The committee is responsible for determining the remuneration philosophy for Primedia, including short and long-term incentive plans and for agreeing the individual remuneration package (salary, bonuses and share options) of the group's top executive management.

The committee provides assistance to the board of directors in fulfilling its responsibility to shareholders and the investment community and in ensuring that the company's senior executives are compensated in accordance with the company's total remuneration goals. It also advises and recommends compensation strategies, policies and salary packages necessary to support group strategic objectives.

The committee makes recommendations to the board on the appointment of new executive and non-executive directors, the composition of the board generally and the balance between executive and non-executive directors.

The committee also co-ordinates an annual written review of the performance of all the board committees and the board itself, and performs an appraisal of the chief executive and chairman.

In terms of the group's remuneration philosophy, guaranteed salary packages are reviewed annually in the context of individual and business performance and benchmarked for senior executives at the 75% quartile of market trends.

Incentive bonuses are payable to executives based on a combination of individual, divisional and group performance. Incentive criteria are agreed early in the group's financial year when objectives are set out in contract form. During the past year, key measures included the achievement of growth objectives encompassing organic growth and innovation, demonstrating leadership competency and meeting transformation scorecard targets.

In order to align the interests of staff with those of shareholders, share options are awarded to senior employees as well as employees who are identified as key talent. The annual allocation of share options to selected employees is based on a percentage of each individual's annual salary package. Share options are granted at market price. Share options issued in December 2002, December 2003 and June 2006 vest in three tranches from the second anniversary of the date the share options were granted. Share options issued in May 2005 and December 2005 vest in four tranches from the second anniversary of the date the share options were granted. All share options granted, except those granted during 2005, are valid for five years. The share options granted in May and December 2005 are valid for six years.

Note 37 of the annual financial statements provides details of the remuneration, fees and share options paid and allocated to directors during the financial year.

The primary role of the audit committee is to ensure the integrity of financial reporting and the audit process, and to ensure that a sound internal control system is maintained.

In fulfilling its responsibility of monitoring the integrity of financial reports to shareholders, the audit committee reviews the accounting principles, policies and practices adopted in the preparation of public financial information and examines documentation relating to the annual report, interim report and preliminary announcement. The clarity of disclosures included in the financial statements is reviewed by the audit committee, as well as the basis for significant estimates and judgements. In assessing the accounting treatment of major transactions open to different approaches, the committee considered written reports by management and the external auditors.

The financial directors of all of the group's major operations have provided confirmation that financial and accounting control frameworks operate satisfactorily. The audit committee considered summaries of the significant risk and control issues arising from these reports as well as the regular reports received from the internal and external auditors.

The audit committee approved the external auditors' terms of engagement, scope of work, the process for the 2006 interim and year-end audits and the applicable levels of materiality. Based on written reports submitted, the audit committee reviewed, with the external auditors, the findings of their work and confirmed that all significant matters were satisfactorily resolved.

The audit committee considered information pertaining to nonaudit work performed by the external auditors during 2006 and has concluded that the nature and extent of non-audit work do not present a threat to the external auditors' independence.

Based on its assessment of the external auditors' performance and independence, the audit committee has recommended the reappointment of Deloitte & Touche as auditors until the conclusion of the annual general meeting in 2006.

The internal audit function reports directly to the audit committee. The mandate and annual coverage plans of the internal audit function were approved by the audit committee, which also considered the results of the internal audit work.

The audit committee comprises an equal number of independent non-executive and non-executive directors, namely Chris Seabrooke, Tshidi Madima, Peter Maw and Sindi Zilwa. The group's chief financial officer, Funke Ighodaro, and head of internal audit, Henry Enslin, attend all audit committee meetings by invitation.

As required by its terms of reference, the audit committee, chaired by an independent non-executive director, met four times during the year to coincide with key dates within the financial reporting and auditing cycle. Two of their meetings were followed by discussions, independent of management, with the external audit partners and the head of internal audit.

	19/08/05	18/11/05	17/02/06	25/05/06
CS Seabrooke	A
(Chairman)
HM Madima
P Maw
SV Zilwa

The risk committee currently comprises Bheki Shongwe, Ferdi Gazendam, Funke Ighodaro, William Kirsh, Peter Maw and Kuben Pillay. The committee is chaired by an independent non-executive director and met three times during the financial year.

	21/07/05	22/11/05	05/06/06
BJT Shongwe (Chairman)			A
FA Gazendam
O Ighodaro
W Kirsh
P Maw			A
K Pillay

The board is responsible for the process of risk management and has mandated the risk committee to ensure that significant risks are identified, evaluated and managed on an ongoing basis. Management is accountable to the board for designing, implementing and monitoring the process of risk management.

The board's policy on risk management encompasses all significant business risks to the group, including financial, operational and compliance risks, which could undermine the achievement of the group's business objectives. Managers are supported in giving effect to their risk responsibilities through policies and guidelines on risk and control management. The risk assessment and reporting criteria are designed to ensure that risks and opportunities are adequately identified, evaluated and managed at the appropriate level in each business and also that the individual and collective impact of the identified risks on the group as a whole is taken into consideration. In this regard, subsidiary company boards and senior managers carry out an annual assessment of risk as part of their strategic review process, to identify and assess the impact of critical risks facing their individual business units and the adequacy and effectiveness of control factors at all levels. These risks are then ranked on the basis of probability and impact, and action plans are put in place to address them and responsibilities allocated.

The risk committee reviews the activities and effectiveness of the group's risk management activities twice a year and ensures that those risks which impact on the group as a whole, are adequately addressed.

The system of internal control, which is embedded in all key operations, provides reasonable assurance that the group's business objectives will be achieved within acceptable risk tolerance levels. These risk tolerance levels are set in each business unit and vary depending on the nature, scope and size of the business. In addition, the board receives assurance from the audit committee, which relies on regular internal and external audit reports, on risk and controls throughout the group.

The board has determined that the risk committee has satisfied its responsibilities for the year under review in compliance with its terms of reference.