It has been a challenging year for Primedia. Our focus has been on steering the group through the troubled economic conditions that characterised the 2002 financial year, with our course set on creating long-term value for our shareholders.

The year saw a faltering world economy, with the media sector being particularly affected. This resulted in the collapse of several high profile media companies, both locally and internationally. It was also the year that corporate governance issues came to the fore and affirmed our belief that business success must be underpinned by good corporate citizenship.

At home, we have had to guide Primedia through a highly regulated industry within this precarious economic environment. This has entailed balancing the challenge of tough markets with the crucial requirements of transformation, including black economic empowerment, employment equity and skills development and transfer; while attending to corporate social responsibility commitments and driving good corporate governance.

Since the financial year-end, we have announced the appointment of four independent non-executive directors to the board. With these new appointments, we have further strengthened the mix of skills and experience required to best represent shareholder interests. In addition, the board, now substantially compliant with King II, has a significantly larger number of non-executives than executives. Also, over 50% of its members are black and nearly 30% are women.

I am very pleased to welcome Mike Bosman, Chairperson of the advertising group FCB South Africa and former President and Chief Operating Officer of FCB North America; Boni Dibate, Chief Executive of South African Express Airways and Chairperson of the Tourism Business Council; Humphrey Khoza, Chief Executive of the national lottery operator, Uthingo, and former Director of Communication for the Independent Electoral Commission; Tshidi Madima, Investment Analyst for Mineworkers Investment Company and former General Manager of Equal Access Consulting; and, Sindi Zilwa, Chairperson and co-founder of accountancy firm Nkonki Pierce and a member of the Competition Tribunal.

APPRECIATION
On behalf of the board, I convey our sincere gratitude to the vast majority of our shareholders who have displayed their confidence in us and the strategic direction in which we are taking the group. We also congratulate the Chief Executive Officer and his executive team, the divisional heads and managing directors and all employees for their energy and constructive contribution in re-focussing the group. As Chairman of a transforming Primedia, and as a South African both fully aware of the local business dynamics of our sector and committed to its long-term success and growth, I have full confidence in the integrity of our board and executives, and their ability to act in the best interests of all stakeholders.

LOOKING AHEAD
My first year as Chairman has been a very rewarding experience. I look forward to the year ahead as the group starts to deliver to its true potential, which should be boosted by the proposed review of media ownership limitations and an improving economic climate.

I am confident that the major effort made by everyone at Primedia in the past year will ensure that Primedia is well positioned to take advantage of the opportunities of the coming year.

Paul Nkuna
Chairman