s proportionate
share of gains or losses previously recognised in other comprehensive income by associates and joint ventures is
reclassified to the income statement when adilution occurs if the gains or losses are required to be reclassified to the
income statement in terms of the applicable accounting standard.
Where an associate or joint venture holds equity in the group, the carrying amount of the investment in the associate or joint
venture isadjusted by an amount representing the group’s indirect holding in its own equity because of the cross-holding.
Theamount of the group’s share of the associate’s or joint venture’s results is determined after eliminating, from the
associate’s or joint venture’s results, any income or dividends received by the associate or joint venture from the group.
Each associate and joint venture is assessed for impairment indicators at each reporting date as a single asset. Impairment
indicators considered will include poor performance of the associate and joint venture on a consistent basis and/or other
significant changes to the business that may indicate that the equity-accounted investment is impaired.
If there is an indicator that it is impaired, the carrying value of the group’s investment in the associate or joint venture is
adjusted to its recoverable amount determined as the higher of its fair value less costs of disposal and its value in use.
Theresulting impairment loss is included in ’Impairment of equity-accounted investments’ in the income statement.
The group’s share of other comprehensive income and other changes in net assets of associates and joint ventures is
recognised in the statement of comprehensive income.
Where the group contributes a non-monetary asset (including a business) to an investee in exchange for an interest in that
investee that is equity accounted, the gain or loss arising on the remeasurement of the contributed non-monetary asset to fair
value is recognised in the income statement only to the extent of other parties’ interests in the investee. The gain or loss is
eliminated against the carrying value of the investment in the associate or joint venture to the extent of the group’s interest.
Disposals
When the group ceases to have control (subsidiaries), exercise significant influence (associates) or exert joint control (joint
ventures), theretained interest is remeasured to its fair value, with the change in the carrying value recognised in the income
statement. This fairvalue is the initial carrying amount for the purposes of subsequent accounting for the retained interest.
Inaddition, the amounts previously recognised in other comprehensive income in respect of the entity disposed of are
accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to the income statement.
Impairment of goodwill
Goodwill is tested annually for impairment or more frequently if changes in circumstances indicate that it may be impaired.
Goodwill iscarried at cost less accumulated impairment losses.
Goodwill is allocated to cash-generating units for purposes of impairment testing. An impairment test is performed by
determining therecoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount of
acash-generating unit orindividual asset is the higher of its value in use and its fair value less costs of disposal. Where the
recoverable amount is less than the carrying amount, an impairment loss is recognised in ’Other (losses)/gains – net’ in
theincome statement. Impairment losses recognised on goodwill are not reversed in subsequent periods.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
6. Business combinations, other acquisitions and disposals
The following sets out the group’s significant transactions related to business combinations and equity-accounted investments for the
year ended 31 March 2022:
Amount invested US$’m
Company
Classification
Net
cash
paid/
(received)
Non-cash
consideration
Cash in
entity
acquired
Total
consideration
Acquisition of subsidiaries
(a)
Good Bidco B.V. (GoodHabitz)
Subsidiary
252
– 6
258(b)
Stack Overflow
Subsidiary
1 644
–
98
1 7421 896
–
104
2 000Acquisition of equity-accounted investments
(c)
Oda
Associate
116
– –
116(d)
API Holdings Private Limited (PharmEasy)
Associate
220
– –
220(e)
Skillsoft Corp
Associate
500 38
–
538(f)
Flink SE (Flink)
Associate
84
– –
84Other
1
Associate
441
– –
4411 361
38
–
1 399Additional investment in existing equity-accounted
investments
(g)
Bundl Technologies Private Limited (Swiggy)
Associate
299
– –
299(h)
NTex Transportation Services Private Limited (ElasticRun)
Associate
90
– –
90(i)
Think & Learn Private Limited (BYJU’S)
Associate
153
– –
153(j)
Delivery Hero SE (Delivery Hero)
Associate
298
1 242
–
1 540(k)
Eruditus Learning Solutions Limited (Eruditus)
Associate
127
– –
127(l)
Meesho Inc (Meesho)
Associate
134
– –
134Other
1
Associate/
joint venture
222
– –
2221 323 1 242
–
2 565Other investments
(m)
UrbanClap Technologies India Private Limited
(UrbanCompany)
FVOCI
84
– –
84(j)
Delivery Hero
2
FVPL
936
– –
936(n)
JD.Com
FVOCI
–
3 855
–3 855
(o)
GoStudent
FVOCI
226
– –
226Other
1
231
– –
2311 477 3 855
–
5 332Partial disposal of equity-accounted investments
(p)
Tencent Holdings Limited (Tencent)
Associate
(14 609)
– –
(14 609)(14 609)
– –
(14 609)1
2
capitalised to the carrying value of the investment in associate.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
161
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
6. Business combinations, other acquisitions and disposals
continued
Acquisition of subsidiaries
(a)
In June 2021, the group acquired a 62% effective interest (61% fully diluted) for US$258m in GoodHabitz. GoodHabitz provides
educational information online, offering commercial, management, and technical training services in the Netherlands. The group
accounted for this investment as a subsidiary.
The group has a put option arrangement with the non-controlling interest exercisable at specified future dates. The settlement of
the put option arrangement is in cash or shares at the group’s discretion. At acquisition, the group recognised a put option liability
amounting to US$144.1m representing the expected redemption amount payable to non-controlling shareholders upon settlement
of their ownership interest in the entity, included in the ’Other non-current liabilities’ line on the statement of financial position.
In addition, the group has a call option arrangement with the non-controlling shareholder that is linked to employment. It is
exercisable at specified future dates upon termination of employment of the non-controlling shareholder due to specified
circumstances. The group has the right to settle this call option in cash at the fair value of shareholder’s interest. The non-controlling
shareholder currently has all the economic benefits associated with ownership of the shares. As a result, the group’s obligation to
settle this interest is included in the put option liability mentioned above.
The main intangible assets recognised in the business combination were customer relationships, trademarks and technology.
Themain factor contributing to the goodwill recognised in the acquisition is GoodHabitz’s market presence, product development
capabilities and engineering capabilities.
(b)
In August 2021, the group acquired a 100% effective and dilutive interest for US$1.7bn in Stack Overflow. Stack Overflow is a
leading knowledge-sharing platform for the global community of developers and technologists. The group accounted for this
investment as a subsidiary.
The main intangible assets recognised in the business combination were trade names, technology and customer relationships.
The main factor contributing to the goodwill recognised in the acquisition is Stack Overflow’s market presence, engineering
capabilities to develop future customers.
The purchase price allocations for the above two acquisitions, in the Edtech segment, were not yet finalised as at 30 September
2021, therefore preliminary figures were disclosed in the condensed consolidated interim financial statements. The changes
between the final and preliminary fair values were not material. The table below summarises the final fair values of each major
class of identifiable assets and liabilities recognised for the above two acquisitions on the acquisition date.
Since the acquisition dates of the above business combinations, revenue of US$83m and net losses of US$102m have been
included in the group’s income statement. The impact on revenue and net losses from the above transactions, had the acquisitions
taken place on 1 April 2021, were US$115m and US$108m respectively.
Acquisition date fair values of each major class of identifiable assets and liabilities recognised
GoodHabitz
June 2021
US$’m
Stack
Overflow
August 2021
US$’m
Total consideration
258
1 742
25 283
Intangible assets
62 247
Property, plant and equipment
1 2
Cash and deposits
6
98
Other receivables
8
36
Other liabilities
(22) (35)
Deferred tax liabilities
(14) (65)
Non-controlling interest
1
(16)
–
Goodwill
233
1 459
1
Acquisition of equity-accounted investments
(c)
In April 2021, the group acquired a 13% effective (12% fully diluted) interest for US$116m in Oda, Norway’s largest online grocery
business. The group accounted for this investment as an equity-accounted associate on account of its significant influence on the
board of directors.
(d)
In May 2021, the group acquired a 16% effective interest (15% fully diluted) for US$191m in PharmEasy. PharmEasy owns India’s
largest integrated digital healthcare platforms. The group accounted for this investment as an equity-accounted associate on
account of its significant influence on the board of directors.
Subsequent to this initial investment the group made an additional investment amounting to US$29m. As we did not participate
equally in the funding round our effective interest is 14% (12% fully diluted) in PharmEasy. The group continues to account for its
interest in PharmEasy as an investment in an associate on account of its significant influence on the board of directors.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
6. Business combinations, other acquisitions and disposals
continued
Acquisition of equity-accounted investments
continued
(e)
In June 2021, the group acquired a 38% effective interest (34% fully diluted) for US$500m in Skillsoft Corp (Churchill). Churchill is
aspecial-purpose acquisition company that provides cloud-based learning, training and talent management solutions through its
acquisition of Skillsoft Corp (NYSE: SKIL) (Skillsoft) and Global Knowledge Training LLC (Global Knowledge). Skillsoft, a global
leader in corporate digital learning, commenced trading on the New York Stock Exchange (NYSE) under the ticker symbol ‘SKIL.’
This follows the completion of Software Luxembourg Holding S.A.’s merger with Churchill Capital Corp II and combination with
Global Knowledge in June 2021, with the combined company now operating as Skillsoft. The group accounted for this investment
as an equity-accounted associate. The cost of the investment in associate includes the fair value of a derivative financial asset
amounting to US$38m at date of closing that arose because the purchase price for this investment was fixed in October 2020
onthe signing date of this transaction.
In addition to the associate investment in Skillsoft, the group received 16 666 667 issued public warrants amounting to US$41m in
exchange for corporate support services to be provided to the company. The public warrants give the group the right to purchase
Skillsoft common stock at an exercise price of US$11.50 per share or are subject to a compulsory cash redemption on specified
future dates and is contingent on the Skillsoft share price. The group accounts for these warrants as financial assets at fair value
through profit or loss and recognised deferred income for the support services to be provided over a specified period.
(f)
In July 2021, the group acquired a 12% effective interest (12% fully diluted) for US$84m in Flink. Flink is a German-based instant
grocery delivery company. The group will account for this investment as an equity-accounted associate on account of its significant
influence on the board of directors. The agreement includes an arrangement with the founder shareholders in which their
shareholding may be repurchased by Flink upon termination of employment at specified values. This share-based payment
arrangement will be settled in cash. The founders’ legal shareholding at acquisition is therefore accounted for as a compound
financial instrument and not as a shareholder ownership interest. This increased the group’s economic interest for equity
accounting the associate to 20% as a result of this arrangement.
Additional investment in existing equity-accounted investments
(g)
In April 2021 and February 2022, the group made an additional investment in Swiggy, the operator of a first-party food delivery
marketplace in India, amounting to US$274m and US$25m respectively. At 31 March 2021, the group held a 41% effective interest.
As we did not participate equally in the funding round our effective interest is 33% (31% fully diluted) in Swiggy. The group continues
to account for its interest in Swiggy as an investment in an associate.
(h)
In April 2021 and February 2022, the group made an additional investment in ElasticRun, a software and technology platform for
providing transportation and logistics services in India, amounting to US$30m and US$60m respectively. At 31 March 2021, the
group held a 20% effective interest. Following these investments, the group holds a 23% effective interest (22% fully diluted) in
ElasticRun. The group continues to account for its interest in ElasticRun as an investment in an associate.
(i)
In April 2021, the group made an additional investment amounting to US$153m, in BYJU’S, India’s largest education company and
the creator of India’s largest personalised learning app. At 31 March 2021, the group held an 11% effective interest. Following this
investment, the group retained its 11% effective interest (10% fully diluted) in BYJU’S. The group continues to account for its interest
inBYJU’S as an investment in an associate on account of its significant influence on the board of directors.
(j)
In May 2021, the group completed bilateral trades that resulted in an additional investment in Delivery Hero. The group acquired
anadditional investment in Delivery Hero in March 2021, which increased its shareholding by 8% to approximately 24.99%. The
additional investment was acquired via the market and bilateral trades. At 31 March 2021, while legal ownership had transferred
forthis 8% additional interest, the access to the returns associated with the ownership had not fully transferred for 4% of this
interest. Accordingly, the effective interest in Delivery Hero recognised at 31 March 2021 was 21% with the remaining 4% amounting
to US$1.2bn recognised as a contractual right to receive the shares or cash. In May 2021, the bilateral trades for the remaining
4%were completed, resulting in an increase in the effective shareholding of Delivery Hero to 24.99% as the access to the returns
associated with the ownership for these shares have been transferred. The group paid an additional US$188m for the increase
inshare price for this interest between March and May 2021. In addition, the financial asset amounting to US$1.2bn recognised
at31March 2021 for the right to receive this interest or cash was derecognised against the carrying value of the investment.
Further, in August 2021 the group announced its intention to acquire an additional 2.5% stake in Delivery Hero, subject to Austrian
competition regulatory approval, through its subsidiary, MIH Food Holdings B.V. The competition approval was granted in
September and accordingly the group acquired an additional investment in Delivery Hero. The group increased its shareholding
inDelivery Hero by 2.5% to 27% from 25%.
The additional investment was acquired initially as a call option to acquire the shares subject to competition approval. The call
option was acquired at the fair value of the shares amounting to US$936m and recognised asa financial instrument measured
atfair value through profit or loss. In addition, the group applied cash flow hedge accounting tothe highly probable forecast
acquisition of this additional investment, hedging the exposure to future share price increases in Delivery Hero shares between
the date the call option was acquired and the date approval was granted to acquire the additional shares. Theadditional
investment in Delivery Hero was based on the fair value of the call option on the date that the approval was granted (US$817m)
and the accumulated losses in the cash flow hedge reserve (US$119m). The accumulated losses within thecash flow hedge
reserve were included in the cost of the investment, as based on the group’s judgement, the investment in associate isanon-
financial asset. The resulting additional investment in Delivery Hero recognised after the basis adjustment was US$936m.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
163
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
6. Business combinations, other acquisitions and disposals
continued
Additional investment in existing equity-accounted investments
continued
(k)
In August 2021, the group made an additional investment amounting to US$127m in Eruditus, an online platform using technology and
curriculum innovation to offer professional education courses in collaboration with top-ranked universities globally. At 31 March 2021,
the group held a 9% effective interest. Following these investments, the group holds a 13% effective interest (11% fully diluted) in
Eruditus. The group continues to account for its interest in Eruditus as an investment in an associate on account of its significant
influence on the board of directors.
(l)
In September 2021, the group made an additional investment amounting to US$134m in Meesho, a leading social commerce
online marketplace in India that enables independent resellers to build small businesses by connecting them with suppliers
tocurate a catalogue of goods and services to sell. Meesho also provides logistics and payment tools on its platform.
At31March 2021, the group held a 12% effective interest. Following these investments, the group holds a 13% effective interest
(12% fully diluted) in Meesho. The group continues to account for its interest in Meesho as an investment in an associate on
account of its significant influence on the board of directors.
Other investments
(m)
In April 2021, the group acquired a 4% effective interest (4% fully diluted) for US$84m in Urban Company. Urban Company is one of
the largest home services platforms in Asia, with representation in India, UAE, Singapore and Australia. The investment is not held
for trading, therefore the group accounts for this as an investment at fair value through other comprehensive income.
(n)
In December 2021, Tencent declared a special interim dividend in the form of a distribution in specie of 457 326 671 class A
ordinary shares of JD.com to its shareholders on the basis of 1 class A ordinary share of JD.com for every 21 shares held.
Asaresult of this distribution the group obtained a 4% effective (131 873 028 class A ordinary shares) interest in JD.com.
JD.comis a platform creator thatbrings value to partners and customers in sectors such as ecommerce, logistics, Internet
finance, cloud computing and smart technology. The investment is not held for trading, therefore the group accounts for this
asan investment at fair value through other comprehensive income.
The group recognised a dividend receivable up until the distribution date of 25 March 2022. The dividend in specie distribution
of the investment in JD.com has reduced the investment in Tencent by US$3.85bn representing the fair value of the investment
on the distribution date.
(o)
In March 2022, the group acquired an 8% effective (7% fully diluted) interest for US$226m in GoStudent. GoStudent is a provider of
online tutoring services in a 1:1, video-based format to K–12 students via a managed marketplace model in Austria. The investment
isnot held for trading, therefore the group accounts for this as an investment at fair value through other comprehensive income.
Disposal of equity-accounted investments
(p)
In April 2021, the group sold 2% of Tencent total issued share capital. The sale reduced its stake in Tencent from approximately
31%to 29%, yielding US$14.6bn in proceeds and a gain on partial disposal of US$12.34bn. The group reclassified a gain of
US$41m from the foreign currency translation reserve to the consolidated income statement related to this partial disposal.
Proceeds from this disposal are included in short-term investments on the consolidated statement of financial position.
Transactions with non-controlling interest
The group acquired the share capital held by non-controlling shareholders of its subsidiary Frontier Car Group Inc (FCG), for US$59.3m.
At31March 2021, the group held a 91% effective interest. Following the acquisition, the group holds a 99% effective interest (98% fully
diluted interest) in FCG. This resulted in the cancellation of the US$66.4m written put option liability and the US$16.6m employment
linked cash-settled share-based payment liability related to the non-controlling shareholders which was derecognised. The cancellation
of the written put option liability was recognised in equity in the ’existing business combination reserve’ and the cancellation of the
cash-settled share-based payment liability was recognised in the consolidated income statement. The group recognised US$59.9m in
the ’existing business combination reserve’ in equity representing the gain from the change in ownership interest in the entity.
Financial year ended 31 March 2021
The following relates to the group’s significant transactions related to business combinations and equity-accounted investments for
the year ended 31 March 2021:
In April 2020, OLX Global B.V. (OLX) contributed its subsidiary, Dubizzle Limited (BVI) (Dubizzle), the leading classifieds platform for
users in the UAE, for an interest in Emerging Markets Property Group (EMPG). EMPG owns and operates bespoke classifieds portals
indifferent emerging markets across the world, including Bayut in Dubai, Zameen in Pakistan, and Mubawab in Morocco, North
Africa. The total consideration was US$390.5m, including cash of US$75m. On disposal of Dubizzle, the group recognised a gain of
US$113.5m in ’Net gains on acquisitions and disposals’ in the income statement, including the recycling of the foreign exchange
translation reserve. This gain on disposal recognised from the contribution ofDubizzle is to the extent of the external parties’ interest
inEMPG.
Following the transaction, the group holds a 39% effective and fully diluted interest in EMPG. The group accounts for its interest in
EMPG as an investment in associate.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
6. Business combinations, other acquisitions and disposals
continued
Financial year ended 31 March 2021
continued
In July 2020, OLX merged its US letgo business with OfferUp, two of America’s most popular apps to buy and sell in the US.
OLX contributed its US letgo business. The total consideration was US$360m, including cash of US$100m. On disposal of
theUS letgo business, the group recognised a gain of US$114.8m in ’Net gains on acquisitions and disposals’. This gain on
disposal recognised from the contribution of the US letgo business is to the extent of the external parties’ interest in OfferUp.
Following the transaction, the group holds a 38% effective (35% fully diluted) interest in OfferUp. The group accounts for its
interest in OfferUp as an investment in associate.
In August and October 2020, the group made an additional investment in Remitly Global Inc (Remitly) amounting to US$52.5m
and US$14.3m respectively. Remitly is an international remittances company focused on the consumer segment, primarily in
the US, the UKand Canada. Following this investment, the group holds a 24% effective (20% fully diluted) interest inRemitly.
The group continues toaccount for its interest in Remitly as an investment in an associate.
In September 2020, Eruditus Learning Solutions Private Limited (Eruditus), a learning platform that partners with top-tier
universities across the US, Europe, Latin America, India and China, announced the successful completion of its Series D
funding round totalling US$113m (including secondary sales). The group, through Naspers Ventures B.V. (Prosus Ventures)
participated in the funding round with a US$59.9m cash contribution. Following the transaction, the group holds a 9%
effective (8% fully diluted) interest in Eruditus. The group accounts for its interest in Eruditus as an investment in associate
asa result of the group’s board representation.
In September 2020, the group made an additional investment amounting to US$25m, in VK (previously Mail.ru), a leading
Russian social networks and instant messaging service. Following this investment, the group holds a 27% effective interest
inVK. The group continues to account for its interest in VK as an investment in an associate.
In October 2020, the group made an additional investment in its joint venture Silver Brazil JVCo B.V. (OLX Brasil) amounting
to US$89m. Furthermore, the group provided loan financing to OLX Brasil amounting to US$171m. The capital and loan
provided were to finance the joint ventures’ investment acquisitions. The funding was provided jointly by the group and its
partner in the jointventure Adevinta ASA (Adevinta). Accordingly, the group’s effective shareholding in this investment
subsequent to the additional investment remained unchanged. The additional contribution to OLX Brasil is included in
thecarrying value of the investment.
In December 2020, Naspers through its subsidiary MIH Treasury Services Proprietary Limited sold Homefind24 Proprietary
Limited (Property24) tothe Prosus group for US$71m. The transaction was accounted for as an acquisition of a subsidiary
under common control.
In March 2020, MIH Movile Holding B.V. (Movile) signed an agreement to sell its subsidiary Wavy Global Holdings B.V. (Wavy)
toStockholm-listed customer engagement platform, Sinch AB, in exchange for cash and the issue of 1 534 582 new shares in
Sinch AB (which represents at the reporting date a 2% equity investment). The transaction obtained regulatory approval and was
closed in February 2021. The total proceeds on disposal of Wavy was US$310.2m, including cash of US$63.4m. On disposal of
Wavy, the group recognised a total gain of US$275.8m, comprising US$101.3m recognised in ’Net gains on acquisitions and
disposals’ and a gain of US$174.5m recognised in ’Other finance income – net’ as a result of the exposure tothe fair-value
gainson 1 534 582 Sinch AB-listed shares from the signing date of the agreement until the closing date. The gain on disposal
recognised in ’Net gains on acquisitions anddisposals’ includes the recycling of the foreign exchange translation reserve. The
group recognised its interest in Sinch AB as an investment at fair value through other comprehensive income.
The following transactions were entered into in March 2021:
IF-JE participaçoes S.A. (iFood) contributed its 100% subsidiary Come Ya S.A.S. (Come Ya) for a 51% effective interest in
Inversiones CMR S.A.S. (Domicilios.com) for a total consideration of US$44m, including cash of US$7m. Domicilios.com
isanonline food delivery platform in Colombia. On disposal of Come Ya, the group recognised a gain of US$18.6m in
’Netgains on acquisitions and disposals’. This gain on disposal recognised from the contribution of Come Ya is to the
extentof theexternal parties’ interest in Domicilios.com.
Following the transaction, the group holds a 51% effective (51% fully diluted) interest in Domicilios.com. The group accounts
forits interest in Domicilios.com as a joint venture as contractually, the decisions over its operations require unanimous
consentof both shareholders.
Prosus acquired approximately 20.37 million shares in Delivery Hero for US$2.6bn by 31 March 2021 to offset current and
potential futuredilutions in the investment. The acquisition increased the group’s shareholding by 8% to approximately
24.99% which continues to position the group as the largest shareholder of Delivery Hero. At 31 March 2021, while legal
ownership had transferred for the 8%additional interest, the access to the returns associated with the ownership had not
fully transferred for 4% of this interest. Accordingly, the effective interest in Delivery Hero recognised at 31 March 2021 was
21% with the remaining 4% amounting to US$1.2bn recognised as a contractual right to receive the shares or cash which
isincluded in ’Other investments’ on the statement of financial position. At31March 2021, the 4% was recognised as a
financial instrument at fair value through profit or loss. The fair value recognised represents the consideration paid for this
interest in the investment which was subsequently included in the effective interest of the investment when access to the
returns associated with the ownership had transferred.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
165
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
7. Goodwill
31 March
2022
US$’m
2021
US$’m
Cost
Opening balance
2 261
2 263
Foreign currency translation effects
(167)
34
Acquisitions of subsidiaries and businesses
1 692
42
Disposals of subsidiaries and businesses
(59)
(78)
Closing balance
3 727
2 261
Accumulated impairment
Opening balance
159
94
Foreign currency translation effects
1
3
Impairment
246
68
Disposals of subsidiaries and businesses
(51)
(6)
Closing balance
355
159
Carrying value
3 372
2 102
The group recognised impairment losses on goodwill of US$246m (2021: US$67.6m) in the current year which related to Stack Overflow
in the Edtech segment. Stack Overflow is a recent acquisition and has performed well to date and delivered on its growth plan, however,
the current market conditions and the increase in risk-free rates resulted in an increase in the discount rate used in the value-in-use
calculations, reducing the recoverable amount to below the carrying amount. The prior year impairment primarily related to Silver
Indonesia JVCo B.V. and Aasaanjobs Private Limited in the classifieds segment that had shown a decline in performance from the
prioryear.
Impairment testing of goodwill
The group has allocated goodwill to various cash-generating units (CGUs). The recoverable amounts of these CGUs have been
determined based on the higher of the value-in-use calculations and the fair value less costs of disposal. Fair value less costs of
disposal of these CGUs takes into account the transaction value for the group’s recent acquisitions or upcoming disposals where
applicable, or is determined using an option-pricing methodology. Value in use is based on discounted cash flow calculations. During
the current and prior financial year, the recoverable amounts for CGUs were determined predominantly using value-in-use calculations.
The group based its cash flow calculations on 10-year budgeted and forecast information approved by senior management and/or
thevarious boards of directors of group companies. Long-term average growth rates for the respective countries in which the entities
operate or, where more appropriate, the growth rate of the CGUs, were used to extrapolate cash flows into the future.
The discount rates used reflect specific risks relating to the relevant CGUs and the countries in which they operate, while maximising
the use of market observable data. Discount rates take into account country risk premiums and inflation differentials as appropriate.
Management used 10-year projected cash flow models, terminal growth rates ranging between 2% and 7% (2021: 2% and 8%) and
post-tax discount rates ranging between 10% and 25% (2021: 10% and 25%) in performing the impairment tests. The group uses up to
10-year projected cash flow models as many businesses have monetisation timelines longer than five years as further explained below.
Other assumptions included in cash flow projections vary widely between CGUs due to the group’s diverse range of business models,
and are closely linked to entity-specific key performance indicators.
Goodwill is tested annually as at 31 December or more frequently if there is a change in circumstance that indicates that it might be
impaired. The group assessed its goodwill impairment calculations as well as the appropriateness of the recoverable amounts taking
into account the impact of significant market movements, the Russia-Ukraine conflict and the Covid-19 pandemic. The group’s 10-year
budgets and forecasts consisted of cash flow projections and included the anticipated impact of the war and the pandemic. These
budgets and forecasts were used to calculate discounted cash flow valuations to identify whether goodwill allocated to various CGUs
was impaired. The value-in-use amounts used were considered appropriate based on these budgets and forecasts.
The increase in risk-free rates and the Russia-Ukraine conflict at the beginning of the 2022 calendar year resulted in the need to update
the goodwill impairment assessment performed at 31 December 2021. The impact of the Russia-Ukraine conflict did not result in an
impairment ofgoodwill for the businesses in Russia or Ukraine.
Estimating the future performance of the group’s CGUs is challenging during this current economic environment. As circumstances
change and/or information becomes available, the risk of impairment may increase in future periods.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
166
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
7. Goodwill
continued
Impairment testing of goodwill
continued
The group’s impairment testing of goodwill takes into account that, in most instances, longer forecast periods are required for many
ecommerce businesses. These longer forecast periods are required as the group’s ecommerce businesses generally only reach
maturity once sufficient market share has been gained, the businesses have reached the appropriate scale and have become
profitable. The forecast period is assessed annually to ensure it remains appropriate for the relevant businesses. Key assumptions in
estimating these future cash flows over the forecast period include the CGU’s ability to capture the required market share and the
additional investment required in order for it to reach the appropriate scale. The group uses look-back analysis to assess past
performance of its CGUs and uses it to validate past judgements and predict future performance. For certain CGUs, risk adjustments
are made to discount rates used when calculating the value in use. Value-in-use calculations are performed using the appropriate
operational cash flows, and, accordingly, discount rates take into account country risk premiums and inflation differentials, as
appropriate.
Where the group has committed to the sale of a CGU or has determined that an impairment loss should be recognised on a CGU
based on its value in use, the group also calculates that CGU’s fair value less costs of disposal to ensure that the recognition of an
impairment loss is appropriate, accordingly, discount rates take into account country risk premiums and inflation differentials, as
appropriate.
Post-tax discount rates have been applied as value in use was determined using post-tax cash flows. Impairment testing is performed
using the appropriate currency cash flows.
The calculation of value in use is most sensitive to the following assumptions:
•
projected revenue and EBITDA growth rates;
•
growth rates used to extrapolate cash flows beyond the budget and forecast period, including the terminal growth rate applied in
the final projection year; and
•
discount rates.
When determining cash flows over the forecast periods, EBITDA margin assumptions vary between the group’s diverse range of
businesses.
The group’s Classifieds and Edtech segments account for 44% and 42% of the overall balance of goodwill respectively. Accordingly,
assumptions made in determining the cash flows of classifieds and edtech CGUs have a significant impact on the annual impairment
assessment. Key assumptions underlying revenue forecasts for CGUs in the Classifieds and Edtech segments include the CGUs
anticipated market share, the number of listings expected over the forecast period and the revenue and EBITDA contribution of each
such listing. EBITDA margins based on the long-term 10-year business plan range between 1% and 57%, depending on the stage of
maturity of the relevant business. Terminal growth rates and discount rates used in performing impairment tests are detailed in the
tables below.
For those CGUs where no impairment is recognised, if either the pre- or post-tax discount rate applied to cash flows were to increase
relatively by 5% or the growth rate used to extrapolate cash flows were to decrease relatively by 5%, or if both the discount rate and
the growth rate were to increase and decrease relatively by 5% respectively, there would be no further significant impairments that
would have to be recognised.
For Stack Overflow if either the pre- or post-tax discount rate applied to cash flows were to increase relatively by 5% there would be
afurther impairment of goodwill of US$119m. If the growth rate used to extrapolate cash flows were to decrease relatively by 5% there
would be a further impairment of US$9m. If both the discount rate and the growth rate were to increase and decrease relatively by 5%
respectively there would be a further impairment of goodwill of US$127m.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
167
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
7. Goodwill
continued
Impairment testing of goodwill
continued
The carrying value of goodwill presented per segment as at 31 March 2022, is as follows:
Carrying
value of
goodwill
US$’m
Basis of
determination
of recoverable
amount
1
Pre-tax
discount
rates at
2
%
Post-tax
discount
rate applied
to cash flows
2
%
Growth rate
used to
extrapolate
cash flows
2
%
Average
revenue
growth
rate
2, 3
%
CGUs by segment
Classifieds
1 495
6.7 – 55.0
OLX Autos
364
VIU
13.2 – 15.1 11.5 – 23.5
3.5Frontier Car Group Inc (FCG)
287
OLX B.V.
77
Avito AB
1 016
VIU
28.4 25.0 4.0
Other Classifieds
115 VIU/FVLCoD Various Various Various
Payments and Fintech
337
10.6 – 38.9
PayU India
130 14.0 3.5
VIU
16.1PayU Global Payments Operations (GPO)
119 14.0 3.5
VIU
16.7Credit India
88 16.5 3.5
VIU
22.4Food Delivery
27
VIU
16.9 14.0 4.5
15.3 – 21.5
Edtech
1 424
22.9 – 36.9
Stack Overflow
1 213
VIU
15.4 13.5 2.3
GoodHabitz
211 12.0 3.0
VIU
13.8Etail
51
VIU
14.6 13.5 4.5
8.2 – 16.4
Other
38
VIU/FVLCoD Various Various Various
3 372
1
FVLCoD is based on the most recent transaction value from an acquisition during the current financial year. The fair values for these CGUs are level 3 measurements.
2
3
Post-tax discount rates have been applied in calculations as value in use was determined using post-tax cash flows.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
168
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
7. Goodwill
continued
Impairment testing of goodwill
continued
The carrying value of goodwill presented per segment as at 31 March 2021, is as follows:
Carrying
value of
goodwill
US$’m
Basis of
determination
of recoverable
amount
1
Pre-tax
discount
rates at
2
%
Post-tax
discount
rate applied
to cash flows
2
%
Growth rate
used to
extrapolate
cash flows
2
%
Average
revenue
growth
rate
2, 3
%
CGUs by segment
Classifieds
1 617 16.1 – 63.7
Avito AB
1 097
VIU
13.7 12.0 4.0
Frontier Car Group Inc (FCG) 10.5 – 22.0
287
12.4 – 26.3VIU
4.0
OLX B.V.
77
VIU
12.3 – 14.8 11.0 – 13.0
4.0Other Classifieds
156 VIU/FVLCoD Various Various Various
Payments and Fintech
372
12.8 – 47.9
PayU India
133 13.5 4.0
VIU
15.8PayU Global Payments Operations (GPO)
151 13.0 4.0
VIU
15.3Credit India
88 13.5 4.0
VIU
15.5Food Delivery
28 12.5 4.5
VIU
15.522.3 – 37.6
Etail
53 12.5 4.0
VIU
13.713.3 – 17.8
Other
32 VIU/FVLCoD Various Various Various
2 102
1
FVLCoD is based on the most recent transaction value from an acquisition during the current financial year. The fair values for these CGUs are level 3 measurements.
2
3
Post-tax discount rates have been applied in calculations as value in use was determined using post-tax cash flows.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
169
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
8. Significant subsidiaries
The following information relates to the group’s interest in its significant subsidiaries as at 31 March:
Effective percentage interest
1
Name of subsidiary
2022
%
2021
%
Nature of
business
Country of
incorporation
Functional
currency
Unlisted companies
Corporate companies
MIH Internet Holdings B.V.
100.00
100.00
Investment
holding
The Netherlands
US$
Prosus Services B.V. The Netherlands
100.00
Corporate entity100.00
US$
Classifieds
OLX Global B.V.
99.00
100.00
Investment
holding
The Netherlands
US$
Avito AB
99.00
100.00 Classifieds Sweden SEK
Brocante Lab SAS (Selency)
54.14
54.79 Classifieds France EUR
Frontier Car Group Inc (FCG)
99.00
90.70 Classifieds
United States
of America
US$
Silver Indonesia JVCo B.V. (OLX Indonesia)
99.00
100.00 Classifieds
The Netherlands
US$Food Delivery
iFood.com Agência de Restaurantes
Online S.A. (iFood)
62.54
Food delivery62.24
Brazil
BRL
Payments and Fintech
PayU Global B.V.
100.00
100.00
Investment
holding
The Netherlands
US$
iyzi Ödeme ve Elektronik Para Hizmetleri Anonim
Şirketi (Iyzico)
91.13
91.13
Payments
platform
Turkey
TRY
PayU Payments Private Limited
100.00
100.00
Payments
platform
India INR
PaySense Private Limited
82.60
79.20
Credit
platform
Singapore
SGD
Red Dot Payment Private Limited
74.09
71.73
Payments
platform
Singapore
SGD
Wibmo Inc
100.00
100.00
Payments
platform
United States
of America
US$
Zooz Mobile Limited
100.00
100.00
Payments
platform
Israel US$
1
retention options. The group’s financial effective interest is, in some instances, impacted by its shareholding in intermediate holding companies.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
170
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
8. Significant subsidiaries
continued
The following information relates to the group’s interest in its significant subsidiaries as at 31 March:
Effective percentage interest
1
Name of subsidiary
2022
%
2021
%
Nature of
business
Country of
incorporation
Functional
currency
Edtech
MIH Edtech Investments B.V.
100.00
–
Investment
holding
The Netherlands
US$
Good BidCo B.V. (GoodHabitz)
2
62.30
–
Educational
platform
The Netherlands
EUR
Stack Overflow Limited
2
100.00
–
Educational
platform
United
Kingdom
GBP
Etail
MIH B2C Holdings B.V.
100.00
100.00
Investment
holding
The Netherlands
US$
Dante International S.A. (eMAG)
79.57
80.08
Retail and
ecommerce
Romania
RON
Extreme Digital Zrt
43.02
41.64
Retail and
ecommerce
Hungary HUF
Other Ecommerce
Movile Mobile Commerce Holdings S.L.
94.03
93.01
Mobile value-
added services
Brazil
BRL
Sympla Internet Soluções S.A.
77.82
77.26
Mobile value-
added services
Brazil
BRL
1
retention options. The group’s financial effective interest is, in some instances, impacted by its shareholding in intermediate holding companies.
2
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
171
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
9. Investments in associates
The following information relates to the group’s financial interest in its significant associates as at 31 March:
Effective percentage interest
1
Name of associated company
2022
%
2021
%
Nature of
business
Country of
incorporation
Functional
currency Year-end
Listed companies
Delivery Hero SE
2
27.28
21.10
Food delivery
Germany EUR December
Tencent Holdings Limited
3
28.81
30.86
Internet-
related
services
Cayman
Islands
RMB
December
VK (previously Mail.ru Group Limited)
4
–
27.29
Internet-
related
services
British Virgin
Islands
RUB
December
Remitly Global Inc
22.75
24.12
Digital money
transfer
United States
of America
US$ December
Skillsoft
5
37.55
–
Educational
platform
United States
of America
US$ December
SimilarWeb Limited
6
14.93
16.86
Internet
metrics
Israel NIS December
Udemy Inc
2
12.27
16.86
Educational
technology
United States
of America
US$ March
Unlisted companies
Classifieds
EMPG Holdings Limited
39.85
39.07 Classifieds
United
Arab Emirates
US$ December
OfferUp Incorporated
39.04
39.54 Classifieds
United States
of America
US$ December
Food Delivery
Bundl Technologies Private Limited
(Swiggy)
2
32.72
41.19
Food delivery
India INR March
Flink SE
5, 6
9.76
–
Food delivery
Germany EUR December
Oda Group Holding AS
5, 6
13.14
–
Food delivery
Norway
NOK
December
Edtech
Ryzac Inc (Codecademy)
23.76
20.94
Educational
technology
United States
of America
US$ December
SoloLearn Inc
2
18.46
19.84
Educational
technology
United States
of America
US$ March
Think & Learn Private Limited
(BYJU’S)
2, 3
9.81
10.57
Educational
technology
India INR March
Brainly Inc
42.13
40.06
Educational
technology
United States
of America
US$ December
Eruditus Learning Solutions Private
Limited
2, 3
13.18
8.83
Educational
technology
Singapore
SGD
JuneOther Ecommerce
Honor Technology Inc (Honor)
2
13.71
15.83
Home care
United States
of America
US$ December
Meesho Inc
2, 3
13.83
12.36
Online
marketplace
United States
of America
US$ March
API Holdings Private Limited
(PharmEasy)
2, 4
13.24
–
Healthcare India INR March
NTEx Transportation Services Private
Limited (ElasticRun)
3
22.63
20.57
Logistic
services
India
INR March
1
options. The group’s financial effective interest is, in some instances, impacted by its shareholding in intermediate holding companies.
2
3
4
comprehensive income. The fair value of the investment is US$nil at 31 March 2022. Refer to note 4.
5
6
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
172
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
9. Investments in associates
continued
The fair values of the group’s investments in its listed associates are detailed below:
31 March
2022
US$’m
2021
US$’m
Listed investments
Delivery Hero SE
3 035
6 810Tencent Holdings Limited
132 311
232 354
VK (previously Mail.ru Group Limited)
1
–
1 409
Remitly Inc
369
–
Skillsoft
302
–
SimilarWeb Limited
145
–
Udemy Inc
213
–
1
The above fair values have been measured using quoted prices in active markets and the disclosed amounts therefore represent
level 1 fair-value measurements.
31 March
2022
US$’m
2021
US$’m
Opening balance
40 556
22 233
Associates acquired – gross consideration
4 823
2 342Net assets
acquired (restated)*
1 277
207
Goodwill and other intangibles recognised (restated)*
1
3 661
2 252
Deferred taxation recognised
(115)
(117)
Associates disposed of
(10)
(20)
Associates transferred to held for sale
(38)
–
Share of current-year changes in OCI and net asset value
(2 699)
6 819Share of equity-accounted results
9 378
7 147Equity-accounted results due to purchase accounting
(72)
(33)
Amortisation of other intangible assets
(99)
(46)
Realisation of deferred taxation
27
13
Impairment
(582)
(9)
Dividends received
2
(4 426)
(458)
Foreign currency translation effects
(250)
1 546
Disposal of partial interest in associate
3
(2 316)
(1)
Dilution gains
4
93
990
Closing balance
44 457
40 556
Investments in associates
Listed
40 463
38 136
Unlisted
3 994
2 420
Total investments in associates 44 457
40 556
* The group made additional investments in Delivery Hero SE in March 2021. At 31 March 2021 the purchase price allocation (PPA) was not yet finalised and, accordingly, previously published
financial information included only provisional amounts for intangible assets. The PPA was finalised during the year ended 31 March 2022 and, accordingly, the provisional amount for
intangible assets was updated to the final amounts. ‘Net assets acquired’ and ‘Goodwill and other intangibles recognised’ previously published were US$436m and US$2 023m
respectively.
This restatement did not change the carrying amount of the investment in Delivery Hero SE at 31 March 2021.
1
2
3
disposal of US$12.34bn.
4
translation reserves from other comprehensive income to the income statement following the shareholding dilutions.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
173
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
9. Investments in associates
continued
The group recognised US$9.3bn (2021: US$7.1bn) from associates as its share of equity-accounted results in the income statement.
There are no cumulative unrecognised losses relating to associates that have been fully impaired, recognised (2021: US$nil) as at
31March 2022.
The group recognised total dilution gains of US$95.1m (2021: US$1bn) as part of ’Dilution gains on equity-accounted investments’ in the
income statement. The net dilution gain includes US$92.2m (2021: US$989.4m) which relates to the group’s shareholding in Delivery
Hero, Swiggy and SimilarWeb and other unlisted investments. The prior year’s net dilution gain relates primarily to a 4% dilution in the
group’s interest in Delivery Hero as a result of share issue.
The total dilution gain presented in the income statement also includes a gain of US$2.9m (2021: dilution loss of US$8.4m) relating to the
reclassification of a portion of the group’s foreign currency translation reserves from other comprehensive income to the income
statement following shareholding dilutions.
In March 2022, the group’s directors resigned with immediate effect from the VK board and no voting rights will be exercised under the
current circumstances and sanctions landscape. As a result of the resignation of the directors from the VK board the group lost
significant influence over VK and ceased accounting for this investment as an associate. The group reclassified a portion of the foreign
currency translation reserves related to VK from other comprehensive income to the ’Net (losses)/gains on acquisitions and disposals’ in
the income statement amounting to a loss of US$1.14bn as a result of the loss of significant influence.
The group’s share of equity-accounted investments’ other comprehensive income and reserves relates mainly to the revaluation of the
associates’ investments at fair value through other comprehensive income.
Direct equity movements relate to the group’s share of equity-accounted investments’ transfer of gains on disposal and deemed
disposal of financial instruments to retained earnings.
Adjustments are made for significant transactions and events that take place where lag periods are applied. These adjustments usually
include impairments and fair-value adjustments related to the underlying financial instruments of associates measured at fair value
through profit or loss or at fair value through other comprehensive income.
As at 31 March 2022, the group does not recognise deferred tax on its investments in associates as distributions from associates do not
have tax consequences.
Impairment of equity-accounted investments
The group assesses whether there is an indication that its equity-accounted investments are impaired. This assessment was due to the
decline in the market capitalisation of the listed equity-accounted investments and the increase in country risk premiums. The group
recognised impairment losses of US$584.1m (2021: US$11m) for equity-accounted investments of which US$473.6m of the impairment
loss related to VK.
The significant decline in the share price of VK presented an indicator for impairment on the carrying value of this investment
immediately prior to the loss of significant influence. Accordingly, the group fully impaired the carrying value of the investment for the
year ended 31 March 2022.
The impairment assessment for equity-accounted investments included an assessment, among others, of the group’s investment in
Delivery Hero as a result ofa decline in its market capitalisation. The recoverable amount for Delivery Hero is the higher of the value
inuse and fair value less costs of disposal. The recoverable amount was based on the value-in-use calculations. The value in use was
higher than the market prices for the investment because market prices reflect current market sentiment while value in use considers a
longer-term horizon. The value in use was determined using the discounted cash flow method. The group used 10-year projected cash
flow models as the business has monetisation timelines longer than five years. The 10-year projected cash flow models incorporated
market views and publicly available analyst projections. The equity-accounted investment was valued using the sum-of-the-parts
approach. The value-in-use calculation determined the equity values for the investment which took into consideration the following key
assumptions:
Revenue and expenses
Revenue and expenses are based on past experience, management’s future expectations of business performance and the latest
guidance announced by Delivery Hero. The revenue and expense drivers for Delivery Hero are the number of orders which increased
annually by forecast annual growth rates and average order values.
Growth rates
The growth rates were consistent with publicly available information relating to long-term average growth rates for the market in which
the equity-accounted investments operate in. The annual growth rate used for revenue and expenses over the 10-year forecast period
ranged between 5% – 47% for Delivery Hero.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
174
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
9. Investments in associates
continued
Impairment of equity-accounted investments
continued
Discount rates
The discount rates used reflect specific risks relating to the relevant operations and the regions in which they operate, while for certain
operations risk adjustments are made to discount rates used when calculating the value in use. Discount rates take into account country
risk premiums and inflation differentials as appropriate. Post-tax discount rate used ranged between 10% – 15% for Delivery Hero.
Pre-tax discount rate used ranged between 11.6% – 16.9%.
Terminal growth rates
The terminal growth rates considered the steady growth rates that would appropriately extrapolate cash flows beyond the forecast
periods once the business segment has assumed to reach maturity. The terminal growth rate for Delivery Hero fell within the range
of2% and 5% based on the expected growth in perpetuity in the economies that these businesses operate in.
Based on the value-in-use calculations of these investments, the value in use of Delivery Hero exceeds the carrying amount.
Accordingly, there was no impairment loss recognised for this investment.
Sensitivity to changes in assumptions
An adverse adjustment to any of the above key assumptions would result in an impairment of Delivery Hero.
Material associates’ summarised financial information
31 March
1
Tencent Holdings Limited
31 March
1
Delivery Hero SE
31 March
1, 3
VK Group Limited
2022
US$’m
2021
US$’m
2022
US$’m
Restated
2
2021
US$’m
2022
US$’m
2021
US$’m
Dividends received
4 426
458
–
– –
Revenue
87 530
71 597
6 7412 919 1 345
Net profit/(loss) from operations
34 179
26 365
810
(4 133)
(197)
Other comprehensive (loss)/income
(18 022)
21 571
(26)
(64) 13
Total comprehensive income/(loss)
16 157
47 936
784
(4 197)
(184)
Non-current assets
2
168 122
160 556
10 4038 321 3 058
Current assets
76 469
48 476
3 9783 809
806
Total assets
244 591
209 032
14 38112 130 3 864
Non-current liabilities
2
51 726
43 169
7 4696 107
792
Current liabilities
60 880
41 064
1 9421 739
655
Total liabilities
112 606
84 233
9 4117 846 1 447
Closing net assets
131 985
124 799
4 9704 284 2 417
Non-controlling interests
(11 103)
(12 857)
(17)
(5) (22)
120 882
111 942
4 9534 279 2 395
Group’s effective interest in associate at year-end
34 826
34 5451 351
903 654
Goodwill and other
2
11
11
3 595
1 919
103
Carrying value of investment 34 837
34 556
4 9462 822
757
1
accounting purposes.
2
accordingly previously published financial information included only provisional amounts for intangible assets. The PPA was finalised during the year ended 31 March 2022 and accordingly
the provisional amount for intangible assets was updated to the final amounts. ’Non-current assets’, ’N
on-current liabilities’ and ’
Goodwill’ previously published were US$8 236m, US$4 959m
and US$1 694m, respectively. This restatement did not change the carrying amount of the investment in Delivery Hero SE at 31March 2021. Included in ‘Goodwill and other’ is the fair-value
adjustment related to intangible assets arising as a result of the incremental acquisition acquired amounting to US$40.4m (2021: US$95.8m).
3
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
175
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
9. Investments in associates
continued
Other associates’ summarised financial information
31 March
2022
US$’m
2021
US$’m
Net loss from continuing operations
(630)
(221)
Other comprehensive income
59
26
Total comprehensive loss
(571)
(195)
Carrying value of investments 4 674
2 420
Total carrying value of investments in associates 44 457
40 556
The group had no capital commitments or contingent liabilities at 31 March 2022 and 2021 in respect of its investments in associates.
10. Investments in joint ventures
The following information relates to the group’s financial interest in its significant joint ventures at 31 March:
Effective interest
1
Name of joint venture
2022
%
2021
%
Nature of
business
Country of
incorporation
Functional
currency Year-end
Unlisted companies
El Cocinero a Cuerda S.L.
(SinDelantal Mexico)
30.72
30.39
Food
delivery
Spain EUR December
Inversiones CMR S.A.S. (Domicilios.com)
31.97
31.63
Food
delivery
Colombia
COP
DecemberSilver Brazil JVCo B.V. (OLX Brasil)
49.50
The Netherlands50.00 Classifieds
US$ December
1
options. The group’s financial effective interest is, in some instances, impacted by its shareholding in intermediate holding companies.
Adjustments are made for significant transactions and events that take place where lag periods are applied.
31 March
2022
US$’m
2021
US$’m
Opening balance
158
72
Joint ventures acquired – gross consideration
1
5
134
Net assets acquired
5
20
Goodwill and other intangibles recognised
–
114
Share of equity-accounted results
(50)
(19)
Equity-accounted results due to acquisition accounting
–
(1)
Impairment
–
(21)
Foreign currency translation effects
31
(7)
Closing balance
144
158
1
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
176
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
10. Investments in joint ventures
continued
The group recognised losses of US$50.2m (2021 losses: US$19.2m) from joint ventures as its share of equity-accounted profits in the
income statement. There are no cumulative unrecognised losses relating to joint ventures that have been fully impaired, recognised
(2021: US$nil) asat31 March 2022.
No impairment losses (2021: US$20.8m) were recognised for the group’s investments in joint ventures.
None of the group’s interests in joint ventures are considered to be individually material.
As at 31 March 2022, the group does not recognise deferred tax on its investments in joint ventures as distributions from joint ventures
do not have tax consequences.
The group had no capital commitments or contingent liabilities in respect of its investments in joint ventures at 31 March 2022 and 2021.
11. Acquisitions of subsidiaries and businesses
31 March
2022
US$’m
2021
US$’m
Fair value of assets and liabilities:
Property, plant and equipment
16
9
Investments and loans
–
2
Other intangible assets
309
45
Net current assets/(liabilities)
90
(11)
Deferred taxation
(81)
(10)
Long-term liabilities
(10)
(9)
324
26
Non-controlling interests
(16)
(24)
Existing control business combination reserve
1
–
71
Goodwill recognised
1 692
42
Purchase consideration
2 000
115
Amount to be settled in future
–
(7)
Net cash in subsidiaries and businesses acquired
(104)
(20)
Net cash outflow from acquisitions of subsidiaries and businesses 1 896
88
1
was accounted for as an acquisition of a subsidiary under common control.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
177
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
12. Disposals of subsidiaries and businesses
31 March
2022
US$’m
2021
US$’m
Carrying values of assets and liabilities:
Property, plant and equipment
2
3
Assets and liabilities classified as held for sale
–
188
Goodwill
8
72
Other intangible assets
16
13
Net current assets/(liabilities)
7
(6)
Deferred taxation
(4)
–
Long-term liabilities
(1)
–
Foreign currency translation reserve realised
–
16
28
286
Existing control business combination reserve
1
(17)
Gain on disposal – net
21
346
Fair-value gain on shares received
–
174
Selling price
50
789
Net cash in subsidiaries and businesses disposed of
(15)
(35)
Shares received as settlement
(33)
(710)
Amounts relating to prior year disposal
22
–
Amounts to be received in the future
(4)
(17)
Net cash inflow from disposals of subsidiaries and businesses
20
27
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Group structure
continued
Prosus annual report 2022
178
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
13. Revenue from contracts with customers
Accounting policies
Revenue from contracts with customers is derived from the sale of goods and rendering of services. Revenue is measured
based on the transaction price specified in the contract with the customer. The group recognises revenue when (or as) it
transfers control of goods and/or services to its customers, which is when specific criteria have been met for each of the
group’s activities as described below. Revenue is recognised at the amount the group expects to be entitled to in exchange
for the goods and/or services transferred to customers.
Revenue is shown net of value-added tax (VAT), returns, rebates and discounts. For contracts that permit returns, rebates
ordiscounts, revenue is recognised only to the extent that it is highly probable that a significant reversal of revenue will not
occur asa result of such items. The amount of revenue recognised is adjusted for expected returns, rebates or discounts
which are estimated based on the group’s historical experience and taking into consideration the type of customer, the type
of transaction and the specific terms of each arrangement. The right to return goods is measured at the former carrying
amount of the inventory less expected costs to recover goods where applicable.
Where contracts include multiple goods and/or services, the transaction price is allocated to each distinct goods or service
(orperformance obligation) based on respective stand-alone selling prices. Where stand-alone selling prices are not
directly observable, they are estimated.
The group identifies all parties that are integral to it generating revenue on its online platforms as its customers and,
accordingly, incentives (including cash discounts and discount vouchers/coupons) provided to any party transacting on
theplatform are treated as a reduction of revenue.
The group considers, for each contract with a customer, whether it is a principal or an agent. The group regards itself as
the principal in a transaction where it controls a promised goods or service before the goods or service is transferred to
acustomer. Where the group is the principal in a transaction, it recognises revenue in the gross amount of consideration
towhich it expects tobe entitled. Where the group is in the capacity of an agent, it recognises revenue on a net basis.
Revenue earned, but for which the group’s right to the consideration is not yet unconditional, is presented as accrued
income aspart of other receivables in the statement of financial position. Payments received in advance from contracts
withcustomers represent an obligation to transfer future goods and/or services and are presented as part of accrued
expenses and other liabilities in the statement of financial position.
The group is not party to contracts where the period between the transfer of goods and/or services and payment exceeds
one year. Consequently, the group does not adjust its transaction prices for financing components.
Revenue recognition for the group’s major revenue streams is outlined below in the following paragraphs.
Ecommerce revenue
Revenue represents amounts received or receivable from customers relating to online goods sold on the group’s etail and
other internet platforms and from services rendered. Services rendered include advertising, classifieds listing revenue, payment
transaction commissions and fees, food delivery revenue, educational technology revenue, mobile and other content revenue.
Sale of goods
Revenue from goods sold is recognised when the goods are delivered and accepted by the customer.
Classifieds listings
The group recognises classifieds listings and related feature fees over the feature period or on listing of an item for sale
depending on the nature of the feature purchased. Success fees and other relevant commissions are recognised when a
transaction is completed on the group’s websites.
Payments and fintech, food delivery and mobile content
Payments and fintech, food delivery, mobile content revenues are recognised once a transaction is completed and is based
on the applicable fee for each transaction performed.
Educational technology revenue
Educational technology revenues are recognised over the period in which the online educational content is provided for or
when the online educational content is provided depending on the nature of the educational content purchased.
Advertising revenues
The group mainly derives advertising revenues from advertisements shown online on its websites and instant-messaging
windows. Online advertising revenues are recognised over the period in which the advertisements are displayed using a
time-based measure.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
179
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
13. Revenue from contracts with customers
continued
31 March
Reportable segment(s)
where revenue is included
2022
US$’m
2021
US$’m
Online sale of goods revenue
Etail and Classifieds
3 805
2 826
Classifieds listings revenue
Classifieds
1 008
715
Payment transaction commissions and fees Payments and Fintech
703
513
Mobile and other content revenue
Other Ecommerce
71
147
Food delivery revenue
Food Delivery
986
733
Advertising revenue
Classifieds
86
71
Educational technology revenue
Edtech
83
–
Other revenue
Various
124
111
6 866
5 116
Revenue is presented on an economic-interest basis (ie including a proportionate consolidation of the revenue of associates and joint
ventures) in the group’s segmental review and is accordingly not directly comparable to the above consolidated revenue figures. Refer
to note 21 for disaggregation of revenue by geographical area.
The group has recognised the following assets and liabilities in the statement of financial position that relate to revenue from contracts
with customers:
Accrued income
(refer to note 35)
Accrued income balance net of impairment allowances as at 31 March 2022 was US$45.5m (2021: US$16.5m). Refer to note 39 for the
group’s credit risk management policy. Impairment allowances recorded on accrued income balances were not material.
Deferred income
(refer to notes 31 and 38)
The total deferred income balance as at 31 March 2022 was US$158.5m (2021: US$81.8m) which consists of a current liability portion of
US$142.8m (2021: US$81.8m) and a non-current liability portion of US$15.7m (2021: US$nil). Revenue recognised in the current year that
wasincluded in the deferred income balance at the beginning of the year (as at 1 April 2021) was US$62.3m (2021: US$36.2m).
There were no significant changes in accrued income or deferred revenue balances during any of the periods presented.
Unsatisfied long-term contracts
The group has no unsatisfied long-term contracts as at 31 March 2022 (2021: US$nil).
14. Expenses by nature
Employee benefits
Accounting policies
Retirement benefits
The group provides retirement benefits to its eligible employees, primarily by means of monthly contributions to a number of
defined contribution pension and provident funds. The assets of these funds are generally held in separate trustee administered
funds. The group’s contributions to retirement funds are recognised as an expense in the period in which employees render the
related service.
Medical aid benefits
The group’s contributions to medical aid benefit funds for employees are recognised as an expense in the period in which the
employees render services to the group.
Post-employment benefits
Some group companies provide post-employment benefits to their retirees. The entitlement to post-employment healthcare
benefits is subject to the employee remaining in service up to retirement age and completing a minimum service period. The
expected costs of these benefits are accrued over the minimum service period. Independent actuaries carry out annual
valuations of these obligations. All remeasurements resulting from experience adjustments and changes in actuarial assumptions
are recognised immediately in other comprehensive income. These obligations are unfunded.
Termination benefits
The group recognises termination benefits when it is demonstrably committed to either terminate the employment of employees
before the normal retirement date, or provide termination benefits as a result of an offer made to encourage voluntary
redundancy.
Where termination benefits fall due more than 12 months after the reporting period, they are discounted. In the case of an offer
made to enco
urage voluntary redundancy, the measurement of termination benefits is based on the number of employees
expected to accept the offer. Termination benefits are immediately recognised as an expense in the income statement.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
Prosus annual report 2022
180
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
14. Expenses by nature
continued
31 March
2022
US$’m
2021
US$’m
Operating loss includes the following items:
Platform cost of sales, website hosting and warehousing costs 3 430
2 598
Payment facilitation transaction costs
610
379
Delivery services costs
639
390
Depreciation
1
116
93
Amortisation
2
137
138
Short-term lease payments
3
1
Auditor’s remuneration – PwC in the Netherlands
3
Audit fees of the financial statements
4
4
Other audit services
1
2
Auditor’s remuneration – PwC network outside the Netherlands
Audit fees of the financial statements
6
4
Audit fees – other audit services
1
1
Total audit fees
12
11
Staff costs
The total cost of employment of all employees, including executive directors, was as follows:
Salaries, wages and bonuses
1 131
856
Social security taxes
132
99
Retirement benefit costs
22
8
Medical aid fund contributions
4
1
Post-employment benefits
2
1
Cash-settled share-based compensation expenses
129
675
Equity-settled share-based compensation expenses
125
54
1 545
1 694
Training costs
12
7
Retention option expense
15
62
Total staff costs
1 572
1 763
Advertising expenses
491
322
General administration cost
524
363
Other costs of providing services and sale of goods, purchases and expenses
29
11
Total
7 563
6 069
1
2
3
Audit Firms Supervision Act (
Wet Toezicht Accountantsorganisaties
) as well as by Dutch and foreign-based accounting firms, including their tax services and advisory groups. The fees relate to
the audit of the financial statements for the respective financial year.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
181
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
15. Other (losses)/gains – net
31 March
2022
US$’m
2021
US$’m
Fair-value adjustments on financial instruments
6
(4)
Impairment losses
(246)
(68)
Impairment of goodwill
(246)
(68)
Dividends received on investments
45
4
Income on business support services
34
–
Covid-19 donation
–
(13)
Other
(1)
(6)
Total other gains/(losses) – net
(162)
(87)
Refer to note 7 for further information on the above impairments.
16. Finance income/(costs)
31 March
2022
US$’m
2021
US$’m
Interest income
Loans and bank accounts
40
61
Other
18
22
58
83
Interest expense
Loans and overdrafts
(384)
(245)
Capitalised lease liabilities
(9)
(10)
Other
(10)
(7)
(403)
(262)
Other finances (costs)/income – net
Net (loss)/profit from foreign exchange translation and fair-value adjustments on financial instruments
On translation of assets and liabilities
119
55
(Losses)/gains on derivative and other financial instruments
1
(202)
122
(83)
177
Total finance (costs)/income – net
(428)
(2)
1
17. Net (losses)/gains on acquisitions and disposals
31 March
2022
US$’m
2021
US$’m
Gains on sale of investments – net
31
241
(Losses)/gains on sale of business – net
(1)
118
(Losses)/gains recognised on loss of significant influence transactions
1
(1 112)
–
Remeasurement of contingent consideration
(6)
–
Transaction-related costs
(43)
(51)
Other
1
1
(1 130)
309
1
asaresult of the loss of significant influence. Refer to note 9.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
Prosus annual report 2022
182
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
18. Cash from operations
31 March
2022
US$’m
2021
US$’m
Profit before tax per income statement
18 691
7 332Adjustments:
Non-cash and other
(18 841)
(7 277)
Depreciation and amortisation
253
231
Retention option expense
15
62
Share-based compensation expenses
254
729
Net finance cost
428
2
Share of equity-accounted results
(9 256)
(7 095)Impairment of equity-accounted investments
582
30
Gains on acquisitions and disposals
(25)
(360)
Dilution gains on equity-accounted investments
(95)
(981)
Gains on partial disposal of equity-accounted investments
(12 339)
(19)
Losses/(gains) recognised on loss of significant influence transactions
1 112
–
Income on business support services
(34)
–
Dividends received on investments
(45)
4
Net realisable value adjustments on inventory, net of reversals
6
–
Impairment of goodwill and other intangible assets
246
68
Reversal of bonus provision
62
39
Other
(5)
13
(150)
55
Working capital
(494)
(107)
Cash movement in trade and other receivables
(208)
(56)
Cash movement in payables, accruals and cash-settled share-based payment liabilities
(96)
48
Cash movement in inventories
(190)
(99)
Total cash utilised in operations
(644)
(52)
19. Taxation
Accounting policies
Tax expense
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In such cases, the related tax is
also recognised in other comprehensive income or directly in equity, respectively.
Current income tax
The statutory Dutch corporate tax rate applicable to Prosus for the year ended 31 March 2022 is 25.8% (2021: 25%). The
current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of
financial position date in the countries where the group operates and generates taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to
interpretation. It accounts for uncertain tax positions where appropriate, on the basis of amounts expected to be paid to the
tax authorities. International tax rates vary from jurisdiction to jurisdiction.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
183
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
19. Taxation
continued
31 March
2022
US$’m
2021
US$’m
Current taxation
156
(52)
Current year
153
120
Prior year
3
(172)
Deferred taxation
(59)
(15)
Current year
(59)
(15)
Total taxation expense/(credit) per income statement
1
97
(67)
Reconciliation of taxation
Taxation at statutory rates
2
4 673
1 833
Adjusted for:
Non-deductible expenses
3
592
226
Non-taxable income
3
(3 146)
(383)
Temporary differences not provided for
4
296
255
Assessed losses utilised
–
(11)
Adjustments related to prior-year taxes
1
(5)
(136)
Other taxes
13
13
Tax attributable to equity-accounted earnings
(2 315)
(1 774)
Tax adjustment for foreign taxation rates
(11)
(90)
Taxation provided in income statement
1
97
(67)
1
2
disclosed above as ’Tax adjustment for foreign taxation rates’.
3
gains on disposals of subsidiaries and associates.
4
20. Deferred taxation
Accounting policies
Deferred tax assets and liabilities have been calculated using tax rates (and laws) that have been enacted or substantively
enacted by the statement of financial position date, being the rates the group expects to apply to the periods in which the
assets arerealised or the liabilities are settled. The statutory Dutch corporate tax rate changes to 25.8% for the year of
assessment beginning 1 January 2022 and is considered to be substantively enacted. The deferred tax temporary
differences expected to reverse at this new corporate tax rate are not material.
Deferred taxation is provided on the taxable or deductible temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes. However, deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill or from the initial recognition of an asset or liability in a transaction, other than a
business combination, that, at the time of the transaction, affects neither the accounting nor the taxable profit or loss. Deferred
tax assets are recognised to the extent that it is probable that future taxable profit will be available against which deductible
temporary differences and unused tax losses can be utilised.
Deferred tax liabilities are provided for temporary differences arising on investments in subsidiaries, associates and joint
ventures, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that
the temporary difference will not reverse in the foreseeable future.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
Prosus annual report 2022
184
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
20. Deferred taxation
continued
The deferred tax assets and liabilities and movements thereon were attributable to the following items:
1 April
2021
US$’m
Charged
to income
US$’m
Acquisition of
subsidiaries
and
businesses
US$’m
Disposals of
subsidiaries
and
businesses
US$’m
Foreign
exchange
effects
US$’m
31 March
2022
US$’m
Deferred taxation assets
Provisions and other current liabilities
11 12
– 1 2
(2)Capitalised lease liabilities
3 –
(1)
–(1)
1Tax losses carried forward
3 3
(1)
3(2)
–Other
10
5 –
(2)1
14Total deferred tax assets
27 (2) 30
3 4
(2)Offsetting of deferred tax liabilities
(4) (4)
Net deferred tax assets
23 26
Deferred taxation liabilities
Intangible assets
179 (31) 80 (6) (10) 212
Other
20 (25)
5 – – –
Total deferred tax liabilities
199 (56) 85 (6) (10) 212
Offsetting of deferred tax assets
(4) (4)
Net deferred tax liabilities
195 208
Net deferred taxation
(172) 59 (81)
4 8
(182)
1 April
2020
US$’m
Charged
to income
US$’m
Charged
to other
comprehensive
income
US$’m
Acquisition of
subsidiaries
and
businesses
US$’m
Foreign
exchange
effects
US$’m
31 March
2021
US$’m
Deferred taxation assets
Provisions and other current liabilities
7 3 – – 1
11
Capitalised lease liabilities
2 1 – – – 3
Tax losses carried forward
3 – – – – 3
Other
10
2
(2)– –
10Total deferred tax assets
22
6
(2)
– 1
27
Offsetting of deferred tax liabilities
(7) (4)
Net deferred tax assets
15 23
Deferred taxation liabilities
Intangible assets
177 (12)
–
104
179Other
17
3 – – –
20Total deferred tax liabilities
194 (9)
–
10
4
199
Offsetting of deferred tax assets
(7) (4)
Net deferred tax liabilities
187 195
Net deferred taxation
(172) 15 (2) (10) (3) (172)
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
185
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
20. Deferred taxation
continued
The ultimate outcome of additional taxation assessments may vary from the amounts accrued. However, management believes that
any additional taxation liability over and above the amounts accrued would not have a material adverse impact on the group’s
combined income statement and statement of financial position.
The group has tax losses carried forward of approximately US$3.3bn (2021: US$2.5bn) and unrecognised deferred tax assets on
interest carried forward of US$224.7m. A summary of the tax losses carried forward at 31 March 2022 by tax jurisdiction and the
expected expiry dates are set out below:
Asia
US$’m
Europe
US$’m
Latin America
and USA
US$’m
Africa
US$’m
Other
US$’m
Total
US$’m
Expires in year one
4 –
23 20
–47
Expires in year two
23 28
3 – –
54Expires in year three
31 30
3 – –
64Expires in year four
38 26
7 – –
71Expires in year five
31 35
– – –
66Expires after year five
187 94 556 19 82 938
Non-expiring
– –
2 024
–10
2 034
314 19 82
2 260
5993 274
Net deferred taxation assets amount to US$25.6m (2021: US$23.3m), of which US$16.1m (2021: US$14.3m) are expected to be
utilised within thenext 12 months and US$9.4m (2021: US$9m) after 12 months. Net deferred taxation liabilities amount to
US$208.4m(2021: US$194.7m), ofwhich US$28m (2021: US$19.1m) are expected to be settled within the next 12 months and
US$180.4m (2021:US$175.6m) after 12 months.
The group has not recognised any deferred tax assets related to accumulated losses when the utilisation depends on future taxable
profits in excess of the profits arising from the reversal of existing taxable temporary differences, and the relevant group entity from
which the deferred tax asset would arise has suffered a loss in either the current or a preceding period.
Temporary differences arise from the existence of undistributed profits of subsidiaries and changes in foreign exchange rates on
translation of the subsidiaries’ operations. No deferred tax liabilities are recognised for these temporary differences because the
group controls the timing of the reversal of temporary differences associated with the investment by controlling the subsidiaries’
dividend policies.
21. Segment information
Accounting policies
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the executive directors who make strategic decisions. The group proportionately
consolidates its share of the results of its associates and joint ventures in the various reportable segments. This is considered
to provide additional information on the economic value of these investments.
Operating segments are identified on the basis of internal reports about components of the group that are regularly reviewed by the
CODM in order to allocate resources to the segments and to assess their performance. The CODM has been identified as the group’s
executive directors, who make strategic decisions. The Prosus group has the same governance structures as its ultimate controlling
parent, Naspers. It has the same board and management oversight, including the same individuals comprising the CODM. Accordingly,
the CODM for Naspers Limited is the same CODM for the Prosus group.
The group proportionately consolidates its share of the results of its associated companies and joint ventures in its reportable
segments. This is considered to provide additional information on the economic reality of these investments and corresponds
tothemanner in which the CODM assesses segmental performance.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
Prosus annual report 2022
186
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
21. Segment information
continued
The group has identified its reportable segments based on its business by service or product. The operating segments are grouped
into the following categories: Ecommerce, Social and Internet Platforms and Corporate. Below are operating segments under each
category:
Ecommerce
– the group operates internet platforms to provide various services and products. These platforms and communities offer
ecommerce, communication, social networks, entertainment and mobile value-added services. The reportable operating segments
within Ecommerce include Classifieds, Payments and Fintech, Food Delivery, Etail, Edtech and Other Ecommerce.
•
Classifieds
– the group operates a number of leading online classifieds platforms comprising general classifieds (such as OLX and
letgo) and verticals (automotive and real estate verticals) in 19 core operating markets.
•
Payments and Fintech
– operates one of the largest mobile and online payment platforms in 20 high growth markets through PayU,
anonline payment services provider. This segment also includes the group’s fintech and credit interests via associates and
subsidiaries.
•
Food Delivery
– the group invests in leading global online food ordering and delivery platforms operating in regions including
India, Latin America and across Europe, Asia and the Middle East through its investments in Delivery Hero, Swiggy and iFood.
•
Etail
– comprises the group’s etail subsidiaries (eMAG). The group’s operations are spread across Central and Eastern Europe and
India.
•
Edtech
– comprises the group’s investment in leading online educational technology platforms (such as Stack Overflow, Skillsoft and
GoodHabitz). The group’s operations are spread across the globe, including North America, Europe, the Middle East, Africa and the
Asia-Pacific region.
•
Other Ecommerce
– this segment comprises the group’s mobile and other content businesses. Also included are various corporate
support functions for the Ecommerce segment.
Social and Internet Platforms
– the group holds listed investments in social and internet platforms through Tencent, China’s largest and
most used internet services platform and VK (previously Mail.ru), a leading internet company in Russian speaking markets.
Corporate
– this segment comprises entities providing various corporate functions and activities. These services include, but are not
limited to, executive oversight, information management, legal, treasury, control and accounting, human resources, taxes and investor
relations.
Sales between the above segments are eliminated in the ’Intersegmental’ column. The revenue from external parties and all other
items of income, expenses, profits and losses reported in the segment report is measured in a manner consistent with that in the
income statement. Adjusted EBITDA and trading profit/loss are presented in the segment report.
Adjusted EBITDA represents operating profit/loss, as adjusted to exclude: (i) depreciation; (ii) amortisation; (iii) retention option
expenses linked to business combinations; (iv) other losses/gains – net, which includes dividends received from investments, profits
and losses on saleof assets, fair-value adjustments of financial instruments, impairment losses, gains or losses on settlement of
liabilities; (v) cash-settled share-based compensation expenses deemed to arise from shareholder transactions by virtue of
employment; and (vi) subsequent fair-value remeasurement of cash-settled share-based compensation expenses for group share
option schemes, equity-settled share-based compensation expenses for group share option schemes as well as those deemed to
arise on shareholder transactions (but not excluding share-based payment expenses for which the group has a cash cost on
settlement with participants). It is considered a useful measure to analyse operational profitability.
Trading profit/loss represents operating profit/loss, as adjusted to exclude: (i) amortisation of intangible assets recognised in
business combinations and acquisitions, as these expenses are not considered operational in nature; (ii) retention option expenses
linked tobusiness combinations; (iii) other losses/gains – net, which includes dividends received from investments, profits and losses
on sale ofassets, fair-value adjustments of financial instruments, impairment losses, compensation received from third parties for
property, plantand equipment impaired, lost or stolen, and gains or losses on settlement of liabilities; (iv) cash-settled share-based
compensation expenses deemed to arise from shareholder transactions by virtue of employment; and (v) subsequent fair-value
remeasurement of cash-settled share-based compensation expenses, equity-settled share-based compensation expenses for group
share option schemes aswell as those deemed to arise on shareholder transactions (but not excluding share-based payment
expenses for which the group hasa cash cost on settlement with participants).
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
187
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
21. Segment information
continued
The revenues from external customers for each major group of products and services are disclosed in note 13. The group is not reliant
on any one major customer as the group’s products are consumed by the general public in a large number of countries.
Revenue
31 March
2022
31 March 2021
External
US$’m
Inter-
segmental
US$’m
Total
US$’m
External
US$’m
Inter-
segmental
US$’m
Total
US$’m
Ecommerce
9 825
–
9 8256 230
–
6 230Classifieds
2 975
–
2 9751 599
–
1 599Food Delivery
2 992
–
2 9921 486
–
1 486Payments and Fintech
784 12 796
567 10 577
Edtech
1
425
–
425115
–
115Etail
2 259
–
2 2592 250
–
2 250Other
1
390 (12) 378
213 (10) 203
Social and Internet Platforms
25 794
–
25 79422 526
–
22 526Tencent
25 261
–
25 26122 155
–
22 155VK
2
533
–
533371
–
371Corporate
– – –
– – –
Total economic interest from operations
35 619
–
35 61928 756
–
28 756Less
: Equity-accounted investments
(28 753)
–
(28 753)(23 640)
–
(23 640)Total consolidated
6 866
–
6 8665 116
–
5 1161
reclassified and presented as part of the new segment.
2
Year ended 31 March 2022
Total
revenue
US$’m
COPS
and SGA
1
US$’m
Adjusted
EBITDA
2
US$’m
Depreciation
US$’m
Amortisation
of software
US$’m
Interest
on leases
US$’m
Trading
(loss)/profit
3
US$’m
Ecommerce
9 825 (10 715)
(890) (193) (18) (10)
(1 111)Classifieds
2 975 (2 880)
95 (55) (8) (7) 25
Food Delivery
2 992 (3 643)
(651) (67) (5) (1) (724)
Payments and Fintech
796 (848) (52) (6) (1) (1) (60)
Edtech
4
425 (525) (100) (16) (1)
–
(117)Etail
2 259 (2 247)
12 (43) (3) (1) (35)
Other
4
378 (572) (194) (6)
– –
(200)Social and Internet Platforms
25 794 (18 171) 7 623 (1 225)
(42) (37)
6 319Tencent
25 261 (17 759) 7 502 (1 181)
(16) (32)
6 273VK
5
533 (412) 121 (44) (26) (5) 46
Corporate
–
(160) (160) (6)
–(1) (167)
Total economic interest
35 619 (29 046) 6 573 (1 424)
(60) (48)
5 041Less
: Equity-accounted investments
(28 753) 21 769 (6 984) 1 308
49 39
(5 588)Total consolidated
6 866 (7 277)
(411) (116) (11) (9) (547)
1
2
expenses for Naspers group share option schemes, interest, taxation, depreciation and amortisation. It is considered a useful measure to analyse profitability by eliminating the effects of
remeasurement of cash-settled share-based compensation expenses, equity-settled share-based compensation expenses for group share option schemes, financing, tax, capital investment,
depreciation and amortisation.
3
useful measure to analyse operational profitability.
4
reclassified and presented as part of the new segment.
5
During March 2022 the group lost its significant influence due in VK. Accordingly, equity-accounted results will no longer be presented subsequent to March 2022.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
Prosus annual report 2022
188
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
21. Segment information
continued
Year ended 31 March 2021
Total
revenue
US$’m
COPS
and SGA
1
US$’m
Adjusted
EBITDA
2
US$’m
Depreciation
US$’m
Amortisation
of software
US$’m
Interest
on leases
US$’m
Trading
(loss)/profit
3
US$’m
Ecommerce
6 230 (6 507)
(277) (132) (10) (10) (429)
Classifieds
1 599 (1 532)
67 (46) (5) (7)
9
Food Delivery
1 486 (1 799)
(313) (38) (3) (1) (355)
Payments and Fintech
577 (636) (59) (8)
–
(1) (68)
Edtech
4
115 (126) (11) (3)
– –
(14)Etail
2 250 (2 148)
102 (31) (2) (1) 68
Other
4
203 (266) (63) (6)
– –
(69)Social and Internet Platforms
22 526 (15 297) 7 229 (1 015)
(31) (29)
6 154Tencent
22 155 (15 004) 7 151
(986) (13) (26)
6 126VK
371 (293) 78 (29) (18) (3) 28
Corporate
–
(104) (104) (5)
–(1) (110)
Total economic interest
28 756 (21 908) 6 848 (1 152)
(41) (40)
5 615Less
: Equity-accounted investments
(23 640) 16 739 (6 901) 1 059
34 30
(5 778)Total consolidated
5 116 (5 169)
(53) (93) (7) (10) (163)
1
2
expenses for Naspers group share option schemes, interest, taxation, depreciation and amortisation. It is considered a useful measure to analyse profitability by eliminating the effects of
remeasurement of cash-settled share-based compensation expenses, equity-settled share-based compensation expenses for group share option schemes, financing, tax, capital investment,
depreciation and amortisation.
3
useful measure to analyse operational profitability.
4
reclassified and presented as part of the new segment.
Additional disclosure
Year ended 31 March 2022
Year ended 31 March 2021
Reversal of
impairment/
(impairment)
of assets
US$’m
Share of
equity-
accounted
results
US$’m
Average
number of
employees
1
Impairment
of assets
US$’m
Share of
equity-
accounted
results
US$’m
Average
number
of employees
1
Ecommerce
143 (523)
26 150
(501)
(1 007) 20 888
Classifieds
–
(70)
10 430
(64) (44)
7 621
Food Delivery
390 (148)
4 560
(414) (903)
3 034
Payments and Fintech
–
(23)
2 120
–
(15)
2 927Edtech
(246) (155) 509
–
(4)
–Etail
(1)
–
7 402
– –
6 041
Other
–
(127)
1 129
(23) (41)
1 265
Social and Internet Platforms
(1 459) 9 779
(553)
8 102
Tencent
(1 453) 9 863
(550)
8 156
VK
(6) (84)
(3) (54)
Corporate
– –
183
– –
130
Total reportable segments
(1 316) 9 256 26 333
(1 054) 7 095 21 018
Less
: Equity-accounted investments
2
1 070
– –
986
– –
Total
(246)
9 256 26 333
(68)
7 095 21 018
1
2
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
189
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
21. Segment information
continued
Trading profit/(loss) as presented in the segment disclosure is the CODM’s measure of each segment’s operational performance.
Areconciliation of the segmental trading profit/(loss) to operating profit/(loss) and profit before tax as reported in the income statement
isprovided below:
31 March
2022
US$’m
2021
US$’m
Consolidated adjusted EBITDA
1
(411)
(53)
Depreciation
(116)
(93)
Amortisation of software
(11)
(7)
Interest on capitalised lease liabilities
(9)
(10)
Trading loss from operations per segment report
2
(547)
(163)
Interest on capitalised lease liabilities
9
10
Amortisation of other intangible assets
(126)
(131)
Other (losses)/gains – net
(162)
(87)
Retention option expense
(15)
(62)
Remeasurement of cash-settled share-based incentive expenses
5
(594)
Share-based incentives for share options settled in Naspers Limited shares
3
(23)
(13)
Operating loss per the income statement
(859)
(1 040)
Interest income
58
83
Interest expense
(403)
(262)
Other finance (costs)/income – net
(83)
178
Share of equity-accounted results
9 256
7 095Impairment of equity-accounted investments
(582)
(30)
Dilution gains on equity-accounted investments
95
981
Gains on partial disposal of equity-accounted investments
12 339
19
Net gains on acquisitions and disposals
(1 130)
309
Profit before taxation per the income statement
18 691
7 333
1
expenses for Naspers group share option schemes, interest, taxation, depreciation and amortisation. It is considered a useful measure to analyse profitability by eliminating the effects of
remeasurement of cash-settled share-based compensation expenses, equity-settled share-based compensation expenses for group share option schemes, financing, tax, capital investment,
depreciation and amortisation.
2
auseful measure to analyse operational profitability.
3
byNaspers.
Geographical information
Revenue is allocated to a country based on the location of users/customers. The group operates in four main geographical areas:
Asia
– The group’s activities comprise its interests in internet activities based in China, India, Thailand and Singapore.
Europe
– The group’s activities comprise its interest in internet activities based in Central, Eastern and Western Europe and Russia.
Furthermore, the group generates revenue from services provided by subsidiaries based in the Netherlands.
Latin America
– The group’s activities comprise its interests in internet activities based in Brazil and other Latin American countries.
North America
– The group’s activities comprise its interests in internet activities based in the United States of America and other countries.
Other
– Includes the group’s provision of various products and internet services located mainly in Africa and Australia.
31 March 2022
31 March 2021
Geographical area
External
consolidated
revenue
US$’m
External
proportionately
consolidated
revenue
1
US$’m
External
consolidated
revenue
US$’m
External
proportionately
consolidated
revenue
1
US$’m
Asia
701
26 540
420
22 803
Europe
2
3 618 5 961
3 186 4 182
Central
768 780
678 684
Eastern Europe 2 031
2 108 2 117
2 027Western Europe
100
1 889
58 673
Russia
642
1 175
423 794
Latin America
1 834 1 919
1 266 1 317
North America
647
1 036
205 356
Other
66 163
39 98
Total
6 866 35 619
5 116 28 756
1
2
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Operational performance
continued
Prosus annual report 2022
190
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
22. Earnings per share
Accounting policies
Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the group by the weighted
average ordinary shares outstanding during the financial year, excluding treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
•
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
ofall dilutive potential ordinary shares.
The group discloses headline earnings per share as determined in accordance with Circular 1/2021, pursuant to the JSE Listings
Requirements. Headline earnings represents net profit for the year attributable to the group’s equity holders, excluding certain
defined separately identifiable remeasurements relating to, among others, impairments of tangible assets, intangible assets
(including goodwill) and equity-accounted investments, gains and losses on acquisitions and disposals of investments as well
as assets, dilution gains and losses on equity-accounted investments, remeasurement gains and losses on disposal groups
classified asheld for sale and remeasurements included in equity-accounted earnings, net of related taxes (both current and
deferred) and the related non-controlling interests. These remeasurements are determined in accordance with Circular 1/2021,
headline earnings, as issued by the South African Institute of Chartered Accountants, at the request of the JSE Limited in relation
to the calculation of headline earnings and disclosure of a detailed reconciliation of headline earnings to the earnings numbers
used in the calculation ofbasic earnings per share in accordance with the requirements of IAS 33
Earnings per Share
, under
the JSE Listings Requirements.
Basic headline earnings per share is determined by dividing the headline earnings described above by the weighted
average ordinary shares outstanding during the financial year, excluding treasury shares. Diluted headline earnings per share
is determined by dividing the diluted headline earnings by the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
In the event that the number of ordinary or potential ordinary shares outstanding increases as a result of a capitalisation
without consideration, the calculation of the basic and diluted earnings per share for the comparative period is adjusted
retrospectively.
Share capital and treasury shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction against share premium.
Where subsidiaries hold Prosus ordinary shares N, the consideration paid to acquire those shares, including attributable
incremental costs, is deducted from shareholders’ equity and presented separately as treasury shares. Where such shares
aresubsequently sold or reissued, the cost of those shares is released, and realised gains or losses are recorded in equity.
Inaddition, where Prosus holds its own ordinary shares N in issue, such shares are shown as treasury shares until they are
cancelled. When these shares are cancelled, they are deducted against share capital and share premium and/or retained
earnings on the basis of their par value.
During the current year the group made a decision to show the treasury shares separately in the statement of changes
inequity as well as on the face of the statement of financial position. The group considers that the change in presentation
will provide more relevant information about the treasury shares held by Prosus subsequent to the share repurchase
programme. Refer to note 4 for further details.
Prosus share exchange with Naspers shareholders and cross-holding arrangement
In August 2021, the group completed a share exchange offer to Naspers shareholders and a distribution agreement
(hereafter referred to as the cross-holding agreement) was entered into between Naspers and Prosus, which became
effective at the time ofclosing of the share exchange. Refer to note 4 for further details.
191
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
22. Earnings per share
continued
Year ended 31 March 2022
Year ended 31 March 2021
Gross
US$’m
Taxation
US$’m
Non-
controlling
interests
US$’m
Net
US$’m
Gross
US$’m
Taxation
US$’m
Non-
controlling
interests
US$’m
Net
US$’m
Earnings
Basic earnings attributable to shareholders
18 733
7 449
Impact of dilutive instruments of subsidiaries,
associates and joint ventures
(170)
(139)
Diluted earnings attributable to shareholders
18 563
7 310
Headline adjustments
Adjustments for:
(15 657)
(1 362)– –
(15 657)(173) (74)
(1 609)Impairment of goodwill and other intangible
assets
246
– –
24668 67
–
(1)Loss on loss of significant influence
transactions
1 112
– –
1 112– – – –
Net gains on acquisitions and disposals of
investments
(31)
– –
(31)(359) (173) 30 (502)
Gains on partial disposal of equity-accounted
investments
(12 339)
– –
(12 339)(19)
– –
(19)Dilution (gains)/losses on equity-accounted
investments
(95)
– –
(95)(981)
– –
(981)Remeasurements included in
equity-accounted earnings
1
(5 132)
– –
(5 132)(101) (196)
–
(95)Impairment of equity-accounted investments
582
– –
58230 22
–
(8)Basic headline earnings
3 076
5 840
Diluted headline earnings
2 906
5 701
1
(2021:US$932.5m) relating to impairments of assets recognised by associates.
The earnings per share represents the economic interest per share taking into account the impact of the cross-holding agreement
between Prosus and Naspers, which became effective at the time of the closing of the share exchange (refer to note 4). The cross-
holding agreement deals with how distributions by Prosus will be attributed to its N ordinary shareholders.
Under the cross-holding agreement, Naspers has waived its entitlement to any distributions from Prosus for a calculated number of the
ordinary shares N it holds in Prosus, as these represent the portion of the Prosus ordinary shares N that Prosus indirectly owns in itself,
by virtue of its 49.5% fully dilutive interest in Naspers. These ordinary shares N (Cross-holding ordinary shares N) are excluded from the
earnings per share calculation, as they contractually do not have an economic interest in the earnings of the group.
The number of shares in issue used in the earnings per share information is weighted for the period that the shares were in issue.
As a result, the ordinary shares N issued in the share exchange in August 2021, the ordinary shares N related to the cross-holding
agreement, and the ordinary shares N repurchased from August 2021 (refer to note 4) are weighted for the period that they have
beenin issue up until 31March 2022.
The A and B ordinary shareholders are entitled to one voting right per share. The A ordinary shareholders are entitled to one fifth
ofthe economic rights attributable to the Prosus free-float shareholders. The B ordinary shareholders are entitled to one millionth
oftheeconomic rights of the Prosus ordinary shares N.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
Prosus annual report 2022
192
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
22. Earnings per share
continued
Issued shares
2022
Participating
ordinary
shares N
2021
ordinary
shares N
Restated
1
Net number of shares in issue at year-end (net of treasury shares)
2
2 003 817 745
1 612 777 577
Cross-holding ordinary shares N
(584 373 494)
–
Net number of shares in issue at year-end
1 419 444 251
1 612 777 577Weighted average number of ordinary shares
Issued net of treasury at the beginning of the year
1 612 777 577
1 624 652 070Weighting of share buyback
(21 496 865)
(2 197 203)Weighting of cross-holding ordinary shares N
3
(365 033 306)
Weighting of ordinary shares N issued to Naspers shareholders
3
280 465 945
Weighted average number of shares in issue during the year 1 506 713 351
1 622 454 867
Adjusted for effect of future share-based payment transactions
–
–
Diluted weighted average number of ordinary shares N in issue during the year
1 506 713 351
1 622 454 867Per share information for the year (US cents)
3, 4
Earnings per ordinary share N for the year
1 243
459
Diluted earnings per ordinary share N for the year
1 232
450
Headline earnings per ordinary share N for the year
204
360
Diluted headline earnings per ordinary share N for the year
193
351
Dividend paid per ordinary share N (euro cents)
14
11
Proposed dividend per ordinary share N (euro cents)
14
14
1
2
1180 250 012 ordinary shares N being held by Naspers.
3
4
23. Share capital and premium
31 March
2022
US$’m
2021
US$’m
Authorised
5 000 000 000 ordinary shares N of €0.05 each (2021: €0.05)
10 000 000 A1 ordinary shares of €0.05 each (2021: €0.05)
10 000 A2 ordinary shares of €50.0 each (2021: €50.0)
3 000 000 000 B ordinary shares of €0.05 each (2021: nil)
Issued
2 073 643 605 ordinary shares N (2021: 1 624 652 070)
114
94
4 456 650 A1 ordinary shares (2021: 3 511 818)
1
1
1 128 507 756 B ordinary shares (2021: nil)
62
–
177
95
Share premium
39 013
517
39 190
612
Treasury shares
(6 411)
(1 416)
32 779
(804)
Equity-compensation plans administered by Naspers group share trusts hold 4 543 614 (2021: 2 736 666) of the ordinary shares N issued.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
193
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
23. Share capital and premium
continued
Share repurchase programme
Purchase of Naspers N ordinary shares
Prosus acquired a total of 15 992 042 Naspers N ordinary shares as part of the share purchase programme announced in
October 2020. A total of 10 568 947 N ordinary shares for US$2.4bn were acquired during the year ended 31 March 2021 and
a further 5 423 095 Naspers N ordinary shares for US$1.2bn were acquired between April and June 2021. The total purchase
consideration for the repurchase programme was US$3.6bn. The shares are held by Prosus and are included in the 49.5% fully
diluted investment in Naspers.
Repurchase of Prosus ordinary shares N
In August 2021, Prosus commenced an on-market share repurchase programme of Prosus’s ordinary shares N for a total consideration
ofUS$4.99bn from its free-float shareholders in support of delivering the overall benefits of the Prosus share exchange offer to Naspers
Limited N ordinary shareholders completed on 16 August 2021. The total consideration includes costs and related taxes. 57 951 367 Prosus
ordinary shares N were repurchased from the share repurchase programme which was completed in February 2022.
In the prior year between October and February 2021, the company repurchased 11 874 493 Prosus ordinary shares N amounting
toUS$1.4bn.
The company intends to cancel the ordinary shares N repurchased under this current and previous repurchase programme in due
course, so as to reduce its issued share capital. At 31 March 2022, US$6.41bn was recognised as treasury shares.
Treasury shares
The group holds a total of 69 825 860 ordinary shares N (2021: 11 874 493), or 3.37% (2021: 0.73%), of the gross number of ordinary
shares N in issue at 31 March 2022 as treasury shares. The group will hold these treasury shares until they are cancelled. For withholding
tax purposes for these shares repurchased, the company financial statements of Prosus N.V. are leading.
Voting and dividend rights
The company’s issued share capital at 31 March 2022 consists of 4 456 650 (2021: 3 511 818) A1 ordinary shares, 1 128 507 756 B ordinary
shares (2021: nil) and 2 073 643 605 (2021: 1 624 652 070) ordinary shares N.
The ordinary shares N are listed on the Euronext Amsterdam stock exchange with a secondary listing on the JSE and A2X
M
arkets,
ona poll, carry one vote per share. The A1 and B ordinary shares are not listed on a stock exchange and, on a poll, carry one vote
per share. The A1ordinary shares automatically convert to A2 ordinary shares carrying 1 000 votes per share, if Naspers makes, or is
obliged to make, a filing with the Netherlands Authority for the Financial Markets that it ceases to be entitled to exercise at least 50%
plus one vote of the total number of voting rights that may be exercised at a general meeting.
In terms of Prosus’s articles of association, ordinary shareholders N are entitled to dividends. The dividends declared to A ordinary
shareholders are equal to one fifth of the dividends to which Prosus free-float ordinary N shareholders are entitled. The dividends declared
toB ordinary shareholders are equal to one millionth of the dividends to which Prosus free-float ordinary N shareholders are entitled.
In respect of all other rights, the A and B ordinary shares rank pari passu with the ordinary shares N of the company.
Share capital and share premium
Refer to the company financial statements for a reconciliation of group equity to the company’s equity. Significant differences from the
equity of the company arises from the accounting treatment of the restructuring that occurred upon formation of the Prosus group.
Unissued share capital
The directors of the company have unrestricted authority, until the next annual general meeting, to allot and issue the unissued
2926356 395 ordinary shares N, 5 543 350 A1, 10 000 A2 ordinary shares and 1 871 492 244 B ordinary shares of the company.
This authority was granted by the Netherlands Authority for the Financial Markets subject to the provisions of the Dutch Civil Code
(
Burgerlijk Wetboek
), other applicable Dutch laws and regulations and any other exchange on which the shares of the company
may be quoted or listed from time to time.
31 March
2022
Number of
shares N
2021
Number of
shares N
Movement in ordinary shares N in issue during the year
Ordinary shares N in issue at 1 April
1 624 652 070
1 624 652 070Ordinary shares N issued as part of the share exchange
448 991 535
–
Shares in issue at 31 March 2 073 643 605
1 624 652 070
Movement in ordinary shares held as treasury shares during the year
Shares held as treasury shares at 1 April
11 874 493
–
Shares acquired under the share repurchase programme
57 951 367
11 874 493
Shares held as treasury shares at 31 March 69 825 860
11 874 493
Net number of ordinary shares in issue at 31 March 2 003 817 745
1 612 777 577
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
Prosus annual report 2022
194
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
23. Share capital and premium
continued
Capital management
The group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to
provide adequate returns to shareholders and benefits for other stakeholders by pricing products and services commensurately with
the level of risk.
The group relies upon distributions, including dividends, from its subsidiaries, associates and joint ventures to generate the funds
necessary tomeet the obligations and other cash flow requirements of the combined group. The operations of the group have
historically been funded ina number of ways, including both debt and equity financing. Recent acquisitions were primarily
fundedthrough debt financing. The group’s businesses are beginning to scale and, accordingly, they are expected to become
cashgenerative and able to sustain their operating capitalrequirements. The group received US$570.7m (2021: US$458.2m)
incashdividends from Tencent during the year and US$565.4m (2021:US$571.1m) after the year-end – an increase of 25%
compared with the 2021 financial year.
The group’s general business strategy is to acquire developing businesses and to provide funding to meet the cash needs of those
businesses until they can, within a reasonable period of time, become self-funding. Funding is provided through a combination of loans
and share capital, depending on the country-specific regulatory requirements. From a subsidiary’s perspective, intergroup loan funding
is generally considered to be part of the capital structure. The focus on increased profitability and cash flow generation will continue
into the foreseeable future, although the group will continue to actively evaluate potential growth opportunities within its areas of
expertise.
The group will also grow its business in the future by making equity investments in growth companies. The group anticipates that it may
fund future acquisitions and investments through the issue of debt and equity instruments and utilisation of available cash resources.
The group follows a risk-based approach to the determination of the optimal capital structure. The group manages the capital structure
and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to
maintain ormodify the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
Below is a summary of the group bonds in issue for the year ended 31 March 2022:
31 March
Currency of
year-end balance Listing date
1
Year of
final repayment
Fixed
interest rate
Interest
payments
2022
US$’m
2021
US$’m
US$
Jul 2017
2025
5.50%
Semi-annual
225
1 200
US$
Jul 2017
2027
4.85%
Semi-annual
614
1 000
US$
Jan 2020
2030
3.68%
Semi-annual
1 250
1 250
EUR
Aug 2020
2028
1.54%
Annual
942
998
EUR
Aug 2020
2032
2.03%
Annual
829
879
US$
Aug 2020
2050
4.03%
Semi-annual
1 000
1 000
US$
Dec 2020
2051
3.83%
Semi-annual
1 500
1 500
US$
Jul 2021
2031
3.06%
Semi-annual
1 850
–EUR
Jul 2021
20331.99%
Annual
940
–
EUR
Jul 2021
2029
1.29%
Annual
1 108
–
US$
Jan 2022
2052
4.99%
Semi-annual
1 250
–US$
Jan 2022
2032
4.19%
Semi-annual
1 000
–US$
Jan 2022
2027
3.26%
Semi-annual
1 000
–EUR
Jan 2022
2034
2.78%
Annual
719
–
EUR
Jan 2022
20302.09%
Annual
664
–
EUR
Jan 2022
2026
1.21%
Annual
553
–
15 444
7 827
1
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
195
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
23. Share capital and premium
continued
Bonds issued during the year ended 31 March 2022
In January 2022, the group issued US dollar and euro notes in an aggregate principal amount totalling the equivalent of US$5.25bn
under its Global Medium-Term Note Programme. These issuances consist of US$1.25bn 4.987% notes due 2052, US$1bn 4.193% notes
due 2032, US$1bn 3.257% notes due 2027, €650m 2.778% notes due 2034, €600m 2.085% notes due 2030 and €500m 1.207% notes
due 2026 (the ’bonds’).
In July 2021, the group issued US dollar and euro notes in an aggregate principal amount totalling the equivalent of US$4bn under its
Global Medium-Term Note Programme. These issuances consist of US$1.85bn 3.061% notes due 2031, €1bn 1.288% notes due 2029
and€850m 1.985% notes due 2033 (the ’bonds’).
The favourable market backdrop enabled Prosus to extend its debt maturity profile as part of a refinancing of its existing debt.
The purpose of the offerings was to raise proceeds for general corporate purposes, including debt refinancing, which took the form
ofa tender offer made in relation to its bonds maturing in 2025 and 2027.
Part of the proceeds from the bond issuance was used to partly settle these two bonds. The 2025 bond consisted of US$1.2bn 5.5%
notes and the 2027 bond consisted of US$1bn 4.85% notes. The early settlement of these bonds consisted of repayments of principal,
accrued interest and present value of the related future interest coupon payments at date of settlement. The group settled US$975m
bond notes due in 2025 and US$386m bond notes due in 2027 for a total combined consideration of US$1.6bn. The difference
between the market value of the future contractual payments and the carrying value of the note at amortised cost, of US$217m
(representing the market value premium) was recognised in ’Other finance (costs)/income – net’ in the income statement and as part
of’Repayments of long- and short-term loans’ in the cash flow statement.
Bonds issued during the year ended 31 March 2021
In August 2020, the group issued bonds totalling US$2.18bn. These bonds consist of 30-year US$1bn notes due in 2050, eight-year
€500m notes due in 2028, and 12-year €500m notes due in 2032.
In December 2020, the group issued bonds totalling US$2.23bn. These bonds consist of 30-year US$1.5bn due in 2051, a tap of €350m
due in 2028, and a tap of €250m of its existing notes due in 2032. The 2028 notes were offered at an issue price yield of 1.211% and will
be treated as a single class of the group’s existing €500m 1.539% senior notes due 2028. The 2032 notes were offered at an issue price
yield of 1.742% and will be treated as a single class of the group’s existing €500m 2.031% senior notes due 2032.
The current favourable market backdrop enabled the group to further enhance its average debt maturity profile while reducing its
average cost of funding. The purpose of this offering was to raise proceeds for general corporate purposes, including potential future
M&A activity, and to further augment the group’s liquidity position.
Undrawn revolving credit facility
The group has an undrawn revolving credit facility (RCF) of US$2.5bn which matures in March 2027 with the option of two extensions
ofone year each. The RCF is undrawn and is denominated in US dollar and euro and bears interest at a secured overnight
financing rate (SOFR) plus a variable mark-up based on credit rating varying between 0.65% and 1.10% before commitment and
utilisation fees.
The borrower under the bonds and the undrawn US$2.5bn (2021: undrawn balance of US$2.5bn) RCF (refer to the group’s unutilised
banking facilities disclosed in note 39) is Prosus N.V. The borrower is obligated to pay a commitment fee equal to 35% of the applicable
margin under the RCF. The undrawn balance of the RCF is available to fund future investments and development expenditure by the
group as part of its growth strategy.
The group has specific financial covenants in place to govern its RCF, all of which were complied with during the reporting period.
These financial covenants are linked to various financial metrics including the ratio of the group’s debt to the value of its investment
portfolio.
Net interest-bearing debt-to-equity ratio
As of 31 March 2022, the group had total interest-bearing debt (including capitalised lease liabilities) of US$15.97bn (2021: US$8.1bn)
and a net cash balance including short-term cash investments of US$13.55bn (2021: US$4.77bn). The net interest-bearing debt-to-equity
ratio was a positive 5% at 31 March 2022 (31 March 2021: positive 8%) due to the group’s cash position and accumulated equity
reserves. The group excludes capitalised lease liabilities from total interest-bearing debt when evaluating and managing capital.
Theseitems are considered to be operating in nature. The adjusted total interest-bearing debt (excluding capitalised lease liabilities)
was US$15.7bn (2021: US$7.9bn) and the adjusted net interest-bearing debt-to-equity ratio was 4% at 31 March 2022 (2021: 7%). The
group does not have a formal targeted debt-equity ratio.
The group’s listed bonds are rated by Moody’s and Standard & Poor’s (S&P) as Baa3 and BBB and have a stable and positive outlook
respectively.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
Prosus annual report 2022
196
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
24. Other reserves
31 March
2022
US$’m
2021
US$’m
Other reserves in the statement of financial position comprise:
Foreign currency translation reserve
(358)
(1 123)
Valuation reserve
65
6 707
Existing control business combination reserve (BCR)
(43 487)
(2 212)
Share-based compensation reserve
3 223
2 446
(40 557)
5 818
Foreign currency translation reserve
The foreign currency translation reserve relates to exchange differences arising on the translation of foreign operations’ income
statements and statements of comprehensive income at average exchange rates for the year and their statements of financial
position at the ruling exchange rates at the reporting date if the functional currency differs from the group’s presentation currency.
The movement on the foreign currency translation reserve for the year relates primarily to the effects of foreign exchange rate
fluctuations related to the group’s net investments in its subsidiaries.
Valuation reserve
The valuation reserve relates to fair-value changes in financial assets at fair value through other comprehensive income, differences
between the fair value and the contractually stipulated value of shares issued in business combinations and other acquisitions.
Furthermore, the valuation reserve includes the group’s share of equity-accounted investees’ revaluations of their financial assets at
fairvalue through other comprehensive income and other changes in net asset value of the equity-accounted investees.
Other changes in net assets of the associate and joint ventures include changes in their share-based compensation reserve,
transactions with non-controlling shareholders and other direct equity movements. The components of the valuation reserve may
subsequently be reclassified to profit or loss except for fair value gains or loss relating to the group’s financial assets at fair value
through other comprehensive income, fair value gains or losses from equity accounted investments’ financial assets at fair value
through other comprehensive income and other direct reserve movements of equity-accounted investments.
Share-based compensation reserve
The grant date fair value of share incentives issued to employees in equity-settled share-based payment transactions is accounted for in
the share-based compensation reserve over the vesting period, if any. The reserve is adjusted at each reporting period when the entity
revises its estimates of the number of share incentives that are expected to vest. The impact of revisions of original estimates, if any, is
recognised in the income statement, with a corresponding adjustment to this reserve in equity. Upon settlement of share-based
compensation benefits, the reserve is reclassified to retained earnings.
A significant proportion of the group’s foreign currency translation, valuation and share-based compensation reserves relates to the
group’s interests in its equity-accounted investments, particularly Tencent.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
197
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
24. Other reserves
continued
Existing control business combination reserve
The existing control business combination reserve (BCR) is used to account for transactions with non-controlling shareholders, whereby
the excess of the cost of the transactions over the acquirer’s proportionate share of the net asset value acquired/sold is allocated to
this reserve in equity. Written put option liabilities and other obligations that may require the group to purchase its own equity
instruments by delivering cash or another financial asset are also initially recognised from this reserve. Similarly, written put option
liabilities and other similar obligations are reclassified to this reserve in the event of cancellation or expiry.
Below is a summary of the group’s significant transactions with non-controlling shareholders during the year:
31 March 2022
31 March 2021
Shareholding
acquired/
(disposed)
%
Purchase
price
US$’m
BCR
US$’m
Shareholding
acquired/
(disposed)
%
Purchase
price
US$’m
BCR
US$’m
Movile Mobile Commerce Holdings S.L.
0.68 43 (4)
11.33 190 (136)
Frontier Car Group Inc
9.30 61 (59)
6.33 34
1
Zoop S.A.
20.12 24 (32)
– – –
Silver Indonesia JVCo B.V.
1
– – –
34.22 54 (37)
Letgo Global B.V.
– – –
20.06 32 (25)
MIH Internet Sea Pte Ltd
1
– – –
8.71 89 (114)
128 (95)
399 (311)
1
Refer to note 4 for details on the share exchange transaction.
25. Retained earnings
The board recommends that shareholders are entitled to a gross payment, in the form of a capital repayment, of 14 euro cents per
listed ordinary share N. Holders of ordinary shares B will receive 0.000014 euro cents per share. Holders of ordinary shares A1 will
receive an amount per share equal to the outcome of the formula set forth in article 30.4 of the articles of association. Furthermore, the
board recommends that holders of ordinary shares N as at 2 September 2022 (the dividend record date) who do not wish to receive
acapital repayment can make a choice to receive a dividend instead. A choice for one option implies an opt-out of the other option.
If confirmed by shareholders at the annual general meeting on 24 August 2022, elections to receive a dividend instead of a capital
repayment will need to be made by holders of ordinary shares N by 19 September 2022. Capital repayments and dividends will be
payable to shareholders recorded in the books on the dividend record date and paid on 27 September 2022. Capital repayments
willbepaid from share capital for Dutch tax purposes. No dividend tax will be withheld on the amounts of capital reductions paid
to shareholders. Holders of ordinary shares N electing to receive a dividend will receive a dividend declared from retained
earnings.
Dividends will be subject to the Dutch dividend tax rate of 15%. Dividends payable to holders of ordinary shares N who elect to receive
adividend and who hold their listed ordinary share N through the listing of the company on the JSE will, in addition to the Dutch
dividend withholding tax, be subject to South African dividend tax at a rate of up to 20%. The amount of additional South African
dividend tax payable will be calculated by deducting from the 20% South African dividend tax otherwise due, a rebate equal to the
Dutch dividends tax paid in respect of the dividend (without any right of recovery). Those shareholders, unless exempt from paying
dividend tax or entitled to a reduced withholding tax rate in terms of an applicable tax treaty will be subject to a maximum of 20% total
dividend tax.
The issued ordinary share capital as at 27 June 2022 was 2 073 643 605 ordinary shares N, 4 456 650 A1 ordinary shares and
1128507756 B ordinary shares. Distributions to Naspers are subject to the cross-holding agreement entered into between Naspers
andProsus.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Earnings per share and equity
continued
Prosus annual report 2022
198
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Financial assets
Accounting policies
Classification, initial recognition and measurement
Financial assets are initially recognised when the group becomes a party to the contractual provisions of the instrument.
On initial recognition, financial assets are classified as financial assets measured at amortised cost, fair value through other
comprehensive income or fair value through profit or loss. The classification is based on the objectives of the business model
withinwhich the financial asset is held and the characteristics of its contractual cash flows.
The group assesses the objective of the business model in which a financial asset is held based on all relevant evidence that
is available at the date of assessment including how the performance of the financial asset is evaluated and reported to
management and the risks affecting the performance of the financial asset as well as how those risks are managed.
In evaluating the contractual cash flows of a financial asset, the group considers its contractual terms, including assessing
whether the financial asset is subject to contractual terms that change (or could potentially change) the timing or amount of
associated future cash flows.
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold assets to
collect contractual cash flows and its contractual cash flows represent solely payments of principal and interest on the amount
outstanding. In making this assessment, the group considers the effect of terms (including conversion, prepayment and
extension features) that may affect the timing and/or amounts of cash flows.
Financial assets classified as at amortised cost include trade and other receivables, related party receivables and cash and
cash equivalents.
All financial assets not classified as at amortised cost or at fair value through other comprehensive income are measured at
fair value through profit or loss. This includes derivative financial assets other than those forming part of effective hedging
relationships to which hedge accounting is applied. A financial asset is classified in this category at initial recognition if it is
acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there
is evidence of short-term profit-making, or if it is designated in this category, to eliminate or significantly reduce an accounting
mismatch that would otherwise arise.
Purchases and sales of financial assets are recognised on the trade date, which is the date that the group commits to
purchase or sell the asset. Financial assets (excluding trade receivables that are not subject to a significant financing
component) are initially measured at fair value plus, for an instrument not at fair value through profit or loss, transaction costs
directly attributable to its acquisition or issue. Trade receivables that are not subject to significant financing components are
initially measured at the relevant transaction prices.
Financial assets are presented as non-current assets, except for those with maturities within 12 months from the statement of
financial position date, which are classified as current assets.
On initial recognition of an equity investment that is not held for trading, the group may irrevocably elect to present
subsequent changes in the fair value of such investments in other comprehensive income. This election is made on an
investment-by-investment basis. These investments are classified as financial assets at fair value through other comprehensive
income. The group has classified all equity investments that do not represent investments in subsidiaries, associates or joint
ventures in this category.
Subsequent measurement
Amortised cost financial assets are subsequently measured using the effective interest method, reduced by relevant
impairment allowances. Interest income, foreign exchange gains and losses and impairment losses on amortised cost
financial assets are recognised in the income statement.
Changes in the fair value of equity investments classified as financial assets at fair value through other comprehensive income
are recognised in other comprehensive income and are accumulated in the valuation reserve in the statement of changes in
equity. Dividends received on equity investments at fair value through other comprehensive income are recognised in the
income statement. On derecognition of financial assets at fair value through other comprehensive income, fair value changes
accumulated in the valuation reserve are transferred to retained earnings.
Financial assets at fair value through profit or loss are subsequently carried at fair value with changes in fair value included in
’Other (losses)/gains – net’ in the income statement.
Refer to note 40 for the group’s fair-value measurement methodology regarding financial assets.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or where they
have been transferred and the group has also transferred substantially all risks and rewards of ownership.
Financial assets are offset and the net amount reported in the statement of financial position when there is a legally
enforceable right to offset the recognised amounts and there is an intention to realise the asset and settle a related financial
liability simultaneously.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
199
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Accounting policies
continued
Impairment
The group recognises expected credit losses (impairment allowances) on financial assets measured at amortised cost and
accrued income balances. The group assesses, on a forward-looking basis, the impairment allowances associated with these
financial assets and makes use of provision matrices relevant to its various operations in establishing impairment allowances,
specifically for trade receivables.
For trade and other receivables, including accrued income balances, the group measures impairment allowances at an
amount equal to the lifetime expected credit losses on these financial assets. Lifetime expected credit losses are those losses
that result from all possible default events over the expected life of the financial instrument.
For related party loans and receivables, the impairment loss allowance is based on a general expected credit loss model.
The measurement of the impairment loss allowance on these loans and receivables is based on the assessment of whether
there has been a significant increase in credit risk.
The group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations in full or the
outstanding amount exceeds its contractual payment terms.
At each reporting date the group assesses whether financial assets at amortised cost and/or accrued income balances are
credit impaired. Financial assets are considered credit impaired when one or more events that have a detrimental impact on
expected future cash flows have occurred. Evidence that a financial asset is credit impaired includes but is not limited to
significant financial difficulty experienced by the borrower, a breach of contract such as defaulting on contractually due
repayments or the probability ofthe borrower entering bankruptcy.
Impairment allowances for financial assets measured at amortised cost and accrued income balances are recognised in the
income statement in an impairment allowance account. The gross carrying amount of the financial assets is reduced by the
impairment loss allowance and is written off when the group has no reasonable expectation of recovering the financial asset
in its entirety or a portion thereof.
Refer to note 39 for further details regarding the group’s credit risk management.
26. Cash and cash equivalents
Accounting
policies
Cash and cash equivalents are carried in the statement of financial position at amortised cost (other than money market funds)
which equals the cost or face value of the asset. Cash and cash equivalents comprise cash on hand and deposits held at call
with banks. Certain cash balances are restricted from immediate use according to terms with banks or other financial
institutions. For purposes ofthe statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.
Cash and cash equivalents include money market funds at fair value through profit or loss. These funds have a maturity of
three months or less, are highly liquid and include cash flows which are not solely payments of principal and interest as well
as subject toinsignificant changes in value.
31 March
2022
US$’m
2021
US$’m
Cash at bank and on hand
1 383
1 167Short-term bank deposits
1
8 263
2 404
Bank overdrafts
(18)
(9)
9 628
3 562
Restricted cash
The following cash balances are restricted from immediate use:
104
–
Payments and Fintech
339
295
Etail
27
25
Other Ecommerce
44
16
Total restricted cash
514
336
1
that have AAA money market fund credit ratings from internationally recognised rating agencies.
Restricted cash is included in cash and cash equivalents due to the fact that it mostly relates to cash held on behalf of customers, as
well as cash held by the group’s Russian operations.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
Prosus annual report 2022
200
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
27. Short-term investments
Accounting
policies
Short-term investments are cash investments with maturities of more than three months from the date of acquisition. On initial
recognition, short-term investments are recognised at fair value plus directly attributable transaction costs and are
subsequently measured at amortised cost.
The carrying values of short-term investments as at 31 March are shown below.
31 March
Weighted average
interest rate
2022
US$’m
2021
US$’m
Deposits and money market investments
0.44%
3 921
1 209
Accrued interest income
3
2
3 924
1 211
The deposits and money market investments of US$3.92bn (2021: US$1.21bn) are mostly denominated in US dollar.
The above investments have maturity dates (from the date of acquisition) of between three and 12 months and have accordingly not
been disclosed as part of cash and cash equivalents.
Short-term investments are classified as financial assets at amortised cost. Due to their short-term nature, the carrying values of these
investments are considered to be a reasonable approximation of their fair values. None of the group’s short-term investments were
past due or subject to significant impairment allowances as at 31 March 2022.
Most short-term investments are held in the same currency as the respective entity’s functional currency. However, there are certain
money market investments held in euro by entities with US dollar functional currencies which give rise to foreign currency risk. Due to
the nature of short-term investments, there is an insignificant exposure to price risk.
Refer to note 39 for further information regarding the credit risk and foreign currency risk of short-term investments.
28. Other investments
31 March
2022
US$’m
2021
US$’m
Investments at fair value through other comprehensive income
5 918
4 122
Investments at fair value through profit or loss
63
1 258Investments at amortised cost
–
11
Total other investments
5 981
5 391
Current portion of other investments
–
(1 253)Investments at fair value through profit or loss
1
–
(1 242)
Investments at amortised cost
–
(11)
Non-current portion of other investments
5 981
4 138
1
Reconciliation of investments at fair value through other comprehensive income
31 March
2022
US$’m
2021
US$’m
Opening balance
4 122
792
Fair value adjustments recognised in OCI
(1 210)
669
Purchases/additional contributions
1
5 646
2 713
Loss of significant influence of an investment in associate
26
–
Disposals
(45)
(49)
Impact of share exchange
2
(2 665)
–
Foreign currency translation effects
44
(3)
Closing balance
5 918
4 122
1
JD.com shares.
2
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
201
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
28. Other investments
continued
Significant equity investments at fair value through other comprehensive income
Significant equity investments at fair value through other comprehensive income include the following:
31 March
Fair value
2022
US$’m
2021
US$’m
Listed investments
JD.com
1
3 940
–
Trip.com Group Limited
694
1 189
Sinch AB
2
105
270
Naspers Limited
3
–
2 526
Other
26
12
4 765
3 997
Unlisted investments
Residual interest in the Naspers group
4
385
–
GoStudent
5
226
–
Urbanclap Technologies
5
84
–
Wolt Enterprises Oy
6
70
70
Creditas Financial Solutions Limited
62
30
Primrose Hill (Zest money)
7
38
–
Sandbox
5
33
–
Pantera Venture Funds
26
10
WayFlyer
5
25
–
Mensa Brand Technologies
5
25
–
Other
179
15
1 153
125
Total other investments
5 918
4 122
1
2
3
4
5
6
7
Fair value gains or losses on investments held at fair value through other comprehensive income are not reclassified to the income
statement. These investments are not held for trading.
29. Trade receivables
31 March
2022
US$’m
2021
US$’m
Carrying value
Trade accounts receivable – gross
304
178
Less
: Allowance for impairment of trade receivables
(28)
(28)
276
150
The movement in the allowance for impairment of trade receivables during the year was as follows:
Opening balance
(28)
(23)
Additional allowances charged to the income statement
(22)
(14)
Allowances reversed through the income statement
16
4
Allowances utilised
6
4
Acquisition of subsidiaries
–
(2)
Disposal of subsidiaries
–
3
Closing balance
(28)
(28)
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
Prosus annual report 2022
202
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
29. Trade receivables
continued
The group’s maximum exposure to credit risk at the reporting date is the carrying value of the trade receivables mentioned above. The
group does not hold any form of collateral as security relating to trade receivables. Refer to note 39 for the group’s credit risk
management.
At 31 March 2022 and 2021, the total allowance for impairment of trade receivables comprised both portfolio allowances and
specific allowances. The majority of the allowance related to a portfolio allowance, which cannot be identified with specific
receivables.
The group recognises an allowance for expected credit losses for its trade receivables. The expected credit loss assessment took
into account all reasonable and supportable information about the likelihood that counterparties would breach their agreed
payment terms and any deterioration of their credit ratings. Where relevant, additional expected credit losses were accounted for
when deemed necessary. Overall, the expected credit loss allowance did not have a material impact on the group’s trade
receivables for the year ended31 March 2022.
The ageing of trade receivables as well as the amount of the impairment allowance per age class is presented below:
31 March 2022
31 March 2021
Carrying
value
US$’m
Impairment
US$’m
Expected
loss rate
%
Carrying
value
US$’m
Impairment
US$’m
Expected
loss rate
%
Current
214 (2)
1
124 (1)
1
Past due 30 to 59 days
51 (4)
8
12 (3) 25
Past due 60 to 89 days
5
(1) 20
8
(2) 25
Past due 90 to 119 days
5
(1) 20
4
(1) 25
Past due 120 days and older
29 (20) 69
30 (21) 70
304 (28)
178 (28)
30. Long-term liabilities
Accounting policies
Financial liabilities
Financial liabilities are recognised when the group becomes party to the contractual provisions of the relevant instrument. The
group classifies financial liabilities at amortised cost or at fair value through profit or loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses on these financial liabilities are recognised in the income statement. Other financial
liabilities comprise primarily trade and other payables, borrowings and written put option liabilities. These financial liabilities
are initially recognised at fair value, net of transaction costs.
Written put option liabilities represent contracts that impose (or may potentially impose) an obligation on the group to
purchase its own equity instruments (including the shares of a subsidiary) for cash or another financial asset. Written put
option liabilities are initially raised from the ’Existing control business combination reserve’ in equity at the present value of the
expected redemption amount payable. Simultaneously, the group may still recognise non-controlling interest where the risks
and rewards of ownership are not deemed to have been transferred to the group on initial recognition of the put option
liability. Subsequent revisions to the expected redemption amount payable as well as the unwinding of the discount related
tothe measurement of the present value of the written put option liability, are recognised in ’Existing control business
combination reserve’ in equity. Where a written put option liability expires unexercised or is cancelled, the carrying value
ofthe financial liability is reclassified to the ’Existing control business combination reserve’ in equity.
Written put options that provide the group with the discretion to settle its obligations in the group’s own equity instruments
(including the shares of a subsidiary) are also accounted for as outlined above. Written put option liabilities are presented
within ’Accrued expenses and other current liabilities’ in the statement of financial position. Written put option liabilities that
are linked toa committed employment period are accounted for as share-based compensation benefits. The expected
redemption amounts payable for these written put options are dependent on the completion of an employment service
period (refer to share-based compensation accounting policy).
Financial liabilities are presented as current liabilities if payment is due or could be demanded within 12 months (or in the
normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Financial liabilities are offset and the net amount reported in the statement of financial position when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis. Financial liabilities
arederecognised when the contractual obligation is discharged, cancelled or when it expires.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
203
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
30. Long-term liabilities
continued
31 March 2022
31 March 2021
Long-term
liabilities
US$’m
Current
portion
US$’m
Total
liabilities
US$’m
Long-term
liabilities
US$’m
Current
portion
US$’m
Total
liabilities
US$’m
Interest-bearing
15 811
157
15 9688 033
84
8 117Capitalised lease liabilities
200 63 263
173 54 227
Loans and other liabilities
15 611
94
15 7057 860
30
7 890Non-interest-bearing
50 31 81
48 18 66
Loans and other liabilities
50 31 81
48 18 66
Total liabilities
15 861
188
16 0498 081
102
8 183Interest-bearing: Capitalised lease liabilities
31 March
Type of lease
Currency of
year-end
balance
Year of
final
repayment
Weighted
average
interest rate
2022
US$’m
2021
US$’m
Buildings
Various
2022 – 2038
1.50% – 6.93%
226
197
Computers, furniture and office equipment
Various
2022 – 2026
3.61% – 8.85%
21
18
Vehicles
Various
2022 – 2029
1.50% – 10.77%
16
12
Total capitalised lease liabilities
263
227
Maturity profile
31 March
2022
US$’m
2021
US$’m
Minimum instalments
Payable within year one
65
58
Payable within year two
68
52
Payable within year three
45
36
Payable within year four
38
29
Payable within year five
30
24
Payable after year five
41
54
287
253
Future finance costs on capitalised lease liabilities
(24)
(26)
Present value of capitalised lease liabilities
263
227
Present value
Payable within year one
63
54
Payable within year two
64
49
Payable within year three
41
33
Payable within year four
33
26
Payable within year five
26
20
Payable after year five
36
45
Present value of capitalised lease liabilities
263
227
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
Prosus annual report 2022
204
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
30. Long-term liabilities
continued
Interest-bearing: Loans and other liabilities
Weighted
average
31 March
Currency of Year of year-end
Asset
year-end final interest 2022
2021
secured balance repayment
rate
US$’mUS$’m
Unsecured
1
Publicly traded bond
US$ 2025 5.50%
225
1 200
Publicly traded bond
US$ 2027 4.85%
614
1 000
Publicly traded bond
US$ 2030 3.68%
1 250
1 250
Publicly traded note
2
EUR 2028 1.54%
941
998Publicly traded note
3
EUR 2032 2.03%
830
879Publicly traded bond
US$ 2050 4.03%
1 000
1 000
Publicly traded bond
US$ 2051 3.83%
1 500
1 500
Publicly traded bond
US$ 2031 3.06%
1 850
–
Publicly traded bond
US$ 2032 4.19%
1 000
–
Publicly traded bond
US$ 2027 3.26%
1 000
–
Publicly traded bond
EUR 2029 1.29%
1 107
–
Publicly traded bond
EUR 2030 2.09%
664
–
Publicly traded bond
EUR 2033 1.99%
941
–
Publicly traded bond
EUR 2034 2.78%
719
–
Publicly traded bond
EUR 2026 1.21%
553
–
Publicly traded bond
US$ 2052 4.99%
1 250
–
Various institutions
Various Various Various
19
8
Secured
4
Exim Bank S.A & Raiffeisen Bank
5
EUR
2029
EURIBOR 1M + 1.41%2028
EURIBOR 1M + 1.41%
41
42Exim Bank S.A. EUR
2029
EURIBOR 1M + 1.6%14
17
Raiffeisen Bank
Building
EUR
2031EURIBOR 3M + 1.6%
30
–
Fondo de Inversion Activa
CLP
2024 8.00%
40
–
Various institutions
Various Various Various
193
27Total facilities
15 781
7 921
Unamortised loan costs
(93)
(50)
Premium on euro bonds
2, 3
17
19
15 705
7 890
1
2
from, and including, 3 August 2020), resulting in a premium of €8.3m which is included in the fair value of the bond at initial recognition and is subsequently released over the term of the bond.
3
from, and including, 3 August 2020), resulting in a premium of €7.6m which is included in the fair value of the bond at initial recognition and is subsequently released over the term of the bond.
4
5
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
205
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
30. Long-term liabilities
continued
Non-interest-bearing: Loans and other liabilities
31 March
Currency of Year of
Asset
year-end final 2022
2021
secured balance repayment US$’m
US$’m
Secured
1
Automotive Finance Corporation
Various US$ 2020
–
13Unsecured
Earn-out obligations
Various Conditional
20
13Preference shares liability
BRL
2023
61
36Other
Various Various
–
4
81
66
Total long-term liabilities
Repayment terms of long-term liabilities (excluding capitalised
lease liabilities)
Payable within year one
142
48
Payable within year two
104
43
Payable within year three
16
18
Payable within year four
792
7
Payable within year five
1 012
1 205
Payable after year five
13 796
6 66615 862
7 987
Premium on euro bonds
17
19
Unamortised loan costs
(93)
(50)
15 786
7 956
Interest rate profile of long-term liabilities (long- and short-term
portion, including capitalised lease liabilities)
Liabilities at fixed rates: one to 12 months
157
84
Liabilities at fixed rates: more than 12 months
15 677
7 974Interest-free loans
81
66
Liabilities linked to variable rates
134
59
16 049
8 183
1
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
Prosus annual report 2022
206
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
30. Long-term liabilities
continued
Reconciliation of liabilities arising from financing activities
31 March 2022
Capitalised
lease
liabilities
US$’m
Interest-
bearing
liabilities
US$’m
Non-interest-
bearing
liabilities
US$’m
Balance at 1 April 2021
227
7 89066
Additional liabilities recognised
82
9 549
15Repayments of long- and short-term loans
1
(51)
(1 402)
–
Repayments of interest on capitalised lease liabilities
(10)
– –
Interest accrued
10
– –
Acquisition of subsidiary
10
– –
Disposal of subsidiary
(1)
– –
Amortisation of transaction costs
– 8 –
Capitalisation of transaction costs
–
(52)
–Foreign exchange translation
(4) (288)
–
Balance at 31 March 2022
263
15 70581
Less
: Current portion
(63) (94) (31)
Non-current liabilities
200
15 611
501
income statement.
31 March 2021
Capitalised
lease
liabilities
US$’m
Interest-
bearing
liabilities
US$’m
Non-interest-
bearing
liabilities
US$’m
Balance at 1 April 2020
226
3 515
34Additional liabilities recognised
44
4 432
161Repayments of long- and short-term debt
(48) (39) (116)
Repayment of interest on capitalised lease liabilities
(10)
– –
Interest accrued
10
3 –
Acquisition of subsidiary
9 – –
Disposal of subsidiary
(2) (1)
–
Amortisation of transaction costs
– 3 –
Capitalisation of transaction costs
–
(16)
–
Foreign exchange translation
3
(7) (13)
Remeasurement of capitalised lease liabilities
(5)
– –
Balance at 31 March 2021
227
7 890
66Less
: Current portion
(54) (30) (18)
Non-current liabilities
173
7 860
4831. Other non-current liabilities
31 March
2022
US$’m
2021
US$’m
Written put option liabilities
1
1 158
1 267
Post-employment liabilities
2
2
Deferred income
16
–
Total other liabilities
1 176
1 269
Less
: Current portion of other liabilities
(1 014)
(1 207)Non-current portion of other liabilities
162
62
1
Private Limited, letgo B.V. classifieds business (based on OfferUp associate valuation), GoodHabitz and various other smaller ecommerce units.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
207
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
31. Other non-current liabilities
continued
During the year, the group recognised an aggregate gain on the remeasurement of written put option liabilities of US$235.7m
(2021loss of: US$508.3m). The movement in the written put option liability in the current year is predominantly due to cancellation of
thewritten put option liabilities as a result of the acquisition of non-controlling interests in the Classifieds segment and a decline in the
group’s ecommerce subsidiaries enterprise values used to determine the expected redemption amount payable (put option liability).
Inthe prior year the remeasurement was predominantly due to growth in the group’s ecommerce subsidiaries that resulted in the
increase in the enterprise values used to determine the expected redemption amount payable.
The maturity profile of the group’s written put option liabilities is detailed in the table below and reflects the first date on which the
respective written put options can be contractually exercised:
31 March
2022
US$’m
2021
US$’m
Exercisable within one year
1 014
1 207
Exercisable within one to two years
–
60
Exercisable after two to five years
144
–
Total other liabilities
1 158
1 267
The group has the contractual discretion to settle all written put option obligations either in cash, Naspers N or Prosus ordinary shares N.
The majority of the group’s written put option liabilities are exercisable when non-controlling shareholders exercise their put option rights
during the exercisable period, request an initial public offering (IPO) of the relevant group subsidiary and the IPO is either declined by
the group or is ultimately unsuccessful.
Sensitivity analysis
The measurement of written put option liabilities is based on the value of the underlying businesses, calculated either through a
discounted cash flow analysis or through transaction prices observed in orderly transactions. Accordingly, the measurement of written
put option liabilities is subject to significant estimation uncertainty. At 31 March 2022, 84% (2021: 95%) of the total balance of written put
option liabilities have been measured using discounted cash flow analyses based on the relevant group subsidiary 10-year budgeted
cash flow and forecasts. The valuations were determined using the same inputs and methodology used in the value-in-use calculations
for the goodwill impairment assessment (refer to note 7).
The following analysis illustrates the sensitivity of written put option liabilities to reasonable changes in the most significant underlying
variables used in their measurement:
31 March
Increase/(decrease) in written put option liabilities and loss/(gain) in equity
2022
US$’m
2021
US$’m
1% increase in the discount rate and a 1% decrease in the terminal growth rate
(99)
(247)
1% decrease in the discount rate and a 1% increase in the terminal growth rate
275
323
Other assumptions contained in the discounted cash flow analyses as at 31 March 2022 used by the group when valuing written put
option liabilities vary widely between obligations due to the group’s diverse range of business models and are closely linked to
entity-specific key performance indicators, taking into account the impact of the shift to online ecommerce platforms, the broader
market expectations in the technology industry in which the entities operate and the 10-year performance projections used for the
entities.
Movements during the year on the group’s written put option liabilities are detailed below. Cash flows arising from the settlement
ofwritten put option liabilities are presented as part of financing activities in the statement of cash flows.
31 March
2022
US$’m
2021
US$’m
Opening balance
1 267
869
Additional obligations raised
157
–
Remeasurements recognised in equity
(236)
508
Settlements
–
(24)
Expirations and cancellations
(81)
(71)
Foreign currency translation effects
51
(15)
Closing balance
1 158
1 267
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial assets and liabilities
continued
Prosus annual report 2022
208
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
32. Property, plant and equipment
Accounting policies
Property, plant and equipment comprise owned and leased assets.
Property, plant and equipment are stated at cost, being the purchase cost plus costs to prepare the assets for their intended
use, less accumulated depreciation and accumulated impairment losses. Cost includes transfers from equity of gains/losses on
qualifying cash flow hedges relating to foreign currency property, plant and equipment acquisitions. Property, plant and
equipment, with the exception of land, are depreciated in equal annual amounts over each asset’s estimated useful life to their
residual values. Land is not depreciated as it is deemed to have an indefinite life.
Depreciation periods vary in accordance with the conditions in the relevant industries, but are subject to the following range
of useful lives:
Class of asset Owned Leased
Buildings
5 to 50 years 2 to 10 years
Computer equipment
2 to 3 years 2 to 3 years
Manufacturing equipment
2 to 12 years 2 to 4 years
Improvements to buildings
2 to 12 years 3 to 5 years
Office equipment
2 to 12 years 2 to 4 years
Vehicles
2 to 5 years 2 to 5 years
Where parts of property, plant and equipment require replacement at regular intervals, the carrying value of an item of
property, plant and equipment includes the cost of replacing the part when that cost is incurred, if it is probable that future
economic benefits will flow to the group and the cost can be reliably measured. The carrying values of the parts replaced are
derecognised on capitalisation of the cost of the replacement part. Each component of an item of property, plant and
equipment with a cost that is significant in relation to the total cost of the item is depreciated separately where it has an
estimated useful life that differs from that of the item as a whole.
Major leasehold improvements are amortised over the shorter of the respective lease terms and estimated useful lives.
Subsequent costs, including major renovations, are included in an asset’s carrying value or recognised as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and
the cost of the item can be measured reliably. Repairs and maintenance are charged to the income statement.
The residual values and useful lives of property, plant and equipment are reviewed, and adjusted if appropriate, at each
statement of financial position date. Gains and losses on disposals are determined by comparing the proceeds to the
asset’s carrying value and are recognised in ’Other (losses)/gains – net’ in the income statement.
Work in progress are assets still in the construction phase and not yet available for use. These assets are carried at cost and
are not depreciated. Depreciation commences once the assets are available for use as intended by management.
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost
of those assets. All other borrowing costs are expensed as incurred. A qualifying asset is an asset that takes more than a
year to get ready for its intended use.
Leased assets
At inception of a contract, the group assesses whether a contract is, or contains a lease. A contract is, or contains a lease if it
conveys a right to control the use of an identified asset for a period of time in exchange for consideration. The group’s leasing
arrangements relate primarily to office buildings, warehouse space, equipment and vehicles. Lease agreements are generally
entered into for fixed periods of between two and 10 years, depending on the nature of the underlying asset being leased.
Lessee accounting
The group recognises all leases (with limited exceptions) as right-of-use assets and obligations to make lease payments (lease
liabilities) from the lease commencement date.
The right-of-use asset is measured at cost less accumulated depreciation and accumulated impairment. The cost includes the
initial amount of the respective lease liability adjusted for lease payments made before the commencement date of the lease,
plus initial direct costs incurred and estimated costs to dismantle or destroy the underlying asset, less lease incentives received
where applicable. The right-of-use asset is subsequently depreciated using the straight-line method over the earlier of the
useful life of the underlying asset or the period of the lease term. In addition, the right-of-use asset is reduced by impairment
losses if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in
the lease and where that rate cannot be readily determined the group entity uses the incremental borrowing rate.
This is the rate of interest that the group entity would have to pay to borrow the funds necessary to obtain an asset of a
similar value to the respective right-of-use asset in a similar economic environment.
209
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
32. Property, plant and equipment
continued
Accounting policies
continued
Lessee accounting
continued
Lease payments included in the measurement of the lease liability comprise the following:
•
Fixed payments.
•
Variable lease payments that depend on an index or rate.
•
Amounts expected to be payable under residual value guarantees.
•
Amounts in an optional renewal lease period if the group is reasonably certain to exercise an extension option.
•
The exercise price of a purchase option that the group is reasonably certain to exercise.
•
Penalties for early termination of the lease unless the group is reasonably certain not to terminate the lease early.
The lease liability is measured at amortised cost using the effective interest rate method. It is remeasured where there is
achange in future lease payments, a change in the group’s estimate of amounts expected to be payable under a residual
value guarantee or if the group changes its assessment of whether it will exercise a purchase, extension or termination
option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recognised in the income statement if the carrying amount of the right-of-use asset has been reduced to zero.
The group presents right-of-use assets in ’Property, plant and equipment’ and capitalised lease liabilities in ’Long-term
liabilities’ in the statement of financial position.
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term
of 12months or less and leases of low-value assets. The group recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.
The group has applied the ’integrally linked’ approach in respect of the tax consequences of lease contracts. At inception of
alease and on the transition date no deferred taxes are recognised as no temporary differences arise between the tax base
and carrying amount of the net lease asset or liability (without taking into account advance payments). Subsequent to initial
recognition, deferred taxes are recognised when temporary differences arise.
Impairment of property, plant and equipment and other intangible assets
Items of property, plant and equipment and other intangible assets (with finite useful lives) are reviewed for indicators of
impairment at least annually. Indicators of impairment include, but are not limited to: significant underperformance relative
toexpectations based on historical or projected future operating results, significant changes in the manner of use of the
assets or the strategy for the group’s overall business and significant negative industry or economic trends.
Property plant and equipment and other intangible assets still in the development phase, and not yet available for use (work
in progress), are tested for impairment on an annual basis. An impairment loss is recognised in ’Other (losses)/gains – net’ in
the income statement when the carrying amount of an asset exceeds its recoverable amount.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from
its disposal at the end of its useful life. The estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Fair value less costs of disposal is the price that would be received to sell an asset in an orderly transaction between
marketparticipants at the measurement date less the incremental costs directly attributable to the disposal of an asset or
cash-generating unit, excluding finance costs and income tax expense.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows that are largely independent of the cash inflows of other assets or groups of assets (a cash-generating unit level).
An impairment loss recognised for an asset in prior years is reversed if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised and the revised recoverable amount
exceeds the carrying amount. The reversal of such an impairment loss is recognised in ’Other (losses)/gains – net’ in the
income statement.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
210
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
32. Property, plant and equipment
continued
Land and
buildings
US$’m
Computers
and office
equipment
US$’m
Furniture
and
fittings
US$’m
Other
US$’m
Total
US$’m
1 April 2021
Cost
388 112 65 21 586
Accumulated depreciation and impairment
(105) (50) (29) (7) (191)
Carrying value at 1 April 2021
283 62 36 14 395
Foreign currency translation effects
(16) (5) (21)
2
(2)Acquisitions of subsidiaries and businesses
10
5 – 1
16Disposals of subsidiaries and businesses
(1) (1)
– –
(2)Acquisitions of assets
89 73 46
3
211Acquisitions of right-of-use assets
82 13 106
–
11Disposals/scrappings
(8) (1) (11)
–
(2)Depreciation
(66) (32) (12) (6) (116)
31 March 2022
Cost
536 197 107 30 870
Accumulated depreciation and impairment
(163) (82) (37) (10) (292)
Carrying value at 31 March 2022
373 115 70 20 578
Work in progress at 31 March 2022
26
Total carrying value at 31 March 2022
604
Land and
buildings
US$’m
Computers
and office
equipment
US$’m
Furniture
and
fittings
US$’m
Other
US$’m
Total
US$’m
1 April 2020
Cost
347 75 52 12 486
Accumulated depreciation and impairment
(57) (31) (20) (4) (112)
Carrying value at 1 April 2020
290 44 32
8
374Foreign currency translation effects
8 3 4 –
15
Acquisitions of subsidiaries and businesses
1 1 – 7 9
Disposals of subsidiaries and businesses
(2) (1)
– –
(3)
Acquisitions of assets
13 31
8 1
53
Acquisitions of right-of-use assets
39
6 1 3
49
Disposals/scrappings
(7) (1) (9)
–
(1)Depreciation
(59) (21) (9) (4) (93)
31 March 2021
Cost
388 112 65 21 586
Accumulated depreciation and impairment
(105) (50) (29) (7) (191)
Carrying value at 31 March 2021
283 62 36 14 395
Work in progress at 31 March 2021
48
Total carrying value at 31 March 2021
443
The carrying value of work in progress mainly comprises buildings and equipment.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
211
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
32. Property, plant and equipment
continued
The carrying values and depreciation of right-of-use assets included in property, plant and equipment are as follows:
31 March 2022
31 March 2021
Carrying
value
US$’m
Depreciation
charge for
the year
US$’m
Carrying
value
US$’m
Depreciation
charge for
the year
US$’m
Vehicles
16 (5)
12 (3)
Buildings
203 (55)
184 (50)
Computers, furniture and office equipment
21 (6)
21 (6)
240 (66)
217 (59)
Included in the acquisition of property, plant and equipment is an amount of US$108.5m (2021: US$44.6m) relating to leased assets,
which are non-cash in nature. Refer to note 42 for details of the group’s assets pledged as collateral.
The group’s leases do not impose covenants, but leased assets may not be used as security for borrowing purposes.
33. Other intangible assets
Accounting policies
Intangible assets acquired are capitalised at cost. Intangible assets with finite useful lives are amortised using the straight-line
method over their estimated useful lives. Residual values of intangible assets are presumed to be zero and along with their
useful lives are reassessed on an annual basis.
Amortisation periods for intangible assets with finite useful lives vary in accordance with the conditions in the relevant
industries, but are subject to the following maximum limits:
Class of asset Useful life
Patents
5 years
Title rights
10 years
Brand names and trademarks
25 years
Software
10 years
Intellectual property rights
10 years
Customer-related assets
11 years
Costs that are directly associated with the production of identifiable and unique software products controlled by the group,
and which will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets.
Direct costs include the software development team’s employee costs and an appropriate portion of relevant overheads.
Allother costs associated with developing or maintaining software programmes are expensed as incurred.
Web and application (app) development costs are capitalised as intangible assets if it is probable that the expected future
economic benefits attributable to the asset will flow to the group and its cost can be measured reliably, otherwise these costs
are expensed as incurred.
Research expenditure is expensed as incurred. Costs incurred on development projects (relating to the design and testing
of new or improved products) are recognised as intangible assets if the costs can be measured reliably, the products or
processes are technically and commercially feasible, future economic benefits are probable, and the group intends to and
has sufficient resources to complete development and to use or sell the asset. Development costs that do not meet these
criteria are expensed as incurred.
Work in progress are assets still in the development phase and not yet available for use. These assets are carried at cost
and are not amortised but are tested for impairment at each reporting date. Amortisation commences once the assets
areavailable for use as intended by management.
Impairment of other intangible assets
Refer to note 32 for details on the impairment of other intangible assets.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
212
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
33. Other intangible assets
continued
Customer-
related
assets
US$’m
Brand
names
US$’m
Software
US$’m
Total
US$’m
1 April 2021
Cost
574 624 181
1 379
Accumulated amortisation and impairment
(212) (314) (75) (601)
Carrying value at 1 April 2021
362 310 106 778
Foreign currency translation effects
(25) (22)
5
(42)Acquisitions of subsidiaries and businesses
103 145 61 309
Disposals of subsidiaries and businesses
(7) (7) (2) (16)
Acquisitions
10
1 5
16Transfers from work in progress
1 – 8 9
Disposals
–
(1) (1) (2)
Amortisation
(51) (43) (43) (137)
Cost
633 689 250
1 572
Accumulated amortisation and impairment
(240) (306) (111) (657)
Carrying value at 31 March 2022
393 383 139 915
Work in progress at 31 March 2022
13
Total carrying value at 31 March 2022
928
Customer-
related
assets
US$’m
Brand
names
US$’m
Software
US$’m
Total
US$’m
1 April 2020
Cost
579 612 125
1 316
Accumulated amortisation and impairment
(186) (247) (49) (482)
Carrying value at 1 April 2020
393 365 76 834
Foreign currency translation effects
12 15
–
27Acquisitions of subsidiaries and businesses
3 4
38 45
Disposals of subsidiaries and businesses
(9) (4)
–
(13)
Acquisitions
4 – 8
12
Transfer from work in progress
– –
11 11
Amortisation
(41) (70) (27) (138)
Cost
574 624 181
1 379
Accumulated amortisation and impairment
(212) (314) (75) (601)
Carrying value at 31 March 2021
362 310 106 778
Work in progress at 31 March 2021
4
Total carrying value at 31 March 2021
782
The group recognised no impairment losses on other intangible assets (2021: US$nil).
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
213
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
34. Inventory
Accounting policies
Inventory is stated at the lower of cost and net realisable value. The cost of inventory is determined by means of the weighted
average method.
The cost of finished products and work in progress comprises raw materials, direct labour, other direct costs and related
production overheads, but excludes finance costs. Costs of inventories include the transfer from other comprehensive income
of gains/losses onqualifying cash flow hedges relating to foreign currency denominated inventory purchases. Net realisable
value is the estimate ofthe selling price, less the costs of completion and selling expenses. Net realisable value includes
allowances made for obsolete, unusable and unsaleable inventory and for latent damage first revealed when inventory items
are taken into use or offered for sale.
31 March
2022
US$’m
2021
US$’m
Carrying value
Finished products, trading inventory and consumables, gross
484
330
Less
: Allowance for slow-moving and obsolete inventories
(14)
(9)
Net inventory
470
321
The total allowance charged to the income statement to write inventory down to net realisable value amounted to US$7.4m
(2021:US$1.7m), and reversals of these allowances amounted to US$1.3m (2021: US$1.5m). Net realisable value writedowns
relateprimarily to inventory within the Etail segment.
Inventories are measured at the lower of cost and net realisable value. In determining the appropriate level of inventory writedowns,
changes in the ageing of inventory and consumer behaviour were taken into account. Overall, the inventory writedown during the
yearended 31March 2022 did not have a significant impact on the group’s financial results.
35. Other receivables
31 March
2022
US$’m
2021
US$’m
Prepayments
191
111
Accrued income
1, 5
46
17
Staff debtors
5
1
3
VAT and related taxes receivable
147
87
Merchant and bank receivables
2, 5
342
268
Sundry deposits
17
8
Interest receivable on cross-currency interest rate swap
5
2
8
Disposal proceeds receivable
5
21
34
Service provider receivable
5
4
5
Loan receivable
3, 5
205
31
Other receivables
6
23
21
Total other receivables
999
593
Less
: Non-current portion of other receivables
4
(132)
(16)
Current portion of other receivables
867
577
1
2
management policy.
3
4
5
6
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
214
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
Accounting policies
The Naspers group grants share options, performance stock units (PSUs) and restricted stock units (RSUs) through the various
trusts consolidated by the Naspers group and therefore not within the Prosus group, and Prosus grants share appreciation
rights (SARs) andshare options settled in the shares of the underlying entity within the Prosus group.
The equity-compensation plans are granted to employees of the group. The group recognises an employee benefit expense
inthe income statement, representing the fair value of share options, PSUs and RSUs granted. A corresponding entry to equity
is raised for equity-settled plans. For SARs and other cash-settled share option schemes, the group recognises an employee
benefit expense in the income statement at fair value of the amount payable to employees over the vesting period during
which the employees become entitled to payment. A corresponding entry to liabilities is raised for these cash-settled plans.
The fair value of the options, PSUs and RSUs at the date of grant under equity-settled plans is charged to the income
statement over the relevant vesting periods, adjusted to reflect actual and expected levels of vesting. For cash-settled
plans, the group remeasures the fair value of the recognised liability at each reporting date and at the date of settlement,
with changes in fair value recognised in the income statement.
A share option, PSU or RSU scheme is considered equity settled when the transaction is settled through equity instruments
ofProsus N.V. or any of its other subsidiaries or where the group has no obligation to settle awards with participants.
SARsand other option schemes are considered cash settled when there is an obligation to settle in cash or any other asset.
Funding for PSU and RSU share schemes are recognised as contributions to Naspers group share trusts in equity and are
accounted for separately from the equity-compensation plans.
On the final vesting date of equity-settled plans, the group transfers the accumulated balance relating to vested share options,
PSUs and RSUs from the share-based compensation reserve to retained earnings.
All awards are granted subject to the completion of a requisite service (vesting) period by employees, ranging from one year
to five years. Unvested awards are subject to forfeiture on termination of employment. Generally, vesting takes place in
tranches depending on the duration of the total vesting period.
All share options and SARS are granted with an exercise price of not less than 100% of the market value or fair value of the
respective company’s shares on the date of the grant. RSUs/PSUs are granted with an exercise price of zero.
Naspers group share trusts
The Naspers group share trusts hold Naspers shares and Prosus shares (as shareholders) to settle Naspers share options,
RSUs and PSUs held by employees of the Naspers and Prosus group. These share trusts were founded by Naspers and
Prosusto administer the Naspers group share schemes for all employees. These share trusts are controlled by Naspers
andnot Prosus because the Naspers board (the board) approves the granting of the equity-compensation plans and therefore
controls the relevant activities of the trusts. Accordingly, Prosus cannot make decisions over these equity-compensation plans
unilaterally and has no obligation to settle these plans. On the listing of Prosus, these trusts received either Naspers or Prosus
shares (the shares), as selected by the trustees, via the capitalisation issue of Naspers M ordinary shares that converted into
Prosus ordinary shares N on listing date. These shares are linked to the respective Naspers shares and accordingly on
settlement of the awards employees will receive the Naspers shares as stipulated on grant date and the linked Prosus/
Naspers shares granted upon listing of the group. There was no adjustment to the original strike price. For these share
schemes, the settlement is in Naspers shares with linked Prosus shares as a result of listing.
In September 2020, the Naspers board approved the establishment of the Prosus RSU share scheme administered by the new
Prosus RSU trust. Similar to the other share trusts, the board controls the operational activity of both the Naspers and Prosus
group and via the remuneration committee approves the share scheme rules and the granting of awards. The settlement of
this share scheme will be in Prosus shares and have been granted to both Naspers and Prosus group employees. Naspers,
asthe ultimate parent has the ultimate decision-making power regarding equity-compensation benefit plans and number of
shares granted. These decision-making rights have not been specifically ceded to Prosus.
Accordingly, all share trusts discussed above (including the Prosus RSU share trust) are controlled and consolidated by
Naspers because the trusts’ relevant activities are governed by the remuneration committee as mandated by the board
and are used to administer the share schemes of the Naspers group as a whole. In addition, Naspers being the ultimate
parent of the group controls the decisions of the trusts.
Classification of equity-compensation plans for the Prosus group
Prosus group entities issue share options and SARs to employees of the group. Certain of the share option plans are settled
in equity instruments of subsidiaries of the Prosus group and are classified as equity settled. All of the SARs and the
remaining share option plans are settled by the Prosus group in cash or other assets (including shares of the Naspers
group) and are classified as cash-settled plans.
The share schemes that are settled in Naspers shares are classified as cash settled when the Prosus group has the obligation
to make settlement, and equity settled when the Naspers group trusts (ie Naspers) has the obligation to make settlement.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
215
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Accounting policies
continued
Classification of Naspers equity-compensation plans for the Prosus group
In respect of RSUs and PSUs, awards are automatically settled in Naspers and/or Prosus equity instruments on the vesting
date bythe relevant Naspers group share trust.
Naspers share-based compensation plans in which the group’s employees participate, awards are settled with employees
bythe relevant Naspers group share trust and the Prosus group does not have any obligation to settle these awards with
employees. Such awards are classified as equity settled. The equity-settled share-based compensation plans administered
bythe Naspers group trusts relate to Naspers and Prosus RSUs, Naspers PSU schemes and share option schemes. The share
options, RSUs and PSUs are classified as equity settled as the group does not have an obligation to make settlement. Naspers
has the obligation to make settlement.
Related party transactions
Prosus provides funding to the trust to settle share options of the Prosus group employees via loan account. Please refer to
note 41 for details of related party balances with the trusts.
Although the group has various equity-compensation plans in operation, disclosure is provided only for those plans that had
the most significant impact on the group’s statement of financial position during the current year.
The following share option and RSU plans were in operation during the financial year:
Share option plan/RSU plan
Maximum
awards
permissible
1
Vesting
period
2
Period to
expiry from
date of offer
IFRS 2
classification
Naspers group
Naspers Share Incentive Trust (Naspers)
Note 3
a
3
10 years Equity settled
MIH Holdings Share Trust (MIH Holdings)
Note 3
a
3
10 years Equity settled
MIH Internet Holdings B.V. Share Trust (MIH Internet)
Note 3
a
3
10 years Equity settled
Naspers Restricted Stock Plan Trust (Naspers RSU/PSU)
4
Note 3, 4
a
Equity settledNote 5
Prosus N.V. Share Award Plan (Prosus RSU/PSU)
Note 7
a
Equity settledNote 5
Prosus N.V. Share Option Plan (Prosus Options) Equity settled
Note 7
a
10 yearsSocial and Internet Platforms
MIH Russia Internet B.V. Share Trust Equity settled
10%
c
10 yearsEcommerce
Frontier Car Group (FCG) Share Trust Option Scheme Cash settled
15%
e
10 yearsiFood.com Share Option Scheme
12.5%
a
8
10 years Cash settled
Movile International Holdings B.V. and Movile Mobile Commerce
Holdings S.L. Joint Stock Option Plan and Movile International
Holdings B.V. Share Option Plan
15%
a
6
10 years Cash settled
Dante International S.A. (eMAG) Share Option Scheme
15%
a
6
10 years Equity settled
MMC PlayKids Holding B.V. Share Option Scheme
15%
a
6
10 years Equity settled
Red Dot Payment Pte Ltd Options Scheme Cash settled
20%
a
10 yearsZoop Holding Participações S.A. Share Option Scheme
4 275 000
shares
a
10 years Cash settled
Stack Exchange, Inc. 2010 Stock Plan Cash settled
15%
f
10 yearsThe group provides detailed disclosure for those share option and RSU plans that are considered significant to the financial statements.
Notes in relation to the group’s share option and RSU plans
1
also includes the % of the underlying assets value allocated to other group schemes, including the Global schemes (also see note 4 in relation to the group’s share appreciation rights plans).
2
3
onequarter vesting after years one, two, three and four. Options granted before 25 August 2017 vest over three, four and five years respectively. In addition, at the Naspers annual general
meeting in August 2020 shareholders approved that up to 5% of the issued capital of Naspers may be granted in the Naspers RSU.
4
of the board.
5
6
7
8
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
216
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
The following share appreciation rights plans were in operation during the financial year:
Share appreciation rights plans
Maximum awards
permissible
1
Vesting
period
2
Period to
expiry from
date of offer
IFRS 2
classification
Social and Internet Platforms
MIH China/MIH TC 2008 SAR Scheme
10%
b
3
10 years Cash settled
Ecommerce
MIH Food Holdings B.V. SAR Scheme (Delivery Hero) Cash settled
7.5%
b
10 yearsMIH India Food Holdings B.V. SAR Scheme (Swiggy) Cash settled
10%
b
10 yearsAvito AB SAR Scheme Cash settled
15%
b
10 yearsCEE Classifieds SAR Scheme
10%
c
10 years Cash settled
Tokobagus Exploitatie B.V. SAR Scheme Cash settled
15%
c
10 yearsMIH Payments Holdings B.V. SAR Scheme
15%
b
3
10 years Cash settled
PayU Credit B.V. SAR Scheme Cash settled
15%
b
10 yearsPayU Global B.V. SAR Scheme
15%
b
3
10 years Cash settled
Naspers Global Classifieds SAR Scheme (Global Classifieds)
Note 4
b
3
10 years Cash settled
Naspers Global Ecommerce SAR Scheme (Global Ecommerce)
Note 4
b
3
10 years Cash settled
MIH Fintech Holdings B.V. SAR Scheme (Global Payments) Cash settled
Note 4
b
10 yearsMIH Food Delivery Holdings B.V. SAR Scheme (Global Food) Cash settled
Note 4
b
10 yearsNaspers Ventures B.V. SAR Scheme Cash settled
15%
d
10 yearsMIH Edtech Investments B.V. SAR plan (Global Edtech) Cash settled
Note 4
b
10 yearsRed Dot Payment Pte Ltd SAR Scheme Cash settled
20%
b
10 yearsSimilarWeb Limited SAR Scheme
5%
c
10 years Cash settled
Property24 SAR Scheme
15%
b
3
10 years Cash settled
Takealot Online Proprietary Limited SAR Scheme Cash settled
15%
b
10 yearsMovile International Holdings B.V. SAR Scheme
15%
b
10 years Cash settled
Dante International S.A. (e Cash settled
MAG
) SAR Scheme12.5%
b
10 yearsMIH Learning B.V. (Skillsoft) SAR Scheme Cash settled
12.5%
b
10 yearsGood BidCo (GoodHabitz) B.V. SAR Scheme Cash settled
15%
b
10 yearsThe group provides detailed disclosure for those share appreciation rights plans that are considered significant to the financial statements.
Notes in relation to the group’s share appreciation rights plans
1
percentage also includes the percentage of the underlying assets’ value allocated to other group schemes, including the Global schemes (also see note 4).
2
3
4
Liabilities arising from share-based payment transactions
The following liabilities have been recognised in the statement of financial position relating to the group’s cash-settled share-based
payment obligations:
31 March
2022
US$’m
2021
US$’m
Share-based payment liability
Total carrying amount of cash-settled share-based payment liability
1 127
1 056Current portion of share-based payment liability
(964)
(897)
Non-current portion of share-based payment liability
163
159
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
217
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Reconciliation of the cash-settled share-based payment liability is as follows:
31 March
2022
US$’m
2021
US$’m
Opening carrying amount of cash-settled share-based payment liability
1 056
376
SAR scheme charge per the income statement
1
129
675
Employment linked put option charge per the income statement
23
45
Additions
5
17
Settlements
(372)
(105)
Modification
2
265
49
Foreign currency translation effects
21
(1)
Closing carrying amount of cash-settled share-based payment liability
1 127
1 056
1
2
that was modified to equity settled (US$99.8m).
As at 31 March 2021, the iFood Share Option Scheme (the scheme) was equity-settled as these options were settled in iFood Holdings B.V.
shares. In June 2021, the Naspers and iFood Holdings B.V. boards approved a prospective change in the settlement of these options by
providing liquidity to employees of the scheme. Subsequent to this approval, the group will settle these share options using cash resources.
Allother features of the awards including strike price, vesting and expiry periods remain unchanged.
The fair value of the iFood scheme recognised as a share-based payment liability on the effective date of the amendment was
US$302.1m. The share-based payment reserve related to this scheme was US$16.3m. The change in settlement is accounted for
asa modification, with the difference between the existing share-based reserve and the share-based liability of US$285.9m being
recognised through retained earnings in equity. Following this change, the iFood scheme will be accounted for in terms of the
group’s accounting policy as cash-settled share-based payments.
As at 31 March 2022, 63.04% (2021: 67.5%) of the share-based payment liability relates to vested share-based compensation plans
that have not been exercised. Included in the share-based payment liability is an amount of US$89.7m (2021: US$85m) as a result of
a written put option included in the acquisition agreement that is linked to a committed employment period for the founders of the
respective subsidiaries.
The group recognised, in the income statement, a remeasurement of US$23.1m (2021: US$45.1m) included in the current-year cash-settled
share-based payment expense related to these subsidiaries. The value on settlement of the put options will be dependent on the
completion of the respective employment period and accordingly impacts the non-controlling interest recognised for these subsidiaries.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
218
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Movements in terms of the group’s significant share option and RSU plans are as follows:
31 March 2022
Naspers
RSU
Prosus
RSU
(Euro)
Naspers
PSU
Prosus
PSU
(Euro)
MIH
Holdings
MIH
Internet
Shares
Outstanding at 1 April
60 999 667 619 227 460 1 909 071
–
17 020Movements between Naspers and Prosus group
companies
– – – –
10 252 11 568
Granted
–
1 833 725 44 268 269 298 1 623 84 755
Exercised
(23 788) (159 424)
– –
(645)
(63 801)Forfeited
(8 960) (205 460) (6 056)
– –
(8 183)Cancelled
– – –
(1 400)
–(2 724)
Outstanding at 31 March
28 251 2135 060 265 672 269 298 28 250 1 930 686
Available to be implemented by the trust
at31March
– – – –
17 482 1 633 120
Weighted average exercise price
(SA rand) (Euro) (SA rand) (Euro) (SA rand) (SA rand)
Outstanding at 1 April
– – – –
2 885.80 1 863.45
Movements between Naspers and Prosus group
companies
– – – –
2 885.80 1 863.45
Granted
– – – –
3 040.00 2 961.41
Exercised
– – – –
2 378.16 1 600.12
Forfeited
– – – – –
3 051.97
Cancelled
– – – – –
3 040.00
Outstanding at 31 March
– – – –
2 860.16 1 921.39
Available to be implemented by the trust
at 31 March
– – – –
2 664.31 1 715.82
Weighted average share price of options
takenupduring the year
(SA rand) (Euro) (SA rand) (Euro) (SA rand) (SA rand)
Shares
23 788 159 424
– –
645
63 801Weighted average share price
2 803.06 2 467.59
68.53
– –
3 432.25Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
219
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Movements in terms of the group’s significant share option and RSU plans are as follows:
31 March 2022
Dante
International iFood
Movile
Joint
Scheme
Shares
Outstanding at 1 April
80 424 123 549 1 115 232
Granted
15 405 12 873 302 451
Exercised
(32 776) (33 920) (190 675)
Forfeited
(432)
(1 714) (186 371)
Outstanding at 31 March
62 621 100 788 1 040 637
Available to be implemented by the trust at31March
17 968 30 914 331 949
Weighted average exercise price
(US$) (BRL) (BRL)
Outstanding at 1 April
786.26
4 117.50
237.36Movements between Naspers and Prosus group companies
– – –
Granted
2 343.84 22 388.59
191.73
Exercised
657.32
3 984.58
266.40Forfeited
969.53
6 033.30
178.36Cancelled
–
2 701.27
–Outstanding at 31 March
1 020.37 6 891.64
229.34
Available to be implemented by the trust at 31 March
753.42
3 583.72
267.79Weighted average share price of options takenupduring the year
(US$) (BRL) (BRL)
Shares
32 776 33 920 190 675
Weighted average share price
567.46
4 270.68 2 170.23
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
220
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Movements in terms of the group’s significant share option and RSU plans are as follows:
31 March 2021
Shares
Naspers
RSU
Prosus
RSU
(Euro)
Naspers
PSU
Prosus
PSU
(Euro)
MIH
Holdings
MIH
Internet
Outstanding at 1 April 114 055 1 946 833
–
84 886–
16 568Movements between Naspers and
Prosus group companies
– – – –
2 093
–Granted
–
696 940 142 574
–1 130 108 228
Exercised
(31 895) (137 362)
(93)
– –
(2 628)Forfeited
(21 161) (28 979)
– –
(143)
(8 628)Cancelled
– – – –
(249)
–Outstanding at 31 March
60 999 667 619 227 460 1 909 071
–
17 020Available to be implemented by the trust
at 31 March 1 436 252
– – –
6 922Weighted average exercise price
(SA rand) (Euro) (SA rand) (Euro) (SA rand) (SA rand)
Outstanding at 1 April 1 795.00
– – – –
2 952.26Movements between Naspers and
Prosus group companies
– – – –
1 347
–Granted
– – – –
2 839.97 2 882.65
Exercised
– – – –
2 046.58 1 637.25
Forfeited
– – – –
3 033.43 2 834.24
Outstanding at 31 March
– – – –
2 885.80 1 863.45
Available to be implemented by the trust
at 31 March 1 522.47
– – – –
2 489.39Weighted average share price of options
takenupduring the year
(SA rand) (Euro) (SA rand) (Euro) (SA rand) (SA rand)
Shares
31 895 137 362
93
– –
2 628Weighted average share price 3 210.87 3 277.14
90.71
– –
3 332.12Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
221
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Movements in terms of the group’s significant share option and RSU plans are as follows:
31 March 2021
Shares
Dante
International iFood
Movile
Joint
Scheme
Outstanding at 1 April 66 641 104 298 725 854
Granted
22 475 27 272
–
Exercised
(4 181)
–
(176 509)Forfeited
(4 511) (8 021) (8 055)
Cancelled
– – –
Outstanding at 31 March
80 424 123 549 541 290
Available to be implemented by the trust at 31 March 33 477 41 240 300 869
Weighted average exercise price
(US$) (BRL) (BRL)
Outstanding at 1 April
684.47
3 229.46301.99
Granted
1 043.32 7 177.42
–
Exercised
597.06
–
118.31Forfeited
738.48
2 974.06
467.23Outstanding at 31 March
786.26
4 117.50
359.43Available to be implemented by the trust at 31 March
612.53
2 289.88273.61
Weighted average share price of options takenupduring the year
(US$) (BRL) (BRL)
Shares
4 181
–
176 509Weighted average share price 1 043.32
–
765.62
Movements in terms of the group’s significant share appreciation rights plans are as follows:
31 March 2022
SARs
MIH
China
Naspers
Global
Classifieds
Naspers
Global
Ecommerce
Naspers
Ventures
PayU
Global
Outstanding at 1 April
301 927 21 304 008 10 097 273 3 679 357 1 433 264
Movements between Naspers and Prosus group companies
– – –
21 100
–Granted
77 615 6 194 375 1 422 443 2 999 945 223 332
Exercised
(5 373) (4 683 827) (156 208) (116 223) (584 675)
Forfeited
–
(3 508 555) (47 252) (36 264) (168 358)
Cancelled
– –
(28 016) (25 848)
–Outstanding at 31 March
374 169 19 277 985 11 311 508 6 526 815 903 563
Available to be implemented at 31 March
176 437 5 779 672 7 843 728 2 009 412 265 956
Weighted average exercise price
(US$) (US$) (US$) (US$) (US$)
Outstanding at 1 April
149.17 8.72 25.01 6.00 74.13
Movements between Naspers and Prosus group companies
– – –
25.01
–Granted
244.59 12.29 64.04 16.94 138.23
Exercised
107.97 8.21 28.55 5.03 62.99
Forfeited
–
9.19 44.35 6.67 95.54
Cancelled
– –
9.05 63.89
–Outstanding at 31 March
169.56 9.90 29.73 11.03 93.19
Available to be implemented at 31 March
136.56 8.38 21.77 5.24 75.45
Weighted average share price of SARs
taken up during the year
(US$) (US$) (US$) (US$) (US$)
SARs
5 373 4 683 827 156 208 116 223 584 675
Weighted average share price
190.31 12.29 64.27 16.25 193.61
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
222
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Movements in terms of the group’s significant share appreciation rights plans are as follows:
31 March 2021
SARs
MIH
China
Naspers
Global
Classifieds
Naspers
Global
Ecommerce
Naspers
Ventures
PayU
Global
Outstanding at 1 April 461 548 21 797 387 9 508 178 3 059 822 1 207 454
Movements between Naspers and Prosus group companies (19 004) 280 854
695
– –
Granted
64 808 7 257 671 1 036 180 720 903 397 759
Exercised
(205 425) (3 874 164) (415 511) (20 835) (65 715)
Forfeited
–
(4 157 740) (32 269) (80 533) (106 234)
Outstanding at 31 March
301 927 21 304 008 10 097 273 3 679 357 1 433 264
Available to be implemented at 31 March 90 824 5 357 863 6 659 174 1 392 076 558 725
Weighted average exercise price
(US$) (US$) (US$) (US$) (US$)
Outstanding at 1 April
103.28 8.24 23.04 5.46 71.10
Movements between Naspers and Prosus group companies
129.86 8.75 36.76
– –
Granted
213.45 9.05 42.02 8.30 82.86
Exercised
68.13 6.39 22.01 5.76 56.97
Forfeited
–
8.97 27.93 6.10 82.96
Outstanding at 31 March
149.17 8.72 25.01 6.00 74.13
Available to be implemented at 31 March
134.59 7.89 19.56 5.11 60.34
Weighted average share price of SARs
taken up during theyear
(US$) (US$) (US$) (US$) (US$)
SARs
205 425 3 874 164 415 511 20 835 65 715
Weighted average share price
217.47 9.05 43.10 7.96 106.75
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
223
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Share option allocations outstanding and currently available to be implemented at 31 March 2022 by exercise price for the group’s
significant share incentive plans:
Share options outstanding Share options currently available
Exercise prices
Number
outstanding
at 31 March
2022
Weighted
average
remaining
contractual
life (years)
Weighted
average
exercise
price
Exercisable
at 31 March
2022
Weighted
average
exercise
price
MIH Internet (SA rand)
376.58 to 440.88
5 661
0.44 377.82
5 661
377.82
482.59 to 661.88
30 527
1.27 659.35
30 527
659.35
780.68 to 886.69
4 639
1.43 783.52
4 639783.52
1 046.88 to 1 272.66
892 363
2.01
1 054.45892 363
1 054.451 302.89 to 1 477.88
9 413
2.64
1 391.029 413
1 391.021 572.04 to 1 634.84
24 757
3.42
1 622.4924 757
1 622.491 700.53 to 1 886.88
36 276
4.15
1 802.0036 276
1 802.001 931.85 to 2 319.53
163 514
4.39
2 062.13160 490
2 057.462 323.52 to 2 755.72
112 264
5.50
2 574.02101 560
2 577.012 782.5 to 3 017
236 903
7.06
2 833.99140 301
2 835.843 040 to 3 380
293 413
6.94
3 098.83167 487
3 108.073 420.55 to 3 809
120 956
7.20
3 450.3759 646
3 458.661 930 686 1 633 120
iFood (BRL)
408.64 to 2 233.05
11 100
4.80
1 230.5910 272
1 149.793 984.58 to 7 177.42
76 868
7.75
5 124.5420 642
4 794.9022 388.59 to 22 388.59
12 820
9.44
22 388.59–
–
100 788 30 914
Movile Joint Scheme (BRL)
48.87 to 80.1
21 750
2.80 75.79
21 750
75.79
117.31 to 211.55
475 354
7.95 127.03
157 891133.13
279.9 to 307.38
51 770
5.28 297.62
43 581
296.37
468.87 to 497
222 791
7.18 491.05
108 727
490.28
771 665 331 949
Dante International (US$)
319.02 to 414.5
762
3.24 374.15
762374.15
533.7 to 678.53
9 192
4.94 622.53
6 640
601.01
829.21 to 1 043.32
37 262
7.76 946.38
10 566
876.55
2 343.84
15 405
6.04
2 343.84–
–
62 621 17 968
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
224
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Share option allocations outstanding and currently available to be implemented at 31 March 2022 by exercise price for the group’s
significant share incentive plans:
Share options outstanding Share options currently available
Exercise prices
Number
outstanding
at 31 March
2022
Weighted
average
remaining
contractual
life (years)
Weighted
average
exercise
price
Exercisable
at 31 March
2022
Weighted
average
exercise
price
MIH Holdings (SA rand)
241.88 to 256.23
7 801
0.52 245.07
7 801245.07
328.71 to 376.58
17 294
1.32 345.79
17 294345.79
440.88 to 482.59
540
1.48 474.17
540474.17
661.88 to 886.69
34 735
2.30 678.13
34 735678.13
1 046.88 to 1 272.66
899 925
3.01
1 056.28899 925
1 056.281 302.89 to 1 477.88
9 413
3.64
1 391.029 413
1 391.021 572.04 to 1 712.87
38 916
4.44
1 629.1638 916
1 629.161 008 624 1 008 624
Share appreciation rights allocations outstanding and currently available to be implemented at 31 March 2022 by exercise price for the
group’s significant share incentive plans:
SARs outstanding SARs currently available
Exercise prices
Number
outstanding
at 31 March
2022
Weighted
average
remaining
contractual
life (years)
Weighted
average
exercise
price
Exercisable
at 31 March
2022
Weighted
average
exercise
price
MIH China (US$)
81.78 to 252.82
374 169
7.20 169.56
176 437
136.56
Naspers Global Classifieds (US$)
3.54 to 8.5
3 869 290
5.51 7.58
2 920 732
7.38
9.05 to 12.29
15 408 695
8.57 10.49
2 858 940
9.41
19 277 985 5 779 672
Naspers Global Ecommerce (US$)
15.58 to 23.61
5 193 466
2.65 16.08
5 193 466
16.08
27.25 to 31.42
1 293 649
5.45 27.53
991 060
27.53
31.84 to 36.67
1 023 867
6.26 33.59
734 78333.58
36.7 to 45.46
2 409 161
7.79 38.96
921 888
38.15
45.64 to 67.1
1 391 365
9.36 63.91
2 531
45.64
11 311 508 7 843 728
Naspers Ventures (US$)
5 to 8.74
3 529 885
196.31 105.28
2 009 412
88.99
10.06 to 19.12
2 996 930
62.32 72.39
–
–
6 526 815 2 009 412
PayU Global (US$)
39.1 to 75.16
202 172
5.56 61.10
118 23456.13
82.86 to 140.26
701 391
8.28 102.44
147 722
90.91
903 563 265 956
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
225
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Share option and RSU plan grants made during the year relating to the group’s significant plans:
Naspers
RSU
(SA rand)
Prosus
RSU
(Euro)
Naspers
PSU
(SA rand)
Prosus
PSU
(Euro)
31 March 2022
Weighted average fair value at measurement date
–
74.89
2 945.46
75.16This weighted average fair value has been calculated using the
Bermudan Binomial option pricing model, using the following
inputsandassumptions:
Weighted average share price
–
74.89
2 945.46
75.16Weighted average option life (years)
–
10.00 3.00 3.00
Weighted average annual suboptimal rate (%)
–
160 160 160
Weighted average vesting period (years)
–
2.5 2.5 3.0
31 March 2021
Weighted average fair value at measurement date
–
80.29
2 839.26–
This weighted average fair value has been calculated using the
Bermudan Binomial option pricing model, using the following
inputs and assumptions:
Weighted average share price
–
80.29
2 839.26–
Weighted average option life (years)
–
10.00 3.00
–
Weighted average annual suboptimal rate (%)
–
160 160
–
Weighted average vesting period (years)
–
2.5 3.0
–
MIH
Holdings
(SA rand)
MIH
Internet
(SA rand)
Dante
International
(US$)
iFood
(BRL)
Movile
Joint
Scheme
(BRL)
31 March 2022
Weighted average fair value at measurement date
1 234.89 1 235.26 1 172.63 9 165.64
–
This weighted average fair value has been calculated
using the Bermudan Binomial option pricing model, using
the following inputs and assumptions:
Weighted average share price
2 955.45 2 957.08 2 343.84 19 927.63
–
Weighted average exercise price
2 955.45 2 957.08 2 343.84 22 388.59
–
Weighted average expected volatility (%)*
32.5 32.4 58.0 50.4
–
Weighted average option life (years)
10.0 10.0 10.0 10.0
–
Weighted average dividend yield (%)
0.2 0.2 0.0
– –
Weighted average risk-free interest rate (%)
(based on zero rate bond yield at perfect fit)
7.1 7.0 1.6 7.3
–
Weighted average annual suboptimal rate (%)
160 160 160 160
–
Weighted average vesting period (years)
2.5 2.5 2.5 2.6
–
* The weighted average expected volatility of all share options listed above is determined using historical daily share prices.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
226
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Share option and RSU plan grants made during the year relating to the group’s significant plans:
MIH
Holdings
(SA rand)
MIH
Internet
(SA rand)
Dante
International
(US$)
iFood
(BRL)
Movile
Joint
Scheme
(BRL)
31 March 2021
Weighted average fair value at measurement date 1 207.10 1 226.18 1 548.98 3 158.04
–
This weighted average fair value has been calculated
using the Bermudan Binomial option pricing model,
usingthe following inputs and assumptions:
Weighted average share price 2 839.97 2 882.65 2 342.31 7 177.42
–
Weighted average exercise price 2 839.97 2 882.65 1 043.32 7 177.42
–
Weighted average expected volatility (%)*
35.6 35.6 59.3 42.0
–
Weighted average option life (years)
10.0 10.0 10.0 10.0
–
Weighted average dividend yield (%)
0.3 0.2 0.0 0.0
–
Weighted average risk-free interest rate (%)
(based on zero rate bond yield at perfect fit)
6.6 6.6 1.7 4.9
–
Weighted average annual suboptimal rate (%)
160 160 160 160
–
Weighted average vesting period (years)
2.5 2.5 2.5 2.5
–
* The weighted average expected volatility of all share options listed above is determined using historical daily share prices.
Share appreciation rights plan grants made during the year relating to the group’s significant plans:
MIH
China
(US$)
Naspers
Global
Classifieds
(US$)
Naspers
Global
Ecommerce
(US$)
Naspers
Ventures
(US$)
PayU
Global B.V.
(US$)
31 March 2022
Weighted average fair value at re-measurement date
48.73 4.28 26.08 15.14 58.70
This weighted average fair value has been calculated
using the Bermudan Binomial option pricing model,
usingthe following inputs and assumptions:
Weighted average share price
155.02 11.59 57.27 25.46 132.78
Weighted average exercise price
244.59 12.29 60.20 16.94 137.83
Weighted average expected volatility (%)*
42.0 37.0 50.1 48.3 53.8
Weighted average option life (years)
10.0 10.0 10.0 15.0 10.0
Weighted average risk-free interest rate (%)
(based on zero rate bond yield at perfect fit)
2.3 2.3 2.3 2.3 2.3
Weighted average annual suboptimal rate (%)
160.0 160.0 160.0 160.0 160.0
Weighted average vesting period (years)
2.5 2.6 2.6 3.5 2.5
Share price at measurement date
155.02 11.59 57.27 25.46 132.78
* The weighted average expected volatility of all share options listed above is determined using historical daily share prices.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
227
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
36. Equity-compensation benefits
continued
Share appreciation rights plan grants made during the year relating to the group’s significant plans:
MIH
China
(US$)
Naspers
Global
Classifieds
(US$)
Naspers
Global
Ecommerce
(US$)
Naspers
Ventures
(US$)
PayU
Global
B.V.
(US$)
31 March 2021
83.12 5.30 33.59 4.79 79.03
Weighted average fair value at re-measurement date
This weighted average fair value has been calculated
using the Bermudan Binomial option pricing model,
usingthe following inputs and assumptions:
Weighted average share price
247.12 12.19 64.46 9.17 138.96
Weighted average exercise price
213.45 9.05 42.02 8.30 82.66
Weighted average expected volatility (%)*
35.3 34.7 47.6 47.2 53.7
Weighted average option life (years)
5.0 10.0 10.0 15.0 10.00
Weighted average risk-free interest rate (%)
(based on zero rate bond yield at perfect fit)
0.8 1.7 1.7 2.0 1.7
Weighted average annual suboptimal rate (%)
160.0 160.0 160.0 160.0 160.0
Weighted average vesting period (years)
2.5 2.5 2.5 3.5 2.50
Share price at measurement date
247.12 12.19 64.46 9.17 138.96
* The weighted average expected volatility of all share appreciation rights listed above is determined using historical daily share prices.
37. Provisions
Accounting policies
Provisions are obligations of the group where the timing or amount (or both) of the obligation is uncertain.
Provisions are recognised when the group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate of the amount of the obligation can be made.
The group recognises a provision relating to its estimated exposure on all products at the statement of financial position
date. A provision for onerous contracts is established when the expected benefits to be derived under a contract are less
than the unavoidable costs of fulfilling the contract.
Reorganisation provisions are recognised in the period in which the group becomes legally or constructively committed
toa formal restructuring plan.
Provisions are reviewed at each statement of financial position date and adjusted to reflect the current best estimate.
Where the effect of the time value of money is material, the amount of a provision is determined by discounting the
anticipated future cash flows expected to be required to settle the obligation at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense in the income statement.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
Prosus annual report 2022
228
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
37. Provisions
continued
31 March
2022
US$’m
2021
US$’m
Pending litigation
7
15
Reorganisation
–
1
Long-service and retirement gratuity
3
2
Other
3
2
Total provisions
13
20
Less
: Non-current portion of provisions
(4)
(4)
Current portion of provisions
9
16
The group is currently involved in various litigation matters. The litigation provision has been estimated based on management’s
assessment on the likelihood of requirements on legal counsel and management’s estimates of costs and possible claims relating to
these after taking appropriate legal advice.
Refer to note 42 for contingent assets disclosed in respect of the group’s litigation matters. The reorganisation provision relates to the
relocation costs of certain of our operations. The long-service and retirement gratuity provision relates to the estimated cost of these
employee benefits. Furthermore, included in other provisions are estimated amounts related to other regulatory matters.
38. Accrued expenses
31 March
2022
US$’m
2021
US$’m
Deferred income
1
143
82
Accrued expenses
2
158
173
Accrued interest related to the bonds
2
124
80
Amounts owing in respect of investments acquired
2
3
170
Taxes and other statutory liabilities
113
96
Bonus accrual
89
82
Accrual for leave
28
23
Other personnel accruals
57
45
Payments received in advance
61
22
Payables from reverse factoring arrangements
2
90
92
Merchant payable
2
724
504
Other
3
48
32
1 638
1 401
1
2
3
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other assets and liabilities
continued
229
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Hedging
Accounting policies
The group uses derivative financial instruments (derivatives) to reduce exposure to fluctuations in foreign currency
exchange rates and interest rates. These instruments mainly comprise forward exchange contracts and interest rate
(including cross-currency) swap agreements. Forward exchange contracts protect the group from movements in exchange
rates by fixing the rate at which a foreign currency asset or liability will be settled. Cross-currency interest rate swap
agreements protect the group from movements in foreign exchange risk on a net investment in a foreign operation.
The group documents, at inception of hedging transactions, the relationship between hedging instruments and hedged items,
as well as its risk management objective and strategy for undertaking various hedging transactions. The group also
documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives used in hedging
transactions are expected to be and have been highly effective in offsetting changes in fair values or cash flows of hedged
items. Hedging instruments are included in ‘Derivative financial instruments’ in the statement of financial position. The group
designates derivatives as hedging instruments either in their entirety or elements thereof, as appropriate. The fair values of
derivatives used for hedging purposes are disclosed in note 39.
The method of recognising the resulting gain or loss arising from the remeasurement of derivatives used for hedging is
dependent on the nature of the item being hedged. The group designates a derivative as either a hedge of the fair value
ofa recognised asset, liability or firm commitment (fair-value hedge), or a hedge of a forecast transaction or of the foreign
currency risk of a firm commitment (cash flow hedge). The group also designates certain derivatives as hedges of the group’s
net investments in its foreign operations (cash flow hedges).
Fair-value hedges
When a derivative is designated as a fair-value hedge, changes in the fair value of the derivative are recorded in the income
statement, along with changes in the fair value of the hedged asset or liability that is attributable to the hedged risk.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of the change in the fair value
ofthe derivative is recognised in other comprehensive income and accumulated in the hedging reserve. The ineffective
portion of the change in the fair value of the derivative is recognised in the income statement.
When the hedged forecast transaction or firm commitment subsequently results in the recognition of a non-financial item
such as inventory, the amount accumulated in the hedging reserve is included directly in the initial cost of the non-financial
item when it is recognised. For all other hedged forecast transactions, the amount accumulated in the hedging reserve is
reclassified to the income statement in the same period during which the hedged expected future cash flow affects the
income statement.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, then
hedge accounting is discontinued prospectively. The amount accumulated in the hedging reserve at that time remains
inequity until, for a hedge resulting in the recognition of a non-financial item, it is included in the initial cost on initial
recognition or, for other cash flow hedges, it is reclassified to the income statement in the same period as the expected
cash flows affect the income statement.
When a committed or forecast transaction is no longer expected to occur, the amounts accumulated in the hedging
reserve are reclassified to the income statement.
Net investment hedges
When a derivative is designated as a hedging instrument in a hedge of the group’s net investment in a foreign operation,
the effective portion of the change in fair value of the hedging instrument is recognised in other comprehensive income
and presented in the foreign currency translation reserve within equity. The ineffective portion of the change in fair value
ofthe derivative is recognised in the income statement. The amount accumulated in the foreign currency translation
reserve is reclassified to the income statement on disposal of the relevant foreign operation.
Certain derivative transactions, while providing effective economic hedges under the group’s risk management policies,
donot qualify for hedge accounting. Changes in the fair value of derivatives that do not qualify for hedge accounting
arerecognised immediately in the income statement.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
Prosus annual report 2022
230
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
Financial risk factors
The group’s activities expose it to a variety of financial risks such as market risk (including currency risk, fair-value interest rate risk,
cashflow interest rate risk and price risk), credit risk and liquidity risk. These include the effects of changes in debt and equity markets,
foreign currency exchange rates and interest rates. The group’s overall risk management programme seeks to minimise the potential
adverse effects of financial risks on its financial performance. The group uses derivative financial instruments, such as forward
exchange contracts and interest rate swaps, to hedge certain risk exposures.
Risk management is carried out by management under policies approved by the board of directors and its risk management
committee. Management identifies, evaluates and, where appropriate, hedges financial risks. The various boards of directors within
the group provide written policies, in line with the overall group policies, covering specific areas, such as foreign exchange risk,
interest rate risk, credit risk, the use of derivative financial instruments and the investment of excess liquidity.
39.1 Foreign exchange risk
The group operates internationally and is exposed to foreign exchange risk. A substantial portion of the group’s revenue and expenses
is denominated in the currencies of the countries in which it operates.
In certain instances, the group will hedge its foreign currency risks associated with certain of its net investments in foreign
operations. The group will determine which investments to hedge based on the foreign currency risk arising on translation of its
foreign operations.
Following the acquisition of the group’s interest in Delivery Hero SE during the 2018 financial year, the group elected to hedge the
foreign exchange risk resulting from the difference between the functional currency of Delivery Hero (euro) and the currency of the
funding incurred to acquire the investment (US$). The group therefore entered into a cross-currency interest rate swap, and in order
tobest reflect the result of this risk management strategy, designated it as a hedge of its net investment in Delivery Hero.
The cross-currency interest rate swap matures in July 2025 and on maturity the group will exchange €200m for US$222m.
Astheinvestment in Delivery Hero SE is translated at the spot rate, the group has designated only the spot exchange rate element
of the cross-currency interest rate swap as forming part of the hedging relationship.
In July 2021 the group issued US$1.85bn 3.061% notes due in 2031, €1bn 1.288% notes due in 2029 and €850m 1.985% notes due
in2033 (the bonds). The purpose of the offerings was to raise proceeds for general corporate purposes, including debt refinancing,
which took the form of a tender offer made in relation to its bonds maturing in 2025 and 2027. Part of the notes due in2025 was
linked to a cross-currency interest rate swap. Due to the part settlement of the 2025 bond notes, the group partly settled the
cross-currency interest rate swap (the swap) related to the portion of the bond notes that were settled. The group therefore
discontinued the hedge forthe portion of the swap that was settled. The group continued the hedge relationship for theremaining
portion of the swap as the hedge of the net investment in Delivery Hero. The repayment of the swap amounted toUS$20m in July
2021, representing the fair value of the portion settled at that date. Cumulative losses of US$13.7m (2021: loss of US$24.1m) have
been recognised in the foreign currency translation reserve relating to the net investment hedge since the inception of the hedging
relationship. The increase in the value of the net investment in Delivery Hero used to determine hedge ineffectiveness for the period
is US$2.1bn (2021: increase in value of US$1.50bn).
The hedge ratio remained 1:1 and the risk strategy for this hedge relationship remained unchanged. The accumulated amount
recognised for this hedge relationship in the foreign currency translation reserve was not reclassified following this partial
settlement. The amount will only be reclassified if the investment in Delivery Hero is disposed.
During the current year, total gains of US$12.1m (2021: losses of US$79.3m) were recognised on the cross-currency interest rate swap.
Gains of US$10.4m (2021: losses of US$48.2m) for the year have been recognised in the foreign currency translation reserve relating
tothe net investment hedge (and comprise the fair-value movements used as a basis for recognising hedge effectiveness). Gains of
US$1.8m (2021: losses of US$31m) were recognised as part of ‘Other finance (costs)/income – net’ in the income statement. This is
theelement of the cross-currency interest rate swap not designated as part of the hedging relationship. Ineffectiveness may arise
fromcredit risk on the cross-currency interest rate swap. Ineffectiveness is negligible as all critical terms on the hedging instrument
andhedged item match.
The group does not apply hedge accounting with respect to any of its forward exchange contracts outstanding as at 31 March 2022.
Where the group has surplus funds offshore, the treasury policy is to spread the funds between more than one currency to limit
theeffect of foreign exchange rate fluctuations and to generate the highest possible interest income. As at 31 March 2022,
thegroup hada net cash balance including short-term cash investments of US$13.55bn (2021: US$4.77bn). These funds are largely
denominated in US dollar which is also the functional currency of the relevant group subsidiary in which the cash is held. However,
there are certain money market investments held in euros by entities with US dollar functional currencies which do give rise to
foreign currency risk.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
231
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.1 Foreign exchange risk
continued
Foreign currency sensitivity analysis
The group’s presentation currency is the US dollar, but as it operates internationally, it is exposed to a number of currencies, of which
the exposure to the US dollar, euro, Indian rupee, Brazilian real, Romanian leu, Turkish lira, Polish zloty and Russian rouble are the most
significant. The group is also exposed to the British pound, Chinese yuan renminbi and South African rand albeit to a lesser extent.
Forpurposes of the below analysis, financial instruments are only considered sensitive to foreign exchange rates when they are not
denominated in the functional currency of the group entity holding the relevant financial instrument.
The sensitivity analysis details the group’s sensitivity to a 10% increase of the US dollar against the Indian rupee, South African rand,
euroand the Romanian leu (2021: 10% decrease on forementioned currencies and 10% increase against the euro), as well as 40%
increase against the Russian rouble, and a 20% increase of the US dollar against the Brazilian real, Turkish lira and Polish zloty
(2021: 10% decrease of the US dollar against the forementioned currencies). These movements would result in a US$379.7m increase
in net profit after tax forthe year (2021: US$177.7m decrease). Other equity would decrease by US$124m (2021: US$295.2m increase).
This analysis includes only outstanding foreign currency denominated monetary assets and liabilities (ie those monetary assets and
liabilities denominated in a currency that differs from the relevant group company’s functional currency) and adjusts their translation
at the period-end for the above percentage changes in foreign currency rates. The sensitivity analysis includes external loans, as well
as loans to foreign operations within the group, but excludes translation differences due to translating from functional currency to
presentation currency. The analysis has been adjusted for the effect of hedge accounting.
Foreign exchange rates
The exchange rates used by the group to translate foreign entities’ income statements, statements of comprehensive income and
statements of financial position are as follows:
31 March 2022
31 March 2021
Average
rate
Closing
rate
Average
rate
Closing
rate
Currency (1FC = US$)
South African rand (ZAR)
0.0670 0.0685
0.0614 0.0677
Euro (EUR)
1.1586 1.1067
1.1691 1.1730
Chinese yuan renminbi (CNY)
0.1562 0.1577
0.1479 0.1526
Brazilian real (BRL)
0.1891 0.2110
0.1830 0.1775
Indian rupee (INR)
0.0134 0.0132
0.0135 0.0137
Polish zloty (PLN)
0.2525 0.2382
0.2593 0.2533
Russian rouble (RUB)
0.0134 0.0122
0.0134 0.0132
Romania leu (RON)
0.2346 0.2240
0.2405 0.2384
Turkish lira (YTL)
0.0927 0.0681
0.1344 0.1212
British pound sterling (GBP)
1.3620 1.3135
1.3152 1.3782
The average rates listed above are only approximate average rates. The group measures separately the transactions of each of its
material operations, using the particular currency of the primary economic environment in which the operation conducts its business,
translated at the prevailing exchange rate on the transaction date.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
Prosus annual report 2022
232
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.1 Foreign exchange risk
continued
Foreign exchange rates
continued
The table below details the group’s unhedged liabilities that are denominated in a currency other than the functional currency of the
settling entity:
31 March 2022
31 March 2021
Currency
amount of
liabilities
US$’m US$’m
Currency
amount of
liabilities
US$’m US$’m
Uncovered liabilities
Euro
5 284 5 847
1 738 2 039
South African rand
5 –
694 46
US dollar
13 13
11 11
British pound
1 2
1 1
Other
– 1
– 2
Derivative financial instruments
The following table details the group’s derivative financial instruments:
31 March 2022
31 March 2021
Assets
US$’m
Liabilities
US$’m
Assets
US$’m
Liabilities
US$’m
Current portion
Forward exchange contracts
27 18
3 2
Derivatives contained in acquisition agreements
– –
15
–
27 18
18
2
Non-current portion
Derivatives contained in lease agreements
11
2
9 2
Cross-currency interest rate swap
2 –
–
30
13
2
9
32
Total
40 20
27 34
The group’s forward exchange contracts and cross-currency interest rate swap are subject to master netting arrangements that
allow for offsetting of asset and liability positions with the same counterparty in the event of default. None of the group’s forward
exchange contracts and cross-currency interest rate swap agreements have been offset in the statement of financial position. At
31March 2022 and 2021 there were no contracts that could be offset under the master netting arrangement.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
233
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.2 Credit risk
The group is exposed to credit risk relating to the following financial assets measured at amortised cost:
Trade receivables and accrued income balances
Trade receivables consist primarily of invoiced amounts from normal trading activities. The group has a diversified customer base
across various geographical areas. Various credit checks are performed on new debtors to determine the quality of their credit history.
These checks are also performed on existing debtors with long-overdue accounts. Furthermore, current debtors are monitored to
ensure they do not exceed their credit limits.
The group’s trade receivables arise mainly in its etail, classifieds and online content businesses. Average payment terms vary
considerably between the group’s businesses, given the diverse nature of their operations. Average payment terms, however,
generally do not exceed 60 days from date of invoice.
Accrued income balances relate to unbilled revenue that has been earned and have substantially similar risk characteristics
astrade receivables. Accrued income balances arise mainly in the group’s etail, classifieds and payments businesses and are
included within ’Other receivables’ in the statement of financial position.
The group applies the simplified approach mandated by IFRS 9
Financial Instruments
when measuring impairment loss allowances
related to trade receivables and accrued income balances and accordingly the group’s impairment allowances on these financial
assets equal, at all times, the credit losses expected to arise over the lifetime of these financial assets.
In measuring credit losses expected to arise over the lifetime of trade receivables and accrued income balances, financial assets
are grouped according to their shared credit characteristics and ageing profile.
The quantification of credit losses expected to arise over the lifetime of trade receivables and accrued income balances is based
on(i)the group’s actual observed historical loss experience/rates within each business and (ii) forward-looking information that is
considered predictive of future credit losses within each business.
The historical loss experience/rates that are taken into account when determining impairment allowances are determined with
reference to representative sales periods within each business (typically not shorter than 12 months) and the credit losses incurred
over that period.
Forward-looking information considered in measuring lifetime expected credit losses includes macroeconomic factors, with the most
significant factors considered being inflation and unemployment rate increases as these are considered to most significantly affect
the future ability of the group’s customers to settle their accounts as they fall due for payment. All forward-looking information
considered is specific to the economy that most significantly affects the underlying customer’s ability to repay the relevant amount
due. Due to the group’s diverse operations, the forward-looking information considered and the values assigned to forward-looking
information when calculating impairment allowances vary by business type and country in which the customer is located.
Related party loans and receivables
Related party loans and receivables consist primarily of balances with a number of entities under the common control of Naspers,
thegroup’s ultimate controlling parent, as well as with certain associates and joint ventures of the group. The measurement of the
impairment loss allowance on these loans and receivables is based on the assessment of whether there has been a significant
increase in credit risk. Management has assessed that the credit risk of these loans and receivables is based on the creditworthiness
of the borrowers and their ability to repay the amounts owing. There has been no significant increase in the credit risk ofthe
borrowers during the financial year. Consequently, the impairment loss allowance is based on a 12-month expected credit
lossmodel. As the amounts owing are due by group companies, the impairment assessment takes into account the default of the
Naspers group on external debt (being the ultimate holding company able to repay debt on behalf of group companies), the credit
rating/probability of default of equity-accounted investments and letters of support by Naspers group companies. The assessment
also reviews actual performance against budgets and forecasts of group companies. Budget forecasts consider the businesses of
these group companies and equity-accounted investments remaining operational amid the pandemic. In addition, these related
parties have sufficient liquid assets and will therefore be able to settle their debt. As at 31 March 2022 and 2021, impairment
allowances on related party loans and receivables were not material.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
Prosus annual report 2022
234
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.2 Credit risk
continued
Other receivables
Credit risk related to other receivables arises mainly from accrued income balances, merchant and bank receivables, and disposal
proceeds receivable.
Accrued income
The credit risk profile and impairment methodology applied to accrued income balance that are included within ’Other receivable’ in
the statement of financial position are outlined above.
Merchant and bank receivables
Merchant and bank receivables balances relate to transactions, primarily in the group’s Payments and Fintech, Etail and Food
Delivery segments, where the group facilitates the payment process between the end consumer and the provider of goods and
services (ie the merchant).
Impairment allowances are established on merchant and bank receivables by considering the group’s historical loss experience/
rates as well as forward-looking information. The group also considers whether the underlying counterparty is a new or recurring
customer. The credit risk inherent in merchant and bank receivables is also reduced by the group’s right to offset amounts
receivable from counterparties against the corresponding amounts payable to banks and other merchants (refer to note 38) in the
event of default. An average payment term of 30 days generally applies to merchant and bank receivables. Merchant receivables
are generally recovered in the month subsequent to the financial year-end, as a result, impairment allowances are not significant.
As at 31 March 2022, an impairment allowance of US$3.9m (2021: US$2.7m) has been recognised with respect to merchant and bank
receivables.
Disposal proceeds receivable
Disposal proceeds receivable relate to amounts held in escrow following disposals of group businesses to external parties. These
amounts are generally held in escrow by the relevant purchaser as security for the group’s warranty and indemnity obligations in
terms of disposal agreements.
The group assesses, on a continuing basis, whether a significant increase in credit risk has taken place with respect to the relevant
underlying counterparty. At 31 March 2022, impairment allowances related to disposal proceeds receivable were not significant.
Loan receivables
Loan receivables are amounts owing to various third parties of the group including external service providers. The group assesses,
ona continuing basis, whether a significant increase in credit risk has taken place with respect to the relevant underlying counterparty.
At 31 March 2022, impairment allowances related to loan receivables amounted to US$7.1m (31 March 2021: US$2.1m).
Cash and cash equivalents, short-term investments, derivative assets and investments at fair value through profit and loss
The group is exposed to certain concentrations of credit risk relating to its cash and cash equivalents, short-term investments, derivative
assets and investments at fair value through profit or loss. There are no significant concentrations of credit risk relating to derivative
financial assets. The group places these instruments mainly with major banking groups and high-quality institutions that have high credit
ratings. The group’s treasury policy is designed to limit exposure to any one institution and to invest excess cash in low-risk investment
accounts. As at 31 March 2022, the group held the majority of its cash and cash equivalents, short-term investments and derivative
assets with local and international banks with a ’Baa1’ credit rating or higher. The majority of the group’s short-term investments are
placed with international banks with an ’A1’ credit rating (Moody’s International’s long-term deposit rating). The credit standings of
counterparties that are used by the group are evaluated on a continuous basis.
Total impairment losses on financial assets at amortised cost
Total impairment losses (net of reversals) recorded on financial assets measured at amortised cost amounted to US$12.5m as at
31March 2022 (2021: US$7.9m). The assessment includes all reasonable and supportable information about the likelihood that
counterparties would breach their agreed payment terms and any deterioration of their credit ratings. Where relevant, additional
expected credit losses were accounted for when deemed necessary. As at 31 March 2022, the impact of Covid-19 on the group’s
impairment allowances was not significant.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
235
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.3 Liquidity risk
Prudent liquidity risk management implies, among other aspects, maintaining sufficient cash and marketable securities, the availability
of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The facilities expiring
within one year are subject to renewal at various dates during the next year. The group had the following unutilised banking facilities as
at 31 March 2022 and 2021:
31 March
2022
US$’m
2021
US$’m
On call
121
78
Expiring within one year
19
15
Expiring beyond one year
2 502
2 500
2 642
2 593
The following analysis details the remaining contractual maturity of the group’s non-derivative liabilities and derivative financial assets
and liabilities. The analysis is based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
group can be required to settle the liability. The analysis includes both interest and principal cash flows.
31 March 2022
Carrying
value
US$’m
Contractual
cash flows
US$’m
0 – 12
months
US$’m
1 – 5
years
US$’m
5 years +
US$’m
Non-derivative financial liabilities
Interest-bearing: Capitalised lease liabilities
(263) (282) (64) (178) (40)
Interest-bearing: Loans and other liabilities
(15 705) (23 098) (18 821)
(464)
(3 813)Non-interest-bearing: Loans and other liabilities
(81) (109) (44) (65)
–
Other non-current liabilities
(1 158) (1 158) (1 014)
(144)
–
Trade payables
(549) (549) (549)
– –
Accrued expenses
(1 141) (1 141) (1 141)
– –
Related party loans and payables
(10) (10) (8) (2)
–
Bank overdrafts
(18) (18) (18)
– –
Derivative financial assets/(liabilities)
Forward exchange contracts – inflow
27
4 769 4 769
– –
Forward exchange contracts – outflow
(18)
(4 760) (4 760)
– –
Derivatives contained in lease agreements – inflow
11 11
–
11–
Derivatives contained in lease agreements – outflow
(2) (2)
–
(2)–
Cross-currency interest rate swap – inflow
2
268 12 256
–Cross-currency interest rate swap – outflow
–
(267) (8) (259)
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
Prosus annual report 2022
236
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.3 Liquidity risk
continued
31 March 2021
Carrying
value
US$’m
Contractual
cash flows
US$’m
0 – 12
months
US$’m
1 – 5
years
US$’m
5 years +
US$’m
Non-derivative financial liabilities
Interest-bearing: Capitalised finance leases
(227) (250) (56) (140) (54)
Interest-bearing: Loans and other liabilities
(7 890) (12 117) (9 289)
(244)
(2 584)Non-interest-bearing: Loans and other liabilities
(66) (66) (15) (48) (3)
Other non-current liabilities
(60) (60)
–
(60)–
Trade payables
(344) (344) (344)
– –
Accrued expenses and other current liabilities
1
(2 250) (2 250) (2 250)
– –
Related party loans and payables
(10) (10) (8) (2)
–
Bank overdrafts
(9) (9) (9)
– –
Derivative financial assets/(liabilities)
Forward exchange contracts – inflow
3 3 3 – –
Forward exchange contracts – outflow
(2) (2) (2)
– –
Derivatives contained in acquisition agreements – inflow
15 15 15
– –
Derivatives contained in lease agreements – inflow
9 9 – 9 –
Derivatives contained in lease agreements – outflow
(2) (2)
–
(2)
–
Cross-currency interest rate swap – inflow
–
977 43 934
–
Cross-currency interest rate swap – outflow
(30)
(1 011)(30) (981)
–
1
39.4 Interest rate risk
As part of the process of managing the group’s fixed and floating borrowings mix, the interest rate characteristics of new borrowings
and the refinancing of existing borrowings are positioned according to expected movements in interest rates. Where appropriate, the
group uses derivative financial instruments, such as interest rate swap agreements, purely for hedging purposes. The fair value of these
instruments will not change significantly as a result of changes in interest rates due to their short-term nature and floating interest rates.
Refer to note 30 for the interest rate profiles and repayment terms of long-term liabilities as at 31 March 2022 and 2021.
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 (after taking into account the effect of hedge accounting) 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 group is mainly exposed to interest rate fluctuations of the South African, American,
European, Brazilian, Russian and London repo rates. Management’s best estimate of the possible change in these interest rates
isan increase of 100 basis points (2021: 100 basis points for all rates) for South African and European repo rates, an increase of
300 basis points for Brazilian, London and Johannesburg Interbank Average Rate. Best estimate of the possible change in Russian
key rate to the interest rates is an increase of 500 basis points.
If interest rates changed as stipulated above and all other variables were held constant, specifically foreign exchange rates, the
group’s net profit after tax and total equity for the year ended 31 March 2022 would increase by US$82.16m (2021: increase on net
profit (and equity) by US$6.9m).
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
237
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
39. Financial risk management
continued
39.5 Price risk
During the 31 March 2022 financial year, the group increased its shareholding in Delivery Hero by 2.5% to 27% from 25%. The additional
investment was acquired initially as a call option to acquire the shares subject to competition approval, which was considered highly
probable. The group applied cash flow hedge accounting to the highly probable forecast acquisition of this additional investment,
hedging the exposure to future share price increases in Delivery Hero shares between the date the call option was acquired, and the
date approval was granted to acquire the additional shares. The additional investment in Delivery Hero was based on the fair value
ofthe call option on the date that the approval was granted (US$817m) and the accumulated losses in the cash flow hedge reserve
(US$119m). The accumulated losses within the cash flow hedge reserve were included in the cost of the investment, as based on the
group’s judgement the investment in associate is a non-financial asset. The resulting additional investment in Delivery Hero recognised
after the basis adjustment was US$936m.
Price risk sensitivity analysis
The group has various listed investments measured at fair value through other comprehensive income. The group’s sensitivity
toa10% decrease in the share price of these investments will result in a US$476.6m decrease in other comprehensive income
(2021:US$398.5m). Refer to note 28 for details of the group’s listed investments.
40. Fair value of financial instruments
The carrying values, net gains and losses recognised in profit or loss, total interest income, total interest expense and impairment
perclass of financial instrument are as follows:
31 March 2022
Carrying
value
US$’m
Net gains/
(losses)
recognised
in profit
or loss
US$’m
Total
interest
income
US$’m
Impairment
US$’m
Assets
Other investments
5 981
3 – –
Financial assets at fair value through profit or loss
63
3 – –
Financial assets at fair value through other comprehensive income
2
5 918
– – –
Receivables and loans
3
1 354
31 19 17
Trade receivables
276 (3)
– 6
Other receivables
645
– 1
11Related party receivables
433 34 18
–
Derivative financial instruments
1
40
6 – –
Forward exchange contracts
27
– – –
Cross-currency interest rate swap
2 – – –
Derivatives contained in lease agreements
11
6 – –
Short-term investments
3
3 924
(63)
9 –
Cash and cash equivalents
1, 3
9 646
(29) 30
–
Total
20 945
(52) 58 17
1
2
comprehensive income.
3
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
Prosus annual report 2022
238
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
40. Fair value of financial instruments
continued
31 March 2022
Carrying
value
US$’m
Net gains/
(losses)
recognised
in profit
or loss
US$’m
Total
interest
expense
US$’m
Liabilities
Long-term liabilities
1
16 007
68 386
Interest-bearing: Capitalised lease liabilities
200
– 8
Interest-bearing: Bonds
15 368
68 362
Interest-bearing: Loans and other liabilities
243
–
16Non-interest-bearing: Loans and other liabilities
50
– –
Other non-current liabilities
2
144
– –
Related party loans and payables
2 – –
Short-term payables and loans
1
2 900
26 10
Interest-bearing: Capitalised lease liabilities
63 (1)
2
Interest-bearing: Loans and other liabilities
94
– 2
Non-interest-bearing: Loans and other liabilities
31
– –
Trade payables
549 (7)
–
Other current liabilities
2
1 014
14
–
Accrued expenses
1 141
6 6
Related party loans and payables
8 – –
Foreign currency intergroup payables
–
14
–Derivative financial instruments
3
20
7 –
Forward exchange contracts
18
8 –
Derivatives contained in lease agreements
2
(1)
–Bank overdrafts
1
18
– 7
Total
18 945
101 403
1
2
3
The carrying values of all financial instruments, apart from those disclosed below, are considered to be a reasonable approximation of
their fair values. The carrying values of these financial instruments are considered to be a reasonable approximation of the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
The fair values of the group’s publicly traded bonds are detailed below:
Financial liabilities
Carrying
value
US$’m
Fair
value
US$’m
Level 1
US$’m
Level 2
US$’m
Level 3
US$’m
31 March 2022
Publicly traded bonds
1
15 368 13 056
–
13 056–
31 March 2021
Publicly traded bonds
1
7 796 7 935
–
7 935–
1
The fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments as at the end
of the reporting period. The fair values of the publicly traded bonds are level 2 financial instruments. The publicly traded bonds are
listed on the Irish Stock Exchange (Euronext Dublin).
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
239
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
40. Fair value of financial instruments
continued
31 March 2021
Carrying
value
US$’m
Net gains/
(losses)
recognised
in profit
or loss
US$’m
Total
interest
income
US$’m
Impairment
US$’m
Assets
Other investments
5 391
– – –
Financial assets at fair value through profit or loss
1
1 258
– – –
Financial assets at fair value through other comprehensive income
2
4 122
– – –
Other loans and investments
1
11
– – –
Receivables and loans
3
928 46 24 15
Trade receivables
150
2 –
10Other receivables
378
–
215
Foreign currency intergroup receivables
– –
44
–Related party receivables
400
– 3 –
Derivative financial instruments
1
27 191
– –
Forward exchange contracts
3 – – –
Derivatives contained in acquisition agreements
15 189
– –
Derivatives contained in lease agreements 9 2 – –
Short-term investments
3
1 211
(5) 21
–
Cash and cash equivalents
1, 3
3 571
26 38
–
Total
11 128
258 83 15
1
2
3
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
Prosus annual report 2022
240
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
40. Fair value of financial instruments
continued
31 March 2021
Carrying
value
US$’m
Net gains/
(losses)
recognised
in profit
or loss
US$’m
Total
interest
expense
US$’m
Liabilities
Long-term liabilities
1
8 143
(2) 244
Interest-bearing: Capitalised finance leases
173
– 8
Interest-bearing: Loans and other liabilities
7 860
(2) 233
Non-interest-bearing: Loans and other liabilities
48
– 3
Other non-current liabilities
60
– –
Related party loans and payables
2 – –
Short-term payables and loans
1
2 704
(30) 14
Interest-bearing: Capitalised finance leases
54 (1)
2
Interest-bearing: Loans and other liabilities
30 (2)
2
Non-interest-bearing: Loans and other liabilities
18 (1)
–
Trade payables
344 (2)
–
Accrued expenses and other current liabilities
2
2 250
4
10
Related party loans and payables
8 – –
Foreign currency intergroup payables
–
(28)
–Derivative financial instruments
3
34 (69)
–
Forward exchange contracts
2
(38)
–Derivatives contained in lease agreements 2 – –
Cross-currency interest rate swap
30 (31)
–Bank overdrafts
1
9 – 4
Total
10 890
(101) 262
1
2
3
The group categorises fair-value measurements into levels 1 to 3 of the fair value hierarchy based on the degree to which the inputs
used in measuring fair value are observable:
•
Level 1 fair-value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2 fair-value measurements are those derived from inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices). The fair value of financial instruments that
are not traded in active markets (for example, derivatives such as interest rate swaps, forward exchange contracts and certain
options) is determined through valuation techniques. These valuation techniques maximise the use of observable market data where
it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to measure the fair value of
an instrument are observable, the instrument is included in level 2.
•
Level 3 fair-value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
241
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
40. Fair value of financial instruments
continued
Valuation techniques and key inputs used to measure significant level 2 and level 3 fair values
Level 2 fair-value measurements
•
Forward exchange contracts
– in measuring the fair value of forward exchange contracts, the group makes use of market
observable quotes of forward foreign exchange rates on instruments that have a maturity similar to the maturity profile of the
group’s forward exchange contracts. Key inputs used in measuring the fair value of forward exchange contracts include: current
spotexchange rates, market forward exchange rates and the term of the group’s forward exchange contracts.
•
Cross-currency interest rate swap
– the fair value of the group’s interest rate and cross-currency swaps is determined through the
use of discounted cash flow techniques using only market observable information. Key inputs used in measuring the fair value of
interest rate and cross-currency swaps include: spot market interest rates, contractually fixed interest rates, foreign exchange rates,
counterparty credit spreads, notional amounts on which interest rate swaps are based, payment intervals, risk-free interest rates as
well as the duration of the relevant interest rate and cross-currency swap arrangement.
•
Cash and cash equivalents
– relate to short-term bank deposits which are money market investments held with major banking
groups and high-quality institutions that have AAA money market fund credit ratings from internationally recognised ratings
agencies. The fair value of these deposits is determined by the amounts deposited and the gains or losses generated by the funds
as detailed in the statements provided by these Institutions. The gains/losses are recognised in the income statement.
•
Financial assets at fair value
– relate to a contractual right to receive shares or cash. The fair value is based on a listed share price
on the date the transaction was entered into.
Level 3 fair-value measurements
•
Financial assets at fair value
– relate predominantly to unlisted equity investments. The fair value of these investments is based
on the most recent funding transactions for these investments. The fair value of the residual interest in the Naspers group was
assessed based on the sum-of-the-parts considering the fair value of the underlying components on a marketable and controlling
basis, applying a consistent valuation model.
•
Derivatives contained in lease agreements
– relate to foreign currency forwards embedded in lease contracts. The fair value
ofthe derivatives is based on forward foreign exchange rates that have a maturity similar to the lease contracts and the
contractually specified lease payments.
•
Earn-out obligations
– relate to amounts that are payable to the former owners of businesses now controlled by the group
provided that contractually stipulated post-combination performance criteria are met. These are remeasured to fair value at
theend of each reporting period. Key inputs used in measuring fair value include: current forecasts of the extent to which
management believes performance criteria will be met, discount rates reflecting the time value of money and contractually
specified earn-out payments.
Instruments not measured at fair value for which fair value is disclosed
•
Level 2
– the fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments
at the reporting date. As the instruments are not actively traded, this is a level 2 disclosure.
The fair values of the group’s financial instruments that are measured at fair value at each reporting period are categorised as follows:
31 March 2022
Fair
value
US$’m
Level 1
US$’m
Level 2
US$’m
Level 3
US$’m
Assets
Financial assets at fair value through other comprehensive income
5 918 4 765
–
1 153Financial assets at fair value through profit or loss
63 19
–
44Forward exchange contracts
27
–
27–
Derivatives contained in lease agreements
11
– –
11Cash and cash equivalents
1
928
–
928–
Cross-currency interest rate swap
2 – 2 –
Total
6 949 4 784
957
1 208Liabilities
Forward exchange contracts
18
–
18–
Derivatives contained in lease agreements
2 – – 2
Earn-out obligations
20
– –
20Total
40 22
–
18Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
Prosus annual report 2022
242
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
40. Fair value of financial instruments
continued
31 March 2021
Fair
value
US$’m
Level 1
US$’m
Level 2
US$’m
Level 3
US$’m
Assets
Financial assets at fair value through other comprehensive income 4 122 3 985
4
133
Financial assets at fair value through profit or loss 1 258
–
1 24216
Forward exchange contracts
3 – 3 –
Derivatives contained in lease agreements
9 – – 9
Derivatives contained in acquisition contracts
15 15
– –
Cash and cash equivalents
1
996
–
996–
Total
6 403 4 000 2 245
158
Liabilities
Forward exchange contracts
2 – 2 –
Derivatives contained in lease agreements
2 – – 2
Earn-out obligations
13
– –
13Cross-currency interest rate swap
30
–
30
–
Total
47 15
–
321
internationally recognised rating agencies.
The following table shows a reconciliation of the group’s level 3 financial instruments:
31 March 2022
Earn-out
obligations
US$’m
Financial
assets at
FVOCI
1
US$’m
Derivatives
embedded
in leases
US$’m
Financial
assets at
FVPL
2
US$’m
Balance at 1 April 2021
(13) 133
7
16
Additions
–
967
–22
Total (losses)/gains recognised in the income statement
(9)
– 2 6
Total gains recognised in other comprehensive income
– –
107
–Settlements/disposals
1 –
(46)
–Foreign currency translation effects
1 2 – –
Transfers
– –
(10)
–Total
(20)
1 153
449
31 March 2021
Earn-out
obligations
US$’m
Financial
assets at
FVOCI
1
US$’m
Derivatives
embedded
in leases
US$’m
Financial
assets at
FVPL
2
US$’m
Balance at 1 April 2020
(22) 85
4
13Additions
(1) 76
3 3
Total losses recognised in the income statement
(10)
– – –
Total losses recognised in other comprehensive income
– –
23
–Settlements/disposals
20 (51)
– –
Total
(13) 133
7
161
2
There was a transfer of US$4.4m (2021: US$nil) from level 2 to level 1 and another transfer of US$9.9m (2021: US$nil) from level 3 to
level 1, during the current year.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Financial risk management
continued
243
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
41. Related party transactions and balances
The group entered into transactions and has balances with a number of related parties, including associates, joint ventures, directors
(key management personnel), shareholders, and entities under common control. Transactions that are eliminated on consolidation as
well as gains or losses eliminated through the application of the equity method are not included. The transactions and balances with
related parties are summarised below:
31 March
2022
US$’m
2021
US$’m
Sale of goods and services to related parties
1
EMPG Holdings Limited
12
18
MIH Holdings Proprietary Limited
12
15
Bom Negocio Atividades de Internet Ltda (OLX Brasil)
14
3
Skillsoft Corp
34
–
Various other related parties
1
1
73
37
1
and subsidiaries of Naspers outside of the group.
31 March
2022
US$’m
2021
US$’m
Services received from related parties
1
MIH Holdings Proprietary Limited
10
11
Various related parties
1
–
11
11
1
group’s controlling parent, Naspers.
Subsequent to the listing on 11 September 2019, corporate expenses have been directly attributed or allocated to non-South African
ecommerce and internet businesses and are accordingly, recharged to the relevant business to which it relates. Those costs remaining
in corporate entities have been allocated to companies based on specific identification criteria/allocation keys. During the current year
the group recharged US$12.2m (2021: US$15.1m) to Naspers companies in respect of services performed on their behalf. In addition
Naspers recharged costs of US$10.1m (2021: US$11.4m) to the group’s companies.
31 March
2022
US$’m
2021
US$’m
Dividends paid to holding company
Naspers Limited
104
155
104
155
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other disclosures
Prosus annual report 2022
244
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
41. Related party transactions and balances
continued
The balances of receivables and payables between the group and related parties are as follows:
31 March
2022
US$’m
2021
US$’m
Loans and receivables
1
Myriad/MIH (Malta) Limited
6
4
MIH Holdings Proprietary Limited
1
35
Bom Negocio Atividades de Internet Ltda (OLX Brasil)
2
219
171
MIH Treasury Services Proprietary Limited
16
7
MIH Internet Holding B.V. Share Trust
3
154
169
Inversiones CMR S.A.S.
21
–
GoodGuyz Investments B.V.
6
–
Silvergate Capital Corporation
4
–
Other
6
14
Less
: Allowance for impairment of loans and receivables
4
–
–
Total related party receivables
433
400
Less
: Non-current portion of related party receivables
(416)
(356)
Current portion of related party receivables
17
44
1
2
The loan is repayable by October 2035 and is interest free until April 2022. Subsequently, interest is charged annually at SELIC+2%.
3
earlier. Cash flows for transactions are disclosed as investing activities in the consolidated cash flow statement.
4
31 March
2022
US$’m
2021
US$’m
Payables
Zitec Com SRL
2
–
MIH Holdings Proprietary Limited
3
7
Myriad/MIH (Malta) Limited
2
1
Other
3
2
Total related party payables
10
10
Less
: Non-current portion of related party payables
(2)
(2)
Current portion of related party payables
8
8
The was no movement in the allowance for impairment of related party receivables during the year (2021: nil).
Terms of significant related party current receivables and payables
Current portion of related party payables amount to US$7.9m (2021:US$8m). The above current receivables and payables relate
primarily to cost recharges to/by entities under the common control of Naspers Limited, the group’s ultimate controlling parent. These
current receivables and payables are interest free.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other disclosures
continued
245
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
41. Related party transactions and balances
continued
Shares held in holding company
The group acquired US$3.6bn shares in Naspers as part of the share repurchase programme announced in October 2020 and
completed in June 2021. These shares were classified as fair value through other comprehensive income (OCI) investments up until
theclosing date of the share exchange in August 2021. The group recognised a fair value loss in OCI for the 3.7% Naspers investment
amounting to US$699.9m during the period from April to August 2021. This interest Prosus had in Naspers from the share repurchase
programme represented 3.7% of the effective interest in Naspers and approximately 1% of the voting rights.
In August 2021, the group completed a share exchange offer to Naspers shareholders and issued newly created class B ordinary
shares to Naspers. The share exchange offered Naspers shareholders to tender their existing Naspers N ordinary shares for newly
issued Prosus ordinary shares N at an exchange ratio of 1 (one) Naspers N ordinary share for 2.27443 Prosus ordinary shares N.
Thisinterest, coupled with the 3.7% shareholding Prosus previously acquired in Naspers, as part of the share repurchase programme
that was completed in June 2021, resulted in Prosus now holding a 49.5% fully dilutive interest in Naspers.
Prosus recognised a FVOCI investment amounting to US$385m, representing its indirect interest in the residual interest in the Naspers
group. In addition, the newly created class B ordinary shares were issued to Naspers for a consideration of €56.4m (US$66.3m).
Refer to note 4 for details of the accounting treatment for the above transaction.
Group equity contributions to Naspers share trusts
The group made contributions to Naspers share trusts amounting to US$190.2m (2021: US$78.8m) during the current year.
Directors’ remuneration
The executive directors received the following remuneration and emoluments:
31 March
2022
US$’000
2021
US$’000
Executive directors
1
Salary
2 372
2 332
Annual short-term incentive payments
1 585
2 310
Pension contributions and other benefits paid on behalf of director
223
226
Share-based payment expense
(22 705)
174 251
Total
(18 525)
179 119
1
The non-executive directors received the following remuneration and emoluments:
31 March
2022
US$’000
2021
US$’000
Non-executive directors
1
Directors’ fees
2 429
2 429
Committee and trust fees
541
592
Other fees
–
–
Total
2 970
3 021
1
70% to Prosus and 30% to Naspers.
Key management received the following remuneration:
31 March
2022
US$’000
2021
US$’000
Key management
Short-term employee benefits
17 901
10 741
Post-employment benefits
513
414
Share-based payment expense
65 534
118 793
Total
83 948
129 948
The group has not provided any personal loans, advances or guarantees to the executive, non-executive directors and key
management personnel.
Key management excludes executive and non-executive directors’ remuneration.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other disclosures
continued
Prosus annual report 2022
246
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
41. Related party transactions and balances
continued
The prior year’s remuneration includes the remuneration of the former statutory directors until the date of resignation and the
remuneration of the newly appointed executive directors from the date of appointment.
Directors’ interest in Prosus shares
The directors of Prosus (and their associates) had the following interests in Prosus A ordinary shares as at 31 March:
2022
2021
Prosus A ordinary shares
Prosus A ordinary shares
Beneficial
Beneficial
Name Direct Indirect
Total
Direct Indirect
Total
SJZ Pacak
1
–
486 486
–
383 383
JDT Stofberg
1
–
810 810
–
639 639
Total
–
1 296 1 296
–
1 022 1 022
1
implementation of the share exchange offer approved by shareholders on 9 July 2021, additional A1 ordinary shares were issued to holders of A1 ordinary shares on a pro rata basis on16
August 2021.
The directors of Prosus (and their associates) had the following interests in Prosus ordinary shares N as at 31 March:
2022
2021
Prosus ordinary shares N
Prosus ordinary shares N
Beneficial
Beneficial
Name Direct Indirect
1
Total
Direct Indirect
Total
JP Bekker
2
–
11 513 809 11 513 809
–
4 688 691 4 688 691
H du Toit
2
5 111
–
5 111– – –
CL Enenstein
–
415 415
–
415 415
FLN Letele
2 604
––
2 6042 604
2 604
SJZ Pacak
2
460 911 747 086 1 207 997
–
630 635 630 635
V Sgourdos
3
110 890 102 290 213 180
32 483 98 410 130 893
MR Sorour
2
3 955
442
4 3972 145
442
2 587JDT Stofberg
2
415 966 141 888 557 854
183 317 141 888 325 205
BJ van der Ross
2, 4
6 262 5 294 11 556
2 550 2 000 4 550
B van Dijk
2
249 975 1 085 405 1 335 380
51 809 1 003 928 1 055 737
Total
1 255 674 13 596 629 14 852 303
274 908 6 566 409 6 841 317
1
102 290 (2021:98 410); Steve Pacak: 54 000 (2021: 54 000).
2
traded a portion of their Naspers N ordinary shares in exchange for Prosus ordinary shares N.
3
shares N. The full net gain after tax on disposal of these shares was reinvested back into the group in the form of Prosus N.V. ordinary shares N when, on 1 March 2022, he purchased
20 000 Prosus ordinary shares N at a volume weighted average value per share of €56.3933.
4
5
Additional information on the remuneration and share-based compensation of members of the board and the remuneration of key
management is disclosed in the remuneration report.
42. Commitments and contingencies
The group is subject to commitments and contingencies, which occur in the normal course of business, including legal proceedings and
claims that cover a wide range of matters. The group plans to fund these commitments and contingencies out of existing facilities and
internally generated funds.
(a) Capital expenditure
Commitments in respect of contracts placed for capital expenditure at 31 March 2022 amount to US$nil (2021: US$2.5m).
(b) Other commitments
The group entered into contracts for the receipt of various services. These service contracts are for the receipt of information
technology and computer support services, access to networks, consulting services and contractual relationships with customers,
suppliers and employees. The group’s commitments in respect of these agreements amount to US$132.1m (2021: US$75.8m).
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other disclosures
continued
247
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Financial statements
Other information
42. Commitments and contingencies
continued
(c) Lease commitments
Lease commitments include the group’s short-term lease arrangements as well as other contractual lease agreements whose
commencement date is after 31 March 2022. Short-term lease commitments relate to leasing arrangements with lease terms of
12 months or less that are not recognised on the statement of financial position. The group has the following lease commitments
at 31 March:
31 March
2022
US$’m
2021
US$’m
Minimum lease payments:
Payable in year one
5
1
Payable in year two
3
2
Payable in year three
2
2
Payable in year four
2
2
Payable in year five
2
2
Payable after five years
3
4
17
13
(d) Litigation claims
Taxation matters
The group operates a number of businesses in jurisdictions where taxes are payable on certain transactions or payments.
Thegroup continues to seek relevant advice and works with its advisers to identify and quantify such tax exposures.
The group had an uncertain tax position of US$170.8m at 31 March 2020 related to amounts receivable from tax authorities.
Inthe financial year ended 31 March 2019, the group concluded that this uncertain tax position was not probable and reflected
the uncertainty in the tax expense recognised during that financial year. In September 2020, the group received this amount
andhas recognised it in ‘Taxation’ in the consolidated income statement, where it was originally recognised. The receipt of
theamount has evidenced that no taxation was payable on the transaction and therefore this cash flow has been classified
consistently with the underlying transaction in the consolidated statement of cash flows.
(e) Assets pledged as collateral
The group pledged property, plant and equipment, investments, cash and cash equivalents, trade receivables and other
working capital as collateral against its secured long-term liabilities with an outstanding balance of US$317.8m (2021: US$98.9m).
Refer to note 30 for further details.
43. Subsequent events
The group entered into an agreement with the shareholders of the India digital payments provider IndiaIdeas.com Limited (BillDesk)
to acquire 100% of the equity in BillDesk for a consideration of approximately US$4.7bn (INR345bn). The acquisition is structured as
an all-cash transaction with the purchase price payable at closing, subject to the approval of the competition commission of India.
The group will account for the investment in BillDesk as a subsidiary.
In May 2022 the group announced its intention to exit its Russian businesses. The group has started the search for an appropriate
buyer for its shares in Avito.
On 14 March 2022, the board of directors decided to cancel 69 825 860 ordinary shares N that Prosus held in its own capital. This
cancellation was effected on 14 June 2022. Subsequent to the Prosus share cancellation, the Prosus free float’s economic interest in the
group is 57.71%. The company’s issued share capital post the share cancellation is 2 003 817 745.
In March 2022 the group received a special interim dividend from Tencent, in the form of a distribution in specie of 131 873 028 JD.com
shares. The group completed the sale of the 131 873 028 JD.com shares in June 2022, for total proceeds of approximately US$3.6bn.
Accumulated fair value losses related to these shares of approximately US$255m will be reclassified from the valuation reserve to
retained earnings within equity as a result of this disposal.
In June 2022, the board of directors approved the beginning of an open-ended, repurchase programme in respect of the ordinary
shares N of Prosus N.V. and N ordinary shares of Naspers Limited, from the respective Prosus and Naspers free-float shareholders.
With the support of Tencent Holdings Limited, Prosus has removed all restrictions on the sale by Prosus of the ordinary shares in
Tencent and will begin selling small amounts of Tencent Shares regularly, in an orderly manner, while concurrently purchasing Prosus
Ordinary Shares N and Naspers N Ordinary Shares as long as the discount to net asset value is at elevated levels.
Notes to the consolidated financial statements
continued
for the year ended 31 March 2022
Other disclosures
continued
248
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Financial statements
Other information
Company statement of financial position
as at 31 March 2022 (before appropriation of results)
31 March
Notes
2022
US$’m
2021
US$’m
ASSETS
Non-current assets
153 420
157 089
Investments in subsidiaries
3
150 306
153 514
Investments at fair value through other comprehensive income
4
385
2 526
Amounts due from group companies
5
2 727
1 049
Derivative financial instruments
18
2
–
Current assets
12 294
3 647
Amounts due from group companies
5
8
78
Derivative financial instruments
18
27
1
Other receivables
6
17
20
Short-term investments
7
3 924
1 211
Cash and cash equivalents
8
8 318
2 337
TOTAL ASSETS
165 714
160 736
EQUITY AND LIABILITIES
Shareholders' equity
150 122
152 715
Share capital
9, 10
177
95
Share premium
9, 10
142 687
150 624
Statutory reserve
138
138
Legal reserves
–
112
Retained earnings
1 085
1 835
Undistributed results
6 035
(89)
Non-current liabilities
15 368
7 826
Long-term liabilities
11
15 368
7 796
Derivative financial instruments
18
–
30
Current liabilities
224
195
Amounts due to group companies
5
77
43
Accrued expenses and other current liabilities
12
135
150
Derivative financial instruments
18
12
2
TOTAL EQUITY AND LIABILITIES
165 714
160 736
The accompanying notes are an integral part of these company financial statements.
249
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Other information
Company statement of comprehensive income
for the year ended 31 March 2022
31 March
Notes
2022
US$’m
2021
US$’m
Selling, general and administration expenses
13
(12)
(9)
Dividend income
14
6 472
–
Operating profit/(loss)
6 460
(9)
Interest income
15
35
68
Interest expense
15
(353)
(234)
Other finance (cost)/income – net
15
(31)
10
Profit/(loss) before taxation
6 111
(165)
Taxation
16
(76)
76
Profit/(loss) for the year
6 035
(89)
Other comprehensive (loss)/income (OCI)
(674)
112
Net fair value (loss)/gains on financial assets at fair value through OCI
1
4
(700)
115
Net movement in hedging reserve
2
26
(3)
Total comprehensive income for the year
5 361
23
1
2
The accompanying notes are an integral part of these company financial statements.
Prosus annual report 2022
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Financial statements
Other information
Company statement of changes in equity
for the year ended 31 March 2022
Share
capital
US$’m
Share
premium
US$’m
Treasury
shares
1
US$’m
Statutory
reserve
2
US$’m
Valuation
reserve
3
US$’m
Retained
earnings
US$’m
Undistri-
buted
results
US$’m
Total
US$’m
Balance at 1 April 2021
1
95
152 040
(1 416)
138
112
1 835
(89)
152 715
Income for the year
– – – –
(112)
(562)
6 035
5 361
Profit for the year
– – – – – –
6 035 6 035
Other comprehensive loss
4
– – – –
(112)
–(562)
(674)
Appropriation of result
– – – – –
(89)
–89
Share capital movements
5
128
(128)
– – – – – –
Annual distribution paid to shareholders
5
(134)
– – – –
(104)–
(238)
Repurchase of own shares
6
– – – – –
(4 995)
–(4 995)
Share exchange transaction
7
27
(2 814)
– – – – –
(2 787)
Prosus ordinary shares B issued
7
66
– – – – – –
66Currency translation of share capital
(5)
– – – – 5 – –
Balance at 31 March 2022 6 035
177
149 098
(6 411)
138
–
1 085150 122
1
During the current year the company made a decision to present treasury shares (a component of share premium) separately within equity. Refer to note 2.
2
As required by article 29 of the company’s articles of association, the company holds a legal reserve for the conversion of A1 shares to A2 shares when the conversion criteria are triggered.
3
This component of equity forms part of ‘Legal reserves’ of the company.
4
Relates predominantly to the company’s investment at fair value through other comprehensive income. Refer to note 4.
5
Share capital movements relate to the net increase in the nominal value of the ordinary shares N in respect to those shareholders who elected the distribution in relation to the 2021 financial year in the form of capital repayment. Annual distribution paid to shareholders relates to
the actual capital and dividend payments made to shareholders in the current year. Refer to note 9.
6
Relates to repurchase of own shares as per the share repurchase programme. Refer to note 9.
7
Relates to the share exchange transaction. The transaction resulted in an increase in share capital and premium due to the issuance of shares with a subsequent decrease in share premium as a result of the capital restructure. Refer to note 4 of the consolidated financial
statements for the accounting treatment.
Share
capital
US$’m
Share
premium
US$’m
Treasury
shares
1
US$’m
Statutory
reserve
2
US$’m
Valuation
reserve
3
US$’m
Retained
earnings
US$’m
Undistri-
buted
results
US$’m
Total
US$’m
Balance at 1 April 2020
90
152 094
–
154 322138
–962
1 038
Income for the year
– – – –
112
–(89)
23
Loss for the year
– – – – – –
(89) (89)
Other comprehensive income
4
– – – – –
112
–112
Appropriation of result
– – – – –
1 038
–(1 038)
Share capital movements
5
54
(54)
– – – – – –
Annual distribution paid to shareholders
5
(55)
– – – –
(159)
–(214)
Repurchase of own shares
6
– – – – –
(1 416)
–(1 416)
Currency translation of share capital
6 – – – – –
(6)
–Balance at 31 March 2021
6
95
152 040
(1 416)
138
112
1 835
(89)
152 715
1 During the current year the company made a decision to present treasury shares (a component of share premium) separately within equity. Refer to note 2.
2 As required by article 29 of the company’s articles of association, the company holds a legal reserve for the conversion of A1 shares to A2 shares when the conversion criteria are triggered.
3 This component of equity forms part of ‘Legal reserves’ of the company.
4 Relates predominantly to the company’s investment at fair value through other comprehensive income. Refer to note 4.
5 Share capital movements relate to the net increase in the nominal value of the ordinary shares N in respect to those shareholders who elected the distribution in relation to the 2021 financial year in the form of capital repayment. Annual distribution paid to shareholders relates to
the actual capital and dividend payments made to shareholders during the financial year. Refer to note 9.
6 Relates to repurchase of own shares as per the share repurchase programme. Refer to note 9.
The accompanying notes are an integral part of these company financial statements.
251
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Other information
Company statement of cash flows
for the year ended 31 March 2022
31 March
Notes
2022
US$’m
2021
US$’m
Cash flows from operating activities
Cash generated/(utilised) in operations
17
6 298
(8)
Interest income received
35
99
Interest expense paid
(300)
(178)
Net cash generated from/(utilised in) operating activities
6 033
(87)
Cash flows from investing activities
Loans advanced to group companies
(7 920)
(5 093)
Loans repaid by group companies
741
1 192
Acquisition of Naspers shares
4
(1 287)
(2 350)
(Acquisition of)/proceeds from short-term investments
7
(2 711)
2 628
Capital repayment received from MIH Internet Holdings B.V.
3
8 708
–Net cash utilised in investing activities
(2 469)
(3 623)
Cash flows from financing activities
Proceeds from issue of share capital
9
66
–Proceeds from long-term loans raised
11
9 211
4 386
Repayments of long-term loans
11
(1 578)
–
Dividends paid to shareholders
9
(104)
(159)
Capital repayments to shareholders
9
(134)
(55)
Repurchase of own shares
9
(4 995)
(1 416)
Repayment of current receivables by group companies
–
22
Other financing activities
(97)
(3)
Net cash generated from financing activities
2 369
2 775
Net increase/(decrease) in cash and cash equivalents
5 933
(935)
Foreign exchange translation adjustments on cash and cash equivalents
48
(4)
Cash and cash equivalents at the beginning of the year
2 337
3 276
Cash and cash equivalents at the end of the year
8
8 318
2 337
The accompanying notes are an integral part of these company financial statements.
Prosus annual report 2022
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Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
for the year ended 31 March 2022
1. Principal accounting policies
General information
Prosus N.V. (Prosus or the company) is a public limited liability company incorporated under Dutch law, with its registered head
office located at Symphony Offices, Gustav Mahlerplein 5, 1082 MS Amsterdam, the Netherlands (registered in the Dutch
commercial register under number 34099856). Prosus is a subsidiary of Naspers Limited (Naspers), a company incorporated in
South Africa. Prosus is listed on the Euronext Amsterdam stock exchange, with a secondary listing on the Johannesburg Stock
Exchange (JSE) Limited and A2X Markets in South Africa. The principal activities of the company are to operate as a holding
company for its internet assets and provide equity funding to the subsidiaries of the Prosus group.
Basis of preparation and accounting policies
IFRS compliance
The company financial statements are presented in accordance with, and comply, in all material respects, with the International Financial
Reporting Standards (IFRS) as adopted by the European Union (IFRS-EU). All standards and interpretations issued by the International
Accounting Standards Board (IASB) and the IFRS Interpretations Committee have been endorsed by the European Union (EU). The
accounting policies applied by Prosus also comply with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code.
Accounting policies
The accounting policies of the company are the same as those of the Prosus group, where applicable (refer to the accounting policies
in the consolidated financial statements), specifically with regard to financial assets measured at amortised cost.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less accumulated impairment losses.
Non-cash distributions to controlling shareholders/distributions from investments in subsidiaries
When the company declares a non-cash distribution to its controlling shareholders, it recognises the distribution when it is
appropriately authorised. Non-cash distributions to controlling shareholders are common control transactions and are therefore
measured at the respective carrying amounts of the assets distributed.
Non-cash distributions received from the company’s investments in subsidiaries are measured at the fair value of the non-cash
assets distributed.
IFRS 9
Financial Instruments
(IFRS 9)
Classification of loans to subsidiaries
Loans to subsidiaries and related party receivables are classified as financial assets at amortised cost as these items are held
within a business model whose objective is to hold assets to collect contractual cash flows, and its contractual cash flows represent
solely payments of principal and interest on the amount outstanding. In making this assessment, the company considers the effect
of terms (including conversion, prepayment and extension features) that may affect the timing and/or amounts of cash flows.
Measurement of financial assets at amortised cost
The company applied the measurement provisions of IFRS 9, including those relating to impairment allowances on financial assets
at amortised cost, to all financial instruments within the measurement scope of IFRS 9. The company’s impairment methodology
related to financial assets at amortised cost is detailed in note 5 of the company financial statements.
253
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Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
1. Principal accounting policies
continued
Basis of preparation and accounting policies
continued
Dividend income
Dividend income is recognised when declared by the company’s subsidiaries and the company has a right to payment. Dividend
income is recognised in the income statement unless the dividend clearly represents a recovery of part of the cost of investment.
Dividend income is presented under operating activities in the statement of cash flows.
Impairment of investments
The company periodically (at least once a year at reporting date) evaluates the carrying value of assets when events and
circumstances indicate that the carrying value may not be recoverable. Factors that the company considers important, which could
trigger an impairment review, include, but are not limited to, significant underperformance relative to historical or projected future
operating results, significant changes in the manner of use of the acquired assets or the strategy for the company's overall business,
significant negative industry or economic trends that are likely to prevail into the long term and the market capitalisation of listed
investments relative to its net book value. The carrying value of an asset is considered impaired when the recoverable amount of
such an asset is less than its carrying value. In that event, a loss is recognised based on the amount by which the carrying value
exceeds the recoverable amount of the asset.
An impairment loss is directly recognised in the income statement, while the carrying amount of the asset concerned is concurrently
reduced.
Accounting judgements and sources of estimation uncertainty
The preparation of the company financial statements necessitates the use of estimates, assumptions and judgements by management.
These estimates, assumptions and judgements affect the reported amounts of assets, liabilities and contingent assets and liabilities at
the statement of financial position date as well as the reported income and expenses for the year. Although estimates are based on
management’s best knowledge and judgement of current facts as at the statement of financial position date, the actual outcome
may differ from these estimates. Estimates and/or judgements are made regarding the accounting treatment of the share exchange
transaction with Naspers shareholders and the measurement of the residual interest in the Naspers group (as disclosed in note 4 in
the consolidated financial statements), identifying impairment triggers for the impairment of investments in subsidiaries (refer to note 3),
the impairment considerations for the expected credit losses of related party loans and receivables (refer to note 5) and the
judgements related to taxation (refer to note 16).
2. Significant changes in financial position and performance during the reporting period
Prosus share exchange with Naspers shareholders
In August 2021, the group completed a voluntary share exchange offer to Naspers shareholders.
Refer to note 4 of the consolidated financial statements for the accounting treatment for the above transaction.
Presentation of treasury shares
The company made a decision to present the treasury shares separately in the statement of changes in equity. The company
considers that the change in presentation provides more relevant information about the treasury shares held by Prosus subsequent
to the share repurchase programme.
At 31 March 2021, the company held 11 874 493 ordinary shares N as treasury shares. These shares were acquired as part of the
share repurchase programme that began in October 2020. The shares repurchased during the year ended 31 March 2021 were
measured at the cost on the date of repurchase and were recognised as treasury shares in ‘Share premium’ on the statement of
financial position.
As at 31 March 2021, the treasury shares were recognised against share premium and have subsequently been presented separately
within the statement of changes in equity during the current period. The treasury shares are still considered a component of share
premium. The separate presentation of treasury shares has no change on the company’s overall equity; however, comparative figures
on the statement of financial position have been re-presented for the separate presentation of treasury shares between ‘
S
hare
premium’ and
‘T
reasury shares’ on the statement of changes in equity.
Prosus annual report 2022
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Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
2. Significant changes in financial position and performance during the reporting period
continued
Prosus share exchange with Naspers shareholders
continued
Presentation of treasury shares
continued
Below is a summary of the impact of the separate presentation of the treasury shares between ‘
S
hare premium’ and ‘ T
reasury
shares’ on the statement of changes in equity as at 31 March 2021:
Company statement of changes in equity
Year ended 31 March 2021
Previously
reported
US$’m
Separate
presentation
US$’m
Re-presented
US$’m
Share capital
95
–
95Share premium
150 624 1 416 152 040
Treasury shares
–
(1 416) (1 416)
Other reserves
250
–
250Retained earnings
1 835
–
1 835Undistributed results
(89)
–
(89)Shareholders’ equity
152 715
–
152 7153. Investments in subsidiaries
The following information relates to Prosus N.V.’s direct interest in its subsidiaries:
Name of subsidiary
Functional
currency
Effective percentage
interest
Direct investment
in shares
Nature of
business
Country of
incorporation
2022
%
2021
%
2022
US$’m
2021
US$’m
Unlisted companies
MIH Internet
Holdings B.V.
US$
100.0
100.0
150 306
153 514
Investment
holding
The
Netherlands
MIH Middle East
Holdings B.V.
US$
–
100.0
–
–Investment
holding
The
Netherlands
150 306
153 514
Below is a summary of the movements in the company’s investments in subsidiaries:
31 March
2022
US$’m
2021
US$’m
Carrying amount as at 1 April
153 514
149 789
Movements during the year
(3 208)
3 725
Capital repayments
(8 708)
–
Loan capitalisations
5 500
3 725
Carrying amount as at 31 March
150 306
153 514
Changes in investments in subsidiaries for the year ended 31 March 2022
The company’s significant corporate transactions related to its investments in subsidiaries for the year ended 31 March 2022 are as
follows:
Capital repayments
During the current year, MIH TC Holdings Limited (the company’s indirect subsidiary holding the investment in Tencent) sold 2% of
Tencent’s issued share capital for US$14.6bn. These proceeds from the sale were declared as a dividend to MIH Internet Holdings B.V.
MIH Internet Holdings B.V. subsequently declared the US$14.6bn as a divided to the company. The company recognised US$8.7bn
as a capital repayment against the cost of its investment in MIH Internet Holdings B.V. The capital repayment represents a recovery
of part of the cost of the investment in Tencent.
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Notes to the company financial statements
continued
for the year ended 31 March 2022
3. Investments in subsidiaries
continued
Changes in investments in subsidiaries for the year ended 31 March 2022
continued
Loan capitalisations
During the current year, the company converted US$5.50bn of its balance receivable from MIH Internet Holdings B.V. into equity.
Funds provided to MIH Internet Holdings B.V. are primarily to finance various corporate transactions including mergers and
acquisitions of the group. The decision in relation to amounts capitalised is determined based on the nature of the corporate
transaction and whether this is best provided via loan financing or a capital contribution.
Impairment assessment
MIH Internet Holdings B.V. is the company’s only investment in subsidiary and it directly or indirectly holds all of the Prosus group's
investments comprising listed and unlisted associates and subsidiaries. At the end of each year, the company assesses whether
there is an indication that its investment in subsidiary is impaired. Decline in the market capitalisation of the company, its indirect
listed investments and changes in the discount rates used to determine the value in use of the unlisted investments are considered
impairment indicators. Accordingly, the company performed an impairment assessment of its investment in subsidiary.
The impairment assessment is performed at the level of MIH Internet Holdings B.V.
The recoverable amount of MIH Internet Holdings B.V. is the sum-of-parts of the underlying listed investments (including Tencent) and
non-listed ecommerce investments using a combination of quoted prices (for some of the listed investments) value-in-use calculations
and recent funding transactions that occurred during the current year. The value in use was determined using the discounted cash flow
method. The group used 10-year projected cash flow models as these businesses have monetisation timelines longer than five years.
Forecasts are approved by senior management and/or the various boards of directors of group companies.
The company’s impairment assessment takes into account that, in most instances, longer forecast periods are required for many
ecommerce businesses, due to the fact that ecommerce businesses generally only reach maturity once sufficient market share has
been gained, the businesses have reached the appropriate scale and have become revenue generative/profitable.
Key assumptions in estimating these future cash flows over the forecast period include the entity’s ability to capture the required
market share and the additional investment required in order for it to reach the appropriate scale. The value-in-use calculations
determined the equity values for the non-listed ecommerce portfolio which took into account the following key assumptions:
•
Revenue and expenses were based on past experience and management's future expectations of business performance.
• The growth rates were consistent with publicly available information relating to long-term average growth rates for the respective
countries in which the entities operate or, where more appropriate, the growth rate of the cash-generating units.
• The discount rates reflected both the time value of money and other market-specific risks relating to the respective entity. The
company applied post-tax discount rates in calculations as value in use was determined using post-tax cash flows. Discount rates
ranged between 9% and 25%.
• The terminal growth rates considered the steady growth rates that would appropriately extrapolate cash flows beyond the
forecast periods. Terminal growth rates ranged between 2% and 7%.
Based on the sum of the fair values of listed and non-listed significant investments, the recoverable amount of MIH Internet Holdings
B.V. significantly exceeds the carrying amount of US$150.3bn. Accordingly, there was no impairment loss recognised.
As part of our impairment testing, we performed sensitivity analyses on the underlying discounted cash flow calculations. These
analyses reveal that the values are highly sensitive and adjustments to the expected future cash flows, or higher discount rates,
could result in an impairment. The main inputs for the expected future cash flows are revenue growth, profit margins, discount rates
and long-term growth rates on which sensitivity analyses have been prepared. Reasonable possible changes on the revenue
growth rates, profit margins and discount rates used to estimate future performance have been assessed as to whether it impacts
the recoverable amounts of the company’s investments in subsidiaries. It has been determined that some investments are more
sensitive to changes than others. The forecast annual revenue growth rates assumed for the investments in subsidiaries range
between 6% and 60%.
As part of our impairment testing, we also compared the sum of the total value of the company’s underlying assets, as well as the
carrying amounts, to the market capitalisation of the company. The market capitalisation of US$76.8bn as at 31 March 2022 shows a
discount to the carrying amount of the company’s shareholders’ equity based on IFRS. We considered that it is common that investment
holding companies trade at a discount to the fair value on the controlling basis of their underlying assets. Holding company discounts
vary significantly but are normally in the 10% to 40% range, although, in some cases, this can extend to over 50%. The reasons for
holding company discounts can vary according to each company’s specific circumstances, but can include management costs, tax
leakage, governance and shareholder structure, information asymmetry and perceived reinvestment risk.
Since the listing in 2019, Prosus has mostly been trading between a 15% and 35% discount to its equity value. The total market value
of the listed marketable securities held by Prosus N.V. at 31 March 2022 was approximately US$141bn. Based on our analysis, we
conclude that this discount does not – as such – result in an additional reduction of the value determined under IAS 36 used in the
impairment assessment of the company’s subsidiaries.
If either the pre- or post-tax discount rate applied to cash flows were to increase relatively by 5% or the growth rate used to extrapolate
cash flows were to decrease relatively by 5%, or if both the discount rate and the growth rate were to increase and decrease relatively
by 5% respectively, there would be no impairments that would have to be recognised.
Prosus annual report 2022
256
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
3. Investments in subsidiaries
continued
Changes in investments in subsidiaries for the year ended 31 March 2022
continued
MIH Middle East Holdings B.V.
During the current year, the company contributed its subsidiary MIH Middle East Holdings B.V. to MIH Internet Holdings B.V.
Changes in investments in subsidiaries for the year ended 31 March 2021
The company’s significant corporate transactions related to its investments in subsidiaries for the year ended 31 March 2021 are
as follows:
Loan capitalisations
On 18 December 2020, the company converted US$525m of its balance receivable from MIH Internet Holdings B.V. into equity.
On 31 March 2021, the company converted a further US$3.20bn of its balance receivable from MIH Internet Holdings B.V. into equity
in exchange for one ordinary share in the capital of MIH Internet Holdings B.V.
Impairment assessment
In light of the Covid-19 pandemic and losses incurred in some of the company’s Ecommerce businesses, the company assessed
whether its investments should be impaired. The impairment assessment was performed at the level of MIH Internet Holdings B.V.
As the fair value of MIH Internet Holdings B.V.’s direct listed investments (based on unadjusted quoted prices per balance sheet
date) significantly exceeded the carrying amount of US$153.51bn, the risk of impairment was considered to be remote.
As a result, no impairment triggers were identified for the investments in subsidiaries. No further impairment testing was performed
on the group’s non-listed ecommerce investments.
MIH Middle East Holdings B.V.
On 23 April 2020, the company, as the sole incorporator, incorporated MIH Middle East Holdings B.V. for the intention to optimise
the corporate structure of the group.
4. Investments at fair value through other comprehensive income
Fair value
31 March
2022
US$’m
2021
US$’m
Naspers Limited N shares (domiciled in South Africa)
–
2 526
Residual interest in the Naspers Limited group
385
–
Total investments at fair value through other comprehensive income
385
2 526
Prosus acquired a total of 15 992 042 Naspers N ordinary shares as part of the share purchase programme announced in October
2020. A total of 10 568 947 N ordinary shares for US$2.4bn were acquired during the year ended 31 March 2021 and a further
5 423 095 Naspers N ordinary shares for US$1.2bn were acquired between April and June 2021. The total purchase consideration
for the repurchase programme was US$3.6bn. Prior to the completion of the voluntary share exchange offer, these Naspers shares
were recognised as an investment at FVOCI. A revaluation loss of these Naspers shares of US$699.9m (2021: revaluation gain of
US$115.2m) was recognised in other comprehensive income and accumulated in equity.
In August 2021, the group completed a voluntary share exchange offer to Naspers shareholders. This offered Naspers shareholders
the opportunity to tender their existing Naspers N ordinary shares for newly issued Prosus ordinary shares N at an exchange ratio
of one (1) Naspers N ordinary share for 2.27443 Prosus ordinary shares N. The share exchange offer resulted in Prosus acquiring
a 45.8% fully diluted interest in Naspers in exchange for newly issued Prosus ordinary shares N. This interest, coupled with the 3.7%
shareholding Prosus previously acquired in Naspers, as part of the share repurchase programme, resulted in Prosus holding a 49.5%
fully diluted interest representing a 49.9% economic interest in Naspers.
The cross-holding agreement between Naspers and Prosus, which became effective simultaneous to the share exchange
programme, mandates that Prosus waives all rights to all distributions (including dividend flows) from its Naspers shares held, other
than the portion attributable to the residual interest in the Naspers group (primarily Takealot, Media24 and corporate entities). The
cross-holding agreement impacted the accounting of Naspers N ordinary shares held by Prosus. In August 2021, with the closing of
the voluntary share exchange programme, these shares were derecognised as an FVOCI financial instrument, with the amount
being transferred to share premium within equity.
The company simultaneously recognised a new FVOCI investment amounting to US$385m, representing its residual interest in the
Naspers group. The corresponding entries are the issue of Prosus ordinary shares N recognised in share capital/share premium of
US$38.64bn and a subsequent decrease of US$38.25bn in share capital/share premium, representing the shareholder distribution in
contemplation of a capital restructure. Refer to note 4 of the consolidated financial statements for the accounting treatment for the
above transaction.
257
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
5. Related party transactions and balances
Amounts due from group companies
31 March
2022
US$’m
2021
US$’m
MIH Internet Holdings B.V.
2 727
1 125
MIH Payments Holdings B.V.
8
– Movile International Holdings B.V.
–
2
Total amounts due from group companies
2 735
1 127
Less:
non-current portion of amounts owing from group companies
(2 727)
(1 049)
Current portion of amounts due from group companies
8
78
Amounts due to group companies
31 March
2022
US$’m
2021
US$’m
iFood Holdings B.V.
3
–Movile International Holdings B.V.
56
42
MIH Nordics Holdings B.V.
–
1OLX Global B.V.
18
– Total amounts due to group companies
77
43
Current positions due from or due to group companies are unsecured, denominated in various currencies, non-interest bearing and
repayable on demand. Accordingly, the effect of discounting on these loans is insignificant. The non-current loan is denominated in
euro and US dollar. The euro-denominated amount bears interest of three-month EURIBOR plus 1.75%. The US dollar-denominated
amount is non-interest bearing and repayable on demand. The loan amount shall be repayable in full by the borrower on or before
31 March 2027.
The measurement of the impairment loss allowance on these loans and receivables is based on the assessment of whether there has
been a significant increase in credit risk. Management has assessed that the credit risk of these loans and receivables is based on
the credit worthiness of the borrowers and their ability to repay the amounts owing. There has been no significant increase in the
credit risk of the borrowers during the financial year. Consequently, the impairment loss allowance is based on a 12-month expected
credit loss model.
At 31 March 2022 and 2021, the impairment allowances related to loans to group companies were not significant on account of the
loan counterparties’ holdings of substantial highly liquid marketable securities, and/or cash/short-term cash investment balances. These
holdings by the counterparties significantly exceed their obligations, excluding their liabilities towards the company, and accordingly
mitigate the credit risk arising from these loans.
Based on the principal activities of the company as a holding company, the transactions disclosed in the notes are related party
transactions. The financial statement impact and nature of the transactions are disclosed in the respective notes.
The company and its subsidiaries benefit from the services of Naspers as a result of the shared corporate and governance structures.
The corporate costs for these services are included in note 21 of the consolidated financial statements. Post the listing of the company
in September 2019, all corporate costs and management fees are carried by the company’s indirect subsidiary, Prosus Services B.V. As
a result, the company has not recognised any employee costs (refer to note 13) and revenue in the current year.
The non-current amount due from MIH Internet Holdings B.V. in the amount of US$2.73bn is unsecured and denominated in euro
(€229.5m) and US dollar (US$2.47bn). The company now provides MIH Internet Holdings B.V. with access to liquidity to fund its
subsidiaries. All amounts drawn from the facility are repayable in full by 31 March 2027.
The euro-denominated amount was interest bearing at three-month EURIBOR plus a 1.75 percentage point mark-up (with a minimum
interest rate of 1.75 percentage points). All interest on the amounts due under the loan facility agreement shall be paid at the end of
each quarter (ie ultimately on 31 March, 30 June, 30 September and 31 December, each such date is referred to as due date). To the
extent that the interest due and payable at the due dates remains unpaid, the interest amount is added to the outstanding balance
under the facility at the end of each quarter during the term of the facility and becomes part of the balance on which future interest
is calculated.
The US dollar-denominated amount is non-interest bearing and repayable in full on or before 31 March 2027. It is therefore presented
as a non-current receivable. The outstanding US dollar amount is intended to be (partially) converted into equity once approved by
management. Refer to note 3.
During the year, the company provided funding to MIH Internet Holdings B.V. for an amount of US$7.92bn, received a repayment of
US$729m and capitalised US$5.50bn (refer to note 3) of the loan balance. The funding was provided for future corporate transactions
and other general corporate purposes.
Prosus annual report 2022
258
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
5. Related party transactions and balances
continued
Dividend distribution
At the prior year annual general meeting, the shareholders approved the proposed capital distribution of 11 euro cents per listed
ordinary share N and the dividend distribution of 0.602 euro cents per ordinary share A1. Holders of ordinary shares N could elect
to receive a dividend distribution instead of a capital distribution. 96 768 ordinary shares N were unclaimed as of 31 March 2021.
The dividend distribution included US$104.2m paid to Naspers (refer to note 9).
Directors’ remuneration
Refer to note 41 of the consolidated financial statements for details of the Prosus group’s remuneration for directors and key
management.
The group has not provided any personal loans, advances or guarantees to the executive and non-executive directors. Additional
information on the remuneration and share-based compensation of members of the board and the remuneration of key management
is disclosed in the remuneration report.
6. Other receivables
31 March
2022
US$’m
2021
US$’m
Prepaid expenses
15
12
Other
2
8
17
20
7. Short-term investments
The carrying values of short-term investments as at 31 March are shown below.
Weighted
average
interest rate
31 March
2022
US$’m
2021
US$’m
Deposits and money market funds
0.44%
3 921
1 209
Accrued interest income
3
2
3 924
1 211
The deposits and money market funds of US$3.92bn (2021: US$1.21bn) are primarily denominated in US dollar.
The above investments have maturity dates (from the date of acquisition) of between three and 12 months and have accordingly not
been disclosed as part of cash and cash equivalents.
Short-term investments are classified as financial assets at amortised cost. Due to their short-term nature, the carrying values of these
investments are considered to be a reasonable approximation of their fair values. None of the company’s short-term investments were
past due or subject to significant impairment allowances as at 31 March 2022 and 31 March 2021.
Most short-term investments are held in the same currency as the company’s functional currency. However, there are certain money
market investments held in euro, which give rise to foreign currency risk. Due to the nature of short-term investments, there is an
insignificant exposure to price risk.
Refer to note 18 for further information regarding the credit risk and foreign currency risk of short-term investments.
8. Cash and cash equivalents
31 March
2022
US$’m
2021
US$’m
Cash at bank and on hand
8 318
2 337
At the company’s free disposal. Included in cash at bank and on hand is an amount of US$927.8m (2021: US$996.2m) which represents
money market investments held with major banking groups and high-quality institutions that have AAA money market fund credit
ratings from internationally recognised ratings agencies.
259
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
9. Share capital and premium
31 March
2022
US$’m
2021
US$’m
Authorised
5 000 000 000 ordinary shares N of €0.05 each (2021: 5 000 000 000)
10 000 000 ordinary shares A1 of €0.05 each (2021: 10 000 000)
10 000 ordinary shares A2 of €50.00 each (2021: 10 000)
3 000 000 000 ordinary shares B of €0.05 each (2021: nil)
Issued and fully paid
2 073 643 605 ordinary shares N (2021: 1 624 652 070)
114
94
4 456 650 ordinary shares A1 (2021: 3 511 818)
1
1
1 128 507 756 ordinary shares B (2021: nil)
62
–
Share capital
177
95
Share premium
149 098
152 040
Treasury shares
(6 411)
(1 416)
Share capital and premium
142 864
150 719
Equity compensation plans administered by Naspers group share trusts hold 4 543 614 (2021: 2 736 666) of the ordinary shares N.
Share repurchase programme
Purchase of Naspers N ordinary shares
Prosus acquired a total of 15 992 042 Naspers N ordinary shares as part of the share purchase programme announced in October
2020. A total of 10 568 947 N ordinary shares for US$2.4bn were acquired during the year ended 31 March 2021 and a further
5 423 095 Naspers N ordinary shares for US$1.2bn were acquired between April and June 2021. The total purchase consideration
for the repurchase programme was US$3.6bn. The shares are held by Prosus and are included in the 49.5% fully diluted investment
in Naspers. At the closing of the voluntary share exchange programme, the company derecognised the Naspers shares as an FVOCI
investment, recognised the residual interest in the Naspers group and recognised amounts in equity representing the issue of share
capital and the shareholder distribution in contemplation of a capital restructure. Refer to note 4 of the consolidated financial
statements for the accounting treatment for the voluntary share exchange programme.
Repurchase of Prosus ordinary shares N
In August 2021, Prosus commenced an on-market share repurchase programme of Prosus’s ordinary shares N for a total
consideration of US$4.99bn from its free-float shareholders in support of delivering the overall benefits of the Prosus voluntary share
exchange offer to Naspers Limited ordinary shareholders N completed on 16 August 2021. The total consideration includes costs
and related taxes. 69 825 860 Prosus ordinary shares N were repurchased from the share repurchase programme which was
completed in February 2022.
In the prior year, between October and February 2021, the company repurchased 11 874 493 Prosus ordinary shares N amounting
to US$1.4bn.
The company intends to cancel the ordinary shares N repurchased under this current and previous repurchase programme in due
course, so as to reduce its issued share capital.
Treasury shares
At 31 March 2022, US$6.41bn was recognised as treasury shares. The company holds a total of 69 825 860 ordinary shares N
(2021: 11 874 493) of the gross number of ordinary shares N in issue at 31 March 2022 as treasury shares. During the current year, the
company made a decision to show the treasury shares separately in the statement of changes in equity. The ordinary shares N were
recognised as treasury shares and are disclosed separately. The company considers that the change in presentation provides more
relevant information about the treasury shares held by Prosus subsequent to the share repurchase programme. The treasury shares
are a component of share premium.
In the 31 March 2021 financial year, the treasury shares were recognised within share premium. The treatment differed from the
consolidated financial statements due to the differences in share premium that arose on formation of the group. Refer to note 10 for
the reconciliation of consolidated and company equity. The company will hold these treasury shares until they are cancelled.
Prosus annual report 2022
260
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
9. Share capital and premium
continued
31 March
2022
Number of
shares
2021
Number of
shares
Movement in ordinary shares in issue during the year
Ordinary shares in issue at 1 April
1 628 163 888
1 628 163 888
Ordinary shares N issued to Naspers shareholders (share exchange transaction)
448 991 535
–
Ordinary shares A1 issued
944 832
–
Ordinary shares B issued to Naspers
1 128 507 756
–
Shares in issue at 31 March
3 206 608 011
1 628 163 888
Movement in ordinary shares N held as treasury shares during the year
Shares held as treasury shares at 1 April
11 874 493
–
Shares acquired under the share repurchase programme
57 951 367
11 874 493
Shares held as treasury shares at 31 March
69 825 860
11 874 493
31 March
2022
US$’m
2021
US$’m
Share premium
Balance at 1 April
150 624
152 094
Share capital increase
1
(326)
(212)
Share capital decrease
1
198
158
Repurchase of own shares
2
(4 995)
(1 416)
Issue of shares as part of the share exchange transaction
38 490
–
Impact of the share exchange transaction (capital restructure)
(41 304)
–
Balance at 31 March
142 687
150 624
1
increasingthe nominal value of an ordinary share N from 5 euro cents to 16 euro cents. After the distribution, the company amended its articles of association by decreasing the nominal
value of an ordinary share N from 16 euro cents to 5 euro cents. On 22 November 2021, the company amended its articles of association that required it to make a capital repayment to
shareholders of 14 euro cents per N ordinary share, by increasing the nominal value of an N ordinary share from 5 euro cents to 19 euro cents. After the distribution, the company amended its
articles of association by decreasing the nominal value of an N ordinary share from 19 euro cents to 5 euro cents. Refer to ‘Distribution to shareholders’ for more information below.
2
Distribution to shareholders
At the annual general meeting on 24 August 2021, the shareholders approved the proposed capital distribution of 14 euro cents per
listed N ordinary share, a dividend distribution of 1.19715 euro cents per A1 ordinary share and a dividend distribution of 0.000014 euro
cents per B ordinary share. Holders of N ordinary shares could elect to receive a dividend distribution instead of a capital distribution.
On 15 November 2021 the dividend distribution/capital repayment was paid.
261
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
9. Share capital and premium
continued
Voting and dividend rights
The company’s issued share capital at 31 March 2022 consists of 4 456 650 (2021: 3 511 818) ordinary shares A1, 1 128 507 756 ordinary
shares B and 2 073 643 605 (2021: 1 624 652 070) ordinary shares N. The ordinary shares N are listed on the Euronext Amsterdam stock
exchange with a secondary listing on the JSE and A2X
M
arkets, and, on a poll, carry one vote per share. The A1 and ordinary shares B are not listed on a stock exchange and, on a poll, carry one vote per share. The ordinary shares A1 automatically convert to ordinary
shares A2 carrying 1 000 votes per share, if Naspers makes, or is obliged to make, a filing with the Netherlands Authority for the
Financial Markets that it ceases to be entitled to exercise at least 50% plus one vote of the total number of voting rights that may be
exercised at a general meeting.
In terms of the company’s articles of association, ordinary shareholders N are entitled to dividends. The dividends declared to ordinary
shareholders A are equal to one fifth of the dividends to which Prosus free-float ordinary shareholders N are entitled. The dividends
declared to ordinary shareholders B are equal to one millionth of the dividends to which Prosus free-float ordinary shareholders N are
entitled.
In respect of all other rights, the ordinary shares A rank pari passu with the ordinary shares N of the company.
Capital management, unissued shares and valuation reserve
Refer to notes 23 and 24 of the consolidated financial statements for the Prosus group’s capital management policy and more details
regarding the nature of the valuation reserve.
10. Reconciliation between consolidated and company equity
Below is a reconciliation of the consolidated equity attributable to the shareholders of the company and the equity in the company
financial statements. The differences between total shareholders’ equity and total comprehensive income in the consolidated financial
statements and the company financial statements relate to the accounting of investments in subsidiaries at cost in the company
financial statements, related impairments, consolidated results of subsidiaries and equity-accounted earnings of the Prosus group’s
associates and joint ventures.
Reconciliation of consolidated income and equity attributable to shareholders of the group to company income and equity
attributable to owners of the company
31 March
31 March
2022
Equity
US$’m
2022
Profit/(loss)
US$’m
2021
Equity
US$’m
2021
Profit/(loss)
US$’m
Consolidated equity attributable to owners of the group
50 421
18 733
43 069
7 449
Reconciling items to consolidated equity attributable
to owners of the company
Share premium
110 085
–
150 106
–
Results from consolidation of subsidiaries, equity-accounted
investments and other movements
(50 941)
(12 698)
(34 761)
(7 538)
Other comprehensive income
(65)
–
(6 595)
–
Foreign currency translation reserve
358
–
1 130
–
Share-based compensation reserve
(3 223)
–
(2 446)
–
Business combination reserve
43 487
–
2 212
–
Company equity attributable to owners
150 122
6 035
152 715
(89)
The reconciling items for equity and income are further detailed below:
Reconciling item – movements in share premium
The share premium in the consolidated financial statements differs from the share premium in the company financial statements due
to the accounting for:
•
the share premium that arose on the formation of the Prosus group;
•
the capital repayments as part of annual shareholder distributions;
•
the treasury shares as a result of the share buyback programme in the prior year; and
•
the share exchange transaction.
Prosus annual report 2022
262
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
10. Reconciliation between consolidated and company equity
continued
Reconciling item – movements in share premium
continued
Share premium on formation of the group
The difference in share premium is as a result of the restructuring on formation of the Prosus group in 2019, particularly the acquisition
of MIH Services FZ LLC that held Naspers’s investment in Tencent Holdings Limited. The acquisition in the company financial statements
was recognised at fair value. In the consolidated financial statements this was accounted for as a common control transaction
recognised at the carrying value of Naspers’s consolidated financial statements in terms of the principles of predecessor accounting.
Capital repayments as part of annual shareholder distributions
Capital repayments in the company financial statements are recognised as a decrease in share premium. This differs from the consolidated
financial statements (through retained earnings) due to the differences in share premium that arose on formation of the group.
Treasury shares as a result of the share buyback programme
In the prior year the share premium decreased due to the share repurchase programme of Prosus ordinary shares N that was
completed in February 2021. The ordinary shares N repurchased are recognised as treasury shares. During the prior year the treatment
for treasury shares and capital repayment differs from the consolidated financial statements (through retained earnings) due to the
differences in share premium that arose on formation of the group.
In the current year the shares repurchased were presented separately as treasury shares. This is aligned with the accounting treatment
in the consolidated financial statements. Accordingly, the treatment of treasury shares is no longer a reconciling item between
company and consolidated equity. The separate presentation of treasury shares is detailed in note 2.
The share exchange transaction
The share exchange transaction in the company financial statements is accounted for as an increase in share capital and premium
with a subsequent decrease in share premium of US$38.25bn as a result of the capital restructure. In the consolidated financial
statements, the capital restructure was recognised as a decrease in the ‘
E
xisting business combination reserve’. Refer to note 4 of the consolidated financial statements for the accounting treatment.
Reconciling item – results from consolidation of subsidiaries, equity-accounted investments and other movements
The results from consolidation of subsidiaries, associates and joint ventures include the impact of consolidating results from the group’s
investments as well as the impact of the restructuring that occurred upon formation of the Prosus group.
The company’s total net profit for the year of US$6.04bn (2021: net loss US$89m) is lower compared to the group’s total profit for the
year of US$18.73bn (2021: US$7.40bn) in the consolidated financial statements. This is due to the consolidated profits from subsidiaries
and the equity-accounted earnings from associates and joint ventures.
Reconciling item – other comprehensive income
The consolidated financial statements’ ‘
O
ther comprehensive income’ includes net fair value gains and losses from the Prosus group’s
investments at fair value through other comprehensive income as well as the Prosus group’s share of equity-accounted investments’
share of other comprehensive income and changes in net asset value. The company’s gains or losses in other comprehensive income
relate only to the investment in Naspers.
Reconciling item – foreign currency translation reserve
The consolidated financial statements include the translation of the consolidated results of the foreign operations of the Prosus group’s
subsidiaries and the equity-accounted associates and joint ventures which are not recognised in the company financial statements.
Reconciling item – share-based compensation reserve
The consolidated financial statements include the expenses and accumulated reserves related to Prosus group’s share-based
compensation plans which are not recognised in the company financial statements.
Reconciling item – business combination reserve
The consolidated financial statements include common control transactions, and the recognition and subsequent measurement of
written put option liabilities related to the Prosus group’s transactions with non-controlling shareholders which are not recognised in
the company financial statements.
11. Long-term liabilities
31 March
31 March
Long-term
liabilities
2022
US$’m
Current
portion
2022
US$’m
Total
liabilities
2022
US$’m
Long-term
liabilities
2021
US$’m
Current
portion
2021
US$’m
Total
liabilities
2021
US$’m
Interest bearing:
Loans and other liabilities
15 368
–
15 3687 795
–
7 795Total liabilities
15 368
–
15 3687 795
–
7 795263
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
11. Long-term liabilities
continued
Interest bearing: Loans and other liabilities
Currency
of year-
end
balance
Year of
final
repayment
I
nterest
payments
Weighted
average
year-end
31 March
interest
rate
2022
US$’m
2021
US$’m
Unsecured
1
Publicly traded bond
2
US$
2025
Semi-annual
5.50%
225
1 200
Publicly traded bond
2
US$
2027
Semi-annual
4.85%
614
1 000
Publicly traded bond
US$
2030
Semi-annual
3.68%
1 250
1 250
Publicly traded bond
3
EUR
2028
Annual
1.54%
941
998
Publicly traded bond
4
EUR
2032
Annual
2.03%
830
879
Publicly traded bond
US$
2050
Semi-annual
4.03%
1 000
1 000
Publicly traded bond
US$
2051
Semi-annual
3.83%
1 500
1 500
Publicly traded bond
US$
2031
Semi-annual
3.06%
1 850
–Publicly traded bond
5
EUR
2029
Annual
1.29%
1 107
–
Publicly traded bond
5
EUR 2033
Annual
1.99%
941
–
Publicly traded bond
US$
2027
Semi-annual
3.26%
1 000
–
Publicly traded bond
US$
2032
–Semi-annual
4.19%
1 000
Publicly traded bond
US$
2052
Semi-annual
4.99%
1 250
–Publicly traded bond
6
EUR
2026
Annual
1.21%
553
–
Publicly traded bond
6
EUR 2030
Annual
2.09%
664
–
Publicly traded bond
6
EUR
2034
Annual
2.78%
719
–
Total facilities
15 444
7 827
Unamortised loan costs
(93)
(50)
Premium on euro bonds
3,4
17
19
15 368
7 796
1
2
3
period from, and including, three August 2020), resulting in a premium of €8.3m which is included in the fair value of the bond at initial recognition and is subsequently released over the term
of the bond.
4
period from, and including, 3 August 2020), resulting in a premium of €7.6m which is included in the fair value of the bond at initial recognition and is subsequently released over the term of
the bond.
5
6
Reconciliation of liabilities arising from financing activities
31 March
Interest-
bearing
liabilities
2022
US$’m
Interest-
bearing
liabilities
2021
US$’m
Balance at 1 April
7 795
3 432
New bonds issued
9 263
4 402
Premium on issued long-term liabilities
(2)
19
Repayments of bonds
(1 361)
–
Foreign exchange translation
(285)
(26)
Deferred issuing costs
(52)
(35)
Amortisation of issuing costs
10
3
Balance at 31 March
15 368
7 795
Less:
Current portion
–
–
Non-current liabilities
15 368
7 795
Prosus annual report 2022
264
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
12. Accrued expenses and other current liabilities
31 March
2022
US$’m
2021
US$’m
Accrued interest related to the bonds
124
80
Accrued expenses
3
8
Acquisition of Naspers shares
–
62
Other
8
–
135
150
13. Expenses by nature
Selling, general and administrative expenses include the following items:
31 March
2022
US$’m
2021
US$’m
Other purchases and expenses
12
9
Total expenses
12
9
Auditor’s remuneration is disclosed in note 14 of the consolidated financial statements.
As at 31 March 2022, the company had no permanent employees (2021: nil).
14. Dividend income
31 March
2022
US$’m
2021
US$’m
Dividend received from MIH Internet Holdings B.V.
1
6 472
–
Dividend income
6 472
–
1
share capital of Tencent of US$5.90bn.
15. Finance costs/income
31 March
2022
US$’m
2021
US$’m
Interest income
Loans and bank accounts
35
68
35
68
Interest expense
Loans and bank accounts
(353)
(234)
Other
–
–
(353)
(234)
Net gain/(loss) from foreign exchange translation and fair value adjustments on financial
instruments
On translation of assets and liabilities
190
88
Losses on derivative and other financial instruments
(222)
(78)
Fair value adjustments on financial instruments at fair value through profit or loss
1
–
Other finance (cost)/income – net
(31)
10
Finance costs – net
(349)
(156)
265
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
16. Taxation
31 March
2022
US$’m
2021
US$’m
Current taxation
(76)
76
Current year
(76)
76
Income tax credit per statement of comprehensive income
(76)
76
Reconciliation of taxation
Profit before taxation
6 111
(165)
Taxation at statutory rate of 25.00% (2021: 25.00%)
(1 540)
41
Adjusted for:
Non-deductible expenses
1
(141)
(22)
Non-taxable income
1
1 635
–
Unrecognised tax losses of the company
46
(19)
Income taxes from members within the fiscal unity
(76)
76
Income tax credit per statement of comprehensive income
(76)
76
1
financial instruments. The non-taxable income relates primarily to dividend income.
As at 31 March 2022, the company is the head of a fiscal unity comprising a number of group subsidiaries for Dutch corporate income
tax purposes.
In terms of Dutch tax law
(Invorderingswet)
, the members of the fiscal unity are jointly and severally liable for the payment of any Dutch
corporate income tax liability of the fiscal unity. The company is responsible for payments to the tax authorities (if any). For the year
ended 31 March 2022 the fiscal unity did not have a corporate income tax liability and it has sufficient carry forward losses available
to offset (future) taxable income.
Tax on profit before taxation is calculated based on the fiscal unity’s profit before tax taking into account losses available for setoff
from previous financial years (to the extent that they have not expired), the exempt profit components and the addition of non-
deductible costs.
The Dutch corporate income tax charge is calculated by applying the corporate income tax rate during this financial year of 25%
and 25.8% (2021: 25%) to the fiscal profit of the company. Furthermore, as head of the fiscal unity for corporate income tax purposes,
the company reflects the recharges of the calculated tax of other participating entities in the fiscal unity in line with the principles
described below.
During the current financial year the company reviewed and amended its settlement principles of corporate income tax positions within
the fiscal unity. The company will no longer seek to recover corporate income tax from entities within the corporate function. In the prior
financial year, MIH Internet Holdings B.V., a direct subsidiary of the company within the corporate function and a member of the fiscal
unity, recognised a fiscal profit and accordingly an income tax expense (US$76.45m). This resulted in MIH Internet Holdings B.V. owing
a liability in this amount to the company, due to the company being the head of the fiscal unity and liable for the settlement of this
income tax liability to the tax authorities.
As a consequence of the amendment in the settlement principles, the income tax amounts recognised in the prior financial year
statement of comprehensive income of the company and MIH Internet Holdings B.V., have been reversed.
As of 31 March 2022, the company has tax losses carried forward, available for setoff against future profits of approximately US$2.01bn
(2021: US$1.91bn). A summary of the tax losses carried forward at 31 March 2022 are set out below:
Total
US$’m
Indefinite based on assessment received from Dutch tax authorities
1 458
Indefinite based on filed corporate income tax returns
397
Indefinite based on management’s best estimate of 2021/2022
151
Expires in year 4
–
Expires in year 5
–
Non-expiring/expires after year 5
–
2 006
This amount is based on the assessment received from the Dutch tax authorities for the years up to and including 2018/2019, the filed
2019/2020 and 2020/2021 corporate income tax returns and management’s best estimate of the 2021/2022 corporate income tax position.
As it is not considered probable that the company and/or the fiscal unity that it forms with its group subsidiaries will generate taxable
income in the future, no deferred tax asset for carry-forward losses has been recognised.
Prosus annual report 2022
266
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
17. Cash generated from/(utilised in) operations
31 March
2022
US$’m
2021
US$’m
Profit/(loss) before taxation per statement of comprehensive income
6 111
(165)
Adjustments:
Non-cash and other
289
159
Finance (income)/costs – net
291
161
Impairment of receivables
–
1
Other
(2)
(3)
6 400
(6)
Working capital
(102)
(2)
Cash movement in other receivables
(8)
1
Cash movement in trade payables and accruals
(94)
(3)
Cash generated from/(utilised in) operations
6 298
(8)
18. Financial risk management
Foreign exchange risk
Refer to note 39 of the consolidated financial statements for the Prosus group’s foreign exchange risks policy.
Following the acquisition of the Prosus group’s interests in Delivery Hero SE during the 2018 financial year, the group elected to hedge
the foreign exchange risk resulting from the difference between the functional currency of Delivery Hero (euro) and the currency of the
funding incurred to acquire the investment (US dollar). To hedge the exposure to the foreign currency translation risk arising on
translation of the Prosus group’s euro-denominated equity-accounted investment at a consolidated level, the company entered into a
cross-currency interest rate swap agreement. The cross-currency interest rate swap agreement has been designated as a hedge of
the net investment in Delivery Hero SE in the consolidated financial statements.
The cross-currency interest rate swap matures in July 2025. In July 2021 the company issued US$1.85bn 3.061% notes due in 2031, €1bn
1.288% notes due in 2029 and €850m 1.985% notes due in 2033 (the bonds). The purpose of the offerings was to raise proceeds for
general corporate purposes, including debt refinancing, which took the form of a tender offer made in relation to its bonds maturing in
2025 and 2027. Part of the notes due in 2025 was linked to a cross-currency interest rate swap. Due to the part settlement of the 2025
bond notes, the company partly settled the cross-currency interest rate swap (the swap) related to the portion of the bond notes that
was settled. The repayment of the swap amounted to US$20m in July 2021, representing the fair value of the portion settled at that
date. On maturity the group will exchange €200m for US$225m.
The company entered into a deal contingent forward (DCF) in which it locked in on the US dollar/Indian rupee exchange rate in order
to settle the acquisition of the Indian rupee investment in IndiaIdeas.com Limited (BillDesk). The settlement of the DCF is subject to the
competition commission approval to acquire the investment. The DCF is disclosed with the forward exchange contracts of the company.
Foreign currency sensitivity analysis
The company’s functional currency is the US dollar, but is also exposed to the euro through loan receivables that are denominated in euro.
The sensitivity analysis below details the company’s sensitivity to a 10% increase (2021: 10% increase) in the dollar against 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, derivative
financial instruments and adjustments to translation at the period-end for the above percentage change in foreign currency rates.
A 10% increase (2021: 10% increase) of the US dollar against the euro would result in an increase in net profit after tax of US$372.7m
(2021: US$38.6m increase in net profit after tax). The weakening of the US dollar (increase in US dollar/euro rate) will result in a
US$24.4m decrease in net profit after tax for the year (2021: US$121.8m decrease) related to the cross-currency interest rate swap.
Credit risk
The company has made various loans to its subsidiaries. The maximum potential exposure to credit risk for the loans is their carrying
amount. As the amounts owing are due by group companies, the impairment assessment for these related party receivables takes into
account the default of the Naspers group on external debt (being the ultimate holding company able to repay debt on behalf of group
companies) as well as the existence of collateral, letters of support by group companies and budgets and forecasts of group companies.
As at 31 March 2022 and 31 March 2021 no impairment losses were recognised for amounts owing from group companies.
Refer to note 23 of the consolidated financial statements for details regarding the Prosus group’s capital management policies.
Guarantees
The company has provided a guarantee for the payment obligations of OLX Group GmbH under a lease agreement, amounting to
US$32.1m (2021: US$32.2m) for the period of the lease. The guarantee expires on 22 December 2027.
The maximum potential exposure to credit risk for the lease amounts to US$32.1m (2021: US$32.2m). Expected credit losses for these
guarantees are not material. The company has issued a declaration of joint and several liabilities for Prosus Services B.V. in accordance
with article 403 of Book 2 of the Dutch Civil Code.
267
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
18. Financial risk management
continued
Liquidity risk
Carrying
value
US$’m
Contractual
cash flows
US$’m
0 – 12
months
US$’m
1 – 5
years
US$’m
5 years +
US$’m
31 March 2022
Non-derivative financial liabilities
Interest bearing: long-term liabilities
(15 368)
(22 721)
(18 694)(354)
(3 673)
Accrued expenses and other current liabilities
(135) (135) (135)
– –
Trade payables
– – – – –
Derivative financial assets/(liabilities)
Forward exchange contracts – inflow
27
4 769 4 769
– –
Forward exchange contracts – outflow
(12)
(4 754) (4 754)
– –
Cross-currency interest rate swap – inflow
2
268
–12
256
Cross-currency interest rate swap – outflow
–
(267)
–(8)
(259)
31 March 2021
Non-derivative financial liabilities
Interest bearing: Long-term liabilities
(7 796)
(12 022)
(211)
(2 558)
(9 253)
Accrued expenses and other current liabilities
(150) (150) (150)
– –
Derivative financial assets/(liabilities)
Forward exchange contracts – inflow
1 1 1 – –
Forward exchange contracts – outflow
(2) (2) (2)
– –
Cross-currency interest rate swap – inflow
–
977
–43
934
Cross-currency interest rate swap – outflow
(30)
(1 011)
(30)(981)
–
Revolving credit facility
The company has an undrawn revolving credit facility (RCF) of US$2.5bn which matures in March 2027 with the option of two extensions
of one year each. The RCF is undrawn and is denominated in US dollar and euro and bears interest at a secured overnight financing
rate (SOFR) plus a variable mark-up based on credit rating varying between 0.65% and 1.10% before commitment and utilisation fees.
The company's obligations under the RCF were guaranteed by its ultimate parent company, Naspers. Naspers was removed as
guarantor of the RCF effective 2 April 2020.
The company has specific financial covenants in place regarding the RCF, all of which were complied with during the reporting period.
These financial covenants are linked to various financial metrics.
The upfront facility and arrangement fees paid in respect of the RCF are amortised over the period of the facility. Since the RCF has
been fully repaid for a number of years and remains available at the balance sheet date, the facility and arrangement fees have been
included in the prepayments and other receivables.
31 March
2022
US$’m
2021
US$’m
Facility arrangement fees
62
56
Fees related to revolving credit facility
(50)
(45)
Accumulated amortisation of fees
12
11
Interest rate risk
Refer to note 39 of the consolidated financial statements for the Prosus group’s interest rate risks policy.
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 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:
European repo rate: increases by 100 basis points (2021: increases by 100 basis points).
American and European Interbank rates: increase by 100 basis points each (2021: increase by 100 basis points each).
Interest sensitivity analysis
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 31 March 2022 would increase by US$11.84m (2021: US$5.70m).
Prosus annual report 2022
268
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
19. Fair value of financial instruments
The carrying values, net gains or losses recognised in profit and loss, total interest income, total interest expense and impairment per
class of financial instrument are as follows:
31 March 2022
Carrying
value
US$’m
Net gains/
(losses)
recognised in
profit or loss
US$’m
Impairment
US$’m
Total
interest
income
US$’m
Total
interest
expense
US$’m
Assets
Amounts due from group companies
2 735
(13)
– 8 –
Investments at fair value through other comprehensive income
385
– – – –
Derivative financial instruments
27
12
– – –
Other receivables
2 – – – –
Short-term investments
3 924
(63)
– 9 2
Cash and cash equivalents
8 318
(30)
–
19
5Total
15 391
(94)
–
36
7Liabilities
Long-term liabilities
15 368
68
– –
362
Amounts due to group companies
77
5 – – –
Derivative financial instruments
12
– – 7 –
Accrued expenses and other current liabilities
135
8 – – –
Total
15 592
81
– 7
362
The carrying values, net gains or losses recognised in profit or loss, total interest income, total interest expense and impairment per
class of financial instrument are as follows:
31 March 2021
Carrying
value
US$’m
Net gains/
(losses)
recognised in
profit or loss
US$’m
Impairment
US$’m
Total
interest
income
US$’m
Total
interest
expense
US$’m
Assets
Amounts due from group companies
1 127
51
–
15
–Investments at fair value through other comprehensive income
2 526
– – – –
Derivative financial instruments
1 – – – –
Other receivables
8 – – – –
Short-term investments
1 211
5 –
21
–Cash and cash equivalents
2 337
6 –
32
–Total
7 210
62
–
68
–Liabilities
Long-term liabilities
7 795
26
– –
229
Derivative financial instruments
32
(78)
– – –
Amounts due to group companies
43
1 – – –
Accrued expenses and other current liabilities
151
(1)
– – –
Total
8 021
(52)
– –
229
269
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
19. Fair value of financial instruments
continued
The carrying values of all financial instruments, apart from those disclosed below, are considered to be a reasonable approximation
of their fair values.
The fair values of the following instruments that are not measured at fair value have been disclosed, as their carrying values are not
a reasonable approximation of fair value:
Financial liabilities
Carrying
value
US$’m
Fair
value
US$’m
Level 1
US$’m
Level 2
US$’m
Level 3
US$’m
31 March 2022
Publicly traded bonds
15 368
13 056
–
13 056–
31 March 2021
Publicly traded bonds
7 796
7 935
–
7 935–
The fair values of the publicly traded bonds have been determined with reference to the listed prices of the instruments at the reporting
date. As the instruments are not actively traded, this is a level 2 disclosure. Refer to note 40 of the consolidated financial statements for
the valuation techniques and inputs used in the fair-value measurement.
The publicly traded bonds are listed on the Irish stock exchange (Euronext Dublin). The company categorises fair-value measurements
into levels 1 to 3 of the fair value hierarchy based on the degree to which the inputs used in measuring fair value are observable. Refer
to note 40 of the consolidated financial statements for details of valuation techniques and key inputs used to measure significant level 2
fair values.
The fair values of the company’s financial instruments that are measured at fair value at each reporting period are categorised as
follows:
Fair
value
US$’m
Level 1
US$’m
Level 2
US$’m
Level 3
US$’m
31 March 2022
Asset/(liability)
Financial assets at fair value through other comprehensive income
1
385
– –
385Foreign exchange contracts
15
–
15–
Cash and cash equivalents
2
928
–
928–
Cross-currency interest rate swap
2 – 2 –
31 March 2021
Asset/(liability)
Financial assets at fair value through other comprehensive income
2 526 2 526
– –
Foreign exchange contracts
(2)
–
(2)–
Cash and cash equivalents
2
996
–
996–
Cross-currency interest rate swap
(30)
–
(30)
–1
2
internationally recognised ratings agencies.
20. Subsequent events
Refer to note 43 of the consolidated financial statements for the subsequent events of the Prosus group.
Prosus annual report 2022
270
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Notes to the company financial statements
continued
for the year ended 31 March 2022
21. Proposal for profit allocation
The board recommends that shareholders are entitled to a gross payment, in the form of a capital repayment, of 14 euro cents per
listed ordinary share N. Holders of ordinary shares B will receive 0.000014 euro cents per share. Holders of ordinary shares A1 will
receive an amount per share equal to the outcome of the formula set forth in article 30.4 of the articles of association. Furthermore, the
board recommends that holders of ordinary shares N as at 2 September 2022 (the dividend record date) who do not wish to receive
a capital repayment can make a choice to receive a dividend instead. A choice for one option implies an opt-out of the other option.
If confirmed by shareholders at the annual general meeting on 24 August 2022, elections to receive a dividend instead of a capital
repayment will need to be made by holders of ordinary shares N by 19 September 2022. Capital repayments and dividends will be
payable to shareholders recorded in the books on the dividend record date and paid on 27 September 2022. Capital repayments
will be paid from share capital for Dutch tax purposes. No dividend tax will be withheld on the amounts of capital reductions paid to
shareholders. Holders of ordinary shares N electing to receive a dividend will receive a dividend declared from retained earnings.
Dividends will be subject to the Dutch dividend tax rate of 15%. Dividends payable to holders of ordinary shares N who elect to
receive a dividend and who hold their listed ordinary share N through the listing of the company on the JSE will, in addition to the
Dutch dividend withholding tax, be subject to South African dividend tax at a rate of up to 20%. The amount of additional South
African dividend tax payable will be calculated by deducting from the 20% South African dividend tax otherwise due, a rebate equal
to the Dutch dividends tax paid in respect of the dividend (without any right of recovery). Those shareholders, unless exempt from
paying dividend tax or entitled to a reduced withholding tax rate in terms of an applicable tax treaty, will be subject to a maximum
of 20% total dividend tax.
Amsterdam, 25 June 2022
Executive directors
B van Dijk
B Sgourdos
Non-executive directors
JP Bekker
HJ du Toit
CL Enenstein
M Girotra
RCC Jafta
AGZ Kemna
FLN Letele
D Meyer
R Oliveira de Lima
SJZ Pacak
MR Sorour
JDT Stofberg
BJ vans der Ross
Y Xu
271
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Other information
Independent auditor’s report
Report on the financial
statements2022
Our opinion
In our opinion, the financial statements of Prosus N.V. (the
Company) give a true and fair view of the financial position of the
Company and the Group (the Company together with its
subsidiaries) as at 31 March 2022, and of its result and its cash
flows for the year then ended in accordance with International
Financial Reporting Standards as adopted by the European Union
(EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the accompanying financial statements 2022 of
Prosus N.V., Amsterdam, The Netherlands. The financial statements
include the consolidated financial statements of the Group and
the company financial statements.
The financial statements comprise:
•
the consolidated and company statement of financial position as
at 31 March 2022;
•
the following statements for the year ended 31 March 2022: the
consolidated income statement, the consolidated and company
statements of comprehensive income, changes in equity and
cash flows; and
•
the notes, comprising the significant accounting policies and
other explanatory information.
The financial reporting framework applied in the preparation of
the financial statements is EU-IFRS and the relevant provisions of
Part 9 of Book 2 of the Dutch Civil Code.
The basis for our opinion
We conducted our audit in accordance with Dutch law, including
the Dutch Standards on Auditing. We have further described our
responsibilities under those standards in the section ‘Our
responsibilities for the audit of the financial statements’ of our
report.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Independence
We are independent of Prosus N.V. in accordance with the
European Union Regulation on specific requirements regarding
statutory audit of public-interest entities, the ‘Wet toezicht
accountantsorganisaties’ (Wta, Audit firms supervision act), the
‘Verordening inzake de onafhankelijkheid van accountants bij
assurance-opdrachten’ (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence) and
other relevant independence regulations in the Netherlands.
Furthermore, we have complied with the ‘Verordening gedrags- en
beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
Our audit approach
We designed our audit procedures with respect to the key audit
matters, fraud and going concern, and the matters resulting from
that, in the context of our audit of the financial statements as a
whole and in forming our opinion thereon. The information in
support of our opinion, such as our findings and observations
related to individual key audit matters, the audit approach fraud
risk and the audit approach going concern was addressed in this
context, and we do not provide a separate opinion or conclusion
on these matters.
Overview and context
Prosus N.V. is a global consumer internet group that operates,
invests in, and partners with internet businesses across Asia,
Central and Eastern Europe, the Middle East, the Americas and
Africa in consumer internet services in Classifieds, Food Delivery,
Payments and Fintech, Education Technology (Edtech), Etail, Other
Ecommerce and Social and Internet platforms. The Group
identifies both as an investor (non-controlling interests in
associates and other investments) and an operator (controlled
subsidiaries). The Group is comprised of several components and
therefore we considered our group audit scope and approach as
set out in the section ‘The scope of our group audit’. We paid
specific attention to the areas of focus driven by the operations of
the Group, as set out below.
The 2022 financial year was impacted by a number of significant
transactions and events. Significant corporate activity included the
voluntary share exchange offer to Naspers Limited shareholders
(as described in note 4 to the consolidated financial statements),
acquisition of and/or (further) investment in subsidiaries and
associates (as described in note 6 to the consolidated financial
statements), bonds issued, and share repurchase programmes.
The Russian government’s military invasion of Ukraine impacted
the Group’s business in Ukraine and the new sanctions imposed
on Russian individuals and entities as a result of this invasion
impacted the businesses in Russia (as described in note 4 to the
consolidated financial statements). Significant market volatility
demonstrated market uncertainties with respect to macro-
economic and geopolitical conditions, providing input to the
Company’s assessment of the value of its investments. This
affected our audit procedures as described in the section ‘Key
audit matters’.
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we considered where management
made important judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. In note 3 of
the consolidated financial statements and note 1 of the company
financial statements, the Company describes the areas of
judgement in applying accounting policies and the key sources of
estimation uncertainty. Of the areas mentioned in these notes we
considered the following matters as key audit matters given the
significant estimation uncertainty, the related higher inherent risk of
material misstatement and the magnitude of the impact:
•
accounting for the voluntary share exchange transaction;
•
valuation of intangible assets arising as a result of acquisitions;
•
impairment assessment of goodwill and intangible assets arising
from business combinations and of investments in associates
(applicable to the consolidated financial statements) and
subsidiaries (applicable to the company financial statements);
and
•
valuation of share-based compensation schemes and share-
based payments.
To: The general meeting and the board of directors of Prosus N.V.
272
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
The outline of our audit approach was as follows:
Materiality
•
Overall consolidated materiality: US$505 million
•
Overall company materiality: US$1 billion
Audit scope
•
We conducted our procedures at eight components in five
countries.
•
Virtual site visits were performed by the group team for the
work performed by PwC teams in China (Tencent), Romania
(Etail segment), Poland (Classifieds segment) and Brazil
(Movile including iFood).
•
Audit coverage: 99% of consolidated revenue, 96% of
consolidated total assets and 97% of consolidated profit
beforetax.
Key audit matters
•
Accounting for the voluntary share exchange transaction.
•
Accounting for the equity-accounted investment in Tencent
Holdings Limited.
•
Valuation of intangible assets arising as a result of acquisitions.
•
Impairment assessment of goodwill and intangible assets
arising from business combinations and of investments in
associates and subsidiaries.
•
Valuation of share-based compensation schemes and
share-based payments.
The most significant investment is in Tencent Holdings Limited
(Tencent). We considered the accounting for this investment also
as a key audit matter.
These key audit matters are set out in the section ‘Key audit
matters’ of this report.
Prosus N.V. assessed the possible effects of climate change. The
Company considered, among others, physical and transitional
risks. Management also assessed the potential impact on the
financial position including underlying assumptions and estimates.
As part of our audit risk assessment, we gained an understanding
of management’s assessment of the potential impact of climate
change on the financial statements and discussed this with
management. The impact of climate change is not considered a
key audit matter.
Other information
Independent auditor’s report
continued
Audit scope
Materiality
Key audit
matters
Other areas of focus, that were not considered to be key audit
matters, were the accounting for corporate transactions (other
than those that are included as part of the key audit matters),
valuation of put option liabilities, the accuracy, occurrence and
completeness of revenue recognition, and the impact of the
Russian government’s military invasion of Ukraine on the financial
statements.
We ensured that the audit teams at both group and component
level included the appropriate skills and competences which are
needed for the audit of a company with a diversified investment
portfolio as well as for the audit of the various consumer internet
businesses. We therefore included in our team specialists and
experts in the areas of among others IT, tax, valuation, actuarial
expertise, share-based payments, financial instruments and
sustainability.
Materiality
The scope of our audit was influenced by the application of
materiality, which is further explained in the section ‘Our
responsibilities for the audit of the financial statements’.
Based on our professional judgement we determined certain
quantitative thresholds for materiality, including the overall
materiality for the financial statements as a whole as set out in the
table below. These, together with qualitative considerations,
helped us to determine the nature, timing and extent of our audit
procedures on the individual financial statement line items and
disclosures and to evaluate the effect of identified misstatements,
both individually and in aggregate, on the financial statements as
a whole and on our opinion.
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Other information
Independent auditor’s report
continued
Consolidated financial statements Company financial statements
Overall materiality
US$505 million
(2021: US$431 million).
US$1 billion
(2021: US$1 billion).
Basis for
determining
materiality
We used our professional judgement and our knowledge
obtained of the Group to determine overall materiality.
As a basis for our judgement, we used 1% of net assets.
We used our professional judgement and our knowledge
obtained of the Company to determine overall materiality.
Asa basis for our judgement, we used 1% of net assets as
apreliminary guideline for determining overall materiality.
We considered US$1 billion as an appropriate measure,
which is approximately 0.7% of net assets.
Rationale for
benchmark applied
Based on our analysis of the common information needs of users of the financial statements we determined that an
asset-based benchmark is appropriate. We believe that, given the focus on long-term value creation of the investments,
‘netassets’ is the most suitable benchmark.
Component
materiality
To each component in our group audit scope, based on our judgement, we allocate materiality that is less than our
overallgroup materiality. The range of materiality individually allocated across components was between US$20 million
andUS$422 million. Certain components were audited to a local statutory materiality that was also less than our overall
group materiality.
We also take misstatements and/or possible misstatements into
account that, in our judgement, are material for qualitative
reasons.
We agreed with the audit committee that we would report to them
misstatements identified during our audit above US$25 million
(2021: US$21.5 million) for the consolidated financial statements
and US$50 million (2021: US$50 million) for the company financial
statements as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
The scope of our group audit
Prosus N.V. is the parent company of a group of entities. The
financial information of this group is included in the consolidated
financial statements of Prosus N.V. The most significant subsidiaries
and associates are disclosed in notes 8 and 9 in the consolidated
financial statements.
We tailored the scope of our audit to ensure that we, in
aggregate, achieve sufficient coverage of the financial statements
for us to be able to give an opinion on the financial statements as
a whole, taking into account the management structure of the
Group, the nature of operations of its components, the accounting
processes and controls, and the markets in which the components
of the Group operate. In establishing the overall group audit
strategy and plan, we determined the type of work required to be
performed at component level by the group engagement team
and by each component auditor.
In scoping our group audit, we first determined the components
that are individually financially significant to the Group, namely
Tencent Holdings Limited, the Classifieds and Etail segments,
Movile group (including iFood), as well as the parent company
Prosus N.V. which includes the majority of the Group’s cash,
short-term investments and external debt. These components
weresubjected to audits of their complete financial information
(full scope audit).
To achieve appropriate audit coverage over the consolidated
financial statements, as well as over material line items in the
financial statements, we selected two additional components
(thePayments and Fintech segment and one corporate entity)
foraudits of their complete financial information, and one
corporate entity where we performed review procedures.
In total, in performing these procedures, we achieved the
following coverage on the consolidated financial line items:
Revenue
99%
Total assets
96%
Profit before tax
97%
None of the remaining components represented more than 1% of
total group profit before tax or 2% of total group assets. For those
remaining components we performed, among other things,
analytical procedures to corroborate our assessment that there
was no significant risk of material misstatement within those
components.
In establishing the overall approach to the group audit, we
determined the extent of work that needed to be performed by
us, as the group engagement team, or by component auditors
from other PwC network firms, or non-PwC firms operating under
our instruction, in order to be able to issue our audit opinion on
the consolidated financial statements of the Group. The group
engagement team performed the audit work on the corporate
entities. For all other components we used component auditors
who are familiar with the local laws and regulations to perform
the audit work.
Where component auditors performed the work, we determined
the level of involvement we needed to have in their work to be
able to conclude whether we had obtained sufficient and
appropriate audit evidence as a basis for our opinion on the
consolidated financial statements as a whole.
We issued group audit instructions to the component audit teams
in our audit scope. These instructions included among others our
risk analysis, materiality and the scope of the work. We explained
to the component audit teams the structure of the Group, the main
developments that were relevant for the component auditors, the
risks identified, the materiality levels to be applied and our global
audit approach. We had individual calls and video-meetings with
each of the in-scope component audit teams before them
commencing their respective audits, throughout the audit and
upon conclusion of their work. During these meetings, we
discussed our instructions, the audit plan and execution, significant
risks, the significant accounting and audit issues and other
relevant audit topics identified by the component auditors
, their
reports, the findings of their procedures and other matters that
could be of relevance for the consolidated financial statements.
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In addition, we discussed the strategy and financial performance
of the local businesses with group and segment management
and local management of selected businesses.
The Covid-19 pandemic continued to limit our ability to physically
visit significant components during the year, hence we conducted
a series of video meetings and performed remote review of
selected working papers of the work performed by component
teams in China (Tencent), Poland (Classifieds segment), Brazil
(Movile group, including iFood) and Romania (Etail segment). In
terms of the execution of our audit, we considered the impact of
the travel and other restrictions on our audit and on the review
and supervision of our teams.
To a large extent, our teams globally worked remotely and
digitally, supported by video meetings and PwC’s digital tooling.
While maintaining compliance with local health regulations, we
performed sufficient physical checks of inventory and documents.
The group engagement team performed a substantial part of
theaudit work on the corporate transactions, share-based
compensation schemes, consolidation and financial statements in
South Africa where the Group’s financial reporting, consolidation
and accounting department is located.
By performing the procedures outlined above at the components,
combined with additional procedures exercised at group level,
wehave been able to obtain sufficient and appropriate audit
evidence on the Group’s financial information, as a whole, to
provide a basis for our opinion on the financial statements.
Audit approach fraud risks
We identified and assessed the risk of material misstatement of
the financial statements due to fraud. During our audit we
obtained an understanding of the Group and its environment and
of the components of the internal control system, including among
others, the Code of business ethics and conduct, the Speak Up
policy, procedures on various anti-bribery and anti-corruption risks
and incident registration and reporting. This included the risk
assessment process and management’s process for responding
to the risks of fraud, monitoring the system of internal control,
howthe audit committee exercises oversight, as well as the
outcomes thereof.
We evaluated the risk of material misstatement due to fraud on
the financial statements. We conducted interviews with executive
and non-executive board members, including the chair of the
audit and risk committee, with segment management and with
others including internal audit and the ethics and compliance
function, to obtain an understanding of management’s fraud risk
assessment and the processes for identifying and responding to
the risks of fraud and the internal control that management has
established to mitigate these risks. In these interviews we also
asked them whether they are aware of any actual or suspected
fraud. They responded that they were not aware of signals of
actual or suspected fraud that may lead to a material
misstatement. As part of our process of identifying fraud risks,
weevaluated fraud risk factors with respect to financial reporting
fraud, misappropriation of assets and bribery and corruption.
Based on our evaluation we identified fraud risks with respect
tomanagement override of controls and the risk of fraud in
revenue recognition.
As for any company, management is in a unique position to
perpetrate fraud because of management’s ability to manipulate
accounting records and prepare fraudulent financial statements
by overriding controls that otherwise appear to be operating
effectively. The fraud risk of management override of controls
would manifest itself in inappropriate journal entries, management
bias in estimates and significant transactions outside the normal
course of business. We therefore performed procedures on
journal entries, including consolidation and elimination entries,
with the support of data analytics. With regards to significant
estimates and assumptions we have considered and discussed
with management the risk of bias. For example, with respect to
valuations underpinning share-based compensation schemes,
impairment tests and put option liabilities we have challenged
management on the assumptions in the cash flow projections
andthe resulting valuations. For further information on our
auditapproach with respect to these estimates, we refer to the
section key audit matters. Furthermore, we assessed matters
reported on the Group’s Speak Up procedures and the results
ofmanagement’s investigation of such matters, if deemed
applicable, and discussed this with the audit committee and risk
committee. We also paid attention to significant transactions
outside the normal course of business, such as corporate
transactions – including investments, divestments, share buy-back
and bonds programmes, and related transaction fees.
With regard to the risk of fraud in revenue recognition, we
concluded that, depending on the operating segment, this risk is
related to accuracy and/or occurrence of revenue transactions
due to their nature in combination with incentives and pressures.
We performed procedures over this risk, including evaluation of
the design and implementation of relevant internal controls,
tracing samples of revenue transactions to supporting documents
such as agreements, invoices, delivery documents and proof of
payment, and testing revenue journal entries with unexpected
account combinations. We evaluated judgements applied by
management in determining the appropriate accounting policies
pertaining to the recognition for revenues per operating segment,
specifically focusing on policies relating to determining the timing
of the satisfaction of performance obligations, transaction price,
and the amounts allocated to the performance obligations as
required by IFRS 15, ‘Revenue from contracts with customers’.
We incorporated elements of unpredictability in our audit. During
the audit we remained alert to indications of fraud. We also
considered the outcome of our audit procedures and evaluated
whether any findings were indicative of fraud or non-compliance
of laws and regulations.
Audit approach going concern
As disclosed in note 2 in the consolidated financial statements,
management performed their assessment of the entity’s ability to
continue as a going concern for at least 12 months from the date
of preparation of the financial statements and has not identified
events or conditions that may cast significant doubt on the entity’s
ability to continue as a going concern (hereafter: going concern
risks). Our procedures to evaluate management’s going concern
assessment included, among others:
•
Considering whether management’s going concern assessment
included relevant information of which we are aware as a result
of our audit, by inquiring with management and with the audit
committee regarding management’s most important
assumptions underlying their going concern assessment.
•
Evaluating management’s current budget including cash flows
for at least 12 months from the date of preparation of the
financial statements taking into account current developments in
the industry such as inflation, credit ratings and other relevant
information of which we are aware as a result of our audit,
including, among others, the long-term cash flow projections
obtained as part of the impairment testing;
Other information
Independent auditor’s report
continued
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Other information
•
Analysing whether the current and the required financing has
been secured to enable the continuation of the entirety of the
entity’s operations, including compliance with relevant covenants;
•
Considering the available balance of short-term investments
andcash and cash equivalents; and
•
Performing inquiries of management as to their knowledge of
going concern risks beyond the period of management’s
assessment.
Our procedures did not result in outcomes contrary to
management’s assumptions and judgements used in the
application of the going concern assumption.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the financial
statements. We have communicated the key audit matters to the
audit committee. The key audit matters are not a comprehensive
reflection of all matters identified by our audit and that we
discussed. In this section, we describe the key audit matters and
include a summary of the audit procedures we performed on
those matters. Key audit matters are in line with the prior year
except for the new key audit matters ‘Accounting for the voluntary
share exchange transaction’ and ‘Valuation of intangible assets
arising as a result of acquisitions’ covering the significant
corporate transactions that occurred in the current year.
Other information
Independent auditor’s report
continued
Key audit matter
Our audit work and observations
Accounting for the voluntary share exchange transaction
(refer to notes 4, 22, 23 and 28 of the consolidated financial statements
and notes 4 and 9 of the company financial statements)
Following the approval by an extraordinary general meeting of
shareholders in July 2021, the Group executed a voluntary share
exchange transaction, whereby newly issued Prosus N ordinary shares
were exchanged for Naspers N ordinary shares, resulting in Prosus
holding 49% of the Naspers N ordinary shares with 49.9% economic
interest in Naspers. A cross-holding agreement was concluded
between Naspers and Prosus that arranged future distributions by
Prosus and Naspers through a waiver by Prosus of its entitlement to
distributions that originates from Prosus on the Naspers shares that it
holds.
The issuance of the new shares was recognised in share capital and
share premium for an aggregate amount of US$38.6 billion and
US$38.2 billion was recognised in the existing business combination
reserve (in the consolidated financial statements) representing the
distribution in contemplation of a capital restructure. In the company
financial statements this distribution was recognised in share premium.
On the date of the transaction Prosus recognised a fair value through
other comprehensive income (FVOCI) investment amounting to US$385
million representing the sum-of-the-parts of the underlying components
of its residual interest in the Naspers group.
Under the cross-holding agreement, and embedded in the articles of
association, Naspers has waived its entitlement to distributions from
Prosus for a calculated number of the N ordinary shares it holds in
Prosus. These represent the portion of the Prosus N ordinary shares
that Prosus indirectly owns in itself and have been excluded from the
weighted average number of shares in the earnings per share
calculation, since these shares do not have an economic interest in the
earnings of the group.
Management applied significant judgement in determining the
accounting for the transaction, the valuation of Prosus’ residual interest
in Naspers and the earnings per share information considering the
cross-holding arrangement.
The accounting for the voluntary share exchange transaction was
considered as a key audit matter due to the complexity of the
transaction, the magnitude of the amounts involved and the significant
judgements applied by management in the accounting for the
transaction.
Our audit procedures included, among others:
•
With the support of our technical accounting specialists, we evaluated
the accounting, recognition and presentation of the transaction;
•
With the support of our valuation experts, we evaluated the
methodology and the reasonableness of the assumptions applied by
management in the determination of the value of Prosus’ residual
interest in the Naspers group;
•
Tested the transaction through reconciliation to underlying
documentation;
•
Tested the calculations of earnings per share information and
reconciled adjustments made to the number of shares used in the
calculation to the terms of the cross-holding arrangement and the
articles of association; and
•
Tested the related financial statement disclosures against the
disclosure requirements of EU-IFRS.
In respect of the audit procedures specified above no material findings
were identified.
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Other information
Independent auditor’s report
continued
Key audit matter
Our audit work and observations
Accounting for the equity-accounted investment in Tencent
Holdings Limited
(refer to notes 3, 6 and 9 of the consolidated financial statements)
The Group holds an investment in Tencent Holdings Limited (Tencent)
which is accounted for in accordance with IAS 28, ‘Investments in
Associates and Joint Ventures’. The carrying amount is US$34.8 billion.
In April 2021, the Group sold 2% of Tencent’s issued share capital
resulting in a gain on partial disposal of US$12.3 billion. In December
2021, Tencent declared a special interim dividend in the form of shares
in JD.com which was distributed on 25 March 2022.
Tencent has a year-end (31 December) that is not coterminous with that
of the Group. In accordance with IAS 28, the Group included a lag
period adjustment reflecting significant transactions that occurred
between Tencent’s year end and 31 March (the Group’s year-end).
Management calculated the gain on partial disposal as the excess of
the proceeds received on the disposal over the proportion of the
carrying value of the investment disposed.
Management accounted for the dividend received from Tencent
relating to JD.com as a reduction of the carrying value of the
investment in associate and the recognition of a FVOCI investment at
the fair value on the date of distribution amounting to US$3.9 billion.
The accounting for the investment in Tencent was a matter of
significance due to the magnitude of the carrying amount, the
significant contribution of the associate investment to the consolidated
results of the Group and the judgement involved in adjusting for
significant transactions that occur in the lag period. Therefore, we
considered the accounting for the investment in Tencent as a key audit
matter.
We performed, among others, the following procedures:
•
Obtained the equity-accounted results recorded by the Group and
reconciled them to the audited 31 December 2021 financial
statements of Tencent;
•
Assessed the appropriateness of the lag period adjustments based
on Tencent’s publicly available first quarter financial information for
the period ended 31 March 2022, as well as input from the
component team to gain comfort that material lag period
adjustments were appropriately accounted for;
•
Independently assessed the accounting policies of the associate to
that of the Group to identify material differences with EU-IFRS; and
•
Reperformed the calculation underlying the gain on partial disposal
of the investment in Tencent and the receipt of the dividend relating
to JD.com and agreed both transactions to minutes of the board of
directors and external supporting documentation such as bank
statements, the shareholder register and external public information.
In respect of the audit procedures specified above, no material
findings were identified.
Valuation of intangible assets arising as a result of acquisitions
(refer to notes 6 and 9 of the consolidated financial statements)
The Group concluded acquisitions of subsidiaries and associates
throughout the year, most notably the acquisition of 100% interest in
Stack Overflow for a consideration of US$1.7 billion and the acquisition
of an additional interest in associate Delivery Hero of 6.3% for US$2.5
billion.
In accordance with IFRS 3, ‘Business Combinations’ and IAS 28,
‘Investments in Associates and Joint Ventures’, the accounting for these
acquisitions requires management to perform a purchase price
allocation which requires significant judgement by management to
determine the fair value of the identifiable assets and liabilities and the
resulting goodwill. As part of the valuation process, management
involved external valuation experts to assist in the determination of the
purchase price allocation and valuation of identified assets and
liabilities. The purchase price allocation performed for Stack Overflow
resulted in the recognition of intangible assets of US$247 million and
goodwill of US$1.5 billion. The purchase price allocation for equity
accounting purposes performed for the additional investment in
associate Delivery Hero resulted in notional intangible assets of
US$0.5 billion and notional goodwill of US$2.1 billion.
The valuation of the intangible assets arising as a result of acquisitions
was a matter of significance due to the judgement and complexity
involved in performing the purchase price allocations, specifically the
underlying estimates involved in forecasting cash flows and other
significant assumptions used in the valuation. Therefore, we considered
the accounting for the valuation of the intangible assets as a key audit
matter.
With support of our internal valuation experts, we performed the
following procedures:
•
Agreed transaction details to supporting documentation such as
signed purchase agreements and proof of payment;
•
Evaluated the competence, capabilities and objectivity of valuation
experts engaged by the Group;
•
Assessed the appropriateness of the identifiable intangible assets
identified by management and their valuation experts based on our
knowledge of the business models of acquired businesses;
•
Assessed the reasonableness of the fair value measurements
prepared by management and their valuation experts by
corroborating and where appropriate benchmarking key data and
assumptions used in the valuation model, such as pre-acquisition
carrying values, royalty rates and retention rates for identified
intangible assets;
•
Compared the assumptions and data underlying the weighted
average cost of capital (WACC) with our own assumptions and
publicly available data;
•
Tested the computational accuracy of the fair value measurement
calculations prepared by management and their valuation experts;
•
Tested the reasonability of future cash flow forecasts and underlying
management assumptions by reconciling the resulting valuation to the
purchase consideration; and
•
Tested the related financial statement disclosures against the
disclosure requirements of IFRS 3 and IAS 28.
In respect of the audit procedures specified above, no material
findings were identified.
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Other information
Independent auditor’s report
continued
Key audit matter
Our audit work and observations
Impairment assessment of goodwill and intangible assets arising
from business combinations and of investments in associates and
subsidiaries
(refer to Basis of consolidation section and notes 7, 9 and 33 of the
consolidated financial statements and note 3 of the company financial
statements)
The consolidated financial statements include material assets resulting
from business combinations and investments in associates. Such assets
include:
–
Goodwill (US$3.4 billion)
–
Intangible assets recognised in purchase accounting (US$0.9 billion)
–
Investments in associates (US$44.5 billion)
In accordance with IAS 36 ‘Impairment of Assets’, at each reporting
date the Company tests these assets for impairment whenever there is
objective evidence of impairment. For goodwill, this test is performed
at least annually at the level of relevant Cash Generating Units (CGUs)
and whenever there is an impairment indicator identified by
management at an intermediate reporting date.
As a result of the impairment tests performed, impairment charges of
US$246 million (goodwill) and US$582 million (investments in
associates) were recognised in the consolidated financial statements.
As described in note 3 to the company financial statements, the
carrying amount of investments in subsidiaries, being the investment in
MIH Internet Holdings B.V., amounts to US$150.3 billion as of 31 March
2022. The decline in the market capitalisation of the Company and
quoted prices for several of its listed investments and changes in the
discount rates used to determine the value in use of the unlisted
investments were considered impairment indicators and the Company
performed an impairment assessment of the investment in MIH Internet
Holdings B.V. The recoverability of the carrying amount was tested for
potential impairment through the ‘sum-of-the-parts’ of valuation
estimates for the underlying investments.
These impairment assessments were considered as a key audit matter
due to the significant judgement applied by management in
determining the recoverable amounts as well as the magnitude of the
balances involved.
We performed procedures, with the support of our valuation experts,
which varied in depth per CGU or investment. Based on our
assessment of the risk of material misstatement due to fraud or error,
we considered among others, (i) the size and maturity of the underlying
business, (ii) the headroom between the recoverable amount and
carrying amount, (iii) availability of external market data, and (iv)
possible indicators of management bias.
We performed, among others, the following procedures:
•
Assessed the composition of future cash flow forecasts and the
underlying management assumptions by evaluating (i) the accuracy
of previous forecasts of the CGU or investment by comparing the
budgets of previous financial years with actual result and by
analysing deviations, (ii) the consistency with external market and
industry data, (iii) the corroboration of strategic initiatives with
evidence obtained in other areas of the audit, (iv) the expectations of
certain equity analysts covering Prosus for a specific CGU or
investment, and (v) the impact of the Russian government’s military
invasion of Ukraine and overall market volatility in recent months on
discount rates, future cash flow forecasts and potential other valuation
adjustments;
•
Assessed the reasonableness of terminal growth rates used by
management per CGU or investment by comparing to the long-term
growth rates most reflective of the underlying operations, obtained
from independent external sources;
•
Compared the inputs to discount rates used by management to
externally obtained data such as risk-free rates, equity market risk
premiums, country risk premiums as well as the betas of comparable
companies;
•
Assessed the reasonableness of additional risk adjustment factors
included in discount rates for certain CGUs and investments in
relation to the risk profile of the future cash flow forecasts;
•
Recalculated the carrying amount of the goodwill CGUs with
reference to underlying documentation;
•
Challenged management’s valuation analyses by performing our
own sensitivity analyses based on independent inputs for key
valuation assumptions;
•
Evaluated external analyst report valuations for certain CGUs or
investments and compared these to management’s valuations;
•
Where value in use was applied to listed investments, compared the
determined value to the listed share price (fair value less cost of
disposal) as at year end and considered market related adjustments;
•
With respect to the carrying amount of the investment in subsidiaries
in the company financial statements, we compared the ‘sum-of-the-
parts’ valuation of Prosus’ subsidiaries and associates and the
resulting implied value of the Company to the Company’s market
capitalisation and considered whether the resulting implied holding
discount would indicate the need to include certain adjustments to the
valuations used in the impairment assessment; and
•
Tested the related financial statements disclosures against the
disclosure requirements of EU-IFRS.
In respect of the audit procedures specified above, no material
findings were identified.
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Other information
Independent auditor’s report
continued
Key audit matter
Our audit work and observations
Valuation of share-based compensation schemes and share-
based payments
(refer to note 36 of the consolidated financial statements)
The Group has share-based compensation plans which are used to
grant share options, restricted stock units (RSUs), performance share
units (PSUs) and share appreciation rights (SARs) to employees.
When these schemes are settled in cash or in Naspers shares, they
are accounted for as cash-settled schemes. The share-based
compensation expense amounts to US$129 million for cash settled
schemes, and US$125 million for equity settled schemes and the total
cash-settled liabilities amount to US$1.1 billion for the year ended 31
March 2022. The grant date fair value and the remeasured fair value of
the options at each reporting period were calculated by management
using an option valuation model. In estimating the fair value of options
management used assumptions relating to risk free rates, volatility
rates, dividend yields, forfeiture rates, listed share prices, and for
schemes with unlisted shares, the share prices of the underlying
businesses. All awards were granted subject to the completion of a
requisite service (vesting) period by employees.
The share schemes as disclosed within note 36 were considered to be
the most significant in terms of their contribution to the total share-
based compensation balances of the Group and have therefore been
separately disclosed by management in the consolidated financial
statements.
Management used an external management valuation expert to assist
them in determining the company value and the scheme share value
(‘sum-of-the parts’) on an annual basis. In determining the company
value and the scheme share value, the management expert used a
number of valuation methods, including, the use of comparable peer
multiples, precedent transactions and discounted cash flow (DCF)
valuations.
Due to the volume of share-based payment transactions and the
complexity surrounding the valuations, specifically the assumptions,
judgements and estimates used in the option valuation models relating
to each scheme, the potential for management bias in determining the
values, the valuation of share-based compensation schemes and
share-based payments was considered a key audit matter.
Using our valuation expertise, we assessed if the approach adopted
by management in the option valuation models is in line with the
requirements of IFRS 2, Share Based Payment, including consideration
of the terms of the share-based compensation schemes and changes
to the existing plans. Based on our assessment of the risk of material
misstatement due to fraud or error, we considered among others
possible indicators of management bias.
With the support of our internal valuation experts, we assessed the key
inputs in the option valuation calculation by performing the following
procedures, among others:
•
Agreed risk free rates to independently obtained external data;
•
Agreed expected volatility rates for listed companies to
independently obtained external data, and for unlisted companies to
volatility rates of comparable companies in the market;
•
For schemes with listed shares, agreed the share prices to the listed
share price as at the grant date for equity-settled awards and for
schemes with unlisted shares, recalculated the share prices of the
underlying businesses by dividing the valuations performed by
management’s expert by the outstanding number of shares of the
relevant scheme;
•
Assessed dividend yields by agreeing the share price information to
independently obtained data and recalculating the average historical
dividend yield;
•
Assessed the reasonableness of forfeiture rates in terms of the history
of forfeitures for each grant of the relevant share option/share
appreciation right scheme; and
We assessed the competence, capabilities and objectivity of
management’s experts utilised in performing the business valuations
for the valuation of schemes with unlisted shares.
With the support of our internal valuation experts, we obtained an
understanding and assessed the reasonableness of the valuation
methods applied by the management expert in determining the
enterprise value of the schemes with unlisted shares. Where the
enterprise value was determined using a DCF valuation, the
procedures performed were consistent with those detailed under the
impairment assessment of non-financial assets key audit matter. Where
market related inputs such as trading multiples and transaction
multiples were used by the management expert, we assessed the
reasonableness thereof by comparing it to independent external
market sources.
We have discussed the governance process on the share scheme
valuations with the chair of the remuneration committee and the audit
committee chair.
We evaluated whether the disclosures were in compliance with the
disclosure requirements of IFRS 2.
In respect of the audit procedures specified above, no material
findings were identified.
Report on the other information
included in the annual report
T
he annual report contains other information. This includes all
information in the annual report in addition to the financial
statements and our auditor’s report thereon.
Based on the procedures performed as set out below, we
conclude that the other information:
•
is consistent with the financial statements and does not contain
material misstatements;
•
contains all the information regarding the Directors’ report and
the other information that is required by Part 9 of Book 2 and
regarding the remuneration report required by the sections
2:135b and 2:145 subsection 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge
and the understanding obtained in our audit of the financial
statements or otherwise, we have considered whether the other
information contains material misstatements.
By performing our procedures, we comply with the requirements
of Part 9 of Book 2 and section 2:135b subsection 7 of the Dutch
Civil Code and the Dutch Standard 720. The scope of such
procedures was substantially less than the scope of those
procedures performed in our audit of the financial statements.
279
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Other information
Independent auditor’s report
continued
The board of directors of Prosus N.V. is responsible for the
preparation of the other information, including the Directors’ report
and the other information in accordance with Part 9 of Book 2 of
the Dutch Civil Code. The board of directors of Prosus N.V. is
responsible for ensuring that the remuneration report is drawn up
and published in accordance with sections 2:135b and 2:145
subsection 2 of the Dutch Civil Code.
Report on other legal and regulatory
requirements and ESEF
Our appointment
We were re-appointed as auditors of Prosus N.V. following the
passing of a resolution by the shareholders at the annual meeting
held on 18 August 2020. Our appointment has been renewed
annually by shareholders representing a total period of
uninterrupted engagement appointment of eighteen years. Since
the Company listed in September 2019, this is the third year that
the Company is a public-interest entity.
European Single Electronic Format (ESEF)
Prosus N.V. has prepared the annual report, including the financial
statements, in ESEF. The requirements for this format are set out in
the Commission Delegated Regulation (EU) 2019/815 with regard
to regulatory technical standards on the specification of a single
electronic reporting format (these requirements are hereinafter
referred to as: the RTS on ESEF).
In our opinion, the annual report prepared in XHTML format,
including the partially marked-up consolidated financial
statements, as included in the reporting package by Prosus N.V.,
complies, in all material respects, with the RTS on ESEF.
The board of directors of Prosus N.V. is responsible for preparing
the annual report, including the financial statements, in
accordance with the RTS on ESEF, whereby the board of directors
of Prosus N.V. combines the various components into a single
reporting package. Our responsibility is to obtain reasonable
assurance for our opinion whether the annual report in this
reporting package complies with the RTS on ESEF.
Our procedures, taking into account Alert 43 of the NBA (Royal
Netherlands Institute of Chartered Accountants), included among
others:
•
Obtaining an understanding of the entity’s financial reporting
process, including the preparation of the reporting package;
•
Obtaining the reporting package and performing validations to
determine whether the reporting package, containing the Inline
XBRL instance document and the XBRL extension taxonomy files,
has been prepared, in all material respects, in accordance with
the technical specifications as included in the RTS on ESEF; and
•
Examining the information related to the consolidated financial
statements in the reporting package to determine whether all
required mark-ups have been applied and whether these are in
accordance with the RTS on ESEF.
Prohibited non-audit services
To the best of our knowledge and belief, we have not provided
prohibited non-audit services as referred to in article 5(1) of the
European Regulation on specific requirements regarding statutory
audit of public-interest entities, with the exception of a tax advisory
service provided by a member firm to an insignificant entity of the
Group. The fee value, which was not billed to the Group, is less
than 0,05% of PwC’s audit fees for the financial statements 2022.
We consulted with the audit committee and reported the matter to
the Dutch regulator. The audit committee agreed with our
conclusion that due to the nature and limited size of the service,
our independence was not compromised.
Services rendered
The services, in addition to the audit, that we have provided to the
Company or its controlled entities, for the period to which our
statutory audit relates, are disclosed in note 14 of the
consolidated financial statements.
Responsibilities for the financial
statements and the audit
Responsibilities of the board of directors and the audit
committee for the financial statements
The board of directors is responsible for:
•
the preparation and fair presentation of the financial statements
in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch
Civil Code; and for
•
such internal control as the board of directors determines is
necessary to enable the preparation of the financial statements
that are free from material misstatement, whether due to fraud
or error.
As part of the preparation of the financial statements, the board
of directors is responsible for assessing the Company’s ability to
continue as a going concern. Based on the financial reporting
frameworks mentioned, the board of directors should prepare the
financial statements using the going concern basis of accounting
unless the board of directors either intends to liquidate the
Company or to cease operations, or has no realistic alternative
but to do so. The board of directors should disclose events and
circumstances that may cast significant doubt on the Company’s
ability to continue as a going concern in the financial statements.
The audit committee is responsible for overseeing the Company’s
financial reporting process.
Our responsibilities for the audit of the financial statements
Our responsibility is to plan and perform an audit engagement in
a manner that allows us to obtain sufficient and appropriate audit
evidence to provide a basis for our opinion. Our objectives are to
obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement,
whether due to fraud or error and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high but not
absolute level of assurance, which makes it possible that we may
not detect all material misstatements. Misstatements may arise
due to fraud or error. They are considered to be material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of the financial statements.
Materiality affects the nature, timing and extent of our audit
procedures and the evaluation of the effect of identified
misstatements on our opinion.
A more detailed description of our responsibilities is set out in the
appendix to our report.
Amsterdam, 25 June 2022
PricewaterhouseCoopers Accountants N.V.
Original has been signed by Fernand Izeboud RA
280
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Other information
Independent auditor’s report
continued
Appendix to our auditor’s report on the financial
statements2022 of Prosus N.V.
In addition to what is included in our auditor’s report, we have
further set out in this appendix our responsibilities for the audit of
the financial statements and explained what an audit involves.
The auditor’s responsibilities for the audit of the
financialstatements
We have exercised professional judgement and have maintained
professional scepticism throughout the audit in accordance with
Dutch Standards on Auditing, ethical requirements and
independence requirements. Our audit consisted, among other
things of the following:
•
Identifying and assessing the risks of material misstatement of
the financial statements, whether due to fraud or error, designing
and performing audit procedures responsive to those risks, and
obtaining audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the intentional
override of internal control;
•
Obtaining an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control;
•
Evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related
disclosures made by the board of directors;
•
Concluding on the appropriateness of the board of directors’
use of the going concern basis of accounting, and based on the
audit evidence obtained, concluding whether a material
uncertainty exists related to events and/or conditions that may
cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the
related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the
date of our auditor’s report and are made in the context of our
opinion on the financial statements as a whole. However, future
events or conditions may cause the Company to cease to
continue as a going concern; and
•
Evaluating the overall presentation, structure and content of the
financial statements, including the disclosures, and evaluating
whether the financial statements represent the underlying
transactions and events in a manner that achieves fair
presentation.
Considering our ultimate responsibility for the opinion on the
consolidated financial statements, we are responsible for the
direction, supervision and performance of the group audit. In this
context, we have determined the nature and extent of the audit
procedures for components of the Group to ensure that we
performed enough work to be able to give an opinion on the
financial statements as a whole. Determining factors are the
geographic structure of the Group, the significance and/or risk
profile of group entities or activities, the accounting processes and
controls, and the industry in which the Group operates. On this
basis, we selected group entities for which an audit or review of
financial information or specific balances was considered
necessary.
We communicate with the audit committee regarding, among
other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit. In this respect, we
also issue an additional report to the audit committee in
accordance with article 11 of the EU Regulation on specific
requirements regarding statutory audit of public-interest entities.
The information included in this additional report is consistent with
our audit opinion in this auditor’s report.
We provide the audit committee with a statement that we have
complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related actions taken to
eliminate threats or safeguards applied.
From the matters communicated with the audit committee, we
determine those matters that were of most significance in the
audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, not communicating the matter is in the public
interest.
281
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Performance reviewGovernance
Financial statements
Other information
Other information to the company financial statements
for the year ended 31 March 2022
Extract from the articles of association relating to net profit/(loss) appropriation
“Article 30. Profits and Distributions
30.1
The Board may decide that all or part of the profits realised during a financial year will be fully or partially appropriated to
increase and/or form reserves.
30.2
The profits remaining after application of Article 30.1 shall be put at the disposal of the General Meeting. The Board shall make
a proposal for that purpose. A proposal to make a distribution shall be dealt with as a separate agenda item at the General
Meeting.
30.3
In connection with the crossholding between Naspers and the Company, Naspers and the Company entered into the cross-
holding agreement dated the twenty-seventh day of May two thousand and twenty-one, as it will read from time to time (the
Cross-Holding Agreement). To give full effect to the Cross-Holding Agreement Articles 30.4 and 30.5 were introduced in the
Articles of Association, and these Articles will cease to apply upon the Cross-Holding Agreement having been terminated
or otherwise ceasing to be operative in accordance with applicable law and/or its terms.
30.4
If it concerns a Terminal Economics Distribution, the Distributable Amount will be distributed among the Ordinary Dividend Prosus
Shares as follows:
(a) On each Ordinary Share A: the amount equal to the Distributable Amount times the Ordinary Shares A Effective Economic
Interest divided by the number of Ordinary Shares A issued and outstanding, excluding Prosus Treasury Shares. Whereby
the Ordinary Shares A Effective Economic Interest is calculated as follows:
•
z = c / (1 – (ax b)) or in words z equals c divided by 1 minus (a times b), where:
•
z means the Ordinary Shares A Effective Economic Interest;
•
a means the Distribution Rights % of the Naspers Held Cross-Holding Shares;
•
b means the Distribution Rights % of the Prosus Held Cross-Holding Shares; and
•
c means the Distribution Rights % of the Ordinary Shares A.
(b) On each Ordinary Share B: the Aggregate B Share Entitlement divided by the number of issued and outstanding Ordinary
Shares B, excluding Prosus Treasury Shares. Whereby the Aggregate B Share Entitlement is calculated as follows:
Distribution Rights % of Ordinary Shares B times Naspers Effective Economic Interest times the Distributable Amount divided
by the Distribution Right % of the Naspers Held Cross-Holding Shares.
(c) On each Ordinary Share N: the amount equal to the Distributable Amount times the Prosus Free-Float's Effective Economic
Interest divided by the number of Ordinary Shares N issued and outstanding, excluding Prosus Treasury Shares and
excluding the number of Ordinary Shares N which are Naspers Held-Cross Holding Shares. Whereby Prosus Free-Float's
Effective Economic Interest is calculated as follows:
•
z = c / (1 – (a x b)) or in words z equals c divided by 1 minus (a times b), where:
•
z means Prosus Free-Float's Effective Economic Interest;
•
a means the Distribution Rights % of the Naspers Held Cross-Holding Shares;
•
b means the Distribution Rights % of the Prosus Held Cross-Holding Shares; and
•
c means the Distribution Rights % of the Ordinary Shares N held by the Prosus Free-Float Shareholders.
(d) On any other Ordinary Dividend Prosus Share: the amount equal to the Distributable Amount times the Effective
Economic Interest of such Ordinary Dividend Prosus Share.
30.5
The definitions used in Article 30.4
30.6
Notwithstanding the provisions of Article 30.4, due to the cross holding between Naspers and the Company, and as long as such
cross holding exists, the distribution to Naspers on the Naspers Held Cross-Holding Shares will be capped at an amount equal
to the Distributable Amount multiplied by the Naspers Effective Economic Interest, with the reduction, if any, being applied first to
the Ordinary Shares N forming part of the Naspers Held Cross-Holding Shares.
30.7
If it concerns any other distribution than referred to in Articles 30.4 through 30.6, the Distributable Amount will be distributed
among the Shares as follows:
(a) on the Ordinary Shares Non a Pari Passu basis;
(b) each Ordinary Share A is entitled to one-fifth (1/5) of the amount of a distribution made on each Ordinary Share N,
multiplied by the Free Float Percentage; and
(c) each Ordinary Share B is entitled to one-millionth (1/1,000,000) of the amount of a distribution made on each Ordinary
Share N.
30.8
Distributions from the Company's distributable reserves may only be made pursuant to a resolution of the General Meeting at
the proposal of the Board.”
282
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Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
284
Shareholder and corporate information
285
Analysis of shareholders and shareholders’ diary
286
Non-IFRS financial measures and alternative
performancemeasures
294
Glossary
Other
information
283
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Shareholder and corporate information
Administration and corporate information
Company secretary
Lynelle Bagwandeen
Gustav Mahlerplein 5
Symphony Offices
1082 MS Amsterdam
The Netherlands
Registered office
Gustav Mahlerplein 5
Symphony Offices
1082 MS Amsterdam
The Netherlands
Tel: +31 20 299 9777
Website:
www.prosus.com
Registration number
34099856
Incorporated in the Netherlands
Independent auditor
PricewaterhouseCoopers Accountants N.V.
Thomas R Malthusstraat 5
1066 JR Amsterdam
The Netherlands
Euronext listing agent
ING Bank N.V.
Bijlmerplein 888
1102 MG Amsterdam
The Netherlands
JSE transfer secretary
Computershare Investor Services
Proprietary Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank, Johannesburg 2196
South Africa
Tel: +27 (0) 86 110 0933
Cross-border settlement agent
Citibank, N.A. South Africa branch
145 West Street
Sandown, Johannesburg 2196
South Africa
Euronext paying agent
ABN AMRO Bank N.V.
Corporate broking and issuer services HQ7212
Gustav Mahlerlaan 10
1082 PP Amsterdam
The Netherlands
ADR programme
Bank of New York Mellon maintains a Global
BuyDIRECT
SM
plan for Prosus N.V.
For additional information, visit Bank of New York Mellon’s website
at
www.globalbuydirect.com
or call Shareholder Relations at
1-888-BNY-ADRS or 1-800-345-1612 or write to:
Bank of New York Mellon
Shareholder Relations Department – Global BuyDIRECT
SM
Church Street Station
PO Box 11258
New York
NY 10286-1258
USA
JSE sponsor
Investec Bank Limited
(Registration number: 1969/004763/06)
PO Box 785700
Sandton 2146
South Africa
Tel: +27 (0)11 286 7326
Fax: +27 (0)11 286 9986
Attorneys
Allen & Overy LLP
Apollolaan 15
1077 AB Amsterdam
The Netherlands
Investor relations
Eoin Ryan
InvestorR[email protected]
Tel: +1 347-210-4305
284
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
Analysis of shareholders and shareholders’ diary
The following shareholders hold 5% and more of the
Nordinary issued share capital of the company:
Name
% of N ordinary
shares held
Number of
N ordinary
shares owned
Naspers Limited
56.92%*
1 180 250 012*
As a result of the cross-holding between Prosus and Naspers,
theeconomic interest attributable to Naspers is 41.97%. More
information can be found in the Governance section.
Prosus share price and trade volume for FY22
Prosus share prices (in Euros) Volume traded
01/04/2021
01/05/2021
01/06/2021
01/07/2021
01/08/2021
01/09/2021
01/10/2021
01/11/2021
01/12/2021
01/01/2022
01/02/2022
01/03/2022
0
50 000
100 000
150 000
200 000
250 000
0
20
40
60
80
100
120
Shareholders’ diary
Annual general meeting
24 August 2022
Reports
23 November 2022
27 June 2022
27 June 2022
Dividend
Declaration
24 August 2022
Payment
27 September 2022
Financial year-end
31 March 2023
285
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
Non-IFRS financial measures and
alternativeperformancemeasures
1 Core headline earnings
Core headline earnings represent headline earnings, excluding certain non-operating items. Specifically, headline earnings are adjusted
for the following items to derive core headline earnings: (i) equity-settled share-based payment expenses on transactions where there is
nocash cost to us. These include those relating to share-based incentive awards settled by issuing treasury shares as well as certain
share-based payment expenses that are deemed toarise on shareholder transactions; (ii) subsequent fair-value remeasurement of
cash-settled share-based incentive expenses; (iii) cash-settled share-based compensation expenses deemed to arise from shareholder
transactions by virtue of employment; (iv) deferred taxation income recognised on the first-time recognition of deferred tax assets, as this
generally relates to multiple prior periods and distorts current-period performance; (v) fair-value adjustments onfinancial and unrealised
currency translation differences, as these items obscure our underlying operating performance; (vi) one-off gains and losses (including
acquisition-related costs) resulting from acquisitions and disposals of businesses, as these items relate to changes in our composition
and are not reflective of our underlying operating performance; (vii) the amortisation of intangible assets recognised in business
combinations and acquisitions; and (viii) the donations due to Covid-19, as these expenses are not considered operational in nature.
These adjustments are made to the earnings of businesses controlled by us, as well asour share of earnings of associates and joint
ventures, to the extent that the information isavailable.
Impact of share-based compensation expenses on core headline earnings
Effective April 2020, the group changed the definition of core headline earnings related to thetreatment of the group’s SAR share-based
compensation benefits. Core headline earnings include the impact of the group’s SAR share-based compensation expenses based on
the grant date fair value for cash-settled share-based compensation benefits. The CODM reviews core headline earnings to include the
impact of share-based compensation expenses based on the grant date fair value for all of the group’s SAR share-based compensation
benefits. The non-IFRS measure therefore excludes the remeasurement portion of the group’s cash-settled share-based compensation
benefits. Including only the grant date, fair value of the group’s cash-settled share-based compensation benefits is consistent with how
the CODM reviewed these measures prior to the modification of the SARs to a cash-settled scheme. The above change was included in
the adjusted EBITDA and trading profit/(loss) results presented for theyear ended 31 March 2021.
On an economic-interest basis, this non-IFRS measure will continue to include the group’s proportionate share of its associate cash-
settled share-based compensation expenses and excludes the share of its associate equity-settled share-based compensation
expenses.
286
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
Non-IFRS financial measures and alternative performance measures
continued
1 Core headline earnings
(continued)
Reconciliation of core headline earnings
Year ended 31 March
2022
US$’m
2021
US$’m
Headline earnings
3 076
5 840
Adjusted for:
– Equity-settled share-based payment expenses
1 535
746
– Remeasurement of cash-settled share-based incentive expenses
(5)
594
– Reversal of deferred tax assets
—
6
– Amortisation of other intangible assets
747
440
– Fair-value adjustments and currency translation differences
(1 685)
(2 896)– Retention option expense
14
62
– Transaction-related costs
46
47
– Covid-19 donations
—
13
– Other
1
—
7
Core headline earnings
3 728
4 859
Per share information for the year
Core headline earnings per ordinary share (US cents)
247
299
Diluted core headline earnings per ordinary share (US cents)
2
236
291
1 Other adjustments relate mainly to the increase in provisions related to disposals.
2 The diluted core headline earnings per share include a decrease of US$170.2m (2021: US$139.3m) relating to the future dilutive impact of potential ordinary shares issued by equity-accounted
investees.
287
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Financial statements
Other information
1 Core headline earnings
(continued)
Equity-accounted results
The group’s equity-accounted investments contributed to the summarised consolidated financial statements as follows:
Year ended 31 March
2022
US$’m
2021
US$’m
Share of equity-accounted results
9 256
7 095
– Gains on acquisitions and disposals
(6 227)
(1 132)
– Impairment of investments
1 092
933
Contribution to headline earnings
4 121
6 896
– Amortisation of other intangible assets
680
355
– Equity-settled share-based payment expenses
1 512
735
– Fair-value adjustments and currency translation differences
(1 761)
(2 734)Contribution to core headline earnings
4 552
5 252
Tencent
5 413
5 721
VK (previously Mail.ru)
(51)
(34)
Delivery Hero
(409)
(230)
Other
(401)
(205)
The group applies an appropriate lag period of not more than three months in reporting the results of equity-accounted investments.
Non-IFRS financial measures and alternative performance measures
continued
288
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Other information
2 Growth in local currency, excluding acquisitions and disposals
The group applies certain adjustments to segmental revenue and trading profit reported inthesummarised consolidated financial
statements to present the growth in such metrics inlocal currency and excluding the effects of changes in the composition of the group.
Such underlying adjustments provide a view of the company’s underlying financial performance thatmanagement believes is more
comparable between periods by removing the impact of changes in foreign exchange rates and changes in the composition of the
group on its results. Such adjustments are referred to herein as ‘growth in local currency, excluding acquisitions and disposals’. The group
applies the following methodology in calculating growth in local currency, excluding acquisitions and disposals:
•
Foreign exchange/constant currency adjustments have been calculated by adjusting the current period’s results to the prior period’s
average foreign exchange rates, determined asthe average of the monthly exchange rates for that period. The local currency financial
information quoted is calculated as the constant currency results, arrived at using the methodology outlined above, compared with the
prior period’s actual IFRS results. The relevant average exchange rates (relative to the US dollar) used for the group’s most significant
functional currencies, were:
Year ended 31 March
Currency (1FC = US$) 2022
2021
South African rand (ZAR)
0.0670
0.0614
Euro (EUR)
1.1586
1.1691
Chinese yuan renminbi (RMB)
0.1562
0.1479
Brazilian real (BRL)
0.1891
0.1830
Indian rupee (INR)
0.0134
0.0135
Polish zloty (PLN)
0.2525
0.2593
Russian rouble (RUB)
0.0134
0.0134
British pound sterling (GBP)
1.3620
1.3152
Turkish lira (TRY)
0.0927
0.1344
Romanian leu (RON)
0.2346
0.2405
•
Adjustments made for changes in the composition of the group relate to acquisitions, mergers and disposals of subsidiaries and
equity-accounted investments, as well as to changes in the group’s shareholding in its equity-accounted investments. For acquisitions,
adjustments are made to remove the revenue and trading profit/(loss) of the acquired entity from the current reporting period and, in
subsequent reporting periods, to ensure that the current reporting period and the comparative reporting period contain revenue and
trading profit/(loss) information relating to the same number of months. For mergers, adjustments are made to include a portion of the
prior period’s revenue and trading profit/(loss) of the entity acquired as a result of a merger. For disposals, adjustments are made to
remove the revenue and trading profit/(loss) of the disposed entity from the previous reporting period to the extent that there is no
comparable revenue or trading profit/(loss) information in the current period and, in subsequent reporting periods, to ensure that the
previous reporting period does not contain revenue and trading profit/(loss) information relating to the disposed business.
Non-IFRS financial measures and alternative performance measures
continued
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Other information
2 Growth in local currency, excluding acquisitions and disposals
(continued)
The following significant changes in the composition of the group during the respective reporting periods have been adjusted for in
arriving at the alternative performance measures financial information:
Year ended 31 March 2022
Transaction
Basis of
accounting
Reportable
segment
Acquisition/
disposal
Dilution of the group’s interest in Tencent
Associate
Social and
Internet Platform
Disposal
Dilution and lag period catch-up adjustment
following the subsequent loss of control of the
group’s interest in VK (Mail.ru)
Associate
Social and
Internet Platform
Disposal/
acquisition
Acquisition of the group’s interest in Encuentra
Associate
Ecommerce
Acquisition/
disposal
Acquisition of the group’s interest in Grupo ZAP
Joint venture
Ecommerce
Acquisition
Acquisition of the group’s interest in P24
Subsidiary
Ecommerce
Acquisition
Acquisition of the group’s interest in Carsmile
Subsidiary
Ecommerce
Acquisition
Acquisition of the group’s interest in Kiwi Finance
Subsidiary
Ecommerce
Acquisition
Acquisition of the group’s interest in Obido
Subsidiary
Ecommerce
Acquisition
Acquisition of the group’s interest in EMPG
Associate
Ecommerce
Acquisition
Disposal of the group’s interest in letgo
Subsidiary
Ecommerce
Disposal
Acquisition of the group’s interest in OfferUp
Associate
Ecommerce
Acquisition
Disposal of the group’s interest in Aasaanjobs
Subsidiary
Ecommerce
Disposal
Disposal of the group’s interest in iFood Colombia
Subsidiary
Ecommerce
Disposal/
acquisition
Disposal of the group’s interest in iFood Mexico
Subsidiary
Ecommerce
Disposal
Acquisition of the group’s interest in Kolonial
Associate
Ecommerce
Acquisition
Increase in the group’s interest in Delivery Hero
Associate
Ecommerce
Acquisition
Disposal of the group’s interest in Luno
Associate
Ecommerce
Disposal
Dilution of the group’s interest in Zest
Associate
Ecommerce
Disposal
Increase of the group’s interest in Remitly
Associate
Ecommerce
Acquisition/
disposal
Acquisition of the group’s interest in Shipper
Associate
Ecommerce
Acquisition
Non-IFRS financial measures and alternative performance measures
continued
290
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
2 Growth in local currency, excluding acquisitions and disposals
(continued)
Year ended 31 March 2022
Transaction
Basis of
accounting
Reportable
segment
Acquisition/
disposal
Increase of the group’s interest in BYJU’S
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in Eruditus
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in GoodHabitz
Subsidiary
Ecommerce
Acquisition
Acquisition of the group’s interest in Stack Overflow
Subsidiary
Ecommerce
Acquisition
Disposal of the group’s interest in Wavy
Subsidiary
Ecommerce
Disposal
Step-up of the group’s interest in Zoop
Subsidiary
Ecommerce
Disposal/
acquisition
Acquisition of the group’s interest in PharmEasy
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in DeHaat
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in Klar
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in 99 Minutos
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in Aruna
Associate
Ecommerce
Acquisition
Dilution of the group’s interest in SimilarWeb
Associate
Ecommerce
Disposal
Dilution of the group’s interest in Swiggy
Associate
Ecommerce
Disposal
Acquisition of the group’s interest in Flink
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in DotPe
Private Limited
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in FinWizard
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in Flat
White Capital
Associate
Ecommerce
Acquisition
Dilution of the group’s interest in Udemy
Associate
Ecommerce
Disposal
Acquisition of the group’s interest in Skillsoft
Associate
Ecommerce
Acquisition
Acquisition of the group’s interest in Delivery
Solutions KFT
Subsidiary
Ecommerce
Acquisition
Acquisition of the group’s interest in Flip
Associate
Ecommerce
Acquisition
Disposal of the group’s interest in
Interbase Resources
Associate
Ecommerce
Disposal
Acquisition of the group’s interest in Meesho
Associate
Ecommerce
Acquisition
The net adjustment made for all acquisitions and disposals on continuing operations that took place during the year ended 31March
2022, amounted to a negative adjustment of US$738m on revenue anda negative adjustment of US$591m on tradingprofit.
Non-IFRS financial measures and alternative performance measures
continued
291
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
2 Growth in local currency, excluding acquisitions and disposals
(continued)
The adjustments to the amounts reported in terms of IFRS, which have been made in arriving at the alternative performance measures
financial information, are presented in the table below:
Year ended 31 March
2021
A
2022
B
2022
C
2022
D
2022
E
2022
F
2
2022
G
3
2022
H
4
IFRS 8
1
US$’m
Group
composition
disposal
adjustment
US$’m
Group
composition
acquisition
adjustment
US$’m
Foreign
currency
adjustment
US$’m
Local
currency
growth
US$’m
IFRS 8
1
US$’m
Local
currency
growth
% change
IFRS 8
% change
Revenue
Ecommerce
6 230 9 825
(133) 822 (224)
3 13051 58
Classifieds
1 599 2 975
(33) 81 (121)
1 44993 86
Food Delivery
1 486 2 992
(9) 374 (1)
1 14277 >100
Payments and Fintech
577 (7)
9
(38) 255 796
45 38
Edtech
115 14 225 425
—
7155 >100
Etail
2 250
(2) 10 (61) 62
2 2593 —
Other
203 (96) 123 (3) 151 378
>100 86
Social
and Internet Platforms
22 526 (1 497) 3 390 25 794
70
1 30516 15
Tencent
22 155 (1 493) 3 297 25 261
—
1 30216 14
VK
371 (4) 70 533
3
9325 44
Corporate segment
— — — — — —
— —
Group economic
interest
28 756 (1 630) 6 520 35 619
892
1 08124 24
1 Figures presented on an economic-interest basis as per the segmental review.
2 A + B + C + D + E.
3 E/(A + B) x 100.
4 (F/A) -1 x 100.
Non-IFRS financial measures and alternative performance measures
continued
292
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
2 Growth in local currency, excluding acquisitions and disposals
(continued)
The adjustments to the amounts reported in terms of IFRS, which have been made in arriving at the alternative performance measures
financial information, are presented in the table below:
Year ended 31 March
2021
A
2022
B
2022
C
2022
D
2022
E
2022
F
2
2022
G
3
2022
H
4
IFRS 8
1
US$’m
Group
composition
disposal
adjustment
US$’m
Group
composition
acquisition
adjustment
US$’m
Foreign
currency
adjustment
US$’m
Local
currency
growth
US$’m
IFRS 8
1
US$’m
Local
currency
growth
% change
IFRS 8
% change
Trading profit
Ecommerce
(429) 45 (218)
3
(512)(1 111)
<(100) <(100)
Classifieds
9 7
13
9(13) 25
(59) >100
Food Delivery
(355) 33 (129) (2) (271) (724)
(84) <(100)
Payments and Fintech
(68)
6
(1) (5)
8
(60)
13 12
Edtech
(14) (1) (55) (117)
1
(48)<(100) <(100)
Etail
68 (35)
—
(3)3
(103)<(100) <(100)
Other
(69) (8) (46) (200)
1
(78)<(100) <(100)
Social
and Internet Platforms
6 154
(413) (5) 342 241
6 3194 3
Tencent
6 126
(413)
—
342 218
6 2734 2
VK
28 46
—
(5)—
2382 64
Corporate segment
(110) (167)
— — 1
(58)(53) (52)
Group economic
interest
5 615
(368) (223) 346 (329)
5 041(6) (10)
1 Figures presented on an economic-interest basis as per the segmental review.
2 A + B + C + D + E.
3 E/(A + B) x 100.
4 (F/A) -1 x 100.
Non-IFRS financial measures and alternative performance measures
continued
293
Prosus annual report 2022
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Term/Acronym Description
ADR
American Depository Receipt
AFM
Netherlands Authority for the Financial Markets
(Stichting Autoriteit Financiële Markten)
AGM
Annual general meeting
Agtech
Agriculture technology
AI
Artificial intelligence
app
Software application designed to run on smartphones and tablet computers.
Average
monthly
payinglisters
A measure of the number of monthly users on a platform who yield one or more revenue generating transactions,
such as listing fees or advertising.
B2C
Business-to-consumer (direct-to-consumer)
BIT
Business information technology
bn
Billion
BNPL
Buy now pay later
BRICS
Brazil, Russia, India, China and South Africa
BRL
Brazilian real
C2C
Consumer-to-consumer
CAGR
Compound annual growth rate
Capex
Capital expenditure
CEE
Central and Eastern Europe
CEO
Chief executive officer
CFO
Chief financial officer
CODM
Chief operating decision-maker
COHE
Core headline earnings
COO
Chief operating officer
Core headline
earnings
Core headline earnings represent headline earnings excluding certain non-operating items. Specifically, headline
earnings are adjusted for the following items to derive core headline earnings: (i) equity-settled share-based
payment expenses on transactions where there is no cash cost to the group. These include those relating to
share-based incentive awards settled by issuing treasury shares as well as certain share-based payment expenses
that are deemed to arise on shareholder transactions; (ii) subsequent fair-value remeasurement of cash-settled
share-based incentive expenses; (iii) cash-settled share-based compensation expenses deemed to arise from
shareholder transactions by virtue of employment; (iv) deferred taxation income recognised on the first-time
recognition of deferred tax assets as this generally relates to multiple prior periods and distorts current-period
performance; (v) fair-value adjustments on financial instruments and unrealised currency translation differences, as
these items obscure the group’s underlying operating performance; (vi) once-off gains and losses (including
acquisition-related costs) resulting from acquisitions and disposals of businesses as these items relate to changes in
the group’s composition and are not reflective of the group’s underlying operating performance; (vii) the
amortisation of intangible assets recognised in business combinations and acquisitions; and (viii) the donations due
to Covid-19, as these expenses are not considered operational in nature. These adjustments are made to the
earnings of businesses controlled by the group as well as the group’s share of earnings of associates and joint
ventures, to the extent that the information is available.
Covid-19
Coronavirus disease
DAU
Daily active users
Dmart
Small Delivery Hero-owned warehouse
Glossary
294
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Financial statements
Other information
Prosus annual report 2022
Term/Acronym Description
EBIT
Earnings before interest and tax
Adjusted
EBITDA
Adjusted EBITDA represents operating profit/loss, as adjusted to exclude: (i) depreciation; (ii) amortisation; (iii)
retention option expenses linked to business combinations; (iv) other losses/gains—net, which includes dividends
received from investments, profits and losses on sale of assets, fair-value adjustments of financial instruments,
impairment losses, compensation received from third parties for property, plant and equipment impaired, lost or
stolen, and gains or losses on settlement of liabilities; (v) cash-settled share-based compensation expenses
deemed to arise from shareholder transactions by virtue of employment; and (vi) subsequent fair-value
remeasurement of cash-settled share-based compensation expenses, equity-settled share-based compensation
expenses for group share option schemes as well as those deemed to arise on shareholder transactions (but not
excluding share-based payment expenses for which the group has a cash cost on settlement with participants).
Ecommerce
Electronic commerce
Economic
interest
Investments in associated companies and joint ventures have been accounted for under the equity method for all
periods, unless otherwise indicated. Associated companies are those companies over which we exercise significant
influence, but which we do not control or jointly control. Joint ventures are arrangements in which we contractually
share control over an activity with others and in which the parties have rights to the net assets of the arrangement.
This approach is consistent with the application of the equity method of accounting required by IFRS-EU in the
financial statements. References to ‘revenue from the group’ or ‘trading profit from the group’, as applicable,
therefore exclude our share of revenue or trading profit from investments in associated companies and joint
ventures. We have, however, also included certain information based on the proportionate consolidation of
associated companies and joint ventures in that section, as indicated therein and as further explained below.
IFRS 8
Operating Segments
aligns the reporting of operating segments with internal management reporting. As the
CODM analyses segment results in accordance with the investments in associated companies and joint ventures on
a proportionately consolidated basis for segmental reporting purposes, this method is also applied for segment
reporting in the financial statements. Proportionate consolidation is a method of accounting whereby our share of
each of the income and expenses of associated companies and joint ventures is combined line by line with similar
items in our operating segments. We refer to revenue and trading profit measures that include its share of revenue
or trading profit from investments in associated companies and joint ventures as ‘proportionately consolidated’ or
on an ‘economic interest’ basis.
Edtech
Marrying learning with technology, enabling new and exciting ways for more people to add to their skills and
knowledge.
EMEA
Europe, Middle East and Africa
E&S
Environmental and social
ESG
Environmental, social and governance
EU
European Union
Fintech
Financial technology is an economic industry that introduces new solutions demonstrating an incremental or
radical/disruptive innovation development of applications, processes, products or business models in the financial
services industry.
FLIGHT
Funding and Learning Initiative for Girls in Higher Education and Skills Training (Prosus initiative)
FMCG
Fast-moving consumer goods
Free cash flow
Free cash flow represents cash generated from operations, plus dividends received, minus: (i) net capital
expenditure; (ii) capital leases repaid (gross); and (iii) cash taxation paid. Free cash flow reflects an additional way
of viewing our liquidity that the board believes is useful to investors because it represents cash flows that could be
used for distribution of dividends, repayment of debt (including interest thereon) or to fund our strategic initiatives,
including acquisitions, if any.
FY
Financial year
GAAP
Generally accepted accounting policies
GDP
Gross domestic product
GDPR
EU’s General Data Protection Regulation
GHG
Greenhouse gas
Gig economy
Labour market characterised by the prevalence of short-term contracts orfreelance work as opposed to
permanentjobs.
GMV
Gross merchandise value
Glossary
continued
295
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Financial statements
Other information
Prosus annual report 2022
Term/Acronym Description
GPO
Global payments operations
GRI
Formerly Global Reporting Initiative
Gross
merchandise
value (GMV)
A measure of the growth of a business determined by the total value of merchandise sold over a given time period
through a consumer to consumer (C2C) or B2C platform.
Growth in
localcurrency,
excluding
acquisitions
and disposals
We apply certain adjustments to the segmental revenue and trading profit reported in the financial statements to
present the growth in such metrics in local currency and excluding the effects of changes in our composition. Such
underlying adjustments provide a view of our underlying financial performance that management believes is more
comparable between periods by removing the impact of changes in foreign exchange rates and changes in our
composition on our results. Such adjustments are referred to herein as ‘growth in local currency, excluding
acquisitions and disposals’. We apply the following methodology in calculating growth in local currency, excluding
acquisitions and disposals:
• Foreign exchange/constant currency adjustments have been calculated by adjusting the current period’s results
to the prior period’s average foreign exchange rates, determined as the average of the monthly exchange rates
for that period. The local currency financial information quoted is calculated as the constant currency results,
arrived at using the methodology outlined above, compared to the prior period’s actual IFRS-EU results.
• Adjustments made for changes in our composition relate to acquisitions, mergers and disposals of subsidiaries
and equity accounted investments, as well as to changes in our shareholding in our equity accounted
investments. For acquisitions, adjustments are made to remove the revenue and trading profit/(loss) of the
acquired entity from the current reporting period and, in subsequent reporting periods, to ensure that the current
reporting period and the comparative reporting period contain revenue and trading profit/(loss) information
relating to the same number of months. For mergers, adjustments are made to include a portion of the prior
period’s revenue and trading profit/(loss) of the entity acquired as a result of a merger. For disposals,
adjustments are made to remove the revenue and trading profit/(loss) of the disposed entity from the previous
reporting period to the extent that there is no comparable revenue or trading profit/(loss) information in the
current period and, in subsequent reporting periods, to ensure that the previous reporting period does not
contain revenue and trading profit/(loss) information relating to the disposed business.
Headline
earnings
Headline earnings represents net profit for the year attributable to the group’s equity holders, excluding certain
defined separately identifiable remeasurements relating to, among others, impairments of tangible assets,
intangible assets (including goodwill) and equity-accounted investments, gains and losses on acquisitions and
disposals of investments as well as assets, dilution gains and losses on equity-accounted investments,
remeasurement gains and losses on disposal groups classified as held for sale and remeasurements included in
equity-accounted earnings, net of related taxes (both current and deferred) and the related non-controlling
interests. These remeasurements are determined in accordance with Circular 1/2021, headline earnings, as issued
by the South African Institute of Chartered Accountants, at the request of the JSE Limited in relation to the
calculation of headline earnings and disclosure of a detailed reconciliation of headline earnings to the earnings
numbers used in the calculation of basic earnings per share in accordance with the requirements of IAS 33
Earnings per Share
, under the JSE Listings Requirements.
Healthtech
Health technology involves the design, development, creation, use and maintenance of information systems and
the internet for the healthcare industry. Automated and interoperable healthcare information systems are expected
to lower costs, improve efficiency and reduce error while providing better consumer care and service.
HEPS
Headline earnings per share
HR
Human resources
I&T
Information and technology
IAPP
International Association of Privacy Professionals
IAS
International Accounting Standards
IASB
International Accounting Standards Board
ICT
Information and communications technology
IFRS
International Financial Reporting Standards
IIRC
International Integrated Reporting Council
ILO
International Labour Organization
IMF
International Monetary Fund
Glossary
continued
296
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
Prosus annual report 2022
Term/Acronym Description
Internal rate
ofreturn (IRR)
IRR is presented in this report for illustrative purposes only and is calculated based on the estimated valuations of
our internet investments. The estimated valuations are calculated as of 31 March 2022 using a combination of: (i)
prevailing share prices for stakes in listed assets; (ii) valuation estimates derived from the average of sell-side
analysts currently covering Naspers for stakes in unlisted assets; and (iii) post-money valuations on transactions of
these assets or from similar recent transactions for stakes in unlisted assets where analyst consensus is not
available. In respect of (ii) above, we do not endorse, and did not participate in, or provide any information for
purposes of the preparation of the market valuations calculated by third-party analysts. These valuation estimates
have not been confirmed by an independent third-party expert, such as an accounting firm or an investment bank.
Accordingly, these valuation estimates may not reflect past, present or future fair values, or any potentially
achievable fair value in the future and no reliance can be placed on these valuation estimates.
IP
Intellectual property
IPO
Initial public offering
IR
Investor relations
IRR
Internal rate of return
ISE
Irish Stock Exchange
ISL
Indian Sign Language
ISP
Internet service provider
JSE
JSE Limited (Johannesburg stock exchange)
JV
Joint venture
K–12
Kindergarten to grade 12
KPI
Key performance indicator
LatAm
Latin America
LGBTQIA+
Lesbian, gay, bisexual, transgender, queer/questioning, intersex, asexual and many other gender and sexual
identities
LIFE
Leadership in the food delivery ecosystem
LSE
London Stock Exchange
LTI
Long-term incentive
m
Million
M&A
Mergers and acquisitions
MAU
Monthly active users
MCSI index
Morgan Stanley Capital International index
MENA
Middle East and North Africa region
MIH B.V.
Myriad International Holdings B.V.
ML
Machine learning
N
Naira – Nigerian currency
NASDAQ
American stock market
Naspers
Naspers Limited
NGO
Non-governmental organisation
NPS
Net promoter score
OECD
Organisation for Economic Cooperation and Development (Brazil)
Omnichannel
A cross-channel content strategy that organisations use to improve their user experience.
OTA
Online travel agency
OTT
Over-the-top
1P
First party – in the context of food delivery, a capital-intensive own-delivery model.
Glossary
continued
297
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Sustainability review
Performance reviewGovernance
Financial statements
Other information
Prosus annual report 2022
Term/Acronym Description
3P
Third party – in the context of food delivery, a capital-light marketplace model where meals are delivered by
restaurants.
P2P
Peer-to-peer
PLN
Polish zloty
POPIA
Protection of Personal Information Act
Prosus
Prosus N.V.
Prosus FLIGHT
Funding and Learning Initiative for Girls in Higher Education and Skills Training
PSP
Payment service provider
PvE
Player versus environment
PwC
PricewaterhouseCoopers Accountants N.V.
R&D
Research and development
RCF
Revolving credit facility
RMB
Chinese renminbi
ROI
Return on investment
RSU
Restricted stock unit
RUB
Russian rouble
R (or ZAR)
South African rand
SA
South Africa
SaaS
Software as a Service
SAR(s)
Share appreciation right(s)
SASB
Sustainability Accounting Standards Board
SAST
South African standard time
SBTi
Science Based Targets initiative
SDG
United Nation’s Sustainable Development Goals
SICA
Prosus Social Impact Challenge for Accessibility
SME
Small and medium-sized enterprise
SO(s)
Share option(s)
STI
Short-term incentive
TAM
Total addressable market
TCFD
Task Force on Climate-related Financial Disclosures
tCO
2
e
Tonnes of CO
2
equivalent
Total payments
in value
A measure of payments, net of payment reversals, successfully completed through a payments platform (PayU),
excluding transactions processed through gateway products (ie those that link a merchant’s website to its
processing network and enable merchants to accept credit or debit card online payments).
TPV
Total payment value
Trading profit/
loss
Trading profit/loss represents operating profit/loss, as adjusted to exclude: (i) amortisation of intangible assets
recognised in business combinations and acquisitions, as these expenses are not considered operational in nature;
(ii) retention option expenses linked to business combinations; (iii) other losses/gains—net, which includes dividends
received from investments, profits and losses on sale of assets, fair-value adjustments of financial instruments,
impairment losses, compensation received from third parties for property, plant and equipment impaired, lost or
stolen, and gains or losses on settlement of liabilities; (iv) cash-settled share-based compensation expenses
deemed to arise from shareholder transactions by virtue of employment; and (v) subsequent fair-value
remeasurement of cash-settled share-based compensation expenses, equity-settled share-based compensation
expenses for group share option schemes as well as those deemed to arise on shareholder transactions (but not
excluding share-based payment expenses for which the group has a cash cost on settlement with participants).
Glossary
continued
298
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Sustainability review
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Financial statements
Other information
Prosus annual report 2022
Term/Acronym Description
TVET
Technical and vocational education training
Twitter
Social networking service
UAE
United Arab Emirates
UK
United Kingdom
UN
United Nations
UNEP
United Nations Environment Program
Unicorns
Start-up companies rapidly reaching a valuation of US$1bn.
US
United States of America
US$
US dollar
US$c
US dollar cent
VAS
Value-added services
VC
Venture capital
WHO
World Health Organization
YoY
Year on year
ZAR (or R)
South African rand
Glossary
continued
299
Group overview
Sustainability review
Performance reviewGovernance
Financial statements
Other information
Prosus annual report 2022
Gustav Mahlerplein 5
Symphony Offices
1082 MS Amsterdam
The Netherlands
www.prosus.com