NPSN.L Regulatory News (NPSN)

Naspers Limited

Incorporated in the Republic of South Africa

(Registration number 1925/001431/06)

(Naspers)

JSE share code: NPN ISIN: ZAE000015889

LSE share code: NPSN ISIN: US 6315121003

Summarised consolidated

financial results for the year

ended 31 March

2016

COMMENTARY

Naspers delivered a satisfactory performance. Core headline earnings (which the board regards as the best indicator of sustainable earnings) grew 21% to US$1.2bn. Consolidated development spend reduced 14% to US$708m. The internet segment continued to expand. Improved competitive positions and scale provide a foundation for sustainable future returns. The video-entertainment segment, however, bore the brunt of a sharp fall in commodity prices, which weakened both African currencies and consumer sentiment.

In the internet segment Tencent again shone on the back of healthy mobile engagement. In classifieds, monetisation plans are on track and resulted in a reduction in trading losses for the core portfolio (excluding new markets, primarily through the mobile app-only classifieds platform, letgo). Avito is delivering ahead of plan. In etail, eMAG expanded with improved operating leverage. Equity- accounted etail investments Flipkart and Souq invested more than prior years to drive revenues and improve product offerings. PayU made progress in its payment service provider (PSP) business, as it consolidated technology and drove efficiencies which, in turn, reduced operating losses. ibibo's air business turned profitable and we boosted our investment to build a leadership position in the hotels segment in India. In LatAm, Movile's mobile food-ordering platform, iFood, expanded and consolidated its leadership.

In the video-entertainment segment, the South African customer base grew by 325 000 homes despite a tough economy. However, recently the South African rand (SA rand) has weakened substantially and a weak macroeconomic outlook could reduce growth and profitability. This segment earns revenues in local currency while incurring a major portion of costs (content and transponder capacity) in United States dollar (US dollar). When local currencies weaken, both margins and financial performance thus suffer. In sub-Saharan Africa, we implemented substantial price increases, given the large US dollar cost base and weakening currencies. This combination of higher prices and weaker consumer sentiment resulted in a loss of 288 000 direct-to-home (DTH) customers. To reinvigorate growth, the focus is now on managing costs, minimising further price increases to the consumer and strengthening content in the mid and lower segments. The digital terrestrial television (DTT) customer base reached 2.4m homes at year-end, and development spend has declined. Our new subscription video-on-demand service, ShowMax, recorded a good start in South Africa with a deeper and more customised content offering than competitors and a focus on service delivery.

The media segment (previously print) faced the negative effect of structural and macroeconomic challenges on revenue. The focus on cost containment has, however, enabled Media24 to improve profitability while investing further in digital and ecommerce initiatives.

As announced on 18 April 2016 and in view of the growing international spread of its business, the group has changed its presentation currency for financial reporting purposes from SA rand to US dollar. In these consolidated numbers the financial performances of our businesses were consolidated in their respective functional currencies and translated to US dollar. The weakness in emerging-market currencies over the past year means year-on-year performance was dampened by the translation impact. Unlike the severe earnings impact of falling currencies on the video-entertainment segment, in ecommerce this impact is less of a concern given the group's diverse geographic spread, plus the fact that costs are also usually incurred in local currencies.

Where relevant in this report, we have adjusted amounts and percentages for the effects of foreign currency and acquisitions and disposals. Such adjustments (pro forma financial information) are quoted in brackets after the equivalent metrics reported under International Financial Reporting Standards (IFRS).

The following financial commentary and segmental review has been prepared on an economic-interest basis, including consolidated subsidiaries and a proportionate consolidation of associated companies

 and joint ventures.

FINANCIAL REVIEW

Revenues grew 6% (22%) to US$12.2bn, driven by growth from Tencent and from ecommerce on the back of revenue growth in classifieds, travel and etail. Consolidated revenues were US$5.9bn - down 10% year on year - primarily due to the impact of currency translation. Excluding currency translation, as well as the impact of acquisitions and disposals, consolidated revenues improved 11%.

Development spend, measured on an economic-interest basis, was stable at US$961m, while consolidated development spend reduced 14% to US$708m. Classifieds development spend, excluding investment in new markets through letgo, declined by a meaningful US$59m, DTT development spend in the video-entertainment segment reduced US$143m and consolidated etail platforms development spend dropped US$26m, as all three businesses continued to increase monetisation and scale. New areas of investment include: ibibo's hotels offering; building new classifieds markets (primarily the US) via the mobile app-only letgo platform; ShowMax; and developing consumer-facing offerings in PayU. Together these accounted for development spend of US$192m. Losses in our equity-accounted etail investments widened by US$68m as they build their platforms and grow revenues to outpace competition.

Trading profit increased 18% (38%) to US$2.2bn, driven by expansion of 39% (43%) in the group's share of Tencent's trading profit. Lower losses in classifieds and DTT, combined with ibibo's air-travel business turning profitable and a reduction in PayU's PSP losses as it scales, also boosted growth. These positives were offset by new investments discussed above and a decline in video entertainment's profitability. With significant US dollar costs, local currency revenues and a loss in sub-Saharan DTH customers, trading profit in the video-entertainment segment declined 17%.

IFRS operating profit declined from a positive US$161m to a negative US$177m in the current year, mainly due to the effects of currency weakness in the video-entertainment segment and impairments, as discussed below.

The group's share of equity-accounted results was 13% lower at US$1.3bn, largely due to one-off gains of US$498m in the prior-year figure. In the current year the group's share of equity-accounted earnings includes one-off gains of US$251m and impairment losses of US$180m recognised by our associates and joint ventures. The contribution to core headline earnings by equity-accounted investments, adjusted for these capital items, was up 25% to US$1.6bn.

The group recognised impairment losses of US$251m during the year, including US$53m relating to Nigerian equity-accounted etail investment, Konga. As reported in the first half, the group wrote off US$140m on its Brazilian online comparison shopping (OCS) business, Buscapé, which faced headwinds. As announced in February 2016, the group waived the preference share debt owed by Welkom Yizani Investments, the largest black economic empowerment structure in the South African print-media industry. This gave rise to an impairment of US$29m.

The group's Czech etail and ecommerce business, Netretail, and OCS platform, Heureka, were classified as held for sale on 30 September 2015. At year-end, the group recognised a writedown to fair value less costs of disposal of US$88m for Netretail. The sale of these businesses was subject to regulatory approval as at 31 March 2016. Subsequent to year-end, approval was received for the Heureka sale and we consequently recognised a gain on disposal of approximately US$61m.

Net interest expense on borrowings rose 19% to US$170m due to increased interest obligations after the US$1.2bn bond issued in July 2015.

Core headline earnings increased by 21% (49%) to US$1.2bn on the back of Tencent's contribution.

Consolidated free cash outflow of US$38m was recorded, marginally higher year on year. Lower capital expenditure in the video-entertainment business, a US$118m reduction in development spend and higher dividends from associates were offset by weaker cash flow from the sub-Saharan Africa video-entertainment business.

Following the US$2.5bn equity raise in December 2015, consolidated net gearing dropped to 12%. Some US$1.2bn of the proceeds was used for the acquisition of a controlling stake in Avito The company's external auditor has not audited, reviewed or reported on any forecasts in these summarised consolidated financial results.

SEGMENTAL REVIEW

Internet

The internet segment benefited from good growth in Tencent and ecommerce to deliver revenues of US$8.2bn, up 18% (31%) year on year. Trading profit was 38% higher year on year at US$1.6bn.

Tencent

For the year ended 31 December 2015, Tencent revenues were RMB102.9bn, up 30% annually. Non-GAAP profit attributable to shareholders (Tencent's measure of normalised performance) grew by 31% to RMB32.4bn. Strong mobile engagement is at the core of Tencent's continued growth. Weixin monthly active users increased 39% year on year to 697m, while mobile games and online advertising revenues were up 53% and 110% respectively, with mobile accounting for 65% of total advertising revenues. The rapid adoption of Tencent's mobile wallet has come at some cost because of subsidising bank fees. Tencent recorded expansion of services embedded in Weixin as use of Weixin Pay grew, as well as from services provided by online and offline partners. Enhancements to premium content provided via subscription services such as video and music, boosted QQ subscription services and drove a 30% year-on-year increase in social network revenues.

Excellent leadership, continued investment and innovation, together with building strategic partnerships across its businesses, position Tencent well for the long term. More information on Tencent's results is available at www.tencent.com/en-us/ir.

Mail.ru

Mail.ru's revenue for the year ended December 2015 was up 11% to RUB36.3bn. Group aggregate segment EBITDA - Mail.ru's measure of normalised performance - was 8% higher at RUB18.1bn.

Improved monetisation in VKontakte and expansion of targeted advertising were key drivers. A weaker rouble and higher share-based compensation expenditure drove the decline in aggregate net profit. More information on Mail.ru's results is available at https://corp.mail.ru/en/investors/.

Ecommerce

This segment recorded a bright year. Revenue grew 6% (24%) to US$2.6bn. The general decline in emerging-market currencies versus the US dollar had a significant impact on translating the segment's performance into US dollars.

The ecommerce business model relies on the continued success of existing businesses and on integrating new acquisitions. Continued investment to drive growth and innovation, develop new markets and deliver superior customer experiences resulted in development spend of US$854m and a trading loss of US$693m.

Progress was made in the classifieds unit, which generated strong revenue growth of 35% (46%). Naspers has demonstrated its ability to outperform direct competitors and gained share in India, Argentina and other markets. Performance indicators in most businesses are trending ahead of expectations.

We continue to invest in long-term growth opportunities, as evidenced by an additional US$1.2bn for a controlling stake in Avito in December 2015. Given the evolution towards mobile, we spent US$100m on a controlling interest in letgo, a contemporary app-only product, allowing us to pursue new markets such as the US. The consolidation with Wallapop in the US subsequent to year-end will give letgo increased scale. The existing classifieds businesses have solid mobile positions, with listings primarily from mobile devices.

Marketplaces continued to deliver stable revenue, positive margins (39%) and surplus cash flow (US$104m). The focus remains on the mobile experience, expanding products and services, and extending consumer reach. The most recognised brand in Polish ecommerce, Allegro, has grown from a consumer-to-consumer (C2C) marketplace to a predominantly business-to-consumer (B2C) third-party (3P) marketplace, and is now transitioning to a structured marketplace that includes first-party (1P) sellers as well. The group concluded the sale of its Swiss marketplace business, the Ricardo group, in September 2015 with proceeds of CHF240m.

Etail grew revenue by 12% (27%) and remains a driver of revenue in the ecommerce segment. This is a solid performance given the aggressive competition in many of our markets. A big share of the growth came from Flipkart (India), Souq (Middle East and North Africa) and eMAG (Central and Eastern Europe (CEE)).

eMAG, the group's consolidated consumer platform in CEE, expanded gross margins through better supplier terms, a more favourable category mix and additional revenue streams such as advertising. The group's CEE fashion business, Fashion Days, merged with eMAG towards the end of the financial year.

Built through organic growth and selective acquisitions, the payments business now operates under one global brand, PayU, across 16 countries. It is organised in three regions: Latin America; Europe, Middle East and Africa (EMEA); and India. PayU reported revenue growth of 1% (20%). In the payment services provider (PSP) area, the focus was on consolidating and migrating technology platforms, increased automation and creating new features. This has allowed the PSP business to scale and reduce losses.

Online travel in India is a business opportunity for us - the estimated US$9bn current market size is expected to double by 2020. Improving its position in air ticketing and hotel bookings, our Indian online travel business, ibibo, generated revenue of US$91m. This is 67% higher in local currency, adjusted for acquisitions and disposals. While registering growth ahead of competitors, ibibo's air-ticketing business turned profitable in the review period. The priority for ibibo is now to expand its hotel segment. Currently only

13% of hotel transactions are online. This is expected to grow to 40% in the next two to three years, creating a large and profitable opportunity.

ibibo's bus-ticketing business, redBus, recorded robust revenue growth of 37% in local currency and is looking at opportunities to expand its footprint. Given the success of redBus in India, the ibibo team has internationalised the platform and strategy, and launched in Singapore and Malaysia.

Movile, a leading mobile services platform in Latin America, exceeded expectations despite the downturn in the Brazilian economy and a deteriorating Brazilian real. Additional investments during the year were focused around iFood (a leading food-delivery platform in Brazil) and PlayKids (mobile app for children). Movile has also made some promising investments in a number of offline-to-online platforms in Brazil and across Latin America.

Video entertainment

The video-entertainment segment generated revenues of US$3.4bn - down 11% (up 10%) year on year. As customers are billed in local currencies, the rapid weakening of currencies in many African markets, driven by a rout in commodity prices, resulted in lower US dollar revenues. However, costs did not decline in a similar way as a significant portion (content and transponder capacity) is US dollar-denominated. Increased competition for content also pushed up costs. The combination of lower revenues and a higher cost base saw trading profit decrease to US$610m - down 17% on the prior year.

Consolidated development spend of US$85m (2015: US$206m) declined year on year, due to DTT scaling further. ShowMax and DTT in sub-Saharan Africa comprise the bulk of the current year's development spend.

The total base closed at 10.4m customers - 185 000 net growth year on year. Macroeconomic headwinds are likely for a while longer. During the year ahead we will absorb the full impact of sub-Saharan currency and customer declines, which will continue to depress financial performance in the near term. Our strategy is to focus on the mid and lower segments of the market, where there is still room for growth. Early signs from consumers after content changes and a commitment to maintain pricing in most sub-Saharan markets are encouraging, but the outlook remains unclear given current volatility.

Given uncertainty related to analogue switchoffs (ASOs) - the process of migrating terrestrial television broadcasting from analogue to digital format - we have chosen to focus on content, service delivery, decoder sales and retention. ASOs in several African markets are expected to take place in the medium term and will then boost DTT customer growth.

Further enhancements were made to the ShowMax product in the second half of the year. The introduction of prepaid vouchers, download functionality and Apple AirPlay functionality has helped ShowMax. It offers deeper and more compelling content than both local and international competition. International and local players continue to invest in this market, with global online players like Netflix launching during the year and others in the process of doing so.

Delivering great local and international content on multiple platforms, developing innovative products, driving customer retention, improving the total customer experience and driving general cost controls remain focus areas. Enhancements, competitive pricing and introducing bundled packages (subscriptions bundled with the Explora and installation) have seen personal video recorder (PVR) penetration increase to 20.6% of South African customers and 11% of customers in the rest of Africa.

Investing in local content remains important. We are proud to be the largest producer of and investor in local content in Africa. Over the past year we contributed US$325m to sport and general entertainment content.

The Eutelsat 36C satellite was successfully launched on 24 December 2015, providing additional capacity to MultiChoice Africa. More capacity was also acquired from Intelsat, with a new satellite expected to be launched in the 2017 financial year.

Our operations are regulated by various bodies across the continent. A number of competition and consumer investigations are under way and we continue to cooperate with regulators.

Media (previously print media) Sectoral and macroeconomic headwinds affected Media24's topline growth with revenues declining 20% (2%). Year-on-year trading profit improved marginally to US$29m, despite continued investment in new initiatives. Media24's digital media and ecommerce businesses delivered topline growth of 8%.

Prospects

In the year ahead, the focus will be on continuing to deliver topline growth while scaling the more established ecommerce businesses. Naspers will invest in long-term growth opportunities such as ShowMax, letgo and ibibo and seek further new promising models. In video entertainment, the loss of DTH subscribers and falling currencies in sub- Saharan Africa will have a significant impact on earnings and cash flows. It could take some time before the plans implemented to reinvigorate growth and cut costs have a material positive impact.

DIVIDEND NUMBER 87

(all figures in South African cents) The board recommends that the annual gross dividend be increased by 11% to 520 cents (previously 470 cents) per listed N ordinary share, and 104 cents (previously 94 cents) per unlisted A ordinary share. If confirmed by shareholders at the annual general meeting on Friday 26 August 2016, dividends will be payable to shareholders recorded in the books on Friday 16 September 2016. It will be paid on Monday 19 September 2016. The last date to trade cum dividend will be on Tuesday 13 September 2016 (shares therefore to trade ex-dividend from Wednesday 14 September 2016). Share certificates may not be dematerialised or rematerialised between Wednesday 14 September 2016 and Friday 16 September 2016, both dates inclusive. The dividend will be declared from income reserves. It will be subject to the dividend tax rate of 15%, yielding a net dividend of 442 cents per listed N ordinary share and 88.4 cents per unlisted A ordinary share to those shareholders not exempt from paying dividend tax. Such dividend tax will amount to 78 cents per listed N ordinary share and 15.6 cents per unlisted A ordinary share. The issued ordinary share capital as at 24 June 2016 was 437 920 115 N ordinary shares and 907 128 A ordinary shares. The company's income tax reference number is 9550138714.

DIRECTORATE

Guijin Liu and Hendrik du Toit were appointed as independent non-executive directors with effect from 1 April 2016.

Guijin Liu is highly experienced in international affairs. He is Dean of the China-Africa International Business School, Zhejiang Normal University and a past Chinese ambassador to South Africa (2001 to 2007).

Hendrik du Toit is chief executive of Investec Asset Management and a director of Investec plc and Investec Ltd. He holds an MPhil in economics and politics of development from Cambridge University and an MCom in economics from Stellenbosch University.

PREPARATION OF THE SUMMARISED

CONSOLIDATED FINANCIAL RESULTS

The preparation of the summarised consolidated financial results was supervised by the financial director, Basil Sgourdos CA(SA). These results were made public on 24 June 2016.

On behalf of the board

Koos Bekker Bob van Dijk

Chair Chief executive

Cape Town

24 June 2016

Notes

(1) These components of other comprehensive income may subsequently be reclassified to profit or loss except for gains of US$387m (2015: US$113m) included in the "Share of other comprehensive income and reserves of equity-accounted investments" as well as losses of US$nil (2015: US$2m) included in "Net fair-value gains/(losses)" relating to remeasurements on the group's post-employment benefit plans.

(2) 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 foreign operations.

Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.

Note

(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation. Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.

Reconciliation of trading profit to operating(loss)/profit

Note: For a reconciliation of operating profit to (loss)/profit before taxation, refer to the condensed consolidated income statement.

Notes to the summarised consolidated financial results

1. General information Naspers Limited (Naspers) is a global internet and entertainment group and one of the largest technology investors in the world. Founded in 1915, we now operate in more than 130 countries and markets with long-term growth potential. Naspers builds leading companies that empower people and enrich communities. It runs some of the world's leading platforms in internet, video entertainment and media.

2. Basis of presentation and accounting policies

 The summarised consolidated financial results for the year ended 31 March 2016 are prepared in accordance with the JSE Limited's stock exchange (JSE) Listings Requirements (the Listings Requirements) relevant to summarised financial statements and the provisions of the Companies Act. No 71 of 2008. The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts, the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The summarised consolidated financial results do not include all the disclosures required for complete annual financial statements prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB). The accounting policies applied in the preparation of the consolidated annual financial statements from which the summarised consolidated financial results were derived, are consistent with those applied in the previous consolidated annual financial statements except as set out below.

On 18 April 2016 Naspers announced that it had changed the presentation currency in its consolidated financial statements from the South African rand (SA rand) to the United States dollar (US dollar) with effect from the financial year ended on 31 March 2016.

Over the past 100 years the group has evolved from a single-country newspaper business and early investor in pay television to a video-entertainment leader and global internet and ecommerce group with operations in over 130 countries.

Today more than 75% of revenue measured on an economic-interest basis (which includes the group's proportionate share of the revenue of associates and joint ventures) is sourced from outside of South Africa. Coupled with the evolution of the business, the group's shareholder base now largely comprises foreign investors to whom financial reporting in SA rand is of limited relevance. Internally, the board also bases its performance evaluation and many investment decisions on US dollar financial information.

The board therefore believes that US dollar financial reporting provides more relevant presentation of the group's financial position, funding and treasury functions, financial performance and its cash flows.

Dividends will continue to be declared in SA rand, with the relevant exchange rate announced at the time of the dividend payment.

A change in presentation currency represents a change in an accounting policy in terms of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors requiring the restatement of comparative information. In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, the following methodology was followed in restating historical financial information from SA rand into US dollar: Non-US dollar assets and liabilities were translated at the relevant closing exchange rate at the end of the reporting period. Non-US dollar items of income and expenditure and cash flows were translated at actual transaction date exchange rates. The foreign currency translation reserve was reset to nil as at 1 April 2006, the date on which the group adopted IFRS, in line with IFRS 1 First-time Adoption of International Financial Reporting Standards. Share capital and premium and other reserves, as appropriate, were translated at the historic rates prevailing at the dates of underlying transactions. The effects of translating the group's financial results and financial position into US dollar were recognised in the foreign currency translation reserve.

Although actual transaction date exchange rates were used to translate previously reported SA rand earnings and cash flows into US dollar, the group has provided the average exchange rates of its major trading currencies relative to the US dollar as an approximation for these rates for reference in the following table. The closing exchange rates of the group's major trading currencies relative to the US dollar, used when translating the statements of financial position presented in this release into US dollar, are also detailed in this table.

The group has adopted all new and amended accounting pronouncements issued by the IASB that are effective for financial years commencing 1 April 2015. None of the new or amended accounting pronouncements that are effective for the financial year commencing 1 April 2015 had a material impact on the group.

The group's reportable segments reflect the components of the group that are regularly reviewed by the chief executive officer and other senior executives who make strategic decisions. The group proportionately consolidates its share of the results of its associates and joint ventures in its reportable segments.

Trading profit excludes amortisation of intangible assets (other than software), equity-settled share-based payment expenses relating to transactions to be settled through the issuance of treasury shares, retention option expenses and other gains/losses, but includes the finance cost on transponder leases.

Core headline earnings exclude one-off and non-operating items. We believe it is a useful measure of the group's sustainable operating performance. However, this is not a defined term under IFRS and may not be comparable with similarly titled measures reported by other companies.

3. Independent audit

The summarised consolidated financial results have been audited by the company's auditor, PricewaterhouseCoopers Inc. (PwC). The individual auditor assigned to perform the audit is Brendan Deegan. PwC's unqualified audit reports on the consolidated annual financial statements and summarised consolidated financial results are available for inspection at the registered office of the company. The auditor's report does not necessarily cover all the information contained in the summarised financial results. Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor's work, they should obtain a copy of that report, together with the consolidated annual financial statements from the registered office of the company. The consolidated annual financial statements, together with the integrated annual report, will be available on www.naspers.com on or about 22 July 2016.

The diluted earnings, headline earnings and core headline earnings per share figures presented on the face of the income statement include a decrease of US$20m (2015: US$20m) relating to the future dilutive impact of potential ordinary shares issued by equity-accounted investees.

7. Profit before taxation

 In addition to the items already detailed, profit before taxation has been determined after taking into account, inter alia, the following:

Note

(1) Net realisable value writedowns relate primarily to set-top box subsidies in the video-entertainment segment.

8. Goodwill Goodwill is subject to an annual impairment assessment. Movements in the group's goodwill for the year are detailed below:

The impairment loss recognised during the current reporting period relates primarily to the group's investment in its online comparison shopping business, Buscapé. Buscapé forms part of the ecommerce segment. The impairment loss has been calculated on a value-in-use basis using a 10-year projected cash flow model, a growth rate of 4% and a discount rate of 20%. If the discount rate applied to cash flows were to increase by 5% and the growth rate used to extrapolate cash flows were to decrease by 5%, there would be no further significant impairments that would have to be recognised.

9. Investments and loans

 The following relates to the group's investments and loans as at the end of the reporting period:

10. Commitments

 Commitments relate to amounts for which the group has contracted, but that have not yet been recognised as obligations in the statement of financial position.

The group has made certain restatements to transponder lease and programme and film rights commitments reported during the comparative period. These adjustments resulted in an increase in total commitments of US$445m.

11. Disposal groups classified as held for sale

 The group classified the net assets and liabilities of Netretail, its Czech etail and ecommerce platform; Heureka, the group's Czech online comparison shopping platform, as well as the assets and liabilities of other smaller businesses as held for sale during the year ended 31 March 2016. The above-mentioned transactions are subject to regulatory approval. The group concluded the disposals of its subsidiaries Ricardo.ch AG and Korbitec Proprietary Limited following the receipt of regulatory approval during September and November 2015 respectively. These businesses were previously classified as held for sale. Refer to note 12 for additional details regarding these disposals.

The carrying values of the assets and liabilities of all disposal groups classified as held for sale as at 31 March 2016 are detailed below:

The group recognised a loss of US$87.7m (2015: US$nil) on remeasuring the net assets of businesses classified as held for sale to their fair value less costs of disposal during the year. The fair value of the businesses was determined based on third-party sales prices. This represents a level 3 fair-value measurement.

12. Business combinations and other acquisitions

 The group acquired an additional 49.0% interest in its associate Avito AB (Avito), the leading online classifieds platform in Russia, during December 2015. The additional investment resulted in the group holding a 67.5% interest in Avito on a fully diluted basis and was accounted for as a business combination. The total purchase consideration amounted to US$1.67bn representing cash paid to the former owners of Avito of US$1.23bn, the fair value of the group's previously held equity interest in Avito of US$411m, as well as the acquisition-date fair value of Avito's vested share-based incentive awards of US$22m. A gain of US$324m has been recognised in "Gains on acquisitions and disposals" in the income statement on the remeasurement of the group's previously held equity interest in Avito to its fair value. The purchase price allocation: property, plant and equipment US$6m; cash US$24m; trade and other receivables US$9m; deferred tax assets US$2m; intangible assets US$812m; trade and other payables US$18m; deferred tax liabilities US$161m and the balance of US$1.19bn to goodwill. The main classes of intangible assets recognised in the business combination were brand names, customer bases and software. The transaction gave rise to the recognition of a non-controlling interest of US$195m, which has been measured at the non-controlling interest's proportionate share of the identifiable net assets of Avito as at the acquisition date.

In May 2015 the group invested US$10m in Ambatana Holdings B.V. (Ambatana), an entity operating a hyperlocal classifieds marketplace app under the letgo brand. The investment resulted in Ambatana being accounted for as an associate of the group. A further US$50m was invested in Ambatana during September 2015, resulting in the group holding a 67.5% interest on a fully diluted basis following the investment. The additional investment was accounted for as a business combination with an effective date of 30 September 2015. The total purchase consideration amounted to US$58m, representing the fair value of the group's previously held equity interest in Ambatana of US$34m and the fair value of a call option granted to the former owners of Ambatana amounting to US$24m. The cash invested and cash consideration still payable, in aggregate amounting to US$50m, remains within the group following the transaction and is accordingly not disclosed as part of the consideration transferred by the group or assets of Ambatana acquired, although it did affect the amount of goodwill recognised in the business combination. A gain of US$24m has been recognised in "Gains on acquisitions and disposals" in the income statement on the remeasurement of the group's previously held equity interest in Ambatana to its fair value. The purchase price allocation: cash US$1m; other receivables US$1m; trade and other payables US$3m and the balance of US$74m to goodwill. The transaction gave rise to the recognition of a non-controlling interest of US$15m, which has been measured at the non-controlling interest's proportionate share of the identifiable net assets of Ambatana as at the acquisition date. On 31 March 2016 the call option granted to the former owners of Ambatana was settled, resulting in the group holding a 55.0% interest in Ambatana on a fully diluted basis at year-end.

Since the acquisition dates of the above business combinations, revenue of US$31m and net results (losses) of US$60m have been included in the income statement relating to Ambatana and Avito. Had the revenue and net results of Ambatana and Avito been included from 1 April 2015, group revenue and net profit would have amounted to US$6.01bn and US$1.02bn respectively.

The main factor contributing to the goodwill recognised in the acquisitions is the acquiree's market presence. The goodwill that arose is not expected to be deductible for income tax purposes. Total acquisition-related costs of US$8m were recorded in "Gains on acquisitions and disposals" in the income statement regarding the above-mentioned acquisitions.

The following relates to the group's investments in its equity-accounted investees:

During April 2015 the group invested US$41m in its joint venture Konga Online Shopping Limited (Konga). Following the additional investment, the group continues to exert joint control over Konga with its 50.9% interest on a fully diluted basis.

The group's associate Flipkart Limited (Flipkart) undertook two funding rounds during April and July 2015 in which the group did not participate. The funding rounds resulted in a dilution of the group's interest in Flipkart and in the recognition of an aggregate net dilution gain of US$61m in "Dilution gains on equity-accounted investments" in the income statement.

Following the dilutions, the group now holds a 15.0% interest in Flipkart on a fully diluted basis.

During May 2015 the group invested US$10m in its joint venture Souq Group Limited (Souq) as part of a funding round. Souq undertook further funding rounds during the year in which the group did not participate. These funding rounds resulted in a dilution of the group's interest in Souq and in the recognition of an aggregate net dilution gain of US$75m in "Dilution gains on equity-accounted investments" in the income statement. Following the dilutions, the group now holds a 36.4% interest in Souq on a fully diluted basis.

The group also recognised dilution losses of US$42m during the year relating to dilutions in its shareholding in Tencent on account of the exercise of share-based incentive awards by Tencent's employees.

The group invested US$20m in its available-for-sale investment Avenida Inc. (Avenida) during July 2015. The transaction resulted in Avenida becoming an associate, and the group now holds a 23.4% interest in Avenida on a fully diluted basis.

The group invested US$54m as part of a funding round of its associate Takealot Online (RF) Proprietary Limited (Takealot) during August 2015. The group holds a 42.4% interest in Takealot on a fully diluted basis.

 The following relates to significant disposals by the group during the reporting period:

During September 2015 the group disposed of its interest in its subsidiary Ricardo.ch AG following approval of the transaction by regulatory authorities. The proceeds on sale amounted to US$248m and a gain of US$76m was recognised in "Gains on acquisitions and disposals" in the income statement following the transaction.

The group disposed of its interest in its subsidiary Korbitec Proprietary Limited during November 2015 for US$33m following the receipt of regulatory approval. A gain of US$24m was recognised in "Gains on acquisitions and disposals" in the income statement following the transaction.

During March 2016 the group disposed of its interest in its subsidiary PayProp Group Services Proprietary Limited for US$10m. The disposal gave rise to the recognition of a gain of US$4m in "Gains on acquisitions and disposals" in the income statement.

The group disposed of its 9.9% interest in Beijing Media Corporation during August 2015 for a cash consideration of US$12m. The transaction resulted in the recognition of an aggregate gain on disposal of US$11m, which has been recognised in "Gains on acquisitions and disposals" in the income statement.

Investments acquired and funding rounds participated in were funded through the utilisation of existing credit facilities, proceeds received from disposals during the reporting period as well as the proceeds from the equity raise during December 2015.

13. Proceeds from placement of N ordinary shares and issue of listed bond

During December 2015 the group placed 18 167 848 new N ordinary shares with qualifying institutional investors at a price of R1 975 per share, thereby raising gross proceeds of approximately US$2.5bn before transaction costs. The placing represented approximately 4.3% of Naspers's issued N ordinary share capital prior to the share issuance. The proceeds raised were utilised to fund the group's acquisition of a controlling interest in Avito AB (refer to note 12), to repay certain amounts on the group's offshore revolving credit facility and the remainder will serve to fund the group's future growth strategy.

In July 2015 the group issued a 10-year US$1.2bn bond. The bond matures in July 2025 and carries a fixed interest rate of 5.5% per annum. The proceeds were utilised for general corporate purposes, including the repayment of certain amounts on the group's offshore revolving credit facility and to fund acquisitions and growth.

14. Financial instruments

 The fair values of the group's financial instruments that are measured at fair value at each reporting period are categorised as follows:

There have been no transfers between levels 1, 2 or 3 during the reporting period, nor were there any significant changes to the valuation techniques and inputs used in measuring fair value.

The fair values of the capitalised finance leases have been determined through discounted cash flow analysis. 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.

Note

Currency devaluation features relate to clauses in content acquisition agreements that provide the group with protection against significant currency devaluations. The fair value of currency devaluation features is measured through the use of discounted cash flow techniques.

The fair value of shareholders' liabilities is determined using a discounted cash flow model. Business-specific adjusted discount rates are applied to estimated future cash flows.

For earnout obligations, 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 earnout payments are used. Changes in these assumptions could affect the reported fair value of these financial instruments. The fair value of level 2 financial instruments is determined with the use of exchange rates quoted in active markets and interest rate extracts from observable yield curves.

15. Related-party transactions and balances

 The group entered into various related-party transactions in the ordinary course of business. There have been no significant changes in related-party transactions and balances since the previous reporting period.

16. Events after the reporting period

 On 12 May 2016 the group announced the merger of the US operations of its mobile marketplace for second-hand goods, letgo, with Wallapop, another leader in the mobile classifieds sector. The transaction resulted in the absorption of Wallapop's US operations into letgo. The group retains control over letgo following the merger and will account for the absorption of Wallapop as a business combination in the 2017 financial year. On 11 May 2016 the group announced its first investment targeting the education technology market by investing US$13m, through Naspers Ventures, in Brainly - a social learning network. Over 60m students in 35 countries interact with Brainly every month. In line with this strategy, the group also invested US$60m in Udemy, an online education marketplace with over 7m students enrolled and US$22m in Codecademy, a leading global platform focused on online coding education, both during June 2016.

In June 2016 the group received regulatory approval for the sale of its business classified as held for sale, Heureka. The group consequently recognised a gain on disposal of approximately US$61m.

17. Pro forma financial information

 The group has presented certain revenue and trading profit metrics in local currency, excluding the effects of changes in the composition of the group (the pro forma financial information) in the following tables. The pro forma financial information is the responsibility of the board of directors (the board) of Naspers Limited and is presented for illustrative purposes. Information presented on a pro forma basis has been extracted from the group's management accounts, the quality of which the board is satisfied with.

Shareholders are advised that, due to the nature of the pro forma financial information and the fact that it has beenextracted from the group's management accounts, it may not fairly present the group's financial position, changes in equity, results of operations or cash flows.

The review report issued by the group's external auditor and which appears at the end of these summarised consolidated financial results does not extend to the pro forma financial information. An assurance report issued in respect of the pro forma financial information, by the group's external auditor, is available at the registered office of the company.

The pro forma financial information has been prepared to illustrate the impact of changes in foreign exchange rates and changes in the composition of the group on its results for the periods ended 31 March 2016 and 31 March 2015 respectively.

The following methodology was applied in calculating the pro forma financial information:

1. 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 results. The relevant average exchange rates used for the group's most significant functional currencies are listed in note 2.

2. Adjustments made for changes in the composition of the group relate to acquisitions and disposals of subsidiaries and equity-accounted investments, as well as to changes in the group's shareholding in its equity-accounted investments. The following significant changes in the composition of the group during the respective reporting periods have been adjusted for in arriving at the pro forma financial information:

The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2016 amounted to a negative adjustment of US$295m on revenue and a negative adjustment of US$24m on trading profit.

The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2015 amounted to a negative adjustment of US$288m on revenue and a positive adjustment of US$3m on trading profit.

The adjustments to the amounts reported in terms of IFRS, that have been made in arriving at the pro forma financial information are presented in the table below:

 Notes

(1) All figures are presented on an economic-interest basis unless otherwise indicated.

(2) A + B + C + D.

(3) D/A x 100.

(4) [(E/A) - 1] x 100.

(5) Development spend is not an IFRS measure and accordingly does not have a corresponding IFRS equivalent and therefore has been excluded from the assurance report issued by the group's external auditor.

The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial information are presented in the table below: