AVUSA shareholders questioned the annual bonuses and a retention bonus paid to two executive directors at the media group's annual meeting yesterday.

Shareholder Theo Botha questioned the lack of figures for the year to March 31 last year for bonuses for the two directors -- Avusa CEO Prakash Desai and chief financial officer Harold Benatar -- which made it difficult to compare bonuses then with those issued in the year to March 31 last year. He wanted to know whether directors had benefited from the sale of a stake in M-Net SuperSport and for realising value for shareholders, and if so by how much. For the year to March 31 Desai received an incentive bonus of R2,88m and a retention bonus of R1,5m paid for the start of a new five-year contract. Benatar received R1,25m.

The shareholder also questioned The Times newspaper's R64m losses over two years, asking how long Avusa would allow it to make a loss, especially in the present economic environment.

Desai, when asked by Business Day for last year's bonus information, said it was included in the ElementOne annual results and was not a proper reflection as he has served as chief operating officer for two months of that year. "It would be comparing apples with pears," he said.

ElementOne, formerly Avusa, formerly Johnnic Communications, sold its M-Net SuperSport stake for R3,5bn in an unbundling of the proceeds to shareholders in the past year, and separately listed its operating media and entertainment assets under the name Avusa, which began operations on March 31 last year.

On the issue of The Times, the daily paper linked to the Sunday Times, Desai said the publication was on target to break even in three years, which would be next September, and had been given seven years to make a profit.

He dismissed concerns by a shareholder that it would be a struggle for the publication to make up such substantial losses when much of its advertising was from companies within Avusa or linked to it. Desai said retail advertising in the newspaper had increased and was up 40% on the previous year.

Desai cautioned shareholders to keep reasonable expectations as the media industry begins to feel the bite of the recession.

"We had a good result for the first nine months of the financial year ending March 31 , but the last quarter saw a softening in advertising spend for the media industry," he said. "Avusa is not counter-cyclical to what is happening globally and locally, in terms of the current year advertising is 20%-30% lower globally and locally than last year."

Cadiz African Harvest media analyst Rob Nagel said analysts were generally pleased with Avusa's results and were not to too concerned with the losses accumulated by The Times, believing the newspaper could still make a profit. "Obviously it cannot be allowed to make losses for ever."

He said bonuses paid in a year when there had been retrenchments were always sensitive. "It's very difficult to critique bonuses because we are not privy to what they are being rewarded for."

Avusa reported a 58% rise in profit and 8% rise in turnover for the year to March , despite a soft second half. It posted a profit of R329m for the year to March, compared with R208m the year before. Headline earnings per share were posted at 239c per share, from 185c previously.