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

CONDENSED CONSOLIDATED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

COMMENTARY

Naspers delivered a solid performance for the six months to 30 September 2017 with group revenue, measured on an economic-interest

basis, increasing 33% year on year to US$9.0bn (or 39% in local currency and adjusted for acquisitions and disposals).

This is a 17% increase on last year's growth rate with the ecommerce businesses being key drivers of the acceleration.

Group trading profit increased by 40% (or 52% in local currency and adjusted for acquisitions and disposals) to US$2.1bn

due to a healthy boost from Tencent and increased profitability in the ecommerce businesses - most notably classifieds.

With this as backdrop, group core headline earnings, the board's measure of sustainable operating performance, was

US$1.5bn - a 65% increase year on year.

Ecommerce accelerated its topline growth and reduced losses (in local currency and adjusted for acquisitions and disposals)

as it increased its scale. Classifieds (excluding letgo) turned profitable and our payment service platforms within

PayU also scaled, reducing losses and moving closer to profitability. Notably, the group strengthened its presence in online

food delivery with significant investments in Delivery Hero and Swiggy. Tencent produced another excellent set of results.

Video entertainment, although still navigating weak African macroeconomic conditions - particularly weak currencies - stabilised

its losses in sub-Saharan Africa and saw a significant improvement in cash remittances from Nigeria.

The group's geographic footprint, across more than 120 countries and markets, exposes it to significant foreign exchange

volatility. This materially impacts on reported revenue and trading profit metrics, especially in video entertainment

where revenues are earned in local currencies but costs are predominantly US dollar based. The internet businesses are less

severely affected given their largely local currency denominated revenue and cost bases. Where relevant in this report we

have adjusted amounts and percentages for the effects of foreign currency and acquisitions and disposals to reflect

underlying trends. These adjustments (pro forma financial information) are quoted in brackets after the equivalent metrics

reported under International Financial Reporting Standards (IFRS). A reconciliation of pro forma financial information to

the equivalent IFRS metrics is provided in note 16 of this condensed consolidated interim report.

The following financial commentary and segmental reviews are prepared on an economic-interest basis (including consolidated

subsidiaries and a proportionate consolidation of associated companies and joint ventures), unless otherwise stated.

FINANCIAL REVIEW

On a consolidated basis, excluding equity-accounted investments, group revenue increased 5% (15%) due to accelerating ecommerce

growth, the latter growing revenue 33% in local currency and adjusted for acquisitions and disposals (notably the disposals

of Allegro and Netretail). Consolidated trading profit improved by 56% (165%) to US$70m.

Development spend has reduced year on year on both a consolidated and economic-interest basis.

Development spend of consolidated businesses was down 18% from the prior year as earlier-stage investments improved

their competitive positions, therefore requiring lower investment while continuing to scale. Excluding the investment in

controlled newer initiatives such as letgo and Showmax, which totalled US$155m, development spend on older investments decreased 12%.

The group's share of the results of associates and joint ventures increased 59% year on year to US$1.5bn. Included in this

figure are once-off gains of US$414m and impairment losses of US$121m recognised by these entities. In aggregate, these

equity-accounted investments contributed US$1.7bn to core headline earnings, an improvement of 52% year on year.

Net interest expense on borrowings was down 27% to US$54m due to lower utilisation of credit facilities, the impact of the

proceeds from the Allegro disposal, and the 4.85% coupon achieved by the group on the US$1bn bond issued in July 2017.

Net debt was US$140m at 30 September 2017, reflecting gearing of 1%.

Consolidated free cash outflow of US$96m was recorded, benefiting from dividend income of US$247m from Tencent.

The company's external auditor has not reviewed or reported on forecasts included in the condensed consolidated interim report.

SEGMENTAL REVIEW

Internet

Robust growth saw internet revenues increasing 42% (52%) year on year to US$6.9bn. Boosted by classifieds and another

exceptional performance by Tencent, trading profit for the internet segment was US$1.8bn - up 47% (61%) year on year.

This segment now contributes 77% of group revenue, compared to 72% last year.

Ecommerce

Revenue in ecommerce increased 15% year on year to US$1.6bn. However, when measured in local currency and adjusted for

acquisitions and disposals, growth was 38% - an acceleration of 14 percentage points on last year's growth rate. This growth

was fuelled by strong performances by classifieds, food delivery, payments and etail. Overall trading losses increased 9%

to US$318m, with equity-accounted investments contributing 44% of the loss. Measured in local currency and adjusted for

acquisitions and disposals - in particular the US$83m in trading profits generated by Allegro last year - ecommerce trading

losses decreased by a meaningful 17%.

Trading losses declined in several ecommerce units including classifieds and payments. The group's profitable ecommerce

businesses delivered US$465m in revenues and US$170m in trading profits, growing these metrics by 50% (36%) and

55% (52%) respectively.

Classifieds continued to gain traction across the portfolio. Excluding the additional investment in letgo, the business

turned profitable during the reporting period. Revenue grew 47% (38%) year on year with OLX Europe benefiting from tailwinds

in the vertical businesses, and Avito showing consistent growth. OLX Brazil is on track to reach break-even by the end of

the financial year.

Etail revenues increased 16% year on year in nominal terms. However, in local currency and before the impact of acquisitions

and disposals, revenue was up 37% with strong year-on-year growth from Takealot and Flipkart.

eMAG powered growth in its home market of Romania and across Central and Eastern Europe with gross merchandise value (GMV)

increasing year on year by 33% in Romania, 50% in Hungary and 27% in Bulgaria.

Flipkart, the group's equity-accounted investment in India, continued its growth acceleration and further solidified its

market leadership. During the recent festive season sales period, Flipkart captured around 70% of the total ecommerce market.

Flipkart has also secured substantial capital from investors - including Tencent and Softbank - to continue building its

position as a leading business-to-consumer (B2C) platform in the fast-growing Indian market.

In August 2017 the group invested an additional US$74m to acquire a controlling stake in South Africa's leading etailer,

Takealot, resulting in the business now being consolidated. Takealot made strong progress over the reporting period, recording

GMV growth of 72%, a significant acceleration on last year.

Since the merger of the group's travel business ibibo with MakeMyTrip in January 2017, the travel business has maintained its

rapid growth - increasing revenue by 91% (24%) year on year.

The group's payments and financial services business, PayU, continued to perform well in the key regions of India, Europe,

the Middle East and Africa, and Latin America. Revenue growth of 52% (36%) was recorded on the back of a 75% increase in

transaction volumes year on year. India is PayU's fastest growing market, representing 47% of total payment volumes and

growing payment volumes by 120% year on year. Overall, PayU processed payment volumes of US$11.7bn during the first six

months of the year.

PayU continues to realise scale efficiencies following the consolidation in India with Citrus Pay and from its drive to

automate and consolidate platforms in other markets. With healthy revenue growth and a focus on cost management, the core

payments service provider business is well on track to achieve break-even by the end of the financial year.

Executing on its strategy to expand into consumer credit, PayU invested US$99m for a non-controlling stake in Kreditech,

a credit-scoring business. PayU plans to extend these consumer credit services in its key markets.

The group is expanding its online food-delivery footprint. iFood, majority-owned by Movile, generated revenue growth of

145% (135%) year on year. The group also invested an initial US$426m in Delivery Hero in May 2017, followed by an additional

US$47m top-up when Delivery Hero successfully listed on the Frankfurt stock exchange. Delivery Hero reported 96% year-on-

year revenue growth in its second quarter results. In September 2017 the group entered into a further agreement, subject to

regulatory approval, to acquire an additional stake in Delivery Hero for EUR660m (approximately US$775m), taking the group's

total ownership to around 24% on a fully diluted basis. The group also led an investment round in Swiggy, a leading online

food-delivery business in India, in May 2017, investing US$61m for a 14.8% fully diluted interest.

Naspers Ventures has strengthened its position in the education technology sector with increased investments in Udemy and

Brainly, both global learning platforms in which the group originally invested during the 2017 financial year.

Tencent

Tencent had an outstanding six months, with revenues growing 57% year on year to RMB106.2bn and non-GAAP operating profit

increasing 37% year on year to RMB38.6bn. Smartphone and PC games, online advertising, digital content subscriptions and

payment-related services, all remain growth drivers. Margins contracted due to high channel costs for smartphone games,

revenue mix changes to low-margin products and increased investments in content.

Online games revenue increased by 36% year on year to RMB46.7bn, primarily driven by more smartphone game users and a higher

proportion of paying users, as well as increased average revenue per user (ARPU) from key PC games titles. In the second

quarter of 2017, smartphone titles (including the titles attributable to the social network business) generated more revenue

than PC-based titles for the first time. It is expected that PC client game revenue growth will decelerate in future.

Online advertising revenues increased by 52% year on year, boosted by increased traffic on video and growth in advertising on

Weixin, mobile browsers and other platforms. Digital-content revenue recorded rapid growth over the period, primarily driven

by the strong performance of video and music services subscriptions and virtual gifting within live broadcasts.

At the end of June 2017, Weixin and WeChat monthly active users (MAU) reached 963m, growing 19% year on year. Total MAU for

QQ was 850m, down around 5% from last year due to fewer casual users, while engagement with core users increased.

More information on Tencent's results is available at www.tencent.com/en-us/ir.

Mail.ru

Mail.ru grew overall revenues 33% year on year to RUB26.3bn, reflecting an improving Russian economic environment and solid

growth in advertising and online games revenues. Advertising revenue increased 26% over the period to RUB10.3bn, driven by

growth in advertising on social networks, video and mobile. Massively multiplayer online (MMO) games revenue was up 53% to

RUB7.8bn year on year, the result of both ongoing success in existing titles and new releases such as HAWK and the console

version of Skyforge. Internet value-added services (IVAS) revenue declines were reversed and saw year-on-year growth of 19%,

closing at RUB7.3bn, primarily on the back of cross-platform subscription offerings. VKontakte remains the largest social

network platform in Russia with 60m daily active users. Investments in leveraging Mail.ru's existing user engagement,

including in food delivery and classifieds, are encouraging.

More information on Mail.ru's results is available at https://corp.mail.ru/en/investors/.

Video entertainment

Overall, the video-entertainment business recorded modest subscriber growth over the period with the total subscriber base

closing at 12.2m households on 30 September 2017.

In South Africa, DStv had a stable performance and continued to deliver healthy profits and cash flows. A further development

was the combination of the group's Showmax offering with DStv Now, which is showing encouraging early results. However, the

business still operates against a difficult and weakening economic backdrop.

Outside South Africa, losses in the sub-Saharan African video-entertainment business stabilised year on year, with most

African currencies, except the Nigerian naira, showing less weakness than in the prior year. Assuming no further significant

currency weakness and continued momentum in subscriber growth, the group will be on track to bring the business back to

profitability in the coming years.

In October 2017, Zambia commenced the process of migrating terrestrial television broadcasting from an analogue to a digital

format - a process commonly referred to as analogue switchoff (ASO). The Zambian business is well prepared to capitalise on

this opportunity. Digital terrestrial television (DTT) networks have been rolled out in Mozambique, Nigeria and Ghana although

release dates for the ASO have not been confirmed in these territories.

Although monetary policy in several African economies continues to restrict liquidity due to the limited supply of foreign

currency, there has been a marked improvement in liquidity in Nigeria. This has allowed the group to regularly remit cash.

At 30 September 2017 cash balances of US$166m, held in Angola, Nigeria, Zimbabwe and Mozambique, remain exposed to weakening

currencies. This balance is down 43% since the end of March 2017.

The expansion of Showmax in Poland continued and a sharp focus on local content is showing traction in this market.

With the above as backdrop, the segment reported revenues of US$1.8bn, up 8% (7%) on the prior year. Trading profit was up

marginally by 4% (3%). Persistent currency weakness in Nigeria, where the naira weakened significantly year on year,

translated to lower US dollar revenues.

Management continues to engage regulators and participate in several regulatory reviews in various markets.

Media

Media24 (excluding Novus) achieved satisfactory results with the structural decline in traditional revenue streams offset by

significant cost-reduction initiatives throughout the business. Revenue increased 11% (5%) year on year to US$315m, while

trading profit grew 75%.

The growth businesses, largely the ecommerce and digital media initiatives, contributed 8% of total revenue and grew 24% over

the period in local currency. The segment's focus on audience migration to digital formats and cost containment remains.

In September 2017 the group unbundled the majority of Media24's investment in the listed South African print business Novus,

to Naspers's shareholders. Post unbundling, Media24 retained a 19% interest in Novus and accordingly no longer consolidates

the business. Media24's remaining portfolio comprises newspapers, magazine and book publishing, ecommerce, digital media,

online job classifieds and online travel.

Prospects

Going forward, the group will continue to drive scale to bring its ecommerce business to profitability and cash generation.

In addition, it will manage macro challenges in the more mature businesses through tight cost controls and continued

innovation and repositioning of businesses to counter increasing competition by global players. The group will also continue

to invest in emerging businesses that may power future growth. Naspers's balance sheet remains strong and the group's current

business plan is fully funded.

PREPARATION OF THE CONDENSED CONSOLIDATED INTERIM REPORT

The preparation of the condensed consolidated interim report was supervised by the group's financial director, Basil Sgourdos

CA(SA). These results were made public on 29 November 2017.

Condensed consolidated income statement

Condensed consolidated statement of comprehensive income

Notes

(1) These components of other comprehensive income may subsequently be reclassified to profit or loss except for gains

of US$142m (2016: US$141m and 31 March 2017: US$292m) included in the "Share of other comprehensive income and

reserves of equity-accounted investments".

(2) The movement on the foreign currency translation reserve relates primarily to the effects of foreign exchange rate

fluctuations related to the translation of the group's investments in its foreign operations.

Condensed consolidated statement of financial position

Condensed consolidated statement of changes in equity

Condensed consolidated statement of cash flows

Segmental review

Notes

(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.

(2) Includes revenue of US$133.0m (2016: US$107.9m and 31 March 2017: US$222.4m), EBITDA of US$33.3m

(2016: US$29.1m and 31 March 2017: US$55.1m) and trading profit of US$33.3m (2016: US$22.4m and 31 March 2017:

US$40.3m) relating to Novus Holdings Limited (Novus). The group distributed the majority of its shareholding in Novus

to its shareholders in September 2017 (refer to note 10).

Notes

(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.

(2) Includes revenue of US$133.0m (2016: US$107.9m and 31 March 2017: US$222.4m), EBITDA of US$33.3m

(2016: US$29.1m and 31 March 2017: US$55.1m) and trading profit of US$33.3m (2016: US$22.4m and 31 March 2017:

US$40.3m) relating to Novus Holdings Limited (Novus). The group distributed the majority of its shareholding in Novus

to its shareholders in September 2017 (refer to note 10).

Reconciliation of trading profit/(loss) to operating profit/(loss)

Note

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

statement.

Notes to the condensed consolidated interim report for the six months ended 30 September

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 120 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 condensed consolidated interim financial statements for the six months ended 30 September 2017 have

been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34 Interim Financial

Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, and Financial

Pronouncements as issued by the Financial Reporting Standards Council as well as the requirements of the

Companies Act of South Africa and the JSE Limited Listings Requirements.

The condensed consolidated interim financial statements 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 used in preparing the condensed consolidated interim financial statements are

consistent with those applied in the previous annual financial statements.

The group has adopted all new and amended accounting pronouncements issued by the IASB that are effective for

financial years commencing 1 April 2017. None of the new or amended accounting pronouncements that are effective

for the financial year commencing 1 April 2017 had a material impact on the group.

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 once-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. Review by the independent auditor

This condensed consolidated interim report has been reviewed by the company's auditor, PricewaterhouseCoopers

Inc., whose unqualified report appears at the end of the condensed consolidated interim report.

4. Calculation of headline and core headline earnings

The diluted earnings, headline earnings and core headline earnings per share figures presented on the face of

the condensed consolidated income statement include a decrease of US$20m (2016: US$11m and 31 March 2017:

US$24m) relating to the future dilutive impact of potential ordinary shares issued by equity-accounted investees.

5. Interest received/(paid)

6. 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.

7. Equity-accounted results

The group's equity-accounted investments contributed to the condensed consolidated interim financial results as follows:

8. Goodwill

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

9. Commitments and contingent liabilities

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 operates a number of businesses in jurisdictions where taxes are payable on certain transactions or

payments. The group continues to seek relevant advice and works with its advisers to identify and quantify such tax

exposures. Our current assessment of possible withholding and other tax exposures, including interest and potential

penalties, amounts to approximately US$155.5m (2016: US$243.8m and 31 March 2017: US$256.7m). No provision has

been made as at 30 September 2017 and 30 September 2016 for these possible exposures.

10. Disposal groups classified as held for sale

During the year ended 31 March 2017, the group announced the unbundling of the majority of its shareholding in its

subsidiary Novus Holdings Limited (Novus), operating in the print industry in South Africa. The assets and liabilities

of Novus were classified as held for distribution as at 31 March 2017. In August 2017 the group received regulatory

approval for the unbundling which was finalised during September 2017. Refer to note 11 for further details.

In May 2017 the group concluded the disposal of its joint venture Souq Group Limited (Souq), following the receipt of

regulatory approval. Souq was classified as held for sale as at 31 March 2017. Refer to note 11 for further details.

The group also concluded the disposals of various other smaller units of which the assets and liabilities were

classified as held for sale as at 31 March 2017.

The group had no assets and liabilities classified as held for sale as at 30 September 2017. Assets and liabilities

classified as held for sale in prior periods are detailed in the following table:

The group recognised a loss of US$nil (2016: US$1.6m and 31 March 2017: US$1.6m) on remeasuring the net assets

of businesses classified as held for sale to their fair value less costs of disposal. Fair value was determined based on

third-party sales prices and accordingly represent level 3 fair-value measurements.

11. Business combinations, other acquisitions and disposals

In August 2017 the group invested US$74m to acquire a controlling interest in its associate Takealot Online (RF)

Proprietary Limited (Takealot), the leading etailer in South Africa. Following the investment, the group holds a 58%

effective interest (54% fully diluted) in Takealot. The transaction was accounted for as a business combination with

an effective date of August 2017. The total purchase consideration amounted to US$123m representing the fair value

of the group's previously held equity interest in Takealot. A gain of US$20m has been recognised in "(Losses)/gains

on acquisitions and disposals" in the income statement on the remeasurement of the group's previously held equity

interest in Takealot to its fair value. The US$74m cash invested remains within the group following the transaction

and is accordingly not disclosed as part of the consideration transferred by the group or assets of Takealot acquired,

although it did affect the amount of goodwill recognised in the business combination. The purchase price allocation:

property, plant and equipment US$13m; cash and deposits US$105m; inventories US$28m; trade and other

receivables US$4m; intangible assets US$107m; trade and other payables US$27m; deferred tax liabilities US$30m

and the balance of US$81m to goodwill. The main classes of intangible assets recognised in the business combination

were trade names and brands, customer relationships and technology. The transaction gave rise to the recognition of

non-controlling interest of US$83m, which has been measured at the non-controlling interest's proportionate share of

the identifiable net assets of Takealot as at the acquisition date.

The main factor contributing to the goodwill recognised in the acquisition is Takealot's market presence. The goodwill

that arose is not expected to be deductible for income tax purposes.

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

In May 2017 the group invested US$426m in Delivery Hero AG (Delivery Hero), a global online food-ordering and

delivery marketplace. On 30 June 2017, Delivery Hero successfully completed an initial public offering of its shares,

a process during which the group invested a further US$47m. Following these investments, the group holds an 11%

effective interest (10% fully diluted) in Delivery Hero. In June 2017 the group invested US$61m in Bundl Technologies

Private Limited (Swiggy), the operator of a first-party food-delivery marketplace in India. Following the investment,

the group holds a 16% effective interest (15% fully diluted) in Swiggy. The group accounts for its interests in these

investees as investments in associates on account of its board representation.

In May 2017 the group invested US$99m in Kreditech Holding SSL GmbH (Kreditech), a provider of consumer lending

and financial services. The group has also committed to provide convertible loan funding of up to EUR20m to Kreditech

in future. Following the investment, the group holds a 38% effective interest (31% fully diluted) in Kreditech. The group

accounts for its interest in Kreditech as an investment in an associate.

During May 2017 the group invested US$132m in its associate MakeMyTrip Limited (MakeMyTrip) as part of a funding

round. In August and September 2017, following MakeMyTrip's issue of share options to its employees, the group

invested US$23m to maintain its relative shareholding. Following these transactions, the group holds a 43% effective

interest (40% fully diluted) in MakeMyTrip.

The group invested US$71m for an additional interest in its associate Flipkart Limited (Flipkart) in April 2017. The

additional interest was acquired from existing shareholders of Flipkart. Flipkart undertook various funding rounds

during the reporting period in which the group did not participate. These 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$11m in "Dilution losses on

equity-accounted investments" in the income statement. Following the dilutions, the group holds a 14% effective

interest (13% fully diluted) in Flipkart.

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

During May 2017 the group disposed of its investment in its joint venture Souq Group Limited for a consideration of

US$173m. A gain on disposal of US$89m has been recognised in "(Losses)/gains on acquisitions and disposals" in

the income statement following the transaction.

In September 2017, following the receipt of regulatory approval, the group distributed the majority of its shareholding

in Novus Holdings Limited (Novus) to its shareholders. The group recognised the distribution as an in specie dividend,

reducing retained earnings by US$69m, being the fair value of the distributed Novus shares. A loss on disposal of

US$145m has been recognised in "(Losses)/gains on acquisitions and disposals" in the income statement following

the distribution, being the difference between the fair value of the distributed Novus shares and the book value of

the assets distributed as well as the reclassification of reserves of US$112m. After the distribution, the group holds a

19% shareholding in Novus and accounts for its interest as an available-for-sale investment.

12. Issue of listed bond

The group issued a 10-year US$1bn international bond in July 2017. The bond matures in July 2027 and carries a fixed

interest rate of 4.85% per annum. The proceeds were partially utilised to repay the group's US$700m international

bond which matured in July 2017. The remaining proceeds will be utilised for general corporate purposes, including

acquisitions.

13. Financial instruments

The group's activities expose it to a variety of financial risks such as market risk (including currency risk, fair-value

interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The condensed consolidated interim report does not include all financial risk management information and

disclosures required in the annual financial statements and should be read in conjunction with the group's annual

financial statements for the year ended 31 March 2017. There have been no material changes in the group's credit,

liquidity, market risks or key inputs used in measuring fair value since 31 March 2017.

The fair values of the group's financial instruments that are measured at fair value at each reporting period, are

categorised as follows:

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 earn-out 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 earn-out payments are used.

Changes in these assumptions could affect the reported fair value of these financial instruments. The fair value of

level 2 financial instruments is determined with the use of exchange rates quoted in active markets and interest rate

extracts from observable yield curves.

The group discloses the fair values of the following financial instruments, as their carrying values are not a

reasonable approximation of their fair values:

Note

(1) Includes financial liabilities classified as held for sale.

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.

14. 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.

15. Events after the reporting period

The group signed an agreement to invest EUR660m (approximately US$775m) in its associate Delivery Hero AG (Delivery

Hero) during September 2017. The transaction is subject to regulatory approval. Following the investment, the group

will hold an approximate 24% interest in Delivery Hero on a fully diluted basis.

In October 2017 the group committed to an investment of US$100m in Remitly Inc. (Remitly), the largest independent

digital remittance company in North America. The transaction is subject to regulatory approval. Following the

investment, the group will hold an approximate 20% interest in Remitly on a fully diluted basis.

Following the receipt of regulatory approval in November 2017, the group acquired a 100% interest in The Car Trader

Proprietary Limited (Auto Trader) for cash consideration of R514m (approximately US$36m).

16. Pro forma financial information

The group has presented certain revenue and trading profit metrics on a constant currency, organic basis

(the pro forma financial information) in the tables below. 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 been

extracted 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 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 30 September 2017

and 30 September 2016 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 organic pro forma 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 most significant currencies were: South African rand (2017: 0.0757; 2016:

0.0690); Polish zloty (2017: 0.2714; 2016: 0.2572); Russian rouble (2017: 0.0172; 2016: 0.0154); Chinese yuan renminbi

(2017: 0.1483; 2016: 0.1512); Indian rupee (2017: 0.0155; 2016: 0.0149); Brazilian real (2017: 0.3134; 2016: 0.3000); and

Nigerian naira (2017: 0.0028; 2016: 0.0037).

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:

Period ended 30 September 2017

The net adjustment made for all acquisitions and disposals that took place during the period ended

30 September 2017 amounted to a negative adjustment of US$298m on revenue and a negative adjustment

of US$101m on trading profit.

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 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: