Sabannual Report 2012

SABMiller plc
Annual Report 2012

Building locally, winning globally, delighting consumers
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Overview
Financial and operational highlights
ofthe year, an overview of the
groupand a description of our
business activities
1 Performance highlights
2 Five minute read
4 Group at a glance
Business review
Statements from our Chairman and
executive directors, an overview of
our markets, strategy, our business
model, the way we manage risk,
howour operations performed
andour approach to sustainable
development and people
7 Chairmans statement
12 Global beer market trends
14 Chief Executives review
15 Business model
20 Strategic priorities
21 Key performance indicators
22 Principal risks
25 Operations review
25 Latin America
27 Europe
29 North America
30 Africa
32 Asia Pacic
34 South Africa: Beverages
35 South Africa: Hotels and Gaming
37 Chief Financial Ofcers review
46 Sustainable development
50 People
Governance
An introduction to the board and
executive committee and details of
the groups approach to corporate
governance and remuneration
52 Board of directors
54 Executive committee
55 Directors report
59 Corporate governance
68 Directors remuneration report
Financial statements
Audited nancial statements, notes
and other key data, and denitions
ofterms
84 Statement of directors responsibilities in respect of the
consolidated nancial statements
85 Independent auditors report to the members of SABMiller plc
on the consolidated nancial statements
86 Consolidated income statement
87 Consolidated statement of comprehensive income
88 Consolidated balance sheet
89 Consolidated cash ow statement
90 Consolidated statement of changes in equity
91 Notes to the consolidated nancial statements
165 Statement of directors responsibilities in respect of the
company nancial statements
166 Independent auditors report to the members of SABMiller plc
on the company nancial statements
167 Balance sheet of SABMiller plc
168 Notes to the company nancial statements
178 Five-year nancial review
180 Denitions
Shareholder information
Information, dates and contact
detailsfor shareholders
182 Ordinary shareholding analyses
183 Shareholders diary
184 Administration
IBC Cautionary statement
Contents
Whats inside
SABMiller plc Annual Report 2012
Performance highlights
Driving strong results in developing markets
Group revenue
a
Revenue
b
EBITA
c
+11%
2012: US$31,388m
2011: US$28,311m
+12%
2012: US$21,760m
2011: US$19,408m
+12%
2012: US$5,634m
2011: US$5,044m
Dividends per share
d
Prot before tax Adjusted EPS
e
+12%
2012: 91.0 US cents
2011: 81.0 US cents
+55%
2012: US$5,603m
2011: US$3,626m
+12%
2012: 214.8 US cents
2011: 191.5 US cents
Net debt
f
Lager volumes Free cash ow
g
+152%
2012: US$17,862m
2011: US$7,091m
+5%
2012: 229m hectolitres
2011: 218m hectolitres
+23%
2012: US$3,048m
2011: US$2,488m
a
Group revenue includes the
attributable share of associates and
joint ventures revenue of US$9,628
million (2011: US$8,903 million).
b
Revenue excludes the attributable
share of associates and joint
venturesrevenue.
c
Note 2 to the consolidated nancial
statements provides a reconciliation
of operating prot to EBITA which
is dened as operating prot before
exceptional items and amortisation of
intangible assets (excluding software)
and includes the groups share
of associates and joint ventures
operating prot, on a similar basis.
As described in the Chief Financial
Ofcers review, EBITA is used
throughout this report.
d
2012 nal dividend is subject to
shareholder approval at the annual
general meeting.
e
A reconciliation of adjusted earnings
to the statutory measure of prot
attributable to equity shareholders is
provided in note 8 to the consolidated
nancial statements.
f
Net debt comprises gross debt
(including borrowings, borrowings-
related derivative nancial instruments,
overdrafts and nance leases)
netofcash and cash equivalents
(excluding overdrafts). An analysis
ofnet debt is provided in note 28c to
the consolidated nancial statements.
g
Note 28b to the consolidated
nancial statements provides a
reconciliation of net cash from
operating activities to free cash ow.
Further information
Go online for more details
This report covers the nancial year
ended 31 March 2012. It is also available
on our website as a downloadable PDF
www.sabmiller.com/annualreport
For more detailed information about
SABMiller please refer to our website
www.sabmiller.com/investors
Cover: Carlton Draught
Our brewery fresh Carlton Draught is a leading
brand in the portfolio of Carlton and United
Breweries (CUB), the Australian beverage
business of Fosters acquired in December
2011. This year the brand produced a strong
performance and consolidated its market share.
SABMiller plc Annual Report 2012 1
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SABMiller is one of the worlds leading brewers with
morethan 200 beer brands and some 70,000 employees
in over 75 countries. We also have growing businesses in
soft drinksand we are one of the worlds largest bottlers
ofCoca-Cola products.
Our strategic direction
Our vision
To be the most admired company in the global beer industry
Our mission
To own and nurture local and international brands that are
therstchoice of the consumer
Our values
Our people are our enduring advantage
Accountability is clear and personal
We work and win in teams
We understand and respect our customers and consumers
Our reputation is indivisible
Our strategic priorities
Creating a balanced and attractive global spread of businesses
Developing strong, relevant brand portfolios that win in the
local market
Constantly raising the protability of local businesses, sustainably
Leveraging our skills and global scale
For more information on our strategic priorities and how
we measure against them, see pages 20 and 21.
SABMiller has become a global leader by
doing business locally, pursuing operational
excellence and offering high-quality products
backed by innovation and a commitment
to sustainability.
Our success is built on a clear strategic direction, a shared vision
and mission and a common set of values.
Our brands and business
Local brands
Typically brewed and consumed in the same community, beer
is an inherently local business. At SABMiller we respect and nurture
the history and heritage of local brands and give our businesses
considerable freedom to meet local needs. Were also innovators
be it new, affordable brands made from locally grown ingredients,
craft beers for the acionado or the concept of the local premium
forconsumers aspiring to affordable luxury.
Global brands
Our four global brands have their own distinct provenance and
characteristics. They comprise the stylishly Italian Peroni Nastro
Azzurro; the worlds original golden beer, the Czech-brewed Pilsner
Urquell; the Northern European Grolsch; and the embodiment
of American urban cool, Miller Genuine Draft.
For more information on the performance of our brands,
seepages 25 to 35.
At the heart of our business is a passion
for producing quality beers. In creating
and building our brands, we draw on deep
insights into local culture and consumers
and seek to win with products that tap into
local preferences.
Our focus on local businesses with tailored brand portfolios makes
us, we believe, the most local of the global brewers.
Five minute read
Our business in brief
2 SABMiller plc Annual Report 2012
Our performance in 2012
Operational highlights
Reported EBITA grew 12%, with organic, constant currency
EBITAgrowth of 8%:
Latin America EBITA
1
grew by 14% as a result of volume
growth,pricing and mix
Europe EBITA
1
declined by 9% due to lower volumes,
adversemix and increased raw material costs
Strong pricing and favourable mix increased North America
EBITA
1
by 2% despite lower volumes
Volume growth, strong pricing and mix drove Africas EBITA
1

growth of 16%
Asia Pacic EBITA
1
increased by 30% with good growth in
both China and India
South Africa: Beverages EBITA
1
grew 14% due to price
andmixbenets and focus on cost productivity
EBITA margin increased by 10 basis points (bps) to 17.9%
Fosters contributes to results from mid-December 2011;
integrationproceeding well
For more information on our nancial performance,
see pages 37 to 44.
1
EBITA growth is shown on an organic, constant currency basis.
We delivered another year of strong nancial
results. Successful development of our brand
portfolios and intensied sales execution,
together with rising consumer spending,
drove strong performance in most of our
developing markets.
Total beverage volumes grew 6% totalling 286 million hectolitres,
with our lager volumes up 5% and soft drinks volumes up 8%.
Reported group revenue rose by 11%.
How we create value
The strategy in action
Building value depends on being in the right markets, both high-growth,
emerging economies and protable, mature markets. It means having
the right brand portfolio one that spans a range of consumer segments,
drinking occasions and price points. It also calls for value-creating
partnerships and an operating process that supports local accountability
and facilitates the sharing of best practice.
For more information on our strategy and how we create
value, see pages 14 to 20.
Inclusive growth
We believe we create best value for our shareholders by also bringing
value to the communities in which we operate. Because our business
is not separate from society but embedded within it, the success
of SABMiller is inextricably linked to the wellbeing of the wider
community. So along with creating jobs and paying taxes, we seek
to stimulate local enterprise, to support economic development, to
collaborate with governments and others on shared challenges and
to help tackle the effects of alcohol abuse all essential underpinnings
of our ongoing licence to trade.
For more information on our approach to sustainable
development, see pages 46 to 49.
We create long-term value by establishing
leading positions in key markets; by investing
in, and building, attractive brands and brand
portfolios; and by taking a local approach to
running our businesses, based on effective
operating processes.
We concentrate on building brands and businesses and make
acquisitions only where they have the potential to add value.
guila Light
Origin: Colombia
First brewed: 2002
www.aguilalight.com
A lighter version of guila, the classic Colombian beer,
guila Light is a popular option for the consumer looking
toexperience a lighter taste and a beer that is very
easilydrinkable.
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Group at a glance
Our operations around the world
Expanding from our roots in Africa, weve built leading positions
in all regions of the world in both emerging and developed
markets. Last year our businesses sold 229 million hectolitres
oflager, over 90% of which was sold in markets in which were
the number one or number two brewer.
Latin America Europe North America Africa Asia Pacic South Africa
32%
Contribution to group EBITA
1
2012
14%
1
2012
13%
1
2012
13%
1
2012
6%
1
2012
22%
1
2012
17 breweries
2
14 bottling plants
2
26,933 employees
3
17 breweries
2
14,095 employees
3
8 breweries
2
8,812 employees
3
32 breweries
2
19 bottling plants
2
13,596 employees
3
23 breweries
2
2 bottling plants
2
3,804 employees
3
7 breweries
2
6 bottling plants
2
11,939 employees
3
Our primary brewing and beverage
operations cover six countries across
South and Central America (Colombia,
Ecuador, El Salvador, Honduras, Panama,
and Peru).
In each of these countries, we are the
number one brewer by market share.
We are also the third largest brewer
in Argentina.
We bottle soft drinks for The Coca-Cola
Company in El Salvador and Honduras,
and for Pepsico International in Panama.
Regional ofce: Bogot, Colombia.
Our primary brewing operations cover
eightcountries the Czech Republic,
Hungary, Italy, Poland, Romania, Slovakia,
Spain (Canary Islands) and the Netherlands.
In the majority of these countries,
wearethe number one or two brewer
bymarket share.
A further 16 countries including Russia,
Turkey and the Ukraine are covered in
astrategic alliance with Anadolu Efes
through either brewing, soft drinks or
export operations.
We export signicant volumes to a further
eight European markets, of which the
largest are the UK and Germany.
Regional ofce: Zug, Switzerland.
MillerCoors is a joint venture with Molson
Coors Brewing Company, formed in 2008
by bringing together the US and Puerto
Rican operations of both groups.
Headquartered in Chicago, MillerCoors
is the second largest brewer in the USA,
with 29% of the beer market.
Our wholly owned Miller Brewing International
business is based in Milwaukee, USA and
exports our brands to Canada and Mexico
and throughout the Americas.
Regional ofce: Chicago, USA.
Our brewing and beverage operations
in Africa cover 15 countries. A further
21are covered through a strategic alliance
with the Castel group and we also have
anassociated undertaking in Zimbabwe.
In most of these countries we are the
Company in 20 of our African markets (in
alliance with Castel in 14 of these markets).
Regional ofce: Johannesburg, South Africa.
CR Snow, our partnership with
ChinaResources Enterprise, Limited,
isthelargest brewer in China.
With the acquisition of Fosters in
December 2011, we have a major business
in Australia. CUB
4
only contributed to our
results from mid-December 2011.
We are the second largest brewer in India.
We have an operation in Vietnam and
weexport to various markets including
South Korea and Cambodia.
Regional ofce: Hong Kong.
The South African Breweries (Pty) Ltd.
(SAB) is South Africas leading producer
and distributor of lager and soft drinks.
It also exports brands for distribution
across Namibia.
Our soft drinks division is South Africas
leading bottler of products for
The Coca-Cola Company.
We have hotel and gaming interests
through our associate Tsogo Sun
HoldingsLtd, the largest hotel and
gaminggroup in SouthAfrica.
For further information see page 25 For further information see page 27 For further information see page 29 For further information see page 30 For further information see page 32 For further information see page 34
Peroni Nastro Azzurro
Origin: Italy
First brewed: 1963
www.peroniitaly.com
An intensely crisp and refreshing lager with an unmistakable
touch of Italian style, Peroni Nastro Azzurro is a premium
lager brewed to the original recipe since 1963.
Latin America Europe North America Africa Asia Pacic South Africa
32%
1
2012
14%
1
2012
13%
1
2012
13%
1
2012
6%
1
2012
22%
1
2012
17 breweries
2
14 bottling plants
2
26,933 employees
3
17 breweries
2
14,095 employees
3
8 breweries
2
8,812 employees
3
32 breweries
2
19 bottling plants
2
13,596 employees
3
23 breweries
2
2 bottling plants
2
3,804 employees
3
7 breweries
2
6 bottling plants
2
11,939 employees
3
Our primary brewing and beverage
operations cover six countries across
South and Central America (Colombia,
Ecuador, El Salvador, Honduras, Panama,
and Peru).
In each of these countries, we are the
We are also the third largest brewer
in Argentina.
Company in El Salvador and Honduras,
and for Pepsico International in Panama.
Regional ofce: Bogot, Colombia.
Our primary brewing operations cover
eightcountries the Czech Republic,
Hungary, Italy, Poland, Romania, Slovakia,
Spain (Canary Islands) and the Netherlands.
In the majority of these countries,
wearethe number one or two brewer
bymarket share.
A further 16 countries including Russia,
Turkey and the Ukraine are covered in
astrategic alliance with Anadolu Efes
through either brewing, soft drinks or
export operations.
We export signicant volumes to a further
eight European markets, of which the
largest are the UK and Germany.
Regional ofce: Zug, Switzerland.
MillerCoors is a joint venture with Molson
Coors Brewing Company, formed in 2008
by bringing together the US and Puerto
Rican operations of both groups.
Headquartered in Chicago, MillerCoors
is the second largest brewer in the USA,
with 29% of the beer market.
Our wholly owned Miller Brewing International
business is based in Milwaukee, USA and
exports our brands to Canada and Mexico
and throughout the Americas.
Regional ofce: Chicago, USA.
Our brewing and beverage operations
in Africa cover 15 countries. A further
21are covered through a strategic alliance
with the Castel group and we also have
anassociated undertaking in Zimbabwe.
In most of these countries we are the
Company in 20 of our African markets (in
alliance with Castel in 14 of these markets).
CR Snow, our partnership with
ChinaResources Enterprise, Limited,
isthelargest brewer in China.
With the acquisition of Fosters in
December 2011, we have a major business
in Australia. CUB
4
only contributed to our
results from mid-December 2011.
We are the second largest brewer in India.
We have an operation in Vietnam and
weexport to various markets including
South Korea and Cambodia.
Regional ofce: Hong Kong.
The South African Breweries (Pty) Ltd.
(SAB) is South Africas leading producer
and distributor of lager and soft drinks.
It also exports brands for distribution
across Namibia.
Our soft drinks division is South Africas
leading bottler of products for
The Coca-Cola Company.
We have hotel and gaming interests
through our associate Tsogo Sun
HoldingsLtd, the largest hotel and
gaminggroup in SouthAfrica.
For further information see page 25 For further information see page 27 For further information see page 29 For further information see page 30 For further information see page 32 For further information see page 34
1
Excluding corporate costs.
2
The number of breweries and bottling plants relates to subsidiaries only (except North America which relates to MillerCoors).
3
See note 6 to the consolidated nancial statements. The average number of employees relates to subsidiaries only (except North America which reects
MillerCoors only and where employee numbers are as at 31 March 2012).
4
CUB (Carlton and United Breweries) is the Australian beverage business of Fosters.
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Castle Milk Stout
Relaunched in South Africas local premium
marketthis year with a Savour the moment
marketing campaign, the newly packaged
CastleMilk Stout has achieved good growth
at a higher price point than before.
6 SABMiller plc Annual Report 2012 6 SABMiller plc Annual Report 2012
Chairmans statement
Signicant progress and strong results
The year has seen further excellent progress.
Growingconsumer demand in developing markets
hashelpedtosecure another strong set of results
andourglobal footprinthas continued to expand.
Meyer Kahn, Chairman
Dear Shareholder,
In my nal letter as Chairman, I am delighted to
report another year of signicant progress and
strongresults. As we predicted 12 months ago,
markets were difcult in Europe and North America
but consumer demand continued to grow in most
developing economies. Through successful
marketing, product innovation and skilful commercial
execution, we were able to build onourposition
inthe worlds developing consumermarkets.
Results and dividend
Beverage volumes totalled 286 million hectolitres,
up 6% with lager volumes up 5% and soft drinks
volumes up 8%. Group revenue grew by 11%
(7%on an organic, constant currency basis) as
aresult of higher volumes, focused price increases
and our efforts to increase the premium element
inour brand mix.
Reported earnings before interest, tax and
amortisation (EBITA) grew by 12% (8% on an
organic, constant currency basis) and EBITA margin
was 10 bps ahead of the prior year at 17.9%. Group
revenue growth offset increases in raw material
costs while marketing investment rose in line with
revenue and xed costs increased asaresult
ofexpenditure on sales and systems capabilities.
Prot before tax was up 55%, after theinclusion
ofexceptional gains in the year.
Finance costs were 7% higher than the prior year
and the effective tax rate was 27.5%. Adjusted
earnings per share were up 12%at 214.8 US cents,
while basic earnings per share were 266.6 US cents.
The groups free cash ow was US$3,048 million,
an increase of US$560 million over the prior year.
Working capital cash inows of US$258 million
continued recent positive trends.
Capital expenditure was US$1,639 million, a
riseofUS$324 million as we increased production
capacity, particularly in Africa. Net debt at 31 March
2012 was US$17,862 million. This was higher than
the previous nancial year-end, primarily due to
theFosters acquisition.
The board has recommended a nal dividend of
69.5 US cents per share to be paid to shareholders
on 17 August 2012. This brings the total dividend for
the year to 91 US cents, an increase of 10 US cents
(12%) over the prior year.
Operational highlights
The year saw strong performance in most of our
developing markets. Latin America and Africa were
particularly notable while South Africa and Asia
Pacic also generated signicant, protable growth.
With the exception of Europe, all beverage divisions
contributed to EBITA growth.
Latin America produced EBITA growth of 15%
(14% on an organic, constant currency basis).
Lagervolumes increased by 8% on an organic
basis with soft drinks volumes growing 10% on
thesame basis. Strong revenue growth reected
acombination of higher volumes, selective price
increases and favourable mix, though these were
partly offset by higher commodity costs. The region
also beneted from manufacturing efciencies.
Castle Lager
Origin: South Africa
First brewed: 1895
www.sab.co.za
First brewed in 1895 by founder brewer, Charles Glass,
Castle Lager enjoys worldwide recognition as the beer
thatbrings friends together. Dedicated to excellence,
itisbrewed using the nest quality ingredients to provide
an engaging taste that always invites another.
91 US cents
Total dividend per share,
an increase of 12%
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Chairmans statement continued
286m hl
Total beverage volumes
sold during the year
AUD180m
Cost savings identied
inAustralian acquisition
In Europe, EBITA declined by 6% (9% on an
organic, constant currency basis) while lager
volumes fell by 1% on an organic basis. Poland and
Romania were particularly affected by discounting
and poor consumer sentiment, with EBITA down
inboth countries. Other markets generally saw
stronger nancial performance with good growth
inpremium brands. Across the region, EBITA was
affected by signicant increases in raw material
costs. Against this background, our regional
manufacturing project continued to deliver
costefciencies.
In North America, EBITA grew by 2%. MillerCoors
sales to wholesalers fell by 3% with sales to retailers
down 2% as economic pressures continued to affect
key consumer groups. The Tenth and Blake crafts
and imports division saw double-digit growth. The
increase in EBITA was mainly a result of revenue
growth from pricing and favourable brand mix along
with cost savings partly offset by higher raw material
and distribution costs and investment in systems.
In Africa, lager volumes increased by 13% and
softdrinks volumes by 11% on an organic basis.
EBITA grew by 15% (16% on an organic, constant
currency basis), driven by volume growth,
pricingand mix benets, cost efciencies and
theraw material costbenets of local agricultural
programmes. These were partly offset by higher
sales and marketing investment, inationary
pressures and currency weakness.
Lager volumes in Asia Pacic increased by 4% on
an organic basis, with reported volumes signicantly
higher as a result of both the inclusion of Fosters
since 16 December 2011 and acquisitions in China.
Reported EBITA grew by 247%, mainly due to the
addition of Fosters. On an organic, constant currency
basis, EBITA grew by 30% with good growth in both
China and India.
In South Africa, lager and soft drinks volumes
bothgrew by 2%. Reported EBITA was upby 9%
(14% on a constant currency basis), beneting from
favourable pricing and mix and with supply chain
productivity offsetting the impact of higher raw
material costs. Further reductions in operating costs
enabled the business to fund higher market-facing
investments in support of its brands.
Continuing expansion
The year saw further progress in expanding
ourgeographic footprint and brewing capacity,
consistent with our strategy of creating a balanced
and attractive global spread of businesses.
The main advance was the acquisition of Fosters
inAustralia. With 11 breweries including cideries,
Fosters is a substantial business and our largest-
ever acquisition by value.
The Fosters deal gives us a highly cash-generative
brewing business with a portfolio of iconic brands
and a leading position in a stable and protable
beermarket. Adding to its attractions areAustralias
soundeconomic growth prospects and expanding
population. In addition, the business provides
opportunities for nancial and operational
improvement as we apply our global skills and the
benets of scale in areas such as procurement. We
have already identied AUD180 million in operating
prot synergies and a range of initiatives for boosting
performance. We welcome Fosters employees into
the group and I thank them for their cooperation
andhard work during the integration process.
Share price performance
from 1 April 2009 to 24 May 2012 ( sterling)
30
25
20
15
10
May 2012 Apr 2009 Oct 2009 Apr 2010 Oct 2010 Oct 2011 Apr 2011
International Brewers Index +53.4%
FTSE 100 +35.3%
SABMiller +124.5%
Source: Factset and Datastream as at 24 May 2012
Note: Share prices are rebased to SABMiller; the International Brewers Index charts the share price progression of an index
of the company's closest peers in the global brewing industry Anheuser-Busch InBev, Carlsberg, Heineken and Molson
Coors, relative to 1 April 2009. The index is weighted relative to the market capitalisation of the brewers as at 1 April 2009
US$260m
Investment in new
capacity in Africa
The years second major transaction was our
strategic alliance with the Turkish beer and soft
drinks business, Anadolu Efes, under which we
have transferred our Russian and Ukrainian beer
businesses to Anadolu Efes in return for a 24%
stake in the enlarged Anadolu Efes group. Anadolu
Efes will now be the vehicle for both groups
investments in Turkey, Russia, the Commonwealth
of Independent States (CIS), Central Asia and the
Middle East. As well as leading the beer and soft
drinks markets in Turkey, Anadolu Efes has strong
positions in Kazakhstan, Moldova and Georgia,
allof which are developing fast. In Russia, the
combined business has a strong number two
position and is beneting from greater scale,
anattractive portfolio of brands and cost synergy
opportunities amounting to at least US$120 million.
The two partners will share best practice and
Anadolu Efes will develop SABMillers international
brands across the territory.
We have also developed our strategic alliance
withCastel in Africa. We are now responsible for the
operational management of the Nigerian businesses
while Castel has taken over the running of the
Angolan businesses.
In China, our CR Snow joint venture continued
itsexpansion with a number of bolt-on additions
including the acquisition of the remaining interest
inHangzhou Xihu Breweries from Asahi Breweries.
The moves further consolidate CR Snows
leadingposition.
Along with widening our geographic footprint, we
have continued to invest in capacity. In response
to rising demand in Africa, we have already invested
US$1,500 million in the continent over the last ve
years. But such is Africas rate of growth that
demand continues to outstrip supply and we now
need even more capacity. We have consequently
embarked on a US$260 million programme to
builda new brewery in Uganda and add capacity
inGhana, Zambia and Tanzania. The projects
announced last year the new brewery in Nigeria
and the major expansion in South Sudan are
progressing well.
In November 2011, we also announced a US$295
million capital investment programme to increase
capacity and support future brewery expansion
atour Peruvian subsidiary.
As a result of this continued expansion, we
nowhave operations in over 75 countries on six
continents with breweries in such far-ung places
as the Gobi Desert, the High Andes, the banks of
the Nile and the Tasman coast.
Building a global leader
As one of the worlds largest and most respected
brewers with strong positions in every region,
SABMiller has come a long way from its origins at
the foot of Africa. On the eve of my retirement, I am
proud of the groups achievements over the years.
Looking back, the trigger for our international
growth was the recognition by the board of
SouthAfrican Breweries, as it was then, that global
consolidation was about to hit the worldwide beer
business as it had done other consumer goods
sectors such as food and soft drinks. At this point
in the late 1980s, the beer industry largely consisted
of local and regional businesses, many still run by
the founding families. We saw an opportunity to
lead the consolidation that we knew was coming
and we took it.
Starting close to home in Africa, we began
toacquire brewing assets typically from
governments wanting to privatise. Many had
beenneglected under public ownership, so were
relatively cheap to buy. Our strategy was then to
establish market leadership and build local brands.
Next we applied the rigorous operational disciplines
learned in South Africa to drive down costs,
achieveworld-class standards in our breweries
anddistribute our products more efciently.
Fromaposition of leadership, we then sought
toenhancethe industrys business practices,
marketresponsibly and initiate local social
investment programmes.
Moving out from Africa, we began acquiring
businesses in newly liberalised Eastern Europe
andthe vast emerging market of China. As our
growth continued, we clearly needed access to
further capital. In 1999, therefore, we took the
majorstep ofmoving to London and listing on
theLondon Stock Exchange. Further expansion
followed. In2002, the addition of Miller in the USA
took us into the global beer industrys biggest prot
pool. Despite widespread scepticism that a brewer
from SouthAfrica could succeed in the worlds
most sophisticated consumer market, we knew the
move was necessary if SABMiller was to continue
playing a decisive role in the industrys
consolidation. And succeed we did.
Kilimanjaro
Origin: Tanzania
First brewed: 1996
www.kilitimetz.com
Named after the iconic mountain and better known
initshome market of Tanzania as Kili, this crisp, mild,
easy-drinking, refreshing natural lager is light in colour
witha slightly bitter taste.
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Chairmans statement continued
790
Return on 100 invested
in SABMiller in 1999
19.0%
Rolling annualised
ve-year total shareholder
return since1999
In the past decade we have added Birra Peroni in
Europe, the Bavaria group in Latin America, Fosters
in Australia and many other brewers and brands,
from the small and specialised to the pan-regional.
The decision to move out from South Africa and
totake on the world has succeeded beyond the
expectations of those of us involved at the time.
Of course we cannot measure our success simply
by the territory we cover. As brewers, we succeed
by making beers that are the rst choice of our
consumers, wherever they live and whatever
theircircumstances. So as well as building our
geographic portfolio and striving to be the best
operationally, we have had to develop our skills
increating, marketing and nurturing great
brandsthat add to our consumers enjoyment
oflife. Again, we can claim to have succeeded.
By running successful businesses, we have also
contributed to the social and economic wellbeing
ofthe countries in which we operate. We have
always known that business and society are
inter-dependent and that SABMillers growth
depends on ourishing local communities. So
aswell as creating jobs and paying taxes, we have
constantly sought to stimulate local enterprise and
to work with governments, NGOs and others on
issues of common concern such as water, energy
and food security. We have also taken a lead in
tackling the abuse of alcohol by small minorities
ofconsumers inour various markets. Im proud
tothink that SABMiller has been a consistent force
for good in its local communities.
Our success in all these areas is reected in
thevalue we have created for our shareholders.
100invested in SABMiller in 1999 would have
grown to790 as at 31 March 2012, compared
withjust 200 if invested in our peer group median
and just 144 if invested in the FTSE 100 index.
Over this period, our rolling annualised ve-year
total shareholder return has been a remarkable
19.0% compared with 1.9% for the FTSE 100 index.
The groups results, both in the past year and
longerterm, are testimony to the high calibre of
ourdirectors, managers and employees. They are,
undoubtedly, among the best in the industry and
Ithank them all along with our business partners
for the skills and dedication that have helped to
establish such an enviable and sustained record.
An abiding lesson of my career is that beer is a
personal business. More than any other, its about
people, friendship, camaraderie and a sense of
connection with fellow workers, customers,
consumers and communities. Appropriately
inanindustry devoted to enjoyment, my career
atSABMiller has been tremendous fun and Ive
beenprivileged to work with a great many talented,
principled and remarkable people, my current board
colleagues among them. While it would be invidious
to single out individuals, I must pay tribute to
Graham Mackay whos been instrumental in
building the group we know today. I leave
withenormous gratitude for his friendship and
support, knowing that the business continues
inexcellent hands.
Succession and board changes
My retirement will take effect at this years Annual
General Meeting on 26 July 2012. At that point,
Graham Mackay will take over as Executive
Chairman for an interim period of one year and
AlanClark, currently Managing Director of SABMiller
Europe, will become an executive director and
ChiefOperating Ofcer. At the end of the interim
period, the intention is that Graham will become
Non-Executive Chairman and that Alan will
succeedhim as Chief Executive.
We acknowledge the recommendation in the UK
Corporate Governance Code that a chief executive
should not go on to be chairman of the same
company and that the roles of chairman and chief
executive should not be exercised by the same
individual. Nevertheless, after long deliberation,
we believe that these appointments are in the
best interests of SABMiller and its shareholders.
In selecting my successor, the board carefully
considered the requirements of the job in the
context of the groups size and geographic spread.
We agreed that the new Chairman must be able
toprovide stability and continuity, must understand
both the global brewing industry and the particular
challenges of the emerging markets in which we
operate, must be familiar with our ways of working
and able to enhance our corporate culture and
operational performance and must be competent
to oversee the completion of the business capability
programme currently under way. Against these
criteria, the nomination committee concluded that
Graham Mackay was the outstanding candidate.
This decision has the unanimous support of the
directors and the strong backing of our two major
shareholders and was made after discussions
withmajor institutional investors. Graham is
highlyregarded in the industry and among our
stakeholders and we rmly believe hes the
rightperson to lead the board and to represent
SABMiller externally at the highest level.
Alan Clark, similarly, is ideally qualied to succeed
Graham as Chief Executive and his appointment
isunanimously supported by your directors. His
22years with the group include positions as
Marketing Director for the South African beer
business and Managing Director of the groups
softdrinks operations in South Africa. In 2003
hejoined the groups executive committee and
wasappointed Managing Director of SABMiller
Europe. During his tenure he built this business
intoone of the groups strongest and fastest-
growing divisions, recording successive years
ofdouble-digit earnings growth between 2003
and2009. In the tough conditions of the last three
years, he has successfully protected the divisions
protability through cost management and
operational improvements.
Any individual stepping up from an operating role
to the chief executives position in a global group
will inevitably need time to absorb the complexities
of the business. This is particularly so in light of
the groups many external relationships and
partnerships and the varied challenges it faces
indifferent markets and regions around the world.
Accordingly, the board has decided that a staged
handover of responsibilities will ensure appropriate
continuity and best serve the interests of the group
and its shareholders. Hence the one-year interim
period before the intended change of roles at the
2013 Annual General Meeting.
Job specications setting out the respective
authorities and responsibilities of the Executive
Chairman and Chief Operating Ofcer have
beenagreed by the board and the directors are
condentthat Graham and Alan will continue to
work effectively together during the transition
andthereafter. Any risk of an over-concentration
ofdecision-making powers in one person will be
mitigated by the fact that John Manser, our senior
independent non-executive director and chairman
of the audit committee, will in addition become
Deputy Chairman of the board.
Alans successor as Managing Director of SABMiller
Europe will be Sue Clark who has been our Director
of Corporate Affairs and a member of the group
executive committee since 2003. Sue has a deep
understanding of the group and its culture and
theright mix of skills to take our European
businessforward.
In December 2011 Ari Mervis was appointed
Managing Director Asia Pacic and Chief Executive
Ofcer of Fosters with responsibility for integrating
Fosters into the SABMiller group. Having been
Managing Director of SABMiller Asia since 2007,
Ari continues his role as Chairman of our Chinese
joint venture, CR Snow.
All these appointments are consistent with the
groups long-standing policy of developing strong
leaders within the business. Having also appointed
ve new independent non-executive directors over
the past four years, we remain committed to our
policy of progressively renewing the board and the
independent directors in terms of age, gender and
balance of skills. In line with that policy, it is also
the boards intention now to begin the process
ofrecruiting a new independent non-executive
director, with the expectation that in due course
heor she could become the senior independent
director in succession to Mr Manser.
Rob Pieterse will retire after this years Annual
General Meeting after four years as an independent
non-executive director. Rob has been a diligent
director and we are sorry to lose him though we
will still have the benet of his wisdom in his capacity
as Chairman of the supervisory board ofRoyal
Grolsch NV in the Netherlands. We are grateful for
his contribution during his time at SABMiller and we
wish him the very best for thefuture.
Outlook
Trading conditions are expected to be broadly
unchanged with further growth in our developing
markets but no more than modest improvements
inconsumer spending in some more developed
economies. We will continue to develop and
differentiate our brand portfolios, taking
opportunities to improve sales mix and raise prices
selectively. Unit input costs are expected to rise
inmid-single digits in constant currency terms.
Focus will be maintained on cost effectiveness,
including synergy delivery in Australia, and on
expanding our globally-managed procurement
programmes. While healthy cash generation will
again be a priority, targeted investments in
production capacity, marketing and sales capability
and business systems will continue in order to drive
medium-term growth.
Meyer Kahn
Chairman
Carlton Dry
Origin: Australia
First brewed: 2007
www.carltondry.com.au
Carlton Drys exceptional dry nish is achieved through a special
brewing process, removing sugars over an extended period of
time. This creates a remarkably smooth, crisp nish with less
carbohydrate than other full-strength beers.
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Growth and development trends in the global beer market
were generally unchanged in 2011. Emerging markets were
still the principal source of volume growth while developed
markets faced weak consumer demand as a result of
difculteconomic conditions and shifting consumer trends.
The better performing markets, regardless of their
stage of development, continued to be those in which
industry leaders used brand development, innovation
and partnerships to capture latent opportunities and
stay ahead of changing consumer trends.
The biggest beer market, China, accounted for
43%of the worlds volume growth. Chinas top
vebrewers accounted for 63% of total industry
volumes. However, beer pricing remains low in
Chinaand prot margins are thin. Consolidation of
the fragmented Chinese beer industry remains an
important long-term trend and one that will lead
eventually to greater industry protability.
China beer market growth* hl 000s
China total industry volumes 2006-11
06 07 08 09 10
346,365
386,890
408,943
437,978
464,124
487,299
11
Beer growth trends by volume* %
Forecast ve-year compound annual growth rate
(CAGR) by region 2012-16
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3.8
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3.5
2.9
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*Source: Canadean
In contrast to Chinas high growth in volumes
butlow protability, South America, impressively,
saw growth in both volumes and protability. In
thecontinents biggest market, Brazil, beer sales
were resilient in the face of softer consumer trends
and the development of premium brands remains
an opportunity as it also does in Argentina. In
Peru and Colombia, where the premium segment
isbetter established, brewers continue to attract
young adult consumers and to raise the image of
the beer category as a whole. A trend from informal
spirits to beer was evident in Peru which still offers
sizeable growth opportunities for beer from adjacent
categories. Latin America as awhole continues to
offer excellent growth and protability opportunities
from an already strong and protable base.
In South Africa, brand development work among
mainstream and premium brands solidied the
leading brewers share in 2011. Elsewhere in Africa,
the ability to form effective partnerships continues
to be an important component of growth for some
companies and the opportunity to formalise
informal beverages is a major factor in markets
where affordability is critical. Industry leaders
SABMiller, Castel and The Coca-Cola Company
remain aligned in their pursuit of the opportunities
provided by beverage volume growth in these
low-scale markets.
In the USA, volumes declined 0.6% in 2011 as
unemployment remained high, particularly among
young, legal drinking age men. Newer craft beers
andsome imports continued to thrive at the upper
end of the price spectrum at the expense of more
sessionable and longer-established light beer brands.
Australia has new opportunities following SABMillers
acquisition of Fosters. We expect to see renewed
focus on innovation and the development of
mainstream, premium and import brands.
European consumer trends remain challenging.
Difcult long-term demographic trends, a shift to
home consumption in markets such as the UK and
near-term austerity measures all combine to limit
growth. Mergers and acquisitions remain a factor in
the Czech Republic while partnerships have played
a role in markets such as Russia where premium
brands remain promising.
Capturing the opportunity in both developed and
emerging markets requires three key skills brand
development, innovation and the ability to forge
successful partnerships in markets where joint
ventures are necessary. Very few brewers excel
atall three. Investors looking for long-term returns
inthe beer industry need to be able to distinguish
those rms that are truly ahead of the eld in these
intangible, elusive and sophisticated disciplines.
Independent industry consultant
May 2012
Global beer market trends
Growing importance of brand development,
innovation and partnerships
Coors Light
The premium light, frost-brewed Coors
Light is the worlds most refreshing beer.
This years growth has been supported by
the new super-cold indicator bar on the
temperature-sensitive label along with innovative,
aluminium pint packaging. Coors Light is now
the number two brand in the USA.
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Chief Executives review
Consistent strategy delivers growth
We create value by being in the right markets, having the
right brand portfolios, creating the right operating processes
and building the right partnerships.
Graham Mackay, Chief Executive
The group has delivered another strong
performance, driven this year by the successful
development of our brands and brand portfolios,
better sales execution and rising consumer
condence in most of our developing markets.
Itsparticularly pleasing to see the progress weve
made in growing revenue and improving margins,
as these are two of our key drivers of value.
Group revenue grew by 11% as a result of higher
beverage volumes, selective price increases
andrising sales of our premium brands. EBITA
increased by 12% (8% on an organic, constant
currency basis), with the reported EBITA margin
rising 10 bps to 17.9%.
Despite the challenges of the nancial crisis, our
strategic direction has remained constant. While
itnaturally evolves over time, the strategy were
pursuing continues to be relevant and has enabled
us to succeed even in trying circumstances. Our
four strategic priorities, together with the measures
we use to track progress and how weve performed
this year, are set out on pages 20 and 21.
To provide greater insight into how the business
generates value for its shareholders and to meet
therequirements of the UK Corporate Governance
Code, this years annual report offers further detail
on our business model. Page 15 details the key
components of this model being in the right
markets, having the right brand portfolio, creating
the right operating processes and building the
rightpartnerships. The past year has seen strong
progress in each case.
Being in the right markets
In line with our rst strategic priority, weve
continuedto build a balanced and attractive global
spread ofbusinesses one that combines generally
protable, mature markets with high-growth,
developing markets characterised by strong economic
fundamentals and rising levels of disposable income.
At the mature end of the portfolio, we have leading
positions in some of the worlds most protable
developed markets, for example through MillerCoors
in the USA. Here the focus is on enhancing
valueand building prot margins by offering local
premium and global brands and developing craft
beers and other malt-based beverages.
In emerging markets, were well represented (either
directly or through partnerships and alliances) in the
worlds fastest-growing countries, including China,
India and many African markets. We also have a
strong presence in the developing regions of Latin
America and Central and Eastern Europe. In these
markets our focus is on volume and value growth,
achieved by providing high-quality, aspirational brands
at a range of prices to cater for all income levels.
At76%, the proportion of our group EBITA coming
from developing or emerging economies remains
thehighest in the brewing sector.
76%
Proportion of group
EBITA from developing
or emerging economies
Our business model
Our strategic priorities
Creating a balanced and attractive global spread of businesses
Developing strong, relevant brand portfolios that win in the local market
Constantly raising the protability of local businesses, sustainably
Leveraging our skills and global scale
How we create value
Being in the right markets
Our geographic portfolio of businesses combines both
developed and emerging markets, exposing us to a
range of protable and high-growth countries. Having
leading positions in both, across the world, is important
in creating value.
What this means in practice
We operate in a range of markets with different
characteristics
In mature markets those generally characterised by
above-average prot pools our focus is on enhancing
value and improving margins.
In emerging markets with above-average growth potential
we aim to deliver volume and value growth and to expand
the beer category.
Having the right brand portfolio
We seek to build a portfolio of lager brands that meets the
diverse needs of local consumers in each market. In selected
markets where value can be created we operate a full-beverage
portfolio including carbonated soft drinks, water and non-
alcoholic malt drinks.
Price ladders
In each market, we aim to offer consumers a range of beer
brands with different attributes and tastes at price points from
economy to premium so capturing consumers as they move
both up and down the price scale.
Market segmentation
On a market-by-market basis, we identify different consumer
needs and drinking occasions and dene our products (both
alcoholic and non-alcoholic) accordingly.

Long-term sustainable value creation

Building the right partnerships
We recognise that our success is dependent upon a broad
number of partnerships. In each of our partnerships, we seek
value-creating opportunities which benet both parties.
Our approach enables us to optimise all aspects of our value
chain from local and global suppliers to mom and pop stores,
key account customers and distributors. It has also facilitated
our global expansion and we have a number of associations
and successful joint ventures with industry partners.
Successful partnerships
We have mutually benecial and, in some cases, long-
standing relationships, typied by a high degree of trust
andrespect.
For example, we have well established partnerships with
oursuppliers. Where possible and cost effective, we choose
to source our brewing raw materials barley, sorghum and,
more recently, cassava from local suppliers and we work
with farming communities to stimulate local economic growth
and boost local jobs and incomes.
Creating the right operating processes
We believe that the focus for management in each market
should be their local commercial priorities. Our culture
and operating processes encourage shared learning within
and across the businesses. They also ensure continuous
improvement in performance through the measurement
and application of SABMiller best practice.
Local accountability
We believe that accountability is clear and personal.
Fullaccountability for the commercial aspects of the business
resides with local management teams in each market.
Sharing best practice
The SABMiller Ways are procedures and protocols designed
to codify and transfer best practice across the business.
Theycover all aspects of our operations from marketing
andmanufacturing to nance and corporate affairs.
Progressin the areas covered by the Ways is measured
bykey performance indicators (KPIs) to ensure
continuousimprovement.
Pilsner Urquell
Origin: Czech Republic
First brewed: 1842
www.pilsner-urquell.com
The worlds rst Pilsner from the Czech city of Pilsen. Pilsner
Urquell has a distinctive bitterness and full-bodied taste that
delight discerning beer drinkers around the world. The name
means Pilsner from the original source.
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Of course, not all countries categorise neatly
asmature or developing. Australia is normally
considered a developed market but has economic
and demographic growth more akin to a developing
market. This fact was one of the main attractions
when it came to acquiring the Fosters business
inDecember 2011.
The Fosters acquisition has been a signicant
transaction for the group. One of our rst actions
after taking ownership was to integrate our existing
Australian business, Pacic Beverages, into CUB
(Carlton and United Breweries, the Australian
beverage business of Fosters) and a key focus in
the coming year will be the integration of CUB into
SABMiller. Weve completed our detailed integration
plans and have identied a range of opportunities
toincrease CUBs revenues and reduce its costs.
These include better management of channels
andkey accounts and a stronger focus on CUBs
core brands with sharper, more distinctive brand
positionings. The application of SABMillers best
operating practices and the benets of the groups
global scale in procurement and other areas are
expected to save AUD180 million per year, by
yearfour.
While current trading may be more challenging
thanwe anticipated and some of the negative and
long-standing trends affecting the Australian beer
category in general will not be reversed overnight,
everything weve seen so far conrms our original
assessment of the Fosters opportunity. There is a
lot of hard work ahead, but Im condent that the
acquisition will add signicant value to the group.
Having the right brand portfolio
Creating the right brand portfolio relates to our
second strategic priority which is to win in the local
market by offering attractive portfolios tailored to
local needs and preferences. Within each market,
we aim to address a growing range of consumer
segments and drinking occasions while catering
fordifferent levels of disposable income offering
consumers a price ladder from affordable to
premium and seeking to capture or retain their
loyalty as they move either up or down.
In each country, the core of the portfolio and the
main contributors to volume are the mainstream
brands. Priorities here are to sharpen the
differentiation between our various offerings and
continually to refresh and polish our brands to
keepthem relevant and appealing. Recent years
have seen major successes around the world.
MillerCoors in the USA has shown how continued
innovation can convincingly reinforce a brands
existing claims and keep it fresh and interesting for
consumers. In the case of Coors Light, the challenge
was to consolidate the brands ownership of the
cold refreshment concept and strengthen its
emotional as well as its functional appeal. Innovations
included a more sophisticated temperature-sensitive
label combined with new packaging and advertising.
Coors Light has responded by becoming the number
two brand in the USA and is on track for a seventh
consecutive year of growth in both volume and
share. Miller Lite is set to benet from a new
positioning, packaging innovations such as a
punch-top, taste-ow can and new advertising
thatincludes digital programmes on Facebook,
Twitter, Google and YouTube.
SAB in South Africa has also been putting energy
and resources into its mainstream brands. When
the FIFA World Cup came to the country in 2010,
the business used the opportunities presented by
the tournament to rejuvenate its115-year-old Castle
brand. With Castle Lager sponsoring the national
football team, SAB created a campaign to rally the
nation and position the brand as representing the
best of South Africa. This activity and the more
recent campaign, It all comes together with a
Castle, have pushed the brands growth rate
intodouble-digits.
When the Poker brand in Colombia needed
refreshing, the key was not to lose the trust of
thebrands low-income and relatively traditional
consumers by changing too much at once. So
theprogramme began with clear messages that
theproduct would remain the trusted friend that
consumers had known since 1929. As bottles and
labels were updated, the friendship message
wasreinforced. Previously a regional brand, Poker
is now a leader across Colombia and one of the
most protable brands in Bavarias portfolio.
In China, our CR Snow joint venture has succeeded
in creating the countrys rst national beer brand
byconcentrating resources behind a single name.
From small beginnings, it decided 10 years ago to
make its Snow brand the countrys number one
brand by volume by 2006 and to achieve national
scale by 2011. In a market ripe for consolidation,
itbegan building local strongholds into regional
areas of leadership. It also developed brand variants
to address specic occasions and price points
andemphasised Snows cultural associations to
reinforce its national status. In 2011, sales volumes
by CR Snow passed 100 million hectolitres. Today,
Snow is the biggest brand by volume, not just in
China, but in the world.
100m+ hl
2011 sales volumes
by CRSnow inChina
Chief Executives review continued
The trend towards premium brands continues,
driven in part by urbanisation and the rise of the
middle class in developing markets. International
premium brands account for 7.5% of the global
beermarket while local premiums make up 11.4%.
SABMiller is active in both segments and is seeing
good results. Revenue growth in premium brands
isone of our key performance indicators against
strategic priority two (see page 20) and this year
hasseen growth of 14%.
Our international premium portfolio comprises
Peroni Nastro Azzurro, Miller Genuine Draft, Pilsner
Urquell and Grolsch. Thanks to their provenance,
fame and brand equity, these brands command
prices at the top of the ladder in most of their
markets around the world.
Unlike the mass marketing appropriate to
mainstream brands, international premiums require
slow, deliberate seeding in each new market to
maintain their exclusivity. Following the 2008 launch
of Grolsch in South Africa, for example, SAB has
been recruiting small numbers of social opinion
leaders, exposing them to the Grolsch experience
and equipping them to become word-of-mouth
advocates among their peers. Feedback from the
programme indicates a growing afnity for Grolsch
among target consumers and the brands share
inpremium bars and restaurants has been rising.
In Slovakia, the challenge has been to revive an
international premium in this case Pilsner Urquell
in response to a steep decline in the Slovak beer
market and a competitor piggy-backing on Pilsner
Urquells brand heritage. The work has involved
positioning the brand as the best of the best,
strengthening its association with special occasions
and offering a better experience to discerning
consumers by delivering fresh, unpasteurised
Pilsner Urquell direct from the brewery to opinion-
leading pubs. Two years on, the brands market
share has made signicant progress.
The local premium segment the premium beer
from here trades on local provenance and pride
and widens the choice for consumers looking for
affordable luxury. It offers attractive margins and
growth and is a segment in which SABMiller has
particular strengths. Again we can point to a run
ofsuccesses.
Our Lesotho business, Maluti Mountain Brewery,
recently reinvigorated its Maluti Premium Lager to
counter new, premium competition arriving from
South Africa. Trading on the brands local heritage,
the business developed a pride in origins positioning
along with new packaging and a national promotion
celebrating Lesothos best-known locations. Having
outstripped all volume forecasts, the product now
has a premium market share of over 70% and is one
of the most protable brands in the brewerys portfolio.
Tanzania Breweries Ltd also took action in the local
premium segment when the merger of two rivals
created a powerful new competitor. In a two-
pronged response, it revitalised its existing, mainly
mainstream brands and expanded its premium
offering with the introduction of Castle Lite, so
meeting the need for a lower-calorie beer and
capturing new drinking occasions.
Local premium brands continue to stimulate
innovation. In Latin America, for instance, seasonal
offerings such as the Negra, Dorada and Roja
variations of Club Colombia and seasonal derivatives
of Cusquea in Peru have underpinned double-digit
volume growth in the premium segment.
Another important trend is the growing interest
incraft beers from consumers who value the
distinctive heritage and character that these brands
offer. Capitalising on the trend, we recently reached
agreement with the Van Steenberge brewery in
Belgium to distribute its St Stefanus brand around
the world. Named after the monastery to which the
brewery is linked, St Stefanus is our rst abbey beer
and an attractive offering for beer connoisseurs.
In the USA, MillerCoors crafts and imports division,
Tenth and Blake, continues to go from strength to
strength, delivering double-digit growth this year.
Akey factor has been the popularity of seasonal
variants of Blue Moon and Leinenkugels,
particularly the very successful Leinenkugels
Summer Shandy. To expand its portfolio, Tenth
andBlake has acquired The Crispin Cider Company,
capitalising on the fact that cider is now the fastest
growing category in the US beer industry.
At the base of the price ladder, were developing
anew generation of affordable brands to cater
forthe aspirations of low-income consumers in
emerging markets. These are typically made from
locally grown raw materials and offer a safe, quality
alternative to informal and illicit beers and spirits.
In 2011 our business in Mozambique launched
Impala, the rst-ever commercial beer made
fromcassava. Although cassava is widely grown
inMozambique, the challenge of transporting the
crop and the fact that it deteriorates rapidly after
harvesting make it difcult for subsistence farmers
to benet from any surplus. This problem has now
been solved by the use of a mobile unit which
travels to the cassava growing regions and
processes the root on the farm, ready for the
brewing process. As a result, some 1,500
smallholders will now have a market for their crop.
With the government recognising the economic
benets and reducing the excise on Impala, more
low-income consumers will be able to make the
transition from home brews to commercial beer.
Poker
Origin: Colombia
First brewed: 1929
www.cervezapoker.com
Poker is a traditionally brewed lager beer, with a smooth
taste that has a touch of sweetness, making it the perfect
brew to share during great moments with friends.
Pokerisaleading brand in Colombia.
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If the key to affordability in Africa is locally-sourced
ingredients, our businesses in Latin America are
achieving the same ends and capturing more
drinking occasions by launching different-sized
packaging. In some cases theyve introduced
smaller units: the 225 ml bottles for guilita and
Pilsener, for example, can sell at a lower price and
also be drunk before the beer loses its chill. In other
cases, the solution is larger packaging. For Poker,
guila and guila Light, the roll-out of 750 ml
bottles designed for sharing is attracting Colombian
consumers looking for affordability, both in bars and
restaurants and when drinking at home.
Although we are rst and foremost a beer business,
we have opportunities to expand into adjacent
categories such as malt and other non-alcoholic
drinks. Our water and malt drink businesses in
Africa continue to grow and we recently launched
two new malt drinks, Maltizz in Colombia and
ActiMalta in Honduras and El Salvador.
Creating the right operating processes
Our geographic footprint and strong brands will
onlybenet the business if we have the systems
and skills to extract value from them. In creating
theright operating process, were guided by our
belief that beer is an inherently local product
andthat SABMillers success depends on local
management being able to pursue their own
commercial priorities.
We constantly seek to improve our local sales
execution and levels of customer service.
TheOperations review on pages 25 to 35 gives
examples of our progress in these areas across
thebusiness during the year.
As competition intensies and regulatory and other
pressures increase, winning in the local market is
becoming more complex. Its therefore important to
remove non-commercial activities from each business
so that local managers can focus without distraction
on their customers, consumers and communities.
To this end, were implementing a comprehensive
business capability programme not just to ease
the load on local teams but also to boost efciency,
raise standards, capitalise on our scale and create
amore connected organisation.
The past year has seen continued progress.
Ourglobal procurement organisation, Trinity, has
contributed signicant savings and were extending
its remit to cover more of our purchasing than
simply brewing materials. Further benets have
come from regional programmes such as the
consolidation of our manufacturing and supply
chain in Europe and the introduction of new sales
and distribution systems in Latin America.
Our global IS project has developed further during
the year. The latest stage covering back, middle
andfront-ofce processes was deployed in its rst
market, Ecuador, in November 2011 and the next
full deployment will be in Poland.
Net operating benets from our business
capabilityprogramme once again exceeded our
expectations, reaching US$159 million for the year.
As a consequence, weve raised our 2014 target
fornet operating benets to US$450 million per
yearby the end of that year. Further details of the
benets and the investment were making to
deliverthem are set out in the Chief Financial
Ofcers review on pages 37 to 44.
Weve been further capitalising on our scale
withprogrammes designed to codify, share and
enhance our business capabilities. In recent years
weve been working on a series of eight SABMiller
Ways procedures and protocols for transferring
best practice across the business and covering
allaspects of our operations from marketing and
manufacturing to nance and corporate affairs.
Wenow have ongoing programmes to build specic
skills in line with the Ways, with particular emphasis
this year on commercial and marketing capabilities at
the local level. To ensure continuous improvement,
weve introduced key performance indicators to
measure our progress in the main areas covered by
the Ways and results are reviewed everyquarter.
Building the right partnerships
More than most other industries, the beer business is
about being rooted in the community and connected
to a wide variety of partners and stakeholders.
Partnerships are crucial to our success. We devote
great care and effort to building alliances throughout
our value chain and believe that SABMiller is unusual
in the industry in its partnership skills.
At industry partner level we have successful and
long-standing alliances with businesses such as
Castel in Africa, CRE in China and Molson Coors
inthe USA, all characterised by mutual respect
anda willingness to work together for mutual value.
Thisyear weve joined forces with Anadolu Efes and
have further strengthened our alliance with Castel.
Other partnerships are aimed at achieving
inclusivegrowth in local communities. By this we
mean building value chains that stimulate economic
development and cultivate the entrepreneurial skills
of local partners so that they can contribute to our
business and we can help them develop theirs.
An example of this approach is our Farming Better
Futures programme, under which were seeking
toincrease the local sourcing of agricultural raw
materials in Africa, India and Latin America. Three
years ago, all the barley we used in Zambia had
tobe imported. Today, Zambia is growing enough
barley not only to meet its own needs but also to
become a net exporter and the new barley industry
has created employment for over 4,000 rural
workers. In Africa as a whole, were committed
toincreasing the local sourcing of raw materials to
US$450m
2014 target net operating
benets from our business
capability programme
Chief Executives review continued
50% in the next two years a move that will raise
the number of farming jobs directly supported by
our operations from 100,000 to an estimated
150,000. In India, we aim to source all our barley
locally within the next ve years.
Building local supply chains in this way requires
close collaboration with farmers and others and
helps to create jobs and prosperity for local
communities. For every person we employ in
Uganda, for instance, we generate over 200 jobs
inthe supply chain and the broader economy.
Downstream from our breweries, we seek value-
enhancing partnerships across the spectrum from
large, sophisticated supermarket chains and major
distributors to neighbourhood stores, bar and
tavern proprietors and owner-drivers. In many
markets, such alliances help further in stimulating
enterprise and boosting employment. We also
contribute through corporate social investment
which this year totalled US$34 million, a signicant
portion of which is focused on supporting local
entrepreneurs, particularly in Colombia and
SouthAfrica.
Recognising that our business is not separate from
society but embedded within it, we play our part in
tackling shared challenges such as water, energy
and food security. Our rst responsibility is to run
our own operations as resource-efciently as
possible and here again were making progress.
Inthe past year, our water consumption per
hectolitre of lager produced was 4.0 hectolitres,
a5% reduction on the previous 12 months. Over
thesame period, our fossil fuel emissions totalled
12.4kgCO
2
e per hectolitre of lager produced,
ayear-on-year drop of 10%.
Looking beyond our own operations, we know
wecan only nd long-term solutions to issues such
aswater scarcity in partnership with governments,
NGOs, civil society and others. A case in point is
our global Water Futures partnership with WWF
andthe German development agency, GIZ,
nowengaged in watershed protection schemes
around the world. Other partnerships including
programmes with police forces and public health
bodies are making us more effective in addressing
alcohol abuse.
In summary, the year has seen solid progress with
the key components of our business model being
in the right markets, having the right brand portfolio,
creating the right operating processes and building
the right partnerships. Our work in these four areas
has continued to generate long-term value for our
shareholders.

Addressing risks
We recognise that running a global business
presents complex risks. Our aim is to maximise
theopportunities and minimise the threats that any
given risk presents so as to generate the greatest
return for our shareholders. To this end we have a
well-developed risk-management process (detailed
on pages 65 to 67) for identifying, monitoring and
managing the principal risks we face (these are
listed on pages 22 and 23).
The latest annual review of our principal risks has
resulted in two changes to the list. The economic
environment is no longer presented as a separate risk
as we feel that the challenges of the global economy
since the global nancial crisis of 2008 have become
a normal part of operating a global business and
should be met through our strategic planning and
business processes. We have also removed volatility
in the price of raw materials from our list of principal
risks as this is now the focus of the Trinity
procurement organisation.
Looking ahead
While its difcult to predict the impact of the
uncertain economic environment on consumer
sentiment, the beer sector has, in the past, proved
itself resilient in difcult times.
Our underlying nancial position remains strong,
asdoes our medium-term outlook for growth in
volume, revenue and protability. As I said last
year,I believe we have the skills, resources and
capabilities to continue generating value for our
shareholders and other stakeholders.
Graham Mackay
Chief Executive
Castle Milk Stout
First brewed: 1935
www.sab.co.za
Castle Milk Stout is brewed as a lager, unlike most stout.
The milk refers to lactose sugars added during the brewing
process. It has a thick texture, strong avour and full,
satisfying taste with a hint of caramel. Roasted dark malt
provides its distinctive colouring, and the creamy-smooth
head comes from special yeast.
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Four strategic priorities
Guiding our progress, driving our growth
Our four strategic priorities dene how SABMiller will achieve its
overall nancial goal. While they naturally evolve and their relative
importance changes in line with market conditions, these priorities
continue to guide our short, medium and long-term growth.
Financial goal
What we measure Why we measure How we have performed
2012 2011 2010
To deliver a higher return to
ourshareholders than our peer
group over the longer term
Total Shareholder Return in excess
ofthemedian of our peer group over
three-year periods
Monitor the value created for our
shareholders over the longer term
relativeto alternative investments
in the drinks industry
89% 73% 52%
Growth in adjusted earnings per share Determine the improvement in
underlyingearnings per share for
ourshareholders
12% 19% 17%
Free cash ow Track cash generated to pay down
debt,return to our shareholders
andinvest in acquisitions
US$3,048m US$2,488m US$2,028m
Strategic priority
Creating a balanced and
attractiveglobal spread
ofbusinesses
The wide geographic spread of our operations allows us to benet from growth
involumes and value in beer markets around the world. We continue to look for
opportunities to strengthen our geographic footprint in both developing and
developedmarkets through greeneld entries, alliances, mergers and acquisitions.
The proportion of our total lager volume
from markets in which we have No.1 or
No.2 national market share positions
Gain an overall picture of the relative
strength of our market positions
93% 94% 94%
The proportion of group EBITA from
developing and emerging economies
Assess the balance of our earnings
exposure between regions of the
worldeconomy with highest growth
potential and more mature regions
76% 79% 78%
Developing strong, relevant
brandportfolios that win
in the local market
We seek to develop attractive brand portfolios that meet consumers needs in each of
our markets. This includes expanding our offerings to address new consumer segments
and drinking occasions, strengthening our mainstream brands, building a differentiated
portfolio of global and local premium brands and channelling the right brands to the
right outlets at the right time and price.
Organic growth in lager volumes Track underlying growth of our
corebusiness
3% 2% 0%
Group revenue growth
(organic, constant currency)
Assess the underlying rate of growth
insales value of our brand portfolios
7% 5% 4%
Revenue growth in premium brands
(constant currency)
Monitor progress in building our portfolio
of global and local premium brands
14% 7% 7%
Constantly raising the protability
oflocal businesses, sustainably
Our aim is to keep enhancing our operational performance through top-line growth and
continuous improvement in costs and productivity. Its also important that we maintain
and advance our reputation, protect our licence to trade and develop our businesses
sustainably for the benet of our stakeholders.
EBITA growth
Track our underlying operational
protgrowth
8% 12% 6%
EBITA margin Monitor our underlying operational
protability
17.9% 17.8% 16.6%
Hectolitres of water used at our breweries
per hectolitre of lager produced
Gauge our progress in reducing the
amount of water used in our breweries
4.0 hl/hl 4.2 hl/hl 4.3 hl/hl
Fossil fuel emissions from energy
useatour breweries per hectolitre
oflagerproduced
Assess progress towards reducing
fossilfuel emissions at our breweries
12.4 kg
CO
2
e/hl
13.8 kg
CO
2
e/hl
14.2 kg
CO
2
e/hl
Leveraging our skills
and global scale
Our global spread presents increasing opportunities to gain value from the scale and skills
of the group, not least by leveraging our scale and expertise in procurement, standardising
our back-ofce functions and integrating our front-ofce systems. We are also beneting
from ongoing collaboration and the sharing of skills between our businesses.
Cumulative nancial benets from
ourbusiness capability programme
Track the payback from our investment in
the group business capability programme
US$890m US$620m US$350m
Key performance indicators
Measuring our progress
The key performance indicators (KPIs) outlined
below are used to monitor progress against our
overall nancial goal and our four strategic priorities.
Further detail is contained in the Chief Executives review, the Chief Financial
Ofcers review and the Sustainable Development review. Detailed denitions
are on page 181.
Financial goal
2012 2011 2010
To deliver a higher return to
ourshareholders than our peer
group over the longer term
Total Shareholder Return in excess
ofthemedian of our peer group over
three-year periods
Monitor the value created for our
shareholders over the longer term
relativeto alternative investments
in the drinks industry
89% 73% 52%
Growth in adjusted earnings per share Determine the improvement in
underlyingearnings per share for
ourshareholders
12% 19% 17%
Free cash ow Track cash generated to pay down
debt,return to our shareholders
andinvest in acquisitions
US$3,048m US$2,488m US$2,028m
Strategic priority
attractiveglobal spread
ofbusinesses
The wide geographic spread of our operations allows us to benet from growth
involumes and value in beer markets around the world. We continue to look for
opportunities to strengthen our geographic footprint in both developing and
developedmarkets through greeneld entries, alliances, mergers and acquisitions.
The proportion of our total lager volume
from markets in which we have No.1 or
No.2 national market share positions
Gain an overall picture of the relative
strength of our market positions
93% 94% 94%
The proportion of group EBITA from
developing and emerging economies
Assess the balance of our earnings
exposure between regions of the
worldeconomy with highest growth
potential and more mature regions
76% 79% 78%
brandportfolios that win
in the local market
We seek to develop attractive brand portfolios that meet consumers needs in each of
our markets. This includes expanding our offerings to address new consumer segments
and drinking occasions, strengthening our mainstream brands, building a differentiated
portfolio of global and local premium brands and channelling the right brands to the
right outlets at the right time and price.
Organic growth in lager volumes Track underlying growth of our
corebusiness
3% 2% 0%
Group revenue growth
Assess the underlying rate of growth
insales value of our brand portfolios
7% 5% 4%
Revenue growth in premium brands
(constant currency)
Monitor progress in building our portfolio
of global and local premium brands
14% 7% 7%
oflocal businesses, sustainably
Our aim is to keep enhancing our operational performance through top-line growth and
continuous improvement in costs and productivity. Its also important that we maintain
and advance our reputation, protect our licence to trade and develop our businesses
sustainably for the benet of our stakeholders.
EBITA growth
Track our underlying operational
protgrowth
8% 12% 6%
EBITA margin Monitor our underlying operational
protability
17.9% 17.8% 16.6%
Hectolitres of water used at our breweries
per hectolitre of lager produced
Gauge our progress in reducing the
amount of water used in our breweries
4.0 hl/hl 4.2 hl/hl 4.3 hl/hl
Fossil fuel emissions from energy
useatour breweries per hectolitre
oflagerproduced
Assess progress towards reducing
fossilfuel emissions at our breweries
12.4 kg
CO
2
e/hl
13.8 kg
CO
2
e/hl
14.2 kg
CO
2
e/hl
Leveraging our skills
and global scale
Our global spread presents increasing opportunities to gain value from the scale and skills
of the group, not least by leveraging our scale and expertise in procurement, standardising
our back-ofce functions and integrating our front-ofce systems. We are also beneting
from ongoing collaboration and the sharing of skills between our businesses.
Cumulative nancial benets from
ourbusiness capability programme
Track the payback from our investment in
the group business capability programme
US$890m US$620m US$350m
Leinenkugels Summer Shandy
Origin: USA
First brewed: 2007
www.leinie.com
Brewed with an adventurous blend of select malted wheat
and barley, lemonade avour and a hint of Wisconsin honey,
Leinenkugels Summer Shandy has delivered summertime
refreshment to US beer drinkers since 2007.
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Principal risks
Monitoring and managing the risks we face
The principal risks facing the group and considered by the board are
detailed below. The groups comprehensive risk management process
is described in the corporate governance section while nancial risks
arediscussed in the Chief Financial Ofcers review and in note 23 to
theconsolidated nancial statements.
Principal risk
Context Specic risks we face Possible impact Mitigation Associated strategic priorities
Industry consolidation
The global brewing and beverages industry is
expected to continue to consolidate. There will
continue to be opportunities to enter attractive
growth markets, to realise synergy benets from
integration and to leverage our global scale.
Failing to participate in value-adding transactions.
Paying too much to acquire a business.
Not implementing integration plans successfully.
Lower growth rate, protability
and nancial returns.
Potential transactions are subject to rigorous analysis.
Onlyopportunities with potential to create value are pursued.
Proven integration processes, procedures and practices
areappliedto ensure delivery of expected returns.
Activities to deliver synergies and leverage scale are in
place,monitored closely and continuously enhanced.
Develop non-traditional capabilities to enter and grow
protablyinnew markets.
Creating a balanced and attractive
global spread of businesses.
of local businesses, sustainably.
Change in consumer
preferences
Consumer tastes and behaviours are constantly
evolving, and at an increasingly rapid rate.
Competition in the beverage industry is
expanding and becoming more fragmented,
complex and sophisticated.
Failing to ensure the strength and relevance
ofour brands with consumers and customers.
Failing to respond in an adequate and timely
manner to rapidly changing consumer
preferences and behaviours.
Failing to continue to improve our commercial
capabilities to deliver brand propositions that
meet consumer, shopper and customer needs.
Market positions come under
pressure, lower top-line growth
rates and protability.
Ongoing evaluation of our brand portfolios in every market to ensure
that they target current and future opportunities for protable growth.
Building our brand equities through innovation and compelling
marketing programmes.
Ensuring we have deep understanding of changing consumer
andindustry dynamics in key markets, enabling us to respond
appropriately to issues which may impact our business performance.
Continued enhancement of the SABMiller Marketing Way which sets
out the best-practice approach for our commercial processes.
Focus on monitoring and benchmarking commercial performance
and developing the critical commercial capabilities that are required
inorder to win in local markets.
brandportfolios that win in
thelocal market.
Leveraging our skills and
globalscale.
Management
capability
We believe that our people are our
enduringadvantage and therefore it is
essentialthat wedevelop and maintain
globalmanagement capability.
Failing to identify, develop and retain a sufcient
pipeline of talented managers for the present
andfuture needs of the group.
Lower long-term
protablegrowth.
Further develop our leadership talent pipeline through our
GlobalTalent Management model and strategic people resourcing.
Sustaining a strong culture of accountability, empowerment
andpersonal development.
Standardisation of key processes and best practices across
thegroup through the roll-out of the SABMiller Ways.
Recognising strong performance through appropriate reward
structures.
thelocal market.
globalscale.
Regulatory
changes
With increasing and high-prole debate over
alcohol consumption in many markets, the
alcohol industry is coming under increasing
pressure from national and international
regulators, NGOs and tax authorities.
Regulation places increasing restrictions
ontheavailability and marketing of beer.
Tax and excise changes cause pressure
onpricing.
Lower growth, protability
andcontribution to local
communities in some
countries.
Rigorous adherence to the principle of self-regulation backed
byappropriate policies and management review.
Constructive engagement with government and all external
stakeholders on alcohol-related issues.
Investment to improve the economic and social impact of our
businesses in local communities and working in partnership
withlocal governments and NGOs.
attractive global spread
ofbusinesses.
Developing strong, relevant brand
portfolios that win in the local
market.
Acquisition
of Fosters
Following the Fosters acquisition, we have
committed to delivering an integration plan with
value creation dened by specic, communicated
medium-term targets, synergies and cost savings
from the Fosters business.
Failing to deliver integration objectives and
commercial and operational excellence targets
communicated as part of the integration plan.
Failing to achieve the synergy and cost saving
commitments of the transaction.
Lower growth rates and
protability. Damage to
ourreputation for strong
commercial capability and
formaking value-creating
acquisitions.
Embedding of the SABMiller Ways (processes,
systems and tools) throughout the Fosters business.
Ongoing monitoring of progress versus the integration plan, including
frequent and regular tracking of key performance indicators.
ofbusinesses.
market.
globalscale.
Delivering business
transformation
The group continues to execute a major business
capability programme that will simplify processes,
reduce costs and allow local management teams
to focus more closely on their markets.
Failing to derive the expected benets
fromtheprojects currently under way.
Failing to contain programme costs or ensure
execution is in line with planned timelines.
Increased programme costs,
delays in benet realisation,
business disruption.
Senior leadership closely involved in monitoring progress
and in making key decisions.
Mechanisms in place to track both costs and benets.
Rigorous programme management and governance processes
withdedicated resources and clear accountability.
globalscale.
Principal risk
Context Specic risks we face Possible impact Mitigation Associated strategic priorities
Industry consolidation
The global brewing and beverages industry is
expected to continue to consolidate. There will
continue to be opportunities to enter attractive
growth markets, to realise synergy benets from
integration and to leverage our global scale.
Failing to participate in value-adding transactions.
Paying too much to acquire a business.
Not implementing integration plans successfully.
Lower growth rate, protability
and nancial returns.
Potential transactions are subject to rigorous analysis.
Onlyopportunities with potential to create value are pursued.
Proven integration processes, procedures and practices
areappliedto ensure delivery of expected returns.
Activities to deliver synergies and leverage scale are in
place,monitored closely and continuously enhanced.
Develop non-traditional capabilities to enter and grow
protablyinnew markets.
Creating a balanced and attractive
global spread of businesses.
Change in consumer
preferences
Consumer tastes and behaviours are constantly
evolving, and at an increasingly rapid rate.
Competition in the beverage industry is
expanding and becoming more fragmented,
complex and sophisticated.
Failing to ensure the strength and relevance
ofour brands with consumers and customers.
Failing to respond in an adequate and timely
manner to rapidly changing consumer
preferences and behaviours.
Failing to continue to improve our commercial
capabilities to deliver brand propositions that
meet consumer, shopper and customer needs.
Market positions come under
pressure, lower top-line growth
rates and protability.
Ongoing evaluation of our brand portfolios in every market to ensure
that they target current and future opportunities for protable growth.
Building our brand equities through innovation and compelling
marketing programmes.
Ensuring we have deep understanding of changing consumer
andindustry dynamics in key markets, enabling us to respond
appropriately to issues which may impact our business performance.
Continued enhancement of the SABMiller Marketing Way which sets
out the best-practice approach for our commercial processes.
Focus on monitoring and benchmarking commercial performance
and developing the critical commercial capabilities that are required
inorder to win in local markets.
thelocal market.
globalscale.
Management
capability
We believe that our people are our
enduringadvantage and therefore it is
essentialthat wedevelop and maintain
globalmanagement capability.
Failing to identify, develop and retain a sufcient
pipeline of talented managers for the present
andfuture needs of the group.
Lower long-term
protablegrowth.
Further develop our leadership talent pipeline through our
GlobalTalent Management model and strategic people resourcing.
Sustaining a strong culture of accountability, empowerment
andpersonal development.
Standardisation of key processes and best practices across
thegroup through the roll-out of the SABMiller Ways.
Recognising strong performance through appropriate reward
structures.
thelocal market.
globalscale.
Regulatory
changes
With increasing and high-prole debate over
alcohol consumption in many markets, the
alcohol industry is coming under increasing
pressure from national and international
regulators, NGOs and tax authorities.
Regulation places increasing restrictions
ontheavailability and marketing of beer.
Tax and excise changes cause pressure
onpricing.
Lower growth, protability
andcontribution to local
communities in some
countries.
Rigorous adherence to the principle of self-regulation backed
byappropriate policies and management review.
Constructive engagement with government and all external
stakeholders on alcohol-related issues.
Investment to improve the economic and social impact of our
businesses in local communities and working in partnership
withlocal governments and NGOs.
ofbusinesses.
market.
Acquisition
of Fosters
Following the Fosters acquisition, we have
committed to delivering an integration plan with
value creation dened by specic, communicated
medium-term targets, synergies and cost savings
from the Fosters business.
Failing to deliver integration objectives and
commercial and operational excellence targets
communicated as part of the integration plan.
Failing to achieve the synergy and cost saving
commitments of the transaction.
Lower growth rates and
protability. Damage to
ourreputation for strong
commercial capability and
formaking value-creating
acquisitions.
Embedding of the SABMiller Ways (processes,
systems and tools) throughout the Fosters business.
Ongoing monitoring of progress versus the integration plan, including
frequent and regular tracking of key performance indicators.
ofbusinesses.
market.
globalscale.
Delivering business
transformation
The group continues to execute a major business
capability programme that will simplify processes,
reduce costs and allow local management teams
to focus more closely on their markets.
Failing to derive the expected benets
fromtheprojects currently under way.
Failing to contain programme costs or ensure
execution is in line with planned timelines.
Increased programme costs,
delays in benet realisation,
business disruption.
Senior leadership closely involved in monitoring progress
and in making key decisions.
Mechanisms in place to track both costs and benets.
Rigorous programme management and governance processes
withdedicated resources and clear accountability.
globalscale.
Kozel 11
First brewed: 2005
www.kozel.cz
The Velke Popovice brewery in Central Bohemia rst
produced Kozel in 1874. Kozel 11 is the most recent
variant launched in 2005. A traditional lager beer with
a pleasantly bitter taste, gentle malt and hoppy aroma
and a perfect sparkle.
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Poker
Dating back to 1929, the mainstream Poker brand
ispart of Colombian culture. Its strong positioning
as The friend that unites friends has helped to
transform it from a regional brand into one of the
countrys market leaders.
Operations review Latin America
Latin America delivered a strong performance
withlager volume growth of 9% (8% on an organic
basis) and soft drinks volumes improving by 10%.
This is attributable to our focus on the affordability
of lager in a number of our markets, differentiated
brand portfolios and the expansion of our premium
segment, in the context of economic growth across
the region. Volume growth, combined with selective
price increases and mix benets, increased group
revenue by 13%. Higher commodity costs were
partly offset by improved manufacturing efciencies
and continued distribution productivity gains.
Increased investment behind our brands was
funded through ongoing xed cost productivity
improvements. EBITA grew 15% and EBITA margin
improved 50 bps (up 70 bps on an organic,
constant currency basis).
In Colombia lager volumes grew by 7% reecting
healthy consumer spending, the implementation of
new marketing campaigns and our strategy of price
restraint in mainstream brands. Our share of the
alcohol market improved in the last quarter, ending
the year in line with the prior year, beneting from
increased marketing support and the narrowing
ofthe relative prices between lager and spirits.
Thelight beer category saw continued growth with
guila Light volumes up 44%. Our premium brands
also grew robustly, with the local premium brand
franchise, Club Colombia, improving volumes by
30% and new variants attracting consumers to the
category. Our non-alcoholic malt products saw
double digit volume growth following the successful
introduction of a smaller pack for our brand, Pony
Malta, and the addition of our new more refreshing
malt brand, Maltizz.
Peru had another good year aided by healthy
economic growth. Lager volumes rose 10% as
consumers continued to trade up from the informal
alcohol sector. The roll-out last year of our business
capability programme enabled direct sales service
model allowed us to capture growth opportunities
while generating operational efciencies and
differentiated value propositions to our customers.
As a consequence, lager market share grew in
bothvolume and value share terms to 93% and
95% respectively. Our agship mainstream brand,
Cristal, increased volumes by 22% reecting the
strong resonance of this brand underpinned by its
support of national soccer. Our premium portfolio
also performed well with volume growth of 22%,
and the Cusquea brand extended its appeal
through a number of seasonal variants and its
association with Peruvian heritage and the
centenary of the rediscovery of Machu Picchu.
Inthe soft drinks category we saw volume growth
of 34%, as our non-alcoholic malt brand, Maltin
Power, beneted from campaigns highlighting its
nutritional attributes.
Latin America
Strong volume and EBITA
growth resulted from improving
affordability of key lager
brands,building our brand
portfolios and expanding
thepremium segment.
Karl Lippert
President, SABMiller Latin America
Financial summary 2012 2011 %
Group revenue (including
share of associates) (US$m) 7,158 6,335 13
EBITA (US$m) 1,865 1,620 15
EBITA margin (%) 26.1 25.6
Sales volumes (hl 000)
Lager 41,596 38,266 9
Lager (organic) 41,264 38,266 8
Soft drinks 17,418 15,809 10
1
In 2012 before exceptional charges of US$119 million
being business capability programme costs of US$85
million and integration and restructuring costs of US$34
million (2011: US$106 million being business capability
programme costs).
Strategic focus areas
Drive strong top-line growth by expanding
consumer occasions and entering adjacent
categories
Increase share of alcohol and capitalise
ondifferentiated and expanded brand and
package portfolios
Optimise and extend distribution network
andsales reach
Protect our licence to trade and business
sustainability
Pursue operational excellence and efciency
inour businesses, optimising resources
andcosts
guila Light
Origin: Colombia
First brewed: 2002
www.aguilalight.com
A lighter version of guila, the
classicColombian beer, guila Light
isapopular option for the consumer
looking to experience a lighter taste.
Maltizz
Origin: Colombia
First produced: 2011
www.maltizz.com
All the natural goodness of malt is
encapsulated in this super-refreshing
carbonated soft drink. Maltizz has
a unique taste that appeals to the
whole family and makes a pleasant
accompaniment to main meals.
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Ecuador saw lager volume growth of 7% as the
expanded direct service model assisted with the
capture of new growth opportunities. Lager market
share of alcohol rose to above 50%. In addition
tocycling the Sunday trading ban of June 2010,
growth was driven by improved product availability
of cold beer at the point of sale and continuing
expansion of our presence in festivals and events.
Our upper mainstream offering, Pilsener Light,
sawvolume growth of 87%, supported by the
introduction of a larger pack. Our local premium
brand, Club, further strengthened its position as
theleading premium lager brand in Ecuador with
volume growth of 15% through new activations and
upsizing of the bottle. The non-alcoholic malt brand,
Pony Malta, continued its success with its PET and
smaller packs performing well, resulting in volume
growth of 38%.
In Honduras lager volumes were up 9% versus
theprior year. Growth was underpinned by our
affordability strategy, in the traditional trade with
alarger multiserve bottle, and in the modern trade
with affordable can pricing, for both mainstream
brands, Imperial and Salva Vida. The super
premiumcategory saw healthy growth, with Miller
Litedoubling its volumes. Our alcohol market
sharecontinued to increase reaching a historic
highof 53%. Soft drinks volumes grew by 7%
boosted by further cooler penetration and brand
activations and the success of multiserve packs.
During the year welaunched Actimalta in the
non-alcoholic malt category with good acceptance
from our target consumers. The juices and tea
categories introduced last year saw volume growth
of over 40%.
In Panama our lager volume growth of 2% and
revenue mix beneted from the performance of
premium brands, with Miller Lite and Miller Genuine
Draft (MGD) showing strong acceptance amongst
targeted consumers. MGD has established itself as
the leader in the super premium segment and Miller
Lite the leader in the premium segment. Mainstream
brands Atlas and Balboa beneted from investment
behind new brand campaigns and improved
in-outlet execution. Soft drinks volumes grew by
4%boosted by the milk category and a strong
performance from sparkling soft drinks, through
increased availability of cold products at the
pointofsale.
In El Salvador domestic lager volumes saw
doubledigit volume growth, driven by the more
affordable bulk pack of our agship mainstream
brand, Pilsener. Our local premium brand, Suprema,
also saw healthy volume growth of 30%, which
together with the repositioning of Golden Light
inthe upper mainstream segment, signicantly
improved revenue mix. As a consequence, our
alcohol market share increased to 32%. Soft drinks
volumes grew by 7%, mainly due to the success
ofmultiserve packs. In January 2012 we expanded
into the non-alcoholic malt category with our
brandActimalta.
In Argentina we saw healthy volume growth
ofourmainstream brand Isenbeck, which on
afullyear comparative basis grew by 13%.
Theintegration and upgrading of our capabilities
inArgentina is progressing.
Port Royal
Origin: Honduras
First brewed: 1984
www.sabmiller.com
Port Royal is a rened and refreshing
premium beer with export quality.
It is brewed to give a smooth, rened
and ultra-refreshing avour. It is a
favourite brand in Honduras due to
its outstanding image and reputation.
Operations review Latin America continued
Club Premium Lager
Origin: Ecuador
First brewed: 1966
www.sabmiller.com
Brewed to international standards
using top quality ingredients, Club
Premium is Ecuadors premium beer.
The Metcalfe Scarlett barley and
super Sterier hops are aromatic
and rich in essential oils giving the
beer a unique quality appreciated
by discerning drinkers.
Operations review Europe
In Europe, full year lager volumes declined by
1%onboth a reported and an organic basis.
Volumes in our businesses in Poland and Romania
fell by 4%and 8% respectively, although other
markets generally saw improved volume trends.
Beer markets continued to be affected by consumer
downtrading and industry focus on economy
brands and packs, together with growth in modern
trade and discounter channels, and declining
on-premise channels. In the second half, planned
destocking of wholesaler inventories was carried
out in Poland and Romania, impacting our lager
volume performance. Organic information includes
11 months of trading for Russia and Ukraine prior
tothe conclusion of the transaction with Anadolu
Efes and excludes our share of the enlarged
Anadolu Efes group for the period since the
transaction. Reported results include our share
ofMarch trading for Anadolu Efes.
Reported EBITA declined by 6% overall with EBITA
down in Poland and Romania. Protability across
theregion was impacted by signicant increases
inraw material costs and negative brand mix, with
reductions in group revenue per hl in Poland and
Romania mainly due to adverse sales mix. Overall
Europes group revenue per hl grew 1% on both a
reported and an organic, constant currency basis,
reecting selective price increases and against a
backdrop of structural shifts to the economy
segment and the modern trade channel in certain
markets. Operational cost efciencies including
thosefrom our global procurement and regional
manufacturing projects continued to deliver benets.
Marketing expenditure was marginally below the
prioryear which included the 2010 FIFA World
Cupactivations. Reported EBITA was helped by
theweakening of the US dollar against central and
eastern European currencies compared with the
prior year. On an organic, constant currency basis
EBITA was down 9% with a margin decline of160 bps.
In Poland lager volumes were down 4% impacted
by competitor price reductions and promotional
activities along with planned destocking of
wholesaler inventories. The beer market has been
increasingly characterised by downtrading together
with continued development of the modern trade,
especially discounters, resulting in growth of
theeconomy segment. In this environment our
economy brand Wojak has performed well and
gained market share however key mainstream
brands and the premium segment have been
negatively affected. Group revenue per hl
declinedby 1% on a constant currency basis
which,combined with the adverse volume
performance, resulted in a decline in EBITA.
Europe
Poland and Romania had a
challenging year, but our other
markets in Europe generally
delivered stronger nancial
performance.
Alan Clark
Managing Director, SABMiller Europe
EBITA (US$m) 836 887 (6)
Lager 43,951 44,193 (1)
Lager (organic) 43,157 43,519 (1)
Soft drinks 533 82 549
Soft drinks (organic) 97 81 19
1
In 2012 before net exceptional gains of US$1,135 million
being net prot on disposal of businesses of US$1,181
million, a refund of a previous anti-trust ne of US$42
million and business capability programme costs of
US$88 million (2011: exceptional charges of US$261
million being impairments of US$98 million, integration
and restructuring costs of US$52 million and business
capability programme costs of US$111 million).
Drive superior organic revenue growth and
margin expansion through growing perceived
category benets and value per serving
Structure and shape the category by driving
our full brand portfolios in growth segments
inkey markets through innovative 360 degree
marketing programmes
Continue to drive differentiation through
innovating in product, packaging and
dispense systems
Design for scale, cost advantage and focus
Grolsch
Origin: Netherlands
First brewed: 1615
www.grolsch.com
Grolsch has a distinctive, bold
and hoppy taste developed through
almost four centuries of crafted
brewing tradition. It owes its superb
quality to the selection of the
nest ingredients and its unique
double fermentation brewing process.
Kozel 10
First brewed: 1870
www.kozel.cz
First brewed in Central Bohemia,
Velkopopovick Kozel is a traditional
lager with a well-balanced, smooth
taste brewed with the exactly right
ratio of caramel malt and Zatec
hops. The craftsmanship of Kozel
brewmasters is enjoyed throughout
the world.
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In Ukraine lager volumes grew 42% on an
organicbasis, as a result of the continued good
performance of the core brand Sarmat, Zolotaya
Bochka and the introduction of mainstream
brandAmsterdam.
Domestic lager volumes were level with the prior
year in Italy despite the impact of a deteriorating
economic outlook. Declines in the rst half of the
year were recovered in a stronger second half
supported by increased promotional activity.
Peronigrew ahead of the prior year beneting from
expansion of draught volumes. EBITA beneted
from xed cost efciencies. On 13 June 2011
wedisposed of our Italian distribution operation.
In the United Kingdom the continued growth of
Peroni Nastro Azzurro through expansion in the
on-premise channel has resulted in lager volume
growth of 8%. This was achieved despite a decline
in the beer market and lower MGD volumes as
distribution was refocused on key regions. EBITA
grew strongly supported by good revenue per hl
growth in the on-premise channel.
In the Netherlands domestic lager volumes were
level with the prior year in a competitive environment
characterised by discounting and promotional
activity in the highly consolidated off-premise
channel and reecting the impact of economic
uncertainty on consumer condence. EBITA was
ahead of the prior year, beneting from
restructuring, despite a slight decline in group
revenue per hl.
In Hungary, lager volumes were up 5% boosted
bystrong promotional support due to the Arany
szok Golden Friday on-premise activation. Our
economy brands took advantage of downtrading
trends, while our super premium brands performed
well, led by Pilsner Urquell. In the Canaries, the
trading environment remained challenging with
improved performance during the summer in the
tourist areas leading to total volume growth of
1%.Lager volumes in Slovakia grew by 2%
supported by particularly strong performance in
themodern trade channel and in the super premium
segment with a number of successful promotions
for Pilsner Urquell.
In the Czech Republic lager volumes were level
with the prior year despite ongoing weakness in
theon-premise channel and a drop in consumer
sentiment during the year. Our super premium
andpremium segments have performed well with
Pilsner Urquell growing despite its on-premise
bias,beneting from strengthening brand equity,
successful trade activities and expanded tank
beerdistribution. Premium segment performance
was boosted by Kozel 11, with particularly strong
performance in the on-premise channel as a
resultof outlet expansion. While the mainstream
segment remains under pressure, the introduction
of PET packaging for key brands has enabled
animprovement in the segments trends. Group
revenue per hl was in line with the prior year on
aconstant currency basis due to the strong
performance of super premium and premium
brands, despite ongoing price pressure and a
channel mix shift in favour of off-premise. EBITA
ona constant currency basis was in line with the
prior year as raw material cost increases were
offsetby operational cost efciencies.
In Romania lager volumes declined by 8% in a
market in which consumers have downtraded. This
emphasis on the economy segment and bulk packs
has involved heavy discounting and led to adverse
brand and pack mix. Our performance was also
impacted by planned wholesaler destocking in the
second half of the year. Our mainstream brand
Timisoreana has been most signicantly impacted
in this environment, although the rate of decline
slowed in the second half supported by effective
promotional activity. The premium segment has
alsobeen affected by competitor activities. Our
economy brand Ciucas has grown slightly with
strong performance of the recently launched 2.5L
PET pack. Group revenue per hl declined by 3%
ona constant currency basis which together with
the volume decline resulted in lower EBITA.
Lager volumes were up 2% in Russia on an organic
basis, with growth in the super premium segment
as Essa performed particularly well beneting from
a successful can launch. In the premium segment
our local brand Zolotaya Bochka remained under
pressure, however Kozel continued to grow despite
strong competition in the Czech beer segment.
Local economy brands performed ahead of the
market driving overall growth of our economy
segment, and we successfully launched a new
mainstream offering, Zwei Meister. Organic,
constant currency group revenue per hl grew
by6%which, along with volume performance,
resulted in EBITA ahead of the prior year,
despiteincreased raw material costs.
St Stefanus
Origin: Belgium
First brewed: 1295*
www.st-stefanus.be
St Stefanus, a Belgian abbey
speciality beer, matures in the bottle,
developing a fuller avour over time,
enabling consumers to keep the beer
to suit their taste. It is a 100% natural,
unpasteurised and unltered beer
that is carefully brewed with devotion
and craftsmanship.
*Original Augustijn abbeybeer
Arany szok
Origin: Hungary
First brewed: 1989
www.aranyaszok.hu
Arany szok, one of the most popular
brands in Hungary, is characterised by
a gentle, delicious, full taste created
with the right balance of hops, high
quality pilsner malt, maize grits, yeast
and crystal clear spring water, giving
a richer than average avour.
Operations review Europe continued
Operations review North America
The North America segment includes the groups
58% share in MillerCoors and 100% of Miller
Brewing International. Total North America EBITA
increased by 2%, driven by strong revenue
management and focused sales and marketing
execution, in a market where consumer sentiment
remained cautious.
MillerCoors
For the year ended 31 March 2012 MillerCoors US
volume STRs declined by 2%, as the mainstream
beer segment continued to be impacted by
economic pressure on key consumer demographics.
Domestic sales to wholesalers (STWs) were down by
3%. EBITA increased as revenue growth more than
offset lower volumes, increased costs of goods sold
and higher xed costs.
Premium light brand volumes declined by low single
digits, with growth in Coors Light offset by a decline
in Miller Lite. MillerCoors Tenth and Blake division
saw double digit growth driven particularly by the
continued success of Blue Moon and Leinenkugels
and their seasonal variants, together with Peroni
Nastro Azzurro. The below premium segment was
down by mid single digits, as consumers continue
to trade up to other segments.
MillerCoors group revenue per hl grew by 3%, due
to front line pricing and aided by favourable brand
mix. Cost of goods sold per hl increased moderately,
despite the ongoing benet of synergies and cost
savings, due to higher freight costs, packaging
innovations, brand mix and rising commodity prices.
Marketing, general and administrative costs were
inline with the prior year, as higher xed costs
wereoffset by the rephasing of certain marketing
programmes into the new nancial year.
MillerCoors delivered US$18 million of incremental
integration synergies, mainly through savings from
brewery and procurement related projects and
freight optimisation as the integration synergies
programme completed on 30 June 2011. In the
yearto 31 March 2012 other cost savings of
US$88million were realised, driven by various
initiatives, primarily in the integrated supply chain
function. The integration of The Crispin Cider
Company and its afliate Fox Barrel Cider
Companyis progressing well.
Total annualised integration synergies and other
cost savings of US$790 million have been realised
since the inception of the joint venture on 1 July
2008. This consists of synergies of US$546 million
and other cost savings of US$244 million.
MillerCoors exceeded the target of US$750 million
in total annualised synergies and other cost savings
one year earlier than originally planned.
North America
Lager volumes were soft,
butimproved pricing and brand
mix plus further efciencies
drove EBITA growth.
Tom Long
Chief Executive Ofcer, MillerCoors
Group revenue (including share
of joint ventures) (US$m) 5,250 5,223 1
EBITA (US$m) 756 741 2
Lager excluding
contract brewing 41,346 42,336 (2)
Lager excluding
contract brewing (organic) 41,341 42,336 (2)
MillerCoors volumes
Lager excluding
contract brewing 39,848 40,949 (3)
Lager excluding
contract brewing (organic) 39,843 40,949 (3)
Sales to retailers (STRs) 39,760 40,757 (2)
Contract brewing 4,549 4,458 2
1
In 2012 before exceptional charges of US$35 million
being the groups share of MillerCoors impairment of the
Sparks brand (2011: US$5 million being the groups share
of MillerCoors integration and restructuring costs).
Win in premium lights with strengthened
positioning of Coors Light, Miller Lite and
Miller64
Through Tenth and Blake Brewing Company
extend and grow MillerCoors import and
craftportfolio
Create value through strong revenue
management
Create leading capability and superior growth
in retail sales
Support the three-tier distribution system to
drive effectiveness and value
Miller Lite
Origin: USA
First brewed: 1973
www.millerlite.com
Miller Lite is the ultimate light
beer,triple hops brewed for a great
pilsenertaste. It is the only beer to
winfour gold awards in the World
Beer Cup
for best American-style

light lager.
Blue Moon
Origin: USA
First brewed: 1995
www.bluemoonbrewingco.com
Blue Moon Belgian White is an
artfullycrafted beer, with a cloudy
white, opaque appearance. Brewed
inthe Belgian style it has a refreshing,
medium-bodied, unltered wheat
ale taste spiced with fresh coriander
and orange peel creating a unique
experience and an uncommonly
smooth nish.
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Africa delivered another strong full year
performance with lager volume growth of 14%
(13% on an organic basis), despite experiencing
capacity constraints in a number of markets.
Projects are currently under way in Uganda,
Tanzania, Zambia, Ghana and South Sudan to
increase capacity. Volume growth was achieved
through increased investment in sales and
marketing to support differentiated brand portfolios
and an expansion ofour local geographic footprint,
underpinned by broadly favourable economic
conditions. The Castleportfolio continues to grow
strongly across the region, with volumes up 27%.
Keen focus has been given to our affordable
products with the introduction of draught formats,
smaller pack offerings and innovative products like
Impala, a cassava-based beer. Soft drinks volumes
grew by9% (11% on an organic basis) driven by
good performances in Ghana, South Sudan and
Zambia as well as by our associates Castel and
Delta in Zimbabwe.
Volume growth translated into EBITA growth of
15%(16% on an organic, constant currency basis).
Group revenue per hl beneted from strong growth
of the premium segment as well as price increases,
at levels typically somewhat below ination. EBITA
margin consequently improved by 30 bps despite
the expansion of sales and marketing capability,
rising ination and weaker local currencies. Margin
improvement was achieved through a continued
cost focus and our local agricultural programmes,
which helped to partly cushion the impact of rising
international commodity prices.
Despite cycling a strong comparative, lager
volumesin Tanzania grew by 15% attributable to
the successful mainstream brand renovations of
Safari and Kilimanjaro, as well as strong premium
segment growth driven by Castle Lite. Our Mbeya
brewery continues to serve the incremental growth
in the south while an enhanced sales force, as well
as increased cooler penetration, have led to market
share gains. Grand Malt, a non-alcoholic offering,
has performed particularly well.
In Mozambique robust mainstream growth driven
by a packaging upgrade for 2M and the continued
expansion of our footprint in the north enabled by
our Nampula Brewery helped grow lager volumes
by 9%. A key focus area for this year was the
expansion of affordable offerings with the launch
ofManica draught and the innovative cassava-
based Impala.
Operations review Africa
Africa
Lager volumes grew 13% on
anorganic basis, beneting from
good economic conditions and
our investments to expand both
our local sales coverage and our
brandportfolios.
Mark Bowman
Managing Director, SABMiller Africa
EBITA (US$m) 743 647 15
Lager 17,374 15,288 14
Lager (organic) 17,033 15,016 13
Soft drinks 13,475 12,373 9
Soft drinks (organic) 13,039 11,785 11
Other alcoholic beverages 5,330 5,080 5
Other alcoholic beverages
(organic) 5,283 5,080 4
1
In 2012 before net exceptional gains of US$185 million
being prot on disposal of business of US$67 million,
prot on disposal of investment in associate of US$103
million and the groups share of the prots on transactions
in associates of US$23 million, net of US$8 million
business capability programme costs (2011: US$4 million
being business capability programme costs).
Drive growth in beer and soft drinks through
fullbrand portfolios, wider price ranges and
expansion into adjacent categories
Step up investment behind our mainstream
brands and differentiated premium portfolio
Increase share of alcohol through accessible
brand and package offerings
Further develop sales and distribution to
enhance our outlet presence and extend
ourgeographic coverage
Mitigate high imported input costs through
innovation and local supply chains
Safari
Origin: Tanzania
First brewed: 1977
www.sabmiller.com
With four Gold Monde Selection
awards, Safari Lager is the most
awarded beer in Tanzania. It has a full
avour, full-bodied, rich golden colour
and taste and is a brand that denes
real masculinity in Tanzania.
Club
Origin: Ghana
First brewed: 1992
www.sabmiller.com
Club lager is Ghanas original and
authentic beer, which celebrates
Ghana and the positive Ghanaian
spirit. It is brewed using the nest
malt, maize and hops, making
it a crisp and fresh lager.
Operations review Africa continued
Improved availability, a wider geographical
distribution reach and healthy economic conditions
enabled Zambia lager volume growth of 17%
despite production capacity constraints. Our key
mainstream brands, Mosi and Castle Lager, have
continued to perform well while the premium Castle
Lite experienced very strong growth. Construction
of the new brewery at Ndola is well under way and
commissioning is anticipated in the second half of
the new nancial year. Soft drinks volumes grew
by 10%.
Lager volumes in Uganda grew by 19% supported
by an enhanced distribution network into western
Uganda, rigorous in-trade execution and a strong
mainstream and affordable portfolio. Our
mainstream brands, Nile Special and Club Pilsener,
both continued to perform well. The rate of growth
slowed in the second half of the year as a result of
capacity constraints, to be addressed by our new
greeneld brewery located in Mbarara, western
Uganda, which is currently under construction.
The consistent growth of Ghanas Club lager
helped drive further volume gains while soft drinks
volume growth remained buoyant. South Sudan
delivered strong lager and soft drinks volume
growth while the capacity expansion project
announced early in 2011 is on track for completion
in the rst quarter of the new nancial year.
Delta Corporation, our associate in Zimbabwe,
experienced strong double digit growth across
allbeverage categories, which was achieved by
improved availability assisted by previous capacity
upgrades. Lager volumes have now exceeded the
historical peak levels experienced in the 1990s.
During the year, we purchased additional shares in
Delta, bringing our shareholding to 40% (25% group
effective economic interest).
With effect from 1 January 2012, together with Castel
we implemented a number of organisational changes
in our African operations as part of our strategic
alliance agreement. Operational management of
theNigerian business is now with SABMiller and
theAngolan businesses with Castel. Castel acquired
Star Breweries in Madagascar in the second quarter
of the year. Castels full year lager volumes,
excluding the successful management combination
of our Angola businesses and their Madagascar
acquisition, grew by 11% with good volume
performances in Cameroon, the Democratic
Republic of Congo, Ethiopia and Tunisia.
Nile Special
Origin: Uganda
First brewed: 1951
www.nilebreweries.com
The agship brand of Nile Breweries
for over 50 years and an eight times
Gold award and three times Grand
Gold winner at the Brussels-based
Monde Selection International,
Nile Special has been trusted over
the generations for its satisfying
full-bodied character and consistency.
Mosi
Origin: Zambia
First brewed: 1975
www.sabmiller.com
Named after the mighty Mosi oa
Tunya (Victoria Falls) Mosi is the
iconic Zambian beer. Brewed for
over 30 years it is a clean, crisp
and refreshing lager with a pleasant
bitterness and delicate hop aroma.
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In Asia Pacic lager volumes for the full year
increased by 4% on an organic basis, with reported
volume growth of 13% enhanced by the inclusion
ofFosters and regional acquisitions in China.
Reported EBITA more than trebled and group
revenue per hl grew by 53% due to the inclusion
ofFosters. EBITA increased by 30%, on an organic,
constant currency basis, driven by favourable
growth in both China and India. Group revenue per
hl on the same basis improved by 14% compared
with the prior year, with good increases in China
and India. EBITA margin increased by 450 bps on
areported basis (50 bps on an organic, constant
currency basis).
In China, lager volumes grew 9% (4% on an
organicbasis) with acquisitions enhancing market
share, as CR Snow sold in excess of 100 million
hectolitres in a 12 month period for the rst time.
Volumes grew in all regions with CR Snows newly
acquired breweries in Jiangsu, Liaoning, Henan
andShanghai, together with new breweries
commissioned in the year, contributing positively
tothe reported volume growth.
Overall CR Snow continued to expand its market
share although organic growth was affected by
heavy and prolonged rains that affected certain
keyprovinces. Good market share increases
weredelivered in Anhui, Zhejiang, Jiangsu, Tianjin,
Liaoning, Guizhou, Shanghai and Heilongjiang,
although market share was lost in Sichuan.
Group revenue per hl increased by 13%, beneting
from high single digit price increases implemented
towards the end of the previous nancial year
torecover cost increases, as well as signicant
positive brand mix. CR Snow continued to expand
its presence in the premium segment through the
expansion of Snow Draft in particular.
Investment in brand marketing and sales capability
together with rising costs of raw materials, higher
labour costs and adverse changes to consumption
tax legislation have increased operating costs
butEBITA margin slightly increased on an organic
basis. Loss-making acquisitions reduced reported
EBITA margins.
Operations review Asia Pacic
Asia Pacic
China and India delivered
good growth, although their
contribution was overshadowed
in the reported numbers by
theinclusion of Fosters from
mid-December.
Ari Mervis
Managing Director, SABMiller Asia Pacic
share of associates and
joint ventures) (US$m) 3,510 2,026 73
EBITA (US$m) 321 92 247
Lager 58,121 51,270 13
Lager (organic) 53,292 51,240 4
1
In 2012 before net exceptional charges of US$70 million
being transaction-related costs of US$109 million,
integration and restructuring costs of US$26 million,
business capability programme costs of US$1 million
anda gain on remeasurement of existing interest in joint
venture on acquisition of US$66 million (2011: US$nil).
Integrate the Fosters acquisition and deliver
the commercial and operational targets
Further build market leadership in China and
enhance protability
Continue to drive Snow, the largest beer brand
in China, with additional premium variants to
increase revenue
Pursue market liberalisation in India and focus
investment on growth and protability in
selected states
Victoria Bitter
Origin: Australia
First brewed: 1854
www.vb.com.au
Victoria Bitter (VB) has long been
Australias favourite beer, and is
specially brewed to deliver full avour
when ice cold. A gentle fruitiness in
the aroma complements the sweet
malt on the mid-palate balancing
perfectly with crisp, clean hop
bitterness delivering satisfying
refreshment like no other.
Snow Brave the World
Origin: China
First brewed: 2006
www.snowbeer.com.cn
A bright, clean-drinking, well
balanced beer, yellow-green in colour
with a white head and a lacy cling
onthe glass, Snow Brave the World
exemplies the proud, adventurous
spirit of modern China.
Operations review Asia Pacic continued
CUB
1
lager volumes in Australia were 4% below the
prior year on a pro forma
1
full year basis, reecting
continued subdued consumer sentiment. CUB
continued to grow its presence in the expanding
NewWorld regular mainstream segment with
robustgrowth of Carlton Dry and the successful
launch ofthe Great Northern Brewing Co brand.
Thetraditional regular mainstream segment,
whichincludes Victoria Bitter, declined at a higher
rate than the market, however Carlton Draught
managedto consolidate share. Premium volumes
performed more strongly, with encouraging
resultsfrom focused execution and expansion
oftheowned premium portfolio including Crown Lager.
Volume improvements in the rapidly expanding craft
segment were driven by Matilda Bay Fat Yak Pale Ale.
Group revenue per hl increased by 3% in the
lastquarter on a pro forma basis, beneting from
focused revenue management across the brand
portfolio following a period of low price realisation.
On a pro forma basis EBITA declined due to the
lower volumes and increased commercial
investment in the market. Results beneted from
theearly delivery of synergies of US$6 million with
an estimated annualised run-rate of US$40 million.
Overall operating prot synergies of AUD180 million
per year are anticipated by year four. Integration
costs over this period are expected to be below
AUD220 million, ofwhich AUD150 million is
expected to impact the income statement.
Indias lager volumes grew 3%. Volumes declined
in the rst half of the year affected by dampened
consumer demand, following substantial excise
increases in key states, and certain trading
restrictions imposed in Andhra Pradesh which
weresubsequently removed in September 2011.
Inthe second half of the year volumes grew at a
more robust 16%. Market share increases were
achieved in the key high margin focus states of
Haryana and Pondicherry.
Revenue per hl increased by 8% (13% on a constant
currency basis), reecting price increases and focus
on higher margin brands, packs and states as well
as new product launches including Miller High Life,
the introduction of PET containers and additional
variants of Fosters and Royal Challenge. Although
marketing investment increased to support these
launches, EBITA more than doubled compared
withthe prior year.
Lager volumes in Vietnam were below the prior
year, but revenue increased reecting a focus on
higher margin brands, channels and geographies.
Gambrinus was launched as a premium brand and
Peroni Nastro Azzurro as a super premium brand
during the year in support of this strategy.
In Australia Pacic Beverages delivered strong
volume growth in the period leading up to the
acquisition of the remaining 50% interest in the joint
venture in January 2012. This was achieved through
greater penetration of the on-premise channel, with
our key premium brand Peroni Nastro Azzurro, as
well as continued growth in the off-premise channel
nationally. Following the acquisition of the remaining
interest, Pacic Beverages was integrated into
thenewly acquired Fosters business, realising
immediate operating and commercial synergies.
As a result of the Fosters acquisition, certain
licence and import arrangements with a combined
annual volume base of approximately 915,000 hl
were terminated towards the end of the nancial
year. The loss of these rights was a known risk
atthe time of the acquisition.
Fat Yak
Origin: Australia
First brewed: 2008
www.matildabay.com
Displaying a lovely golden amber
colour, the rst impression is the
distinctive hop-driven fruity and
herbaceous aromas, giving
characteristic passion fruit and
melon notes. The taste is refreshingly
clean on the palate which leaves you
looking forward to your next Fat Yak.
Haywards 5000
Origin: India
First brewed: 1983
www.sabmiller.com
Haywards 5000 is brewed with
the choicest of malts and hops.
It perfectly combines strength with
quality, resulting in the hallmark
oforiginal and authentic strong
beerto which other Indian beer
brands aspire.
1
CUB (Carlton and United Breweries) pro forma volumes
and nancial information are based on results for CUB
reported under IFRS for the period from 1 April 2010 to
31 March 2011 (full year) or 1January 2011 to 31 March
2011 (quarter). Adjustments have been made to reect
SABMiller group accounting policies. CUB is the
Australian beverage business of the recently acquired
Fosters group.
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Our South Africa beverages business delivered
strong EBITA and EBITA margin growth as the
business strategy launched in 2009 continued
todeliver good results. This was achieved despite
aconsumer and economic environment which
remained difcult, although the business beneted
from the timing of the Easter peak trading period.
South Africa lager volumes returned to growth
inthesecond half of the year, resulting in full year
lager growth of 2%. We outpaced the industry and
had gained market share by the end of the year, as
a result of sustained brand investment, improved
retail execution and better customer service. Our
targeted brand investments included product and
packaging innovations and actions to meet the
demands of specic market segments. The
investment in market-facing activities was funded
largely by cost efciencies. Lager volume growth
was further supported by the expanded distribution
footprint and effective supply chain management.
Continued intensive through-the-line marketing
investment behind the core brands drove good
performance from both premium and mainstream
segments. Castle Lite, the fastest growing scale
brand in South Africa, strengthened its leadership
position as the countrys most popular premium
brand driven by the continued communication of
itsExtra Cold proposition. The premium category
also beneted from Castle Milk Stouts good growth
following its repositioning as a local premium brand
during the year. Castle Lagers volume growth
accelerated to double digits during the second
half,propelled by the success of the It all comes
together with a Castle campaign. Carling Black
Label further slowed its decline, with volumes level
with the prior year during the second half of the
year. The brands improved performance was
supported by its recognition as an award-winning
champion beer, drawing attention to its
qualitycredentials.
In addition to the continued extensive social
responsibility efforts, two signicant new initiatives
were launched during the year. These were the
Responsible Trader Programme where more than
16,500 traders were trained; and a programme to
tackle underage drinking, called You Decide, which
was rolled out to almost 300 schools reaching more
than 187,000 teenagers.
Operations review South Africa
South Africa: Beverages
Sustained investment in our
brands, combined with better
retail execution and customer
service, drove growth in volumes,
EBITA and market share.
Norman Adami
Chairman and Managing Director, SAB Ltd
EBITA (US$m) 1,168 1,067 9
Lager 26,859 26,306 2
Soft drinks 17,979 17,574 2
Other alcoholic beverages 1,565 1,467 7
1
In 2012 before net exceptional charges of US$41 million
being Broad-Based Black Economic Empowerment
scheme costs of US$29 million and business capability
programme charges of US$12 million (2011: US$188
million being business capability programme costs of
US$39 million and charges incurred in relation to the
Broad-Based Black Economic Empowerment scheme
ofUS$149 million).
Leverage scale to drive productivity and
reinvest savings in market-facing activities
Engage the competition in all alcohol
categories
Ensure that key brands resonate
Shape a culture of partnership and superior
service offering in all classes of trade
Ensure societal leadership
Carling Black Label
Origin: Canada
First brewed in South Africa: 1966
www.carlingblacklabel.co.za
Carling Black Label is the best-selling
beer in South Africa. A full-avoured
lager with low bitterness and
a distinctive, fruity aroma. It is
refreshing and highly rewarding to
drink, making it a champion beer
preferred by consumers and
international experts alike.
Castle Lite
First brewed: 1994
www.sab.co.za
Castle Lite is differentiated from
otherpremium beers through its low
calorie content and its lower levels
ofbitterness which ensure a light
aftertaste and decreased levels of
carbon dioxide, resulting in the drinker
feeling less full.
Operations review South Africa continued
South Africa: Hotels and Gaming
Group revenue (share of
associates) (US$m) 487 481 1
EBITA (US$m) 135 137 (2)
Revenue per available
room(Revpar) US$ 69.39 73.74 (6)
1
In 2012 before exceptional gains of US$23 million being
the groups share of prots on transactions in associates
(2011: US$26 million being the groups share of the loss
on the merger transaction).
SABMiller is a 39.7% shareholder in the Tsogo Sun
Group, which is listed on the Johannesburg Stock
Exchange. The full year results reect our share
ofthe enlarged group following the merger with
Gold Reef Resorts Ltd at the end of the previous
nancial year.
Our share of Tsogo Suns reported revenue grew
by1% over the prior year, with constant currency
growth of 6%. Revenue growth was adversely
impacted by a strong prior year performance,
boosted by the 2010 FIFA World Cup. The operations
of Tsogo Sun remain highly geared towards the
South African consumer in gaming and towards
thecorporate market in hotels, with both sectors
experiencing difcult trading conditions.
The gaming industry in South Africa experienced a
satisfactory rst half year with a more robust second
half assisting full year growth of 7%. The biggest
gaming province, Gauteng, grew by 6% compared
with 2% in the prior year with the KwaZulu-Natal
region growing by 8% over the 5% reported in 2011.
Tsogo Sun improved market share in both Gauteng
and KwaZulu-Natal.
The South African hotel industry remained under
pressure during the early part of the year, with
trading in the second half reecting signs of
improvement. South African market occupancies
averaged 57% in the year compared with 58% for
the prior year including the impact of the FIFA World
Cup. Group-wide occupancies ended the year at
62% against prior year occupancy rates of 59%. US
dollar revenue per available room (revpar) declined
by 6% and by 2% on a constant currency basis, as
a result of higher rates achieved during the FIFA
World Cup in the prior year.
EBITA ended 2% down on the prior year but grew
by 3% on a constant currency basis. EBITA margin
declined as a result of utility price increases which
together with other cost increases, outstripped the
rate of revenue growth.
Soft drinks volumes grew by 2% for the full year,
asthe second half saw benets from the continued
execution of focused channel plans, improved
customer service and better weather conditions.
Sparkling soft drinks volumes beneted from good
performance of two litre PET packs and several
growth initiatives, particularly those targeted at
restoring the 1.25 litre returnable glass bottle to
growth. Growth in still drinks exceeded that of the
total soft drinks portfolio, reecting strong gains in
the Glaceau and Powerade brands.
Appletiser volumes beneted from the introduction
of new PET packs, driving strong revenue growth
and an improved EBITA performance.
Our associate Distells international and domestic
volumes continued to exhibit good performance
particularly from ciders and ready-to-drink brands,
with slower growth in the wine portfolio and spirits
volumes remaining level. The higher volumes
resulted in group revenue and EBITA growth and
margins expanded further as foreign currency
conversion gains offset increases in certain raw
materials and excise duties.
Group revenue for our South Africa beverages
business grew by 9% on a constant currency basis
with group revenue per hl up by 6% on the same
basis. This was as a result of price increases to
recover beer excise increases, as well as the strong
performance of the local premium brands.
Across the business, productivity continued to
improve and we continued to focus on reducing
operating costs, in order to fund increased market
and consumer-facing investments, as well as
expanding our EBITA margin. The soft drinks
business more than offset the effect of increasing
commodity costs, specically increases in sugar
and resin prices, through productivity gains from
improvements in its supply chain and packaging
redesigns. Reported EBITA grew by 9% and by
14%in constant currency, as EBITA margin rose
to20.1%, an improvement of 100 bps compared
with the prior year.
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Kozel 11
This year our premium Kozel 11 brand performed
strongly in bars and restaurants in the Czech
Republic as a result of expanding to more outlets.
It also captured new off-trade opportunities by
launching Kozel 11 in 1.25 litre PET plastic bottles
tomeet the growing demand from consumers
wanting to share with family and friends at home.
Chief Financial Ofcers review
Another strong performance
Jamie Wilson, Chief Financial Ofcer
Financial highlights
Group revenue up 11% to US$31,388 million
EBITA of US$5,634 million, an increase of 12%
EBITA margin of 17.9%, 10 bps higher than
theprior year
Adjusted prot before tax of US$5,062 million,
an increase of 13%; prot before tax of
US$5,603 million, up 55%
Adjusted EPS of 214.8 US cents increased
by12%; basic EPS of 266.6 US cents
Total dividend for the year of 91 US cents per
share, up 12%
Free cash ow improved by US$560 million
toUS$3,048 million
Net debt of US$17,862 million, an increase
ofUS$10,771 million from prior year
Shareholder value
The groups nancial goal is to deliver a higher
return to our shareholders than our peer group over
the longer term. We aspire to be the investment of
choice in the global beer industry. We measure our
performance against this goal by assessing total
shareholder return (TSR), growth in adjusted
earnings per share and free cash ow.
We achieved further strong adjusted earnings per
share growth in the year, up 12%, on top of the
19%achieved in the prior year. Free cash ow at
US$3,048 million improved further and was ahead
of lastyear by US$560 million.
Over the three years to 31 March 2012, we achieved
a TSR of 151%, compared with the median of the
comparator group of 62%. In addition, since
SABMiller moved its primary listing to the London
Stock Exchange in March 1999, and over the past
ve years, we have signicantly outperformed the
FTSE 100 in sterling terms, as demonstrated in
thetable below.
TSR growth
Last ve years
to 31 March
Since listing
in March 1999
to 31 March
2012
%
2011
%
2012
%
2011
%
SABMiller plc 154 119 690 579
FTSE 100 10 19 44 42
Key performance indicators (KPIs)
We use a range of KPIs to monitor progress against
our four strategic priorities and our nancial goal,
asnoted on pages 20 and 21. Our KPIs and other
performance indicators include non-GAAP
performance measures to assess underlying
performance. These use constant exchange rates
formeasuring revenue and prot growth; organic
measures to exclude acquisition and divestment
effects; adjusted prot measures to exclude
exceptional items and amortisation of certain
intangible assets; and adjusted EBITDA as a key
cash ow measure (which includes dividends from
the MillerCoors joint venture and excludes the cash
impact of exceptional items). Detailed denitions of
these terms can be found on pages 180 and 181,
and for certain items reconciliations to the nearest
equivalent GAAP measure are provided below or in
the notes to the consolidated nancial statements.
Grolsch
Origin: Netherlands
First brewed: 1615
www.grolsch.com
Grolsch has a distinctive, bold and hoppy taste developed
through almost four centuries of crafted brewing tradition. It
owes its superb quality to the selection of the nest ingredients
and its unique double fermentation brewingprocess.
We achieved further strong adjusted earnings per share
growth in the year, up 12%, on top of the 19%achieved in
theprior year. Free cash ow at US$3,048 million improved
further and was ahead of lastyear by US$560 million.
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Chief Financial Ofcers review continued
Volumes
The successful development of our brand portfolios
and intensied sales execution, together with rising
consumer spending drove strong volume performance
in most of our developing markets, with Latin America
and Africa being particularly notable. Europes
performance was affected by volume declines in
Poland and Romania. Total volumes, including lager,
soft drinks and other alcoholic beverages volumes,
were up 4% on the prior year on an organic basis
and up 6% on a reported basis. Lager volumes were
up 3% on theprior year on an organic basis and 5%
on a reported basis.
Reported Organic
2012
hl m
2011
hl m
%
change
%
change
Total volumes 286 270 6 4
Lager volumes 229 218 5 3
Aggregated beverage volumes, which include 100%
of the volumes of all of our consolidated subsidiaries,
associated companies and joint ventures, grew 7% to
421 million hectolitres and aggregated lager volumes
increased 6% to 339 million hectolitres. This reected
strong volume growth in our associates, CR Snow in
China and Castel in Africa, together with the impact
ofthe transaction with Anadolu Efes.
Chart (a) shows organic growth in lager volumes for
each of the last ve years. Volumes in the 2009 and
2010 nancial years were impacted by the economic
recession following the global nancial crisis.
Revenue
Group revenue was US$31,388 million (including
thegroups share of associates and joint ventures
revenue of US$9,628 million). This represented an
increase of 11% (7% on an organic, constant currency
basis) driven by higher volumes, focused price
increase and favourable brand mix.
As can be seen in chart (b) increased volumes and
improved price and mix have contributed evenly to
the growth in group revenue, with price/mix gains
inall divisions, most notably Africa, Asia Pacic
andSouth Africa: Beverages. Currency movements
during the year had no net effect on reported group
revenue, mainly due to the strength of European and
Latin American currencies being offset by currency
weakness in the South African rand, Indian rupee
andAfrican currencies. Acquisitions have positively
impacted group revenue in the year by almost 5%
onthe prior year base as adjusted for disposals.
In the past ve years, we have grown group revenue,
both on an organic basis and by acquisition. The
compound annual organic growth rate in volumes
has been 2.4% (2011: 3.5%), and we have leveraged
this growth through price and mix benets to
generate compound annual group revenue growth
of7.1% (2011: 7.8%) over that period.
Chart (c) illustrates the organic growth in group
revenue for each of the past ve years, with
performance shown in constant currency.
Input costs
Cost of goods sold for the year increased
approximately 3% on the prior year, on a constant
currency per hectolitre basis. Raw material input
costs increased at a slightly higher rate in the
second half of the year reecting ongoing increases
inglobal barley and energy prices. The impact of
recent increases in commodity prices has been
mitigated partially from savings achieved through
our global procurement programme. Distribution
costs, however, grew at a slower rate in the second
half of the year as efciency initiatives throughout
our distribution network, and especially in South
Africa, gained traction and partly offset crude oil
price increases.
We expect raw material input costs to increase
bymid-single digits on a per hectolitre basis in
theforthcoming nancial year. This will principally be
driven by the anticipated increases in the global grain
and sugar market prices, moderated by our forward
cover positions, but could be lower dependent on
theEuropean barley harvest. Packaging costs are
expected to grow at a slightly slower rate, as our
procurement function is expected to continue to
deliver savings.
EBITA
We report EBITA (earnings before interest, tax and
amortisation) as this is the key prot metric by which
the group is managed and operating performance
isevaluated internally. Segmental performance is
reported after the apportionment of attributable
headofce service costs.
We delivered a strong nancial performance in 2012
with EBITA growth of 8% on an organic, constant
currency basis, with all beverage divisions except for
Europe contributing to the increase. Reported EBITA
(including the impact of acquisitions) grew 12%
compared with the prior year, to US$5,634 million.
Chart (d) shows the increase in EBITA for each of
thelast ve years with each years growth shown
inconstant currency after excluding the impact of
acquisitions and disposals.
EBITA margin
EBITA margin at 17.9% was 10 bps higher than
theprior year. Chart (e) on page 39 shows EBITA
margin by division. Asia Pacic and South Africa:
Beverages made particular progress, up 450 bps
and100bpsrespectively, the former beneting
fromthe inclusion of Fosters.
Exceptional items
Items that are material either by size or incidence
areclassied as exceptional items. Further details
onthese items can be found in note 4 to the
consolidated nancial statements.
Net exceptional credits of US$1,037 million before
nance costs and tax were reported during the year
(2011: charges of US$467 million) and included net
exceptional credits of US$11 million (2011: charges
ofUS$31 million) related to the groups share of
associates and joint ventures exceptional charges.
(b) Group revenue US$m
Components of performance
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(c) Group revenue growth %
Organic, constant currency basis
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08 09 10 11
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(d) EBITA growth %
Organic, constant currency basis
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08 09 10 11
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(a) Lager: organic volume
growth %
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The net exceptional credits included:
US$1,195 million gain on the disposal of our
Russian and Ukrainian businesses to Anadolu
Efes in Europe;
US$67 million gain on the disposal of our
Angolan businesses to the Castel group in Africa;
US$66 million gain on the Pacic Beverages
transaction in Asia Pacic;
US$103 million gain on the disposal of our
Kenyan associate in Africa;
US$42 million gain on the repayment of an EU
ne paid by Grolsch before we acquired it;
US$14 million loss on the disposal of a business
in Europe;
US$235 million charge related to the business
capability programme in Latin America, Europe,
Africa, Asia Pacic; South Africa: Beverages,
andCorporate;
US$109 million of transaction-related costs in
relation to the Fosters acquisition;
US$60 million charge related to integration and
restructuring costs in Asia Pacic and Latin
America; and
US$29 million of costs of the Broad-Based Black
Economic Empowerment scheme in SouthAfrica.
The groups share of joint ventures and associates
exceptional items in the year included:
US$35 million being our share of MillerCoors
Sparks brand impairment;
US$10 million credit being our share of
SouthAfrica: Hotel and Gamings gain on
theFormula 1 transaction;
US$13 million share of South Africa: Hotel and
Gamings release of deferred contingent
consideration; and
US$23 million share of Castels gain on the
disposal of its Nigerian subsidiary.
Finance costs
Net nance costs were US$562 million, a 7%
increase on the prior years US$525 million mainly
as a result of the increase in borrowings following
the Fosters acquisition. Finance costs in the
currentyear included a net gain of US$2 million
(2011: loss of US$7 million) from the mark to market
adjustments of various derivatives on capital items
for which hedge accounting cannot be applied.
Finance costs in the year also included net
exceptional nance costs of US$22 million including
transaction-related net costs of US$26 million in
relation to nancing fees and premiums on
derivative instruments used to hedge currency risk
partially offset by mark to market gains on derivative
nancial instruments connected with the Fosters
transaction, and exceptional interest income of
US$4 million associated with the successful
outcome of litigation in Europe.
The mark to market gain and the net exceptional
nance costs have been excluded from adjusted
nance costs and adjusted earnings per share.
Adjusted net nance costs are reconciled to net
nance costs in the table below. They were 5%
higher than in 2011. Interest cover has increased
to11.4 times from 10.8 times in the prior year.
2012
US$m
2011
US$m
Net nance costs 562 525
Mark to market gain/(loss)
on capital items 2 (7)
Exceptional nance costs (22)
Adjusted nance costs 542 518
We expect nance costs in the 2013 nancial year
to increase, as a result of higher net debt levels.
Tax
The effective rate of tax for the year (before
amortisation of intangible assets other than
software and exceptional items) was 27.5%
compared with a rate of 28.2% in the prior year.
This reduction in the rate resulted from a
combination of factors including:
the successful conclusion of our Russian court
proceedings;
reorganisation gains as a result of the Fosters
acquisition;
changes in tax legislation; and
the resolution of various uncertain tax positions.
In the medium term we expect the effective tax rate
to be between 27% and 29%, reecting a level
which we believe is sustainable given the current
tax structure and composition of the group.
The corporate tax charge for the year was US$1,126
million. This differed from the tax paid because the
payment of a tax liability can fall outside the nancial
year, and because of deferred tax accounting
treatments. Uncertainty of interpretation and
application of tax law in some jurisdictions also
contributes to differences between the amounts
paid and those charged to the income statement.
(e) EBITA margin performance % 2011 2012
Asia
Pacic
Africa North
America
Europe Latin
America
South Africa:
Beverages
South Africa:
Hotels & Gaming
Group
25.6
26.1
16.4
15.3
14.2 14.4
19.9 20.2
4.6
9.1
19.1
20.1
28.5
27.7
17.8 17.9
Pure Blonde
Origin: Australia
First brewed: 2004
www.pureblonde.com.au
Pure Blonde uses pure ingredients to deliver a smooth,
crisp, aromatic lager. Specially brewed longer to create
afull avoured beer with 70% less carbohydrate than
regular strength beer and no compromise on taste.
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In terms of total taxes borne and collected by the
group, including excise and indirect taxes, these
amounted to US$9,400 million (2011: US$8,400
million) in the year. The various business
combinations and disposals of businesses during
the year impacted this analysis. The composition
and divisional analysis is shown in charts (f) and (g).
During the year approximately US$2,500 million
oftaxes have been paid to African tax authorities
(including South Africa).
Prot and earnings
Adjusted prot before tax of US$5,062 million
increased by 13% over the prior year primarily as
aresult of higher volumes, price increases and the
effect of premiumisation partially offset by increases
in raw material costs and expenditure on sales,
marketing and systems capabilities. On a statutory
basis, prot before tax of US$5,603 million was
55% higher than the prior year. The table below
reconciles EBITA to adjusted prot before tax and
tothe statutory prot before tax.
2012
US$m
2011
US$m
%
change
EBITA 5,634 5,044 12
Adjusted nance costs (542) (518) (5)
Share of associates and joint
ventures nance costs (30) (35) 14
Adjusted prot before tax 5,062 4,491 13
Exceptional items (excluding
nance cost exceptionals) 1,037 (467)
Adjustments to nance costs (20) (7)
Amortisation (264) (209) (26)
Share of associates and
jointventures tax and
non-controlling interests (212) (182) (16)
Prot before tax 5,603 3,626 55
Adjusted earnings increased by 13% to US$3,400
million. With the weighted average number of basic
shares in issue for the year of 1,583 million, up
slightly from last years 1,576 million, we achieved
strong adjusted earnings per share growth in both
our reporting currency of US dollars and also in the
currencies in which our shares are quoted, as
demonstrated in the table below.
2012 2011 % change
US cents 214.8 191.5 12
UK pence 134.4 123.4 9
South African cents 1,607.0 1,369.6 17
A reconciliation of the statutory measure of prot
attributable to equity shareholders with adjusted
earnings is shown in note 8 to the consolidated
nancial statements. On a statutory basis, basic
earnings per share were 74% up on the prior year
primarily as a result of the exceptional gains
intheyear.
Dividends
The board has proposed a nal dividend of 69.5
UScents to make a total of 91 US cents per share
for the year an increase of 12% over the prior year.
This represents dividend cover of 2.4 times based
on adjusted earnings per share (2011: 2.4 times).
Our guideline is to achieve dividend cover of
between 2.0 and 2.5 times adjusted earnings.
Therelationship between the growth in dividends
per share and adjusted earnings per share is
demonstrated in chart (h).
Details of payment dates and related matters are
disclosed in the directors report.
Business combinations and similar
transactions
On 16 December 2011 we acquired a 100% interest
in Fosters Group Ltd (Fosters) in Australia at an
enterprise value of US$11,786 million, comprising
cash consideration of US$10,598 million, together
with acquired net debt and non-controlling
interests, less a net present value attributed to cash
receivable for historical tax losses. The acquisition
provides us with exposure to Australias strong
economic growth prospects; a leading position
inthe stable and protable Australian beer industry;
and the opportunity to apply our capabilities
andscale to improve Fosters nancial and
operating performance.
With effect from 1 January 2012 together with
Castel we implemented a number of organisational
changes in our African operations as part of our
strategic alliance agreement. As a result we
acquired a 27.5% interest in BIH Brasseries
Internationales Holding (Angola) Ltd (BIH Angola) in
exchange for contributing our Angolan businesses,
Coca-Cola Bottling Luanda SARL, Coca-Cola
Bottling Sul de Angola SARL, Empresa de Cervejas
NGola Norte SA, and our interest in our associate
Empresa de Cervejas NGola SARL, into BIH
Angola. Castel acquired the remaining 72.5% in BIH
Angola, having contributed its Angolan businesses
into BIH Angola. We acquired a 65% interest
(effective 33% interest) in International Breweries plc
in Nigeria, from Brasseries Internationales Holding
Ltd (BIH), part of the Castel group, in exchange for
cash and a dilution of our effective interests in our
existing Nigerian businesses, Pabod Breweries Ltd
and Voltic Nigeria Ltd.
Following the Fosters acquisition, on 13 January
2012 we acquired the remaining 50% interest which
we did not already own in Pacic Beverages Pty Ltd
(Pacic Beverages) in Australia from Coca-Cola
Amatil Limited (CCA) for cash consideration of
US$343 million. The acquisition took our effective
interest in Pacic Beverages to 100%.
On 6 March 2012 we completed our strategic
alliance with Anadolu Group and Anadolu Efes
Biracilik ve Malt Sanayii AS (Anadolu Efes). Our
Russian beer business, SABMiller RUS LLC, and
Ukrainian beer business, PJSC Miller Brands
Ukraine, were contributed to Anadolu Efes in
exchange for a 24% equity stake in the enlarged
Anadolu Efes group. Anadolu Efes is now the
(h) Adjusted earnings per share
(EPS) and dividend per share
US cents
220
190
160
130
100
70
40
12 08 09 10 11
Adjusted EPS
Dividend per share
(f) Tax borne and collected
by category
1
2
3
4
1 Excise 60%
2 Other Indirect taxes 21%
3 Taxes on prots 10%
4 Employment taxes 7%
5 Tax withheld at source 1%
6 Taxes on property 1%
(g) Tax borne and collected
by region
1
2
3
4
5
6
7
8
Emerging and developing economies
1 Latin America 32%
2 South Africa 19%
3 Europe 14%
4 Africa 8%
5 Asia Pacic 4%
Developed economies
6 USA 9%
7 Europe 9%
8 Asia Pacic 5%
5
6
vehicle for both groups investments in Turkey,
Russia, the CIS, Central Asia and the Middle East.
The alliance will result in the enlarged Anadolu Efes
strengthening its market position in the large
Russian beer market; it is the leading beverage
producer in Turkey and has leading market
positions in the growth beer markets of Kazakhstan,
Moldova and Georgia.
During the year SABMiller Africa BV increased its
interest in Delta Corporation Limited in Zimbabwe
from 36.75% to 40%, to give an effective interest
of 25%.
In January 2012 we acquired an additional 2.9%
effective interest in Tanzania Breweries Ltd following
apublic offer through the Dar-es-Salaam Stock
Exchange. This increased our effective interest to36%.
On 13 June 2011 we completed the disposal of our
distribution business in Italy, which was classied
asa disposal group held for sale at 31 March 2011,
and which generated a US$14 million exceptional
loss on disposal, primarily being the recycling of the
foreign currency translation reserve associated with
this business.
On 25 November 2011 we disposed of our 12%
effective interest in our associate, Kenya Breweries
Limited, for cash consideration of US$205 million.
Cash ow and investment highlights
Net cash generated from operations before working
capital movements (EBITDA) of US$4,979 million
was 11% higher than the prior year. EBITDA
excludes cash contributions from joint ventures
andalso includes the effects of cash ows from
exceptional items. To consider cash generation on
an underlying basis, we use an adjusted EBITDA
measure which excludes the cash ow impact of
exceptional items and includes the dividends
received from MillerCoors (which is a proxy for our
share of MillerCoors EBITDA). Adjusted EBITDA of
US$6,183 million grew by 10% compared with the
prior year. Adjusted EBITDA margin, including the
groups share of MillerCoors revenue, improved
10bps in the year to 23.0%.
2012
US$m
2011
US$m
EBITDA (see note 28a) 4,979 4,502
Plus cash outows from
exceptionalitems 308 293
Plus MillerCoors dividend 896 822
Adjusted EBITDA 6,183 5,617
Revenue 21,760 19,408
Plus share of MillerCoors revenue 5,116 5,106
26,876 24,514
Adjusted EBITDA margin 23.0% 22.9%
We achieved a cash inow from working capital of
US$258 million, principally as a result of the extension
of supplier credit terms as contracts are renegotiated
by our procurement organisation. Cash generated
from operations increased by 15% over the prior year,
to US$5,237 million.
Tax paid in the year increased marginally to US$893
million from US$885 million in the prior year. The
increase arose essentially from a higher tax base this
year together with additional withholding taxes paid.
Net interest paid has decreased compared with the
prior year at US$407 million primarily reecting an
increase in accrued interest arising from the bond
issue in January 2012 and the exclusion of certain
non-recurring items that occurred in the prior year.
Capital expenditure on property, plant and equipment
for the year was US$1,473 million (2011: US$1,189
million), or US$1,639 million (2011: US$1,315 million)
including the purchase of intangible assets.
Selectively we have continued to make investments,
particularly in Africa where capacity constraints have
been experienced. New breweries are currently
beingconstructed in Nigeria, Uganda and Zambia
and there has been capacity expansion in Peru
andSouth Sudan. Capital expenditure of
approximately US$1,600 million is expected
inthenext nancialyear.
Free cash ow improved by US$560 million to
US$3,048 million, beneting from higher cash
generated from operating activities partly offset by
higher capital expenditure. Free cash ow over the
last ve years is shown in chart (i).
Business Capability Programme
In addition to the exceptional costs of the business
capability programme noted above, the programme
incurred capital expenditure in the year of US$122
million (2011: US$87 million). The programme has
already led to accumulated improvements in working
capital of US$549 million, and to net operating
benets in the year of US$159 million (2011: US$67
million), bringing the accumulated amount of
operating benets to US$243 million. These include
benets generated from the global procurement
programme, the regional manufacturing operation
inEurope and from sales and distribution systems
inLatin America. Including cost avoidance benets
and the net operating benets of prior years, the
accumulated benets from the programme now
amount to US$890 million.
Based on plans to extend the scope and depth of
globally-managed procurement in particular, we
haverevised our benet estimates and now expect
that accumulated net operating benets will reach
US$250 million in the year to March 2013, US$400
million in the following year, and an annual run rate
ofapproximately US$450 million by March 2014.
(i) Free cash ow
US$m
545 97
2,010
2,488
08 09 10 11
3,048
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Hansa Pilsener
First brewed: 1975
www.sab.co.za
The light refreshment of Hansa comes from the centuries-old
pilsener style of brewing beer. The uniquely crisp, clean taste
is attributable to the kiss of the Saaz hop; only grown in the
Czech Republic and the most expensive hop in the world.
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Balance sheet
A signicant proportion of the non-current assets on
our balance sheet reect acquisitions since our listing
on the London Stock Exchange in March 1999. No
goodwill or intangible assets are recognised on the
balance sheet in relation to businesses or brands
thathave been developed organically or were
acquired prior to 1998. The same policy applies for
our investments in associates and joint ventures,
including MillerCoors. Acquisitions post 1 April
1998and prior to the IFRS transition in 2005 were
accounted for in accordance with UK GAAP, with
intangible assets, such as brands, not separately
recognised but instead forming part of the goodwill
on the acquisition, which was amortised over 20
years in most instances. On transition to IFRS in
2005, we changed our policy and have recognised
acquired intangible assets, primarily brands,
separately from goodwill on acquisitions, with
intangible assets subject to amortisation and with no
amortisation of goodwill. The goodwill and intangible
assets relating to investments in associates and joint
ventures including MillerCoors are subsumed within
the investment total and not separately identied on
our balance sheet.
Total assets increased to US$55,651 million from
theprior years US$39,114 million (restated to reect
adjustments to provisional fair values of business
combinations in the prior year), primarily as a result
ofthe acquisitions and business combinations in
theyear.
Goodwill increased by US$8,174 million, compared
with the restated prior year amount, as a result of
goodwill arising on the business combinations in Asia
Pacic and Africa and the impact of foreign exchange
rate changes on goodwill denominated in currencies
other than the US dollar partly offset by the goodwill
on the disposal of businesses in Europe and Africa.
Intangible assets increased by US$5,537 million
compared with the restated prior year amount
primarily reecting intangibles recognised as a result
of business combinations in particular in Australia,
foreign exchange movements and additions primarily
related to the business capability programme,
partially offset by amortisation.
Gross debt at 31 March 2012 increased to
US$18,607 million from US$8,162 million at 31 March
2011. Gross debt comprises borrowings together with
the fair value of derivative assets or liabilities held to
manage interest rate and foreign currency risk of
borrowings. Net debt (comprising gross debt net of
cash and cash equivalents) increased to US$17,862
million from US$7,091 million at 31 March 2011. The
increased level of net debt resulted primarily from the
debt nancing of the Fosters acquisition, together
with debt acquired with Fosters, partially offset by
strong free cash ow. As at 31 March 2012, we held
cash and cash equivalent investments of US$745
million (2011: US$1,071 million).
An analysis of net debt is provided in note 28c to
theconsolidated nancial statements. Our gearing
(presented as a ratio of net debt to equity) has
increased to 68.7% from 31.2% at 31 March 2011.
Total equity increased from US$22,759 million at
31March 2011 to US$26,013 million at 31 March
2012. The increase was primarily due to the prot
for the year, share issues, a credit of US$158 million
related to share-based payment charges, currency
translation movements on foreign currency
investments, partly offset by dividend payments.
Financial structure and liquidity
Our strong nancial structure gives us adequate
resources to facilitate ongoing business along with
medium-term exibility to invest in appropriate
growth opportunities and manage the
balancesheet.
The group nances its operations through cash
generated by the business and a mixture of short
and medium-term bank credit facilities, bank loans,
corporate bonds and commercial paper. In this way,
we avoid over-reliance on any particular liquidity
source. We use cash in hand, cash from operations
and short-term borrowings to manage liquidity.
The following table summarises our funding
structure at 31 March 2012.
2012
US$m
2011
US$m
Overdrafts (139) (258)
Borrowings (19,067) (8,193)
Derivatives 620 298
Finance leases (21) (9)
Gross debt (18,607) (8,162)
Cash and cash equivalents 745 1,071
Net debt (17,862) (7,091)
Maturity of gross debt:
Within one year (1,061) (1,358)
Between one to two years (1,958) (590)
Between two and ve years (10,263) (4,383)
Over ve years (5,325) (1,831)
The average maturity of the gross committed debt
portfolio is 6.9 years (2011: 4.0 years).
On 7 April 2011 SABMiller plc entered into a ve
year US$2,500 million committed syndicated facility,
with the option of two one-year extensions.
Subsequently the facility was extended in part such
that US$2,236 million is now due to mature in April
2017. This facility replaced the existing US$2,000
million and US$600 million committed syndicated
facilities, which were both voluntarily cancelled.
On 1 July 2011 the US$600 million 6.2% Notes due
2011 matured and were repaid from existing cash.
On 9 September 2011 SABMiller Holdings Inc, a
wholly owned indirect subsidiary of SABMiller plc,
entered into a US$12,500 million committed
syndicated facility to nance the acquisition of
Fosters and related purposes. The facility consisted
of four tranches; a US$8,000 million one-year term
facility with the option of two six-month extensions;
a US$2,500 million three-year term facility; a
US$1,000 million ve-year term facility; and a
US$1,000 million ve-year revolving credit facility.
InDecember 2011 the group drew US$7,850 million
under the one-year term facility; AUD2,000 million
(approximately US$2,021 million) and US$100
million under the three-year term facility and
US$750 million under the ve-year term facility. The
undrawn balance of those facilities was cancelled
and the amount of the revolving credit facility was
reduced to US$500 million.
On 17 January 2012 SABMiller Holdings Inc issued
bonds to the value US$7,000 million, in four tranches:
US$1,000 million 1.85% Notes due January 2015,
US$2,000 million 2.45% Notes due January 2017,
US$2,500 million 3.75% Notes due January 2022
and US$1,500 million 4.95% Notes due January
2042, guaranteed by SABMiller plc. The proceeds
ofthe bonds were used to repay US$7,000 million
under the one-year term facility.
In March 2012 SABMiller Holdings Inc repaid the
remaining US$850 million balance outstanding on
the one-year term facility, which was then cancelled.
Our committed undrawn borrowing facilities have
increased from US$3,164 million at 31 March 2011
to US$3,810 million at 31 March 2012. We have
sufcient headroom to enable us to conform to
covenants on our existing borrowings and sufcient
undrawn committed nancing facilities to service
our operating activities and ongoing capital
investment. Maturing debt in the next 24 months
includes a ZAR1,600 million bond maturing in July
2012, COP370,000 million and COP338,500 million
bonds maturing in September 2012 and May 2013
respectively, US$1,100 million and US$550 million
bonds maturing in August 2013 and January 2014
and a number of local bank facilities. Current
committed headroom is sufcient to cover all
maturing borrowings over the next 24 months. We
have continued to be able to access sufcient and
signicant funding from a number of sources and
expect to renew maturing facilities as they fall due.
Currency, interest rate, commodity
andcreditrisk management
We manage the risks from foreign exchange,
interest rates, commodities and credit risk within a
framework of policies approved by the board which
are reviewed on a regular basis. Exposures are
managed within target hedge levels and reported
regularly to the treasury and audit committees.
Currency risk
Most of our net assets are denominated in
currencies other than the US dollar with the result
that our US dollar balance sheet can be signicantly
affected by currency movements. We seek to
mitigate this impact, where cost effective, by
borrowing (directly or synthetically) in the same
currencies as the functional currencies of our main
operating units. We borrow principally in US dollars,
Australian dollars, euros, Colombian pesos and
South African rand. Other than this, we do not
hedge translation exposures.
Our debt prole at 31 March 2012 (after taking
account of cross currency swaps) is illustrated
inchart (j).
We are also exposed to transactional currency risk
on sales and purchases. Committed transactional
exposures are fully hedged and a proportion of
other transactional exposures for a period of up
to18 months is also hedged; this is principally
achieved using forward exchange contracts and
foreign exchange swaps.
Interest rate risk
Our policy is to borrow (directly or synthetically)
principally in oating rates, reecting our view that
oating rates are generally lower than xed rates in
the medium term. However, in order to mitigate the
impact of an upward change in interest rates, the
extent to which group debt may be in oating rates
is restricted to below 75% of consolidated net debt
and is in addition managed to a measure based on
the potential impact of adverse moves in interest
rates. This policy excludes borrowings arising from
recent acquisition activity and ination-linked debt.
As at 31 March 2012, 45% of net borrowings
wereat xed rates taking into account nancial
derivatives, compared with 44% at 31 March 2011.
Exposure to movements in interest rates on group
borrowings is managed through interest rate swaps
and forward rate agreements as well as borrowings
in xed and oating rate instruments.
The weighted average interest rate for the total
gross debt portfolio at 31 March 2011 decreased
to4.9% (2011: 5.9%) primarily reecting the cost-
effective nancing package put in place for the
Fosters acquisition.
Commodity risk
Our policy is to manage both commodity supply
and price risk. Commodity supply risk is managed
by the setting of minimum coverage levels and
principally through supplier contracts. Commodity
price risk is managed within minimum and
maximum guardrails principally through multi-year
xed price contracts with suppliers and where
appropriate derivative contracts. We hedge a
proportion of commodity supply and price risk
foraperiod of up to ve years. Where derivative
contracts are used, we manage exposures
principally through exchange traded futures,
forward contracts and swaps.
(j) Net debt prole
1
2
3
4
5
6
1 US dollars 59%
2 Australian dollars 21%
3 Euro 9%
4 Colombian peso 6%
5 SA rand 2%
6 Other currencies 3%

2M
Origin: Mozambique
First brewed: 1965
www.sabmiller.com
Named after the original Mac Mahon brewery, 2M is
Mozambiques most popular mainstream beer brand.
Pronounced dosh-em locally it is a truly sessionable
andsociable beer with a light, crisp, and refreshing taste.
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Credit risk
Our counterparty credit risks arise mainly from
exposure to customers and nancial institutions.
Welimit the exposure to nancial institutions arising
from cash, deposits of surplus funds and derivative
nancial instruments by setting credit limits based
on the institutions credit ratings and generally only
with counterparties with a minimum credit rating
ofBBB- and Baa3 from Standard & Poors and
Moodys respectively. There is no signicant
concentration of credit risk with respect to trade
receivables as we have a large number of
internationally dispersed customers.
Usage of derivative instruments
Our policy only allows the use of derivative
instruments to manage the currency, commodity
and interest rate risks arising from our operations
and nancing activities. It is group policy that no
trading in nancial instruments is undertaken.
Currency
The exchange rates to the US dollar used in the
preparation of the consolidated nancial statements
are detailed in the table on page 44. Most of the
major currencies in which we operate strengthened
against the US dollar on a weighted average basis
over the year with the exception of the South African
rand. In terms of closing rates, European currencies
as well as the South African rand weakened,
whilethe Colombian peso and Peruvian nuevo
solstrengthened.
Year ended 31 March %
2012 2011 change
Average rate
Australian dollar 0.95 1.06 12
South African rand 7.48 7.15 (4)
Colombian peso 1,831 1,881 3
Euro 0.72 0.76 5
Czech koruna 17.65 19.04 8
Peruvian nuevo sol 2.73 2.81 3
Polish zloty 2.99 3.01 1
Closing rate
Australian dollar 0.97 0.97
South African rand 7.67 6.77 (12)
Colombian peso 1,792 1,879 5
Euro 0.75 0.71 (6)
Czech koruna 18.52 17.27 (7)
Peruvian nuevo sol 2.67 2.80 5
Polish zloty 3.13 2.84 (9)
Accounting policies
The principal accounting policies used by the group
are shown as note 1 to the consolidated nancial
statements.
In addition, note 1 details the areas where a high
degree of judgement has been applied in the
selection of a policy, an assumption or estimates
used. These relate to:
the assumptions used in impairment tests of
carrying values for goodwill and intangible assets;
judgements in relation to provision for taxes
where the tax treatment cannot be fully
determined until a formal resolution has been
reached with the relevant tax authority;
assumptions required for the calculation of
post-retirement benet obligations;
estimates of useful economic lives and residual
values for intangible assets, property, plant
andequipment;
judgements in relation to the fair values of assets
and liabilities on acquisition; and
judgements as to the determination of
exceptional items.
Jamie Wilson
Chief Financial Ofcer
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Kilimanjaro
You are now in Kilimanjaro country was the
headline of the integrated marketing campaign
behind the successful renovation of the Kilimanjaro
brand in Tanzania this year. The result has been
signicant growth in Kilimanjaros volumes and
market share.
Economic contribution across our value chain
Beer is a local product typically brewed, sold and
consumed in the same community. By delivering
high-quality products that consumers enjoy, our
businesses create jobs, pay taxes, develop local
skills and encourage enterprise.
In the year, SABMiller generated US$23,921 million
of economic value, of which the majority was
distributed through the course of our business
toour employees, shareholders and investors,
suppliers and governments, as well as to local
communities through our corporate social
investment activities.
Across our value chains we seek opportunities
tobuild our local supply chain. In our developing
markets we are working to build the capability of
local farmers in order to increase local sourcing.
InAfrica, research by Professor Ethan Kapstein
ofINSEAD, and other experts, indicates that our
commitment to increasing the local sourcing of
rawmaterials to 50% over the next two years will
raise the number of direct farming jobssupported
by our operations from 100,000 to150,000.
This year we published a number of independent
studies to assess our socio-economic impact.
InEurope, for example, a recent study by Ernst
&Young found that a total of 202,000 jobs can be
attributed to the production and sale of our beers
including over 98,000 in the hospitality sector
alone. For each person employed by SABMiller
inEurope, 17jobs are generated outside the
brewing industry.
We recognise there is a growing interest in the
amount of tax paid by multinational companies.
Weseek to be fully transparent in our tax returns
and related disclosures torevenue authorities.
Wehave a strong governance process andour
group tax policy guides the way we manage tax
affairs across the group. The corporate tax charge
for the year was US$1,126million an effective
taxrate of 27.5%.
In the year total taxes borne and collected by
thegroup amounted to US$9,400 million (2011:
US$8,400 million). This includes excise taxes,
transactional taxes and taxes borne by employees
as well as our share (based on equity interest) of
taxes paid by our US joint venture. We consider
thiswider calculation to be an important and
appropriate indication of the tax contribution
ofouroperations and the scal impact these have
on the countries in which we do business.
The groups presence in many developing economies
provides major sources of employment and income
and therefore tax revenues. Of the taxes we pay,
77% go to governments in emerging and developing
countries and 23% are paid in developed economies.
The growing resource challenge
This year, two of our fastest-growing regions were
the emerging and developing markets of Africa and
Latin America, which saw lager volumes increasing
on an organic basis by 13% and 8% respectively.
The growth of middle class consumers from two
tove billion worldwide by 2030
1
, with improved
incomes and enhanced quality of life, is a key driver
of our future growth.
That said, the demands that this growth will place
on the worlds nite resources mean that business,
government and civil society must work together
todevelop practical, local solutions that generate
inclusive growth while conserving water and energy
and managing land use. Successfully addressing
the triple challenge of water, food and energy
security means taking a holistic view and
balancingthe many competing demands,
trade-offs andinteractions.
Businesses such as ours are well placed to
innovateand drive efciencies. We have extensive
programmes in place to improve water and energy
efciency and reduce waste across our breweries.
The water efciency of our lager operations has
improved by 5% over the last year, and 13% since
we set our target to reduce water consumption by
25% by 2015 in 2008.
Across our operations we aim to become
50%morecarbon-efcient by 2020. Our carbon
emissions from fossil fuel use have reduced by
10%per hectolitre of lager produced this year,
andby 17% since we set our target in 2008.
InIndia, converting fossil fuel boilers to biomass
across three breweries has reduced the emissions
associated with boiler fuel in these three plants
by90% since 2008.
SABMiller has become one of the worlds leading brewers by
building strong local businesses that contribute to their local
economies. We seek to generate inclusive growth: creating
long-term returns by building value chains that drive economic
growth and stimulate social development while using scarce
natural resources efciently.
Sustainable development
Generating inclusive growth
Water to lager ratio
(hl water/hl lager)
4.6
4.5
4.3
4.2
08 09 10 11
4.0
12
5%
Water to lager ratio
down5% to 4.0 hl/hl
1
The emerging middle class in
developing countries, HomiKharas,
OECD Development Centre Working
Paper No. 285, January 2010. Middle
class is dened as having daily per
capita spending of US$10 to US$100.
We continue to drive down brewery waste
andimprove the sustainability of our packaging.
Forexample, in the past year in Italy, Birra Peroni
reduced the weight of its Peroni Gran Riserva
330ml bottle by 40% (from 310g to 185g), saving
750 tonnes of glass and about 600 tonnes of
CO
2
ea year.
Building strong partnerships
We devote great care and effort to building alliances
throughout our value chain, and recognise that
partnerships are crucial to our success.
Focusing solely on improving efciency at our
operations will not on its own secure adequate
long-term water, agricultural supplies, and energy
for our breweries. The resource challenges we
jointly face with local communities are complex
andinterconnected. We can only effectively tackle
these challenges by sharing knowledge and
working in partnership with experts from non-
governmental organisations (NGOs), governments
and academic institutions to deliver innovative
solutions at a local level.
Our Water Futures partnership, established with
WWF and the German development agency, GIZ,
isone example of a public-private partnership
devoted to managing shared water risk and to
demonstrating the link between water, food and
energy security. This year we doubled the reach
ofthe partnership, extending to four new markets:
Colombia, Honduras, India and the USA.
We continue to build our affordability strategy in
Africa, based on locally sourced crops such as
sorghum and cassava. This year in Mozambique
wepartnered with DADTCO (Dutch Agricultural
Development and Trading Company) to develop
amobile processing unit that enabled us to launch
the worlds rst commercial-scale, cassava-based
clear beer Impala. In recognition of its contribution
to agricultural and economic development in
Mozambique the government introduced a new
excise category for beer made from cassava.
This,combined with the reduced production costs
associated with using a local crop, enables us to
sell Impala at 70% of the price of mainstream lager,
attracting consumers who might otherwise
consume illicit alcohol.
In South Africa we are a strategic partner in Project
Promote, working with SABCOHA (South African
Business Coalition on HIV and AIDS) and The
Global Fund to deliver condoms to taverns through
SABs distribution infrastructure. Since the start
ofthe project 18 months ago, just under 8.5 million
condoms have been delivered to 4,600 taverns
across South Africa, helping to avert an estimated
17,000 new HIV infections.
Beer in society
Each day our beers are enjoyed by millions
ofconsumers. There is, sadly, a small minority
ofconsumers who do not drink responsibly and
who pose a risk to themselves, their families and
their communities.
Alcohol abuse and associated societal issues
suchas violence, drunk-driving, underage drinking
and the impact on non-communicable diseases
area cause of concern around the world. Most
critically for SABMiller, the increasing focus by
bothgovernments and NGOs on these social
andhealth challenges is leading to increased
regulatory intervention and a stronger expectation
for businesses to play a greater role in leading
actionto tackle these problems.
As a brewer we recognise that, along with the
widercommunity, we have a role to play in tackling
alcohol abuse. We have clear principles that guide
the way we operate as a business, and we uphold
high standards in all aspects of alcohol production
and marketing.
Our local businesses are committed to engaging
inpartnerships to encourage responsible drinking,
remind consumers about the impact of alcohol-
related harm and address the wider societal
issuesresulting from alcohol abuse. In Europe, for
example, we have implemented comprehensive
commitments to the EU Alcohol and Health Forum
to provide information to consumers through
packaging labels, marketing materials, online
toolsand mobile apps.
Impala
Origin: Mozambique
First brewed: 2011
www.sabmiller.com
Impala is the worlds rst commercial-scale cassava-based beer.
Brewed using 70% cassava sourced from smallholder farmers
in Mozambique creating new employment for over 1,500
smallholder farmers and their families. Impala uses conventional
brewing techniques and has a crisp, refreshing taste.
10%
Fossil fuel emissions
from energy use at our
breweries down 10%
to12.4 kgCO
2
e per hl
Global focus areas
Regional focus areas
Continual improvement
Our vision
To be the most
admired company in
the global beer industry
Human rights Waste
Transparency
and ethics
Packaging
Energy/carbon HIV/Aids CSI
Alcohol
responsibility
Water
Enterprise
development in
our value chains

A focused approach to sustainable
development management
CO
2
e emissions from fossil
fuel energy used on site
(kgCO
2
e/hl lager)
14.9
14.3 14.2
13.8
08 09 10 11
12.4
12
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Sustainable development continued
Integrating sustainable development
intobusiness planning
Sustainable development is integral to the way
wedo business. One of SABMillers four strategic
priorities is to constantly raise the protability
oflocal businesses, sustainably.
We structure the measurement of sustainable
development through our 10 priorities, which
informhow we focus our efforts and prioritise our
resources. At a global level particular focus is given
to the three most material areas for our business:
alcohol responsibility, water, and enterprise
development in our value chain. It is these areas
that we believe have the greatest potential to impact
on business value, and create the greatest benets
for the communities in which we work.
Our 10 sustainable development priorities
alsotakeinto account our commitment to the
UNGlobal Compact, as well as our support of
theUN Millennium Development Goals.
The group corporate accountability and risk
assurance committee (CARAC), a sub-committee
ofthe SABMiller plc board, is responsible for
overseeing progress against our 10 sustainable
development priorities. Our Sustainability
Assessment Matrix (SAM) provides a detailed
assessment of sustainable development
performance twice a year, which informs both
business planning and corporate governance
through our regional and group CARACs.
During the year, the groups average SAM score
increased from 2.9 to 3.2, with scores increasing
across all priorities as our local businesses focused
on advancing the sustainable development issues
most material to their particular markets. More
detailed information on our scores by country and
priority can be found at www.sabmiller.com/sd.
Transparency and ethics
High standards of ethical behaviour and
transparency underpin all that we do. We have
aCode of Business Conduct and Ethics which
applies to all employees across the group as well
asthird parties acting on our behalf. This year,
westrengthened our anti-bribery procedures
byintroducing a new Anti-Bribery Policy, which
supplements and builds on the requirements of
theCode, and helps to ensure that we meet our
obligations under the new UK Bribery Act 2010.
We place a high value on reporting and
communicating in an open and honest way to our
stakeholders, and have produced a sustainable
development report for over 10 years. This year
wecommissioned an independent report into
thefuture of sustainability reporting, Multiple
Messages, which highlighted the need for a exible,
multi-channel approach to reporting. Fifteen of
ourbusinesses produce their own sustainability
reports; Italy and Botswana produced reports for
the rst time, and many others provide information
online. Botswanas report won Best Corporate
Social Responsibility Reporter at the national
PricewaterhouseCoopers Annual Reporting Awards.
3.2
The average score
achieved against
ourSustainability
Assessment Matrix
was 3.2
Online
For more information on our
approachto sustainable development
and ourperformance, go to our 2012
Sustainable Development Report
atwww.sabmiller.com
Alcohol Water Energy
and
carbon
Packaging
and
packaging
waste
Waste Enterprise
development
and value
chain
management
CSI HIV/Aids Human
rights
Trans-
parency
and ethics
Overall
Score
Stairway level assessment criteria Sustainable development group average scorecard 2012
5
Leading edge:
Performance that represents genuine global
leadership on an issue.
2010 2011 2012
4
Best practice:
Achieving what is currently considered to
beglobalbest practice in a particular eld.
3
Developing leadership:
Applying a comprehensive approach including
innovative tools and widespread engagement.
2
Progressing:
Ensuring consistent performance is achieved
in a particular eld.
1
Minimum standard:
All operations must achieve level 1, or have a plan
in place to do so, as it represents management of
our key sustainable development risks.
Building a Zambian
barley industry
Zambian Breweries has been
working with farmers to build
aZambian barley industry.
Three years ago, our Zambian business
imported 100% of the barley needed for
itsbreweries.
With a climate that supports a strong
wheat industry, Zambian Breweries saw
an opportunity to build a national barley
industry, improving the security of its
barley supply and reducing costs by
sourcing locally. The business developed
partnerships with technical experts and
built relationships within the established
Zambian farming industry to design
abarley farming model. Working in
collaboration with CHC Commodities,
experts in crop storage and post-harvest
management, in 2009 a successful pilot
established the capability of farmers in
Zambia to produce a high-yielding,
high-quality crop.
Zambian Breweries now works with
21commercial farmers, who employ
over4,000 rural workers. The barley they
produce is used in the production of the
companys premium beer brands Mosi,
Mosi Gold, Castle Lager and Carling
BlackLabel.
Despite the strong wheat price, against
which barley competes for acreage,
Zambian barley costs about US$100
pertonne less than imported barley.
Next year, we expect the Zambian barley
industry to produce a surplus of about
10,000 tonnes, which can be exported
tolocal markets such as Uganda and
Tanzania.
Managing shared
water risk in Peru
Through the Water Futures
partnership SABMiller works
with NGOs such as WWF
and The Nature Conservancy
in eight markets to protect
the watersheds on which
ourbusiness depends.
This year the local Water Futures
partnership in Peru undertook a series
ofstudies to examine the water resources
available in the basins that supply each of
Backus breweries. The rst, in the Rmac
river basin in Lima, identied a number of
projects to improve water security for the
region. Backus is now reviewing a number
of aquifer sustainability projects including:
Improving the infrastructure of canals
and river beds
Reusing treated water to irrigate public
green areas such as parks
Establishing a Rmac River Water
Observatory an expert technical panel
to monitor and assess the aquifer.
Other local businesses and communities
also depend on the watershed, and
Backus water risk cannot be addressed
inisolation. This year Backus became
afounding partner in the Aquafondo,
established by The Nature Conservancy.
The fund (which has an initial start-up
capital of US$900,000) will invest in
conservation, water protection measures,
education and communication projects in
Lima. Backus is working to encourage
more businesses and institutions to join
the alliance, to safeguard shared water
supplies for the future.
Supporting small
retailers in Colombia
The Bavaria Foundations
Destapa Futuro programme
is the largest private initiative
promoting entrepreneurship
in Colombia.
It seeks to boost economic development
across the country by supporting high
potential entrepreneurs.
This year, the Bavaria Foundation has
been tackling one of the main barriers
tostarting a small business the lack
ofaccess to credit. The Foundation
hasworked with local banks to provide
micro-nance for shopkeepers so they can
strengthen their businesses, increase their
revenues and improve their quality of life.
More than 4,000 shopkeepers have
beneted in two years with US$6 million
made available in micro-credit nancing.
Over the last ve years the Bavaria
Foundation has helped to create over
280businesses through the Destapa
Futuro programme, supporting over
1,100entrepreneurs by investing over
US$8 million in seed capital and US$2
million for training and mentoring.
The investment, practical advice and
mentoring provided means that 93% of
thebusinesses supported through the
programme arestilloperating.
In turn, the entrepreneurs who have
beneted from the programme have
created over 5,000 jobs.
Cusquea
Origin: Peru
First brewed: 1912
www.cusquena.com.pe
Perus premium beer is brewed with the highest quality
malt, yeast and hops to create excellent harmony in terms
of aroma, body, bitterness and taste. Cusquea retains the
mystery and magic of its origin in Cusco and appeals to
consumers who value the best brands.
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People
Succeeding by valuing and empowering our employees
Being a exible, fair and equitable employer
SABMiller employs some 70,000 people from
diverse cultures and backgrounds across six
continents. We aim to attract, develop and retain
high-calibre people with the skills, attributes and
drive to help SABMiller achieve its strategic
objectives, both now and in the future. We seek
totreat all our employees and contractors fairly
andwith respect, and to provide a safe and
positiveworking environment.
All our employees are compensated with a fair
wage and comprehensive benets and have access
to development opportunities both within their role
and towards career progression.
In many countries, we offer our employees free
medical healthcare if they need it. In countries
where HIV/Aids is prevalent, our employees and
their dependants have access to voluntary testing
and counselling, as well as managed healthcare
programmes including free anti-retroviral drugs.
Asat 31 March 2012, our businesses in countries
ofhigh prevalence had 1,847 peer educators,
onefor every 13 employees.
We have clear policies and processes relating to
diversity and encourage a culture that respects
andtolerates individual differences.
In an industry traditionally perceived as male-
dominated, we have various initiatives for ensuring
better representation for women. As at31 March
2012, a total of 19.0% of our employees were
female (2011: 19.5%) and 27.8% of our executives
and managers were women. Five of the last seven
independent non-executive directors appointed to
the SABMiller plc board were female and women
currently comprise 33% of the independent
non-executive directors on the board.
We acknowledge our employees right to union
representation and 36.4% of our workforce are
union members. Many of our businesses have
developed productive partnerships with trade
unions on collective bargaining and other issues.
This year, independent experts reviewed our
humanrights policies, procedures and performance
measurement in light of the new UN Protect,
Respect and Remedy framework for Business
andHuman Rights. They found that, in general,
weare ahead of many businesses in this respect,
particularly in our independent assessments of
human rights issues across the value chain, for
example through the Oxfam Poverty Footprint
Report. They also identied opportunities for
improvement in areas such as verication of
supplier performance. In response, our global
procurement company, Trinity, has joined SEDEX,
anot-for-prot organisation promoting ethical
andresponsible business practices in global
supplychains.
In South Africa we actively support Broad-Based
Black Economic Empowerment (BBBEE). Through
the BBBEE ownership programme, SAB Zenzele,
we have created almost 40,000 shareholders
among our staff and retailers. Retailers who
acquired the minimum allocation of shares for R100
at the start of the programme in 2010 have, to date,
received R875 in dividends, almost nine times their
initial investment.
We believe that a healthy, engaged, well-trained and motivated
workforce is a key competitive advantage.
70,000
We employ about
70,000 people across
sixcontinents
Promoting diversity at MillerCoors
MillerCoors has been working
to improve the advancement
of women in the company.
Women represent 20% of all vice-
president and executive level roles
atMillerCoors. To increase female
representation MillerCoors is taking
threesteps:
First, they are seeking to hire more
women. Recruiters are encouraged
tolook for talented female candidates,
andthis year 62% of all candidate lists
fornewhires included at least one
woman. During the year 83% of people
hired through the Sales Management
Development Program were women,
creating a strong talent pipeline of
womenfor senior roles in the future.
Secondly, they aim to provide a
supportive environment for personal
growth. Every function has established
guidelines and principles to promote
greater exibility, introducing new ideas
such as telecommuting. This year the
average number of training hours
completed by women also increased
byalmost 50%.
Thirdly, women are encouraged to
sharetheir own experiences with others.
Since 2010, of the 115 women who have
participated in group mentoring, 36 were
promoted and 30 made lateral moves to
develop broader or deeper skills.
Safety, health and wellbeing of our employees
Each of our businesses is responsible for ensuring
asafe working environment in its breweries, bottling
plants and ofces. This year we joined the World
Economic Forums workplace wellness alliance, a
consortium of companies committed to advancing
wellness in the workplace. We adapt ourwellness
programmes to meet changing needs. This year we
piloted a new Wellness Development Programme
covering sexually transmitted infections, hepatitis B
and C, malaria and tuberculosis in Botswana, South
Africa, Swaziland and Tanzania.
We aim to provide a safe working environment
inour breweries, bottling plants and ofces and
have robust systems, including regular audits,
foridentifying and minimising the risk of accidents
andmonitoring and addressing incidents when
theyoccur. This year better reporting on health and
safety has resulted in noticeable improvements in
health and safety performance inseveral markets
including Hungary, Italy and Uganda. That said, we
recorded 1,713 industrial injuries, 18% more than in
2011, largely due to an increase in injuries reported
in Latin America in line with new reporting protocols.
Across our business, we recorded 17,735 days lost
through injury a 34% increase on 2011 also due
to improved reporting.
It is with regret that we report 11 employee and
contractor fatalities this year. Two of these related to
accidents while undertaking maintenance or repairs,
ve related to accidents involving vehicles, and four
related to robberies or assaults on our staff while
on sales or trade visits. Ineach case, we have
undertaken an investigation and, where applicable,
implemented measures to minimise the likelihood of
such an incident recurring. We have also established
a group health and safety working group, which will
report to the group CARAC.
Business success through high performance
We recognise and reward strong performance.
Every year, each employee sets stretching individual
objectives in conjunction with their manager.
Thesegoals are linked to local company objectives
to ensure that everyone is contributing to, and
hasclear accountability for, the delivery of
businessstrategy.
Bonus payments and salary increases are linked
toperformance against individual goals and are
calculated against a combination of individual
achievement and overall company performance.
Promoting talent and personal development
We aim to offer appropriate career development
opportunities to all our employees and encourage
them to take ownership of, and manage, their own
development. In the year ended 31 March 2012, we
provided an average of 4.0 training days for every
employee, anincrease on the previous year.
Through our global learning strategy, we offer over
400 courses from specic functional programmes
to management development and leadership
programmes. These range from e-learning courses
to programmes facilitated by leading educational
institutions. Our European Management Development
Programme (EMDP), for example, has been designed
in partnership with Ashridge Business School. A
quarter of participants in the 2010 programme were
promoted within one year, taking new knowledge and
innovative thinking into the business in their new roles.
Cascade Pure
Origin: Australia
First brewed: 2008
www.cascadebreweryco.com.au
Cascade Pure has a light golden colour with a fresh hop
aroma courtesy of locally-grown Tasmanian galaxy hops.
Being environmentally friendly matters more than low
carbs, but this all malt lager offers both. Pures carbon
footprint is 100% offset, delivering a carbon neutral beer.
4 days
4 days of training per
employee on average
Educating our employees on alcohol responsibility
We provide regular education
on alcohol responsibility for
our employees, all of whom
are required to adhere to our
Alcohol Code of Conduct.
As at 31 March 2012, our businesses
had trained over 50,000 employees
inalcohol responsibility worldwide.
Weare also committed to training all
newemployees on alcohol responsibility
as they join SABMiller.
We have developed a two-part, specially
designed programme, which local
businesses can adapt to address local
circumstances:
Alcohol, Behaviour and Communication
(AB&C) training is designed for
everyone at SABMiller.
Alcohol Intelligence Quotient (AIQ)
provides additional in-depth training
forpeople in marketing, sales, trade
marketing, legal and communication
functions globally.
This year we introduced an online
refresher course, part of which asks
participants to make a personal pledge
onalcohol responsibility. In Hungary we
received 370 pledges from 400 e-learning
participants in just one month, including
pledges about being a role model at work
and at home, and pledges to stop people
from driving home if theyve been drinking
when out with friends.
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Board of directors
Corporate accountability
and risk assurance
committee (CARAC)
Executive committee
Nomination committee
Remuneration committee
Audit committee
Graham Mackay
BSc (Eng), BCom
Chief Executive
Graham Mackay joined
TheSouth African Breweries
Limited (SAB Ltd) in 1978 and
has held a number of senior
positions in the group, including
Executive Chairman of the beer
business in South Africa.
He was appointed Group
Managing Director in 1997
andChief Executive of South
African Breweries plc upon its
listing on the London Stock
Exchange in 1999.
He is the Senior Independent
Non-Executive Director of
Reckitt Benckiser Group plc
and a director of Philip Morris
International Inc.
He will become Executive
Chairman of SABMiller plc
atthe conclusion of the 2012
annual general meeting,
withthe intention that he will
continue in that role for one
year, before becoming
Non-Executive Chairman at the
2013 annual general meeting.
Jamie Wilson
LL.B.(Hons), CA, ATII
Jamie Wilson joined SABMiller
in 2005 and was elected as
adirector and appointed as
Chief Financial Ofcer in 2011.
Hehas held a number of senior
Senior Vice President, Market
Development and Strategy,
Miller Brewing Company, USA;
Managing Director, SABMiller
Russia; Managing Director for
SABMillers Central European
businesses, and Finance
Director for SABMiller Europe.
Before joining SABMiller he
held a number of senior roles
inthe global beverage industry,
notably Group Finance Director
and Managing Director
Operations of Highland Distillers
plc; Executive Chairman of
Maxxium; Managing Director of
Orpar SA, the parent company
of Remy Cointreau; Strategy/
Finance Director for Scottish
Courage Ltd; and Strategy/
Project Director for Scottish
&Newcastle plc.
Meyer Kahn BA (Law), MBA,
DCom (hc), SOE
Chairman
Meyer Kahn joined the group in
1966 and occupied executive
positions in a number of the
groups former retail interests
before being appointed to
theboard of SAB Ltd in 1981.
Managing Director in 1983 and
Executive Chairman in 1990.
In1997, he was seconded
full-time to the South African
Police Service as its Chief
Executive, serving for two and
a half years. He was appointed
Chairman of South African
Breweries plc upon its listing
onthe London Stock Exchange
in 1999.
Among other awards, he
holdsan honorary doctorate in
commerce from the University
of Pretoria and was awarded
The South African Police Star
for Outstanding Service (SOE)
in 2000.
Mr Kahn will retire at the 2012
annual general meeting.
John Manser
CBE, DL, FCA
Senior Independent Director
John Manser joined the board
in 2001. He is Chairman of
Shaftesbury PLC and was
Chairman of Intermediate
Capital Group plc and Deputy
Chairman of Colliers CRE plc
until 2010. He was previously
Chairman of Delancey PLC,
Hiscox Investment
Management Ltd and Robert
Fleming Holdings Limited,
aformer member of the
Presidents Committee of the
British Banking Association, a
directorof the Securities and
Investments Board between
1986 and 1993 and is a past
Chairman of the London
Investment Banking
Association.
He will become Deputy
Mark Armour
MA, FCA
Mark Armour joined the
boardin 2010. He is the
ChiefFinancial Ofcer of Reed
Elsevier Group plc and of its
two parent companies, Reed
Elsevier PLC and Reed Elsevier
NV. He will retire from Reed
Elsevier at the end of 2012.
From July 2012 he will join
theboard of The Financial
Reporting Council (FRC).
Prior to joining Reed Elsevier
in1995 he was a partner in
theLondon ofce of Price
Waterhouse.
From 2002 until 2004, he was
Chairman of The Hundred
Group of Finance Directors.
Hewas a member of the
Finance and Reporting
Working Group of the UK
Governments Company Law
Review Steering Group, which
reported in 2001, and a
member of the group
appointed by the FRC which
produced the Smith Report on
Audit Committees in 2003.
Geoffrey Bible
FCA (Aust), ACMA
Geoffrey Bible joined the
boardin 2002 as a nominee
ofAltria Group, Inc. following
completion of the Miller
Brewing Company transaction.
He served as Chief Executive
Ofcer of Altria Group, Inc.
from 1994 until April 2002 and
as Chairman of the Altria board
from January 1995 until August
2002, when he retired. He also
served as Chairman of the
board of Kraft Foods Inc. from
March 2001 until his retirement
in August 2002.
Dinyar Devitre
BA (hons), MBA
Dinyar Devitre joined the board
in 2007 as a nominee of Altria
Group, Inc. He is a member of
the board of Altria. Between
April 2002 and March 2008 he
was Senior Vice President and
Chief Financial Ofcer of Altria
and prior to his appointment
tothis position had held a
number of senior management
positions within the Altria
group. He is a director of
Western Union Company and
aspecial advisor to General
Atlantic LLC. He was a director
of Kraft Foods Inc. from 2002
until March 2007. He serves
asa Trustee of the Brooklyn
Academy of Music and is
aTrustee Emeritus of the
AsiaSociety.
Lesley Knox
MA
Lesley Knox joined the board
in2011. She is a non-executive
Director of Centrica plc and
isaTrustee of the Grosvenor
Estates and Chairman of
Grosvenor Group Limited. She
originally qualied as a solicitor
and then spent 15 years with
Kleinwort Benson from 1981 to
1996, rst in corporate nance,
where she became a director
in1986, and then as Chief
Executive of the institutional
asset management business.
In 1997 she moved to the
British Linen Bank, becoming
Governor in 1999, and was
subsequently a founder
director of British Linen
Advisers from 1999 to 2003.
She was until April 2012
Chairman of Alliance Trust plc
and has held a variety of
non-executive directorships
with international and British
companies, and is involved
with a number of arts and
charitable organisations.
John Manzoni
BEng, MEng, MBA
John Manzoni joined the
boardin 2004. He is President
and Chief Executive Ofcer of
Talisman Energy Inc. Prior to
joining Talisman in 2007 he was
Chief Executive of Rening and
Marketing of BP plc. He joined
BP in 1983 and was appointed
to the BP plc board in 2003. He
is a member of the Accenture
Energy Advisory Board.
It is proposed that Alan Clark
will be elected as an executive
director and appointed as Chief
Operating Ofcer of SABMiller
plc at the 2012 annual general
meeting, with the intention
thathe will succeed Graham
Mackay as Chief Executive
atthe 2013 annual general
meeting.
Miles Morland

Miles Morland joined the board
in 1999. He is founder and
Chairman of two companies
investing in Africa, Blakeney
Management and
Development Partners
International. He is also a
director of various companies
investing in the emerging world.
Dambisa Moyo
BSc, MPA, MBA, Ph.D
Dambisa Moyo joined the
board in 2009. She is an
international economist and
commentator on the global
economy and worked at
Goldman Sachs for eight years.
A Non-Executive Director
ofBarclays PLC and Barrick
Gold Corporation, Dambisa
previously worked at the World
Bank in Washington, D.C.
She is a Patron for Absolute
Return for Kids (ARK), a hedge
fund supported childrens
charity.
Carlos Alejandro Prez
Dvila BA, MPhil
Carlos Prez joined the board
in 2005, following completion
of the Bavaria transaction.
Heisa Managing Director at
Quadrant Capital Advisors,
Inc., President of Caracol TV
S.A. and serves on the board
and executive committee of
Valorem S.A. He is also a
Director of Comunican S.A.,
Cine Colombia S.A. and the
Queen Soa Spanish Institute.
He was previously an
investment banker at Goldman
Sachs & Co., S.G. Warburg &
Co. and Violy, Byorum &
Partners.
Rob Pieterse
Rob Pieterse joined the
boardin 2008. He is chairman
of thesupervisory boards of
Mercurius Groep B.V., and
Royal Grolsch N.V. and is a
member of the supervisory
board of CSM N.V.
He spent 25 years at the
multinational information
services company, Wolters
Kluwer N.V., where he was
Chairman from 2000 until
2003. He was a Non-Executive
Director of Mecom Group plc
between 2007 and 2009 and
has previously been a member
of the supervisory boards of
Connexxion Holding N.V.,
Essent N.V and Koninlijke
Wegener N.V. From 1999 to
2011, he served on the board
of VEUO, the association of
Dutch listed companies, and
until April 2011, he served on
the board of EuropeanIssuers.
He will retire at the 2012 annual
general meeting.
Cyril Ramaphosa
Bproc LLD (hc)
Cyril Ramaphosa joined the
board of SAB Ltd in 1997 and
was appointed to the board of
South African Breweries plc
upon its listing on the London
Stock Exchange in 1999. He
isthe founder and Chairman
ofShanduka Group and Joint
Non-Executive Chairman
ofMondi Group. He holds
directorships in Macsteel
Global B.V., MTN Group Ltd,
The Bidvest Group, Lonmin
plc, Standard Bank, Optimum
Coal Holdings Limited and
Alexander Forbes.
He is a former Secretary
General of the African National
Congress (ANC) and was
chairman of the Constitutional
Assembly, which negotiated
South Africas rst democratic
constitution.
Alejandro Santo Domingo
Dvila BA
joined the board in 2005,
following completion of the
Bavaria transaction. He is a
Managing Director at Quadrant
Capital Advisors, Inc., and
serves on the boards of
Valorem S.A., Comunican S.A.
and Caracol Television S.A. He
is the treasurer of Aid for AIDS
Charity, a member of the board
of trustees of The Metropolitan
Museum of Art and is also a
member of the board of the
US-based DKMS Americas
Foundation, WNET (Channel
Thirteen) and the Wildlife
Conservation Society.
Helen Weir
CBE FCMA
Helen Weir joined the board
in2011. She is Group Finance
Director of the John Lewis
Partnership. Between 2008
and 2011 she was Group
Executive Director Retail
atLloyds Banking Group plc,
having originally joined Lloyds
as Group Finance Director in
2004. From 2000 until 2004,
she was Group Finance
Director of Kingsher plc, and
before that Finance Director of
B&Q, which she joined in 1995.
She spent her early career at
Unilever and McKinsey & Co.
She has previously held a
number of non-executive
directorships, including Royal
Mail Holdings and the City
ofLondon Investment Trust.
She is a member of the Said
Business School Advisory
Council, and was previously
amember of the Accounting
Standards Board. She is a
Fellow of the Chartered
Institute of Management
Accountants.
Howard Willard
BA (hons), MBA
Howard Willard joined the
board in 2009 as a nominee
ofAltria Group, Inc. He is
Executive Vice President and
Group. He also oversees the
nancial services business
ofPhilip Morris Capital
Corporation andthe Strategy
and Business Development
organisation. Prior to this he
was Executive Vice President,
Strategy and Business
Development for Altria.
Additionally he has held various
leadership positions atPhilip
Morris USA Inc. in Finance,
Sales, Information Services
and Corporate Responsibility.
Before joining the Altria family
of companies in1992 he
worked at Bain & Company
and Salomon Brothers Inc.
Hecurrently serves on the
Executive Advisory Council for
the Robins School of Business
at the University of Richmond.
Alan Clark
MA, DLitt et Phil
Managing Director,
SABMiller Europe
Alan Clark was appointed
Europe in 2003. He joined SAB
Ltd in 1990 as Training and
Development Manager. He has
since held a number of senior
Marketing Director, SAB Ltd,
Managing Director, ABI and
Chairman, Appletiser South
Africa (Pty) Ltd. Before joining
the group, he practised as a
clinical psychologist and
lectured in psychology at
VistaUniversity in South Africa.
Corporate accountability
and risk assurance
committee (CARAC)
Executive committee
Nomination committee
Remuneration committee
Audit committee
Graham Mackay
BSc (Eng), BCom
Chief Executive
Graham Mackay joined
TheSouth African Breweries
Limited (SAB Ltd) in 1978 and
Executive Chairman of the beer
business in South Africa.
Managing Director in 1997
andChief Executive of South
African Breweries plc upon its
listing on the London Stock
Exchange in 1999.
He is the Senior Independent
Non-Executive Director of
Reckitt Benckiser Group plc
and a director of Philip Morris
International Inc.
He will become Executive
annual general meeting,
withthe intention that he will
continue in that role for one
year, before becoming
Non-Executive Chairman at the
2013 annual general meeting.
Jamie Wilson
LL.B.(Hons), CA, ATII
Jamie Wilson joined SABMiller
in 2005 and was elected as
adirector and appointed as
Chief Financial Ofcer in 2011.
Hehas held a number of senior
Senior Vice President, Market
Development and Strategy,
Miller Brewing Company, USA;
Russia; Managing Director for
SABMillers Central European
businesses, and Finance
Director for SABMiller Europe.
Before joining SABMiller he
held a number of senior roles
inthe global beverage industry,
notably Group Finance Director
and Managing Director
Operations of Highland Distillers
plc; Executive Chairman of
Maxxium; Managing Director of
Orpar SA, the parent company
of Remy Cointreau; Strategy/
Finance Director for Scottish
Courage Ltd; and Strategy/
Project Director for Scottish
&Newcastle plc.
Meyer Kahn BA (Law), MBA,
DCom (hc), SOE
Chairman
Meyer Kahn joined the group in
1966 and occupied executive
positions in a number of the
groups former retail interests
before being appointed to
theboard of SAB Ltd in 1981.
Managing Director in 1983 and
Executive Chairman in 1990.
In1997, he was seconded
full-time to the South African
Police Service as its Chief
Executive, serving for two and
a half years. He was appointed
Chairman of South African
Breweries plc upon its listing
onthe London Stock Exchange
in 1999.
Among other awards, he
holdsan honorary doctorate in
commerce from the University
of Pretoria and was awarded
The South African Police Star
for Outstanding Service (SOE)
in 2000.
Mr Kahn will retire at the 2012
John Manser
CBE, DL, FCA
Senior Independent Director
John Manser joined the board
in 2001. He is Chairman of
Shaftesbury PLC and was
Chairman of Intermediate
Capital Group plc and Deputy
Chairman of Colliers CRE plc
until 2010. He was previously
Chairman of Delancey PLC,
Hiscox Investment
Management Ltd and Robert
Fleming Holdings Limited,
aformer member of the
Presidents Committee of the
British Banking Association, a
directorof the Securities and
Investments Board between
1986 and 1993 and is a past
Chairman of the London
Investment Banking
Association.
He will become Deputy
Mark Armour
MA, FCA
Mark Armour joined the
boardin 2010. He is the
ChiefFinancial Ofcer of Reed
Elsevier Group plc and of its
two parent companies, Reed
Elsevier PLC and Reed Elsevier
NV. He will retire from Reed
Elsevier at the end of 2012.
From July 2012 he will join
theboard of The Financial
Reporting Council (FRC).
Prior to joining Reed Elsevier
in1995 he was a partner in
theLondon ofce of Price
Waterhouse.
From 2002 until 2004, he was
Chairman of The Hundred
Group of Finance Directors.
Hewas a member of the
Finance and Reporting
Working Group of the UK
Governments Company Law
Review Steering Group, which
reported in 2001, and a
member of the group
appointed by the FRC which
produced the Smith Report on
Audit Committees in 2003.
Geoffrey Bible
FCA (Aust), ACMA
Geoffrey Bible joined the
boardin 2002 as a nominee
ofAltria Group, Inc. following
completion of the Miller
Brewing Company transaction.
He served as Chief Executive
Ofcer of Altria Group, Inc.
from 1994 until April 2002 and
as Chairman of the Altria board
from January 1995 until August
2002, when he retired. He also
served as Chairman of the
board of Kraft Foods Inc. from
March 2001 until his retirement
in August 2002.
Dinyar Devitre
BA (hons), MBA
Dinyar Devitre joined the board
in 2007 as a nominee of Altria
Group, Inc. He is a member of
the board of Altria. Between
April 2002 and March 2008 he
was Senior Vice President and
and prior to his appointment
tothis position had held a
number of senior management
positions within the Altria
group. He is a director of
Western Union Company and
aspecial advisor to General
Atlantic LLC. He was a director
of Kraft Foods Inc. from 2002
until March 2007. He serves
asa Trustee of the Brooklyn
Academy of Music and is
aTrustee Emeritus of the
AsiaSociety.
Lesley Knox
MA
Lesley Knox joined the board
in2011. She is a non-executive
Director of Centrica plc and
isaTrustee of the Grosvenor
Estates and Chairman of
Grosvenor Group Limited. She
originally qualied as a solicitor
and then spent 15 years with
Kleinwort Benson from 1981 to
1996, rst in corporate nance,
where she became a director
in1986, and then as Chief
Executive of the institutional
asset management business.
In 1997 she moved to the
British Linen Bank, becoming
Governor in 1999, and was
subsequently a founder
director of British Linen
Advisers from 1999 to 2003.
She was until April 2012
Chairman of Alliance Trust plc
and has held a variety of
non-executive directorships
with international and British
companies, and is involved
with a number of arts and
charitable organisations.
John Manzoni
BEng, MEng, MBA
John Manzoni joined the
boardin 2004. He is President
Talisman Energy Inc. Prior to
joining Talisman in 2007 he was
Chief Executive of Rening and
Marketing of BP plc. He joined
BP in 1983 and was appointed
to the BP plc board in 2003. He
is a member of the Accenture
Energy Advisory Board.
It is proposed that Alan Clark
will be elected as an executive
director and appointed as Chief
Operating Ofcer of SABMiller
plc at the 2012 annual general
meeting, with the intention
thathe will succeed Graham
Mackay as Chief Executive
atthe 2013 annual general
meeting.
Miles Morland

Miles Morland joined the board
in 1999. He is founder and
Chairman of two companies
investing in Africa, Blakeney
Management and
Development Partners
International. He is also a
director of various companies
investing in the emerging world.
Dambisa Moyo
BSc, MPA, MBA, Ph.D
Dambisa Moyo joined the
board in 2009. She is an
international economist and
commentator on the global
economy and worked at
Goldman Sachs for eight years.
A Non-Executive Director
ofBarclays PLC and Barrick
Gold Corporation, Dambisa
previously worked at the World
Bank in Washington, D.C.
She is a Patron for Absolute
Return for Kids (ARK), a hedge
fund supported childrens
charity.
Carlos Alejandro Prez
Dvila BA, MPhil
Carlos Prez joined the board
in 2005, following completion
of the Bavaria transaction.
Heisa Managing Director at
Quadrant Capital Advisors,
Inc., President of Caracol TV
S.A. and serves on the board
and executive committee of
Valorem S.A. He is also a
Director of Comunican S.A.,
Cine Colombia S.A. and the
Queen Soa Spanish Institute.
He was previously an
investment banker at Goldman
Sachs & Co., S.G. Warburg &
Co. and Violy, Byorum &
Partners.
Rob Pieterse
Rob Pieterse joined the
boardin 2008. He is chairman
of thesupervisory boards of
Mercurius Groep B.V., and
Royal Grolsch N.V. and is a
member of the supervisory
board of CSM N.V.
He spent 25 years at the
multinational information
services company, Wolters
Kluwer N.V., where he was
Chairman from 2000 until
2003. He was a Non-Executive
Director of Mecom Group plc
between 2007 and 2009 and
has previously been a member
of the supervisory boards of
Connexxion Holding N.V.,
Essent N.V and Koninlijke
Wegener N.V. From 1999 to
2011, he served on the board
of VEUO, the association of
Dutch listed companies, and
until April 2011, he served on
the board of EuropeanIssuers.
He will retire at the 2012 annual
general meeting.
Cyril Ramaphosa
Bproc LLD (hc)
Cyril Ramaphosa joined the
board of SAB Ltd in 1997 and
was appointed to the board of
South African Breweries plc
upon its listing on the London
Stock Exchange in 1999. He
isthe founder and Chairman
ofShanduka Group and Joint
Non-Executive Chairman
ofMondi Group. He holds
directorships in Macsteel
Global B.V., MTN Group Ltd,
The Bidvest Group, Lonmin
plc, Standard Bank, Optimum
Coal Holdings Limited and
Alexander Forbes.
He is a former Secretary
General of the African National
Congress (ANC) and was
chairman of the Constitutional
Assembly, which negotiated
South Africas rst democratic
constitution.
Dvila BA
joined the board in 2005,
following completion of the
Bavaria transaction. He is a
Managing Director at Quadrant
Capital Advisors, Inc., and
serves on the boards of
Valorem S.A., Comunican S.A.
and Caracol Television S.A. He
is the treasurer of Aid for AIDS
Charity, a member of the board
of trustees of The Metropolitan
Museum of Art and is also a
member of the board of the
US-based DKMS Americas
Foundation, WNET (Channel
Thirteen) and the Wildlife
Conservation Society.
Helen Weir
CBE FCMA
Helen Weir joined the board
in2011. She is Group Finance
Director of the John Lewis
Partnership. Between 2008
and 2011 she was Group
Executive Director Retail
atLloyds Banking Group plc,
having originally joined Lloyds
as Group Finance Director in
2004. From 2000 until 2004,
she was Group Finance
Director of Kingsher plc, and
before that Finance Director of
B&Q, which she joined in 1995.
She spent her early career at
Unilever and McKinsey & Co.
She has previously held a
number of non-executive
directorships, including Royal
Mail Holdings and the City
ofLondon Investment Trust.
She is a member of the Said
Business School Advisory
Council, and was previously
amember of the Accounting
Standards Board. She is a
Fellow of the Chartered
Institute of Management
Accountants.
Howard Willard
BA (hons), MBA
Howard Willard joined the
board in 2009 as a nominee
ofAltria Group, Inc. He is
Executive Vice President and
Group. He also oversees the
nancial services business
ofPhilip Morris Capital
Corporation andthe Strategy
and Business Development
organisation. Prior to this he
was Executive Vice President,
Strategy and Business
Development for Altria.
Additionally he has held various
leadership positions atPhilip
Morris USA Inc. in Finance,
Sales, Information Services
and Corporate Responsibility.
Before joining the Altria family
of companies in1992 he
worked at Bain & Company
and Salomon Brothers Inc.
Hecurrently serves on the
Executive Advisory Council for
the Robins School of Business
at the University of Richmond.
Alan Clark
MA, DLitt et Phil
Managing Director,
SABMiller Europe
Alan Clark was appointed
Europe in 2003. He joined SAB
Ltd in 1990 as Training and
Development Manager. He has
since held a number of senior
Marketing Director, SAB Ltd,
Managing Director, ABI and
Chairman, Appletiser South
Africa (Pty) Ltd. Before joining
the group, he practised as a
clinical psychologist and
lectured in psychology at
VistaUniversity in South Africa.
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Executive committee
The executive committee (excom) is appointed by the Chief Executive.
Itcomprises the Chief Financial Ofcer, divisional managing directors
and directors ofgroup functions. Its purpose is to support the Chief
Executive in carrying out the duties delegated to him by the board.
Inthat context, excom co-ordinates brand and operational
executionand delivers strategic plans and budgets for the boards
consideration. Italso ensures that regular nancial reports are
presented to the board, that effective internal controls are in place
andfunctioning, and that there is an effective risk management
process in operation throughout the group.
Norman Adami
BBusSc (hons), MBA
Chairman and Managing
Director, SAB Ltd
Norman Adami was
reappointed Chairman and
Managing Director of The South
African Breweries Limited (SAB
Ltd) in 2008. He rst joined
SABLtd in 1979 and has held
anumber of senior positions
inthe group. These include
Regional Director, Operations
Director, Chairman and
Managing Director, SAB Ltd,
President and Chief Executive
Ofcer, Miller Brewing
Company and President and
Chief Executive Ofcer,
SABMiller Americas. He is an
independent non-executive
director of Allied Electronics
Corporation Limited.
Mark Bowman
BCom, MBA
Managing Director,
SABMiller Africa
Mark Bowman was appointed
Managing Director of SABMiller
Africa in 2007. He joined
SABMillers beer division in
1993 and has held various
senior positions in the group.
These include Managing
Director of SABMillers Polish
subsidiary Kompania
Piwowarska S.A., Managing
Director of Amalgamated
Beverage Industries Ltd (ABI)
(now the Soft Drinks Division
ofSAB Ltd) and Chairman
ofAppletiser. He is an
independent non-executive
director of Tiger Brands Limited.
Sue Clark
BSc (hons), MBA
Corporate Affairs Director,
SABMiller plc
Sue Clark was appointed
Corporate Affairs Director,
SABMiller plc in 2003. Prior
tothis, she held a number of
senior roles in UK companies,
including Director of Corporate
Affairs, Railtrack Group from
2000 to 2003 and Director of
Corporate Affairs, Scottish
Power plc from 1996 to 2000.
She will become Managing
Director of SABMiller Europe
inJune 2012.
She is a Trustee of the Clore
Social Leadership Programme.
John Davidson
MA, BCL (Oxon)
General Counsel and
GroupCompany Secretary,
SABMiller plc
John Davidson joined the
group as General Counsel and
Group Company Secretary in
2006. Before joining SABMiller,
he spent his entire legal
careerat Lovells, a leading
international law rm, where he
had been a partner since 1991.
John was the Chairman for
2010 and 2011 of the GC100
group (the association of
general counsel and company
secretaries of companies in the
FTSE 100).
Domenic De Lorenzo
BCom (hons), CA (SA)
Director, Corporate
Financeand Development,
SABMiller plc
Domenic De Lorenzo joined
SABMillers corporate nance
team in 1996 from UAL
Investment Bank in South
Africa. He became Director,
Corporate Finance and
Development for Europe and
the Americas in 2000 and
theDirector of the global team
in 2010.
Nick Fell
BA (hons)
Marketing Director,
SABMiller plc
Nick Fell was appointed
Marketing Director, SABMiller
plc in 2006. Prior to this,
heworked for Cadbury
Schweppes Plc, as President,
Global Commercial Strategy
and also as Director of
Marketing, Cadbury Trebor
Bassett. He previously worked
for Diageo plc for 15 years
inanumber of senior roles
including Global Brands
Director, Johnnie Walker,
andGroup Marketing
Director,Guinness Brewing.
Tony van Kralingen
BA (hons)
Director: Supply Chain
&Human Resources,
SABMiller plc
Tony van Kralingen was
appointed Director: Supply
Chain & Human Resources for
the SABMiller group in 2008.
He joined SAB Ltd in 1982 and
positions in the group. These
include Operations Director
and Marketing Director,
SABLtd, Chairman & Chief
Executive Ofcer, Plzensk
Prazdroj a.s. and, most
recently, Chairman and
Managing Director: SAB Ltd.
In his current role he is
accountable for group
procurement, technical and
R&D and human resources.
Karl Lippert
M.Eng (Mechanical)
President,
SABMiller Latin America
Karl Lippert was appointed
President, SABMiller Latin
America in 2011. He joined
thegroup in 1992 and has
extensive experience in the
global brewing industry. Prior
tohis appointment as President
of Bavaria S.A. in Colombia
in2006, Karl was Managing
Director of Kompania
Piwowarska S.A. in Poland,
and previously held senior
positions as Managing Director
of Dreher in Hungary, Sales
and Distribution Director for
SABMiller Europe, and various
positions within SAB Ltd in
South Africa, including General
Manager, Distribution Services
Manager and Operations
Manager.
Ari Mervis
BCom
Managing Director,
SABMiller Asia Pacic and
Chief Executive Ofcer,
Fosters
Ari Mervis was appointed
Managing Director Asia Pacic
Fosters in 2011, having been
Asia since 2007. He joined
SABs soft drinks division, ABI,
in 1989 and has held various
senior positions in sales,
marketing, nance and general
management. He has been
Managing Director of
Swaziland Bottling Company
and Appletiser as well as
operations in Russia and
Australia.
The directors have pleasure in submitting their report to shareholders,
together with the audited annual nancial statements for the year
ended 31 March 2012.
Principal activities and business review
SABMiller plc is a holding company which has brewing and beverage
interests across six continents. Our principal subsidiaries, associates
and joint ventures are listed in note 35 to the consolidated nancial
statements. Our principal activities are the manufacture, distribution
and sale of beverages.
We are required by the Companies Act 2006 to produce a fair review
of our business, including a description of the principal risks and
uncertainties we face, our development and performance during the
year, and our position at the end of the year. These are all covered in
the business review on pages 1 to 44 of this annual report. Other key
performance indicators and information relating to environmental
matters, employee matters and social and community issues required
by the business review are set out in our sustainable development
review and people section on pages 46 to 51 of this annual report.
Signicant acquisitions, disposals, nancing transactions,
investments and material developments during the year
In April 2011 we entered into a ve-year US$2,500 million committed
syndicated facility, with the option of two-one year extensions. This
facility replaced our existing US$2,000 million and US$600 million
committed syndicated facilities, which were both voluntarily cancelled.
In May 2011 Birra Peroni agreed to sell its in-house distribution
business to the Tuo Group for cash consideration. The disposal was
completed in June 2011.
Also in May, SABMiller Africa BV agreed to sell its 20% shareholding
inits associate, Kenya Breweries Limited (KBL), to East African
Breweries Limited (EABL), subject to EABL disposing of its 20%
shareholding in SABMiller Africa BVs subsidiary, Tanzania Breweries
Limited (TBL), by way of public offer through the Dar-es-Salaam Stock
Exchange. SABMiller International BV also agreed to terminate a
brewing and distribution agreement with KBL, with KBL ceasing to
distribute SABMillers brands in Kenya. Pursuant to that agreement,
the group disposed of its 20% shareholding (12% effective economic
interest) in KBL in November 2011 for cash consideration of US$205
million. SABMiller Africa BV applied for all the shares offered in TBL,
but the offer was substantially oversubscribed, and after priority
applications were made to applicants who were Tanzanian residents
or East African residents, SABMiller Africa BV was allocated shares
representing an additional 4.72% of TBL, increasing its shareholding
to 58% (36% group effective economic interest).
In June 2011 we announced a proposal to acquire Fosters Group
Limited (Fosters). Agreement was reached with the Fosters board
inSeptember 2011 for a recommended cash offer. The acquisition, via
a scheme of arrangement, was approved by the Fosters shareholders
in December 2011 and subsequently implemented on 16 December
2011 with the approval of the Supreme Court of Victoria. The cash
consideration for the acquisition was US$10,598 million. As part of
theproposal to acquire Fosters we separately reached agreement
with Coca-Cola Amatil Limited to acquire its 50% share of our joint
venture, Pacic Beverages Pty Limited for cash consideration of
US$343 million, and this acquisition was completed in January 2012.
In September 2011 SABMiller Holdings Inc, a wholly owned indirect
subsidiary of SABMiller plc, entered into a US$12,500 million
committed syndicated facility to nance the acquisition of Fosters and
related purposes. The facility consisted of four tranches; a US$8,000
million one-year term facility with the option of two six-month
extensions; a US$2,500 million three-year term facility; a US$1,000
million ve-year term facility; and a US$1,000 million ve-year revolving
credit facility. In December 2011 the group drew US$7,850 million
under the one-year term facility; AUD2,000 million (approximately
US$2,021 million) and US$100 million under the three-year term
facility and US$750 million under the ve-year term facility. The
undrawn balance of those facilities was cancelled and the amount
ofthe revolving credit facility was reduced to US$500 million.
In October 2011 we announced our proposed agreement with the
Anadolu Group (Anadolu Endstri Holding A.S ., Yazclar Holding
A.S .and zilhan Snai Yatrm A.S .), and Anadolu Efes Biraclk ve Malt
Sanayii A.S . (Anadolu Efes) to form a strategic alliance for Turkey,
Russia, CIS, Central Asia and the Middle East. The strategic alliance
completed in March 2012, under which our Russian and Ukrainian
beer businesses were contributed to Anadolu Efes in exchange for
a 24% equity stake in the enlarged Anadolu Efes.
In November and December 2011 two of our African subsidiaries
Zambian Breweries plc in Zambia and Nile Breweries Ltd in Uganda,
launched rights issues. On closing of the rights issue in Uganda our
subsidiarys interest increased by 2.7% to 99.8% (group effective
economic interest increasing from 60% to 62%). The rights issue in
Zambia closed with our interest remaining unchanged (group effective
economic interest 54%).
With effect from 1 January 2012, together with Castel, we
implemented a number of organisational changes in our African
operations as part of our strategic alliance agreement. We combined
the operational management of our Angolan businesses with the
Angolan businesses of our associate, Castel, with all of the Angolan
businesses, in which the group retains an associate interest, being
managed from that date by Castel. We acquired a 65% interest
(effective 33% interest) in International Breweries plc in Nigeria,
fromBrasseries Internationales Holding Ltd (BIH), part of the Castel
group, in exchange for cash and a dilution of our effective interests
inour existing Nigerian businesses, Pabod Breweries Ltd and
VolticNigeria Ltd.
Also in January 2012, SABMiller Holdings Inc issued bonds to the
value of US$7,000 million, in four tranches: US$1,000 million 1.85%
Notes due January 2015, US$2,000 million 2.45% Notes due January
2017, US$2,500 million 3.75% Notes due January 2022 and US$1,500
million 4.950% Notes due January 2042, all guaranteed by SABMiller
plc. The proceeds of the bonds were used to repay US$7,000 million
under the one-year term facility.
In the same month our subsidiary in Mozambique, Cervejas de
Moambique SARL, launched a rights issue. Our interest on closing
remained unchanged at 79% (group effective economic interest 49%).
In March 2012 SABMiller Holdings Inc repaid from existing cash
resources the remaining US$850 million balance outstanding on
theone-year term facility, which was then cancelled.
Directors report
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Directors report continued
Post balance sheet events
There are no material post balance sheet events.
Directors
The names and biographical details of the current directors are set
outon pages 52 and 53. All the current directors served throughout
the period, except Ms Knox and Ms Weir (who were both appointed
tothe board on 19 May 2011) and Mr Wilson (who was appointed to
the board on 21 July 2011). Mr Wyman served as a director until his
retirement from the board on 21 July 2011. As detailed in our corporate
governance report, it is intended that Mr Kahn and Mr Pieterse will
retire from the board at the conclusion of the 2012 annual general
meeting and that Dr Clark will be proposed for election as a third
executive director. Details of the interests in shares and options
ofthedirectors who held ofce during the year and any persons
connected to them are set out in the directors remuneration
reportonpages 68 to 83.
Corporate governance
The directors approach to corporate governance, and statements of
our application of the UK Corporate Governance Code are set out in
the corporate governance report, which forms part of this directors
report, on pages 59 to 67 and in the directors remuneration report
onpages 68to 83.
Share capital
During the year, our issued ordinary share capital increased from
1,659,040,014 shares of 10 US cents each to 1,664,323,483 shares
of10 US cents each, as a result of the issue of 5,283,469 ordinary
shares to satisfy the exercise of options granted under our share
incentive plans, details of which are shown in note 26 to the
consolidated nancial statements. At 31 March 2012 we held
atotalof72,068,338 ordinary shares in treasury.
In addition, we have had 50,000 deferred shares of 1 each in issue
since our incorporation in 1998. None were issued during the year.
During the year 1,406,612 ordinary shares were purchased by the
trustee on behalf of the Employees Benet Trust (EBT) (at an average
price of 22.54 per share) which amounted to 0.09% of the issued
ordinary shares of the company, in order to ensure that the EBT
continued to hold sufcient ordinary shares to meet potential future
obligations in respect of performance shares conditionally awarded
under the Performance Share Award Schemes. The total
consideration paid amounted to 31,697,759.
Purchase of own shares
At the last annual general meeting, shareholder authority was
obtained for us to purchase our own shares up to a maximum of
10%of the number of ordinary shares in issue as at 2 June 2011.
Thisauthority is due to expire at the earlier of the next annual general
meeting or 21 October 2012, and remains exercisable provided that
certain conditions relating to the purchase are met. The notice of
annual general meeting proposes that shareholders approve a
resolution updating and renewing the authority allowing us to
purchase our own shares.
We did not repurchase any shares during the year for the purpose
ofcancellation, holding in treasury or for any other purpose.
Annual general meeting
Our 2012 annual general meeting will be held at Pennyhill Park
Hotel,London Road, Bagshot, Surrey GU19 5EU, UK at 11.00am
onThursday 26 July 2012. Copies of the Notice of this meeting may
beobtained from our website.
Dividends
An interim dividend of 21.5 US cents per share was paid to
shareholders on 9 December 2011, in respect of the year ended
31March 2012. Details of the nal dividend proposed by the board
forthe year ended 31 March 2012 are set out below:
Amount of nal dividend proposed
by the board:
69.5 US cents per share
Total proposed dividend for the
year ended 31 March 2012:
91 US cents per share
If approved, the nal dividend will be payable to shareholders on
either section of the register on 10 August 2012 in the following way:
Dividend payable on: 17 August 2012
Currency of payment: South African rands to
shareholders on the RSA
section of the register,
US dollars to shareholders
shown as having an address
in the USA and recorded on
the UK section of the register
(unless mandated otherwise),
Pounds sterling to all other
shareholders on the UK section
of the register.
Ex-dividend dates: 3 August 2012 for shares
traded on the JSE Limited,
South Africa.
8 August 2012 for shares
traded on the London Stock
Exchange (LSE).
The rate of exchange for conversion from US dollars will be calculated
on 25 July 2012 and published on the RNS of the LSE and the SENS
of the JSE Limited on 26 July 2012.
Since the introduction on 1 April 2012 of a new dividend withholding
tax in South Africa dividends paid to shareholders registered on the
RSA section of the register will, unless a shareholder qualies for an
exemption, be subject to a dividend withholding tax at a rate of 15%.
The dividend withholding tax is only of direct application to shareholders
registered on the RSA section of the register, who should direct any
questions about the application of the new dividend withholding tax to
Computershare Investor Services (Pty) Limited, Tel:+27 11 373-0004.
Note 9 to the consolidated nancial statements discloses dividends waived.
Donations
During the year the group contributed US$34 million to corporate
social investment programmes, of which US$10,367,220 represented
charitable donations. Of this amount charitable donations amounting
to US$170,561 were made by SABMiller plc and our UK subsidiary,
Miller Brands (UK) Limited, both in the UK and overseas, comprising
donations in respect of community development, health and
education, the environment and other causes.
To support the democratic process in El Salvador, the groups
subsidiary Industrias La Constancia, SA de CV made donations
totalling US$175,000, allocated across all political parties participating
in the legislative elections at a national level in accordance with rules
laid down by the electoral authorities. In addition it donated soft drinks
to the value of US$35,000 to those parties for the benet of volunteers
assisting during the elections.
It remains our policy not to make donations to political organisations
inthe European Union. Other political donations are only made by
exception, and where permitted by local laws, and must be consistent
with building multi-party democracy.
Ethical business conduct
The SABMiller Code of Business Conduct and Ethics sets out the high
ethical standards with which all SABMiller employees are expected
tocomply, and forms part of our wider programme of policies and
procedures throughout the group for combatting bribery and
corruption. We are committed to conducting business in a way
thatisfair, ethical and within the framework of applicable laws and
regulations. During the course of the year, we reviewed our policies
and procedures in light of the implementation of the UK Bribery Act,
related adequate procedures guidance, and developing corporate
best practice, and made a number of enhancements, including the
rollout of a new group-wide anti-bribery policy. Key aspects covered
by our programme include, amongst other matters, our anti-bribery
policy, due diligence and other forms of assurance in relation to
business partners, training for our employees and monitoring
andreporting mechanisms. We offer independent condential
whistleblower hotlines in the countries in which we operate so that
ouremployees can reportany breach of our Code, including bribery,
fraud or corruption.
Employment, environmental and social policies
Our aim is to be the employer of choice in each country in which our
group companies operate. To achieve this, each operating company
designs employment policies which attract, retain and motivate
thehighest quality of staff. We are committed to an active equal
opportunities policy, from recruitment and selection, through training
and development, appraisal and promotion to retirement. Within
theconstraints of local law, it is our policy to ensure that everyone is
treated equally, regardless of gender, colour, nationality, ethnic origin,
race, disability, marital status, sexual orientation, religion or trade
union afliation. We value the benets of employing people of different
races, genders, creeds and backgrounds. If employees become
disabled, efforts are made to allow them to continue in their role, or
asuitable alternative role, through making reasonable adjustments.
We are committed to the 10 principles of the United Nations Global
Compact, which sets out universally accepted principles in the
areasof human rights, labour, the environment and anti-corruption.
Our website sets out these principles and our progress towards
achieving them.
We are committed to regular communication and consultation with
our employees and we encourage employee involvement in our
performance. We have global distribution of real time news through
our global intranet, which is available to all of the groups businesses
to help inform employees about what is happening in our global
operations. Further information is provided to employees at
regionaland country level by way of newsletters and electronic
communication. Certain employees throughout the group are eligible
to participate in the groups share incentive plans.
The sustainable development review on pages 46 to 49 gives an
overview of the progress against our 10 sustainable development
priorities and of the impact of our business on the environment. More
detailed information is provided in our sustainable development report
2012, available on our website.
Research and development
To ensure improved overall operational effectiveness, we place
considerable emphasis on research and development in our global
technical activities. This enables us to develop new products,
packaging, processes and manufacturing technologies. Continued
progress was made in our research in the key areas of raw materials,
brewing, avour stability, packaging materials and energy and water
saving. Our total investment in research and development in the year
under review was US$7 million (2011: US$7 million).
Payment of suppliers
Our policy is to pay invoices in accordance with the terms of payment
agreed in advance. At the year end, the amount we owed to trade
creditors was equivalent to 49.4 days (2011: 48.8 days) of purchases
from suppliers.
Overseas branches
SABMiller plc does not have any branches registered overseas.
Going concern and audit
Page 84 details the directors responsibilities for preparing the
consolidated nancial statements. As set out in that statement,
thedirectors are satised that SABMiller plc is a going concern.
PricewaterhouseCoopers LLP have expressed their willingness
tocontinue in ofce as auditors and resolutions proposing their
re-appointment and authorising the board to set their remuneration
will be submitted to the forthcoming annual general meeting.
Directors indemnities
The company has granted rolling indemnities to the directors,
uncapped in amount, in relation to certain losses and liabilities which
they may incur in the course of acting as directors of the company or
of one or more of its subsidiaries. The company secretary and deputy
company secretary have also been granted indemnities, on similar
terms, covering their roles as company secretary and deputy company
secretary respectively of the company and as directors or as company
secretary of one or more of the companys subsidiaries. The board
believes that it is in the best interests of the group to attract and retain
the services of the most able and experienced directors and ofcers
by offering competitive terms of engagement, including the granting
ofsuch indemnities.
The indemnities were granted at different times according to the law
inforce at the time and where relevant are categorised as qualifying
third-party indemnity provisions as dened by Section 309B of the
Companies Act 1985 and Section 234 of the Companies Act 2006.
They will continue in force for the benet of directors and ofcers for
as long as they remain in their positions.
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Directors report continued
Substantial shareholdings
Details of notications received by the company in accordance
withthe Disclosure and Transparency Rules as at 8 June 2012 and
ofpersons with signicant direct or indirect holdings known to the
company at the year end are set out in the ordinary shareholding
analyses on page 182 of this annual report.
Financial instruments
Information on our nancial risk management objectives and policies
and details of our exposure to price risk, credit risk, liquidity risk
andcash ow risk are contained in note 23 to the consolidated
nancial statements.
Other disclosures required by the Companies Act and the
Disclosure and Transparency Rules
We do not have any contractual or other arrangements that individually
are essential to the business of the company or the group as a whole.
The structure of our share capital, including the rights and obligations
attaching to each class of share and the percentage of the share
capital that each class of share comprises, is set out in note 26 to
theconsolidated nancial statements. There are no securities of
thecompany that grant the holder special control rights.
At 31 March 2012 our employees benet trusts held 5,941,686
ordinary shares in the company. By agreement with the company,
voting rights attached to these shares are not exercised unless shares
are benecially owned by a participant and that participant has
instructed the underlying shareholder to vote. As at 31 March 2012
there were no benecially held shares in our employees benet trusts.
The directors are responsible for the management of the business of
the company and may exercise all the powers of the company subject
to the articles of association and relevant statutes. Powers of the
directors relating to the issuing and buying back of shares are set out
in the articles of association. These powers are subject to renewal by
our shareholders each year at the annual general meeting.
Our articles of association give the board of directors power to
appoint directors. The articles of association may be amended
byspecial resolution of the shareholders. Directors appointed by
theboard are required to submit themselves for election by the
shareholders at the next annual general meeting. Additionally, as
disclosed in the corporate governance report on pages 59 to 67,
AltriaGroup, Inc. (Altria) and BevCo Ltd (BevCo) have power under
their respective relationship agreements with the company to
nominate directors for appointment to the board and certain
committees. These relationship agreements also regulate processes
applicable in relation to the acquisition or disposal of shares by Altria
and BevCo.
We have a number of facility agreements with banks which contain
provisions giving rights to the banks upon a change of control of
thecompany. A change of control of the company would also give
TheCoca-Cola Company certain rights under its bottling agreements
withvarious subsidiaries of the company, and in certain limited
circumstances may give China Resources Enterprise, Limited the
ability to exercise certain rights under a shareholders agreement in
relation to the companys associate CR Snow. A change of control
may also give the Molson Coors Brewing Company the ability to
exercise certain rights under the MillerCoors operating agreement,
and would result in certain minority protection rights contained in our
relationship agreement with the Anadolu Group and Anadolu Efes
ceasing to apply.
The company does not have any agreements with any director
orofcer that would provide compensation for loss of ofce
oremployment resulting from a takeover.
Our articles of association allow directors, in their absolute discretion,
to refuse to register the transfer of a share in certicated form which
isnot fully paid or the transfer of a share in certicated form on which
the company has a lien. If that share has been admitted to the Ofcial
List, the board may not refuse to register the transfer if this would
prevent dealings in our shares from taking place on an open and
proper basis. The board may also refuse to register a transfer of a
share in certicated form unless the instrument of transfer is lodged,
duly stamped (if stampable), at the address at which our register is
held or at such other place as the directors may appoint, and (except
in the case of a transfer by a nancial institution where a certicate
hasnot been issued in respect of the share) is accompanied by the
certicate for the share to which it relates and such other evidence as
the directors may reasonably require to show the right of the transferor
to make the transfer, is in respect of only one class of share and is
infavour of not more than four transferees jointly.
Transfers of shares in uncerticated form must be made in
accordance with, and subject to, the Uncerticated Securities
Regulations (the Regulations), the facilities and requirements of the
relevant CREST system and such arrangements as the board may
determine in relation to the transfer of certicated shares (subject
tothe Regulations).
Transfers of shares listed on the JSE in uncerticated form must be
made in accordance with, and subject to, the Securities Services
Act2004, the Rules and Directives of the JSE and STRATE Ltd.
Certicated shares may be transferred prior to dematerialisation,
butshare certicates must be dematerialised prior to trading in
theSTRATE environment.
Pursuant to our code for securities transactions, directors and
persons discharging managerial responsibilities require, and
employees may in certain circumstances require, approval to deal
inthe companys shares.
Unless the directors otherwise determine, no shareholder is entitled in
respect of any share held by them to vote either personally or by proxy
at a shareholders meeting or to exercise any other right conferred by
membership in relation to shareholders meetings if any call or other
sum presently payable by them to the company in respect of that
share remains unpaid. In addition, no shareholder will be entitled
tovote if they have been served with a notice after failing to provide
the company with information concerning interests in those shares
required to be provided under Section 793 of the Companies Act
2006. Restrictions on the rights of the holders of convertible shares
and deferred shares are set out in note 26 to the consolidated
nancial statements (although there are no convertible shares
currently in issue).
Votes may be exercised in person, by proxy, or in relation to corporate
members, by a corporate representative. The deadline for delivering
proxy forms is 48 hours before the time for holding the meeting.
John Davidson
General Counsel and Group Company Secretary
For and on behalf of the board of SABMiller plc
11 June 2012
Corporate governance
Introduction
This report describes the directors approach to corporate governance
and how the board applies the UK Corporate Governance Code.
The directors are committed to maintaining the highest standards
ofcorporate governance, which they believe are fundamental to
discharging their stewardship responsibilities. In his statement on
pages 7 to 11 of the annual report, the Chairman reports personally
on how we apply the principles of the Code relating to the role and
effectiveness of the board.
Application of the UK Corporate Governance Code
The board applied all of the principles and provisions of the Code
throughout the year ended 31 March 2012, except that the audit
committee did not consist solely of independent directors. Under our
relationship agreement, as approved by shareholders in 2002 and in
2005, Altria Group, Inc. (Altria) has the right to nominate a director to
the audit committee, and has nominated Mr Devitre, whom the board
does not consider to be an independent director for the purposes of
the Code.
The board nevertheless considers that the composition of the
auditcommittee remains appropriate, given Altrias interest as the
companys largest shareholder, and is satised that, having regard
tothe experience and background in nancial matters of Mr Devitre,
as a former chief nancial ofcer of Altria, the independence and
effectiveness of the audit committee in discharging its functions
interms of the Code continue to be considerably enhanced and
notinthe least compromised.
In April 2012 we announced a number of changes to the board
whichwill take place at the 2012 annual general meeting, including
theretirement of Mr Kahn as Chairman; the appointment of Mr Mackay
as Executive Chairman for an interim period of one year; and the
appointment of Dr Clark as an executive director and as Chief
Operating Ofcer, with the intention that he will succeed Mr Mackay
as Chief Executive at the end of that interim period, when Mr Mackay
will become non-executive Chairman.
The Code recommends that a chief executive should not go on to be
chairman of the same company and that when, exceptionally, a board
decides that a chief executive should become chairman, the board
should consult major shareholders in advance and should set out its
reasons to shareholders. The Code also recommends that the roles
ofchairman and chief executive should not be exercised by the
sameindividual and that the division of responsibilities between the
chairman and chief executive should be clearly established, set out
inwriting and agreed by the board. Upon announcement of the
proposed changes, the board wrote to all shareholders explaining
theprocess that had been followed and setting out the reasons for
these appointments.
Before concluding that these appointments were in the best interests
of the company and would promote the success of SABMiller for the
benet of shareholders as a whole, the board considered carefully the
requirements of the position of chairman in the context of the groups
size and geographical spread. The board recognised the need for
achairman who would be able to commit himself fully to the role
andprovide stability and continuity for a number of years, and that
thecandidate would need a wide range of skills and expertise.
Thenomination committee came to the unanimous conclusion that
MrMackay was the outstanding candidate for the position and the
decision to nominate him received the unanimous support of the
directors and the strong backing of our two major shareholders, Altria
and BevCo Ltd (a holding company of the Santo Domingo Group) and
was made after discussion with representatives of major institutional
shareholders. The decision to appoint Dr Clark as Chief Operating
Ofcer to facilitate a staged handover of responsibilities recognises
the complexities of our global business and our many signicant
external relationships and partnerships.
The board also considered carefully whether it would be appropriate
to appoint an interim chairman for 12 months before Mr Mackay
becomes non-executive chairman but concluded this would not be in
the best interests of the company or its shareholders as it would not
provide the appropriate continuity of strategic direction and oversight
that the group requires.
Any risk of an over-concentration of decision making powers in one
person will be mitigated by the formal appointment of Mr Manser as
Deputy Chairman, the fact that Mr Mackays appointment as Executive
Chairman is for a pre-determined and limited period of one year, and
the proposed appointment of Dr Clark as a third executive director. It is
also the boards intention now to begin the process of recruiting a new
independent non-executive director, with the expectation that in due
course he or she could become the senior independent director in
succession to Mr Manser.
Leadership and effectiveness
Board of directors: composition, independence and renewal
Composition
The board currently consists of the Chairman (Mr Kahn); nine
independent non-executive directors (including Mr Manser, the
SeniorIndependent Director); ve non-executive directors who are not
considered to be independent; and two executive directors (Mr Mackay,
the Chief Executive, and Mr Wilson, the Chief Financial Ofcer). Short
biographies of each of the directors are on pages 52 and 53.
The size and certain aspects of the composition of the board and of
the audit, nomination and corporate accountability and risk assurance
committees continue to be determined in part by the terms of our
relationship agreements with Altria and with BevCo, both of which
have been approved by the shareholders of SABMiller.
The agreement with Altria limits the size of the board to a maximum of
15 directors, of whom no more than two are to be executive directors,
up to three are to be non-executive directors nominated by Altria,
upto two are to be non-executive directors nominated by BevCo,
andup to eight are to be non-executive directors nominated by the
board. The agreement with BevCo allows BevCo to nominate up
totwo non-executive directors for appointment to the board.
As was the case last year, the number of directors on the board
currently exceeds the number permitted under our agreement with
Altria. If Dr Clark is elected by shareholders at the forthcoming annual
general meeting on 26 July 2012, the board will have three executive
directors, which also exceeds the number contemplated by our
agreement. Altria has given its consent to these changes in order
tofacilitate the progressive renewal of the board and the broadening
of the diversity of background, gender and experience at board level,
and to enable the boards agreed executive succession planning to
beimplemented. The board is grateful to Altria for its agreement to
permit the maximum number of directors and executive directors
allowed under the relationship agreement to be exceeded for the
timebeing, and also for its agreement that the board should begin
theprocess of recruiting a new independent director, on the
understanding that in the absence of unforeseen circumstances,
thesize of the board will gradually be reduced over the next two
years, to restore the number of directors to that envisaged by the
agreement, while still applying the provision of the Code that at least
half of the directors (excluding the Chairman) should be independent
non-executive directors.
Altria and BevCo have each exercised their right under their
respectiveagreements to nominate one director for appointment to
the nomination committee. Both Altria and BevCo have the right to
nominate directors for appointment to the corporate accountability
and risk assurance committee (CARAC), although neither Altria nor
BevCo currently exercise this right, and Altria has exercised its right
tonominate one director for appointment to the audit committee.
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Corporate governance continued
Independence
The board considers nine directors Mr Armour, Ms Knox, Mr Manser,
Mr Manzoni, Mr Morland, Dr Moyo, Mr Pieterse, Mr Ramaphosa and
Ms Weir to be independent for the purposes of the Code. The board
considers ve non-executive directors not to be independent for the
purposes of the Code: Mr Bible, Mr Devitre and Mr Willard, as they are
nominees of Altria, the companys largest shareholder; and Mr Santo
Domingo and Mr Prez, as they are nominees of the Santo Domingo
Group, the companys second largest shareholder. The test of
independence under the Code does not apply in relation to the
Chairman, Mr Kahn.
If a director has served for a period of nine years or more, the Code
requires the board to consider whether that director continues to be
independent. In respect of each of the three independent directors
who have served the board for more than nine years and are
offeringthemselves for re-election (Mr Manser, Mr Morland and
MrRamaphosa), the board has therefore considered specically
whether their length of service has compromised their independence.
In each case the board has determined that the director concerned
remains independent in character and judgement and that there are
no relationships or circumstances which are likely to affect, or could
appear to affect, his judgement, and that the independence of
character and judgement of each of the directors concerned is not
inany way affected or impaired by length of service. The board has
also conducted a rigorous review of the performance of Mr Manser,
Mr Morland and Mr Ramaphosa and considers that each of these
directors continues to bring invaluable integrity, wisdom and
experience to the board and to contribute positively to board and
committee deliberations. The board is therefore entirely satised
astothe performance and continued independence of judgement
ofeach of these directors.
Progressive renewal of the board
The board continues to believe that its overall composition remains
appropriate, having regard in particular to the independence of
character and integrity of all of its directors, and the experience
andskills which they bring to their duties.
It is now 13 years since the company listed on the London Stock
Exchange, and SABMiller has been fortunate to retain the services
ofseveral distinguished non-executive directors the Chairman,
MrBible, Mr Manser, Mr Morland and Mr Ramaphosa for all or most
of that period. They have provided considerable stability to the board
and the board has beneted greatly from the presence of individuals
who have over time gained valuable insight into the group, its markets
and the industry.
Nevertheless, the directors are committed to the progressive refreshment
of the board in terms of age, gender and balance of skills, with the
appointment of ve new independent non-executive directors over
thepast four years, including the appointment of two new independent
non-executive directors during the year ended 31 March 2012, with
MsKnox and Ms Weir both joining our board in May 2011. In line with
ourcontinuing commitment to this policy, it is the boards intention now
tobegin the process of recruiting a new independent non-executive
director, with the expectation that in due course he or she could become
the senior independent director in succession to Mr Manser.
Mr Wilson was elected as a director and appointed as Chief Financial
Ofcer in July, succeeding Mr Wyman who retired at the July 2011
In April 2012, we announced that Mr Pieterse had elected to retire
andwould not offer himself for re-election at the 2012 annual general
meeting. Although his decision was accepted with sadness the group
will continue to benet from Mr Pieterses knowledge and experience
on Grolschs supervisory board.
Also in April, as detailed above, we announced the retirement of
MrKahn and the consequent succession plans.
The Code recommends that all directors should stand for annual
re-election and the board has decided that all directors, save those
who are retiring, should stand for re-election at the next annual
general meeting.
Directors attendance (1 April 2011 to 31 March 2012) and committee memberships
Independent
Board Audit Remuneration Nomination CARAC AGM
Attended Possible Attended Possible Attended Possible Attended Possible Attended Possible Attended
J M Kahn N/A 7 7 1 1 2 2 Y
E A G Mackay N/A 7 7 2 2 Y
M I Wyman N/A 3 3 Y
J S Wilson N/A 4 4 2 2 N/A
M H Armour Yes 7 7 4 4 3 3 Y
G C Bible No 7 7 1 1 Y
D S Devitre No 7 7 4 4 Y
L M S Knox Yes 4 5 2 3 2 2 Y
P J Manser Yes 6 7 4 4 3 3 1 1 2 2 Y
J A Manzoni Yes 6 7 3 3 1 1 2 2 Y
M Q Morland Yes 7 7 4 4 3 3 1 1 Y
D F Moyo Yes 5 7 1 2 Y
C A Prez Dvila No 6 7 Y
R Pieterse Yes 7 7 2 2 Y
M C Ramaphosa Yes 6 7 1 1 1 2 Y
A Santo Domingo Dvila No 7 7 1 1 Y
H A Weir Yes 5 5 2 3 Y
H A Willard No 6 7 Y
Mr Manser was unable to attend the board meeting in April 2011. The date
ofthat meeting was moved from that originally scheduled, and he had a
longstanding prior commitment on the rearranged date.
Ms Knox was unable to attend the board and audit committee meetings
inSeptember 2011 because of an overseas commitment which had been
arranged before her appointment to the board.
Ms Weir was unable to attend the audit committee meeting in September 2011
because of a prior commitment which had been arranged before her
appointment to the board.
Messrs Manzoni and Prez and Dr Moyo were unable to attend an additional
board meeting held in October 2011 which was called on short notice to
consider our alliance with Anadolu Efes.
Dr Moyo was unable to attend the board and CARAC meetings in February 2012
because of an overseas commitment.
Mr Ramaphosa was unable to attend the board meeting in May 2011 and the
CARAC meeting in February 2012 because of other business commitments.
Mr Willard was unable to attend the board meeting in February 2012 because
ofcommitments in his new role as Chief Financial Ofcer of Altria.
The board considers there is an appropriate balance of skills,
collective experience, independence, knowledge and gender
amongthe non-executive directors to enable them to discharge
theirrespective duties and responsibilities effectively.
How the board operates
Board meetings and attendance
During the year there were seven board meetings. Individual directors
attendance at board and committee meetings and at the annual
general meeting is set out in the table opposite. All directors attended
the annual general meeting. In the few instances where a director has
not been able to attend a board or committee meeting, any comments
which they have had on the matters to be considered at that meeting
have been given in advance to the chairman of the meeting.
Operation of the board
The board sets the strategic objectives of the group, determines
investment policies, agrees on performance criteria, and delegates
tomanagement the detailed planning and implementation of those
objectives and policies in accordance with appropriate risk
parameters. The board monitors compliance with policies and
achievement against objectives by holding management accountable
for its activities through monthly and quarterly performance reporting
and budget updates. In addition, members of the executive committee
(the executive directors, the divisional managing directors and the
directors of key group functions: corporate affairs; corporate nance
and development; legal; marketing; and supply chain and human
resources) make regular presentations to the board, enabling
directorsto explore and interrogate specic issues and developments
in greater detail.
Board and committee meetings are held in an atmosphere of
intellectual honesty of purpose, integrity and mutual respect,
requiringreporting of the highest standard by management and
direct, robust and constructive challenge and debate among board
and committee members.
Matters reserved for the board
There is a schedule of matters which are dealt with exclusively
bytheboard. These include approval of nancial statements; the
groupsbusiness strategy; the annual capital expenditure plan;
majorcapital projects; major changes to the groups management
andcontrol structure; material investments or disposals; risk
management strategy; sustainability and environmental policies;
andtreasury policies.
The board governs through clearly mandated board committees,
accompanied by monitoring and reporting systems. Each standing
board committee has specic written terms of reference issued by
theboard and adopted in committee. The terms of reference of the
audit, remuneration and nomination committees are available on the
companys website. All committee chairmen report orally on the
proceedings of their committees at the next meeting of the board, and
the minutes of the meetings of all board committees are included in
the papers distributed to all board members in advance of the next
board meeting.
Conicts of interest
The directors are required to avoid situations where they have,
orcanhave, a direct or indirect interest that conicts, or possibly
mayconict, with the companys interests. In accordance with the
Companies Act 2006, the articles of association of the company allow
the board to authorise potential conicts of interest that may arise and
to impose such limits or conditions as it thinks t. Procedures are in
place for the disclosure by directors of any potential conicts and for
the appropriate authorisation to be sought if a conict arises. These
procedures continue to operate effectively. There were no actual or
potential conicts of interest which were required to be authorised
bythe board during the year ended 31 March 2012.
The roles of executive and non-executive directors
The executive directors are responsible for proposing strategy and
formaking and implementing operational decisions. Non-executive
directors complement the skills and experience of the executive
directors, bring independent judgement and contribute to the
formulation of strategy, policy and decision-making through their
knowledge and experience of other businesses and sectors.
Information and training
The Company Secretary is responsible for advising the board, through
the Chairman, on matters of corporate governance. The board and
itscommittees are supplied with full and timely information, including
detailed nancial information, to enable directors to discharge their
responsibilities, and the committees are provided with sufcient
resources to undertake their duties. All directors have access to the
advice of the Company Secretary. Independent professional advice
isalso available to directors in appropriate circumstances, at the
companys expense. None of the directors has sought independent
external advice through the company.
Following the appointment of new directors to the board, directors
arebriefed on the duties they owe to the company as directors, and
tailored induction programmes are arranged which involve industry-
specic training and include visits to the groups businesses and
meetings with senior management, as appropriate. New directors are
briefed on internal controls at head ofce and business unit level and
are advised of the legal and other duties they have as directors of a
listed company as well as on relevant company policies and
governance-related matters.
The company is committed to the continuing development of directors
in order that they may build on their expertise and develop an ever
more detailed understanding of the business and the markets in
whichgroup companies operate. Members of board committees
areencouraged to attend internal and external briengs and courses
on aspects of their respective committee specialisms and regular
updates on relevant legal, regulatory, corporate governance and
technical developments are presented to committee members at
eachmeeting and, as appropriate, to the full board. The Chairman
considers the training and development needs of the board and
discusses these with the respective directors as necessary.
Outside appointments
Non-executive directors may serve on a number of other boards
provided that they continue to demonstrate the requisite commitment
to discharge effectively their duties to SABMiller. The Chairman and
the nomination committee keep under review the extent of directors
other interests to ensure that the effectiveness of the board is not
compromised by the extent of their external commitments. The board
is satised that the Chairman and each of the non-executive directors
commit sufcient time to their duties as Chairman and directors of the
company, respectively, and the non-executive directors have
conrmed that they have sufcient time to full their respective
obligations to the company.
The board believes, in principle, in the benet to the company
ofexecutive directors and members of the executive committee
accepting non-executive directorships of other companies in order to
widen their experience and knowledge for the benet of the company.
Accordingly, subject to the agreement of the board, executive
directors and members of the executive committee are permitted to
accept external non-executive board appointments and to retain any
fees received from such appointments.
Mr Mackay is a non-executive director of Reckitt Benckiser
Groupplcand is the senior independent director and a member
ofitsremuneration committee. He is also a member of the board of
Philip Morris International Inc. and serves on three of its committees:
compensation and leadership development, nance, and product
innovation and regulatory affairs. The board is satised that these
duties do not impinge on Mr Mackays commitment and ability to
discharge fully his duties to the company, and that his service on
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theboards of two global consumer product companies, which
operate in many of the developed and emerging markets in which the
company also has businesses, continues to give Mr Mackay valuable
additional insights and knowledge which enhance his ability to full
hisduties as Chief Executive of the company.
Fees earned by Mr Mackay from these appointments are set out
inthedirectors remuneration report.
Chairman, Chief Executive and Senior Independent Director
The roles of Chairman and Chief Executive are separate with
responsibilities divided between them, as formalised in their respective
letters of appointment, approved by the board. There were no signicant
changes to the Chairmans external commitments during the year.
As noted in the introduction to this report and in the Chairmans
Statement on pages 7 to 11, MrKahn will retire at the forthcoming
annual general meeting, MrMackay will be appointed as Executive
Chairman for one year and Dr Clark will be appointed as Chief
Operating Ofcer for an interim period. It is intended that at the
annualgeneral meeting in 2013, Mr Mackay will become Non-
Executive Chairman, and Dr Clark will become the Chief Executive
inhis place. Job specications for the Executive Chairman andthe
Chief Operating Ofcer, setting out clearly their respective authorities
and responsibilities, have been agreed by the board, and the directors
are condent that Mr Mackay and Dr Clark will continue to work
closely and effectively together, both during the transitional year and
thereafter. As noted, any risk of an over-concentration ofdecision
making powers in one person will be mitigated by the formal
appointment of Mr Manser, theSenior Independent Director,
asDeputyChairman, by the fact that the interim appointment of
MrMackay as Executive Chairman is for a pre-determined and limited
period of one year, and by the proposed appointment of Dr Clark as
athird executive director. It is also the boards intention now to begin
the process of recruiting a new independent non-executive director,
with the expectation that in due course he or she could become the
Senior Independent Director in succession to Mr Manser.
Mr Manser chairs or serves on all four main committees of the
board,and is therefore well placed to inuence the governance of the
company and to meet his responsibilities as Deputy Chairman and
Senior Independent Director. He serves as an additional contact
pointfor shareholders, and is also available to fellow non-executive
directors, either individually or collectively, to discuss any matters
ofconcern in a forum that does not include executive directors or
other members of the management team.
The Chairman is available to consult with shareholders throughout
theyear and, in the month prior to the annual general meeting, he
alsoinvites major shareholders to meet him to deal with any issues.
The board is kept informed of the views of shareholders through
regular updates from the Chairman, the Company Secretary and
theexecutive directors, as well as through the inclusion in the
boardpapers of reports on commentaries of, and exchanges with,
shareholders, investor bodies and analysts. In the year under review,
the Chairman hosted a meeting of the non-executive directors
withoutthe executive directors being present. The Senior
IndependentDirector also held a meeting of non-executive directors
without thepresence of the Chairman at which, among other things,
the performance of the Chairman was discussed.
Board, committee and director performance evaluation
A formal and rigorous evaluation of the performance and effectiveness
of the board and its principal committees is carried out each year, led
by the Chairman, with input from the Senior Independent Director, and
in consultation with other directors and the Company Secretary. Given
the imminent directorate changes, it was not considered appropriate
to carry out an externally facilitated performance evaluation for the
year under review.
The performance of the Chief Executive is reviewed by the
remuneration committee and this review is shared with and
considered by the board. The performance of the Chief Financial
Ofcer is reviewed by the Chief Executive and the remuneration
committee, and reported on to the board by the remuneration
committee. Each non-executive directors performance is evaluated
by the Chairman, in consultation with the Senior Independent Director,
who in turn consults with the executive directors and the Company
Secretary. The Chairmans performance is evaluated against the
samecriteria by the Senior Independent Director, the non-executive
directors and the Company Secretary, taking into account the views
ofthe executive directors.
In considering the contribution of individual directors for the year
under review, performance was assessed against the companys
selected criteria of strategy, expertise in their eld, ethics and
governance factors, commitment, prole, knowledge of the industry,
and team contribution, culminating in an overall contribution rating,
while recognising the importance of the different roles played by
individual directors in bringing a balanced overall view to the board.
Inreviewing the performance of the board and its committees, the
Chairman and the Senior Independent Director were aligned in their
conclusion that, measured against the principal duties expected of it,
the board and its standing and ad hoc sub-committees continued to
operate effectively and to meet in full their obligations to support
management, to monitor performance, and to maintain the boards
strategic oversight.
In a meeting of the Chairman, the Senior Independent Director,
thecommittee chairmen and the Company Secretary, the results
ofthe performance and effectiveness evaluations conducted in
respect ofthe board, each of the directors, the Chairman, the
SeniorIndependent Director and each of the boards four standing
committees were reviewed. Regarding the board committees, each
ofthe committee chairmen present expressed their views regarding
the operation of his committee against its terms of reference and the
performance and effectiveness of that committee. These views were
discussed in an open and constructive manner with recommendations
arising from the discussions being brought forward to the board and
the respective committees. The conclusion of this meeting was that
the board was balanced and operated effectively and that the board
committees discharged effectively their duties under their respective
terms of reference.
The results of the performance and effectiveness assessment process
as outlined above were reviewed in full and approved by the board.
Matters identied as requiring further consideration have been
addressed, and in particular additional time continues to be made
available in the boards agenda for focus on strategic matters by
holding an away day dedicated to strategy.
All directors, except for those who are retiring, will be standing for
re-election at this years annual general meeting. The Chairman
conrms that each of the existing directors offering themselves
forelection or re-election continues to perform effectively and to
demonstrate commitment to their role. In particular, the Chairman
conrms that, in relation to each of the non-executive directors who
will have served for over nine years, the board is satised with his
performance and has determined that the length of their service does
not compromise their independence. The test of independence does
not apply to Mr Bible.
The board unanimously recommends to shareholders the election
ofDr Clark as a director, in consequence of his appointment as Chief
Operating Ofcer. The board believes that Dr Clark is ideally qualied
to succeed Mr Mackay. He has 22 years experience with the group
and has been a member of the executive committee since 2003 when
he was appointed as managing director of SABMiller Europe.
Biographical details of all directors and of Dr Clark are included
onpages 52 and 53.
Retirement of directors
The companys articles of association require that new directors
areappointment, and directors are subject to retirement and
re-election by shareholders every three years. The reappointment
ofnon-executive directors is not automatic. However, the board
hasdetermined that all directors will stand for re-election annually.
Independent non-executive directors who have served for nine years
will only be asked to stand for re-election if the board remains satised
both with the directors performance and that nine years continuous
service does not compromise the directors continuing independence.
The Company Secretary
The Company Secretary acts as secretary to the board and its
committees and he attended all meetings during the year under review.
The boards committees and the executive committee
The executive committee
The board delegates responsibility for determining and implementing
the groups strategy and for managing the group to the Chief
Executive, Mr Mackay, who is supported by the executive committee
(excom), which he chairs. Excom members are appointed by Mr
Mackay, after consultation with the board. The other members of
excom are the Chief Financial Ofcer; the divisional managing
directors and the directors ofkeygroup functions (corporate affairs;
corporate nance and development; legal; marketing; and supply chain
and human resources). Excoms purpose is to support the Chief
Executive in carrying out theduties delegated to him by the board
and, in that context, excom co-ordinates brand and operational
execution, delivers strategic plans, budgets and nancial reports for
the boards consideration and, through the Chief Executive, reports
onthese matters to the board.
Excom also ensures that effective internal controls are in place and
functioning, and that there is an effective risk management process
inoperation throughout the group.
The audit committee
During the year under review, the audit committee was chaired by
MrManser, chairman since 2002. Mr Manser qualied as a chartered
accountant in 1964 and was made a Fellow of the Institute of
Chartered Accountants in 1976. Further biographical information
concerning Mr Manser is set out on page 52.
Mr Morland, Mr Devitre and Mr Armour served on the committee
throughout the year. Mr Morland has been a member of the
committee since 13 April 1999, Mr Devitre since 16 May 2007 and
MrArmour since 1 May 2010. Ms Knox and Ms Weir were appointed
to the committee on 19 May 2011. The chairman has recent and
relevant nancial experience, as do Mr Devitre, having until 31March
2008 held the position of Chief Financial Ofcer of Altria, and the other
members of the committee. Mr Armour is the Chief Financial Ofcer
ofReed Elsevier Group plc, a position he has held since 1996, and of
its parent companies, Reed Elsevier PLC and Reed Elsevier NV. From
July 2012 he will be appointed to the board of the Financial Reporting
Council. Ms Knox has had a successful career ininvestment banking
and asset management, and has served in a wide range of non-
executive director positions including having been a member and a
chairman of a number of audit committees. MsWeir is Group Finance
Director of The John Lewis Partnership andwas until May 2011 an
executive director of Lloyds Banking Groupplc, including four years
asgroup nance director.
The committee met four times during the year. The external auditors,
the Chief Executive, the Chief Financial Ofcer and the Chief Internal
Auditor attended each meeting by invitation. Other members of the
management team attended as required.
The work of the committee during the year included consideration
ofthe following matters:
the annual nancial statements and the preliminary results
announcement for the year ended 31 March 2011 before their
submission to the board for approval, including consideration
ofthegroup on a going concern basis, with particular reference
tobalance sheet and treasury considerations;
the interim nancial statements and interim results announcement
for the six months ended 30 September 2011;
areas of signicance in the preparation of the nancial statements,
including exceptional items, impairment reviews, tax provisions and
the treatment of costs relating to the groups business capability
programme;
governance and controls in relation to the business capability
programme;
reports from the external auditors on the annual and interim
nancial statements, the approval of the audit plan and fee proposal
for the 2012 year-end audit;
developments in accounting standards and the groups responses;
the progress of the years internal audit programme and matters
arising;
the effectiveness of the internal audit function and of the Chief
Internal Auditor;
the results of the groups bi-annual letters of representation and
managements investigation and follow-up of any instances of
non-compliance;
the internal control environment and risk management systems
andthe groups statement on internal control systems, prior to
endorsement by the board;
revisions to treasury policies and compliance with risk limits;
material legal developments;
whistleblowing systems in place within the group and material
whistleblowing reports;
the effectiveness of the external auditors and the recommendation
to the board of the reappointment of PricewaterhouseCoopers LLP
as the external auditors;
the policy on auditor independence and non-audit services,
andconsideration of the nature, scope and appropriateness
ofnon-audit services supplied by the external auditors; and
its terms of reference and effectiveness.
The audit committee reports its activities and makes
recommendations to the board. During the year, the audit committee
discharged its responsibilities as they are dened in the committees
terms of reference, and has been engaged in ensuring that
appropriate standards of governance, reporting and compliance
arebeing met. The committee has advised the board on issues
relating to the application of accounting standards as they relate
topublished nancial information.
The Chief Internal Auditor has direct access to the committee,
primarily through its chairman. The committee has access to
subsidiary company internal audit leadership. The reports of the
divisional nance, control and assurance committees are also
available to the audit committee. During the year, the chairman
ofthecommittee met at least once with the external auditors and
withthe Chief Internal Auditor without management being present.
The nomination committee
During the year, the nomination committee was chaired by Mr Kahn.
Mr Bible, Mr Manser, Mr Manzoni, Mr Morland, Mr Ramaphosa and
Mr Santo Domingo were members of this committee throughout the
year. The committee considers the composition of the board and
itscommittees, the retirement, appointment and replacement of
directors, and makes appropriate recommendations to the board.
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The nomination committee has continued to evaluate the balance of
skills, knowledge and experience of the board and remains committed
to the progressive renewal of the board through orderly succession.
Where vacancies arise they prepare a description of the role and
capabilities required for the appointment. Appropriate succession
plans for the non-executive directors, for the executive directors
andfor senior management were also kept under close review.
Thecommittee is conscious of the need for due regard to be given
todiversity when considering appointments to the board. Five of the
lastseven independent non-executive directors to be appointed by
the board were women, and currently one-third of the companys
independent non-executive directors are women, and the committee
therefore believes that the company is well positioned in terms of the
future balance of the board.
Where non-executive vacancies arise, the committee may use the
services of external consultants in order to identify suitable candidates
for the board to consider. In relation to the most recent non-executive
board appointments, an external search rm was retained and
produced a strong list of candidates, who were then shortlisted for
consideration by the nomination committee on the basis of their
relevant corporate or professional skills and experience, from which
Ms Knox and Ms Weir were appointed in May 2011.
An external search rm was not used in relation to the appointment
ofMr Mackay as Executive Chairman or Dr Clark as Chief Operating
Ofcer. The process followed in connection with these appointments
is described above. Mr Manser chaired the nomination committee
during its deliberations on the appointment of Mr Mackay as the
successor to Mr Kahn as chairman.
The remuneration committee
During the year, the remuneration committee consisted entirely
ofindependent directors: Mr Morland (Chairman), Mr Armour,
MrManzoni and Mr Manser. Ms Knox was appointed to the
remuneration committee with effect from 19 May 2011.
The committee is responsible for the assessment and approval of
abroad remuneration strategy for the group and for the operation
ofthe companys share-based incentive plans. This includes
determination of short-term and long-term incentives for executives
across the group, and the committee is empowered by the board to
set short-term and long-term remuneration for the executive directors
and members of the executive committee.
The remuneration committee has implemented its strategy of ensuring
that employees and executives are rewarded for their contribution to
the groups operating and nancial performance at levels which take
account of industry, market and country benchmarks. To ensure that
the executives goals are aligned to those of the company, share
incentives are considered to be critical elements of executive incentive
pay. During the year the committee engaged the services of
consultants, Kepler Associates. These consultants have no other
connection with the company. At levels below the companys
executive committee, the companys management engages other
consultants, on a project basis.
Specically, during the year the work of the remuneration committee
included:
reviewing trends in global executive remuneration and governance;
reviewing the key elements and design of the groups long-term
incentive schemes (including peer comparator group composition);
reviewing global benchmarking methodologies and outcomes;
reviewing and approving performance hurdles for short and
long-term incentive awards;
reviewing and approving long-term incentive awards for executive
committee members and other senior employees;
reviewing executive director shareholding guidelines;
reviewing and approving total remuneration for the executive
directors and executive committee members;
determining the appropriate remuneration for the newly appointed
executive director (Mr Wilson as Chief Financial Ofcer) and excom
member (Mr De Lorenzo, as Director of Corporate Finance and
Development); and
reviewing and approving the directors remuneration report and
recommending it to the board.
More details of the companys remuneration policy and the work
ofthe remuneration committee can be found in the directors
remuneration report on pages 68 to 83.
The corporate accountability and risk assurance
committee(CARAC)
Dr Moyo chaired the committee throughout the year. Mr Kahn,
MrMackay, Mr Manser, Mr Manzoni, Mr Pieterse and Mr Ramaphosa
served as members for the entire period. Mr Willard, who has served
the committee since September 2009, stepped down from the
committee on 7 September 2011 as a result of new commitments
inhis role as Chief Financial Ofcer of Altria. Mr Wyman ceased to be
a member of the committee on his retirement from the board in July
2011 and was replaced by Mr Wilson. Mr Pieterse will cease to be a
member of the committee on his retirement in July 2012 and Mr Bible
will join the committee. Additionally, the Director of Corporate Affairs,
Ms Clark, met regularly with the chairman of CARAC to discuss
implementation and planning issues, and attended all meetings
ofthecommittee.
The objective of the committee is to assist the board in the discharge
of its responsibilities in relation to corporate accountability, including
sustainable development, corporate social responsibility, corporate
social investment and ethical commercial behaviour. More details
ofthe committees activities can be found in the sustainable
development review section of this report and in the companys
separate Sustainable Development Report, which is available on
thecompanys website and, upon request, in hard copy.
During the year the committee continued to focus on company-
specic and industry issues which are critical to protecting the
companys licence to operate.
The disclosure committee
The disclosure committee consists of the Chairman, the Chief
Executive, the Chief Financial Ofcer, the Senior Independent
Directorand the General Counsel and Company Secretary or
theDeputy Company Secretary. The function of the disclosure
committee, in accordance with the groups inside information policy,
isto meet as and when required in order to assure compliance with
the Disclosure and Transparency Rules and the Listing Rules, as
guided by the General Counsel, and to ensure that the routes of
communication between excom members, the disclosure committee,
the General Counsels ofce, the company secretarial ofce and
investor relations are clear, and provide for rapid escalation to the
disclosure committee and key advisers, and the board, of any
decision regarding potential inside information, so that the company
isable to comply fully with its continuing obligations under the
Disclosure and Transparency Rules and the Listing Rules.
Accountability
The audit committee
A description of the composition, scope of responsibilities and work
undertaken by the audit committee during the year is included in the
section dealing with the board and its committees.
Relationship with auditors
PricewaterhouseCoopers were appointed as auditors of the company
on 8 February 1999, subsequently becoming PricewaterhouseCoopers
LLP (PwC) in 2003.
The company has in place a formal policy on auditor independence
and non-audit services, with which the external auditors are required
to comply, to ensure that the independence of the auditors is not
impaired by the nature of non-audit work. The policy stipulates work
which is permitted or not permitted to be performed by the auditors,
and provides for appropriate approval and oversight processes.
Asafurther safeguard, PwC conrm in a formal report to the audit
committee that processes to ensure compliance with this policy are
inplace and that these processes are monitored regularly. This report
includes a statement that, in their opinion, PwC believe that the nature
of their non-audit services has not impaired their independence as
auditors. Note 3 to the consolidated nancial statements has a
breakdown of non-audit services provided to the group by the
auditors for the year under review.
The audit committee is satised that, for the period under review, the
independence of the auditors has not been affected by the provision
of non-audit services. Fees in respect of non-audit services provided
by PwC were primarily related to services relating to corporate nance
transactions, taxation and our major business capability programme.
In December 2010, the FRC issued revised Guidance on Audit
Committees as part of the new UK Corporate Governance Code
and,as a consequence, the audit committee reviewed and revised
thegroups policy on auditor independence and non-audit services.
Anew policy was adopted with effect from 1 April 2011 which
classies all non-audit services into audit related services (being
thoseservices which are effectively required by law or regulation),
andother non-audit services, and provides that engagements for
other non-audit services are subject to formal pre-approval limits,
either bythe full audit committee or by the chairman of the audit
committee, depending on the quantum, and that all requests for
approval be accompanied by a detailed justication as to why the
appointment ofthe external auditors to provide the services is in the
best interests of the company, and how auditor independence is
proposed to be safeguarded in connection with the provision of those
services. In theinstances where approval was sought for the auditors
to provide non-audit services the committee concluded that the
auditors detailed understanding of our group and ability to deliver
services inatimely fashion provided a cost-effective method of
delivery withoutcompromising auditor independence.
The committee has a formal system for the review of the effectiveness
of the external auditors. This process involves the external auditors
presenting to the committee their proposed audit strategy followed
bythe output of their initial discussions with management. At the audit
committee meeting in May, the external auditors present the output
oftheir detailed year-end work. In making its assessment of external
auditor effectiveness, the committee reviews the audit engagement
letters before signature by management, reviews the external auditors
summary of group and subsidiary issues and managements
response to the summary, and conducts an overall review of the
effectiveness of the external audit process and the external auditors.
This review is facilitated by the use of templates that rate effectiveness
across 18 key criteria. Following the review, the committee makes a
recommendation to the board on the reappointment of the external
auditors by the shareholders. The committee has not adopted a policy
on tendering frequency since it prefers to conduct an annual
assessment of the auditors effectiveness. There are no contractual
obligations restricting the companys choice of external auditor.
Risk management
The groups risk management system is subject to regular review to
ensure compliance with the Code and the Turnbull Guidance (2005)
on internal control and risk management.
Risk and the board of directors
The directors are ultimately responsible for the groups risk
management system and for reviewing its effectiveness. There is a
regular schedule for the board to consider the groups signicant risks
and mitigating actions. The risk management system is designed to
manage, rather than eliminate, the risk of failure to achieve business
objectives and there is an ongoing process in place for identifying,
assessing, managing, monitoring and reporting on the signicant risks
faced by individual group companies and by the group as a whole.
This process has been in place for the year under review up to the
approval of the Annual Report and Accounts. The principal risks and
uncertainties facing the group are set out on pages 22 and 23.
Executive committee
Excom has specic responsibility as the risk management committee
for the groups system of risk management. Excom reviews the
groups signicant risks and subsequently reports to the board
onmaterial changes and the associated mitigating actions.
In accordance with the Turnbull Guidance, reviews on the
effectiveness of the risk management system were carried out by
excom, as the risk management committee, in April and October 2011
and in April 2012.
Enterprise-wide risk management
Excom views the careful and appropriate management of risk as a key
management role. Managing business risk to deliver opportunities is
akey element of all our business activities, and is undertaken using
apractical and exible framework which provides a consistent and
sustained approach to risk evaluation. Business risks, which may
bestrategic, operational, nancial or environmental, or concern the
groups reputation, are understood and visible. The business context
determines in each situation the level of acceptable risk and controls.
The group continues to seek improvement in the management of risk
by sharing best practice throughout the organisation.
Key features of the groups system of risk management are:
group statements on strategic direction, ethics and values;
clear business objectives and business principles;
an established risk policy;
a continuing process for identication and evaluation of signicant
risks to the achievement of business objectives;
management processes in place to mitigate signicant risks to an
acceptable level;
ongoing monitoring of signicant risks and internal and external
environmental factors that may change the groups risk prole; and
a regular review by the group of both the type and amount of
external insurance that it buys, bearing in mind the availability of
such cover, its cost and the likelihood and magnitude of the risks
involved.
In addition to excoms bi-annual reports to the board on key risks,
there is a process of regular reporting to the board through the
auditcommittee on the status of the risk management process.
Ourapproach was strengthened during 2010 by further integrating
strategic planning, internal audit and other risk control specialists into
line managements risk processes and simplifying risk reporting, and
this process of gradual renement and strengthening has continued
during this year.
Key reports include those that identify, assess and monitor strategic
and operational risks in each division and on a group basis.
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Internal control
The Turnbull Guidance recommends internal control practices for
UKlisted companies to assist them in assessing the application of
theCodes principles and compliance with the Codes provisions with
regard to internal control.
The groups systems of internal control are designed and operated
tosupport the identication, evaluation and management of risks
affecting the group. These include controls in relation to the nancial
reporting process and the preparation of consolidated accounts, but
extend across all areas of operations. They are subject to continuous
review as circumstances change and new risks emerge.
Key features of the systems of internal control are:
the risk management system described in the preceding section;
written policies and procedures within our businesses, which are
detailed in policy manuals;
clearly dened lines of accountability and delegation of authority;
minimisation of operating risk by using appropriate infrastructure,
controls, systems and people throughout the businesses;
business continuity planning, including preventative and
contingency measures, back-up capabilities and the purchase
ofinsurance;
the company has maintained a state of readiness for compliance
with s404 of the Sarbanes-Oxley Act through the identication and
testing of key nancial controls under its Internal Financial Control
(IFC) programme. This is a voluntary initiative, and has led to a
further strengthening of internal control systems and processes
within the group;
key policies employed in managing operating risk involve
segregation of duties, transaction authorisation, monitoring,
nancial and managerial review and comprehensive reporting
andanalysis against approved standards and budgets;
a treasury operating framework which establishes policies and
manages liquidity and nancial risks, including foreign exchange,
interest rate and counterparty exposures, and incorporates central
and regional treasury committees that monitor these activities and
compliance with the policies. Treasury policies, risk limits and
monitoring procedures are reviewed regularly by the audit
committee on behalf of the board; and
a group tax risk and tax operating framework which forms the basis
of tax governance across the group and is managed by the group
tax function which monitors tax risk and implements strategies and
procedures to control it.
Assurance on compliance with systems of internal control and on
theireffectiveness is obtained through regular management reviews,
reviews of key nancial controls, internal audit reviews and quality
assurance, testing of certain aspects of the internal nancial control
systems by the external auditors during the course of their statutory
examinations and regular reports to the audit committee by the external
auditors. The groups divisional nance, control and assurance
committees consider the results of these reviews to conrm that
controls are functioning and to ensure that any material breakdowns
and remedial actions have been reported to the appropriate boards
ofdirectors. In relation to the groups associated undertakings or joint
ventures, these matters are reviewed at the level of the associates
orjoint ventures boards or other governing committees.
At the half year and at the year end the divisional managing directors
and nance directors of all the groups operations, each of the
groupsfunctional directors (corporate affairs, corporate nance and
development, legal, marketing and supply chain and human resources)
and each of the direct reports to the Chief Financial Ofcer, are
required to submit to the Company Secretary on behalf of the board
formal letters of representation on controls, compliance and notication
of continuing or potential material nancial and legal exposures.
These letters form the subject of reports to the audit committee, and
cover all subsidiary companies, as well as MillerCoors and Tsogo
SunHoldings Limited which submit tailored letters of representation.
Where material, group executives sit on the boards of associated
companies. Directors and members of the executive committee
alsomake annual written declarations of interests and are obliged
toreportwithout delay any potential or actual conicts of interest
which may arise.
The directors are responsible for the groups systems of internal
control and for reviewing their effectiveness annually. The board
hasconducted a review of the effectiveness of the groups internal
controls covering material nancial, operational and compliance
controls and risk management systems for the year under review.
Necessary actions have been, or are being, taken to remedy any
signicant weaknesses identied from the boards review of the
internal control system. The systems of internal control are designed
to manage, rather than eliminate, the risk of failure to achieve business
objectives and can provide reasonable, but not absolute, assurance
against material misstatement or loss. In reviewing these, the board
has taken into account the results of all the work carried out by
internal and external auditors.
Fosters Group Limited (Fosters) became part of the group during the
second half of the year under review. Fosters was a listed company
until shortly after its acquisition and was required to comply with
relevant regulatory and corporate governance requirements applicable
to companies listed on the Australian Securities Exchange. As part of
the integration of the Fosters group of companies into the SABMiller
group, work is under way to embed systems, controls and procedures
to bring them into full alignment with those in place throughout the
rest of the group.
The board, with advice from the audit committee, has completed its
annual review of the effectiveness of the system of internal control and
risk management for the period since 1 April 2011 in accordance with
the Turnbull Guidance.
Internal audit
The global internal audit function consists of the group internal audit
team, led by the Chief Internal Auditor, plus regional and country
auditfunctions that operate in each of the groups principal areas
ofbusiness. The regional and country functions are centrally
co-ordinated by the group internal audit team. The country internal
audit functions report to local senior nance management but have
direct access and accountability to local audit committees, the
regional heads of internal audit and the Chief Internal Auditor.
Internal audit activities, all of which are risk-based, are performed by
teams of appropriate, qualied and experienced employees. Third
parties may be engaged to support audit work as appropriate. The
Chief Internal Auditor, who reports functionally to the Chief Financial
Ofcer and who has regular meetings with the chairman of the audit
committee, prepares formal reports for each audit committee meeting
as to the consolidated activities and key ndings of the global internal
audit function.
The global internal audit function uses a standardised group-wide
internal audit methodology which is in compliance with the
International Standards for the Professional Practice of Internal
Auditing of the Institute of Internal Auditors. The function operates
aformal global quality assurance and effectiveness programme.
Accordingly, detailed quality review assessments are performed
withregard to the regional and country internal audit teams, to ensure
compliance with dened quality and performance measures. This
process provides a basis for the annual review of the effectiveness
ofthe global internal audit function and results in a formal report
(prepared by the Chief Internal Auditor) to the audit committee
tosupport the committees formal annual assessment of the
effectiveness of internal audit. In addition, a periodic review
ofinternalaudit is undertaken by an independent external
consultantin accordance with the requirements of the Institute
ofInternal Auditors.
The audit committee has therefore satised itself that adequate,
objective internal audit assurance standards and procedures exist
within the group, and that continuous improvement in the quality
andobjectivity of the global internal audit function remains a primary
objective of the department.
Whistleblowing measures
All employees in subsidiaries within the group have the opportunity
tomake condential disclosures about suspected impropriety or
wrongdoing. The Company Secretary or the Deputy Company
Secretary, in consultation with the Chief Internal Auditor if appropriate,
decides on the appropriate method and level of investigation. The
audit committee is notied of all material disclosures made and
receives reports on the results of investigations and actions taken.
Theaudit committee has the power to request further information,
conduct its own inquiries or order additional action as it sees t.
Remuneration
A description of the composition, terms of reference and scope of
responsibilities and work undertaken by the remuneration committee
during the year is included in the section dealing with the
boardscommittees.
A detailed description of the companys remuneration policies is
included in the directors remuneration report on pages 68 to 83
ofthis annualreport.
Relations with shareholders
All shareholders were again encouraged to attend the annual general
meeting held in July 2011, which provided shareholders with the
opportunity to ask questions of the board and chairmen of all the
board committees. At the meeting, all resolutions were put to a vote
on a poll, with the results being published on the companys website,
and on the London and Johannesburg stock exchange news services.
As the geographic spread of shareholders inevitably means that not
every shareholder can attend a meeting in the UK, a video lm and a
full transcript of the proceedings of the meeting were published on the
companys website. Similar arrangements are planned for the
forthcoming annual general meeting.
The company maintains a dedicated investor relations function which
reports to the Director of Corporate Affairs. The investor relations team
builds and maintains long-term relationships with institutional investors
and analysts and, in partnership with our corporate and divisional
management teams and within the scope of regulatory constraints, gives
presentations on regional business outlooks and strives to ensure that
these are understood across the global equity markets in subsequent
one-to-one meetings with investors. Dialogue on sustainable
developments and socially responsible investment matters is handled
by the Group Head of Sustainable Development, who undertakes
focused meetings with interested investors and stakeholders.
In addition to scheduled management-led programmes in which
executives interact with investors and analysts, the Chairman annually
contacts all shareholders (or their representatives) holding more than
1% of the issued share capital of the company, to enable him to
address any queries which shareholders may have about the
governance of the company or non-operational aspects of company
strategy. It is also, more broadly, designed to give the board a greater
awareness of shareholder concerns. During the year the Chairman
and Mr Manser, as Senior Independent Director, accompanied by the
Company Secretary, met with a number of institutional shareholders.
Alongside the Chairman, the Senior Independent Director and the
Company Secretary are also available to discuss issues with
shareholders and views expressed are communicated by the
Chairman to the board. As part of this initiative the Chairman offers
tomeet with signicant shareholders in the month before the annual
general meeting specically to deal with issues arising from the annual
report and notice of the annual general meeting. All non-executive
directors of the company are invited to participate in this process.
Institutional and shareholder comment on the annual report is
conveyed by the Company Secretary to the full board and to the
auditand remuneration committees in relation to matters within
theirrespective terms of reference.
During April 2012 we also consulted with major shareholders before
announcing the proposed appointment of Mr Mackay as Executive
Chairman and Dr Clark as Chief Operating Ofcer. The Chairman, the
Senior Independent Director and the Company Secretary conducted
a number of calls and personal meetings with major shareholders and
institutional investors to discuss the proposals with them. Following the
announcement of the appointments, the Senior Independent Director
then wrote personally to all shareholders setting out the rationale for
the proposed appointments, and explaining why the directors thought
it in the best interests of SABMiller to make these appointments.
John Davidson
For and on behalf of the board of SABMiller plc
11 June 2012
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Chairman of the remuneration committee
The remuneration committees main task
is to ensure that executive remuneration is
aligned with the delivery of the groups
strategy for growth over the long term.
Miles Morland
Dear shareholder
The remuneration committees main task is to ensure that executive
remuneration is aligned with the delivery of the groups strategy for
growth over the long term. We believe that the nancial rewards
tomanagement over the years have been consistent with their
achievements, with a direct link to our share price growth, both in
absolute and relative terms, and to our strong underlying nancial
andstrategic performance, and that our approach to remuneration
willcontinue to incentivise management to deliver superior
performance in future years.
Accordingly, there have been no changes to remuneration
policiesduring the year, except for the adoption for the rst time of
shareholding guidelines for executive directors. No other changes
areproposed for the year ahead.
We are all too well aware of the global economic environment in which
SABMiller operates, and the delivery of continuing strong performance
in yet another challenging year is a testament to our strong and
motivated executive team, led by Chief Executive Graham Mackay,
and to our talented employees across the group.
The following charts illustrate this, with SABMiller continuing to
outperform both the FTSE 100 and our sector peer group since our
listing in London in 1999. 100 invested in SABMiller in 1999 would
have grown to 790 as at 31 March 2012, compared with just 200
ifinvested in our peer group median, or 144 if invested in the
FTSE100 index.
Similarly, our rolling annualised ve-year total shareholder return has
been a healthy 19% compared with just 1.9% for the FTSE 100.
Value of 100 invested in SABMiller on listing in London
11 12 00 99 01 02 03 04 05 06 07 08 09 10
SABMiller = 790
Peer median
= 200
FTSE 100 = 144 0
100
200
300
400
500
600
800
700
Note: Spot prices
Rolling annualised 5-year TSR since listing in London
%
11 12 05 04 06 07 08 09 10
SABMiller = 19.0%
Peer median = 7.5%
FTSE 100 = 1.9%
30
25
20
15
10
5
0
5
Note: 6-month share price averaging
During the year, I was delighted to welcome Lesley Knox to the
committee, and I thank her for her valuable contribution. In July 2011,
Malcolm Wyman retired from the board, and Jamie Wilson was
appointed in succession as an executive director and Chief Financial
Ofcer. In April 2012, we announced that Alan Clark would be
appointed as Chief Operating Ofcer and as an executive director,
andthat Graham Mackay would become Executive Chairman,
bothwith effect from the upcoming annual general meeting. These
changes caused us to apply and reect upon our remuneration
policies, and I explain our decisions below.
Remuneration policies
Our core policy continues to be to ensure that all employees
arerewarded fairly for their contribution to the groups operating
andnancial performance, recognising their responsibilities and
skills.Fairness in remuneration is appropriate and consistent with
SABMillers values, and builds a relationship with employees which
helps to attract, motivate and retain individuals of the necessary
calibre with the shared values that lead to our collective success.
Thecompany and the committee undertake regular reviews of
remuneration to ensure that it remains fair and appropriate for the
markets and countries in which we operate and compete for talent.
As a global company, with almost all of our revenue being
earnedoutside the UK, we need and expect our executives to be
internationally mobile, and to have experience in working in a number
of different countries. Therefore, we compete for talent in a global
marketplace, and our approach to remuneration takes account of
theneed to be competitive throughout different parts of the world
inwhich the group operates.
Directors remuneration report
Particularly during these challenging economic times, it is necessary
to manage our xed cost base effectively, including remuneration.
Ourpolicy is therefore to set base pay at a level no higher than is
necessary, while recognising and rewarding experience in the role.
Typically, base pay is set at or around median for the relevant market.
A signicant proportion of executive pay is variable and subject to
stretching performance conditions. Short-term incentives are aligned
to the groups strategic priorities, and are based as to 60% on
challenging annual nancial performance targets and 40% on specic
personal and strategic targets, while long-term incentives are directly
linked to demonstrable value creation for shareholders. This
remuneration structure ensures that high pay is achieved only
forhighperformance and high shareholder returns.
The chart below shows the relationship between adjusted earnings
per share and total bonus paid tothe CEO and CFOs for each of the
5 years to 31 March 2012.
Pay versus performance
Short-term incentive payouts compared to EPS
1
000 CEO CFO EPS (US cents)
2008 2009 2010 2011 2012
1,606
640
888
400
1,580
683
1,775
750
1,687
586
2,000
1,500
1,000
500
0
240
220
200
180
160
140
120
100
1
Adjusted earnings per share
Application of remuneration policies during the year
The application of these remuneration policies guided us in the
determination of an appropriate remuneration package for Jamie
Wilson upon his appointment as an executive director and Chief
Financial Ofcer in July 2011 and for Alan Clark in anticipation of his
appointment as Chief Operating Ofcer and as an executive director
inJuly 2012. As can be seen from the table of annualised base pay
onpage 71, Jamies base pay for his rst year was considerably lower
than the then current base pay of his predecessor, Malcolm Wyman,
who had served as an executive director since 1999 and as Chief
Financial Ofcer since 2001. This reects our policy of setting base
pay in part according to experience in the role. Jamie is a very
experienced and capable professional, but the committee considered
it appropriate to set base pay at a lower level during his rst year in
this role, with the intention of bringing it more into line with the market
median after this initial period. In accordance with this philosophy,
thecommittee at its meeting in May 2012 increased Jamies annual
base pay to 720,000, which is in line with the median of the current
market and remains slightly below that of his predecessor. Short-term
incentives were set and remain in the same proportion, and long-term
incentives offer exactly the same opportunity, as is appropriate, given
that any amounts resulting from these incentives will be based on
actual performance.
Similarly, Alans pay as Chief Operating Ofcer has been set, after
external and internal benchmarking, at a level which the committee
considers appropriate for the transitional year, while he absorbs the
complexities of the global business, and builds the relationships and
partnerships on which the groups business depends.
The appointment of Jamie Wilson also caused the committee to
review the requirement for executive director shareholding guidelines.
Previously, no guidelines were considered appropriate or necessary
as the executive directors had built up and retained signicant
shareholdings (being 26 times base pay for Graham Mackay and
17.5times base pay for Malcolm Wyman at the end of the 2011
nancial year) which were far in excess of formal shareholding
guidelines adopted by any FTSE 100 company. With Jamies much
shorter tenure with the group, the opportunity to acquire a signicant
shareholding has obviously not been available, but the committee
considers it important that executive directors hold a signicant
number of shares in the company and therefore a shareholding
guideline has now been set at 300% of base pay for the Chief
Executive and 200% of base pay for other executive directors.
Review of remuneration policies for the years ahead
We remain satised that SABMillers remuneration policies have been
working well, but we will continue to evaluate all policies each year to
ensure that they remain appropriate for the future. As indicated in last
years report, our intention is to conduct a more detailed review of
allelements of remuneration, including the level and structure of
long-term incentives, at approximately three-year intervals, which we
believe is the minimum period over which outcomes can be properly
evaluated. Accordingly, barring any unforeseen circumstances, the
next review will commence during the coming year, with any changes
to be implemented from 2013.
Conclusion
We believe that our approach to remuneration, which rewards the
achievement of nancial and strategic targets aligned to shareholder
returns, incentivises employees to deliver results for shareholders that
continue to outperform the market. I therefore commend to you this
directors remuneration report and hope that, with your continued
support, we will be able to continue to strive to make SABMiller
themost admired company in the global beer industry.
Yours sincerely
Miles Morland
Director
11 June 2012
(The directors remuneration report continues on pages 70 to 83.)
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Directors remuneration report continued
Information not subject to audit
Composition and terms of reference of the
remuneration committee
During the year ended 31 March 2012, the committee met three times.
The members of the committee were Mr Morland (chairman), Mr Armour,
Mr Manser and Mr Manzoni, with Ms Knox joining the committee on
19 May 2011. In addition, Mr Bible, Mr Kahn, Mr Santo Domingo and
Mr Willard joined some meetings as observers. Also present were
MrMackay (Chief Executive), Mr Davidson (General Counsel and
Group Company Secretary), Mr Shapiro (Deputy Company
Secretary), and MrFairhead (Group Head of Compensation
andBenets), although none were present when their own
remuneration was discussed.
In accordance with its terms of reference (which are available on
thecompanys website), the committee determines the basis on
whichthe executive directors are to be paid and the amount of
theirremuneration. In addition, the committee has oversight of the
remuneration strategy for the group as a whole, monitoring the level
and structure of remuneration for senior management, and approving
all awards under the companys share incentive arrangements.
Whensetting the remuneration of executive directors, the committee
considers the specic performance measures for each incentive plan
(explained below) as well as overall corporate nancial performance,
and pays particular regard to environmental, social and governance
issues, to ensure that the incentive arrangements do not inadvertently
motivate or reward inappropriate outcomes or excessive risk.
Advisers
In the course of its deliberations, the committee considers the views
of the Chief Executive on the remuneration and performance of the
members of the executive committee. Mr Davidson and Mr Fairhead
also provide information to the committee on legal, regulatory and
governance issues, equity usage through share incentive plans, and
the pay and employment conditions of other employees throughout
the group.
Kepler Associates is retained by the committee to provide independent
advice on remuneration matters including current market practices,
incentive design and performance metrics, and independent monitoring
of total shareholder return. Kepler Associates does not provide any
other advice or services to the group.
Remuneration policies
As outlined in the committee chairmans introductory letter, the
committees policy is to ensure that all employees are rewarded fairly
for their contribution to performance, recognising their responsibilities
and skills. In setting remuneration levels, the committee takes into
account industry, market and country benchmarks, while recognising
and rewarding experience in the role. This approach helps to attract,
motivate and retain individuals of the necessary calibre with the
shared values that lead to our collective success.
The policy is to pay xed pay at median for the relevant market,
withasignicant proportion of performance-related variable pay,
comprising both short-term and long-term incentives.
The table and charts below show, for each executive director, the
amounts and ratio of xed pay and performance-related variable
payawarded in respect of the year ended 31 March 2012, assuming
targetor median performance for long-term incentives awarded
during the year. The ratios accord with the committees policy on
structuring executive pay so that a signicant proportion of executive
pay is variable.
Executive remuneration for the year ended 31 March 2012
Fixed pay Performance-related
Total
remuneration Ratio of total reward
Base pay
Notional
retirement
benets
Other
benets
Short-term
incentives
(STI)
Long-term
incentives
(LTI)
Total
Fixed
Pay
%
Variable
STI
%
Variable
LTI
%
EAG Mackay 1,245,000 373,500 110,642 1,687,000 2,503,000 5,919,142 29 29 42
JS Wilson
1
407,951 120,000 117,043 385,000 1,079,000 2,108,994 31 18 51
MI Wyman
1
230,595 69,179 161,745 200,618 218,021 880,158 52 23 25
1
Mr Wilson was appointed, and Mr Wyman retired, as an executive director on 21 July 2011. The gures shown in the table above for Mr Wilson are for the period
from 21 July 2011 to 31 March 2012, and those for Mr Wyman are for the period from 1 April 2011 to the date of his retirement as a director on 21 July 2011.
EAG Mackay JS Wilson MI Wyman
1 Fixed pay 29%
2 STI 29%
3 LTI 42%
1
2
3
1 Fixed pay 31%
2 STI 18%
3 LTI 51%
1
2
3
1 Fixed pay 52%
2 STI 23%
3 LTI 25%
1
2
3
Base pay and benets
The purpose of base pay is to provide employees with a xed
minimum level of earnings. For this reason, the committee seeks to
set base pay levels no higher than is necessary to retain and attract
the right employees, while providing an opportunity for above median
pay, conditional upon performance, through the companys short-
term and long-term incentive plans.
In setting base pay and overall target levels of remuneration for
executive directors and other executive committee members,
thecommittee has regard to the 30 companies in the FTSE 100
mostclosely ranked above and below the company by market
capitalisation, as well as to the companys principal international
competitors and, where relevant, other companies of comparable
sizeto the companys divisions in countries where the company has
asignicant presence. To ensure that any increases in base pay are
appropriate and affordable, the committee also considers the wider
market context and overall company nancial performance.
The committee reviews the base pay of executive directors and other
executive committee members with effect from the beginning of each
nancial year. Base pay for each of the executive directors is shown in
the table opposite for the year ended 31 March 2012 and for the year
ending 31 March 2013, showing the percentage change between
those years. The base pay for Mr Mackay as Executive Chairman for
the year ending 31 March 2013 has been set on the same basis as his
base pay for serving as Chief Executive. His terms and conditions and
remuneration as Non-Executive Chairman, when he assumes that role
in due course, will be settled by the committee nearer to the time of
that appointment and will be appropriate to the role of non-executive
chairman. Annualised base pay is shown for ease of comparison,
notwithstanding that Mr Wilson and Mr Wyman were executive
directors for only part of the year. The proposed annualised base pay
is also shown for Dr Clark for comparative purposes, although he will
only take up his post as Chief Operating Ofcer if his election is
approved by shareholders at the annual general meeting in July this
year. Actual base pay received by each executive director for the year
ended 31 March 2012 is shown in the table of directors emoluments
on page 77.
In determining the base pay increase for Mr Mackay for the year
ending 31 March 2013, the committee took into consideration base
pay of similar roles in other comparable organisations, the 4%
averageincrease in base pay for other UK-based employees, and
theoverall nancial performance of the company, which recorded
a12% increase in adjusted EPS, a 12% increase in EBITA, and the
recommended 12.3% increase (or 12.4% in pounds sterling, or 27.3%
in rands) in the full year dividend for the year ended 31 March 2012.
Accordingly, his annual base pay was increased by 4% to 1,295,000.
For Mr Wilson, the committee set his base pay last year at alower
introductory level, with the intention that it would be reviewed in May
2012 having regard to his performance during his rst year in his new
role. Taking into consideration performance and base pay for chief
nancial ofcers in comparable sized UK companies, the committee
determined that his annual base pay should be adjusted to720,000.
In setting Dr Clarks base pay in his new role, the committee had
regard to the base pay levels for the other executive directors, as well
as for similar roles in comparable sized UK companies, and determined
that it should be set at 850,000.
Annualised base pay
Executive directors
Year ended
31 March 2012
Year ended
31 March 2013
Change
%
EAG Mackay 1,245,000 1,295,000 4
JS Wilson 600,000 720,000 20
MI Wyman 745,000 n/a n/a
AJ Clark n/a 850,000 n/a
For UK-based executive committee members, pay is referenced
toappropriate UK benchmarks, as detailed above for executive
directors. For executive committee members whose primary
responsibilities are for operations outside the UK, total remuneration
isreferenced to appropriate benchmarks in those locations, but with
additional reference to UK pay levels to ensure fairness and equity
between executive committee members wherever the company
chooses to locate them.
Retirement benefts
It is the companys policy that retirement benets should wherever
possible take the form of dened contribution arrangements, to
minimise the companys funding risk. Where feasible, the company
applies this policy to new acquisitions. The companys pension
contributions for each executive director are xed at 30% of base pay.
Within the UK, amounts up to the annual and lifetime allowances are
contributed to the SABMiller plc Staff Pension Scheme, a registered
pension scheme, with any amounts in excess of these limits being
notionally credited to the companys unfunded retirement benets
scheme, in which the executive directors and other UK-based
employees participate. During the year ended 31March 2012, no
amounts were contributed to the SABMiller plc Staff Pension Scheme
for any of the executive directors, and the amounts notionally credited
to the companys unfunded retirement benets scheme for each
executive director are shown in the footnote to the table of directors
emoluments on page 77.
Other benefts
Executive directors are provided with a company car allowance,
medical insurance, long-term disability insurance, death in service
benets, beer allowance, accompanied travel, legal and professional
fees relevant to their duties, club subscriptions, and occasional
London accommodation. During the year ended 31 March 2012,
MrWilson also received relocation assistance, and Mr Wyman
received a long service award equal to 1 months base pay in
accordance with the groups policy applied to all employees
uponattaining 25 years service with the group. The value of these
benets is included in the table of directors emoluments on page 77.
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Short-term incentive plan
Short-term incentive plans have been established to reward the
achievement of specic annual nancial, operational and strategic
goals. Payment is made only for performance, thereby enabling the
company to control its cost base.
The executive directors and other members of the executive
committee participate in an annual short-term incentive plan which
delivers a cash bonus based upon the achievement of group or
(where applicable) divisional nancial targets, and on strategic and
personal performance objectives agreed in advance by the
committee. For the year ended 31 March 2012 and for the year ending
31 March 2013, the Chief Executive may earn a bonus of up to 175%
of base pay, and the Chief Financial Ofcer may earn a bonus of up to
120% of base pay. For the year ending 31 March 2013, the committee
has agreed that the Chief Operating Ofcer may earn a bonus of up to
150% of base pay. The other executive committee members may earn
maximum bonuses of between 120% and 150% of their base pay,
depending upon local market practices in the locations in which they
are based.
For the year ended 31 March 2012, the group nancial performance
measures for the executive directors and other UK-based executive
committee members were adjusted EPS growth, management
EBITA,and group working capital. The performance measures for
executive committee members based outside the UK were divisional
management EBITA and divisional working capital. These measures
were selected by the committee as they encompassed the
companyskey operating objectives for the year.
Sixty per cent of an executive directors short-term incentive
opportunity isbased on the degree of achievement of specied
nancial performance targets, which for the year ended 31 March
2012 was weighted as to 25% to adjusted EPS growth, 25% to
management EBITA and 10% to group working capital. The remaining
40% is based upon the degree of achievement of specic strategic
and personal performance objectives, agreed at the beginning of each
year, and evaluated by the committee at the year end. In determining
the resulting bonus amounts, the committee also takes into account
overall corporate performance and any other factors that it considers
appropriate, including environmental, social and governance issues.
At its meeting on 22 May 2012, the committee reviewed performance
against the specic performance targets, and considered overall
corporate nancial performance, noting a 12% increase in adjusted
EPS, a 12% increase in EBITA, and improved working capital cash
ows of US$258 million for the year ended 31 March 2012. The
committee also assessed the level of achievement against their
individual strategic and personal performance objectives by each
executive director and other executive committee members.
After consideration, the committee awarded bonuses to the executive
directors in the amounts shown below for the year ended 31 March
2012. The bonuses awarded for the previous year and the percentage
of maximum bonus opportunity each represents is also shown for
comparison. The bonuses for the year ended 31 March 2012 are
lower in absolute terms and as a percentage of maximum bonus
opportunity, as notwithstanding the groups strong results for the year,
the degree of achievement of stretching internal nancial performance
targets was not as high as in the year ended 31 March 2011.
Short-term incentive bonus
2011 2012
Executive directors
STI paid
for year
% of
maximum
bonus
opportunity
STI paid
for year
% of
maximum
bonus
opportunity
EAG Mackay 1,775,000 85 1,687,000 77.4
JS Wilson n/a n/a 385,000 78.6
1
MI Wyman 750,000 87 200,618 72.5
1
1
Mr Wilson was appointed as an executive director with effect from 21 July 2011,
and Mr Wyman retired as an executive director on 21 July 2011. Accordingly,
their bonus amounts were pro-rated for the year ended 31 March 2012, and
are shown here as a percentage of the pro-rated maximum bonus opportunity
for ease of comparison.
For the year ending 31 March 2013, appropriate group nancial
performance and individual strategic targets were discussed and
agreed at the committees meeting on 22 May 2012, but these are
notdisclosed in this years report as they represent commercially
sensitive information which if disclosed too early could be detrimental
to the companys competitive position. However, performance against
these targets willbe assessed by the committee at the end of the
year, and the outcomes will be disclosed in next years report.
Long-term incentive plans
The descriptions of the long-term incentive plans in the section
below have been audited
Long-term incentive plans are an integral part of the companys
overallapproach to competitive performance-based pay. The
plansare designed to create a clear line of sight between executive
remuneration and long-term value creation for shareholders. For this
reason, long-term incentive plans are the component of pay which
represents the largest opportunity for executive directors.
The following share incentive plans are in operation for employees
throughout the group, as approved by shareholders at the
2008 AGM.
Approved Executive Share Option Plan 2008
Executive Share Option Plan 2008
South African Executive Share Option Plan 2008
Executive Share Award Plan 2008
Stock Appreciation Rights Plan 2008
Associated Companies Employees Share Plan 2008
Share option plans
Share options are granted at market price at the time of grant
overSABMiller plc ordinary shares as traded on the London Stock
Exchange (except for options granted under the South African
Executive Share Option Plan 2008 which are denominated in South
African rand and are granted over SABMiller plc ordinary shares
astraded on the Johannesburg Stock Exchange). Grants of share
options are usually made annually to eligible employees at the
discretion of the committee taking into account managements
recommendations about employees performance and potential,
andalso having regard to local market practices.
The performance condition for share options granted during the
yearended 31 March 2012 is real growth in earnings per share, with
compound annualised adjusted earnings per share growth equivalent
to RPI +3% per annum required for any amount to vest, and RPI +5%
per annum required for full vesting. Performance tests are applied to
two-thirds of the award after three years and one-third of the award
after ve years. Any part of the award which does not meet its
performance target at those times will lapse in full, with no provision
for retesting. All share options expire on the tenth anniversary of the
grant date. Adjusted earnings per share was selected by the
committee as the appropriate performance measure to ensure that
share options will vest only if there is a real increase in underlying
nancial performance of the group over a three and ve year period.
The table on page 78 provides details, for each executive director,
ofthe number of share options granted, exercised, lapsed, held and
vested during the year ended 31 March 2012 (or until their date of
retirement if earlier). The table also provides details of the performance
conditions applying to prior year awards held by executive directors.
Share award plan
The SABMiller Executive Share Award Plan 2008 (the Award Plan)
provides awards of shares to executive directors and other members
of the executive committee, and other eligible senior executives.
Theremuneration committee has discretion under the Award Plan
todetermine appropriate performance conditions each year, and in
the year ended 31 March 2012, as in the previous year, awards were
made to members of the executive committee in two parts.
The rst part, described for ease of reference as Performance Share
Awards, vests in a single tranche on the third anniversary of the grant
date, subject to achieving an adjusted earnings per share (EPS)
growth target. For awards made during the year ended 31 March
2012, the 3-year EPS growth target was set at 11% compound
annualgrowth for full vesting, with a threshold growth target of 6%
compound annual growth, at which 25% of the shares awards would
vest. If the threshold target is not met, the Performance Share Awards
will lapse in full, with no retesting.
The second part, described for ease of reference as Value Share
Awards, vests on the fth anniversary of the grant date, subject to
aperformance condition based on Total Shareholder Return (TSR).
Executives will only receive shares under these awards if the growth
inthe companys market capitalisation exceeds the median growth in
market capitalisation of a weighted group of comparator companies
(as shown on page 83). No shares will vest if only median performance
is achieved, but for every 10 million of additional shareholder value
created in excess of the median, a dened number of shares will vest.
There is an overall cap on the number of shares vesting at the point
atwhich outperformance of the median equals the companys market
capitalisation at the date of grant. Based on the awards granted
during the year ended 31 March 2012 aggregate awards would
becapped at 0.54% of additional shareholder value created.
TSR was selected by the committee as the appropriate performance
measure for Value Shares because of its strong link with shareholder
value, while EPS was selected as the performance measure for
Performance Shares to ensure that full vesting under the Share
AwardPlan cannot be achieved unless there is also an increase
inthegroups underlying nancial performance.
The tables on pages 80 and 82 provide details of the number of
Performance Share Awards and Value Share Awards granted, vested,
lapsed and held during the year ended 31 March 2012 (or until their
date of retirement, if earlier), for each executive director.
Stock appreciation rights and the Associated Companies
Employees Share Plan
Executive directors do not participate in the Stock Appreciation Rights
Plan, which is used principally for a small number of executives based
in countries where it may be impractical to operate the share option
plan for legal or regulatory reasons. The Associated Companies
Employees Share Plan is used to grant long-term share-based
incentives to a limited number of employees of certain associated
companies in the group who are not eligible to receive awards under
the companys share option plans and share award plans because
they do not work for subsidiaries of the company.
Employees Benet Trust (EBT)
The Share Award Plan and the older performance share schemes
areoperated in conjunction with the companys EBT. During the year
1,406,612 ordinary shares were purchased by the trustee on behalf
ofthe EBT (at an average price of 22.54 per share) which amounted
to 0.09% of the issued ordinary shares of the company, in order to
ensure that the EBT continued to hold sufcient ordinary shares to
meet potential future obligations in respect of performance shares
conditionally awarded under the Performance Share Award
Schemes.The total consideration paid amounted to 31,697,759.
At 31 March 2012 the number of shares held in the EBT was 5.6 million
(2011: 7.4 million), representing 0.35% (2011: 0.47%) of the issued
ordinary shares of the company.
On 21 September 2011, pursuant to the authority granted by
shareholders at the 2008 annual general meeting, the SABMiller
Associated Companies Employees Benet Trust (Associated
Companies EBT) was established in order to facilitate the provision
ofshare-based long-term incentives to employees of companies
associated with the SABMiller group but not subsidiaries of the
company, and hence not eligible to participate in the companys
existing share option and award plans. At 31 March 2012 the number
of shares held in the Associated Companies EBT was 0.3 million
representing less than 0.01% of the issued ordinary shares of
thecompany.
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In aggregate there are therefore 5.9 million shares held in trust as at
31 March 2012 (2011: 7.4 million). These shares are held by the trustee
on behalf of the EBT and the Associated Companies EBT to ensure
that they hold sufcient ordinary shares to meet potential future
obligations in respect of performance and value share awards and
share-settled stock appreciation rights. The trustees of the EBT and
the Associated Companies EBT have waived their right to receive
dividends on shares held by them, and will only vote shares or claim
dividends on shares which are benecially owned by a participant,
and only then in accordance with the instructions of the underlying
shareholder. As at 31 March 2012, there were no benecially held
shares in the EBT (2011: nil) or in the Associated Companies EBT.
Dilution of share capital
All shares issued in satisfaction of share option exercises over the
tenyears ended 31 March 2012, and all outstanding share options
capable of being satised by the issue of new shares, amount to
apotential dilution of 3.97% of the issued ordinary shares of the
company (excluding shares held in treasury) on 31 March 2012.
Obligations under the companys other long-term incentive plans are
typically settled by the EBT from shares transferred from treasury or
purchased in the market.
Service contracts
Mr Mackay and Mr Wilson have service contracts with the company
which are terminable on not less than 12 months notice to be given
by the company or by the executive. Payment in lieu of notice may be
made on termination of employment, calculated by reference to the
executives base pay plus company pension contributions for the
relevant period, less any deduction considered by the committee to
be appropriate and reasonable taking account of accelerated receipt
of payment and the executives duty to mitigate any loss.
Mr Wyman retired as an executive director on 21 July 2011. He was
retained by the group as a full-time employee until 31 August 2011,
and as a part-time employee from 1 September 2011 until 31 March
2012 to provide strategic and tactical advice on various projects
including the acquisition of Fosters Group Limited. No compensation
was due, or paid, in respect of the termination of Mr Wymans contract
as an executive director or on the termination of his full-time or
part-time employment.
Date of
service
contract
Date rst
appointed
to the board
Date last
elected as
a director
Date next
due for
re-election
EAG Mackay 27/02/1999 08/02/1999 21/07/2011 2012 AGM
MI Wyman 26/02/1999 08/02/1999 22/07/2010 n/a
JS Wilson 17/08/2011 21/07/2011 21/07/2011 2012 AGM
Dr Clark will enter into a new service contract if his election is
approved by shareholders at the annual general meeting in July 2012,
and its terms will mirror those of Mr Mackay and Mr Wilson as
described above.
Shareholding guidelines
As explained in the committee chairmans introductory letter, given
thesignicant shareholdings of Mr Mackay (31 times his base pay at
31 March 2012), and Mr Wyman (just under 20 times his annualised
base pay at his date of retirement on 21 July 2011), the committee had
not previously considered it necessary to adopt formal shareholding
guidelines. However, with the appointment of Mr Wilson as an
executive director during the year, and the proposed appointment
ofDr Clark, the committee has now set a shareholding guideline of
300% of base pay for the Chief Executive and 200% of base pay for
other executive directors, with the expectation that they will retain all
shares vesting under the companys share award plans or resulting
from the exercise of vested share options (except those shares sold
topay tax on any award or exercise), or otherwise market purchase
sufcient shares, to achieve the relevant threshold.
Non-executive directors fees
The Chairmans fee is determined annually by the committee, taking
into account the time commitment required. Other non-executive
directors fees are reviewed annually by the board to ensure that they
remain appropriate for the commitments and responsibilities of each
role. Consistent with the approach for executive directors, fees are
benchmarked against the non-executive directors fees in the 30
companies in the FTSE-100 most closely ranked above and below the
company by market capitalisation, and are determined having regard
to an independent review conducted on behalf of the committee by
Kepler Associates. On the basis of this review, directors fees were
increased by 3.9% to 80,000 per annum, fees for committee
chairmanship and membership were left unchanged, and the senior
independent directors fee was increased to 30,000, as the existing
fee was shown to have fallen considerably behind the market rate for
companies of a similar size in the FTSE 100.
Annual fees for the year ended 31 March 2012 and the proposed
feesfor the year ending 31 March 2013 are shown in the table on the
following page, with actual fees received by each named non-executive
director for the year ended 31 March 2012 shown in the table of
directors emoluments on page 77. The increase in the Chairmans
feewas determined by reference to the rate of consumer price
ination inSouth Africa, where the Chairman is resident, and will be
payable toMr Kahn until his retirement at the annual general meeting
in July 2012, and hence will be pro-rated for the year ending 31 March
2013. Mr Mackay will not receive any additional fees for acting as
Executive Chairman, and his terms and conditions and remuneration
for acting as Non-Executive Chairman, when he assumes that role
indue course, will be settled by the committee nearer to the time of
that appointment and will be appropriate to the role of Non-Executive
Chairman. Mr Manser, the Senior Independent Director, will be
appointed as Deputy Chairman with effect from the annual general
meeting in July 2012, but will not receive any additional fees for acting
as Deputy Chairman.
Fee category (per annum)
Year ended
31 March
2012
Year ending
31 March
2013
Change
%
Chairmans fee 290,000 315,000 8.6
Basic fee 77,000 80,000 3.9
Committee chairmen (inclusive)
Audit 30,000 30,000 0
Remuneration 24,000 24,000 0
CARAC 20,000 20,000 0
Nomination 15,000 15,000 0
Committee members
Audit 15,000 15,000 0
Remuneration 12,000 12,000 0
CARAC 8,000 8,000 0
Nomination 0
Senior independent director 20,000 30,000 50
In order to carry out his duties effectively, the Chairman is provided
with an ofce, a secretary, a company car and medical insurance.
Thenon-executive directors do not participate in any of the companys
incentive plans, nor do they receive retirement or other benets
(otherthan a beer allowance).
Non-executive directors do not have service contracts, but serve the
company under letters of appointment, which may be terminated
without liability for compensation. Their dates of appointment are
shown in the table below.
Director
Date rst
appointed
to the board
Date of
letter of
appointment
Date next due
for election or
re-election
MH Armour 01/05/2010 14/04/2010 2012 AGM
GC Bible 01/08/2002 27/09/2002 2012 AGM
DS Devitre 16/05/2007 16/05/2007 2012 AGM
JM Kahn
1
08/02/1999 23/02/1999 n/a
LMS Knox 19/05/2011 17/05/2011 2012 AGM
PJ Manser 01/06/2001 20/06/2001 2012 AGM
JA Manzoni 01/08/2004 12/05/2004 2012 AGM
MQ Morland 08/02/1999 23/02/1999 2012 AGM
DF Moyo 01/06/2009 26/05/2009 2012 AGM
CA Prez Dvila 09/11/2005 12/10/2005 2012 AGM
R Pieterse
1
15/05/2008 09/06/2008 n/a
MC Ramaphosa 08/02/1999 23/02/1999 2012 AGM
A Santo Domingo
Dvila 09/11/2005 12/10/2005 2012 AGM
HA Weir 19/05/2011 17/05/2011 2012 AGM
HA Willard 01/08/2009 01/08/2009 2012 AGM
1
Mr Kahn and Mr Pieterse were last re-elected to the board in July 2011, but
have conrmed their intention not to stand for re-election in 2012.
Performance review
The company is required under the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 to
include a line graph showing the companys Total Shareholder Return
(TSR) performance compared to an appropriate broad equity market
index for the preceding ve years. The chart below compares the
companys TSR with the FTSE 100 Total Return Index over the period
from 1 April 2007 to 31 March 2012, assuming an initial investment
of100. The company is a constituent of the FTSE 100 Total Return
Index and, accordingly, this is considered to be an appropriate
comparison to demonstrate the companys relative performance.
Over this period, 100 invested in SABMiller would have returned
254, while the same amount notionally invested in this index would
have returned just 111.
5-year cumulative TSR performance
Value of 100 invested 31 March 2007
11 12 07 08 09 10
SABMiller
FTSE 100
300
250
200
150
100
50
0
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Information subject to audit
Directors interests in shares of the company
Director
Ordinary shares
held as at
31 March 2011
(or date of
appointment if later)
Ordinary shares
acquired during
the period
Ordinary shares
disposed of
during the period
Ordinary shares
held as at
31 March 2012
(or date of
retirement if earlier)
JM Kahn 1,670,578 1,670,578
EAG Mackay 1,402,927 280,100
4
145,652
4
1,537,375
11
MI Wyman
1
567,129 140,000
5
72,800
5
634,329
JS Wilson
2
6,850 6,850
11
AJ Clark
12
MH Armour
GC Bible 55,000 20,775
6
75,775
DS Devitre
LMS Knox
3
3,000
7
3,000
PJ Manser 5,000 5,000
JA Manzoni 1,211 2,368
8
3,579
MQ Morland 40,000 40,000
DF Moyo 386
9
386
CA Prez Dvila
R Pieterse
MC Ramaphosa 4,000
10
4,000
10
A Santo Domingo Dvila
HA Weir
3

HA Willard
1
Mr Wyman retired from the board on 21 July 2011, and the table reects
hisshareholding on his retirement date.
2
Mr Wilson was appointed to the board on 21 July 2011, and the period
ofthetable in respect of his shareholding commences on that date.
3
Ms Knox and Ms Weir were both appointed to the board on 19 May 2011,
andthe period of the table in respect of their shareholdings commences
on19 May 2011.
4
Awards vested in respect of 280,100 shares and subsequent sale of shares to
settle tax liabilities on the gross awards vested, with the balance of the shares
being retained by Mr Mackay benecially.
5
Awards vested in respect of 140,000 shares and subsequent sale of shares to
settle tax liabilities on the gross awards vested, with the balance of the shares
being retained by Mr Wyman benecially.
6
Mr Bible acquired 7,600 shares on 9 December 2011 at a price of 21.68 per
share, 7,000 shares on 28 December 2011 at a price of 22.72 per share,
1,950 shares on 4 January 2012 at a price of 23.16 per share, 2,875 shares
on 14 March 2012 at a price of 26.53 per share and 1,350 shares on 19
March 2012 at a price of 26.09 per share
7
Ms Knox acquired 3,000 shares on 21 November 2011 at a price of 21.08
per share.
8
Mr Manzoni has elected to apply his quarterly directors fees to the regular
purchase of SABMiller ordinary shares after the deduction of taxes by way
ofa trading plan, and accordingly acquired 590 shares on 24 June 2011 at
aprice of 20.94 per share, 591 shares on 23 September 2011 at a price of
20.47 per share, 644 shares on 20 December 2011 at a price of 21.64 per
share, and 543 shares on 23 March 2012 at a price of 25.62 per share. The
trading plan will remain in place until revoked by Mr Manzoni. The trading plan
instruction cannot be revoked or altered except in open dealing periods with
the clearance of the Chairman in accordance with the Model Code.
9
Dr Moyo acquired 386 shares on 27 March 2012 at a price of 25.90 per share.
10
Mr Ramaphosas interest in 4,000 shares is non-benecial.
11
In May 2012, Messrs Mackay and Wilsons benecial holdings increased by
134,448 and 5,425 shares, respectively, following the vesting of awards over
280,100 and 9,000 shares, respectively, and the subsequent sales of shares
to settle tax liabilities on the gross awards vested, with the balance of the
shares being retained. There have been no other changes in the directors
benecial interests as at 11 June 2012.
12
Dr Clark is proposed for appointment as Chief Operating Ofcer and for
election as a director at the annual general meeting to be held on 26 July
2012. As at 11 June 2012, Dr Clark had a benecial interest in 173,747 shares.
Directors emoluments
The directors emoluments in respect of the year ended 31 March 2012 in total have been audited and are set out in the table below:
Emoluments paid in respect of the year ended 31 March 2012
2012
Base pay
or fees
2012
Expense
allowance
2012
Benets
2012 Total
(excluding
bonus)
2012
Bonus
2012
Total
1
2011
Total
1
Executive directors
EAG Mackay
2
1,245,000 110,642
3
1,355,642 1,687,000 3,042,642 3,435,202
JS Wilson
4
407,951 117,043 524,994 385,000 909,994
MI Wyman
5
230,595 161,745 392,340 200,618 592,958 1,802,402
Total (A) 4,545,594 5,237,604
Non-executive directors
MH Armour
6
104,000 203 104,203 104,203 82,240
GC Bible 77,000 77,000 77,000 72,000
DS Devitre 92,000 148 92,148 92,148 82,152
ME Doherty
7
61,693
Lord Fellowes
7
38,220
JM Kahn 313,000 1,074 314,074 314,074 287,044
LMS Knox
6
90,212 100 90,312 90,312
PJ Manser 147,000 398 147,398 147,398 121,583
JA Manzoni 97,000 462 97,462 97,462 86,794
MQ Morland 116,000 400 116,400 116,400 102,384
DF Moyo 97,000 357 97,357 97,357 86,583
CA Prez Dvila 77,000 181 77,181 77,181 72,187
R Pieterse 85,000 85,000 85,000 78,000
MC Ramaphosa 85,000 199 85,199 85,199 78,192
A Santo Domingo Dvila 77,000 246 77,246 77,246 72,253
HA Weir
6
79,803 394 80,197 80,197
HA Willard
8
382 382 382 297
Total (B) 1,541,559 1,321,622
Grand total (A+B) 6,087,153 6,559,226
1
For the year ended 31 March 2012, no retirement contributions were made
forany of the executive directors to the SABMiller plc Staff Pension Scheme
orany other registered pension scheme, and for each executive director
anamount equal to 30% of his base salary was notionally credited to the
companys unfunded retirement benets scheme (being 373,500, 120,000
and 69,179 for Messrs Mackay, Wilson and Wyman, respectively). For the
year ended 31 March 2011, in light of the uncertainty which at the time
surrounded the United Kingdom Governments announcement that it was
reviewing the tax treatment of retirement contributions, the company paid
MrMackay and Mr Wyman the equivalent of their pension contributions (being
357,600 and 214,500 respectively) in the form of a cash allowance for the
year, with the company and the individuals paying their respective shares of
national insurance and income tax on these amounts as if they were salary.
These amounts are included in the total emoluments reported for 2011.
2
Mr Mackay receives annual fees for his service as a non-executive director
from Reckitt Benckiser Group plc of 92,000 and from Philip Morris
International Inc of US$130,000, respectively, which he is permitted to
retain.13,500 of the fee from Reckitt Benckiser Group plc is applied to
thepurchase of Reckitt Benckiser Group plc ordinary shares. In addition,
MrMackay receives from Philip Morris International Inc. an annual award of
shares of common stock in Philip Morris International Inc. pursuant to that
companys Stock Compensation Plan for Non-Employee Directors, which
forthe year ended 31 December 2011 had a fair market value of US$160,000
on the date of grant, being 11 May 2011.
3
The groups apartment in London is made available to Mr Mackay to occupy
occasionally, subject to tax on this use for his own account.
4
Mr Wilson was appointed as a director on 21 July 2011, and accordingly only
received pro-rated emoluments from the company as an executive director
inrespect of the year ended 31 March 2012.
5
Mr Wyman retired as a director on 21 July 2011 and accordingly only received
pro-rated emoluments from the company for his services as an executive
director up to that date. Mr Wyman continued as a full-time employee until
31August 2011, and as a part-time employee for the period from his retirement
from full-time employment on 31 August 2011 until 31 March 2012. For his
services from 21 July 2012 to 31 March 2012, he received a salary of
246,692, a short-term incentive of 69,382 and other benets of 34,275.
Inaddition anamount of30,465 was notionally credited to the companys
unfunded retirement benets scheme. During the year ended 31 December
2011, MrWyman received annual fees for his service as a non-executive
director from Nedbank Group Limited and Nedbank Limited of ZAR706,000
intotal, which he is permitted to retain.
6
Mr Armour was appointed to the board on 1 May 2010, and accordingly only
received pro-rated emoluments from the company in respect of the year
ended 31 March 2011. Ms Knox and Ms Weir were appointed to the board
on19 May 2011, and accordingly received no emoluments from the company
in respect of the year ended 31 March 2011 and only received pro-rated
emoluments from the company in respect of the year ended 31 March 2012.
7
Ms Doherty resigned as a director with effect from 31 December 2010,
andLord Fellowes retired as a director with effect from 22 July 2010, and
accordingly they each received only pro-rated emoluments from the company
in respect of the year ended 31 March 2011.
8
Mr Willard is an executive ofcer of Altria Group, Inc (Altria) and in terms of the
companys agreement with Altria, he does not receive directors fees from the
company, but is entitled to a nominal annual beer allowance.
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Share incentive plans
The interests of the executive directors in shares of the company provided in the form of options and awards are shown in the tables below,
and have been audited. During the year ended 31 March 2012 the highest and lowest market prices for the companys shares were 19.79
(on8 August 2011) and 26.60 (on 13 March 2012) respectively and the closing market price on 30 March 2012 was 25.095).
Share options
Exercisable for
3-10 years from
Subscription
price
()
Outstanding
as at
31 March 2011
(or date of
appointment
if later)
Granted
during
the period
Exercised
during
the period
Lapsed
during
the period
Outstanding
as at
31 March 2012
(or date of
retirement
if earlier)
Vested and
exercisable as at
31 March 2012
(or date of
retirement
if earlier)
Directors in service as at 31 March 2012
EAG Mackay 19/05/2006
5
10.61 230,000 230,000
7
230,000
7
18/05/2007
5
11.67 230,000 230,000
8
154,100
8
16/05/2008
5
12.50 230,000 230,000
9
154,100
9
14/11/2008
5
9.295 60,000 60,000
9
40,200
9
15/05/2009
5
12.31 290,000 290,000
10
01/06/2010
5
19.51 250,000 250,000
01/06/2011
5
22.495 250,000 250,000
1,290,000 250,000 1,540,000
11
578,400
JS Wilson
1
20/05/2005
4
8.28 3,623 3,623 3,623
16/05/2008
2
12.50 13,000 13,000 13,000
15/05/2009
2
12.31 13,000 13,000
2
01/06/2010
2
19.51 13,000 13,000
01/06/2011
5
22.495 100,000 100,000
01/12/2011
5
22.40 50,000 50,000
42,623 150,000 192,623
11
16,623
Directors who retired during the nancial year
MI Wyman
3
20/05/2005
4
8.28 3,623 3,623 3,623
6
19/05/2006
5
10.61 46,200 46,200
7
46,200
7
18/05/2007
5
11.67 46,200 46,200
8
16/05/2008
5
12.50 140,000 140,000
9
93,800
9
01/08/2008
5
10.49 35,000 35,000
9
15/05/2009
5
12.31 175,000 175,000
01/06/2010
5
19.51 150,000 150,000
01/06/2011
5
22.495 150,000 150,000
596,023 150,000 746,023 143,623
1
Mr Wilson was appointed to the board on 21 July 2011, and the gures in
theabove table represent the period commencing from his appointment
andconcluding at the end of the nancial year on 31 March 2012.
2
Share options granted to Mr Wilson prior to the announcement in May 2011
ofhis appointment to the board are not subject to a separate performance
condition. On 15 May 2012, 13,000 share options granted to Mr Wilson on
15May 2009 vested in full and became exercisable. Share options granted to
Mr Wilson on 1 June 2011 were granted in anticipation of his appointment to
the board and are subject to the performance condition described in note 5.
3
Mr Wyman retired from the board on 21 July 2011, and the gures in the table
above represent the period of the nancial year from 1 April 2011 until 21 July
2011 while he was a director. Following Mr Wymans retirement from full time
employment on 31 August 2011 all further vesting ceased, and his unvested
share options were pro-rated for time elapsed since grant, and will remain
outstanding along with his other remaining share options until 31 March 2013
after which time they will lapse.
4
The performance condition for options granted in 2002 and until 2005
required compound annualised adjusted EPS growth (expressed in sterling)
ofRPI + 3% subject to testing at three, four and ve-year intervals from a
xedbase for vesting of the base annual award. Half of any additional annual
amount vested at compound annualised adjusted EPS growth of RPI + 4%;
and the other half of any additional annual amount vested at compound
annualised adjusted EPS growth of RPI + 5%. After the ve-year test any
unvested portion of the option lapsed.
5
The performance condition for options granted from 2006 and onwards
requires compound annualised adjusted EPS growth of RPI + 3% from a xed
base for vesting of the base annual award. Half of any additional annual amount
vests at compound annualised adjusted EPS growth of RPI + 4%; and the other
half of any additional annual amount vests at compound annualised adjusted
EPS growth of RPI + 5%. The performance tests are applied to two-thirds of
theaward after three years and one-third of the award after ve years, with any
unvested portion of the options lapsing after three years or ve years, as the
case may be, and with no provision for retesting any part of the awards.
6
On 20 May 2008, share options granted on 20 May 2005 vested in full and
became exercisable as the groups adjusted EPS for the year ended 31 March
2008, at 71.28 pence (converted from US$ at the average exchange rate over
the period 1 April 2007 to 31 March 2008) was more than 27.1% higher (the
aggregate of RPI movement and 5% per annum compound growth) than the
adjusted EPS of 54.7 pence for the year ended 31 March 2005 (the base year
calculation of the performance condition) converted fromUS$ at the average
exchange rate for the period from 1 April 2004 to 31March 2005. The mid
market close on 20 May 2008 was 12.74.
7
Two-thirds of the share options granted on 19 May 2006 were eligible to be
tested against the performance condition described in this report for the three
years ended 31 March 2009, and on 19 May 2009 vested in full and became
exercisable as the groups adjusted EPS for the year ended 31 March 2009,
at79.7 pence (converted from US$ at the average exchange rate over the
period 1 April 2008 to 31 March 2009) was more than 24.2% higher (the
aggregate ofRPI movement and 5% per annum compound growth) than the
adjusted EPS of 61.1 pence for the year ended 31 March 2006 (the base year
calculation of the performance condition) converted from US$ at the average
exchange rate for the period from 1 April 2005 to 31 March 2006. The mid
market close on 19 May 2009 was 12.57. The remaining one-third of the
options granted on 19 May 2006 were eligible to be tested against the
performance condition described in this report for the ve years ended
31March 2011, and on 19 May 2011 vested in full and became exercisable
asthe groups adjusted EPS for the year ended 31 March 2011, at 123.4
pence (converted from US$ at the average exchange rate over the period
1April 2010 to 31 March 2011) was more than 37.2% higher than the
adjustedEPS of 61.1 pence for the year ended 31 March 2006 (the base
yearcalculation of the performance condition) converted from US$ at the
average exchange rate for the period from 1 April 2005 to 31 March 2006
plusthe aggregate of RPI movement and 5% per annum compound growth.
The mid market close on 19 May 2011 was 22.66.
8
period 1 April 2009 to 31 March 2010) was 28.7% higher than the adjusted
EPS of 63.4 pence for the year ended 31 March 2007 (the base year
calculation of the performance condition converted from US$ at the average
exchange rate for the period from 1 April 2006 to 31 March 2007) plus the
aggregate of RPI movement and 5% per annum compound growth. The mid
market close on 18 May 2010 was 20.76. The remaining one-third of the
options granted on 18 May 2007 were eligible to be tested against the
performance condition described in this report for the ve years ended 31
March 2012, and on 18 May 2012 vested in full and became exercisable as
the groups adjusted EPS for the year ended 31 March 2012, at 134.4 pence
(converted from US$ at the average exchange rate over the period 1 April
2011 to 31 March 2012) was more than 46% higher than the adjusted EPS
of63.4 pence for the year ended 31 March 2007 (the base year calculation
ofthe performance condition) converted from US$ at the average exchange
rate for the period from 1 April 2006 to 31 March 2007 plus the aggregate of
RPI movement and 5% per annum compound growth. The mid market close
on 18 May 2012 was 24.195.
9
Two-thirds of the share options granted on 16 May 2008 and 14 November
2008 were eligible to be tested against the performance condition described
in this report for the three years ended 31 March 2011, and on 16 May 2011
and 14 November 2011 respectively vested in full and became exercisable as
the groups adjusted EPS for the year ended 31 March 2011, at 123.4 pence
(converted from US$ at the average exchange rate over the period 1 April
2010 to 31 March 2011) was 38.0% higher than the adjusted EPS of 71.3
pence for the year ended 31 March 2008 (the base year calculation of the
performance condition converted from US$ at the average exchange rate
forthe period from 1 April 2007 to 31 March 2008) plus the aggregate of RPI
movement and 5% per annum compound growth. The mid market close on
16 May 2011 was 22.495. The mid market close on 14 November 2011 was
22.12. The one-third which remains unvested will be eligible to be tested
against the performance condition described in note 5 above for the ve years
ending 31 March 2013.
10
period 1 April 2011 to 31 March 2012) was 29.5% higher than the adjusted
EPS of 80.0 pence for the year ended 31 March 2009 (the base year
calculation of the performance condition converted from US$ at the average
exchange rate for the period from 1 April 2008 to 31 March 2009) plus the
aggregate of RPI movement and 5% per annum compound growth. The mid
market close on 15 May 2012 was 24.90. The one-third which remains
unvested will be eligible to be tested against the performance condition
described in note 5 above for the ve years ending 31 March 2014.
11
Messrs Mackay and Wilson were granted 250,000 and 150,000 share options
respectively at a subscription price of 23.95 per share on 1 June 2012, and
Dr Clark was granted 200,000 share options at the same subscription price in
anticipation of his appointment as Chief Operating Ofcer and as an executive
director at the annual general meeting on 26 July 2012.
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Performance Share Awards
Director
Effective date
of award
Share price
at effective
date of award
()
Outstanding
as at
31 March 2011
(or date of
appointment
if later)
Awarded
during
the period
Vested
during
the period
Lapsed
during
the period
Outstanding
as at
31 March 2012
(or date of
retirement
if earlier) Vesting date
EAG Mackay 19/05/2006
1
10.61 37,950 37,950
7
19/05/2011
18/05/2007
2
11.67 37,950 37,950
10
18/05/2012
16/05/2008
3
12.50 230,000 192,050
8
37,950 16/05/2013
14/11/2008
3
9.295 60,000 50,100
9
9,900 14/11/2013
15/05/2009
4
12.31 290,000 290,000
11
15/05/2012
01/06/2010
5
19.51 125,000 125,000 01/06/2013
01/06/2011
6
22.495 125,000 125,000 01/06/2014
780,900 125,000 280,100 625,800
14
JS Wilson
12
15/05/2009
4
12.31 9,000 9,000
11
15/05/2012
01/06/2010
5
19.51 9,000 9,000 01/06/2013
01/06/2011
6
22.495 50,000 50,000 01/06/2014
01/12/2011
6
22.40 25,000 25,000 01/12/2014
18,000 75,000 93,000
14
MI Wyman
13
19/05/2006
1
10.61 23,100 23,100
7
19/05/2011
18/05/2007
2
11.67 23,100 23,100 18/05/2012
16/05/2008
3
12.50 140,000 116,900
8
23,100 16/05/2011
01/08/2008
3
10.49 35,000 35,000 01/08/2011
15/05/2009
4
12.31 175,000 175,000 15/05/2012
01/06/2010
5
19.51 75,000 75,000 01/06/2013
01/06/2011
6
22.495 75,000 75,000 01/06/2014
471,200 75,000 140,000 406,200
1
From 2006 to 2009, 50% of performance share awards were subject to a TSR performance condition and 50% to an adjusted EPS growth performance
condition. The TSR test is applied to two-thirds of the relevant part of the award after three years and to one-third after ve years. The EPS condition is a
three-year adjusted EPS growth target, set by reference to historical and forecast adjusted EPS growth for the six members of the comparator group determined
by the committee to be the companys closest peers in the global brewing industry, namely Anheuser-Busch, Carlsberg, Heineken, InBev, Molson Coors and
Scottish & Newcastle (although Scottish & Newcastle was dropped from this group for the purposes of awards made in 2008 and 2009, and Anheuser-Busch
was dropped from this group for the purposes of awards made in 2009). From 2010 onwards, the EPS condition was set by reference to historical and forecast
adjusted EPS growth for a broader range of food, beverage and consumer goods companies with a global spread of operations.
TSR condition
2006
Performance shares awarded in 2006 vest if three year and ve year TSR
exceeds the median TSR of a comparator group of companies identied at
the time of the award, with two-thirds of the award being tested after three
years, and one-third after ve years. On reaching the median performance of
the comparator group, 25% of the award vests, and on reaching at least the
upper quartile, 100% of the award vests, with pro rata vesting in between.
EPS condition
2006
The EPS growth target for awards made in 2006 is 11% p.a. for full vesting
with threshold vesting of 25% at 6% p.a., and pro rata vesting between these
levels of achievement.
2
2007
Performance shares awarded in 2007 vest if three year and ve year TSR
exceeds the median TSR of a comparator group of companies identied at
the time of the award. 25% of the award vests on reaching the median, and
100% vests if TSR exceeds the median by 25% with respect to the three-year
vesting test and by 33% with respect to the ve-year vesting test.
2007
The EPS growth target for awards made in 2007 is 11% p.a. for full vesting,
3
2008
The same TSR performance condition applies to performance shares
awarded in 2008 as applied in 2007.
2008
4
2009
The same TSR performance condition applies to performance shares
awarded in 2009 as applied in 2008.
2009
5
2010
From June 2010 the TSR performance condition was replaced by the value
sharing condition referred to on page 83.
2010
6
2011
From June 2010 the TSR performance condition was replaced by the value
sharing condition referred to on page 83.
2011
7
In May 2011, the remaining one-third of the executive directors 2006 TSR
based performance share awards were tested against the TSR performance
condition for the ve-year period ended 18 May 2011. TSR for this ve-year
period was 113.1%, which exceeded the peer group median of 58.3% by
more than 94% and therefore all of the shares comprised in the remaining
one-third of the 2006 awards vested. This resulted in 37,950 and 23,100 TSR
awards vesting for Mr Mackay and Mr Wyman respectively. The remuneration
committee exercised its discretion to recommend to the trustee of the EBT
that these shares be released to Mr Mackay and Mr Wyman on 19 May 2011
(when the price was 22.66). Of these, 19,734 and 12,012 shares were sold
on 19 May 2011 to cover income tax liabilities owing by Mr Mackay and Mr
Wyman respectively. (All of the shares comprised in the rst two-thirds of this
part of the executive directors 2006 performance share awards lapsed on 19
May 2009, as TSR for the three-year period ended 18 May 2009 was below
median.)
8
Also in May 2011, the executive directors May 2008 performance share
awards were tested against the applicable TSR and EPS performance
conditions. The EPS performance measurement was achieved as to 100%
ofmaximum which resulted in 115,000 and 70,000 EPS awards vesting for
MrMackay and Mr Wyman respectively. The remuneration committee
exercised its discretion to recommend to the trustee of the EBT that 115,000
and 70,000 shares be released to Mr Mackay and Mr Wyman respectively on
16 May 2011 (when the price was 22.495). Of these, 59,800 and 36,400
shares were sold on 16 May 2011 to cover income tax liabilities owing by
MrMackay and Mr Wyman respectively. TSR for the three-year period ended
31 March 2011 was 98.4%, which exceeded the peer group median of 25.3%
by more than 290% and therefore all of the shares comprised in the rst
two-thirds of the 2008 awards vested, with the remaining one-third to be
tested against the TSR performance condition for the ve-year period ending
31 March 2013. This resulted in 77,050 and 46,900 TSR awards vesting
forMrMackay and MrWyman respectively. The remuneration committee
exercised its discretion to recommend to the trustee of the EBT that these
shares be released to MrMackay and Mr Wyman on 16 May 2011 (when
theprice was 22.495). Ofthese, 40,066 and 24,388 shares were sold
on16May 2011 to cover income tax liabilities owing by Mr Mackay and
MrWyman respectively.
9
In November 2011, Mr Mackays November 2008 performance share awards
were tested against the applicable TSR and EPS performance conditions. The
EPS performance measurement was achieved as to 100% of maximum which
resulted in 30,000 EPS awards vesting for Mr Mackay. TSR for the three-year
period ended 31 March 2011 was 98.4%, which exceeded the peer group
median of 25.3% by more than 290% and therefore all of the shares
comprised in the rst two-thirds of the 2008 awards vested, with the
remaining one-third to be tested against the TSR performance condition for
the ve-year period ending 14 November 2013. This resulted in 20,100 TSR
awards vesting. The remuneration committee exercised its discretion to
recommend to the trustee of the EBT that these shares be released to Mr
Mackay on 14 November 2011 (when the price was 22.51). Of the resulting
total number of 50,100 shares released, 26,052 shares were sold on
14November 2011 to cover income tax liabilities owing by Mr Mackay.
10
After the year end, the remaining one-third of the executive directors
2007TSR based performance share awards were tested against the TSR
performance condition for the ve-year period ended 19 May 2012. TSR for
this ve-year period was 152%, which exceeded the peer group median of
36% by 116% and therefore all of the shares comprised in the remaining
one-third of the 2007 awards vested. This resulted in 37,950 TSR awards
vesting for Mr Mackay. The remuneration committee exercised its discretion
to recommend to the trustee of the EBT that these shares be released to
MrMackay on 18 May 2012 (when the price was 24.755). Of these, 19,734
MrMackay.
11
Also after the year end, the executive directors 2009 performance share
awards were tested against the applicable TSR and EPS performance
conditions. The EPS performance measurement was achieved as to 100%
ofmaximum which resulted in 150,000 and 9,000 EPS awards vesting for
MrMackay and Mr Wilson respectively. The remuneration committee
exercised its discretion to recommend to the trustee of the EBT that 150,000
and 9,000 shares be released to Mr Mackay and Mr Wilson respectively on
15May 2012 (when the price was 24.965). Of these, 78,000 and 3,575
MrMackay and MrWilson respectively. TSR for the three-year period ended
31 March 2012 was 151%, which exceeded the peer group median of 62%
by89% and therefore all of the shares comprised in the rst two-thirds of the
2009 awards vested, with the remaining one-third to be tested against the TSR
performance condition for the ve-year period ending 31 March 2014. This
resulted in 92,150 TSR awards vesting for Mr Mackay. The remuneration
committee exercised its discretion to recommend to the trustee of the EBT
that these shares be released to Mr Mackay on 15 May 2012 (when the price
was 24.965). Of these, 47,918 shares were sold on 15 May 2012 to cover
income tax liabilities owing by Mr Mackay.
12
Mr Wilson was appointed to the board on 21 July 2011, and the gures in the
above table represent the period commencing from his appointment and
concludes at the end of the nancial year on 31 March 2012.
13
above represent the period of the nancial year from 1 April 2011 until 21 July
2011 while he was a director. Following Mr Wymans retirement from full-time
employment on 31 August 2011, his outstanding performance share awards
were pro-rated for time elapsed since their date of grant, and will remain
outstanding along with his other remaining share awards and will vest or not
on their normal release dates depending on the extent to which the applicable
performance conditions are met.
14
On 1 June 2012 Messrs Mackay and Wilson were awarded 125,000 and
75,000 conditional awards of performance shares respectively, subject to the
companys adjusted EPS growth performance condition, and Dr Clark was
awarded 100,000 conditional awards of performance shares, subject to the
companys adjusted EPS growth performance condition, in anticipation of his
appointment as Chief Operating Ofcer and his election as an executive
director atthe annual general meeting on 26 July 2012.
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Value Share Awards
Director
Effective date
of award
Share price
on effective
date of award
()
Outstanding
as at
31 March 2011
(or date of
appointment
if later)
(shares per
10m of
additional
value)
Awarded
during
the period
(shares per
10m of
additional
value)
Released
during
the period
(ordinary
shares
released)
Lapsed
during
the period
(shares per
10m of
additional
value)
Outstanding
as at
31 March 2012
(or date of
retirement
if earlier)
(shares per
10m of
additional
value)
1
Earliest
possible
release
date
2
Final
vesting date
EAG Mackay 01/06/2010 19.51 220 220 01/06/2013 01/06/2015
01/06/2011 22.495 220 220 01/06/2014 01/06/2016
220 220 440
4
JS Wilson 01/06/2011 22.495 100 100 01/06/2014 01/06/2016
01/12/2011 22.40 30 30 01/06/2014 01/06/2016
130 130
4
MI Wyman
3
01/06/2010 19.51 130 130 01/06/2013 01/06/2015
01/06/2011 22.495 130 130 01/06/2014 01/06/2016
130 130 260
3
1
The number of shares which can be released under a value share award
iscapped at the level at which the additional shareholder value created in
excess of the median growth of the comparator group equals the market
capitalisation of the company at the beginning of the performance period.
Additional shareholder value created is the amount by which the growth in the
companys market capitalisation after taking account of net equity cash ows
exceeds the median growth of a weighted peer group index over the ve-year
performance period. The payout under the value share awards made in the
year ended 31 March 2012 for the executive directors and members of the
executive committee in the aggregate is capped at circa 0.54% (2011: 0.40%)
of additional shareholder value created (over and above the median of the
comparator group) for any one cycle. This is the maximum theoretical
percentage that can be earned in aggregate by the executive directors and
the members of the executive committee, with 99.46% of the extra value
created accruing to shareholders. No awards will be released if the growth
inthe companys market capitalisation after taking account of net equity
cashows is only at the median of the comparator group.
2
Value share awards vest on the fth anniversary of the grant date, subject
toachievement of the performance condition, but participants may elect to
request the trustees of the EBT release all or part of the award following their
third anniversary of grant, during specied quarterly release windows, each
lasting no longer than two weeks. Participants electing to exercise their
awards before the fth anniversary crystallise the number of shares which
willvest and cannot retest their awards against any future growth in additional
value. These shares will be subject to partial deferral, being released to the
participant in a number of equal instalments over the period up to the fth
anniversary of the date of grant, and are subject to forfeiture under certain
circumstances should their employment be terminated before the fth
anniversary.
3
above represent the period of the nancial year between 1 April 2011 and
21July 2011 while he was a director. Following Mr Wymans retirement from
full-time employment on 31 August 2011, his outstanding value share awards
were pro-rated for time elapsed since their date of grant, and will remain
outstanding along with his other remaining share awards and will vest or not
on their normal release dates depending on the extent to which the applicable
performance conditions are met.
4
On 1 June 2012 Messrs Mackay and Wilson were awarded 220 and 130 value
shares respectively for each 10 million of additional shareholder value
created over the ve year performance period commencing on 1 April 2012,
and Dr Clark was awarded 175 value shares on the same terms in anticipation
of his appointment as Chief Operating Ofcer and as an executive director at
the annual general meeting on 26 July 2012.
The following information is not subject to audit
Kepler Associates undertakes each year the assessment of the
companys TSR performance relative to the comparator group, and
the methodology used and the calculations performed for each award
are reported on by the companys auditors.
For the purpose of calculating TSR and additional shareholder value,
the share prices and dividends of the comparator companies are
converted, as necessary, into sterling at the exchange rates prevailing
at the relevant times. The conversion into sterling is intended to
remove distortions arising from differing rates of ination in the
countries in which the comparator companies are listed. TSR and the
relevant statistical quartiles are determined in accordance with current
market practice, using three averaging periods for awards granted
before June 2010, and six months for awards granted in June 2010
and subsequently. The longer averaging period was adopted in 2010
to reduce the sensitivity of vesting to short-term stock market volatility.
The companies comprising the TSR comparator group for all the
performance share awards which had not yet vested or lapsed as at
31 March 2012 are listed below.
Comparator group for outstanding TSR based performance
share awards granted before June 2010:
Current constituents:
Company Weighting
1 Anheuser-Busch InBev 10%
2 Heineken 10%
3 Molson Coors Brewing Co 10%
4 Carlsberg 10%
5 Diageo 10%
6 Pernod-Ricard 10%
7 Kirin Holdings 10%
8 Asahi Breweries 10%
9 Constellation Brands 10%
10 Sapporo Holdings 10%
1
6
7
8
9
10
2
3
4
5
Former constituents removed from the comparator group:
Anheuser-Busch (acquired by InBev)
FEMSA UBD (acquired by Heineken)
Grolsch (acquired by SABMiller)
Lion Nathan (acquired by Kirin Holdings)
Scottish & Newcastle (acquired by Heineken and Carlsberg)
Fosters Group (acquired by SABMiller)
Comparator group for TSR based value share awards
grantedfrom June 2010 and thereafter:
For 2010 and subsequent awards, those companies considered to be
the most signicant competitors of SABMiller (and therefore the best
comparators for benchmarking company performance) are weighted
more heavily. The weighting of comparators for value share awards
granted in June 2010, 2011 and 2012 was:
Current constituents:
Company Weighting
1 Anheuser-Busch InBev 21%
2 Heineken 21%
3 Molson Coors Brewing Co 11%
4 Carlsberg 11%
5 Diageo 11%
6 Pernod-Ricard 5%
7 Kirin Holdings 5%
8 Asahi Breweries 5%
9 Constellation Brands 5%
10 Sapporo Holdings 5%
1
6
7
8
9
10
2
3
4
5
Fosters Group was originally a constituent of the comparator group
with a 5% weighting. It was removed from the group in December
2011 following the acquisition of Fosters by SABMiller, and its
weighting was redistributed in proportion among the other members
of the comparator group.
Approval
This report and the recommendations of the remuneration committee
were approved by the board on 11 June 2012 as recommended by
the remuneration committee on 22 May 2012 and will be submitted
toshareholders for approval at the 2012 annual general meeting.
This report complies with the requirements of the Large and Medium-
sized Companies and Groups (Accounts and Reports) Regulations
2008. Throughout the year ended 31 March 2012 the company
applied the provisions of the UK Corporate Governance Code relating
to remuneration.
Signed on behalf of the board of directors by
John Davidson
11 June 2012
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Statement of directors responsibilities
in respect of the consolidated nancial statements
The directors are responsible for preparing the consolidated nancial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare consolidated nancial
statements for each nancial year. The directors have prepared the
consolidated nancial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European
Union. The consolidated nancial statements are required by law to
give a true and fair view of the state of affairs of the group and of the
prot or loss of the group for that year.
In preparing those nancial statements, the directors are required to:
select suitable accounting policies and then apply them
consistently;
make judgements and estimates that are reasonable and prudent;
state that the nancial statements comply with IFRSs as adopted
bythe European Union; and
prepare the consolidated nancial statements on the going concern
basis, unless it is inappropriate to presume that the group will
continue in business, in which case there should be supporting
assumptions or qualications as necessary.
The directors conrm that they have complied with the above
requirements in preparing the nancial statements.
The directors are responsible for keeping adequate accounting
records that disclose with reasonable accuracy at any time the
nancial position of the group and to enable them to ensure that
theconsolidated nancial statements comply with the Companies
Act2006 and Article 4 of the IAS Regulation. They are also
responsible for safeguarding the assets of the group and hence
fortaking reasonable steps for the prevention and detection of fraud
and otherirregularities.
Each of the directors, whose names and functions are listed in the
Governance section of the Annual Report, conrms that, to the best
oftheir knowledge:
the consolidated nancial statements, which have been prepared
inaccordance with IFRSs as adopted by the EU, give a true and
fairview of the assets, liabilities, nancial position and prot of the
group; and
the directors report contained in the Governance section of the
Annual Report includes a fair review of the development and
performance of the business and the position of the group,
togetherwith a description of the principal risks and uncertainties
that itfaces.
In addition, the Companies Act 2006 requires directors to provide
thegroups auditors with every opportunity to take whatever steps
and undertake whatever inspections the auditors consider to be
appropriate for the purpose of enabling them to give their audit report.
Each of the directors, having made appropriate enquiries,
conrmsthat:
so far as the director is aware, there is no relevant audit information
of which the groups auditors are unaware; and
each director has taken all the steps that they ought to have taken
as a director in order to make themselves aware of any relevant
audit information and to establish that the groups auditors are
aware of that information.
The directors have reviewed the groups budget and cash ow
forecasts. On the basis of this review, and in the light of the current
nancial position and existing borrowing facilities, the directors are
satised that SABMiller plc is a going concern and have continued to
adopt the going concern basis in preparing the nancial statements.
A copy of the nancial statements of the group is placed on the
companys website. The directors are responsible for the maintenance
and integrity of statutory and audited information on the companys
website. Information published on the internet is accessible in many
countries with different legal requirements. Legislation in the United
Kingdom governing the preparation and dissemination of nancial
statements may differ from legislation in other jurisdictions.
Independent auditors report
to the members of SABMiller plc
We have audited the consolidated nancial statements of
SABMillerplc for the year ended 31March 2012 which comprise
theconsolidated income statement, the consolidated statement
ofcomprehensive income, the consolidated balance sheet, the
consolidated cash ow statement, the consolidated statement
ofchanges in equity and the related notes. The nancial reporting
framework that has been applied in their preparation is applicable law
and International Financial Reporting Standards (IFRSs) as adopted
bythe European Union.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors responsibilities,
the directors are responsible for the preparation of the consolidated
nancial statements and for being satised that they give a true
andfair view. Our responsibility is to audit and express an opinion
onthe nancial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Boards Ethical
Standards for Auditors.
This report, including the opinions, has been prepared for and only for
the companys members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do
not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown
orinto whose hands it may come save where expressly agreed by
ourprior consent in writing.
Scope of the audit of the nancial statements
An audit involves obtaining evidence about the amounts and
disclosures in the nancial statements sufcient to give reasonable
assurance that the nancial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to
thegroups circumstances and have been consistently applied and
adequately disclosed; the reasonableness ofsignicant accounting
estimates made by the directors; and the overall presentation of
thenancial statements. In addition, we read all the nancial and
non-nancial information in the SABMiller plc Annual Report to
identifymaterial inconsistencies with the audited nancial statements.
If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on nancial statements
In our opinion the consolidated nancial statements:
give a true and fair view of the state of the groups affairs as
at31March 2012 and of its prot and cash ows for the year
thenended;
have been properly prepared in accordance with IFRSs as adopted
by the European Union; and
have been prepared in accordance with the requirements of the
Companies Act 2006 and Article 4 of the IAS Regulation.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion, the information given in the directors report for the
nancial year for which the consolidated nancial statements are
prepared is consistent with the consolidated nancial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if,
inour opinion:
certain disclosures of directors remuneration specied by law
arenot made; or
we have not received all the information and explanations we
require for our audit.
Under the Listing Rules we are required to review:
the directors statement in relation to going concern; and
the part of the corporate governance report relating to
thecompanys compliance with the nine provisions of the
UKCorporateGovernance Code specied for our review; and
certain elements of the directors remuneration report.
Other matter
We have reported separately on the company nancial statements
ofSABMiller plc for the year ended 31 March 2012 and on the
information in the directors remuneration report that is described
ashaving been audited.
Richard Hughes (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
11 June 2012
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Notes
2012
US$m
2011
US$m
Revenue 2 21,760 19,408
Net operating expenses 3 (16,747) (16,281)
Operating prot 2 5,013 3,127
Operating prot before exceptional items 2 3,987 3,563
Exceptional items 4 1,026 (436)
Net nance costs 5 (562) (525)
Interest payable and similar charges 5a (1,093) (883)
Interest receivable and similar income 5b 531 358
Share of post-tax results of associates and joint ventures 2 1,152 1,024
Prot before taxation 5,603 3,626
Taxation 7 (1,126) (1,069)
Prot for the year 28a 4,477 2,557
Prot attributable to non-controlling interests 256 149
Prot attributable to owners of the parent 4,221 2,408
4,477 2,557
Basic earnings per share (US cents) 8 266.6 152.8
Diluted earnings per share (US cents) 8 263.8 151.8
All operations are continuing.
The notes on pages 91 to 164 are an integral part of these consolidated nancial statements.
Consolidated income statement
for the year ended 31 March
Notes
2012
US$m
2011
US$m
Prot for the year 4,477 2,557
Other comprehensive income:
Currency translation differences on foreign currency net investments 136 644
Increase in foreign currency translation reserve during the year 153 644
Recycling of foreign currency translation reserve on disposals (17)
Net actuarial losses on dened benet plans 32 (9) (28)
Net investment hedges:
Fair value losses arising during the year 27b (1) (137)
Cash ow hedges: 27b 6 39
Fair value gains arising during the year 16
Fair value losses transferred to inventory 2 2
Fair value losses transferred to prot or loss 4 21
Tax on items included in other comprehensive income 7 101 22
Share of associates and joint ventures losses included in other comprehensive income 13,14 (256) (50)
Other comprehensive income for the year, net of tax (23) 490
Total comprehensive income for the year 4,454 3,047
Attributable to:
Owners of the parent 4,199 2,904
Non-controlling interests 255 143
Total comprehensive income for the year 4,454 3,047
Consolidated statement of comprehensive income
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Notes
2012
US$m
2011
1
US$m
Assets
Non-current assets
Goodwill 10 20,128 11,954
Intangible assets 11 9,901 4,364
Property, plant and equipment 12 9,299 9,331
Investments in joint ventures 13 5,520 5,813
Investments in associates 14 4,946 2,719
Available for sale investments 15 30 35
Derivative nancial instruments 24 732 330
Trade and other receivables 17 136 140
Deferred tax assets 21 117 184
Loan participation deposit 18 100
50,909 34,870
Current assets
Inventories 16 1,255 1,256
Trade and other receivables 17 2,156 1,687
Current tax assets 482 152
Available for sale investments 15 1
Cash and cash equivalents 18 745 1,067
4,663 4,178
Assets of disposal group classied as held for sale 19a 79 66
4,742 4,244
Total assets 55,651 39,114
Liabilities
Current liabilities
Derivative nancial instruments 24 (40) (50)
Borrowings 22 (1,062) (1,345)
Trade and other payables 20 (4,054) (3,487)
Current tax liabilities (910) (658)
Provisions 25 (717) (412)
(6,783) (5,952)
Liabilities of disposal group classied as held for sale 19b (7) (66)
(6,790) (6,018)
Non-current liabilities
Derivative nancial instruments 24 (69) (85)
Borrowings 22 (18,164) (7,115)
Trade and other payables 20 (112) (98)
Deferred tax liabilities 21 (3,917) (2,578)
Provisions 25 (586) (461)
(22,848) (10,337)
Total liabilities (29,638) (16,355)
Net assets 26,013 22,759
Equity
Share capital 26 166 166
Share premium 6,480 6,384
Merger relief reserve 4,586 4,586
Other reserves 27b 1,978 1,881
Retained earnings 27a 11,863 8,991
Total shareholders equity 25,073 22,008
Non-controlling interests 940 751
Total equity 26,013 22,759
1
As restated (see note 29).
The balance sheet of SABMiller plc is shown on page 167.
The nancial statements were authorised for issue by the board of directors on 11 June 2012 and were signed on its behalf by:
Graham Mackay Jamie Wilson
Chief Executive Chief Financial Ofcer
Consolidated balance sheet
at 31 March
Notes
2012
US$m
2011
US$m
Cash ows from operating activities
Cash generated from operations 28a 5,237 4,568
Interest received 516 293
Interest paid (923) (933)
Tax paid (893) (885)
Net cash generated from operating activities 28b 3,937 3,043
Cash ows from investing activities
Purchase of property, plant and equipment (1,473) (1,189)
Proceeds from sale of property, plant and equipment 116 73
Purchase of intangible assets (166) (126)
Purchase of available for sale investments (1) (3)
Proceeds from disposal of available for sale investments 2
Proceeds from disposal of associates 205
Proceeds from disposal of businesses (net of cash disposed) (23)
Acquisition of businesses (net of cash acquired) (10,951) (60)
Investments in joint ventures (288) (186)
Investments in associates (52) (5)
Repayment of investments by associates 14 68
Dividends received from joint ventures 13 896 822
Dividends received from associates 120 88
Dividends received from other investments 1 1
Net cash used in investing activities (11,600) (517)
Cash ows from nancing activities
Proceeds from the issue of shares 96 73
Proceeds from the issue of shares in subsidiaries to non-controlling interests 107 34
Purchase of own shares for share trusts (52)
Purchase of shares from non-controlling interests (27) (12)
Proceeds from borrowings 19,000 1,608
Repayment of borrowings (10,139) (2,767)
Capital element of nance lease payments (5) (5)
Net cash payments on derivative nancial instruments (52) (43)
Dividends paid to shareholders of the parent (1,324) (1,113)
Dividends paid to non-controlling interests (109) (102)
Net cash generated from/(used in) nancing activities 7,495 (2,327)
Net cash (outow)/inow from operating, investing and nancing activities (168) 199
Effects of exchange rate changes (39) 25
Net (decrease)/increase in cash and cash equivalents (207) 224
Cash and cash equivalents at 1 April 28c 813 589
Cash and cash equivalents at 31 March 28c 606 813
Consolidated cash ow statement
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Consolidated statement of changes in equity
Called up
share capital
US$m
Share
premium
account
US$m
Merger
relief
reserve
US$m
Other
reserves
US$m
Retained
earnings
US$m
Total
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equity
US$m
Non-
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interests
US$m
Total
equity
US$m
At 1 April 2010 165 6,312 4,586 1,322 7,525 19,910 683 20,593
Total comprehensive income 559 2,345 2,904 143 3,047
Prot for the year 2,408 2,408 149 2,557
Other comprehensive income 559 (63) 496 (6) 490
Dividends paid (1,115) (1,115) (106) (1,221)
Issue of SABMiller plc ordinary shares 1 72 73 73
Proceeds from the issue of shares in
subsidiaries to non-controlling interests 34 34
Buyout of non-controlling interests (10) (10) (3) (13)
Credit entry relating to share-based
payments 246 246 246
At 31 March 2011 166 6,384 4,586 1,881 8,991 22,008 751 22,759
Total comprehensive income 97 4,102 4,199 255 4,454
Prot for the year 4,221 4,221 256 4,477
Other comprehensive income 97 (119) (22) (1) (23)
Dividends paid (1,324) (1,324) (159) (1,483)
Issue of SABMiller plc ordinary shares 96 96 96
Proceeds from the issue of shares in
subsidiaries to non-controlling interests 107 107
Non-controlling interests disposed of via
business disposal (64) (64)
Arising on business combinations 65 65
Dilution of non-controlling interests as a
result of business combinations (5) (5) 5
Payment for purchase of own shares
for share trusts (52) (52) (52)
Buyout of non-controlling interests (7) (7) (20) (27)
Credit entry relating to share-based
payments 158 158 158
At 31 March 2012 166 6,480 4,586 1,978 11,863 25,073 940 26,013
Merger relief reserve
Merger relief reserve comprises US$3,395 million in respect of the excess of value attributed to the shares issued as consideration for Miller
Brewing Company over the nominal value of those shares and US$1,191 million relating to the merger relief arising on the issue of SABMiller plc
ordinary shares for the buyout of non-controlling interests in the groups Polish business.
1. Accounting policies
The principal accounting policies adopted in the preparation of
thegroups nancial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwisestated.
a) Basis of preparation
The consolidated nancial statements of SABMiller plc have been
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted
bythe EU), and the Companies Act 2006 applicable to companies
reporting under IFRS.
The nancial statements are prepared under the historical cost
convention, except for the revaluation to fair value of certain nancial
assets and liabilities, and post-retirement assets and liabilities as
described in the accounting policies below. The accounts have
beenprepared on a going concern basis.
The preparation of nancial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process
ofapplying the groups accounting policies. Actual results could
differfrom those estimates.
b) Recent accounting developments
(i) New standards, amendments and interpretations of
existing standards adopted by the group
There were no standards, interpretations and amendments adopted
by the group since 1 April 2011 which had a signicant impact on the
groups consolidated results or nancial position.
(ii) New standards, amendments and interpretations of
existing standards that are not yet effective and have not
beenearly adopted by the group
The following standards, interpretations and amendments to existing
standards have been published and are mandatory for the groups
accounting periods beginning on or after 1 April 2012 or later periods,
but which have not been early adopted by the group and in relation
towhich the group is yet to assess the full impact:
Amendment to IAS 19, Employee Benets is effective from
1January 2013
1
.
IFRS 9, Financial Instruments, is effective from 1 January 2015.
IFRS 10, Consolidated Financial Statements, is effective from
1January 2013
1
.
IFRS 11, Joint Arrangements, is effective from 1 January 2013.
IFRS 12, Disclosures of Interests in Other Entities is effective from
1 January 2013
1
.
IFRS 13, Fair Value Measurement, is effective from
1January2013
1
.
Not yet endorsed by the EU.
There are no other standards, interpretations and amendments to
existing standards that are not yet effective that would be expected
tohave a material impact on the consolidated results of operations
ornancial position of the group.
c) Signicant judgements and estimates
In determining and applying accounting policies, judgement is
oftenrequired where the choice of specic policy, assumption or
accounting estimate to be followed could materially affect the reported
results or net position of the group, should it later be determined that
a different choice be more appropriate.
Management considers the following to be areas of signicant
judgement and estimation for the group due to greater complexity
and/or particularly subject to the exercise of judgement:
(i) Impairment reviews
Goodwill arising on business combinations is allocated to the relevant
cash generating unit (CGU). Impairment reviews in respect of the
relevant CGUs are performed at least annually or more regularly if
events indicate that this is necessary. Impairment reviews are based
on future cash ows discounted using the weighted average cost
ofcapital for the relevant country with terminal values calculated
applying the long-term growth rate. The future cash ows which are
based on business forecasts, the long-term growth rates and the
discount rates used are dependent on management estimates and
judgements. Future events could cause the assumptions used in
these impairment reviews to change with a consequent adverse
impact on the results and net position of the group. Details of the
estimates used in the impairment reviews for the year are set out
innote 10.
(ii) Taxation
The group operates in many countries and is subject to taxes
innumerous jurisdictions. Signicant judgement is required in
determining the provision for taxes as the tax treatment is often by
itsnature complex, and cannot be nally determined until a formal
resolution has been reached with the relevant tax authority which may
take several years to conclude. Amounts provided are accrued based
on managements interpretation of country specic tax laws and the
likelihood of settlement. Actual liabilities could differ from the amount
provided which could have a consequent adverse impact on the
results and net position of the group.
(iii) Pension and post-retirement benets
Pension accounting requires certain assumptions to be made in order
to value the groups pension and post-retirement obligations in the
balance sheet and to determine the amounts to be recognised in the
income statement and in other comprehensive income in accordance
with IAS 19. The calculations of these obligations and charges are
based on assumptions determined by management which include
discount rates, salary and pension ination, healthcare cost ination,
mortality rates and expected long-term rates of return on assets.
Details of the assumptions used are set out in note 32. The selection
of different assumptions could affect the net position of the group
andfuture results.
(iv) Property, plant and equipment
The determination of the useful economic life and residual values of
property, plant and equipment is subject to management estimation.
The group regularly reviews all of its depreciation rates and residual
values to take account of any changes in circumstances, and any
changes that could affect prospective depreciation charges and
assetcarrying values.
(v) Business combinations
On the acquisition of a company or business, a determination of the
fair value and the useful life of intangible assets acquired is performed,
which requires the application of management judgement. Future
events could cause the assumptions used by the group to change
which would have a signicant impact on the results and net position
of the group.
(vi) Exceptional items
Exceptional items are expense or income items recorded in a period
which have been determined by management as being material by
their size or incidence and are presented separately within the results
of the group. The determination of which items are disclosed as
exceptional items will affect the presentation of prot measures
including EBITA and adjusted earnings per share, and requires a
degree of judgement. Details relating to exceptional items reported
during the year are set out in note 4.
Notes to the consolidated nancial statements
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Notes to the consolidated nancial statements continued
1. Accounting policies continued
d) Segmental reporting
Operating segments reect the management structure of the group
and the way performance is evaluated and resources allocated
basedon group revenue and EBITA by the groups chief operating
decision maker, dened as the executive directors. The group is
focused geographically, and while not meeting the denition of
reportable segments, the group reports separately as segments
South Africa: Hotels and Gaming and Corporate as this provides
usefuladditional information.
e) Basis of consolidation
SABMiller plc (the company) is a public limited company incorporated
in Great Britain and registered in England and Wales. The
consolidated nancial statements include the nancial information
ofthe subsidiary, associate and joint venture entities owned by
thecompany.
(i) Subsidiaries
Subsidiaries are entities controlled by the company, where control is
the power directly or indirectly to govern the nancial and operating
policies of the entity so as to obtain benet from its activities,
regardless of whether this power is actually exercised. Where the
companys interest in subsidiaries is less than 100%, the share
attributable to outside shareholders is reected in non-controlling
interests. Subsidiaries are included in the nancial statements from
the date control commences until the date control ceases.
Control is presumed to exist when the group owns, directly or
indirectly through subsidiaries, more than half of the voting power
ofan entity unless, in exceptional circumstances, it can be clearly
demonstrated that such ownership does not constitute control.
Control also exists where the group has the ability to direct or
dominate decision-making in an entity, regardless of whether this
power is actually exercised.
On the subsequent disposal or termination of a business, the results
of the business are included in the groups results up to the effective
date of disposal. The prot or loss on disposal or termination is
calculated after charging the amount of any related goodwill to the
extent that it has not previously been taken to the income statement.
Intra-group balances, and any unrealised gains and losses or income
and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated nancial statements. Unrealised losses are
eliminated unless the transaction provides evidence of an impairment
of the asset transferred.
Some of the companys subsidiaries have a local statutory accounting
reference date of 31 December. These are consolidated using
management prepared information on a basis coterminous with the
companys accounting reference date.
(ii) Associates
Associates are entities in which the group has a long-term interest and
over which the group has directly or indirectly signicant inuence,
where signicant inuence is the ability to inuence the nancial and
operating policies of the entity.
The associate, Distell Group Ltd, has a statutory accounting
referencedate of 30 June. In respect of each year ending 31 March,
this company is included based on nancial statements drawn up
totheprevious 31 December, but taking into account any changes
inthesubsequent period from 1 January to 31 March that would
materially affect the results. All other associates are included on
acoterminous basis.
(iii) Joint ventures
Joint ventures are contractual arrangements which the group has
entered into with one or more parties to undertake an economic
activity that is subject to joint control. Joint control is the contractually
agreed sharing of control over an economic activity, and exists only
when the strategic, nancial and operating decisions relating to
theactivity require the unanimous consent of the parties sharing
thecontrol.
The groups share of the recognised income and expenses of
associates and joint ventures are accounted for using the equity
method from the date signicant inuence or joint control commences
to the date it ceases based on present ownership interests.
The group recognises its share of associates and joint ventures
post-tax results as a one line entry before prot before taxation in
theincome statement and its share of associates and joint ventures
equity movements as a one line entry under other comprehensive
income in the statement of comprehensive income.
When the groups interest in an associate or joint venture has been
reduced to nil because the groups share of losses exceeds its
interestin the associate or joint venture, the group only provides
foradditional losses to the extent that it has incurred legal or
constructiveobligations to fund such losses, or make payments
onbehalf oftheassociate or joint venture. Where the investment
inanassociateor joint venture is disposed, the investment ceases
tobeequity accounted.
(iv) Transactions with non-controlling interests
Transactions with non-controlling interests are treated as transactions
with equity owners of the group. For purchases from non-controlling
interests, the difference between any consideration paid and the
relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity where there
isnoloss of control.
(v) Reduction in interests
When the group ceases to have control, joint control or signicant
inuence, any retained interest in the entity is remeasured to its fair
value, with the change in carrying amount recognised in prot
orloss.The fair value is the initial carrying amount for the purposes
ofsubsequently accounting for the retained interest as an associate,
joint venture or nancial asset. In addition, certain amounts previously
recognised in other comprehensive income in respect of that entity
are accounted for as if the group had directly disposed of the related
assets or liabilities. This may mean that certain amounts previously
recognised in other comprehensive income are reclassied to prot
orloss.
If the ownership interest in an associate is reduced but signicant
inuence is retained, or if the ownership interest in a joint venture is
reduced but joint control is retained, only the proportionate share of
the carrying amount of the investment and of the amounts previously
recognised in other comprehensive income are reclassied to prot
orloss where appropriate.
f) Foreign exchange
(i) Foreign exchange translation
Items included in the nancial statements of each of the groups
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
Theconsolidated nancial statements are presented in US dollars
which is the groups presentational currency. The exchange rates to
the US dollar used in preparing the consolidated nancial statements
were as follows:
Year ended
31 March 2012
Year ended
31 March 2011
Average rate
Australian dollar (AUD) 0.95 1.06
South African rand (ZAR) 7.48 7.15
Colombian peso (COP) 1,831 1,881
Euro () 0.72 0.76
Czech koruna (CZK) 17.65 19.04
Peruvian nuevo sol (PEN) 2.73 2.81
Polish zloty (PLN) 2.99 3.01
Closing rate
Australian dollar (AUD) 0.97 0.97
South African rand (ZAR) 7.67 6.77
Colombian peso (COP) 1,792 1,879
Euro () 0.75 0.71
Czech koruna (CZK) 18.52 17.27
Peruvian nuevo sol (PEN) 2.67 2.80
Polish zloty (PLN) 3.13 2.84
The average exchange rates have been calculated based on the
average of the exchange rates during the relevant year which have
been weighted according to the phasing of revenue of the groups
businesses.
(ii) Transactions and balances
The nancial statements for each group company have been prepared
on the basis that transactions in foreign currencies are recorded in
their functional currency at the rate of exchange ruling at the date of
the transaction. Monetary items denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance sheet date
with the resultant translation differences being included in operating
prot in the income statement other than those arising on nancial
assets and liabilities which are recorded within net nance costs
andthose which are deferred in equity as qualifying cash ow hedges
and qualifying net investment hedges. Translation differences on
non-monetary assets such as equity investments classied as
available forsale assets are included in other comprehensive income.
(iii) Overseas subsidiaries, associates and joint ventures
One-off items in the income and cash ow statements of overseas
subsidiaries, associates and joint ventures expressed in currencies
other than the US dollar are translated to US dollars at the rates of
exchange prevailing on the day of the transaction. All other items are
translated at weighted average rates of exchange for the relevant
reporting period. Assets and liabilities of these undertakings are
translated at closing rates of exchange at each balance sheet date.
Alltranslation exchange differences arising on the retranslation of
opening net assets together with differences between income
statements translated at average and closing rates are recognised
asa separate component of equity. For these purposes net assets
include loans between group companies that form part of the net
investment, for which settlement is neither planned nor likely to occur
in the foreseeable future. When a foreign operation is disposed of, any
related exchange differences in equity are reclassied to the income
statement as part of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate.
g) Business combinations
(i) Subsidiaries
The acquisition method is used to account for business combinations.
The identiable net assets (including intangibles) are incorporated into
the nancial statements on the basis of their fair value from the
effective date of control, and the results of subsidiary undertakings
acquired during the nancial year are included in the groups results
from that date.
On the acquisition of a company or business, fair values reecting
conditions at the date of acquisition are attributed to the identiable
assets (including intangibles), liabilities and contingent liabilities
acquired. Fair values of these assets and liabilities are determined
byreference to market values, where available, or by reference to
thecurrent price at which similar assets could be acquired or similar
obligations entered into, or by discounting expected future cash ows
to present value, using either market rates or the risk-free rates and
risk-adjusted expected future cash ows.
The consideration transferred is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of the acquisition, and also includes the groups
estimate of the fair value of any deferred consideration payable.
Acquisition-related costs are expensed as incurred. Where the
business combination is achieved in stages and results in a change
incontrol, the acquisition date fair value of the acquirers previously
held equity interest in the acquiree is remeasured to fair value at
theacquisition date through prot or loss. Where the business
combination agreement provides for an adjustment to the cost that
iscontingent on future events, the consideration transferred includes
the fair value of any asset or liability resulting from a contingent
consideration arrangement. On an acquisition by acquisition basis,
thegroup recognises any non-controlling interest in the acquiree
either at fair value or at the non-controlling interests proportionate
share of the acquirees net assets.
(ii) Associates and joint ventures
On acquisition the investment in associates and joint ventures
isrecorded initially at cost. Subsequently the carrying amount
isincreased or decreased to recognise the groups share of the
associates and joint ventures income and expenses after the
dateofacquisition.
Fair values reecting conditions at the date of acquisition are
attributed to the groups share of identiable assets (including
intangibles), liabilities and contingent liabilities acquired. The
consideration transferred is measured as the fair value of the assets
given, equity instruments issued and liabilities incurred or assumed
atthe date of the acquisition, and also includes the groups estimate
of the fair value of any deferred consideration payable.
The date signicant inuence or joint control commences is not
necessarily the same as the closing date or any other date named
inthe contract.
(iii) Goodwill
Goodwill arising on consolidation represents the excess of the
consideration transferred, the amount of any non-controlling interest
inthe acquiree and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the identiable
assets (including intangibles), liabilities and contingent liabilities of the
acquired entity at the date of acquisition. Where the fair value of the
groups share of identiable net assets acquired exceeds the fair value
of the consideration, the difference is recognised immediately in the
income statement.
Goodwill is stated at cost less impairment losses and is reviewed
forimpairment on an annual basis. Any impairment identied is
recognised immediately in the income statement and is not reversed.
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The carrying amount of goodwill in respect of associates and joint
ventures is included in the carrying value of the investment in the
associate or joint venture.
h) Intangible assets
Intangible assets are stated at cost less accumulated amortisation
ona straight-line basis (if applicable) and impairment losses. Cost is
usually determined as the amount paid by the group, unless the asset
has been acquired as part of a business combination. Intangible
assets acquired as part of a business combination are recognised
attheir fair value at the date of acquisition. Amortisation is included
within net operating expenses in the income statement. Internally
generated intangibles are not recognised except for software and
applied development costs referred to under software and research
and development below.
Intangible assets with nite lives are amortised over their estimated
useful economic lives, and only tested for impairment where there is
atriggering event. The group regularly reviews all of its amortisation
rates and residual values to take account of any changes in
circumstances. The directors assessment of the useful life of
intangible assets is based on the nature of the asset acquired,
thedurability of the products to which the asset attaches and
theexpected future impact of competition on the business.
(i) Brands
Brands are recognised as an intangible asset where the brand has
along-term value. Acquired brands are only recognised where title
isclear or the brand could be sold separately from the rest of the
business and the earnings attributable to it are separately identiable.
Acquired brands are amortised. In respect of brands currently held
the amortisation period is 10 to 40 years, being the period for which
the group has exclusive rights to those brands.
(ii) Contract brewing and other licences recognised as
partofa business combination
Contractual arrangements for contract brewing and competitor
licensing arrangements are recognised as an intangible asset at
afairvalue representing the remaining contractual period with an
assumption about the expectation that such a contract will be
renewed, together with a valuation of this extension.
Acquired licences or contracts are amortised. In respect of licences or
contracts currently held, the amortisation period is the period for which
the group has exclusive rights to these assets or income streams.
(iii) Customer lists and distributor relationships recognised
aspart of a business combination
The fair value of businesses acquired may include customer lists and
distributor relationships. These are recognised as intangible assets
and are calculated by discounting the future revenue stream
attributable to these lists or relationships.
Acquired customer lists or distributor relationships are amortised.
Inrespect of contracts currently held, the amortisation period is
theperiod for which the group has the benet of these assets.
(iv) Software
Where computer software is not an integral part of a related item
ofproperty, plant and equipment, the software is capitalised as
anintangible asset.
Acquired computer software licences are capitalised on the basis
ofthe costs incurred to acquire and bring them to use. Direct costs
associated with the production of identiable and unique internally
generated software products controlled by the group that will
probably generate economic benets exceeding costs beyond one
year are capitalised. Direct costs include software development
employment costs (including those of contractors used), capitalised
interest and an appropriate portion of overheads. Capitalised
computer software, licence and development costs are amortised
over their useful economic lives of between three and eight years.
Internally generated costs associated with maintaining computer
software programmes are expensed as incurred.
(v) Research and development
Research and general development expenditure is written off in the
period in which it is incurred.
Certain applied development costs are only capitalised as internally
generated intangible assets where there is a clearly dened project,
separately identiable expenditure, an outcome assessed with
reasonable certainty (in terms of feasibility and commerciality),
expected revenues exceed expected costs and the group has the
resources to complete the task. Such assets are amortised on a
straight-line basis over their useful lives once the project is complete.
i) Property, plant and equipment
Property, plant and equipment are stated at cost net of accumulated
depreciation and any impairment losses.
Cost includes expenditure that is directly attributable to the acquisition
of the assets. Subsequent costs are included in the assets carrying
value or recognised as a separate asset as appropriate, only when it
isprobable that future economic benets associated with the specic
asset will ow to the group and the cost can be measured reliably.
Repairs and maintenance costs are charged to the income statement
during the nancial period in which they are incurred.
(i) Assets in the course of construction
Assets in the course of construction are carried at cost less any
impairment loss. Cost includes professional fees and for qualifying
assets certain borrowing costs as determined below. When these
assets are ready for their intended use, they are transferred into the
appropriate category. At this point, depreciation commences on the
same basis as on other property, plant and equipment.
(ii) Assets held under nance leases
Assets held under nance leases which result in the group bearing
substantially all the risks and rewards incidental to ownership are
capitalised as property, plant and equipment. Finance lease assets
are initially recognised at an amount equal to the lower of their fair
value and the present value of the minimum lease payments at
inception of the lease, then depreciated over the lower of the lease
term or their useful lives. The capital element of future obligations
under the leases is included as a liability in the balance sheet
classied, as appropriate, as a current or non-current liability. The
interest element of the lease obligations is charged to the income
statement over the period of the lease term to reect a constant
rateof interest on the remaining balance of the obligation for each
nancialperiod.
(iii) Returnable containers
Returnable containers in circulation are recorded within property,
plant and equipment at cost net of accumulated depreciation less
anyimpairment loss.
Depreciation of returnable bottles and containers is recorded
towritethe containers off over the course of their economic life.
Thisistypically undertaken in a two stage process:
The excess over deposit value is written down over a period of
1to10 years.
Provisions are made against the deposit values for breakages and
losses in trade together with a design obsolescence provision held
to write off the deposit value over the expected container design
period which is a period of no more than 14 years from the
inception of a container design. This period is shortened where
appropriate by reference to market dynamics and the ability of
theentity to use containers for different brands.
(iv) Depreciation
No depreciation is provided on freehold land or assets in the course
ofconstruction. In respect of all other property, plant and equipment,
depreciation is provided on a straight-line basis at rates calculated to
write off the cost, less the estimated residual value, of each asset over
its expected useful life as follows:
Freehold buildings 20 50 years
Leasehold buildings Shorter of the lease term
or50years
Plant, vehicles and systems 2 30 years
Returnable containers
(non-returnable containers
arerecorded as inventory) 1 14 years
Assets held under nance leases Lower of the lease term or
lifeofthe asset
The group regularly reviews all of its depreciation rates and residual
values to take account of any changes in circumstances. When
setting useful economic lives, the principal factors the group takes
intoaccount are the expected rate of technological developments,
expected market requirements for the equipment and the intensity
atwhich the assets are expected to be used.
The prot or loss on the disposal of an asset is the difference between
the disposal proceeds and the net book amount.
(v) Capitalisation of borrowing costs
Financing costs incurred, before tax, on major capital projects
duringthe period of development or construction that necessarily
takea substantial period of time to be developed for their intended
use, are capitalised up to the time of completion of the project.
j) Advance payments made to customers (principally
hotels,restaurants, bars and clubs)
Advance payments made to customers are conditional on the
achievement of contracted sales targets or marketing commitments.
The group records such payments as prepayments initially at fair value
and amortises them in the income statement over the relevant period
to which the customer commitment is made (typically three to ve
years). These prepayments are recorded net of any impairment losses.
Where there is a volume target the amortisation of the advance is
included in sales discounts as a reduction to revenue and where there
are specic marketing activities/commitments the amortisation is
included as an operating expense. The amounts capitalised are
reassessed annually for achievement of targets and are impaired
where there is objective evidence that the targets will not be achieved.
Assets held at customer premises are included within property, plant
and equipment and are depreciated in line with group policies on
similar assets.
k) Inventories
Inventories are stated at the lower of cost incurred in bringing each
product to its present location and condition, and net realisable value,
as follows:
Raw materials, consumables and goods for resale: Purchase cost
net of discounts and rebates on a rst-in rst-out basis (FIFO).
Finished goods and work in progress: Raw material cost plus direct
costs and a proportion of manufacturing overhead expenses on a
FIFO basis.
Net realisable value is based on estimated selling price less further
costs expected to be incurred to completion and disposal. Costs of
inventories include the transfer from equity of any gains or losses on
matured qualifying cash ow hedges of purchases of raw materials.
l) Financial assets and nancial liabilities
Financial assets and nancial liabilities are initially recorded at fair
value (plus any directly attributable transaction costs, except in the
case of those classied at fair value through prot or loss). For those
nancial instruments that are not subsequently held at fair value, the
group assesses whether there is any objective evidence of impairment
at each balance sheet date.
Financial assets are recognised when the group has rights or other
access to economic benets. Such assets consist of cash, equity
instruments, a contractual right to receive cash or another nancial
asset, or a contractual right to exchange nancial instruments with
another entity on potentially favourable terms. Financial assets are
derecognised when the right to receive cash ows from the asset
have expired or have been transferred and the group has transferred
substantially all risks and rewards of ownership.
Financial liabilities are recognised when there is an obligation to
transfer benets and that obligation is a contractual liability to deliver
cash or another nancial asset or to exchange nancial instruments
with another entity on potentially unfavourable terms. Financial
liabilities are derecognised when they are extinguished, that is
discharged, cancelled or expired.
If a legally enforceable right exists to set off recognised amounts of
nancial assets and liabilities, which are in determinable monetary
amounts, and there is the intention to settle net, the relevant nancial
assets and liabilities are offset.
Interest costs are charged to the income statement in the year in
which they accrue. Premiums or discounts arising from the difference
between the net proceeds of nancial instruments purchased or
issued and the amounts receivable or repayable at maturity are
included in the effective interest calculation and taken to net nance
costs over the life of the instrument.
There are four categories of nancial assets and nancial liabilities.
These are described as follows:
(i) Financial assets and nancial liabilities at fair value
throughprot or loss
Financial assets and nancial liabilities at fair value through prot or
loss include derivative assets and derivative liabilities not designated
as effective hedging instruments.
All gains or losses arising from changes in the fair value of nancial
assets or nancial liabilities within this category are recognised in the
income statement.
a. Derivative fnancial assets and fnancial liabilities
Derivative nancial assets and nancial liabilities are nancial
instruments whose value changes in response to an underlying
variable, require little or no initial investment and are settled in
thefuture.
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These include derivatives embedded in host contracts. Such
embedded derivatives need not be accounted for separately if
thehost contract is already fair valued; if it is not considered as a
derivative if it was freestanding; or if it can be demonstrated that it
isclosely related to the host contract. There are certain currency
exemptions which the group has applied to these rules which limit
theneed to account for certain potential embedded foreign exchange
derivatives. These are: if a contract is denominated in the functional
currency of either party; where that currency is commonly used in
international trade of the good traded; or if it is commonly used for
local transactions in an economic environment.
Derivative nancial assets and liabilities are analysed between current
and non-current assets and liabilities on the face of the balance sheet,
depending on when they are expected to mature.
For derivatives that have not been designated to a hedging
relationship, all fair value movements are recognised immediately in
the income statement. (See note x for the groups accounting policy
on hedge accounting).
(ii) Loans and receivables
Loans and receivables are non-derivative nancial assets with xed or
determinable payments that are not quoted on an active market. They
arise when the group provides money, goods or services directly to
adebtor with no intention of trading the receivable. They are included
in current assets, except for maturities of greater than 12 months after
the balance sheet date which are classied as non-current assets.
Loans and receivables are initially recognised at fair value including
originating fees and transaction costs, and subsequently measured
atamortised cost using the effective interest method less provision
forimpairment. Loans and receivables include trade receivables,
amounts owed by associates trade, amounts owed by joint
ventures trade, accrued income and cash and cash equivalents.
a. Trade receivables
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost less provision for
impairment.
A provision for impairment of trade receivables is established when
there is objective evidence that the group will not be able to collect all
amounts due according to the terms of the receivables. The amount
of the provision is the difference between the assets carrying value
and the present value of the estimated future cash ows discounted
atthe original effective interest rate. This provision is recognised in
theincome statement.
b. Cash and cash equivalents
In the consolidated balance sheet, cash and cash equivalents
includes cash in hand, bank deposits repayable on demand and other
short-term highly liquid investments with original maturities of three
months or less. In the consolidated cash ow statement, cash and
cash equivalents also includes bank overdrafts which are shown
within borrowings in current liabilities on the balance sheet.
(iii) Available for sale investments
Available for sale investments are non-derivative nancial assets that
are either designated in this category or not classied as nancial
assets at fair value through prot or loss, or loans and receivables.
Investments in this category are included in non-current assets unless
management intends to dispose of the investment within 12 months
ofthe balance sheet date. They are initially recognised at fair value
plus transaction costs and are subsequently remeasured at fair value
and tested for impairment. Gains and losses arising from changes
infair value including any related foreign exchange movements
arerecognised in other comprehensive income. On disposal or
impairment of available for sale investments, any gains or losses in
other comprehensive income are reclassied to the income statement.
Purchases and sales of investments are recognised on the date on
which the group commits to purchase or sell the asset. Investments
are derecognised when the rights to receive cash ows from the
investments have expired or have been transferred and the group
hastransferred substantially all risks and rewards of ownership.
(iv) Financial liabilities held at amortised cost
Financial liabilities held at amortised cost include trade payables,
accruals, amounts owed to associates trade, amounts owed to
jointventures trade, other payables and borrowings.
a. Trade payables
Trade payables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method. Trade
payables are analysed between current and non-current liabilities on
the face of the balance sheet, depending on when the obligation to
settle will be realised.
b. Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs and are subsequently stated at amortised cost and include
accrued interest and prepaid interest. Borrowings are classied as
current liabilities unless the group has an unconditional right to defer
settlement of the liability for at least 12 months from the balance sheet
date. Borrowings classied as hedged items are subject to hedge
accounting requirements (see note x). Bank overdrafts are shown
within borrowings in current liabilities and are included within cash and
cash equivalents on the face of the cash ow statement as they form
an integral part of the groups cash management.
m) Impairment
This policy covers all assets except inventories (see note k), nancial
assets (see note l), non-current assets classied as held for sale
(seenote n), and deferred tax assets (see note u).
Impairment reviews are performed by comparing the carrying value
ofthe non-current asset to its recoverable amount, being the higher
ofthe fair value less costs to sell and value in use. The fair value less
costs to sell is considered to be the amount that could be obtained on
disposal of the asset. Value in use is determined by discounting the
future post-tax cash ows generated from continuing use of the cash
generating unit (CGU) using a post-tax discount rate, as this closely
approximates to applying pre-tax discount rates to pre-tax cash ows.
Where a potential impairment is identied using post-tax cash ows
and post-tax discount rates, the impairment review is reperformed
ona pre-tax basis in order to determine the impairment loss to
berecorded.
Where the asset does not generate cash ows that are independent
from the cash ows of other assets, the group estimates the
recoverable amount of the CGU to which the asset belongs. For the
purpose of conducting impairment reviews, CGUs are considered to
be groups of assets that have separately identiable cash ows. They
also include those assets and liabilities directly involved in producing
the income and a suitable proportion of those used to produce more
than one income stream.
An impairment loss is held rstly against any specically impaired
assets. Where an impairment is recognised against a CGU, the
impairment is rst taken against goodwill balances and if there is a
remaining loss it is set against the remaining intangible and tangible
assets on a pro-rata basis.
Should circumstances or events change and give rise to a reversal of
a previous impairment loss, the reversal is recognised in the income
statement in the period in which it occurs and the carrying value of
theasset is increased. The increase in the carrying value of the asset
is restricted to the amount that it would have been had the original
impairment not occurred. Impairment losses in respect of goodwill
areirreversible.
Goodwill is tested annually for impairment. Assets subject to
amortisation are reviewed for impairment if circumstances or events
change to indicate that the carrying value may not be fully recoverable.
n) Non-current assets (or disposal groups) held for sale
Non-current assets and all assets and liabilities classied as held for
sale are measured at the lower of carrying value and fair value less
costs to sell.
Such assets are classied as held for resale if their carrying amount
will be recovered through a sale transaction rather than through
continued use. This condition is regarded as met only when a sale is
highly probable, the asset or disposal group is available for immediate
sale in its present condition and when management is committed to
the sale which is expected to qualify for recognition as a completed
sale within one year from date of classication.
o) Provisions
Provisions are recognised when there is a present obligation, whether
legal or constructive, as a result of a past event for which it is probable
that a transfer of economic benets will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Such provisions are calculated on a discounted basis
where the effect is material to the original undiscounted provision.
Thecarrying amount of the provision increases in each period to
reect the passage of time and the unwinding of the discount and
themovement is recognised in the income statement within net
nance costs.
Restructuring provisions comprise lease termination penalties and
employee termination payments. Provisions are not recognised for
future operating losses, however, provisions are recognised for
onerous contracts where the unavoidable cost exceeds the
expectedbenet.
p) Share capital
Ordinary shares are classied as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity
as a deduction, net of tax, from the proceeds.
q) Investments in own shares (treasury and shares held by
employee benet trusts)
Shares held by employee share ownership plans, employee benet
trusts and in treasury are treated as a deduction from equity until the
shares are cancelled, reissued, or disposed.
Purchases of such shares are classied in the cash ow statement as
a purchase of own shares for share trusts or purchase of own shares
for treasury within net cash from nancing activities.
Where such shares are subsequently sold or reissued, any
consideration received, net of any directly attributable incremental
costs and related tax effects, is included in equity attributable to the
companys equity shareholders.
r) Revenue recognition
(i) Sale of goods and services
Revenue represents the fair value of consideration received or
receivable for goods and services provided to third parties and
isrecognised when the risks and rewards of ownership are
substantially transferred.
The group presents revenue gross of excise duties because unlike
value added tax, excise is not directly related to the value of sales. It is
not generally recognised as a separate item on invoices, increases in
excise are not always directly passed on to customers, and the group
cannot reclaim the excise where customers do not pay for product
received. The group therefore considers excise as a cost to the group
and reects it as a production cost. Consequently, any excise that is
recovered in the sale price is included in revenue.
Revenue excludes value added tax. It is stated net of price discounts,
promotional discounts, settlement discounts and after an appropriate
amount has been provided to cover the sales value of credit notes yet
to be issued that relate to the current and prior periods.
The same recognition criteria also apply to the sale of by-products
and waste (such as spent grain, malt dust and yeast) with the
exception that these are included within other income.
(ii) Interest income
Interest income is recognised on an accruals basis using the effective
interest method.
When a receivable is impaired the group reduces the carrying amount
to its recoverable amount by discounting the estimated future cash
ows at the original effective interest rate, and continuing to unwind
the discount as interest income.
(iii) Royalty income
Royalty income is recognised on an accruals basis in accordance
withthe relevant agreements and is included in other income.
(iv) Dividend income
Dividend income is recognised when the right to receive payment
isestablished.
s) Operating leases
Rentals paid and incentives received on operating leases are charged
or credited to the income statement on a straight-line basis over the
lease term.
t) Exceptional items
Where certain expense or income items recorded in a period are
material by their size or incidence, the group reects such items as
exceptional items within a separate line on the income statement
except for those exceptional items that relate to associates, joint
ventures, net nance costs and tax. (Associates, joint ventures, net
nance costs and tax exceptional items are only referred to in the
notes to the consolidated nancial statements).
Exceptional items are also summarised in the segmental analyses,
excluding those that relate to net nance costs and tax.
The group presents alternative earnings per share calculations on a
headline and adjusted basis. The adjusted earnings per share gure
excludes the impact of amortisation of intangible assets (excluding
software), certain non-recurring items and post-tax exceptional items
in order to present an additional measure of performance for the years
shown in the consolidated nancial statements. Headline earnings per
share is calculated in accordance with the South African Circular
3/2009 entitled Headline Earnings which forms part of the listing
requirements for the JSE Ltd (JSE).
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u) Taxation
The tax expense for the period comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent that it
relates to items recognised in other comprehensive income or directly
in equity, in which case it is recognised in other comprehensive
income or directly in equity, respectively.
Current tax expense is based on the results for the period as adjusted
for items that are not taxable or not deductible. The groups liability for
current taxation is calculated using tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is provided in full using the liability method, in respect
ofall temporary differences arising between the tax bases of assets
and liabilities and their carrying values in the consolidated nancial
statements, except where the temporary difference arises from
goodwill (in the case of deferred tax liabilities) or from the initial
recognition (other than a business combination) of other assets
andliabilities in a transaction that affects neither accounting nor
taxableprot.
Deferred tax liabilities are recognised where the carrying value of
anasset is greater than its tax base, or where the carrying value of
aliability is less than its tax base. Deferred tax is recognised in full
ontemporary differences arising from investment in subsidiaries,
associates and joint ventures, except where the timing of the
reversalof the temporary difference is controlled by the group and
itisprobable that the temporary difference will not reverse in the
foreseeable future. This includes taxation in respect of the retained
earnings of overseas subsidiaries only to the extent that, at the
balance sheet date, dividends have been accrued as receivable
orabinding agreement to distribute past earnings in future periods
has been entered into by the subsidiary. Deferred income tax is also
recognised in respect of the unremitted retained earnings of overseas
associates and joint ventures as the group is not able to determine
when such earnings will be remitted and when such additional tax
such as withholding taxes might be payable.
A net deferred tax asset is regarded as recoverable and therefore
recognised only when, on the basis of all available evidence, it is
probable that future taxable prot will be available against which
thetemporary differences (including carried forward tax losses)
canbe utilised.
Deferred tax is measured at the tax rates expected to apply in the
periods in which the timing differences are expected to reverse
basedon tax rates and laws that have been enacted or substantively
enacted at balance sheet date. Deferred tax is measured on a
non-discounted basis.
v) Dividend distributions
Dividend distributions to equity holders of the parent are recognised
as a liability in the groups nancial statements in the period in which
the dividends are approved by the companys shareholders. Interim
dividends are recognised when paid. Dividends declared after the
balance sheet date are not recognised, as there is no present
obligation at the balance sheet date.
w) Employee benets
(i) Wages and salaries
Wages and salaries for current employees are recognised in the
income statement as the employees services are rendered.
(ii) Vacation and long-term service awards costs
The group recognises a liability and an expense for accrued
vacationpay when such benets are earned and not when these
benets are paid.
The group also recognises a liability and an expense for long-term
service awards where cash is paid to the employee at certain
milestone dates in a career with the group. Such accruals are
appropriately discounted to reect the future payment dates at
discount rates determined by reference to local high-quality
corporatebonds.
(iii) Prot-sharing and bonus plans
The group recognises a liability and an expense for bonuses and
prot-sharing, based on a formula that takes into consideration
theprot attributable to the companys shareholders after
certainadjustments.
The group recognises a provision where contractually obliged or
where there is a past practice that has created a constructive
obligation. At a mid-year point an accrual is maintained for the
appropriate proportion of the expected bonuses which would
becomepayable at the year end.
(iv) Share-based compensation
The group operates a variety of equity-settled share-based
compensation plans and a cash-settled share-based
compensationplan.
The equity-settled plans comprise share option plans (with and
without market performance conditions attached), performance
shareaward plans (with market conditions attached) and awards
related to the employee element of the Broad-Based Black Economic
Empowerment (BBBEE) scheme in South Africa. An expense is
recognised to spread the fair value of each award granted after
7November 2002 over the vesting period on a straight-line basis, after
allowing for an estimate of the share awards that will eventually vest.
Acorresponding adjustment is made to equity over the remaining
vesting period. The estimate of the level of vesting is reviewed at least
annually, with any impact on the cumulative charge being recognised
immediately. In addition the group has granted an equity-settled
share-based payment to retailers in relation to the retailer element of
the BBBEE scheme. A one-off charge has been recognised based on
the fair value at the grant date with a corresponding adjustment to
equity. The charge will not be adjusted in the future.
The charges are based on the fair value of the awards as at the date
of grant, as calculated by various binomial model calculations and
Monte Carlo simulations.
The charges are not reversed if the options and awards are not
exercised because the market value of the shares is lower than the
option price at the date of grant.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share premium
when the options are exercised.
For the cash-settled plan a liability is recognised at fair value in the
balance sheet over the vesting period with a corresponding charge
tothe income statement. The liability is remeasured at each reporting
date, on an actuarial basis using the analytic method, to reect the
revised fair value and to adjust for changes in assumptions such as
leavers. Changes in the fair value of the liability are recognised in the
income statement. Actual settlement of the liability will be at its
intrinsic value with the difference recognised in the income statement.
(v) Pension obligations
The group has both dened benet and dened contribution plans.
The liability recognised in the balance sheet in respect of dened
benet pension plans is the present value of the dened benet
obligation at the balance sheet date less the fair value of plan assets,
together with adjustments for unrecognised past service costs. The
dened benet obligation is calculated annually by independent
actuaries using the projected unit credit method. The present value
ofthe dened benet obligation is determined by discounting the
estimated future cash outows using interest rates of high-quality
corporate bonds that are denominated in the currency in which the
benets will be paid, and that have terms to maturity approximating
tothe terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions are recognised in full as they arise
outside of the income statement and are charged or credited to
equityin other comprehensive income in the period in which they
arise, withthe exception of gains or losses arising from changes
inthebenets regarding past services, which are recognised in
theincomestatement.
Past service costs are recognised immediately in the income
statement, unless the changes to the pension plan are conditional
onthe employees remaining in service for a specied period of time
(the vesting period). In this case, the past service costs are amortised
on astraight-line basis over the vesting period.
The contributions to dened contribution plans are recognised
asanexpense as the costs become payable. The contributions are
recognised as employee benet expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
(vi) Other post-employment obligations
Some group companies provide post-retirement healthcare benets
toqualifying employees. The expected costs of these benets are
assessed in accordance with the advice of qualied actuaries and
contributions are made to the relevant funds over the expected
service lives of the employees entitled to those funds. Actuarial gains
and losses arising from experience adjustments, and changes in
actuarial assumptions are recognised in full as they arise outside
theincome statement and are charged or credited to equity in other
comprehensive income in the period in which they arise. These
obligations are valued annually by independent qualied actuaries.
(vii) Termination benets
Termination benets are payable when employment is terminated
before the normal retirement date, or whenever an employee accepts
voluntary redundancy in exchange for these benets. The group
recognises termination benets when it is demonstrably committed
toterminating the employment of current employees according to a
detailed formal plan without possibility of withdrawal, or providing
termination benets as a result of an offer made to encourage
voluntary redundancy. Benets falling due more than 12 months
afterbalance sheet date are discounted to present value in a
similarmanner to all long-term employee benets.
x) Derivative nancial instruments hedge accounting
Financial assets and nancial liabilities at fair value through prot
orloss include all derivative nancial instruments. The derivative
instruments used by the group, which are used solely for hedging
purposes (i.e. to offset foreign exchange and interest rate risks),
comprise interest rate swaps, cross currency swaps, forward foreign
exchange contracts and other specic instruments as necessary
under the approval of the board. Such derivative instruments are used
to alter the risk prole of an existing underlying exposure of the group
in line with the groups risk management policies. The group also has
derivatives embedded in other contracts primarily cross border foreign
currency supply contracts for raw materials.
Derivatives are initially recorded at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair
value. The method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging instrument, and
if so, the nature of the hedging relationship.
In order to qualify for hedge accounting, the group is required to
document at inception, the relationship between the hedged item
andthe hedging instrument as well as its risk management objectives
and strategy for undertaking hedging transactions. The group is
alsorequired to document and demonstrate that the relationship
between the hedged item and the hedging instrument will be highly
effective. This effectiveness test is reperformed at each period end
toensure that the hedge has remained and will continue to remain
highly effective.
The group designates certain derivatives as either: hedges of the
fairvalue of recognised assets or liabilities or a rm commitment
(fairvalue hedge); hedges of highly probable forecast transactions
orcommitments (cash ow hedge); or hedges of net investments
inforeign operations (net investment hedge).
(i) Fair value hedges
Fair value hedges comprise derivative nancial instruments designated
in a hedging relationship to manage the groups interest rate risk
towhich the fair value of certain assets and liabilities are exposed.
Changes in the fair value of the derivative offset the relevant changes
in the fair value of the underlying hedged item attributable to the
hedged risk in the income statement in the period incurred.
Gains or losses on fair value hedges that are regarded as highly
effective are recorded in the income statement together with the
gainor loss on the hedged item attributable to the hedged risk.
(ii) Cash ow hedges
Cash ow hedges comprise derivative nancial instruments
designated in a hedging relationship to manage currency and interest
rate risk to which the cash ows of certain liabilities are exposed. The
effective portion of changes in the fair value of the derivative that is
designated and qualies for hedge accounting is recognised in
othercomprehensive income. The ineffective portion is recognised
immediately in the income statement. Amounts accumulated in equity
are reclassied to the income statement in the period in which the
hedged item affects prot or loss. However, where a forecasted
transaction results in a non-nancial asset or liability, the accumulated
fair value movements previously deferred in equity are included in the
initial cost of the asset or liability.
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(iii) Hedges of net investments in foreign operations
Hedges of net investments in foreign operations comprise either
foreign currency borrowings or derivatives (typically forward
exchangecontracts and cross currency swaps) designated in
ahedging relationship.
Gains or losses on hedging instruments that are regarded as highly
effective are recognised in other comprehensive income. These
largely offset foreign currency gains or losses arising on the translation
of net investments that are recorded in equity, in the foreign currency
translation reserve. The ineffective portion of gains or losses on
hedging instruments is recognised immediately in the income
statement. Amounts accumulated in equity are only reclassied
totheincome statement upon disposal of the net investment.
Where a derivative ceases to meet the criteria of being a hedging
instrument or the underlying exposure which it is hedging is sold,
matures or is extinguished, hedge accounting is discontinued and
amounts previously recorded in equity are reclassied to the income
statement. A similar treatment is applied where the hedge is of a
future transaction and that transaction is no longer likely to occur.
When the hedge is discontinued due to ineffectiveness, hedge
accounting is discontinued prospectively.
Certain derivative instruments, whilst providing effective economic
hedges under the groups policies, are not designated as hedges.
Changes in the fair value of any derivative instruments that do not
qualify or have not been designated as hedges are recognised
immediately in the income statement. The group does not hold or
issue derivative nancial instruments for speculative purposes.
y) Deposits by customers
Returnable containers in circulation are recorded within property,
plant and equipment and a corresponding liability is recorded in
respect of the obligation to repay the customers deposits. Deposits
paid by customers for branded returnable containers are reected in
the balance sheet within current liabilities. Any estimated liability that
may arise in respect of deposits for unbranded containers is shown
inprovisions.
z) Earnings per share
Basic earnings per share represents the prot on ordinary activities
after taxation attributable to the equity shareholders of the parent
entity, divided by the weighted average number of ordinary shares in
issue during the year, less the weighted average number of ordinary
shares held in the groups employee benet trusts and in treasury
during the year.
Diluted earnings per share represents the prot on ordinary activities
after taxation attributable to the equity shareholders of the parent,
divided by the weighted average number of ordinary shares in issue
during the year, less the weighted average number of ordinary shares
held in the groups employee benet trusts and in treasury during the
year, plus the weighted average number of dilutive shares resulting
from share options and other potential ordinary shares outstanding
during theyear.
2. Segmental analysis
Operating segments reect the management structure of the group and the way performance is evaluated and resources allocated based
ongroup revenue and EBITA by the groups chief operating decision maker, dened as the executive directors. The group is focused
geographically and, while not meeting the denition of reportable segments, the group reports separately as segments South Africa: Hotels
and Gaming and Corporate as this provides useful additional information.
The segmental information presented below includes the reconciliation of GAAP measures presented on the face of the income statement to
non-GAAP measures which are used by management to analyse the groups performance.
Income statement
Group
revenue
2012
US$m
EBITA
2012
US$m
Group
revenue
2011
US$m
EBITA
2011
US$m
Latin America 7,158 1,865 6,335 1,620
Europe 5,482 836 5,394 887
North America 5,250 756 5,223 741
Africa 3,686 743 3,254 647
Asia Pacic 3,510 321 2,026 92
South Africa: 6,302 1,303 6,079 1,204
Beverages 5,815 1,168 5,598 1,067
Hotels and Gaming 487 135 481 137
Corporate (190) (147)
Group 31,388 5,634 28,311 5,044
Amortisation of intangible assets (excluding software) group and share of associates
andjoint ventures (264) (209)
Exceptional items group and share of associates and joint ventures 1,015 (467)
Net nance costs group and share of associates and joint ventures
(excludingexceptionalitems) (570) (560)
Share of associates and joint ventures taxation (170) (139)
Share of associates and joint ventures non-controlling interests (42) (43)
Group revenue (including associates and joint ventures)
With the exception of South Africa: Hotels and Gaming, all reportable segments derive their revenues from the sale of beverages. Revenues are
derived from a large number of customers which are internationally dispersed, with no customers being individually material.
Revenue
2012
US$m
Share of
associates
and joint
ventures
revenue
2012
US$m
Group
revenue
2012
US$m
Revenue
2011
US$m
Share of
associates
and joint
ventures
revenue
2011
US$m
Group
revenue
2011
US$m
Latin America 7,148 10 7,158 6,324 11 6,335
Europe 5,347 135 5,482 5,379 15 5,394
North America 134 5,116 5,250 117 5,106 5,223
Africa 2,299 1,387 3,686 2,059 1,195 3,254
Asia Pacic 1,682 1,828 3,510 564 1,462 2,026
South Africa: 5,150 1,152 6,302 4,965 1,114 6,079
Beverages 5,150 665 5,815 4,965 633 5,598
Hotels and Gaming 487 487 481 481
Group 21,760 9,628 31,388 19,408 8,903 28,311
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2. Segmental analysis continued
Operating prot
The following table provides a reconciliation of operating prot to operating prot before exceptional items.
Operating
prot
2012
US$m
Exceptional
items
2012
US$m
Operating
prot before
exceptional
items
2012
US$m
Operating
prot
2011
US$m
Exceptional
items
2011
US$m
Operating
prot before
exceptional
items
2011
US$m
Latin America 1,617 119 1,736 1,391 106 1,497
Europe 1,939 (1,135) 804 596 261 857
North America 16 16
Africa 584 (162) 422 361 4 365
Asia Pacic 54 70 124 (22) (22)
South Africa: Beverages 1,050 41 1,091 809 188 997
Corporate (231) 41 (190) (24) (123) (147)
Group 5,013 (1,026) 3,987 3,127 436 3,563
EBITA (segment result)
This comprises operating prot before exceptional items, amortisation of intangible assets (excluding software) and includes the groups share
of associates and joint ventures operating prot on a similar basis. The following table provides a reconciliation of operating prot before
exceptional items to EBITA.
Operating
prot
before
exceptional
items
2012
US$m
Share of
associates
and joint
ventures
operating
prot before
exceptional
items
2012
US$m
Amortisation
of intangible
assets
(excluding
software)
group and
share of
associates
and joint
ventures
2012
US$m
EBITA
2012
US$m
Operating
prot
before
exceptional
items
2011
US$m
Share of
associates
and joint
ventures
operating
prot before
exceptional
items
2011
US$m
Amortisation
of intangible
assets
(excluding
software)
group and
share of
associates
and joint
ventures
2011
US$m
EBITA
2011
US$m
Latin America 1,736 129 1,865 1,497 123 1,620
Europe 804 11 21 836 857 2 28 887
North America 711 45 756 16 679 46 741
Africa 422 318 3 743 365 277 5 647
Asia Pacic 124 132 65 321 (22) 108 6 92
South Africa: 1,091 211 1 1,303 997 206 1 1,204
Beverages 1,091 77 1,168 997 70 1,067
Hotels and Gaming 134 1 135 136 1 137
Corporate (190) (190) (147) (147)
Group 3,987 1,383 264 5,634 3,563 1,272 209 5,044
The groups share of associates and joint ventures operating prot is reconciled to the share of post-tax results of associates and joint
ventures in the income statement as follows.
2012
US$m
2011
US$m
Share of associates and joint ventures operating prot (before exceptional items) 1,383 1,272
Share of associates and joint ventures exceptional items 11 (31)
Share of associates and joint ventures net nance costs (30) (35)
Share of associates and joint ventures taxation (170) (139)
Share of associates and joint ventures non-controlling interests (42) (43)
Share of post-tax results of associates and joint ventures 1,152 1,024
EBITDA
The following table provides a reconciliation of EBITDA (the net cash generated from operations before working capital movements) toadjusted
EBITDA. A reconciliation of prot for the year for the group to EBITDA after cash exceptional items for the group can be found innote 28a.
EBITDA
2012
US$m
Cash
exceptional
items
2012
US$m
Dividends
received
from
MillerCoors
2012
US$m
Adjusted
EBITDA
2012
US$m
EBITDA
2011
US$m
Cash
exceptional
items
2011
US$m
Dividends
received
from
MillerCoors
2011
US$m
Adjusted
EBITDA
2011
US$m
Latin America 2,068 112 2,180 1,853 103 1,956
Europe 1,067 58 1,125 1,021 125 1,146
North America 22 896 918 27 822 849
Africa 564 13 577 517 4 521
Asia Pacic 159 88 247 17 17
South Africa: Beverages 1,267 13 1,280 1,143 42 1,185
Corporate (168) 24 (144) (76) 19 (57)
Group 4,979 308 896 6,183 4,502 293 822 5,617
Other segmental information
Capital
expenditure
excluding
investment
activity
1
2012
US$m
Investment
activity
2
2012
US$m
Total
2012
US$m
Capital
expenditure
excluding
investment
activity
1
2011
US$m
Investment
activity
2
2011
US$m
Total
2011
US$m
Latin America 522 (34) 488 438 55 493
Europe 324 17 341 265 (2) 263
North America 288 288 171 171
Africa 398 (82) 316 211 24 235
Asia Pacic 69 10,931 11,000 54 15 69
South Africa: 284 284 275 (68) 207
Beverages 284 284 275 275
Hotels and Gaming (68) (68)
Corporate 42 1 43 72 3 75
Group 1,639 11,121 12,760 1,315 198 1,513
1
Capital expenditure includes additions of intangible assets (excluding goodwill) and property, plant and equipment.
2
Investment activity includes acquisitions and disposals of businesses, net investments in associates and joint ventures, purchases of shares in non-controlling
interests and purchases and disposals of available for sale investments.
Depreciation and
amortisation
2012
US$m
2011
US$m
Latin America 445 461
Europe 298 309
Africa 128 126
Asia Pacic 117 29
South Africa: Beverages 168 176
Corporate 26 23
Group 1,182 1,124
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Geographical information
The UK is the parent companys country of domicile. Those countries which account for more than 10% of the groups total revenue and/or
non-current assets are considered individually material and are reported separately below.
Revenue
2012
US$m
2011
US$m
UK 359 316
Australia 1,025
Colombia 3,481 3,145
South Africa 5,150 4,965
USA 124 108
Rest of world 11,621 10,874
Group 21,760 19,408
Non-current assets
2012
US$m
2011
1
US$m
UK 354 333
Australia 14,577 101
USA 5,777 5,968
Rest of world 17,865 16,660
Group 50,060 34,356
1
Non-current assets by location exclude amounts relating to derivative nancial instruments and deferred tax assets.
3. Net operating expenses
2012
US$m
2011
US$m
Cost of inventories recognised as an expense 5,049 4,640
Changes in inventories of nished goods and work in progress 18 25
Raw materials and consumables used 5,031 4,615
Excise duties 5,047 4,263
Employee costs (see note 6a) 2,502 2,240
Depreciation of property, plant and equipment 909 904
Owned assets 669 662
Under nance lease 3 3
Containers 237 239
Net prot on disposal of businesses (1,242)
Prot on disposal of investment in associate (103) (159)
Gain on remeasurement of existing interest in joint venture on acquisition (66)
Prot on disposal of property, plant and equipment (15) (5)
Amortisation of intangible assets 273 220
Intangible assets (excluding software) 218 158
Software 55 62
Other expenses 4,906 4,566
Selling, marketing and distribution costs 2,562 2,249
Repairs and maintenance expenditure on property, plant and equipment 325 315
Impairment of intangible assets 14
Impairment of property, plant and equipment 31
Impairment of trade and other receivables 25 91
Operating lease rentals land and buildings 60 61
Operating lease rentals plant, vehicles and systems 84 78
Research and development expenditure 7 7
Acquisition-related costs 109 3
Other operating expenses 1,734 1,717
Total net operating expenses by nature 17,260 16,669
Other income (513) (388)
Revenue received from royalties (43) (40)
Dividends received from investments (1) (1)
Other operating income (469) (347)
Net operating expenses 16,747 16,281
1
Excise duties of US$5,047 million (2011: US$4,263 million) have been incurred during the year as follows: Latin America US$1,843 million (2011: US$1,639
million); Europe US$1,204 million (2011: US$1,160 million); North America US$3 million (2011: US$2 million); Africa US$408 million (2011: US$324 million);
AsiaPacic US$626 million (2011: US$219 million) and South Africa US$963 million (2011: US$919 million). The groups share of MillerCoors excise duties
incurred during the year was US$703 million (2011: US$719 million).
Foreign exchange differences recognised in the prot for the year, except for those arising on nancial instruments measured at fair value
underIAS 39, were a loss of US$27 million (2011: gain of US$4 million).
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3. Net operating expenses continued
The following fees were paid to a number of different accounting rms as auditors of various parts of the group.
2012
US$m
2011
US$m
Group auditors
Fees payable to the groups auditor and their associates for:
The audit of parent company and consolidated nancial statements 3 2
The audit of group subsidiaries pursuant to legislation 8 8
11 10
Other services supplied pursuant to legislation 1 1
Services relating to taxation 7 3
Services relating to information technology
1
4 1
Services relating to corporate nance transactions 3
Other services
1
3 5
29 20
Other audit rms
Fees payable to other audit rms for:
Auditing of subsidiaries, pursuant to legislation 1 2
Services relating to taxation 2 3
Services relating to information technology
1
8 5
Services relating to corporate nance transactions 1
Services relating to internal audit 1
Other services
1
7 9
20 19
1
Principally relating to the business capability programme.
4. Exceptional items
2012
US$m
2011
US$m
Exceptional items included in operating prot:
Net prot on disposal of businesses 1,248
Prot on disposal of investment in associate 103 159
Gain on remeasurement of existing interest in joint venture on acquisition 66
Litigation 42
Business capability programme costs (235) (296)
Transaction-related costs (109)
Integration and restructuring costs (60) (52)
Broad-Based Black Economic Empowerment scheme costs (29) (149)
Impairments (98)
Net exceptional gains/(losses) included within operating prot 1,026 (436)
Exceptional items included in net nance costs:
Litigation-related interest income 4
Transaction-related net costs (26)
Net exceptional losses included within net nance costs (22)
Share of associates and joint ventures exceptional items:
Prots/(losses) on transactions in associates 46 (26)
Impairments (35)
Integration and restructuring costs (5)
Share of associates and joint ventures exceptional gains/(losses) 11 (31)
Net taxation credits relating to subsidiaries and the groups share of associates and joint ventures
exceptional items 24 2
4. Exceptional items continued
Exceptional items included in operating prot
Net prot on disposal of businesses
During 2012 a prot of US$1,195 million arose in Europe on the disposal of the groups Russian and Ukrainian businesses in exchange for a
24% interest in the enlarged Anadolu Efes group; a prot of US$67 million arose in Africa on the disposal of the groups Angolan operations in
exchange for a 27.5% interest in BIH Angola; partially offset by a loss of US$14 million incurred in Europe primarily in relation to the recycling of
the foreign currency translation reserve on the disposal of the distribution business in Italy.
Prot on disposal of investment in associate
During 2012 a prot of US$103 million was realised on the disposal of the groups investment in its associate, Kenya Breweries Ltd, in Africa.
In 2011 a prot of US$159 million arose on the partial disposal of the groups shareholding in Tsogo Sun Holdings (Pty) Ltd (Tsogo Sun) as part
of the Tsogo Sun/Gold Reef Resorts Ltd (GRR) merger.
Gain on remeasurement of existing interest in joint venture on acquisition
During 2012 the group acquired the remaining 50% interest which it did not already own in Pacic Beverages Pty Ltd (Pacic Beverages)
fromCoca-Cola Amatil Limited. This resulted in a US$66 million gain arising on the remeasurement to fair value of the groups existing interest.
Litigation
During 2012 in Europe a US$42 million anti-trust ne paid by Grolsch prior to its acquisition by SABMiller plc was annulled by the EU General
Court and the payment refunded.
Business capability programme costs
The business capability programme will streamline nance, human resources and procurement activities through the deployment of global
systems and introduce common sales, distribution and supply chain management systems. Costs of US$235 million have been incurred in
theyear (2011: US$296 million).
Transaction-related costs
During 2012 costs of US$109 million were incurred in relation to the Fosters Group Ltd (Fosters) transaction.
Integration and restructuring costs
During 2012 US$34 million of restructuring costs were incurred in Latin America, principally in Ecuador, Peru and the regional ofce,
andUS$26 million of integration costs were incurred in Asia Pacic following the Fosters and Pacic Beverages acquisitions.
In 2011 in Europe US$52 million of restructuring costs were incurred in Romania, the Netherlands, the Canary Islands and Italy.
Broad-Based Black Economic Empowerment scheme costs
US$29 million (2011: US$149 million) of costs have been incurred in relation to the Broad-Based Black Economic Empowerment (BBBEE)
scheme in South Africa. This represents the ongoing IFRS 2 share-based payment charge in respect of the employee element of the scheme
and in the prior year also, the one-off IFRS 2 charge in respect of the retailer element, together with the costs associated with the transaction.
Impairments
In 2011 impairment charges of US$98 million were incurred in Europe including charges following the classication of the in-house distribution
business in Italy as held for sale and the closure of the Cluj brewery in Romania.
Exceptional items included in net nance costs
Litigation-related interest income
During 2012 US$4 million of interest was received in relation to the refund of the anti-trust ne in Europe.
Transaction-related net costs
During 2012 net costs of US$26 million were incurred primarily related to the Fosters transaction and included fees relating to nancing
facilities and premiums on derivative instruments which were partially offset by mark to market gains on derivative nancial instruments taken
out in anticipation of the transaction and where hedge accounting could not be applied.
Share of associates and joint ventures exceptional items
Prots/(losses) on transactions in associates
During 2012 Tsogo Sun released deferred consideration relating to a prior acquisition of which the groups share was US$13 million; US$10
million prot arose on Tsogo Suns fair value accounting on the change in control on the acquisition of the outstanding stake in the Formula 1
chain; and a US$23 million prot arose in Africa being the groups share of Castels prot on disposal of its subsidiary in Nigeria.
In 2011 the groups share of the impairment loss on Tsogo Suns existing holding in GRR as a result of the merger transaction between these
two businesses and costs associated with the transaction was US$26 million.
Impairments
During 2012 the groups share of MillerCoors impairment of the Sparks brand amounted to US$35 million.
Integration and restructuring costs
In 2011 the groups share of MillerCoors integration and restructuring costs was US$5 million primarily related to severance costs.
Net taxation credits relating to subsidiaries and the groups share of associates and joint ventures exceptional items
Net taxation credits of US$24 million (2011: US$2 million) arose in relation to exceptional items during the year and include US$13 million
(2011:US$2 million) in relation to MillerCoors although the tax credit is recognised in Miller Brewing Company (see note 7).
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5. Net nance costs
2012
US$m
2011
US$m
a. Interest payable and similar charges
Interest payable on bank loans and overdrafts 170 123
Interest payable on derivatives 156 163
Interest payable on corporate bonds 463 408
Interest element of nance lease payments 1 1
Net exchange losses/(gains) on nancing activities 13 (14)
Net exchange losses on dividends
1
9
Fair value losses on nancial instruments:
Fair value losses on standalone derivative nancial instruments 144 153
Ineffectiveness of net investment hedges 4 4
Exceptional interest payable and similar charges 96
Other nance charges 46 36
Total interest payable and similar charges 1,093 883
b. Interest receivable and similar income
Interest receivable 55 48
Interest receivable on derivatives 226 212
Fair value gains on nancial instruments:
Fair value gains on standalone derivative nancial instruments 170 92
Fair value gains on dividend-related derivatives 3 6
Net exchange gains on dividends 3
Exceptional interest receivable and similar income 74
Total interest receivable and similar income 531 358
Net nance costs 562 525
1
These items have been excluded from the determination of adjusted earnings per share. Adjusted net nance costs are therefore US$542 million
(2011:US$518million).
Refer to note 23 Financial risk factors for interest rate risk information.
6. Employee and key management compensation costs
a. Employee costs
2012
US$m
2011
US$m
Wages and salaries 2,038 1,837
Share-based payments 161 130
Social security costs 193 172
Pension costs 112 114
Post-retirement benets other than pensions 13 5
2,517 2,258
Of the US$2,517 million employee costs shown above, US$15 million (2011: US$18 million) has been capitalised within intangible assets and
property, plant and equipment.
b. Employee numbers
The average monthly number of employees are shown on a full-time equivalent basis, excluding employees of associated and joint venture
undertakings and including executive directors.
2012
Number
2011
Number
Latin America 26,933 25,691
Europe 14,095 14,239
North America 76 51
Africa 13,596 13,481
Asia Pacic 3,804 3,358
Corporate 701 495
Group 71,144 69,212
6. Employee and key management compensation costs continued
c. Key management compensation
The directors of the group and members of the executive committee (excom) are dened as key management. At 31 March 2012 there were
27(2011: 24) key management.
2012
US$m
2011
US$m
Salaries and short-term employee benets 32 26
Post-employment benets 2 1
70 58
The key management gures given above include the directors.
d. Directors
2012
US$m
2011
US$m
Aggregate emoluments 6,087,153 (2011: 6,559,226) 10 10
Aggregate gains made on the exercise of share options or vesting of share awards 15 2
Notional contributions to unfunded retirement benets scheme 562,679 (2011: nil) 1
26 12
Malcolm Wyman retired from the board at the conclusion of the 2011 annual general meeting on 21 July 2011 and from full-time employment
on 31 August 2011 after which he continued as a part-time employee up to 31 March 2012. Only his emoluments up to 21 July 2011 are
included in the table above.
At 31 March 2012 one director (2011: two) had retirement benets accruing under money purchase pension schemes. There were no company
contributions to money purchase pension schemes during the year (2011: nil).
Full details of individual directors remuneration are given in the directors remuneration report on pages 68 to 83.
7. Taxation
2012
US$m
2011
US$m
Current taxation 957 808
Charge for the year (UK corporation tax: US$39 million (2011: US$11 million)) 986 817
Adjustments in respect of prior years (29) (9)
Withholding taxes and other remittance taxes 137 101
Total current taxation 1,094 909
Deferred taxation 32 160
Charge for the year (UK corporation tax credit: US$24 million (2011: US$nil)) 60 183
Adjustments in respect of prior years (3) (16)
Rate change (25) (7)
Taxation expense 1,126 1,069
Tax credit relating to components of other comprehensive income is as follows:
Deferred tax credit on actuarial gains and losses (71) (36)
Deferred tax (credit)/charge on nancial instruments (30) 14
(101) (22)
Total current tax 1,094 909
Total deferred tax (69) 138
Total taxation 1,025 1,047
Effective tax rate (%) 27.5 28.2
See the nancial denitions section for the denition of the effective tax rate. The calculation is on a basis consistent with that used in prior
years and is also consistent with other group operating metrics. Tax on amortisation of intangible assets (excluding software) was US$72 million
(2011: US$58 million).
MillerCoors is not a taxable entity. The tax balances and obligations therefore remain with Miller Brewing Company as a 100% subsidiary of the
group. This subsidiarys tax charge includes tax (including deferred tax) on the groups share of the taxable prots of MillerCoors and includes
tax in other comprehensive income on the groups share of MillerCoors taxable items included within other comprehensive income.
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7. Taxation continued
Tax rate reconciliation
2012
US$m
2011
US$m
Less: share of post-tax results of associates and joint ventures (1,152) (1,024)
4,451 2,602
Tax charge at standard UK rate of 26% (2011: 28%) 1,157 729
Exempt income (413) (21)
Other incentive allowances (63) (20)
Expenses not deductible for tax purposes 47 131
Deferred taxation on changes in tax legislation within Europe division countries (64)
Deferred tax asset not recognised 30 32
Initial recognition of deferred taxation (10)
Tax impact of MillerCoors joint venture 179 198
Withholding taxes and other remittance taxes 137 101
Other taxes 28 36
Adjustments in respect of foreign tax rates 90 (22)
Adjustments in respect of prior periods (32) (25)
Deferred taxation rate change (25) (7)
Deferred taxation on unremitted earnings of overseas subsidiaries 1 1
Total taxation expense 1,126 1,069
8. Earnings per share
2012
US cents
2011
US cents
Basic earnings per share 266.6 152.8
Diluted earnings per share 263.8 151.8
Headline earnings per share 179.8 150.8
Adjusted basic earnings per share 214.8 191.5
Adjusted diluted earnings per share 212.5 190.3
The weighted average number of shares was:
2012
Millions of
shares
2011
Millions of
shares
Ordinary shares 1,661 1,656
Treasury shares (72) (72)
EBT ordinary shares (6) (8)
Basic shares 1,583 1,576
Dilutive ordinary shares 17 10
Diluted shares 1,600 1,586
The calculation of diluted earnings per share excludes 8,362,920 (2011: 9,045,847) share options that were non-dilutive for the year because
the exercise price of the option exceeded the fair value of the shares during the year, 14,799,716 (2011: 12,842,609) share awards that were
non-dilutive for the year because the performance conditions attached to the share awards have not been met and nil (2011: 732,869) shares
inrelation to the employee component of the BBBEE scheme that were non-dilutive for the year. These share incentives could potentially dilute
earnings per share in the future.
Incentives involving 12,590,280 shares were granted after 31 March 2012 and before the date of signing of these nancial statements.
8. Earnings per share continued
Adjusted and headline earnings
The group presents an adjusted earnings per share gure which excludes the impact of amortisation of intangible assets (excluding software),
certain non-recurring items and post-tax exceptional items in order to present an additional measure of performance for the years shown in the
consolidated nancial statements. Adjusted earnings per share has been based on adjusted earnings for each nancial year and on the same
number of weighted average shares in issue as the basic earnings per share calculation. Headline earnings per share has been calculated in
accordance with the South African Circular 3/2009 entitled Headline Earnings which forms part of the listing requirements for the JSE Ltd
(JSE). The adjustments made to arrive at headline earnings and adjusted earnings are as follows.
2012
US$m
2011
US$m
Prot for the year attributable to owners of the parent 4,221 2,408
Headline adjustments
Impairment of business held for sale 53
Tax effects of these items 12 14
Non-controlling interests share of the above items 40 1
Share of joint ventures and associates headline adjustments, net of tax and non-controlling interests 20
Headline earnings 2,847 2,377
Business capability programme costs 235 296
Broad-Based Black Economic Empowerment scheme costs 29 149
Integration and restructuring costs 60 52
Transaction-related costs 109
Litigation (42)
Litigation-related interest income (4)
Net (gain)/loss on fair value movements on capital items
1
(2) 7
Transaction-related net nance costs 26
Amortisation of intangible assets (excluding software) 218 158
Tax effects of the above items (101) (71)
Non-controlling interests share of the above items (7) (10)
Share of joint ventures and associates other adjustments, net of tax and non-controlling interests 32 60
Adjusted earnings 3,400 3,018
1
This does not include all fair value movements but includes those in relation to capital items for which hedge accounting cannot be applied.
9. Dividends
2012
US$m
2011
US$m
Equity
2011 Final dividend paid: 61.5 US cents (2010: 51.0 US cents) per ordinary share 973 806
2012 Interim dividend paid: 21.5 US cents (2011: 19.5 US cents) per ordinary share 351 309
1,324 1,115
In addition, the directors are proposing a nal dividend of 69.5 US cents per share in respect of the nancial year ended 31 March 2012,
whichwill absorb an estimated US$1,103 million of shareholders funds. If approved by shareholders, the dividend will be paid on 17 August
2012 to shareholders registered on the London and Johannesburg registers on 10 August 2012. The total dividend per share for the year is
91.0US cents (2011: 81.0 US cents).
Treasury shares do not attract dividends and the employee benet trusts have both waived their right to receive dividends (further information
can be found in note 27).
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10. Goodwill
US$m
Cost
At 1 April 2010 11,918
Exchange adjustments 348
Acquisitions through business combinations 43
At 31 March 2011
1
12,309
Acquisitions through business combinations (provisional) (see note 30) 8,049
Disposals (63)
Transfers to disposal group classied as held for sale (see note 19) (29)
At 31 March 2012 20,453
Accumulated impairment
At 1 April 2010 339
At 31 March 2011 355
Exchange adjustments (20)
Disposals (10)
At 31 March 2012 325
Net book amount
At 1 April 2010 11,579
At 31 March 2011
1
11,954
At 31 March 2012 20,128
1
2012
Provisional goodwill arose on the acquisition through business combinations in the year of Fosters and Pacic Beverages in Australia and
International Breweries plc in Nigeria. The fair value exercises in respect of these business combinations have yet to be completed.
2011
Goodwill arose on the acquisition through business combinations of Cervecera Argentina SA Isenbeck (CASA Isenbeck) in Argentina
andCrown Beverages Ltd (previously Crown Foods Ltd) in Kenya. The fair value exercises in respect of these business combinations are
nowcomplete.
Goodwill is monitored principally on an individual country basis and the net book value is allocated by cash generating unit (CGU) as follows.
2012
US$m
2011
1
US$m
CGUs:
Latin America:
Central America 819 830
Peru 1,744 1,667
Other Latin America 243 245
Europe:
Czech Republic 976 1,046
Netherlands 104 109
Italy 431 457
Poland 1,218 1,343
Other Europe 77 126
North America 256 256
Africa 256 181
Asia Pacic:
Australia 8,215
India 350 392
Other Asia Pacic 12 12
South Africa 618 700
20,128 11,954
1
10. Goodwill continued
Assumptions
The recoverable amount for a CGU is determined based on value in use calculations. Value in use is determined by discounting the future
post-tax cash ows generated from continuing use of the CGU using a post-tax discount rate, as this closely approximates to applying
pre-taxdiscount rates to pre-tax cash ows. Where a potential impairment is identied using post-tax cash ows and post-tax discount rates,
the impairment review is reperformed on a pre-tax basis in order to determine the impairment loss to be recorded. The key assumptions
forthevalue in use calculations are as follows:
Expected volume growth rate Cash ows are based on nancial forecasts approved by management covering ve-year periods and are
dependent on the expected volume growth rates.
Discount rate The discount rate (weighted average cost of capital) is calculated using a methodology which reects the returns from United
States Treasury notes with a maturity of 20 years, and an equity risk premium adjusted for specic industry and country risks. The group
applies local post-tax discount rates to local post-tax cash ows.
Long-term growth rate Cash ows after the rst ve-year period were extrapolated using a long-term growth rate, in order to calculate the
terminal recoverable amount.
The following table presents the key assumptions used in the value in use calculations in each of the groups operating segments:
Expected volume
growth rates
2013-2017
Post-tax
discount rates
Long-term
growth rates
Latin America 4.2%18.6% 8.0%13.1% 2.0%3.0%
Europe 1.8%8.9% 7.7%9.9% 2.0%3.5%
North America 8.5% 7.1% 2.5%
Africa 1.9%15.1% 8.3%12.6% 2.5%7.1%
Asia Pacic 2.6%19.2% 7.6%10.3% 2.3%7.0%
South Africa 2.8% 8.8% 3.0%
Impairment reviews results
As a result of the annual impairment reviews, no impairment losses have been recognised in the year (2011: US$nil).
Sensitivities to assumptions
The groups impairment reviews are sensitive to changes in the key assumptions described above. Based on the groups sensitivity analysis,
areasonably possible change in a single assumption will not cause an impairment loss in any of the groups CGUs.
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11. Intangible assets
Brands
US$m
Computer
software
US$m
Other
US$m
Total
US$m
Cost
At 1 April 2010 4,724 430 71 5,225
Exchange adjustments 106 21 4 131
Additions separately acquired 20 102 4 126
Acquisitions through business combinations 10 10
Transfers 3 (3)
Transfers from property, plant and equipment 8 8
Disposals (23) (23)
Transfers to disposal group classied as held for sale (1) (28) (29)
At 31 March 2011
1
4,860 540 48 5,448
Exchange adjustments 303 (32) 12 283
Additions separately acquired 6 165 171
Acquisitions through business combinations (see note 30) 4,775 596 5,371
Transfers from property, plant and equipment 3 3
Disposals (28) (30) (58)
At 31 March 2012 9,916 646 656 11,218
Accumulated amortisation and impairment
At 1 April 2010 617 223 31 871
Amortisation 151 62 7 220
Disposals (22) (22)
Impairment 14 14
At 31 March 2011 782 275 27 1,084
Exchange adjustments 23 (17) (2) 4
Amortisation 201 55 17 273
Disposals (18) (26) (44)
At 31 March 2012 988 287 42 1,317
Net book amount
At 1 April 2010 4,107 207 40 4,354
At 31 March 2011
1
4,078 265 21 4,364
At 31 March 2012 8,928 359 614 9,901
1
During 2012 no impairment charge in respect of intangible assets was incurred (2011: US$14 million related to the impairment of intangible
assets transferred to disposal group classied as held for sale).
At 31 March 2012 signicant individual brands included within the carrying value of intangible assets are as follows.
2012
US$m
2011
US$m
Amortisation
period
remaining
(years)
Brand carrying value
Carlton (Australia) 2,181 40
guila (Colombia) 1,557 1,529 33
Victoria Bitter (Australia) 1,101 40
Cristal (Peru) 646 634 33
Grolsch (Netherlands) 451 492 36
12. Property, plant and equipment
Assets in
course of
construction
US$m
Land and
buildings
US$m
Plant,
vehicles
and systems
US$m
Returnable
containers
US$m
Total
US$m
Cost
At 1 April 2010 543 3,387 8,008 2,105 14,043
Exchange adjustments 3 126 300 87 516
Additions 551 45 352 273 1,221
Acquisitions through business combinations 14 9 23
Breakages and shrinkage (172) (172)
Transfers (733) 222 462 49
Transfers to intangible assets (6) (2) (8)
Disposals (46) (276) (97) (419)
At 31 March 2011
1
358 3,743 8,787 2,245 15,133
Exchange adjustments (15) (99) (350) (106) (570)
Additions 801 20 369 306 1,496
Acquisitions through business combinations (see note 30) 54 342 515 12 923
Transfers (563) 118 383 62
Transfers to intangible assets (3) (3)
Transfers to disposal group classied as held for sale (see note 19) (10) (44) (54)
Disposals (48) (354) (1,268) (379) (2,049)
At 31 March 2012 584 3,760 8,392 2,067 14,803
Accumulated depreciation and impairment
At 1 April 2010 553 3,552 1,023 5,128
Provided during the year 80 585 239 904
Impairment 10 21 31
Transfers (3) 3
Disposals (4) (248) (73) (325)
At 31 March 2011 667 4,016 1,119 5,802
Exchange adjustments (29) (174) (57) (260)
Provided during the year 78 594 237 909
Transfers to disposal group classied as held for sale (see note 19) (2) (25) (27)
Disposals (42) (635) (217) (894)
At 31 March 2012 672 3,776 1,056 5,504
Net book amount
At 1 April 2010 543 2,834 4,456 1,082 8,915
At 31 March 2011
1
358 3,076 4,771 1,126 9,331
At 31 March 2012 584 3,088 4,616 1,011 9,299
Included in land and buildings is freehold land with a cost of US$742 million (2011: US$616 million) which is not depreciated.
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12. Property, plant and equipment continued
Included in plant, vehicles and systems are the following amounts relating to assets held under nance leases.
2012
US$m
2011
US$m
Net book amount 34 13
Included in the amounts above are the following amounts in respect of borrowing costs capitalised.
2012
US$m
2011
US$m
At 1 April 56 58
Exchange adjustments (2) 2
Amortised during the year (1) (6)
Capitalised during the year 2
At 31 March 53 56
Borrowing costs of US$nil (2011: US$2 million) were capitalised during the year.
Borrowings are secured by various of the groups property, plant and equipment with an aggregate net book value of US$20 million
(2011:US$161 million).
13. Investments in joint ventures
A list of the groups signicant investments in joint ventures, including the name, country of incorporation and proportion of ownership interest
is given in note 35 to the consolidated nancial statements.
US$m
At 1 April 2010 5,822
Investments in joint ventures 186
Share of results retained 667
Share of losses recognised in other comprehensive income (52)
Dividends received (822)
At 31 March 2011 5,813
Investments in joint ventures 288
Transfer to subsidiary undertaking (100)
Share of losses recognised in other comprehensive income (256)
Dividends received (896)
At 31 March 2012 5,520
On 13 January 2012 the remaining 50% interest in Pacic Beverages was purchased and from this date the company has been accounted for
as a subsidiary.
Summarised nancial information for the groups interest in joint ventures is shown below.
2012
US$m
2011
US$m
Revenue 5,174 5,157
Expenses (4,502) (4,489)
Prot after tax 672 668
Non-current assets 5,613 5,837
Current assets 573 675
Current liabilities (528) (531)
Non-current liabilities (801) (783)
14. Investments in associates
A list of the groups signicant investments in associates, including the name, country of incorporation and proportion of ownership interest is
given in note 35 to the consolidated nancial statements.
US$m
At 1 April 2010 2,213
Investments in associates 168
Repayment of investments by associates (68)
Share of gains recognised in other comprehensive income 2
Dividends receivable (89)
At 31 March 2011 2,719
Investments in associates 2,056
Repayment of investments by associates (14)
Acquisitions through business combinations (see note 30) 65
Disposal of investments in associates (104)
Dividends receivable (150)
At 31 March 2012 4,946
2012
On 1 January 2012 the group acquired a 27.5% interest in BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola) in exchange for
contributing its Angolan businesses, including its associate, Empresa de Cervejas NGola SARL, into BIH Angola. Castel acquired the
remaining 72.5% in BIH Angola, having contributed its Angolan businesses into BIH Angola.
On 6 March 2012 the group completed its strategic alliance with Anadolu Efes. The groups Russian business, SABMiller RUS LLC, and Ukrainian
business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes, inexchange for a 24% equity stake in the enlarged Anadolu Efes group.
On 25 November 2011 the group disposed of its effective 12% investment in Kenya Breweries Ltd, generating a prot of US$103 million.
2011
On 24 February 2011 the Tsogo Sun Group merged with GRR, a Johannesburg Stock Exchange listed business, through an all share merger.
The transaction was effected through the acquisition by GRR of Tsogo Sun, and the group exchanged its entire 49% shareholding in Tsogo
Sun for a 39.68% shareholding in the listed enlarged entity which resulted in a prot of US$159 million on the partial disposal of the groups
shareholding in Tsogo Sun and a loss of US$26 million being the groups share of its associates loss on the merger transaction. The increase
in the investments in associates includes US$159 million being the groups share of the fair value uplift on the investment in the enlarged entity.
On 4 November 2010 Tsogo Sun Gaming (Pty) Ltd, a wholly owned subsidiary of the groups associate, Tsogo Sun, repaid the ZAR490 million
(US$68 million) preference shares issued to SABSA Holdings (Pty) Ltd, a wholly owned subsidiary of the group.
The analysis of associated undertakings between listed and unlisted investments is shown below.
2012
US$m
2011
US$m
Listed 2,536 662
Unlisted 2,410 2,057
4,946 2,719
As at 31 March the market value of listed investments included above is:
Anadolu Efes 1,985
Distell Group Ltd 574 624
Delta Corporation Ltd 204 188
Tsogo Sun Holdings Ltd (formerly Gold Reef Resorts Ltd) 1,032 1,028
Summarised nancial information for associates for total assets, total liabilities, revenue and prot or loss on a 100% basis is shown below.
2012
US$m
2011
US$m
Total assets 18,731 14,046
Total liabilities (6,231) (5,730)
Revenue 12,963 10,921
Net prot 1,760 1,276
Some of the groups investments in associated undertakings which operate in African countries are also subject to local exchange control
regulations. These local exchange control regulations provide for restrictions on exporting capital from those countries, other than through
normal dividends.
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15. Available for sale investments
US$m
At 1 April 2010 32
Additions 3
Impairment (1)
At 31 March 2011 35
Additions 1
Disposals (3)
At 31 March 2012 31
2012
US$m
2011
US$m
Analysed as:
Non-current 30 35
Current 1
31 35
In 2011 the impairment related to the full impairment of the available for sale investments transferred to disposal group classied as held
forsale.
Available for sale investments are denominated in the following currencies.
2012
US$m
2011
US$m
SA rand 16 18
US dollars 9 9
Peruvian nuevo sol 2 3
Other currencies 4 5
31 35
An analysis of available for sale investments between listed and unlisted is shown below.
2012
US$m
2011
US$m
Listed 3 3
Unlisted 28 32
31 35
The fair values of unlisted investments are based on cash ows discounted using a rate based on the market interest rate and the risk premium
specic to unlisted securities, or by reference to valuations provided by third party investment managers. The fair value of listed investments
have been determined by reference to quoted stock exchanges.
The maximum exposure to credit risk at the reporting date is the fair value of the securities classied as available for sale.
16. Inventories
2012
US$m
2011
US$m
Raw materials and consumables 675 746
Work in progress 123 122
Finished goods and goods for resale 457 388
1,255 1,256
The following amount of inventories are expected to be utilised after 12 months.
2012
US$m
2011
US$m
Raw materials and consumables 43 35
There were no borrowings secured on the inventories of the group (2011: US$nil).
An impairment charge of US$12 million was recognised in respect of inventories during the year (2011: US$20 million).
17. Trade and other receivables
2012
US$m
2011
US$m
Trade receivables 1,545 1,380
Less: provision for impairment (140) (147)
Trade receivables net 1,405 1,233
Other receivables 495 463
Less: provision for impairment (12) (14)
Other receivables net 483 449
Amounts owed by associates 205 12
Amounts owed by joint ventures trade 6 5
Prepayments and accrued income 193 128
Total trade and other receivables 2,292 1,827
Analysed as:
Current
Trade receivables net 1,389 1,219
Amounts owed by associates 205 12
Amounts owed by joint ventures trade 6 5
2,156 1,687
Non-current
Trade receivables net 16 14
136 140
The net carrying values of trade and other receivables are considered a close approximation of their fair values.
At 31 March 2012 trade and other receivables of US$441 million (2011: US$333 million) were past due but not impaired. These relate to
customers of whom there is no recent history of default. The ageing of these trade and other receivables is shown below.
Past due
Fully
performing
US$m
Within
30 days
US$m
30-60 days
US$m
60-90 days
US$m
90-180 days
US$m
Over
180 days
US$m
At 31 March 2012
Trade receivables 1,140 129 58 15 23 29
Other receivables 356 16 13 4 18 3
Amounts owed by associates 72 8 6 12 107
Amounts owed by joint ventures trade 6
At 31 March 2011
Trade receivables 944 133 53 23 23 37
Other receivables 180 36 8 5 6 9
Amounts owed by associates trade 12
Amounts owed by joint ventures trade 5
The group holds collateral as security for past due trade receivables to the value of US$28 million (2011: US$33 million) and for past due other
receivables of US$nil (2011: US$1 million). Collateral held primarily includes bank guarantees and charges over assets.
At 31 March 2012 trade receivables of US$151 million (2011: US$167 million) were determined to be specically impaired and provided for.
Theamount of the provision at 31 March 2012 was US$140 million (2011: US$147 million) and reects trade receivables from customers which
are considered to be experiencing difcult economic situations. It was assessed that a portion of these receivables is expected to be recovered.
The group holds collateral as security against specically impaired trade receivables with a fair value of US$1 million (2011: US$4 million).
At 31 March 2012 other receivables of US$13 million (2011: US$15 million) were determined to be specically impaired and provided for.
Theamount of the provision at 31 March 2012 was US$12 million (2011: US$14 million) and reects loans to customers which are considered
tobe experiencing difcult economic situations. It was assessed that a portion of these receivables is expected to be recovered. The group
didnot hold collateral as security against specically impaired other receivables at 31 March 2012 or 31 March 2011.
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17. Trade and other receivables continued
The carrying amounts of trade and other receivables are denominated in the following currencies.
2012
US$m
2011
US$m
SA rand 413 397
US dollars 355 175
Australian dollars 337 3
Euro 241 229
Colombian peso 162 138
Czech koruna 89 97
British pound 79 87
Polish zloty 142 160
Other currencies 474 541
2,292 1,827
Movements on the provisions for impairment of trade receivables and other receivables are as follows.
Trade receivables Other receivables
2012
US$m
2011
US$m
2012
US$m
2011
US$m
At 1 April (147) (156) (14) (11)
Provision for receivables impairment (25) (89) (2)
Receivables written off during the year as uncollectible 7 35 1
Acquisitions through business combinations (5) (1)
Disposals 20
Transfers to disposal group classied as held for sale 1 73
Exchange adjustments 9 (9) 1 (1)
At 31 March (140) (147) (12) (14)
The creation of provisions for impaired receivables is included in net operating expenses in the income statement (see note 3).
18. Cash and cash equivalents
2012
US$m
2011
US$m
Short-term deposits 103 551
Cash at bank and in hand 642 516
745 1,067
Cash and short-term deposits of US$144 million (2011: US$143 million) are held in African countries (including South Africa) and are subject to
local exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from those countries,
other than through normal dividends.
The group operates notional cash pools. The structures facilitate interest and balance compensation of cash and bank overdrafts. These
notional pooling arrangements meet the set-off rules under IFRS and, as a result, the cash and overdraft balances have been reported net
onthe balance sheet.
Effective 1 January 2012 the group combined the operational management of its Angolan businesses, in Africa, with the Angolan businesses
of its associate, Castel, with all of the Angolan businesses, in which the group retains an associate interest, being managed from that date by
Castel. As a result, a participation ina bank loan of US$100 million previously owed by an Angolan subsidiary of the group is no longer entitled
to be offset within borrowings. The loan participation has been separately disclosed on the balance sheet as a loan participation deposit, and
in the cash ow statement, has not been treated as a cash and cash equivalent as it is not readily convertible into cash in accordance with
IAS 7 Statement of Cash Flows.
19. Disposal group held for sale
Following the Fosters acquisition, and the subsequent purchase of the 50% interest in Pacic Beverages from Coca-Cola Amatil Ltd, the group
has agreed to dispose of Fosters interests in its Fijian beverage operations, Fosters Group Pacic Limited (FGPL), subject to regulatory
approvals. Accordingly the assets and liabilities related to FGPL have been presented as held for sale.
In the prior year, the assets and liabilities related to the in-house distribution business in Italy were presented as held for sale, and the disposal
group presented within Europe in accordance with IFRS 8 Operating segments. The distribution business was disposed of on 13 June 2011.
a. Assets of disposal group classied as held for sale
2012
US$m
2011
US$m
Goodwill 29
Property, plant and equipment 27
Inventories 18 19
Trade and other receivables 5 38
Current tax assets 5
Cash and cash equivalents 4
79 66
b. Liabilities of disposal group classied as held for sale
2012
US$m
2011
US$m
Borrowings 1
Trade and other payables 3 55
Provisions 1 10
Deferred tax liabilities 2
Current tax liabilities 1
7 66
20. Trade and other payables
2012
US$m
2011
1
US$m
Trade payables 1,262 1,103
Accruals 1,022 760
Deferred income 14 20
Containers in the hands of customers 449 493
Amounts owed to associates trade 42 24
Amounts owed to joint ventures trade 17 16
Deferred consideration for acquisitions 12 3
Excise duty payable 383 365
VAT and other taxes payable 248 189
Other payables 717 612
Total trade and other payables 4,166 3,585
Analysed as:
Current
Trade payables 1,262 1,103
Accruals 1,022 760
Deferred income 6 6
Containers in the hands of customers 449 493
Amounts owed to associates trade 42 24
Amounts owed to joint ventures trade 17 16
Excise duty payable 383 365
VAT and other taxes payable 248 189
4,054 3,487
Non-current
Deferred income 8 14
112 98
1
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21. Deferred taxation
The movement on the net deferred tax liability is shown below.
2012
US$m
2011
US$m
At 1 April 2,394 2,210
Exchange adjustments 60 45
Acquisitions through business combinations (see note 30) 1,460 1
Transfers to disposal group classied as held for sale (see note 19) (2)
Disposals (26)
Transfers to current tax (17)
Charged to the income statement 57 167
Deferred tax on items (charged)/credited to other comprehensive income:
Financial instruments (30) 14
Actuarial gains and losses (71) (36)
At 31 March 3,800 2,394
The movements in deferred tax assets and liabilities (after offsetting of balances as permitted by IAS 12) during the year are shown below.
Fixed asset
allowances
US$m
Pensions
and post-
retirement
benet
provisions
US$m
Intangibles
US$m
Financial
instruments
US$m
Investment in
MillerCoors
joint venture
US$m
Other timing
differences
US$m
Total
US$m
Deferred tax liabilities
At 1 April 2010 656 (13) 1,210 (97) 599 19 2,374
Exchange adjustments 23 1 27 (1) (4) 46
Acquisitions through business combinations 1 1
Rate change (2) (9) 1 (10)
Transfers from deferred tax assets (3) (5) 27 (53) (34)
Charged/(credited) to the income statement 37 10 (41) 43 142 32 223
Deferred tax on items credited/(charged) to other
comprehensive income:
Financial instruments 7 7 14
Actuarial gains and losses (9) (27) (36)
At 31 March 2011 711 (16) 1,187 (48) 748 (4) 2,578
Exchange adjustments (32) (1) 96 (8) 55
Acquisitions through business combinations (see note 30) 21 1,601 5 (165) 1,462
Disposals (49) (2) (4) (55)
Transfers to current tax 1 (16) (15)
Transfers to/(from) deferred tax assets 2 (23) (21)
Transfers to disposal group classied as held for sale (2) (2)
Charged/(credited) to the income statement 112 5 (62) 37 (51) 41
Deferred tax on items charged to other
comprehensive income:
Financial instruments (1) (29) (30)
Actuarial gains and losses (2) (69) (71)
At 31 March 2012 766 (14) 2,820 (46) 687 (296) 3,917
21. Deferred taxation continued
Fixed asset
allowances
US$m
Pensions
and post-
retirement
benet
provisions
US$m
Provisions
and
accruals
US$m
Other timing
differences
US$m
Total
US$m
Deferred tax assets
At 1 April 2010 3 7 67 87 164
Rate change (3) (3)
Transfers to deferred tax liabilities (3) (5) (21) (5) (34)
(Charged)/credited to the income statement (2) 13 45 56
At 31 March 2011 60 124 184
Exchange adjustments 1 (1) (5) (5)
Acquisitions through business combinations (see note 30) 2 2
Disposals (4) (7) (18) (29)
Transfers to current tax 2 2
Rate change 1 (1)
Transfers from/(to) deferred tax liabilities 2 (1) (22) (21)
(Charged)/credited to the income statement (1) 5 (20) (16)
At 31 March 2012 57 60 117
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and the deferred tax assets and liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
The deferred tax asset arises due to timing differences in Europe, Africa, Asia Pacic, Latin America and Corporate. Given both recent and
forecast trading, the directors are of the opinion that the level of prots in the foreseeable future is more likely than not to be sufcient to recover
these assets.
Deferred tax liabilities of US$3,860 million (2011: US$2,568 million) are expected to fall due after more than one year.
Deferred tax assets of US$71 million (2011: US$103 million) are expected to be recovered after more than one year.
2012
US$m
2011
US$m
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Tax losses 161 144
Tax credits 40
Capital allowances in excess of depreciation 13 11
Other deductible temporary differences 107 113
306 337
Deferred tax assets in respect of tax losses are not recognised unless there is convincing evidence that there will be sufcient prots in future
years to recover the assets. A signicant part of the tax losses arise in the UK and the value has been calculated at the substantively enacted
rate of 24%. Ithas beenannounced that the rate will fall annually to 23% and 22% commencing 1 April 2013. The impact of these reductions
isnot anticipated to have a material impact on the nancial statements.
The deferred tax assets will not expire, unlike 2011 where US$40 million tax credits were set to expire if conditions for utilisation were not met.
Deferred tax is recognised on the unremitted earnings of overseas subsidiaries where there is an intention to distribute those reserves.
Adeferred tax liability of US$37 million (2011: US$31 million) has been recognised. A deferred tax liability of US$51 million (2011: US$75 million)
has also been recognised in respect of unremitted prots of associates where a dividend policy is not in place. No deferred tax has been
recognised on temporary differences of US$8,600 million (2011: US$6,900 million) relating to unremitted earnings of overseas subsidiaries
where either the overseas prots will not be distributed in the foreseeable future, or, where there are plans to remit overseas earnings of
subsidiaries, it is not expected that such distributions will give rise to a tax liability. No deferred tax liability is recognised as the group is able
tocontrol the timing of the reversal of these differences and it is probable that they will not reverse in the foreseeable future.
As a result of UK legislation which largely exempts from UK tax the overseas dividends received, the temporary differences arising on
unremitted prots are unlikely to lead to additional corporate taxes. However, remittance to the UK of those earnings may still result in
ataxliability, principally as a result of withholding taxes levied by the overseas tax jurisdictions in which those subsidiaries operate.
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22. Borrowings
2012
US$m
2011
US$m
Current
Secured
Overdrafts 10 21
Obligations under nance leases 5 4
Other secured loans 6 10
21 35
Unsecured
ZAR1,600 million 9.935% Notes due 2012
1
209
COP370 billion IPC + 8.18% Ordinary Bonds due 2012
2
220
US$600 million 6.2% Notes due 2011
3
609
Other unsecured loans 484 464
Overdrafts 128 237
1,041 1,310
Total current borrowings 1,062 1,345
The fair value of current borrowings equals the carrying amount, as the impact of discounting is not signicant.
1
On 19 July 2007 SABSA Holdings (Pty) Ltd issued ZAR1,600 million, 9.935% Guaranteed Notes due July 2012, guaranteed by SABMiller plc. The notes were
issued under the ZAR4,000 million (increased to ZAR6,000 million on 24 December 2008) Domestic Medium Term Note Programme established on 17 July 2007.
The notes are redeemable in whole but not in part at the option of the issuer upon the occurrence ofcertain changes in taxation at their principal amount with
accrued and unpaid interest to the date of redemption.
2
With effect from 31 March 2011 98.7% of the bonds issued by Bavaria SA have been guaranteed by SABMiller plc.
3
On 28 June 2006, SABMiller plc issued US$600 million, 6.2% Notes due July 2011. The notes were repaid on 1 July 2011.
2012
US$m
2011
US$m
Non-current
Secured
Other secured loans 12 152
28 157
Unsecured
US$1,000 million 1.85% Notes due 2015
1,2,3
1,000
1,2,3
1,993
1,2,3
2,483
1,2,3
1,484
2,3,4,16
1,124 1,138
1,000 million 4.5% Notes due 2015
3,5,16
1,367 1,417
2,3,6,16
416 361
2,3,7,16
960 943
2,3,8,16
588 594
2,3,8,16
811 759
PEN150 million 6.75% Notes due 2015
3,9,16
56 53
2,3,10
335
2,3,11
730
3,12
383
2,3,11
358
13
391 387
COP561.8 billion IPC + 6.52% Ordinary Bonds due 2015
13
320 335
13
213
COP338.5 billion IPC + 7.5% Ordinary Bonds due 2013
13
205 199
ZAR1,600 million 9.935% Notes due 2012
3,14
236
US$2,169 million unsecured loan due December 2014
15
2,180
US$750 million unsecured loan due September 2016
15
744
Other unsecured loans 208 323
18,136 6,958
Total non-current borrowings 18,164 7,115
Total current and non-current borrowings 19,226 8,460
Analysed as:
Borrowings 19,067 8,193
Overdrafts 138 258
19,226 8,460
22. Borrowings continued
The fair value of non-current borrowings is US$18,821 million (2011: US$7,587 million). The fair values are based on a combination of market
quoted prices and cash ows discounted using prevailing interest rates.
1
On 17 January 2012 SABMiller Holdings Inc issued US$1,000 million, 1.85% Notes due January 2015, US$2,000 million, 2.45% Notes due January 2017,
US$2,500 million, 3.75% Notes due January 2022 and US$1,500 million, 4.95% Notes due January 2042, guaranteed by SABMiller plc.
2
The notes are redeemable in whole or in part at any time at the option of the issuer at a redemption price equal to the make-whole amount.
3
The notes are redeemable in whole but not in part at the option of the issuer upon the occurrence of certain changes in taxation at their principal amount
withaccrued and unpaid interest to the date of redemption.
4
On 7 August 2003 Miller Brewing Company issued US$1,100 million, 5.5% Guaranteed Notes due August 2013. Since 1 July 2008 SABMiller plc has been
thesole obligor of the notes.
5
On 17 July 2009 SABMiller plc issued 1,000 million, 4.5% Notes due January 2015. The notes were issued under the US$5,000 million Euro Medium Term
NoteProgramme.
6
On 7 August 2003 SABMiller plc issued US$300 million, 6.625% Guaranteed Notes due August 2033. Since 10 September 2010 the principal and interest
inrespect of the notes has not been guaranteed.
7
On 28 June 2006 SABMiller plc issued US$850 million, 6.5% Notes due July 2016.
8
On 17 July 2008 SABMiller plc issued US$550 million, 5.7% Notes due January 2014 and US$700 million, 6.5% Notes due July 2018.
9
On 12 March 2010 SABMiller plc issued PEN150 million, 6.75% Notes due March 2015.
10
On 5 October 2004 Fosters Finance Corp issued US$300 million, 4.875% Notes due October 2014, guaranteed by Fosters.
11
On 28 June 2005 FBG Finance Ltd issued US$700 million, 5.125% Notes due June 2015 and US$300 million, 5.875% Notes due June 2035, guaranteed by Fosters.
12
On 3 June 1996 FBG Finance Ltd issued US$300 million, 7.875% Notes due June 2016, guaranteed by Fosters.
13
With effect from 31 March 2011 85.5% of the 2014 bonds, 94.0% of the 2015 bonds, 98.7% of the 2012 bonds and 97.4% of the 2013 bonds, all issued by
Bavaria SA, have been guaranteed by SABMiller plc.
14
On 19 July 2007 SABSA Holdings (Pty) Ltd issued ZAR1,600 million, 9.935% Guaranteed Notes due July 2012, guaranteed by SABMiller plc. The notes
wereissued under the ZAR4,000 million (increased to ZAR6,000 million on 24 December 2008) Domestic Medium Term Note Programme established on
17July2007.
15
On 9 September 2011 the group entered into US$12,500 million, multicurrency committed syndicated facilities primarily for the purpose of acquiring Fosters.
By31 March 2012 US$9,081 million of this facility had been voluntarily cancelled. Of the remaining US$3,419 million facility, US$500 million is a revolving credit
facility and undrawn.
16
On 11 June 2012 SABMiller Holdings Inc entered into a contingent guarantee of the obligations of SABMiller plc in respect of these Notes and certain of its other
present and future external borrowings. This guarantee takes effect upon the occurrence of certain insolvency events in relation to SABMiller plc.
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22. Borrowings continued
Undrawn borrowing facilities
The group had the following undrawn committed borrowing facilities available at 31 March in respect of which all conditions precedent had
been met at that date.
2012
US$m
2011
US$m
Amounts expiring:
Within one year 774 967
Between one and two years 12 2,118
Between two and ve years 788 79
In ve years or more 2,236
3,810 3,164
In April 2011 the group entered into a ve-year US$2,500 million committed syndicated facility, with the option of two one-year extensions.
InMarch 2012 the maturity of US$2,236 million of this facility was extended to April 2017. This facility replaced the US$2,000 million and
US$600 million committed syndicated facilities, which were both voluntarily cancelled and which are shown in the comparatives in the table
above as expiring between one and two years and within one year respectively. The contingent guarantee referred to in footnote 16 on
page 125 extends to the obligations of SABMiller plc in respect of this facility.
Maturity of obligations under nance leases
Obligations under nance leases are as follows.
2012
US$m
2011
US$m
The minimum lease payments under nance leases fall due as follows.
Within one year 6 4
Between one and ve years 17 5
23 9
Future nance charges (2)
Present value of nance lease liabilities 21 9
Maturity of non-current nancial liabilities
The maturity prole of the carrying amount of the groups non-current nancial liabilities at 31 March was as follows.
Borrowings
and
overdrafts
US$m
Finance
leases
US$m
Net derivative
nancial
assets
1
(note 24)
US$m
2012
Total
US$m
Borrowings
and
overdrafts
US$m
Finance
leases
US$m
Net derivative
nancial
assets
1
(note 24)
US$m
2011
Total
US$m
Amounts falling due:
Between one and two years 1,964 2 (8) 1,958 593 (3) 590
Between two and ve years 10,605 14 (356) 10,263 4,458 5 (80) 4,383
In ve years or more 5,579 (254) 5,325 2,059 (228) 1,831
18,148 16 (618) 17,546 7,110 5 (311) 6,804
1
Net borrowings-related derivative nancial instruments only.
23. Financial risk factors
Financial risk management
Overview
In the normal course of business, the group is exposed to the following nancial risks:
Market risk
Credit risk
Liquidity risk
This note explains the groups exposure to each of the above risks, aided by quantitative disclosures included throughout these consolidated
nancial statements, and it summarises the policies and processes that are in place to measure and manage the risks arising, including those
related to the management of capital.
The directors are ultimately responsible for the establishment and oversight of the groups risk management framework. An essential part of
this framework is the role undertaken by the audit committee of the board, supported by the internal audit function, and by the chief nancial
ofcer, who in this regard is supported by the treasury committee and the group treasury function. Amongst other responsibilities, the audit
committee reviews the internal control environment and risk management systems within the group and it reports its activities to the board.
Theboard also receives a quarterly report on treasury activities, including conrmation of compliance with treasury risk management policies.
The group treasury function is responsible for the management of cash, borrowings and the nancial risks arising in relation to interest rates
and foreign exchange rates. The responsibility for the management of commodities exposures lies with the procurement functions within the
group, including Trinity Procurement GmbH (Trinity), the groups centralised procurement function. Risk management of key brewing and
packaging materials has now been substantially transferred to Trinity. Some of the risk management strategies include the use ofderivatives,
principally in the form of forward foreign currency contracts, cross currency swaps, interest rate swaps and exchange-traded futures contracts,
in order to manage the currency, interest rate and commodities exposures arising from the groups operations. The group also purchases call
options where these provide a cost-effective hedging alternative and, where they form part of an option collar strategy, thegroup also sells put
options to reduce or eliminate the cost of purchased options. It is the policy of the group that no trading in nancial instruments be undertaken.
The groups treasury policies are established to identify and analyse the nancial risks faced by the group, to set appropriate risk limits and
controls and to monitor exposures and adherence to limits.
a. Market risk
(i) Foreign exchange risk
The group is subject to exposure on the translation of the foreign currency denominated net assets of subsidiaries, associates and joint
ventures into the groups US dollar reporting currency. The group seeks to mitigate this exposure, where cost effective, by borrowing in the
same currencies as the functional currencies of its main operating units or by achieving the same effect through the use of forward foreign
exchange contracts and currency swaps. An approximate nominal value of US$4,429 million of US dollar borrowings and 255 million of euro
borrowings have been swapped into currencies that match the currency of the underlying operations of the group, including South African
rand, Peruvian nuevo sol, Czech koruna, Polish zloty, Australian dollar and Colombian peso. Of these nancial derivatives, US$2,406 million
and 255million are accounted for as net investment hedges.
The group does not hedge currency exposures from the translation of prots earned in foreign currency subsidiaries, associates and
jointventures.
The group is also exposed to transactional currency risk on sales and purchases that are denominated in a currency other than the respective
functional currencies of group entities. These exposures are presently managed locally by group entities which, subject to regulatory
constraints or currency market limitations, hedge a proportion of their foreign currency exposure estimated to arise over a period of up to
18months. Committed transactional exposures that are certain are hedged fully without limitation in time. The group principally uses forward
exchange contracts to hedge currency risk.
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23. Financial risk factors continued
The tables below set out the groups currency exposures from nancial assets and liabilities held by group companies in currencies other than
their functional currencies and resulting in exchange movements in the income statement and balance sheet.
US dollars
US$m
SA rand
US$m
Australian
dollars
US$m
Euro
US$m
Other
European
currencies
US$m
Latin
American
currencies
US$m
Other
US$m
Total
US$m
Financial assets
Trade and other receivables 25 130 4 46 155 61 421
Derivative nancial instruments
1
2,273 40 543 231 21 3,108
Cash and cash equivalents 50 7 1 22 5 2 21 108
Intra-group assets 278 63 17 1,080 323 3 1,764
At 31 March 2012 2,626 240 22 1,691 714 2 106 5,401
Potential impact on earnings (loss)/gain
20% increase in functional currency (345) (40) (4) (211) (81) (15) (696)
20% decrease in functional currency 414 47 4 254 97 19 835
Potential impact on other comprehensive income
(loss)/gain
20% increase in functional currency (93) (1) (71) (39) (2) (206)
20% decrease in functional currency 111 1 85 46 2 245
Financial liabilities
Trade and other payables (160) (54) (18) (159) (384) (19) (21) (815)
Derivative nancial instruments (236) (492) (1,035) (121) (709) (510) (3,103)
Borrowings (1,692) (2,069) (1,381) (56) (62) (5,260)
Intra-group liabilities (8) (79) (278) (159) (189) (2) (715)
At 31 March 2012 (2,096) (625) (3,400) (1,820) (1,282) (585) (85) (9,893)
Potential impact on earnings gain/(loss)
20% increase in functional currency 349 22 49 287 95 3 15 820
20% decrease in functional currency (419) (27) (59) (344) (115) (4) (16) (984)
gain/(loss)
20% increase in functional currency 82 517 17 118 95 829
20% decrease in functional currency (98) (621) (20) (142) (113) (994)
1
These represent the notional amounts of derivative nancial instruments.
US dollars
US$m
SA rand
US$m
Euro
US$m
Other
European
currencies
US$m
Other
African
currencies
US$m
Other
US$m
Total
US$m
Financial assets
Trade and other receivables 34 216 42 2 62 92 448
Derivative nancial instruments 540 16 488 486 69 1,599
Cash and cash equivalents 45 10 121 7 13 14 210
Intra-group assets 143 1,338 539 29 2,049
At 31 March 2011 762 242 1,989 1,034 75 204 4,306
Potential impact on earnings (loss)/gain
20% increase in functional currency (50) (40) (289) (137) (13) (34) (563)
20% decrease in functional currency 60 48 346 165 15 41 675
(loss)/gain
20% increase in functional currency (77) (43) (35) (155)
20% decrease in functional currency 92 51 42 185
Trade and other payables (293) (111) (182) (13) (27) (175) (801)
Derivative nancial instruments (93) (668) (355) (1,195) (117) (2,428)
Borrowings (40) (1,515) (43) (147) (1,745)
Intra-group liabilities (12) (146) (314) (306) (1) (43) (822)
At 31 March 2011 (438) (925) (2,366) (1,514) (71) (482) (5,796)
Potential impact on earnings gain/(loss)
20% increase in functional currency 73 49 316 140 12 41 631
20% decrease in functional currency (88) (59) (380) (167) (14) (49) (757)
gain/(loss)
20% increase in functional currency 105 78 113 39 335
20% decrease in functional currency (126) (93) (135) (47) (401)
1
These represent the notional amounts of derivative nancial instruments.
Foreign currency sensitivity analysis
Currency risks arise on account of nancial instruments being denominated in a currency that is not the functional currency and being of
amonetary nature.
The group holds foreign currency cash ow hedges totalling US$1,224 million at 31 March 2012 (2011: US$927 million). The foreign exchange
gains or losses on these contracts are recorded in the cash ow hedging reserve until the hedged transactions occur, at which time the
respective gains and losses are transferred to inventory, property, plant and equipment, goodwill or to the income statement as appropriate.
The group holds net investment hedges totalling US$5,312 million at 31 March 2012 (2011: US$1,944 million). The foreign exchange gains or
losses on these contracts are recorded in the net investment hedging reserve and partially offset the foreign currency translation risk on the
groups foreign currency net assets.
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(ii) Interest rate risk
As at 31 March 2012 43% (2011: 40%) of consolidated gross borrowings were in xed rates taking into account interest rate swaps and forward
rate agreements.
The groups policy is to borrow (directly or synthetically) in oating rates, reecting the fact that oating rates are generally lower than xed
ratesin the medium term. However, a minimum of 25% of consolidated net borrowings is required to be in xed rates for a minimum duration
of12months and the extent to which group borrowings may be in oating rates is restricted to the lower of 75% of consolidated net borrowings
and that amount of net borrowings in oating rates that with a 1% increase in interest rates would increase nance costs by an amount equal
to(but not more than) 1.20% of adjusted EBITDA. The policy also excludes borrowings arising from recent acquisitions and any ination-linked
debt, where there will be a natural hedge within business operations.
Exposure to movements in interest rates in group borrowings is managed through interest rate swaps and forward rate agreements. As at
31March 2012 on a policy adjusted basis, excluding borrowings from recent acquisitions and any ination-linked debt, 45% (2011: 44%) of
consolidated net borrowings were in xed rates. The impact of a 1% rise in interest rates on borrowings in oating rates would be equivalent
to0.44% (2011: 0.67%) of adjusted EBITDA.
The cash ow interest rate risk sensitivities on variable debt and interest rate swaps were:
US dollars
US$m
SA rand
US$m
Australian
dollars
US$m
Euro
US$m
Other
European
currencies
US$m
Colombian
peso
US$m
Other
US$m
Total
US$m
At 31 March 2012
Net debt
1
13,141 192 2,226 1,359 (34) 1,148 450 18,482
Less: xed rate debt (12,665) (1,367) (282) (14,314)
Variable rate debt 476 192 2,226 (8) (34) 1,148 168 4,168
Adjust for:
Financial derivatives 3,692 183 1,083 885 139 5,982
Net variable rate debt exposure 4,168 375 3,309 877 105 1,148 168 10,150
+/- 100 bps change
Potential impact on earnings 42 4 34 9 1 12 2 104
+/- 100 bps change
Potential impact on other comprehensive income 12 12
At 31 March 2011
Net debt
1
4,011 263 18 1,416 (23) 1,106 598 7,389
Less: xed rate debt (4,404) (236) (1,417) (168) (6,225)
Variable rate debt (393) 27 18 (1) (23) 1,106 430 1,164
Adjust for:
Financial derivatives 1,380 202 705 564 2,851
Net variable rate debt exposure 987 229 18 704 541 1,106 430 4,015
+/- 100 bps change
Potential impact on earnings 10 2 7 5 11 5 40
+/- 100 bps change
Potential impact on other comprehensive income 3 3
1
Excluding net borrowings-related derivative instruments.
Fair value sensitivity analysis for xed income instruments
Changes in the market interest rates of non-derivative nancial instruments with xed interest rates only affect income if these are measured at
their fair value. As such, all nancial instruments with xed rates of interest that are accounted for at amortised cost are not subject to interest
rate risk as dened in IFRS 7.
The group holds derivative contracts with a nominal value of US$6,217 million as at 31 March 2012 (2011: US$2,933 million) which are
designated as fair value hedges. In the case of these instruments and the underlying xed rate bonds, changes in the fair values of the hedged
item and the hedging instrument attributable to interest rate movements net off almost completely in the income statement in the same period.
Cash ow sensitivity analysis for variable rate instruments
A change of 100 bps in interest rates at the reporting date would have increased/(decreased) other comprehensive income and the income
statement by the amounts shown above. This analysis assumes all other variables, in particular foreign currency rates, remain constant.
Theanalysis was performed on the same basis for 2011.
Interest rate proles of nancial liabilities
The following table sets out the contractual repricing included within the underlying borrowings (excluding net borrowings-related derivatives)
exposed to either xed interest rates or oating interest rates and revises this for the repricing effect of interest rate and cross currency swaps.
2012

2011
Total
borrowings
US$m
Effect of
derivatives
US$m
Total
exposure
US$m
Total
borrowings
US$m
Effect of
derivatives
US$m
Total
exposure
US$m
Repricing due:
Within one year 5,138 5,981 11,119 2,959 2,834 5,793
Between one and two years 1,712 (900) 812
Between two and ve years 6,824 (3,874) 2,950 3,438 (1,459) 1,979
In ve years or more 5,552 (1,207) 4,345 2,063 (1,375) 688
Total interest bearing 19,226 19,226 8,460 8,460
Analysed as:
Fixed rate interest 14,314 (5,981) 8,333 6,225 (2,834) 3,391
Floating rate interest 4,912 5,981 10,893 2,235 2,834 5,069
Total interest bearing 19,226 19,226 8,460 8,460
(iii) Price risk
Commodity price risk
The group is exposed to variability in the price of commodities used in the production or in the packaging of nished products, such as the
price of malt, barley, sugar and aluminium. Commodity price risk is managed within minimum and maximum guard rails principally through
multi-year xed price contracts with suppliers and, where appropriate, derivative contracts. The group hedges a proportion of commodity
supply and price risk for a period of up to ve years. Where derivative contracts are used the group manages exposures principally through
exchange-traded futures, forwards and swaps.
At 31 March 2012 the notional value of commodity derivatives amounted to US$36 million (2011: US$21 million). No sensitivity analysis has
been provided on these outstanding contracts as the impact is considered to be immaterial.
Equity securities price risk
The group is exposed to equity securities price risk because of investments held by the group and classied on the balance sheet as available
for sale investments. No sensitivity analysis has been provided on these outstanding contracts as the impact is considered to be immaterial.
b. Credit risk
Credit risk is the risk of nancial loss to the group if a customer or counterparty to a nancial instrument fails to meet its contractual obligations.
Financial instruments
The group limits its exposure to nancial institutions by setting credit limits on a sliding scale based on their credit ratings and generally dealing
only with counterparties with a minimum credit rating of BBB- by Standard & Poors and Baa3 from Moodys. For banks with a lower credit
rating, or with no international credit rating, a maximum limit of US$4 million is applied, unless specic approval is obtained from either the chief
nancial ofcer or the audit committee of the board. The utilisation of credit limits is regularly monitored. To reduce credit exposures, the group
has ISDA Master Agreements with most of its counterparties for nancial derivatives, which permit net settlement of assets and liabilities in
certain circumstances.
Trade and other receivables
There is no signicant concentration of credit risk with respect to trade receivables as the group has a large number of customers which are
internationally dispersed. The type of customers range from wholesalers and distributors to smaller retailers. The group has implemented
policies that require appropriate credit checks on potential customers before sales commence. Credit risk is managed by limiting the aggregate
amount of exposure to any one counterparty.
The group considers its maximum credit risk to be US$3,657 million (2011: US$2,984 million) which is the total of the groups nancial assets.
c. Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its nancial obligations as they fall due.
The group nances its operations through cash generated by the business and a mixture of short-term and medium-term bank credit facilities,
bank loans, corporate bonds and commercial paper with a range of maturity dates. In this way, the group ensures that it is not overly reliant on
any particular liquidity source or that maturities of borrowings sourced in this way are not overly concentrated.
Subsidiaries have access to local bank credit facilities, but are principally funded by the group.
At 31 March 2012 the group had the following core lines of credit that were available for general corporate purposes.
SABMiller plc:
US$2,500 million committed syndicated facility, of which US$264 million is due to expire in April 2016 and US$2,236 million is due to expire
inApril 2017.
SABMiller Holdings Inc:
US$500 million revolving credit facility, which is due to expire in September 2016.
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Liquidity risk faced by the group is mitigated by having diverse sources of nance available to it and by maintaining substantial unutilised
banking facilities and reserve borrowing capacity, as indicated by the level of undrawn facilities.
As at 31 March 2012 borrowing capacity under committed bank facilities amounted to US$3,810 million (2011: US$3,164 million).
The table below analyses the groups nancial liabilities which will be settled on a net basis into relevant maturity groupings based on
theremaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash ows. Balances due within 12 months equal their carrying balances as the impact of discounting is not signicant.
Less than
1 year
US$m
Between
1 and 2
years
US$m
Between
2 and 5
years
US$m
Over
5 years
US$m
At 31 March 2012
Borrowings (1,803) (2,904) (11,763) (8,361)
Derivative nancial instruments (18) 16 (11) (35)
Trade and other payables (3,416) (95) (7) (4)
Financial guarantee contracts (6) (2) (6) (4)
At 31 March 2011
1
Borrowings (1,689) (1,096) (4,380) (2,003)
Derivative nancial instruments (124) (18) (21) (2)
Trade and other payables (2,927) (73)
Financial guarantee contracts (5) (3)
1
The table below analyses the groups derivative nancial instruments which will be settled on a gross basis into relevant maturity groupings
based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash ows. Balances due within 12 months equal their carrying balances as the impact of discounting is not signicant.
Less than
1 year
US$m
Between
1 and 2
years
US$m
Between
2 and 5
years
US$m
Over
5 years
US$m
At 31 March 2012
Forward foreign exchange contracts
Outow (399) (12)
Inow 401 12
Cross currency swaps
Outow (278) (346) (1,686) (866)
Inow 216 331 1,637 877
At 31 March 2011
Forward foreign exchange contracts
Outow (423) (30)
Inow 384 30
Outow (29) (33) (315) (422)
Inow 19 23 326 446
Capital management
The capital structure of the group consists of net debt (see note 28c) and shareholders equity.
The groups policy is to maintain a strong capital base so as to maintain investor, creditor and market condence and to sustain future
development of the business.
Besides the minimum capitalisation rules that may apply to subsidiaries in different countries, the groups only externally imposed capital
requirement relates to the groups core lines of credit which include a net debt to EBITDA nancial covenant which was complied with
throughout the year.
The group monitors its nancial capacity and credit ratings by reference to a number of key nancial ratios and cash ow metrics including
netdebt to adjusted EBITDA and interest cover. These provide a framework within which the groups capital base is managed including
dividend policy. If the group fails to meet the nancial targets required by the ratings agencies, a credit rating downgrade could impact the
average interest rate of borrowings of the group and the future availability of credit to the group.
The group is currently rated Baa1 by Moodys Investors Service and BBB+ by Standard & Poors Ratings Services, both with a stable outlook.
Fair value estimation
The following table presents the groups nancial assets and liabilities that are measured at fair value.
Level 1
US$m
Level 2
US$m
Level 3
US$m
Total
US$m
At 31 March 2012
Assets
Financial assets at fair value through prot or loss
Derivative nancial instruments 756 756
Available for sale investments 1 18 12 31
Total assets 1 774 12 787
Liabilities
Financial liabilities at fair value through prot or loss
Derivative nancial instruments (109) (109)
Total liabilities (109) (109)
At 31 March 2011
Assets
Financial assets at fair value through prot or loss
Derivative nancial instruments 346 346
Total assets 1 365 15 381
Liabilities
Financial liabilities at fair value through prot or loss
Derivative nancial instruments (135) (135)
Total liabilities (135) (135)
The levels of the fair value hierarchy and its application to the groups nancial assets and liabilities are described below.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities:
The fair value of nancial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is
regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service,
orregulatory agency, and those prices represent actual and regularly occurring market transactions on an arms length basis. The quoted
market price used for nancial assets held by the group is the current bid price.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
fromprices):
The fair values of nancial instruments that are not traded in an active market (for example, over the counter derivatives or infrequently traded
listed investments) are determined by using valuation techniques. These valuation techniques maximise the use of observable market data
where it is available and rely as little as possible on entity specic estimates. If all signicant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
Level 3: Inputs for the asset or liability that are not based on observable market data:
Specic valuation techniques, such as discounted cash ow analysis, are used to determine fair value of the remaining nancial instruments.
The following table presents the changes in level 3 instruments for the years ended 31 March.
Available for sale
investments
2012
US$m
2011
US$m
At 1 April 15 15
Additions 1
Disposals (2)
Impairments (1)
At 31 March 12 15
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24. Derivative nancial instruments
Current derivative nancial instruments
2012 2011
Assets
US$m
Liabilities
US$m
Assets
US$m
Liabilities
US$m
Embedded derivatives (1)
Forward foreign currency contracts on operating items 7 (13) 3 (12)
Forward foreign currency contracts on borrowings
1
14 (12) 1 (1)
Forward foreign currency contracts designated as net investment hedges (13)
Forward foreign currency contracts designated as cash ow hedges 3 (12) 8 (11)
Cross currency swaps on borrowings (13)
Commodity contracts designated as cash ow hedges (2) 4
24 (40) 16 (50)
1
Borrowings-related derivative nancial instruments amounting to a net asset of US$2 million (2011: net liability of US$13 million).
Non-current derivative nancial instruments
2012 2011
Assets
US$m
Liabilities
US$m
Assets
US$m
Liabilities
US$m
Interest rate swaps designated as fair value hedges
1
394 (18) 269 (4)
Interest rate swaps designated as cash ow hedges
1
(4) (7)
Interest rate swaps on borrowings
1
55 (9)
Forward foreign currency contracts on borrowings
1
5 4 (1)
Forward foreign currency contracts on operating items designated as net investment hedges 42 (21) 1 (16)
Forward foreign currency contracts on borrowings designated as net investment hedges
1
(10)
Cross currency swaps on borrowings
1
74 50
Cross currency swaps designated as cash ow hedges
1
18
Cross currency swaps designated as fair value hedges
1
113
Cross currency swaps designated as net investment hedges 31 (7) 6 (56)
Commodity contracts designated as cash ow hedges (1)
732 (69) 330 (85)
1
Borrowings-related derivative nancial instruments amounting to a net asset of US$618 million (2011: US$311 million).
Derivatives designated as hedging instruments
The group has entered into several interest rate swaps to pay oating and receive xed interest which have been designated as fair value
hedges to hedge exposure to changes in the fair value of its US dollar and euro xed rate borrowings. Non-current borrowings are designated
as the hedged item as part of the fair value hedge. The borrowings and the interest rate swaps have the same critical terms.
As at 31 March 2012 the notional amount of the US dollar interest rate swaps was US$3,950 million (2011: US$2,225 million). The xed interest
rates received vary from 1.85% to 6.625% (2011: 5.5% to 6.625%) and the oating interest rates paid vary from LIBOR plus 71.6 bps to LIBOR
plus 177.8 bps (2011: LIBOR plus 71.6 bps to LIBOR plus 198.8 bps) on the notional amount.
As at 31 March 2012 the notional amount of the euro interest rate swaps was 500 million (2011: 500 million). The xed interest rates received
are 4.5% (2011: 4.5%) and oating interest rates paid vary from EURIBOR plus 177 bps to EURIBOR plus 178 bps on the notional amount
(2011:EURIBOR plus 177 bps to EURIBOR plus 178 bps on the notional amount).
Fosters has entered into interest rate swaps and cross currency interest rate swaps, the cumulative effect of which is to receive xed US
dollarinterest and pay Australian dollar oating interest, and to convert the prole of the US dollar borrowings into Australian dollars.
Theseswaps have been designated as fair value hedges to hedge the exposure of the Australian operations to changes in the fair value
oftheUS dollar borrowings.
As at 31 March 2012 the notional amount of the interest rate swaps was US$600 million (2011: US$nil). The xed interest rates received vary
from 4.875% to 7.875% and the oating rates paid vary from LIBOR plus 47 bps to LIBOR plus 73 bps on the notional amounts.
24. Derivative nancial instruments continued
The notional amount of the cross currency interest rate swaps was US$1,600 million (2011: US$nil). These were:
US$1,000 million received US dollar xed rate interest varying from 5.125% to 5.875% and paid oating Australian dollar interest with
ratesvarying from Australian bank bills plus 268 bps to Australian bank bills plus 410 bps; and
US$600 million received oating US dollar interest with rates varying from LIBOR plus 47 bps to LIBOR plus 71 bps and paid oating
Australian dollar interest with rates varying from Australian bank bills plus 87 bps to Australian bank bills plus 117 bps.
As at 31 March 2012 the carrying value of the hedged borrowings was US$6,827 million (2011: US$3,212 million).
(ii) Cash ow hedges
The group has entered into interest rate swaps designated as cash ow hedges to manage the interest rate on borrowings. The notional
amount of these interest rate swaps was US$515 million equivalent (2011: US$99 million). The fair value of these interest rate swaps was a
liability of US$4 million (2011: US$7 million). The xed interest rate paid varies from 4.27% to 4.38% (2011: 4.7%) and the oating rates received
are Australian bank bills plus zero bps (2011: EURIBOR plus zero bps). As at 31 March 2012 the carrying value of the hedged borrowings was
US$535 million (2011: US$99 million).
The group has entered into forward exchange contracts designated as cash ow hedges to manage short-term foreign currency exposures
toexpected net operating costs including future trade imports and exports. As at 31 March 2012 the notional amounts of these contracts
were317 million, US$557 million, GBP128 million and Czech koruna (CZK) 12 million (2011: 182 million, US$460 million, GBP120 million
andCZK299 million).
The group has entered into commodity contracts designated as cash ow hedges to manage the future price of commodities. As at 31 March
2012 the notional amount of forward contracts for the purchase price of corn was US$3 million (2011: US$2 million) and the notional amount
offorward contracts for the purchase price of aluminium was US$33 million (2011: US$19 million).
The following table indicates the period in which the cash ows associated with derivatives that are cash ow hedges are expected to occur
and impact the income statement.
Carrying
amount
US$m
Expected
cash ows
US$m
Less than
1 year
US$m
Between 1
and 2 years
US$m
Between 2
and 5 years
US$m
More than
5 years
US$m
At 31 March 2012
Interest rate swaps:
Liabilities (4) (4) (1) (2) (1)
Forward foreign currency contracts:
Assets 3 4 4
Liabilities (12) (13) (13)
Commodity contracts:
(15) (15) (12) (2) (1)
At 31 March 2011
Interest rate swaps:
Liabilities (7) (7) (2) (2) (3)
Assets 8 9 9
Commodity contracts:
Assets 4 4 4
(7) (7) (1) (3) (3)
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(iii) Hedges of net investments in foreign operations
The group has entered into several forward foreign currency contracts and cross currency swaps which it has designated as hedges of
netinvestments in its foreign subsidiaries in South Africa, Australia, the Czech Republic, Poland, Colombia and Peru to hedge the groups
exposure toforeign exchange risk on these investments. Net losses relating to forward foreign currency contracts and cross currency swaps
ofUS$1million (2011:US$137 million) have been recognised in other comprehensive income.
Analysis of notional amounts on nancial instruments designated as net investment hedges:
2012
m
2011
m
SA rand (ZAR) 2,374 1,459
Czech koruna (CZK) 6,825 5,500
Peruvian nuevo sol (PEN) 631 328
Australian dollars (AUD) 1,000
Polish zloty (PLN) 630
Colombian pesos (COP) 490,476
Cross currency swaps:
SA rand (ZAR) 1,404 2,799
Polish zloty (PLN) 433 649
Czech koruna (CZK) 2,258
Standalone derivative nancial instruments
(i) Forward foreign currency contracts
The group has entered into forward foreign currency contracts to manage short-term foreign currency exposures to expected future trade
imports and exports. These derivatives are fair valued based on discounted future cash ows with gains and losses taken to the income
statement. As at 31 March 2012 the notional amounts of these contracts were 91 million, US$150 million and ZAR37 million (2011: 83 million
and US$136 million).
The group has entered into forward foreign currency contracts to manage foreign currency exposures on intercompany loan balances. These
derivatives are fair valued based on discounted future cash ows with gains and losses taken to the income statement. As at 31 March 2012
the notional amounts of these contracts were 60 million, GBP34 million, Romanian lei (RON) 196 million, Polish zloty (PLN) 189 million,
Swissfranc (CHF) 15 million, South African rand (ZAR) 632 million, Czech koruna (CZK) 1,425 million and Australian dollars (AUD) 209 million
(2011: 21 million, GBP25 million, Russian rouble (RUB) 2,530 million, RON319 million, PLN230 million, CHF15 million, ZAR66 million and
CZK2,500 million).
(ii) Cross currency swaps
The group has entered into cross currency swaps to manage foreign currency exposures on intercompany loan balances. These derivatives
arefair valued based on discounted future cash ows with gains and losses taken to the income statement. As at 31 March 2012 the notional
amounts of these contracts were 317 million (2011: 317 million, RUB1,400 million and PLN443 million).
Fair value gain/(loss) on nancial instruments recognised in the income statement
2012
US$m
2011
US$m
Derivative nancial instruments:
Interest rate swaps (8)
Interest rate swaps designated as fair value hedges 104 12
Forward foreign currency contracts 76 (13)
Forward foreign currency contracts designated as fair value hedges 8 3
Cross currency swaps 27 (39)
Cross currency swaps designated as net investment hedges (4) (4)
Other fair value gains 30
233 (41)
Other nancial instruments:
Non-current borrowings designated as the hedged item in a fair value hedge (104) (14)
Total fair value gain/(loss) on nancial instruments recognised in the income statement 129 (55)
Fair value gains or losses on borrowings, derivative nancial instruments held to hedge interest rate risk on borrowings and derivative nancial
instruments acquired to hedge the risks of the Fosters acquisition are recognised as part of net nance costs. Fair value gains or losses on all
other derivative nancial instruments are recognised in operating prot.
Reconciliation of total nancial instruments
The table below reconciles the groups accounting categorisation of nancial assets and liabilities (based on initial recognition) to the classes
ofassets and liabilities as shown on the face of the balance sheet.
Fair value
through
income
statement
US$m
Loans and
receivables
US$m
Available
for sale
US$m
Financial
liabilities
held at
amortised
cost
US$m
Not
categorised
as a nancial
instrument
US$m
Total
US$m
Non-
current
US$m
Current
US$m
At 31 March 2012
Assets
Derivative nancial instruments 756 756 732 24
Trade and other receivables 2,025 267 2,292 136 2,156
Loan participation deposit 100 100 100
Cash and cash equivalents 745 745 745
Liabilities
Borrowings (19,226) (19,226) (18,164) (1,062)
Trade and other payables (3,521) (645) (4,166) (112) (4,054)
At 31 March 2011
1
Assets
Available for sale investments 35 35 35
Derivative nancial instruments 346 346 330 16
Trade and other receivables 1,536 291 1,827 140 1,687
Cash and cash equivalents 1,067 1,067 1,067
Liabilities
Borrowings (8,460) (8,460) (7,115) (1,345)
Trade and other payables (3,011) (574) (3,585) (98) (3,487)
1
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25. Provisions
Demerged
entities and
litigation
US$m
Post-
retirement
benets
US$m
Taxation-
related
US$m
Restructuring
US$m
Payroll-
related
US$m
Onerous
contracts
US$m
Other
US$m
Total
US$m
At 1 April 2010 78 290 308 32 52 6 42 808
Exchange adjustments 4 10 7 3 2 1 27
Acquisitions through business combinations 6 1 4 11
Charged/(credited) to the income statement
Additional provision in year 12 28 21 49 15 1 12 138
Unused amounts reversed (6) (24) (3) (33)
Utilised in the year (5) (35) (10) (14) (20) (4) (8) (96)
Actuarial losses recorded in other
comprehensive income 28 28
Transfers to disposal group classied as held
for sale (1) (6) (3) (10)
At 31 March 2011
1
94 310 302 70 46 7 44 873
Exchange adjustments (3) (1) (1) 2 1 7 4 9
Acquisitions through business combinations 13 1 79 149 58 188 37 525
Disposals (1) (10) (1) (9) (21)
Charged/(credited) to the income statement
Additional provision in year 4 28 3 23 17 2 37 114
Unused amounts reversed (10) (54) (1) (1) (66)
Utilised in the year (7) (28) (26) (31) (14) (13) (20) (139)
Actuarial losses recorded in other
comprehensive income 9 9
Transfers to disposal group classied as held
for sale (see note 19) (1) (1)
Transfer between categories 3 5 4 (4) (8)
At 31 March 2012 103 309 308 206 101 191 85 1,303
Analysed as:
Current 65 6 265 195 61 63 62 717
Noncurrent 38 303 43 11 40 128 23 586
103 309 308 206 101 191 85 1,303
1
Demerged entities and litigation
During the year ended 31 March 1998 the group recognised a provision of US$73 million for the disposal of certain demerged entities
inrelation to equity injections which were not regarded as recoverable, as well as potential liabilities arising on warranties and the sale
agreements. During the year ended 31 March 2012 US$2 million (2011: US$1 million) of this provision was utilised in regard to costs associated
with SAB Ltds previously disposed of remaining retail interests. The residual balance of US$13 million relates mainly to the disposal of OK
Bazaars (1929) Ltd to Shoprite Holdings Ltd (Shoprite). As disclosed in previous annual reports, a number of claims were made by Shoprite in
relation to the valuation of the net assets of OK Bazaars at the time of the sale and for alleged breaches by SAB Ltd of warranties contained in
the sale agreements. These claims are being contested by SAB Ltd.
There are US$90 million (2011: US$76 million) of provisions in respect of outstanding litigation within various operations, based on
managements expectation that the outcomes of these disputes are expected to be resolved within the forthcoming ve years.
While provision for all claims has already been made, the actual outcome of the disputes and the timing of the resolution cannot be estimated
by the directors at this time. The further information ordinarily required by IAS 37, Provisions, contingent liabilities and contingent assets has
not been disclosed on the grounds that it can be expected to seriously prejudice the outcome of the disputes.
Post-retirement benets
The provision for post-retirement benets represents the provision for medical benets for retired employees and their dependants in South
Africa, for post-retirement medical and life insurance benets for eligible employees and their dependants in North America and Europe,
medical and other benets in Latin America, and pension provisions for employees in North America, Latin America, Europe, Africa and Asia
Pacic. The principal assumptions on which these provisions are based are disclosed in note 32.
25. Provisions continued
Taxation-related
The group has recognised various provisions in relation to taxation exposures it believes may arise. The provisions principally relate to
non-corporate taxation and interest and penalties on corporate taxation in respect of a number of group companies. Any settlement in respect
of these amounts will occur as and when the assessments are nalised with the respective tax authorities.
Restructuring
This includes the remaining provision for restructuring costs related to Europe which management expects to be utilised within ve years, and
provisions for costs related to pre-existing demerger costs and demerger warranties in Fosters in Australia which are expected to be utilised
within one year.
Payroll-related
This principally relates to employee long service awards of US$19 million (2011: US$20 million) within South Africa and US$15 million
(US$22million) within Latin America, which are expected to be utilised on an ongoing basis when service awards fall due. Payroll-related
provisions also include US$46 million (2011: US$nil) within Asia Pacic relating to employee entitlement provisions.
Onerous contracts
This includes provisions for unfavourable supply contracts for malt, glass, aluminium cans and concentrated fruit juice for non-alcoholic
beverages, as well as provisions for surplus property leases in Australia, which management expect to be utilised within eight years.
Other provisions
Included within other provisions are environmental provisions, insurance provisions and other provisions. These are primarily expected to
beutilised within ve years.
26. Share capital
2012
US$m
2011
US$m
Group and company
Called up, allotted and fully paid share capital
1,664,323,483 ordinary shares of 10 US cents each (2011: 1,659,040,014) 166 166
50,000 deferred shares of 1.00 each (2011: 50,000)
166 166
Ordinary
shares of
10 US cents
each
Deferred
shares of
1 each
Nominal
value
US$m
At 1 April 2010 1,654,749,852 50,000 165
Issue of shares share incentive plans 4,290,162 1
At 31 March 2011 1,659,040,014 50,000 166
Issue of shares share incentive plans 5,283,469
At 31 March 2012 1,664,323,483 50,000 166
Changes to authorised share capital
With effect from 1 October 2009 the company adopted new articles of association which removed any previous limit on the authorised share
capital. Directors are still limited as to the number of shares they can at any time allot because allotment authority continues to be required
under the Companies Act 2006, save in respect of employee shares plans.
Changes to issued share capital
During the year the company issued 5,283,469 (2011: 4,290,162) new ordinary shares of 10 US cents to satisfy the exercise of options granted
under the various share incentive plans, for consideration of US$96 million (2011: US$73 million).
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26. Share capital continued
Rights and restrictions relating to share capital
Convertible participating shares
Altria is entitled to require the company to convert its ordinary shares into convertible participating shares so as to ensure that Altrias voting
shareholding does not exceed 24.99% of the total voting shareholding.
If such an event occurs, the convertible participating shares will rank pari passu with the ordinary shares in all respects and no action shall
betaken by the company in relation to ordinary shares unless the same action is taken in respect of the convertible participating shares.
Ondistribution of the prots (whether by cash dividend, dividend in specie, scrip dividend, capitalisation issue or otherwise), the convertible
participating shares will rank pari passu with the ordinary shares. On a return of capital (whether winding-up or otherwise), the convertible
participating shares will rank pari passu with the ordinary shares.
Altria is entitled to vote its convertible participating shares at general meetings of the company on a poll on the basis of one-tenth of a vote
forevery convertible participating share on all resolutions other than a resolution:
(i) proposed by any person other than Altria, to wind-up the company;
(ii) proposed by any person other than Altria, to appoint an administrator or to approve any arrangement with the companys creditors;
(iii) proposed by the board, to sell all or substantially all of the undertaking of the company; or
(iv) proposed by any person other than Altria, to alter any of the class rights attaching to the convertible participating shares or to approve
thecreation of any new class of shares,
in which case Altria shall be entitled on a poll to vote on the resolution on the basis of one vote for eachconvertible participating share, but,
for the purposes of any resolution other than a resolution mentioned in (iv) above, the convertible participating shares shall be treated as
being of the same class as the ordinary shares and no separate meeting or resolution of the holders ofthe convertible participating shares
shall be required to be convened or passed.
Upon a transfer of convertible participating shares by Altria other than to an afliate, such convertible participating shares shall convert into
ordinary shares.
Altria is entitled to require the company to convert its convertible participating shares into ordinary shares if:
(i) a third party has made a takeover offer for the company and (if such offer becomes or is declared unconditional in all respects) it would
result in the voting shareholding of the third party being more than 30% of the total voting shareholding; and
(ii) Altria has communicated to the company in writing its intention not itself to make an offer competing with such third party offer, provided
that the conversion date shall be no earlier than the date on which the third partys offer becomes or is declared unconditional in all respects.
Altria is entitled to require the company to convert its convertible participating shares into ordinary shares if the voting shareholding of a third
party should be more than 24.99%, provided that:
(i) the number of ordinary shares held by Altria following such conversion shall be limited to one ordinary share more than the number of
ordinary shares held by the third party; and
(ii) such conversion shall at no time result in Altrias voting shareholding being equal to or greater than the voting shareholding which would
require Altria to make a mandatory offer in terms of rule 9 of the City Code.
If Altria wishes to acquire additional ordinary shares (other than pursuant to a pre-emptive issue of new ordinary shares or with the prior
approval of the board), Altria shall rst convert into ordinary shares the lesser of:
(i) such number of convertible participating shares as would result in Altrias voting shareholding being such percentage as would, in the
eventof Altria subsequently acquiring one additional ordinary share, require Altria to make a mandatory offer in terms of rule 9 of the
CityCode; and
(ii) all of its remaining convertible participating shares.
The company must use its best endeavours to procure that the ordinary shares arising on conversion of the convertible participating shares
areadmitted to the Ofcial List and to trading on the London Stock Exchanges market for listed securities, admitted to listing and trading
onthe JSE Ltd, and admitted to listing and trading on any other stock exchange upon which the ordinary shares are from time to time listed
and traded, but no admission to listing or trading need be sought for the convertible participating shares whilst they remain convertible
participating shares.
Deferred shares
The deferred shares do not carry any voting rights and do not entitle their holders to receive any dividends or other distributions. In the event
ofa winding up deferred shareholders would receive no more than the nominal value. Deferred shares represent the only non-equity share
capital of the group.
Share-based payments
The group operates various share incentive plans. The share incentives outstanding are summarised as follows.
Scheme
2012
Number
2011
Number
GBP share options 16,622,334 15,088,057
ZAR share options 13,024,503 13,686,079
GBP stock appreciation rights (SARs) 2,820,144 3,575,370
GBP performance share awards 6,880,114 7,364,124
GBP value share awards 6,877,784 3,168,200
GBP cash settled awards 335,940
Total share incentives outstanding
1
46,560,819 42,881,830
1
Total share incentives outstanding exclude shares relating to the BBBEE scheme.
Further details relating to all of the share incentive schemes can be found in the directors remuneration report on pages 68 to 83.
The exercise prices of incentives outstanding at 31 March 2012 ranged from 0 to 25.48 and ZAR53.30 to ZAR290.23 (2011: 0 to 22.44
and ZAR43.09 to ZAR225.08). The movement in share awards outstanding is summarised in the following tables.
GBP share options
GBP share options include share options granted under the Executive Share Option Plan 2008, the Approved Executive Share Option Plan
2008, the Executive Share Option (No.2) Scheme, the Approved Executive Share Option Scheme and the International Employee Share
Scheme. No further grants can be made under the now closed Executive Share Option (No.2) Scheme, the Approved Executive Share Option
Scheme, or the International Employee Share Scheme; although outstanding grants may still be exercised until they reach their expiry date.
Number
of options
Weighted
average
exercise
price
GBP
Weighted
average fair
value at
grant date
GBP
Outstanding at 1 April 2010 13,515,685 11.05
Granted 4,178,150 19.58 5.87
Lapsed (521,316) 12.91
Exercised (2,084,462) 10.27
Outstanding at 31 March 2011 15,088,057 13.46
Granted 4,417,346 22.51 6.47
Lapsed (679,700) 18.88
Exercised (2,203,369) 11.44
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ZAR share options
Share options designated in ZAR include share options granted under the South African Executive Share Option Plan 2008 and the
MirrorExecutive Share Purchase Scheme (South Africa). No further grants can be made under the Mirror Executive Share Purchase Scheme
(SouthAfrica) although outstanding grants may still be exercised until they reach their expiry date.
Number
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Weighted
average
exercise
price
ZAR
Weighted
average fair
value at
grant date
ZAR
Granted 2,943,850 222.55 88.63
Lapsed (499,850) 176.93
Exercised (2,205,700) 126.34
Granted 2,943,373 283.07 105.43
Lapsed (524,849) 218.17
Exercised (3,080,100) 138.30
GBP SARs
GBP SARs include stock appreciation rights granted under the Stock Appreciation Rights Plan 2008 and the International Employee Stock
Appreciation Rights Scheme. No further grants can be made under the now closed International Employee Stock Appreciation Rights Scheme,
although outstanding grants may still be exercised until they reach their expiry date.
Number
of SARs
Weighted
average
exercise
price
GBP
Weighted
average fair
value at
grant date
GBP
Granted 49,900 19.51 5.85
Lapsed (24,036) 10.81
Exercised (747,543) 9.27
Granted 64,900 22.50 6.47
Lapsed (26,583) 11.44
Exercised (793,543) 8.85
GBP performance share awards
GBP performance share awards include awards made under the Executive Share Award Plan 2008, the Performance Share Award Scheme
and the International Performance Share Award Sub-Scheme. No further awards can be made under the Performance Share Award Scheme
and the International Performance Share Award Sub-Scheme, although outstanding awards remain and will vest, subject to the achievement
oftheir respective performance conditions on their vesting date.
Number
of awards
Weighted
average
exercise
price
GBP
Weighted
average fair
value at
grant date
GBP
Outstanding at 1 April 2010 6,915,855
Granted 2,012,800 18.08
Lapsed (734,088)
Released to participants (830,443)
Outstanding at 31 March 2011 7,364,124
Granted 2,208,640 20.46
Lapsed (278,760)
Released to participants (2,413,890)
Outstanding at 31 March 2012 6,880,114
GBP value share awards
The 4,034,340 (2011: 3,317,000) value share awards granted represent the theoretical maximum number of awards that could possibly vest
inthe future, although in practice it is extremely unlikely that this number of awards would be released.
Number of
value shares
(per 10 million of
additional value)
Theoretical
maximum
shares at cap
Weighted
average
exercise price
GBP
Weighted
average fair
value at
grant date
GBP
Outstanding at 1 April 2010
Granted 1,070 3,317,000 7.61
Lapsed (48) (148,800)
Outstanding at 31 March 2011 1,022 3,168,200
Granted 1,205 4,034,340 7.27
Lapsed (97) (324,756)
Outstanding at 31 March 2012 2,130 6,877,784
GBP cash settled awards
GBP share incentives included under the Associated Companies Cash Award Plan 2011.
Number
of awards
Weighted
average
exercise
price
GBP
Weighted
average fair
value at
grant date
GBP
Outstanding at 1 April 2011
Granted 335,940 20.35
Outstanding at 31 March 2012 335,940
Outstanding share incentives
The following table summarises information about share incentives outstanding at 31 March.
Range of exercise prices
Number
2012
Weighted
average
remaining
contractual
life in years
2012
Number
2011
Weighted
average
remaining
contractual
life in years
2011
GBP share options
4 5 204,850 1.0 229,452 1.9
5 6 73,418 1.6 161,070 1.9
6 7 401,993 2.1 501,543 3.1
8 9 622,494 3.1 687,427 4.1
9 10 78,275 6.6 116,000 7.6
10 11 1,097,744 4.4 1,345,838 5.5
11 12 1,456,403 5.1 1,806,653 6.1
12 13 4,781,927 6.8 6,213,927 7.7
17 18 28,700 7.6 34,200 8.6
19 20 3,603,984 8.2 3,839,997 9.2
20 21 66,950 8.7 71,950 9.7
22 23 4,185,596 9.2 80,000 9.8
25 26 20,000 9.7
16,622,334 7.1 15,088,057 7.2
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Range of exercise prices
Number
2012
Weighted
average
remaining
contractual
life in years
2012
Number
2011
Weighted
average
remaining
contractual
life in years
2011
ZAR share options
R50 R60 172,932 1.1 250,932 2.1
R60 R70 229,400 1.2 518,900 1.8
R70 R80 68,500 2.1 153,500 3.1
R80 R90 10,000 0.2 18,000 1.2
R90 R100 519,607 3.0 775,857 4.0
R110 R120 40,000 3.4 40,000 4.4
R120 R130 757,940 3.9 1,070,940 4.9
R140 R150 1,292,300 6.3 2,355,500 7.3
R150 R160 629,600 7.0 651,750 8.0
R160 R170 461,100 5.1 620,350 6.1
R170 R180 12,500 6.3
R180 R190 1,377,700 5.9 2,246,300 6.9
R210 R220 2,455,350 7.8 2,618,150 8.8
R220 R230 2,140,000 8.7 2,353,400 9.7
R250 R260 542,400 9.2
R290 R300 2,327,674 9.7
13,024,503 7.2 13,686,079 6.0
GBP SARs
4 5 219,168 1.1 377,468 1.8
6 7 344,018 2.1 457,018 3.1
8 9 460,085 3.1 590,884 4.1
9 10 9,100 6.6 9,100 7.6
10 11 522,934 4.1 654,634 5.1
11 12 651,500 5.1 812,017 6.1
12 13 481,839 6.3 607,649 7.3
13 14 16,700 5.6 16,700 6.6
19 20 49,900 8.2 49,900 9.2
22 23 64,900 9.2
2,820,144 4.3 3,575,370 5.0
GBP performance share awards
0 6,880,114 1.1 7,364,124 2.4
GBP value share awards
0 6,877,784 3.0 3,168,200 3.2
GBP cash settled awards
0 335,940 1.0
Total share incentives outstanding 46,560,819 5.4 42,881,830 5.5
Exerciseable share incentives
The following table summarises information about exerciseable share incentives outstanding at 31 March.
Number
2012
Weighted
average
exercise
price
2012
Number
2011
Weighted
average
exercise
price
2011
GBP share options 5,103,986 10.46 4,335,349 9.75
ZAR share options 5,004,479 140.97 4,914,079 128.71
GBP SARs 2,705,344 9.8 3,525,470 9.59
Share incentives exercised or vested
The weighted average market price of the groups shares at the date of exercise or vesting for share incentives exercised or vested during the
year were:
Number
2012
Weighted
average market
price
2012
Number
2011
Weighted
average market
price
2011
Share incentives designated in GBP 5,410,802 23.01 3,662,448 20.15
Share incentives designated in ZAR 3,080,100 278.19 2,205,700 225.73
Total share incentives exercised or vested during the year 8,490,902 5,868,148
Broad-Based Black Economic Empowerment (BBBEE) scheme
On 9 June 2010 the initial allocation of participation rights was made in relation to the BBBEE scheme in South Africa. A total of 46.2 million
new shares in The South African Breweries Limited (SAB), representing 8.45% of SABs enlarged issued share capital, were issued. The shares
in SAB will be exchanged at the end of the estimated ten-year scheme term for shares in SABMiller plc based on a repurchase formula linked,
inter alia, to the operating performance of SAB. No performance conditions and exercise prices are attached to these shares, although the
employee component has a four-year vesting period. The weighted average fair value of each SAB share at the grant date was ZAR40.
Weighted average fair value assumptions
The fair value of services received in return for share awards granted is measured by reference to the fair value of share awards granted. The
estimate of the fair value of the services received is measured based on a binomial model approach except for the awards under Performance
Share Award schemes, the Executive Share Award Plan 2008 (including value share awards) and the BBBEE scheme which have been valued
using Monte Carlo simulations, and awards under the cash settled scheme which have been valued based on an analytic approach.
The Monte Carlo simulation methodology is necessary for valuing share-based payments with TSR performance hurdles. This is achieved
byprojecting SABMiller plcs share price forwards, together with those of companies in the same comparator group, over the vesting period
and/or life of the awards after considering their respective volatilities.
The following weighted average assumptions were used in these option pricing models during the year.
2012 2011
Share price
1
South African share option scheme (ZAR) 280.49 226.66
BBBEE scheme SAB share price (ZAR) 162.68
All other schemes () 22.33 19.49
Exercise price
1
South African share option scheme (ZAR) 283.07 222.55
All other schemes () 9.35 8.80
Expected volatility
2
BBBEE scheme 27.1%
All other schemes 23.1% 29.2%
Dividend yield
BBBEE scheme 4.9%
Annual forfeiture rate
South African share option scheme 5.0% 5.0%
Riskfree interest rate
South African share option scheme 7.9% 8.7%
BBBEE scheme 8.3%
1
The calculation is based on the weighted fair value of issues made during the year.
2
Expected volatility is calculated by assessing the historical share price data in the United Kingdom and South Africa since May 2002.
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27. Retained earnings and other reserves
a. Retained earnings
Treasury and
EBT shares
US$m
Retained
earnings
US$m
Total
US$m
At 1 April 2010 (673) 8,198 7,525
Other comprehensive income (63) (63)
Actuarial losses taken to other comprehensive income (28) (28)
Share of associates and joint ventures losses recognised in other comprehensive income (71) (71)
Deferred tax credit on items taken to other comprehensive income 36 36
Dividends paid (1,115) (1,115)
Buyout of non-controlling interests (10) (10)
Utilisation of EBT shares 16 (16)
Credit entry relating to share-based payments 246 246
At 31 March 2011 (657) 9,648 8,991
Other comprehensive income (119) (119)
Actuarial losses taken to other comprehensive income (9) (9)
Share of associates and joint ventures losses recognised in other comprehensive income (181) (181)
Deferred tax credit on items taken to other comprehensive income 71 71
Dilution of non-controlling interests as a result of business combinations (5) (5)
Payment for purchase of own shares for share trusts (52) (52)
Buyout of non-controlling interests (7) (7)
At 31 March 2012 (661) 12,524 11,863
The groups retained earnings includes amounts of US$709 million (2011: US$693 million), the distribution of which is limited by statutory or
other restrictions.
Treasury and EBT shares reserve
On 26 February 2009, 77,368,338 SABMiller plc non-voting convertible shares were converted into ordinary shares and then acquired by the
company to be held as treasury shares. While the purchase price for each share was 10.54, the whole amount of the consideration was paid
between group companies. On 15 February 2010, 5,300,000 of these treasury shares were transferred to the EBT for nil consideration. These
shares will be used to satisfy awards outstanding under the various share incentive plans. As at 31 March 2012 a total of 72,068,338 shares
(2011: 72,068,338) were held in treasury.
There are two employee benet trusts currently in operation, being the SABMiller Employee Benet Trust (the EBT) and the SABMiller
Associated Companies Employees Benet Trust (the AC-EBT). The EBT holds shares in SABMiller plc for the purposes of the various
executive share incentive plans, further details of which are disclosed in the directors remuneration report. At 31 March 2012 the EBT held
5,605,746 shares (2011:7,437,406 shares) which cost US$98 million (2011: US$94 million) and had a market value of US$225 million (2011:
US$263 million). These shares have been treated as a deduction in arriving at shareholders funds. The EBT used funds provided by SABMiller
plc to purchase such of the shares as were purchased in the market. The costs of funding and administering the scheme are charged to the
income statement in the period to which they relate.
The AC-EBT holds shares in SABMiller plc for the purposes of providing share incentives for employees of companies in which SABMiller has
asignicant economic and strategic interest but over which it does not have management control. Further details on the AC-EBT are disclosed
in the directors remuneration report. At 31 March 2012 the AC-EBT held 335,940 shares which cost US$11 million and had a market value of
US$13 million. These shares have been treated as a deduction in arriving at shareholders funds. The AC-EBT used funds provided by Gardwell
Ltd, awholly owned indirect subsidiary of SABMiller plc, to purchase the shares. The costs of funding and administering the scheme are
charged to the income statement in the period to which they relate.
Shares currently held in each EBT rank pari passu with all other ordinary shares, however, in both cases the trustees have elected to waive
dividends and decline from voting shares, except in circumstances where they may be holding shares benecially owned by a participant.
There were no benecially owned shares in either EBT as at 31 March 2012.
27. Retained earnings and other reserves continued
b. Other reserves
The analysis of other reserves is as follows.
Foreign
currency
translation
reserve
US$m
Cash ow
hedging
reserve
US$m
Net
investment
hedging
reserve
US$m
Available
for sale
reserve
US$m
Total
US$m
At 1 April 2010 1,533 (11) (203) 3 1,322
Currency translation differences:
Subsidiaries 501 501
Associates and joint ventures 149 149
Net investment hedges (137) (137)
Cash ow hedges 39 39
Deferred tax on items taken to other comprehensive income (14) (14)
Share of associates and joint ventures gains recognised in other
comprehensiveincome 21 21
At 31 March 2011 2,183 35 (340) 3 1,881
Currency translation differences:
Subsidiaries 243 243
Associates and joint ventures (106) (106)
Net investment hedges (1) (1)
Cash ow hedges 6 6
Deferred tax on items taken to other comprehensive income 30 30
Share of associates and joint ventures losses recognised in other
comprehensiveincome (75) (75)
At 31 March 2012 2,320 (4) (341) 3 1,978
Foreign currency translation reserve
The foreign currency translation reserve comprises all translation exchange differences arising on the retranslation of opening net assets
together with differences between income statements translated at average and closing rates.
28a. Reconciliation of prot for the year to net cash generated from operations
2012
US$m
2011
US$m
Taxation 1,126 1,069
Share of post-tax results of associates and joint ventures (1,152) (1,024)
Interest receivable and similar income (531) (358)
Interest payable and similar charges 1,093 883
Operating prot 5,013 3,127
Depreciation:
Property, plant and equipment 672 665
Containers 237 239
Container breakages, shrinkages and write-offs 34 24
Amortisation of intangible assets 273 220
Impairment of working capital balances 16 82
Amortisation of advances to customers 24 28
Unrealised net (gain)/loss from fair value hedges (20) 1
Dividends received from other investments (1) (1)
Charge with respect to share options 132 99
Charge with respect to Broad-Based Black Economic Empowerment scheme 29 147
Other non-cash movements 12 (10)
Net cash generated from operations before working capital movements (EBITDA) 4,979 4,502
(Increase)/decrease in inventories (45) 26
Increase in receivables (25) (147)
Increase in payables 374 161
(Decrease)/increase in provisions (46) 18
Increase in post-retirement benet provisions 8
Net cash generated from operations 5,237 4,568
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28a. Reconciliation of prot for the year to net cash generated from operations continued
Prot for the year and cash generated from operations before working capital movements includes cash ows relating to exceptional items
ofUS$308 million (2011: US$293 million), comprising US$228 million (2011: US$283 million) in respect of business capability programme
costs,US$72 million (2011: US$nil) in respect of transaction-related costs, US$50 million (2011: US$8 million) in respect of integration and
restructuring costs, US$nil (2011: US$2 million) in respect of Broad-Based Black Economic Empowerment scheme costs, partially offset
byUS$42 million (2011: US$nil) in respect of a litigation-related credit.
The following table provides a reconciliation of EBITDA to adjusted EBITDA.
2012
US$m
2011
US$m
EBITDA 4,979 4,502
Cash exceptional items 308 293
Dividends received from MillerCoors 896 822
Adjusted EBITDA 6,183 5,617
28b. Reconciliation of net cash from operating activities to free cash ow
2012
US$m
2011
US$m
Net cash generated from operating activities 3,937 3,043
Purchase of property, plant and equipment (1,473) (1,189)
Proceeds from sale of property, plant and equipment 116 73
Purchase of intangible assets (166) (126)
Investments in joint ventures (288) (186)
Investments in associates (4)
Repayment of investments by associates 14 68
Dividends received from joint ventures 896 822
Dividends received from associates 120 88
Dividends received from other investments 1 1
Dividends paid to non-controlling interests (109) (102)
Free cash ow 3,048 2,488
28c. Analysis of net debt
Cash and cash equivalents on the balance sheet are reconciled to cash and cash equivalents on the cash ow statement as follows.
2012
US$m
2011
US$m
Cash and cash equivalents (balance sheet) 745 1,067
Cash and cash equivalents of disposal group classied as held for sale 4
745 1,071
Overdrafts (138) (258)
Overdrafts of disposal group classied as held for sale (1)
Cash and cash equivalents (cash ow statement) 606 813
28c. Analysis of net debt continued
Net debt is analysed as follows.
Cash and
cash
equivalents
(excluding
overdrafts)
US$m
Overdrafts
US$m
Borrowings
US$m
Derivative
nancial
instruments
US$m
Finance
leases
US$m
Total
gross
borrowings
US$m
Net
debt
US$m
At 1 April 2010 779 (190) (9,212) 237 (12) (9,177) (8,398)
Exchange adjustments 8 17 (174) (3) (160) (152)
Cash ow 283 (72) 1,159 84 5 1,176 1,459
Acquisitions through business combinations 1 (13) (1) (14) (13)
Other movements 34 (20) (1) 13 13
At 31 March 2011 1,071 (258) (8,193) 298 (9) (8,162) (7,091)
Exchange adjustments 10 (49) (38) 9 (78) (68)
Cash ow (246) 157 (8,861) (43) 5 (8,742) (8,988)
Acquisitions through business combinations 12 (1,844) 259 (2) (1,587) (1,575)
Disposals (102) 11 98 109 7
Other movements (229) 97 (15) (147) (147)
At 31 March 2012 745 (139) (19,067) 620 (21) (18,607) (17,862)
The groups net debt is denominated in the following currencies.
US dollars
US$m
SA rand
US$m
Australian
dollars
US$m
Euro
US$m
Colombian
peso
US$m
Other
currencies
US$m
Total
US$m
Total cash and cash equivalents 346 37 49 41 81 191 745
Total gross borrowings (including overdrafts) (13,043) (228) (2,190) (1,306) (1,239) (601) (18,607)
(12,697) (191) (2,141) (1,265) (1,158) (410) (17,862)
Cross currency swaps 2,211 (183) (1,528) (361) (139)
Net debt at 31 March 2012 (10,486) (374) (3,669) (1,626) (1,158) (549) (17,862)
Total cash and cash equivalents 609 30 111 96 225 1,071
Total gross borrowings (including overdrafts) (4,334) (290) (18) (1,482) (1,202) (836) (8,162)
(3,725) (260) (18) (1,371) (1,106) (611) (7,091)
Cross currency swaps 1,089 (413) (116) (560)
Net debt at 31 March 2011 (2,636) (673) (18) (1,487) (1,106) (1,171) (7,091)
28d. Major non-cash transactions
2012
Major non-cash transactions in the year included the following.
The disposal of the groups Angolan operations, Coca-Cola Bottling Luanda SARL, Coca-Cola Bottling Sul de Angola SARL, Empresa de
Cervejas NGola Norte SA, and its interest in Empresa de Cervejas NGola SARL, in Africa in exchange for a 27.5% interest in BIH Angola.
The contribution of the groups Russian beer business, SABMiller RUS LLC, and Ukrainian beer business, PJSC Miller Brands Ukraine, to
Anadolu Efes in exchange for a 24% economic interest in the enlarged Anadolu Efes group.
The remeasurement of the groups existing 50% interest in the Pacic Beverages joint venture to fair value on the acquisition of the remaining
50% interest.
2011
Major non-cash transactions in the year included the following.
IFRS 2 share-based payment charges in relation to the retailer and employee components of the Broad-Based Black Economic Empowerment
(BBBEE) scheme in South Africa.
The all-share merger of Tsogo Sun with GRR, a Johannesburg Stock Exchange listed business, on 24 February 2011. The transaction was
effected through the acquisition by GRR of Tsogo Sun, and the group exchanged its entire 49% shareholding in Tsogo Sun for a 39.68%
shareholding in the listed enlarged entity.
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29. Restatement of the balance sheet at 31 March 2011
The initial accounting under IFRS 3, Business Combinations, for the Cervecera Argentina SA Isenbeck (CASA Isenbeck) and Crown
Beverages Ltd (previously Crown Foods Ltd) acquisitions had not been completed as at 31 March 2011. During the year ended 31 March 2012
adjustments to provisional fair values in respect of these acquisitions were made which resulted in goodwill increasing by US$2 million to
US$11,954 million, intangible assets increasing by US$3 million to US$4,364 million, property, plant and equipment increasing by US$1 million
to US$9,331 million, current trade and other payables increasing by US$3 million to US$3,487 million, current provisions increasing by
US$2million to US$412 million and non-current provisions increasing by US$1 million to US$461 million. As a result comparative information
forthe year ended 31 March 2011 has been presented in the consolidated nancial statements as if the adjustments to provisional fair values
had been made from the respective transaction dates. The impact on the prior year income statement has been reviewed and no adjustments
to the income statement are required as a result of the adjustments to provisional fair values.
30. Acquisitions and disposals
The following business combinations took effect during the year.
Australia
On 16 December 2011 the group acquired a 100% interest in Fosters in Australia for cash consideration of US$10,598 million.
On 13 January 2012 the group acquired the remaining 50% interest which it did not already own in Pacic Beverages from Coca-Cola Amatil
Limited (CCA) for cash consideration of US$343 million. The acquisition took the groups investment in Pacic Beverages to 100% and the
acquisition has been treated as a business combination following the change in control.
Other
On 1 January 2012 the group acquired a 65% interest (effective 33% interest) in International Breweries plc in Nigeria in exchange for
US$20million cash consideration and a dilution in the groups effective interests in its existing Nigerian businesses.
All business combinations
All business combinations have been accounted for using the acquisition method. All assets were recognised at their respective fair values.
Theresidual over the net assets acquired is recognised as goodwill in the nancial statements. The following table represents the assets and
liabilities acquired in respect of all business combinations entered into during the year ended 31 March 2012.
Provisional fair values
Australia
US$m
Other
US$m
Total
US$m
Intangible assets 5,369 2 5,371
Property, plant and equipment 860 63 923
Investment in associates 65 65
Inventories 222 10 232
Trade and other receivables 449 25 474
Current tax assets 342 342
Deferred tax assets 2 2
Cash and cash equivalents 10 2 12
Derivative nancial assets 259 259
Finance leases (2) (2)
Trade and other payables (500) (71) (571)
Borrowings (1,842) (2) (1,844)
Current tax liabilities (80) (80)
Deferred tax liabilities (1,462) (1,462)
Provisions (525) (525)
Net assets acquired 3,165 31 3,196
Non-controlling interests (12) (53) (65)
Provisional goodwill 7,961 88 8,049
Consideration 11,114 66 11,180
Goodwill represents, amongst other things, tangible and other assets yet to be recognised separately from goodwill as the fair value valuations
are still in progress, potential synergies and the value of the assembled workforce. None of the goodwill recognised is expected to be
deductible for tax purposes.
The fair value of trade and other receivables was US$474 million and included trade receivables with a fair value of US$322 million. The gross
contractual amount for trade receivables due was US$327 million, of which US$5 million is expected to be uncollectible.
30. Acquisitions and disposals continued
Acquisition-related costs of US$109 million are included in operating expenses in the consolidated income statement for the year ended
31March 2012.
Australia
US$m
Other
US$m
Total
US$m
Consideration satised by:
Cash consideration 10,931 20 10,951
Cash and cash equivalents acquired 10 2 12
Fair value of existing interest in Pacic Beverages 150 150
Non-cash consideration via acquisition of intercompany balance 23 9 32
Fair value of existing interest in International Breweries plc in Nigeria (via 20% holding in Castel) 30 30
Dilution in the groups effective interests in existing Nigerian businesses 5 5
11,114 66 11,180
From the date of acquisition to 31 March 2012 the following amounts have been included in the groups income and cash ow statements for
the year.
Australia
US$m
Other
US$m
Total
US$m
Income statement
Revenue 1,058 19 1,077
Operating prot 125 3 128
Prot before tax 105 2 107
Cash ow statement
Cash generated from/(utilised in) operations 266 (5) 261
Net interest paid 23 23
Purchase of property, plant and equipment 15 4 19
If the date of the acquisitions made during the year had been 1 April 2011, then the groups revenue, operating prot and prot before tax for
the year ended 31 March 2012 would have been as follows.
US$m
Income statement
Revenue 24,430
Operating prot 5,389
Prot before tax 5,695
In preparing the pro forma results, revenue and costs have been included as if the businesses were acquired on 1 April 2011 and intercompany
transactions had been eliminated. This information is not necessarily indicative of the results of the combined group that would have occurred
had the purchases actually been made at the beginning of the period presented, or indicative of the future results of the combined group.
Non-controlling interests
The following non-controlling interests were acquired for cash consideration of US$27 million, with US$7 million taken to shareholders equity.
Company % acquired
Effective %
holding after
acquisition
of non-
controlling
interest
Form of
consideration Country
Tanzania Breweries Ltd 4.7 36% Cash Tanzania
Nile Breweries Ltd 2.7 62% Cash Uganda
Disposals
During the year the group completed the disposal of its Angolan operations, Coca-Cola Bottling Luanda SARL, Coca-Cola Bottling Sul de
Angola SARL, Empresa de Cervejas NGola Norte SA, and its interest in Empresa de Cervejas NGola SARL, in Africa in exchange for a 27.5%
interest in BIH Angola, which generated a prot on disposal of US$67 million. It also completed the disposal of its Russian business, SABMiller
RUS LLC, and its Ukrainian business, PJSC Miller Brands Ukraine, in exchange for a 24% interest in Anadolu Efes, which generated a prot
ondisposal of US$1,195 million, and which included US$284 million arising as a result of measuring to fair value the groups retained 24%
interest inits Russian and Ukrainian businesses. The group also completed the sale of its Italian distribution business in the year, which
generated a loss on disposal of US$14million.
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30. Acquisitions and disposals continued
Non-controlling interests
The following non-controlling interests were diluted for non-cash consideration of US$5 million, with US$5 million taken to shareholders equity.
Company % disposed
Effective %
holding after
disposal
of non-
controlling
interest
Form of
Pabod Breweries Ltd 21.6 38% Asset exchange Nigeria
Voltic Nigeria Ltd 30.0 50% Asset exchange Nigeria
The following non-controlling interests were disposed via business disposals, with no impact on equity.
Company % disposed
Effective %
holding after
disposal
of non-
controlling
interest
Form of
Coca-Cola Bottling Luanda SARL 55.0 0% Asset exchange Angola
Coca-Cola Bottling Sul de Angola SARL 40.0 0% Asset exchange Angola
Empresa de Cervejas NGola Norte SA 49.9 0% Asset exchange Angola
31. Commitments, contingencies and guarantees
a. Operating lease commitments
The minimum lease rentals to be paid under non-cancellable leases at 31 March 2012 are as follows.
2012
US$m
2011
US$m
Land and buildings
Later than one year and less than ve years 171 106
After ve years 42 26
278 182
Plant, vehicles and systems
Later than one year and less than ve years 126 111
After ve years 87 63
268 224
31. Commitments, contingencies and guarantees continued
b. Other commitments
2012
US$m
2011
US$m
Capital commitments not provided in the nancial information
Contracts placed for future expenditure for property, plant and equipment 277 269
Contracts placed for future expenditure for intangible assets 1 1
Share of capital commitments of joint ventures 44 50
Other commitments not provided in the nancial information
Contracts placed for future expenditure 3,164 1,925
Share of joint ventures other commitments 512 449
Contracts placed for future expenditure in 2012 primarily relate to minimum purchase commitments for raw materials and packaging
materials,which are principally due between 2012 and 2019. Additionally, as part of the business capability programme the group has entered
intocontracts for the provision of IT, communications and consultancy services and in relation to which the group had commitments of
US$193million at 31 March 2012 (2011: US$193 million).
The groups share of joint ventures other commitments primarily relate to MillerCoors various long-term non-cancellable advertising and
promotion commitments.
c. Contingent liabilities and guarantees
2012
US$m
2011
US$m
Guarantees to third parties provided in respect of trade loans
1
4 8
Guarantees to third parties provided in respect of bank facilities 14 3
Share of joint ventures contingent liabilities 4 6
Litigation
2
23 24
Other contingent liabilities 9 4
54 45
1
Guarantees to third parties provided in respect of trade loans
These primarily relate to guarantees given by Grolsch to banks in relation to loans taken out by trade customers.
2
Litigation
The group has a number of activities in a wide variety of geographic areas and is subject to certain legal claims incidental to its operations.
Inthe opinion of the directors, after taking appropriate legal advice, these claims are not expected to have, either individually or in aggregate,
a material adverse effect upon the groups nancial position, except insofar as already provided in the consolidated nancial statements.
These include claims made by certain former employees in Ecuador arising out of events which took place before the groups investment
inEcuador in 2005, in respect of which, based on legal advice that they have no valid legal basis, the directors have determined that no
provision is required and that they should continue to be contested.
Other
SABMiller and Altria entered into a tax matters agreement (the Agreement) on 30 May 2002, to regulate the conduct of tax matters between
them with regard to the acquisition of Miller and to allocate responsibility for contingent tax costs. SABMiller has agreed to indemnify Altria
against any taxes, losses, liabilities and costs that Altria incurs arising out of or in connection with a breach by SABMiller of any representation,
agreement or covenant in the Agreement, subject to certain exceptions.
The group has exposures to various environmental risks. Although it is difcult to predict the groups liability with respect to these risks, future
payments, if any, would be made over a period of time in amounts that would not be material to the groups nancial position, except insofar as
already provided in the consolidated nancial statements.
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32. Pensions and post-retirement benets
The group operates a number of pension schemes throughout the world. These schemes have been designed and are administered in
accordance with local conditions and practices in the countries concerned and include both dened contribution and dened benet schemes.
The majority of the schemes are funded and the schemes assets are held independently of the groups nances. The assets of the schemes
do not include any of the groups own nancial instruments, nor any property occupied by or other assets used by the group. Pension and
post-retirement benet costs are assessed in accordance with the advice of independent professionally qualied actuaries. Generally, the
projected unit method is applied to measure the dened benet scheme liabilities.
The group also provides medical benets, which are mainly unfunded, for retired employees and their dependants in South Africa,
theNetherlands and Latin America.
The total pension and post-retirement medical benet costs recognised in the income statement, and related net liabilities on the balance
sheetare as follows.
2012
US$m
2011
US$m
Dened contribution scheme costs 97 97
Dened benet pension plan costs 15 17
Post-retirement medical and other benet costs 13 5
Accruals for dened contribution plans (balance sheet) 3 3
Provisions for dened benet pension plans (balance sheet) 197 196
Provisions for other post-retirement benets (balance sheet) 112 114
The group operates various dened contribution and dened benet schemes. Details of the main dened benet schemes are provided below.
Latin America pension schemes
The group operates a number of pension schemes throughout Latin America. Details of the major scheme are provided below.
The Colombian Labour Code Pension Plan is an unfunded scheme of the dened benet type and covers all salaried and hourly employees in
Colombia who are not covered by social security or who have at least 10 years of service prior to 1 January 1967. The plan is nanced entirely
through company reserves and there are no external assets. The most recent actuarial valuation of the Colombian Labour Code Pension Plan
was carried out by independent professionally qualied actuaries at 28 February 2012 using the projected unit credit method. All salaried
employees are now covered by social security or private pension fund provisions. The principal economic assumptions used in the preparation
of the pension valuations are shown below and take into consideration changes in the Colombian economy.
Grolsch pension scheme
The Grolsch pension plan, named Stichting Pensioenfonds van de Grolsche Bierbrouwerij, is a funded scheme of the dened benet type,
based on average salary with assets held in separately administered funds. The latest valuation of the Grolsch pension fund was carried out at
31 March 2012 by an independent actuary using the projected unit credit method.
Other
Details of other dened benet pension schemes are provided below.
Fosters pension scheme
The Fosters pension plan, named AusBev Superannuation Fund, provides accumulation style and dened benets to employees. The
company funds the dened benets, administration and insurance costs of the fund as a benet to employees who elect to be members of this
fund. The latest valuation of the Fosters pension scheme was carried out at 30 June 2011 by an independent actuary using the projected unit
credit method. The dened benets section is now closed to new members.
South Africa pension schemes
The group operates a number of pension schemes throughout South Africa. Details of the major schemes are provided below.
The ABI Pension Fund, Suncrush Pension Fund and Suncrush Retirement Fund are funded schemes of the dened benet type based on
average salary with assets held in separately administered funds. The surplus apportionment schemes for the ABI Pension Fund, the Suncrush
Pension Fund and Suncrush Retirement Fund have been approved by the Financial Services Board.
The active and pensioner liabilities in respect of the ABI Pension Fund and the Suncrush Retirement Fund have been settled. The only liabilities
are in respect of former members, the surplus apportionment scheme and unclaimed benets. Once the surplus liabilities have been settled,
the Funds will be deregistered and liquidated. During the year a signicant number of former members of the ABI Pension Fund were
successfully traced and there was a second allocation of surplus to the former members of the Fund in terms of Section 15C of the Pension
Funds Act.
The Section 14 transfer of the Suncrush Pension Fund members to the SAB Staff Provident Fund was annulled by the Financial Services Board
on 24 August 2011. The trustees have decided to make a provision in the rules of the fund to allow for paid-up benets for each of the
members. This would allow for each member to be paid their initial benet, valued as at 1 July 2005, upon their exit.
32. Pensions and post-retirement benets continued
Principal actuarial assumptions at 31 March (expressed as weighted averages)
Dened benet pension plans
Medical and other

post-retirement benets
Latin
America Grolsch Other South Africa Other
At 31 March 2012
Discount rate (%) 7.5 4.8 6.0 9.3 7.0
Salary ination (%) 3.5 2.0 3.8
Pension ination (%) 3.5 2.0 3.2
Healthcare cost ination (%) 7.8 3.0
Mortality rate assumptions
Retirement age: Males 55 65 66 63 57
Females 50 65 61 63 53
Life expectations on retirement age:
Retiring today: Males 27 21 32 16 24
Females 36 24 33 20 31
Retiring in 20 years: Males 27 23 32 16 24
Females 36 25 33 20 32
At 31 March 2011
Discount rate (%) 8.4 5.3 5.2 8.8 8.4
Salary ination (%) 4.0 2.0 2.4
Pension ination (%) 4.0 2.0 3.0
Healthcare cost ination (%) 7.3 4.0
Mortality rate assumptions
Retirement age: Males 55 65 63 55
Females 50 65 63 50
Life expectations on retirement age:
Retiring today: Males 27 21 16 27
Females 36 24 20 36
Retiring in 20 years: Males 22 16
Females 25 20
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The present value of dened benet pension plan and post-employment medical benet liabilities are as follows.
Medical and other

Latin
America
US$m
Grolsch
US$m
Other
US$m
Total
US$m
South
Africa
US$m
Other
US$m
Total
US$m
Present value of scheme liabilities at 1 April 2010 148 299 62 509 59 44 103
Portion of dened benet obligation that is unfunded 146 24 170 59 44 103
Portion of dened benet obligation that is partly or wholly funded 2 299 38 339
Benets paid (18) (9) (14) (41) (6) (6)
Contributions paid by plan participants 3 3 (2) (2)
Current service cost 1 5 3 9 2 2
Past service cost (1) (1)
Interest costs 11 14 4 29 6 4 10
Actuarial losses/(gains) 24 (18) 6 2 6 8
Settlements and curtailments (3) (3) (6) (6)
Transfer from/(to) other provisions 3 (3)
Acquisitions 1 1
Transfers to disposal group classied as held for sale (6) (6)
Exchange adjustments 5 14 2 21 4 2 6
Present value of scheme liabilities at 31 March 2011 175 305 48 528 71 43 114
Portion of dened benet obligation that is partly or wholly funded 305 35 340
Benets paid (18) (11) (15) (44) (4) (4)
Contributions paid by plan participants 3 3 (2) (2)
Current service cost 4 2 6 2 1 3
Interest costs 13 15 5 33 6 4 10
Actuarial losses/(gains) 6 21 13 40 (1) 1
Reversal of unused provision (10) (10)
Acquisitions 52 52
Exchange adjustments 6 (18) (3) (15) (10) 1 (9)
Present value of scheme liabilities at 31 March 2012 172 319 102 593 66 46 112
Portion of dened benet obligation that is partly or wholly funded 319 89 408
The fair value reconciliations of opening plan assets to closing plan assets, on an aggregated basis, are as follows.
Grolsch
US$m
Other
US$m
Total
US$m
Plan assets at 1 April 2010 291 53 344
Expected return on plan assets 15 4 19
Benets paid (9) (10) (19)
Employer contributions 7 7
Actuarial gains 13 1 14
Exchange adjustments 16 4 20
Plan assets at 31 March 2011 333 52 385
Benets paid (11) (14) (25)
Employer contributions/(employer assets recognised) 9 (5) 4
Actuarial gains/(losses) 26 (3) 23
Acquisitions 51 51
Exchange adjustments (21) (5) (26)
Plan assets at 31 March 2012 352 84 436
The fair value of assets in pension schemes and the expected rates of return were:
Latin America

Grolsch

Other

Total
US$m
Long-
term
rate of
return US$m
Long-
term
rate of
return US$m
Long-
term
rate of
return US$m
At 31 March 2012
Equities 102 7.0 31 1.0 133
Bonds 229 4.0 14 9.0 243
Cash 34 6.0 34
Property and other 21 7.0 5 9.0 26
Total fair value of assets 352 84 436
Present value of scheme liabilities (172) (319) (102) (593)
(Decit)/surplus in the scheme (172) 33 (18) (157)
Unrecognised pension asset due to limit (33) (7) (40)
Pension liability recognised (172) (25) (197)
At 31 March 2011
Equities 111 8.0 111
Bonds 202 4.0 4 9.0 206
Cash 48 8.0 48
Property and other 20 8.0 20
Total fair value of assets 333 52 385
Present value of scheme liabilities (175) (305) (48) (528)
(Decit)/surplus in the scheme (175) 28 4 (143)
Unrecognised pension asset due to limit (28) (25) (53)
Pension liability recognised (175) (21) (196)
The amounts recognised in the balance sheet are as follows.
Medical and other

Latin
America
US$m
Grolsch
US$m
Other
US$m
Total
US$m
South
Africa
US$m
Other
US$m
Total
US$m
At 31 March 2012
Present value of scheme liabilities (172) (319) (102) (593) (66) (46) (112)
Fair value of plan assets 352 84 436
(172) 33 (18) (157) (66) (46) (112)
Unrecognised assets due to limit (33) (7) (40)
Net liability recognised on balance sheet (172) (25) (197) (66) (46) (112)
At 31 March 2011
Present value of scheme liabilities (175) (305) (48) (528) (71) (43) (114)
Fair value of plan assets 333 52 385
(175) 28 4 (143) (71) (43) (114)
Unrecognised assets due to limit (28) (25) (53)
Net liability recognised on balance sheet (175) (21) (196) (71) (43) (114)
In respect of dened benet pensions plans in South Africa, which are included in Other, the pension asset recognised is limited to the extent
that the employer is able to recover a surplus either through reduced contributions in the future or through refunds from the scheme. Pension
fund assets have been set equal to nil as the surplus apportionment exercise required in terms of the South African legislation has not yet
beencompleted.
The pension asset recognised in respect of Grolsch is limited to the extent that the employer is able to recover a surplus either through reduced
contributions in the future or through refunds from the scheme. The limit has been set equal to nil due to the terms of the pension agreement
with the pension fund.
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The amounts recognised in net operating expenses in the income statement are as follows.
Medical and other

Latin
America
US$m
Grolsch
US$m
Other
US$m
Total
US$m
South
Africa
US$m
Other
US$m
Total
US$m
At 31 March 2012
Current service cost (4) (2) (6) (2) (1) (3)
Interest costs (13) (15) (5) (33) (6) (4) (10)
(13) (3) 1 (15) (8) (5) (13)
At 31 March 2011
Current service cost (1) (5) (3) (9) (2) (2)
Past service cost 1 1
Interest costs (11) (14) (4) (29) (6) (4) (10)
Settlements and curtailments 3 3 6 6
Unrecognised gains due to limit (1) (1)
(12) (1) (4) (17) (8) 3 (5)
The amounts recognised in the statement of comprehensive income are as follows.
Medical and other

Latin
America
US$m
Grolsch
US$m
Other
US$m
Total
US$m
South
Africa
US$m
Other
US$m
Total
US$m
At 31 March 2012
Actual return on plan assets 42 5 47
Less: expected return on plan assets (16) (8) (24)
Experience gains/(losses) arising on
scheme assets 26 (3) 23
scheme liabilities (21) (10) (31) 1 1
Changes in actuarial assumptions (6) (3) (9) (1) (1)
Unrecognised (gains)/losses due to limit (6) 14 8
(6) (1) (2) (9) 1 (1)
At 31 March 2011
Actual return on plan assets 28 5 33
Less: expected return on plan assets (15) (4) (19)
Experience gains/(losses) arising on
scheme assets 13 1 14
scheme liabilities 18 18 (2) (2)
Changes in actuarial assumptions (23) (23) (6) (6)
Other actuarial losses (1) (1)
Unrecognised gains due to limit (26) (2) (28)
(24) 5 (1) (20) (2) (6) (8)
The cumulative amounts recognised in other comprehensive income are as follows.
2012
US$m
2011
US$m
Cumulative actuarial losses recognised at beginning of year (203) (175)
Net actuarial losses recognised in the year (9) (28)
Cumulative actuarial losses recognised at end of year (212) (203)
History of actuarial gains and losses
2012
US$m
2011
US$m
2010
US$m
2009
US$m
2008
US$m
Experience gains/(losses) of plan assets 23 14 33 (77) (90)
Percentage of plan assets 5% 4% 10% 26% 7%
Experience (losses)/gains of scheme liabilities (30) 16 (44) 28 2
Percentage of scheme liabilities 4% 2% 7% 6% 0%
Fair value of plan assets 436 385 344 299 1,348
Present value of scheme liabilities (705) (642) (612) (499) (2,338)
Decit in the schemes (269) (257) (268) (200) (990)
Unrecognised assets due to limit (40) (53) (22) (17) (27)
Net liability recognised in balance sheet (309) (310) (290) (217) (1,017)
Contributions expected to be paid into the groups major dened benet schemes during the annual period after 31 March 2012 are
US$25million.
A 1% increase and a 1% decrease in the assumed healthcare cost of ination will have the following effect on the groups major
post-employment medical benets.
2012
Increase
US$m
Decrease
US$m
Current service costs
Interest costs 1 (1)
Accumulated post-employment medical benet costs 12 (10)
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33. Related party transactions
a. Parties with signicant inuence over the group: Altria Group, Inc. (Altria) and the Santo Domingo Group (SDG)
Altria is considered to be a related party of the group by virtue of its 27.0% equity shareholding. There were no transactions with Altria during
the year.
SDG is considered to be a related party of the group by virtue of its 14.1% equity shareholding in SABMiller plc. During the year the group
madea donation of US$33 million to the Fundacin Mario Santo Domingo (2011: US$32 million), pursuant to the contractual arrangements
entered into at the time of the Bavaria transaction in 2005, under which it was agreed that the proceeds of the sale of surplus non-operating
property assets owned by Bavaria SA and its subsidiaries would be donated to various charities, including the Fundacin Mario Santo
Domingo. At 31 March 2012 US$nil (2011: US$nil) was owing to the SDG.
b. Associates and joint ventures
Details relating to transactions with associates and joint ventures are analysed below.
2012
US$m
2011
US$m
Purchases from associates
1
(214) (211)
Purchases from joint ventures
2
(86) (75)
Sales to associates
3
39 36
Sales to joint ventures
4
28 31
Dividends receivable from associates
5
150 89
Dividends received from joint ventures
6
896 822
Royalties received from associates
7
13 7
Royalties received from joint ventures
8
2 2
Management fees and other recoveries received from associates
9
24 10
Management and guarantee fees paid to joint ventures
10
(1) (2)
1
The group purchased canned Coca-Cola products for resale from Coca-Cola Canners of Southern Africa (Pty) Limited (Coca-Cola Canners); inventory from
Distell Group Ltd (Distell) and Associated Fruit Processors (Pty) Ltd (AFP); and accommodation from Tsogo Sun Holdings (Pty) Ltd (Tsogo Sun), all in South
Africa.
2
The group purchased lager from MillerCoors LLC (MillerCoors).
3
The group made sales of lager to Tsogo Sun, Empresa de Cervejas NGola SARL (ECN), Socit des Brasseries et Glacires Internationales and Brasseries
Internationales Holding Ltd (Castel), Delta Corporation Ltd (Delta) and Distell.
4
The group made sales to MillerCoors and Pacic Beverages.
5
The group had dividends receivable from Castel of US$61 million (2011: US$39 million), Kenya Breweries Ltd US$9 million (2011: US$14 million),
Coca-ColaCanners US$6 million (2011: US$5 million), Distell US$22 million (2011: US$21 million), Tsogo Sun US$41 million (2011: US$3 million), ECN US$nil
(2011: US$3million), Delta US$3 million (2011: US$2 million), Grolsch (UK) Ltd of US$2 million (2011: US$2 million) and International Trade and Supply Limited
ofUS$6million (2011: US$nil).
6
The group received dividends from MillerCoors.
7
The group received royalties from Delta, Kenya Breweries Ltd and Anadolu Efes.
8
The group received royalties from MillerCoors and Pacic Beverages.
9
The group received management fees from ECN and Delta, and other recoveries from AFP.
10
The group paid management fees to MillerCoors.
At 31 March
2012
US$m
2011
US$m
Amounts owed by associates trade
1
145 12
Amounts owed by associates loans
2
60
Amounts owed by joint ventures
3
6 5
Amounts owed to associates
4
(42) (24)
Amounts owed to joint ventures
5
(17) (16)
1
Amounts owed by AFP, Delta, BIH Angola and Anadolu Efes.
2
Amounts owed by BIH Angola.
3
Amounts owed by MillerCoors and in the prior year also Pacic Beverages.
4
Amounts owed to Coca-Cola Canners and Tsogo Sun.
5
Amounts owed to MillerCoors.
Amounts owed by associates include balances with BIH Angola and Anadolu Efes which were previously intra-group balances with former
group subsidiaries in Angola, Russia and Ukraine.
c. Transactions with key management
The group has a related party relationship with the directors of the group and members of the excom as key management. At 31 March 2012
there were 27 (2011: 24) members of key management. Key management compensation is provided in note 6c.
34. Post balance sheet events
There are no material post balance sheet events.
35. Principal subsidiaries, associates and joint ventures
The principal subsidiary undertakings of the group as at 31 March were as follows.
Country of
incorporation
Principal
activity
Effective interest
Name 2012 2011
Corporate
SABMiller Holdings Ltd United Kingdom Holding company 100% 100%
SABMiller Africa and Asia BV
1
Netherlands Holding company 100% 100%
SABMiller Holdings SA Ltd United Kingdom Holding company 100%
SABMiller Holdings SH Ltd United Kingdom Holding company 100%
SABMiller International BV Netherlands Trademark owner 100% 100%
SABMiller SAF Limited United Kingdom Holding company/Financing 100%
SABMiller Southern Investments Ltd
2
United Kingdom Holding company 100% 100%
SABSA Holdings (Pty) Ltd South Africa Holding company 100% 100%
Trinity Procurement GmbH Switzerland Procurement 100% 100%
Latin American operations
Bavaria SA
3
Colombia Brewing/Soft drinks 99% 99%
Cervecera Argentina SA Isenbeck Argentina Brewing 100% 100%
Cervecera del Valle SA Colombia Brewing 99% 99%
Cervecera Hondurea, SA de CV Honduras Brewing/Soft drinks 99% 99%
Cervecera Nacional (CN) SA
3
Ecuador Brewing 96% 96%
Cervecera Nacional SA
3
Panama Brewing 97% 97%
Cervecera San Juan SA
3
Peru Brewing/Soft drinks 92% 92%
Cervecera Unin SA Colombia Brewing 98% 98%
Industrias La Constancia, SA de CV El Salvador Brewing/Soft drinks 100% 100%
Unin de Cerveceras Peruanas Backus y Johnston SAA
3
Peru Brewing 94% 94%
European operations
SABMiller Europe BV
1
Netherlands Holding company 100% 100%
SABMiller Holdings Europe Ltd United Kingdom Holding company 100% 100%
SABMiller Netherlands Cooperative WA Netherlands Holding company 100% 100%
Compaia Cervecera de Canarias SA Spain Brewing 51% 51%
Dreher Srgyrak Zrt Hungary Brewing 100% 100%
Grolsche Bierbrouwerij Nederland BV Netherlands Brewing 100% 100%
Kompania Piwowarska SA
4
Poland Brewing 100% 100%
Miller Brands (UK) Ltd United Kingdom Sales and distribution 100% 100%
Pivovary Topvar as Slovakia Brewing 100% 100%
PJSC Miller Brands Ukraine
5
Ukraine Brewing 100%
Plze nsk Prazdroj as Czech Republic Brewing 100% 100%
SABMiller RUS LLC
5
Russia Brewing 100%
Birra Peroni Srl
6
Italy Brewing 100% 100%
Ursus Breweries SA Romania Brewing 99% 99%
North American operations
SABMiller Holdings Inc USA Holding company/Financing 100% 100%
Miller Brewing Company USA Holding company 100% 100%
African operations
SABMiller Africa BV Netherlands Holding company 62% 62%
SABMiller Botswana BV Netherlands Holding company 62% 62%
SABMiller (A&A) Ltd United Kingdom Holding company 100% 100%
SABMiller Investments Ltd Mauritius Holding company 80% 80%
SABMiller Investments II BV Netherlands Holding company 80% 80%
SABMiller Zimbabwe BV Netherlands Holding company 62% 62%
Accra Brewery Ltd Ghana Brewing 60% 60%
Ambo Mineral Water Share Company Ethiopia Soft drinks 40% 40%
Botswana Breweries (Pty) Ltd Botswana Sorghum brewing 31% 31%
Cervejas de Moambique SARL
3
Mozambique Brewing 49% 49%
Chibuku Products Ltd Malawi Sorghum brewing 31% 31%
Coca-Cola Bottling Luanda SARL
7
Angola Soft drinks 28%
Coca-Cola Bottling Sul de Angola SARL
7
Angola Soft drinks 37%
Crown Beverages Ltd
8
Kenya Soft drinks 80% 80%
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35. Principal subsidiaries, associates and joint ventures continued
Country of
incorporation
Principal
activity
Effective interest
Name 2012 2011
African operations continued
Empresa de Cervejas NGola Norte SA
7
Angola Brewing 31%
Heinrichs Syndicate Ltd Zambia Soft drinks 62% 62%
Intafact Beverages Ltd Nigeria Brewing 41% 41%
International Breweries plc
3,9
Nigeria Brewing 33%
Kgalagadi Breweries (Pty) Ltd Botswana Brewing/Soft drinks 31% 31%
Maluti Mountain Brewery (Pty) Ltd Lesotho Brewing/Soft drinks 24% 24%
MUBEX Mauritius Procurement 100% 100%
National Breweries plc
3
Zambia Sorghum brewing 43% 43%
Nile Breweries Ltd Uganda Brewing 62% 60%
Pabod Breweries Ltd
9
Nigeria Brewing 38% 59%
Rwenzori Bottling Company Ltd Uganda Soft drinks 80% 80%
Southern Sudan Beverages Ltd South Sudan Brewing 80% 80%
Swaziland Beverages Ltd Swaziland Brewing 37% 37%
Tanzania Breweries Ltd
3
Tanzania Brewing 36% 33%
Voltic (GH) Ltd Ghana Soft drinks 80% 80%
Voltic Nigeria Ltd
8
Nigeria Soft drinks 50% 80%
Zambian Breweries plc
3
Zambia Brewing/Soft drinks 54% 54%
Asia Pacic operations
SABMiller Asia BV Netherlands Holding company 100% 100%
SABMiller (Asia) Ltd Hong Kong Holding company 100% 100%
SABMiller (A&A 2) Ltd United Kingdom Holding company 100% 100%
SABMiller Beverage Investments Pty Ltd Australia Holding company 100%
SABMiller India Ltd India Holding company 100% 100%
Fosters Group Ltd Australia Holding company 100%
Bulmer Australia Ltd Australia Brewing 100%
Cascade Brewery Company Pty Ltd Australia Brewing 100%
FBG Treasury (Aust) Ltd Australia Financing 100%
Fosters Australia Ltd Australia Brewing 100%
Fosters Group Pacic Ltd
3
Fiji Brewing 89%
Pacic Beverages Pty Ltd
10
Australia Brewing 100%
Queensland Breweries Pty Ltd Australia Brewing 100%
SABMiller Breweries Private Ltd India Brewing 100% 100%
SABMiller Vietnam Company Ltd Vietnam Brewing 100% 100%
Skol Breweries Ltd India Brewing 99% 99%
South African operations
The South African Breweries (Pty) Ltd
11
South Africa Brewing/Soft drinks/
Holding company
100% 100%
The South African Breweries Hop Farms (Pty) Ltd South Africa Hop farming 100% 100%
The South African Breweries Maltings (Pty) Ltd South Africa Maltsters 100% 100%
Appletiser South Africa (Pty) Ltd South Africa Fruit juices 100% 100%
1
Operates and resident for tax purposes in the United Kingdom.
2
Previously SABMiller Latin America Ltd.
3
Listed in country of incorporation.
4
SABMiller Poland BV, a wholly owned subsidiary of the group, holds 100% of Kompania Piwowarska SA.
5
On 6 March 2012 the group completed its strategic alliance with Anadolu Group and Anadolu Efes Biraclk ve Malt Sanayii AS (Anadolu Efes). The groups
subsidiaries SABMiller RUS LLC and PJSC Miller Brands Ukraine were contributed to Anadolu Efes, in exchange for a 24% equity stake in the enlarged Anadolu
Efes group.
6
Previously S.p.A Birra Peroni.
7
On 1 January 2012 the group acquired a 27.5% interest in BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola) in exchange for contributing its
Angolan businesses into BIH Angola. Castel acquired the remaining 72.5% in BIH Angola, having contributed its Angolan businesses into BIH Angola.
8
Previously Crown Foods Ltd.
9
On 1 January 2012 the group acquired an effective 33% interest in International Breweries plc in exchange for cash and a dilution in the groups effective
interests in its existing Nigerian businesses, Pabod Breweries Ltd and Voltic Nigeria Ltd.
10
On 13 January 2012 the remaining 50% interest in Pacic Beverages Pty Ltd was purchased and from this date the company has been a subsidiary.
In 2011 the company was a joint venture.
11
Previously The South African Breweries Ltd.
The group comprises a large number of companies. The list above includes those subsidiary undertakings which materially affect the prot or
net assets of the group, or a business segment, together with the principal intermediate holding companies of the group. With the exception of
those noted above, the principal country in which each of the above subsidiary undertakings operates is the same as the country in which each
is incorporated.
Where the groups nominal interest in the equity share capital of an undertaking is less than 50%, the basis on which the undertaking is a
subsidiary undertaking of the group is as follows.
African operations
The groups effective interest in the majority of its African operations was diluted as a result of the disposal of a 38% interest in SABMiller Africa
BV and SABMiller Botswana BV on 1 April 2001, in exchange for a 20% interest in the Castel groups African beverage interests. Investments in
new territories are generally being made with the Castel groups African beverage operations on an 80:20 basis. The operations continue to be
consolidated due to SABMiller Africa BVs, SABMiller Botswana BVs and SABMiller Investment II BVs majority shareholdings, and ability to
control the operations.
Botswana Breweries (Pty) Ltd and Kgalagadi Breweries (Pty) Ltd
SABMiller Botswana holds a 40% interest in each of Botswana Breweries (Pty) Ltd and Kgalagadi Breweries (Pty) Ltd with the remaining
60%interest in each held by Sechaba Brewery Holdings Ltd. SABMiller Botswanas shares entitle the holder to twice the voting rights of
thoseshares held by Sechaba Brewery Holdings Ltd. SABMiller Africa BVs 10.1% indirect interest (2011: 10.1%) is held via a 16.8% interest
(2011: 16.8%) in Sechaba Brewery Holdings Ltd.
Maluti Mountain Brewery (Pty) Ltd (Maluti)
SABMiller Africa BV holds a 39% interest in Maluti with the remaining interest held by a government authority, the Lesotho National
Development Corporation (51%), the Privatisation Unit (5.25%), and the Lesotho Unit Trust (4.75%). Maluti is treated as a subsidiary undertaking
based on the groups ability to control its operations through its board representation. The day to day business operations are managed in
accordance with a management agreement with Bevman Services AG, a group company.
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Associates and joint ventures
The principal associates and joint ventures of the group as at 31 March are as set out below. Where the groups interest in an associate or a joint
venture is held by a subsidiary undertaking which is not wholly owned by the group, the subsidiary undertaking is indicated in a note below.
Country of
incorporation
Nature of
relationship Principal activity
Effective interest
Name 2012 2011
European operations
Anadolu Efes Biraclk ve Malt
SanayiiAS
1,2,3
Turkey Associate Brewing/Soft drinks 24%
Grolsch (UK) Ltd United Kingdom Associate Brewing 50% 50%
North American operations
MillerCoors LLC
4
USA Joint venture Brewing 58% 58%
African operations
BIH Brasseries Internationales
HoldingLtd
3
Gibraltar Associate Holding company for subsidiaries
principally located in Africa
20% 20%
Socit des Brasseries et Glacires
Internationales
3
France Associate Holding company for subsidiaries
principally located in Africa
20% 20%
Algerienne de Bavaroise
3,5
Algeria Associate Brewing 40% 40%
BIH Brasseries Internationales Holding
(Angola) Ltd
3,7
Gibraltar Associate Brewing/Soft drinks 27%
Delta Corporation Ltd
1,3,6
Zimbabwe Associate Brewing/Soft drinks 25% 23%
Empresa de Cervejas NGola SARL
7
Angola Associate Brewing 28%
Kenya Breweries Ltd
6,8,9
Kenya Associate Brewing 12%
Marocaine dInvestissements et de
Services
1,10
Morocco Associate Brewing 40% 40%
Skikda Bottling Company
3,5
Algeria Associate Soft drinks 40% 40%
Socit de Boissons de IOuest,
Algerien
3,5
Algeria Associate Soft drinks 40% 40%
Socit des Nouvelles Brasseries
3,5
Algeria Associate Brewing 40% 40%
Asia Pacic operations
China Resources Snow Breweries Ltd
3
British Virgin Islands Associate Holding company for brewing
subsidiaries located in China
49% 49%
Pacic Beverages Pty Ltd
11
Australia Joint venture Sales and distribution 50%
International Trade and Supply Limited
3
British Virgin Islands Associate Sales and distribution 40%
South African operations
Coca-Cola Canners of Southern Africa
(Pty) Ltd
3
South Africa Associate Canning of beverages 32% 32%
Distell Group Ltd
1,8
South Africa Associate Wines and spirits 29% 29%
Hotels and Gaming
Tsogo Sun Holdings Ltd
1,12
South Africa Associate Holding company for Hotels and
Gaming operations
40% 40%
1
Listed in country of incorporation.
2
On 6 March 2012 the group completed its strategic alliance with Anadolu Group and Anadolu Efes Biraclk ve Malt Sanayii AS (Anadolu Efes). The groups
subsidiaries SABMiller RUS LLC and PJSC Miller Brands Ukraine were contributed to Anadolu Efes, in exchange for a 24% equity stake in the enlarged Anadolu
Efes group.
3
These entities report their nancial results for each 12 month period ending 31 December.
4
SABMiller shares joint control of MillerCoors with Molson Coors Brewing Company under a shareholders agreement. Voting interests are shared equally
between SABMiller and Molson Coors, and each of SABMiller and Molson Coors has equal board representation. Under the agreement SABMiller has a 58%
economic interest in MillerCoors and Molson Coors has a 42% economic interest.
5
Effective 18 March 2004 SABMiller acquired 25% of the Castel groups holding in these entities. Together with its 20% interest in the Castel groups African
beverage interests, this gives SABMiller participation on a 40:60 basis with the Castel group.
6
Interests in these companies are held by SABMiller Africa BV which is held 62% by SABMiller Holdings Ltd.
7
On 1 January 2012 the group acquired a 27.5% interest in BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola) in exchange for contributing its
Angolan businesses into BIH Angola. Castel acquired the remaining 72.5% in BIH Angola, having contributed its Angolan businesses into BIH Angola.
8
These entities report their nancial results for each 12 month period ending 30 June.
9
Disposed on 25 November 2011.
10
SABMiller acquired a 25% direct interest in this holding company on 18 March 2004 which has controlling interests in three breweries, a malting plant and a wet
depot in Morocco. This 25% interest together with its 20% interest in the Castel groups African beverage interests, gives SABMiller an effective participation of
40% and the other 60% is held by the Castel groups Africa beverage interests.
11
Pacic Beverages Pty Ltd became a subsidiary on 13 January 2012.
12
Previously Gold Reef Resorts Ltd.
The principal country in which each of the above associated undertakings operates is the same as the country in which each is incorporated.
However, Socit des Brasseries et Glacires Internationales, BIH Brasseries Internationales Holding Ltds (Castel) and BIH Brasseries
Internationales Holding (Angola) Ltds principal subsidiaries are in Africa, China Resources Snow Breweries Ltds principal subsidiaries are in
the Peoples Republic of China and International Trade and Supply Limited operates in the United Arab Emirates.
Statement of directors responsibilities
in respect of the company nancial statements
The directors are responsible for preparing the Annual Report, the
directors remuneration report and the company nancial statements
in accordance with applicable law and regulations.
Company law requires the directors to prepare nancial statements
foreach nancial year. The directors have prepared the company
nancial statements in accordance with applicable law and United
Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice). The nancial statements are required by law
togive a true and fair view of the state of affairs of the company for
that year.
In preparing those nancial statements, the directors are required to:
select suitable accounting policies and then apply them
consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the nancial statements; and
prepare the nancial statements on the going concern basis unless
it is inappropriate to presume that the company will continue in
business, in which case there should be supporting assumptions
orqualications as necessary.
The directors conrm that they have complied with the above
requirements in preparing the nancial statements.
The directors are responsible for keeping adequate accounting
records that disclose with reasonable accuracy at any time the
nancial position of the company and enable them to ensure that the
nancial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection
offraud and other irregularities.
In addition, the Companies Act 2006 requires directors to provide
thecompanys auditors with every opportunity to take whatever
stepsandundertake whatever inspections the auditors consider to
beappropriate for the purpose of enabling them to give their audit
report. Each of the directors, having made appropriate enquiries,
conrms that:
so far as the director is aware, there is no relevant audit
informationof which the companys auditors are unaware; and
each director has taken all the steps that they ought to have taken
as a director in order to make themselves aware of any relevant
audit information and to establish that the companys auditors
areaware of that information.
A copy of the nancial statements of the company is placed on the
companys website. The directors are responsible for the maintenance
and integrity of statutory and audited information on the companys
website. Information published on the internet is accessible in many
countries with different legal requirements. Legislation in the United
Kingdom governing the preparation and dissemination of nancial
statements may differ from legislation in other jurisdictions.
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Independent auditors report
to the members of SABMiller plc
We have audited the company nancial statements of SABMiller plc
for the year ended 31 March 2012 which comprise the company
balance sheet and the related notes. The nancial reporting
framework that has been applied in their preparation is applicable
lawand United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors responsibilities,
the directors are responsible for the preparation of the company
nancial statements and for being satised that they give a true and
fair view. Our responsibility is to audit and express an opinion on the
company nancial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Boards Ethical
Standards for Auditors.
This report, including the opinions, has been prepared for and only for
the companys members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do
not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown
orinto whose hands it may come save where expressly agreed by
ourprior consent in writing.
Scope of the audit of the nancial statements
An audit involves obtaining evidence about the amounts and
disclosures in the nancial statements sufcient to give reasonable
assurance that the nancial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to the
companys circumstances and have been consistently applied and
adequately disclosed; the reasonableness of signicant accounting
estimates made by the directors; and the overall presentation of the
nancial statements. In addition, we read all the nancial and
non-nancial information in the SABMiller plc Annual Report to identify
material inconsistencies with the audited nancial statements. If we
become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on nancial statements
In our opinion the company nancial statements:
give a true and fair view of the state of the companys affairs as at
31 March 2012;
have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the
Companies Act 2006.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:
the part of the directors remuneration report to be audited has
been properly prepared in accordance with the Companies Act
2006; and
the information given in the directors report for the nancial year for
which the company nancial statements are prepared is consistent
with the company nancial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where
the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the company,
or returns adequate for our audit have not been received from
branches not visited by us; or
the company nancial statements and the part of the directors
remuneration report to be audited are not in agreement with the
accounting records and returns; or
certain disclosures of directors remuneration specied by law
arenot made; or
we have not received all the information and explanations we
require for our audit.
Other matter
We have reported separately on the consolidated nancial statements
of SABMiller plc for the year ended 31 March 2012.
Richard Hughes (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
11 June 2012
Balance sheet of SABMiller plc
at 31 March
Notes
2012
US$m
2011
US$m
Fixed assets
Tangible xed assets 2 119 100
Investments in subsidiary undertakings 3 17,083 17,052
17,701 17,477
Current assets
Debtors 4 6,621 7,738
Short-term deposits 5 293 695
6,920 8,436
Creditors amounts falling due within one year 6 (1,081) (2,654)
Net current assets 5,839 5,782
Total assets less current liabilities 23,540 23,259
Creditors amounts falling due after more than one year 7 (7,646) (8,927)
Net assets 15,894 14,332
Capital and reserves
Share capital 166 166
Share premium 6,480 6,384
Merger relief reserve 4,586 4,586
Other reserves (1,198) (1,219)
Prot and loss account 5,860 4,415
Total shareholders funds 9 15,894 14,332
The nancial statements on pages 167 to 177 were approved by the board of directors on 11 June 2012 and were signed on its behalf by:
Graham Mackay Jamie Wilson
Chief Executive Chief Financial Ofcer
Advantage has been taken of the provisions of section 408(3) of the Companies Act, 2006 which permit the omission of a separate prot and
loss account for SABMiller plc. The prot for the parent company for the year was US$2,661 million (2011: US$1,476 million).
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1. Accounting policies
a) Basis of preparation
SABMiller plc (the company) is a public limited company incorporated
in Great Britain and registered in England and Wales. The company
nancial statements have been prepared in accordance with the
Companies Act 2006 and with accounting standards applicable
intheUnited Kingdom (UK GAAP).
The nancial statements are prepared on the going concern basis,
under the historical cost convention, as modied by certain nancial
assets and nancial liabilities (including derivative instruments) at fair
value through prot and loss. The principal accounting policies, which
have been applied consistently throughout the year are set out below.
b) Investments in subsidiary undertakings
These comprise investments in shares and loans that the directors
intend to hold on a continuing basis in the companys business.
Theinvestments are stated at cost less provisions for impairment.
c) Foreign currencies
The nancial statements are presented in US dollars which is the
companys functional and presentational currency.
The South African rand (ZAR) and British pound (GBP) exchange rates
to the US dollar used in preparing the company nancial statements
were as follows:
Weighted average rate Closing rate
ZAR GBP ZAR GBP
Year ended 31 March 2012 7.48 0.63 7.67 0.62
Year ended 31 March 2011 7.15 0.64 6.77 0.62
Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance sheet date
orat the related forward contract rate with the resultant translation
differences being included in operating prot, other than those arising
on nancial liabilities which are recorded within net nance costs.
Non-monetary items that are measured in terms of historical cost in
aforeign currency are translated at the rate of exchange ruling at the
date of the transaction. All other non-monetary items denominated in
a foreign currency are translated at the rate of exchange ruling at the
balance sheet date.
d) Tangible xed assets and depreciation
Tangible xed assets are stated at cost net of accumulated
depreciation and impairment losses. Cost includes the original
purchase price of the assets and the costs attributable to bringing
theasset to its working condition for the intended use.
No depreciation is provided on freehold land or assets in the course of
construction. In respect of all other tangible xed assets, depreciation
is provided on a straight-line basis at rates calculated to write off the
cost, less the estimated residual value of each asset, evenly over its
expected useful life as follows:
Ofce equipment and software 2-30 years
Leasehold land and buildings Shorter of the lease term or 50 years
The company regularly reviews its depreciation rates to take account
of any changes in circumstances. When setting useful economic lives,
the principal factors the company takes into account are the expected
rate of technological developments, expected market requirements for
the equipment and the intensity at which the assets are expected to
be used. The prot or loss on the disposal of an asset is the difference
between the disposal proceeds and the net book value of the asset.
e) Impairment
In accordance with FRS 11 Impairment of xed assets and goodwill,
long term assets are subject to an impairment review if circumstances
or events change to indicate that the carrying value may not be fully
recoverable. The review is performed by comparing the carrying value
of the long term asset to its recoverable amount, being the higher of
the net realisable value and value in use. The net realisable value is
considered to be the amount that could be obtained on disposal of
the asset. The value in use of the asset is determined by discounting,
at a market based discount rate, the expected future cash ows
resulting from its continued use, including those arising from its nal
disposal. When the carrying values of long term assets are written
down by any impairment amount, the loss is recognised in the prot
and loss account in the period in which it is incurred. Should
circumstances or events change and give rise to a reversal of a
previous impairment loss, the reversal is recognised in the prot
andloss account in the period in which it occurs and the carrying
value of the asset is increased.
The increase in the carrying value of the asset will only be up to
theamount that it would have been had the original impairment not
occurred. For the purpose of conducting impairment reviews, income
generating units are considered to be groups of assets and liabilities
that generate income, and are largely independent of other income
streams. They also include those assets and liabilities directly involved
in producing the income and a suitable proportion of those used to
produce more than one income stream.
f) Financial assets and nancial liabilities
Financial assets and nancial liabilities are initially recorded at fair
value (plus any directly attributable transaction costs except in the
case of those classied at fair value through prot or loss). For those
nancial instruments that are not subsequently held at fair value, the
company assesses whether there is any objective evidence of
impairment at each balance sheet date.
Financial assets are recognised when the company has rights or other
access to economic benets. Such assets consist of cash, equity
instruments, a contractual right to receive cash or another nancial
asset, or a contractual right to exchange nancial instruments with
another entity on potentially favourable terms. Financial assets are
derecognised when the rights to receive cash ows from the asset
have expired or have been transferred and the company has
transferred substantially all risks and rewards of ownership.
Financial liabilities are recognised when there is an obligation to
transfer benets and that obligation is a contractual liability to deliver
cash or another nancial asset or to exchange nancial instruments
with another entity on potentially unfavourable terms. Financial
liabilities are derecognised when they are extinguished, that is
discharged, cancelled or expired. If a legally enforceable right exists
toset off recognised amounts of nancial assets and liabilities, which
are in determinable monetary amounts, and there is the intention to
settle net, the relevant nancial assets and liabilities are offset. Interest
costs are charged to the income statement in the year in which they
accrue. Premiums or discounts arising from the difference between
the net proceeds of nancial instruments purchased or issued and
theamounts receivable or repayable at maturity are included in the
effective interest calculation and taken to net interest payable over
thelife of the instrument.
Notes to the company nancial statements
(i) Loans and receivables
Loans and receivables are non-derivative nancial assets with xed or
determinable payments that are not quoted in an active market. They
arise when the company provides money, goods or services directly
to a debtor with no intention of trading the receivable. Loans and
receivables are included in debtors in the balance sheet.
(ii) Cash and short-term deposits
Cash and short-term deposits include cash in hand, bank deposits
repayable on demand, other short-term highly liquid investments with
original maturities of three months or less. Bank overdrafts are shown
within creditors amounts falling due within one year.
(iii) Derivative nancial assets and nancial liabilities
Derivative nancial assets and nancial liabilities are nancial
instruments whose value changes in response to an underlying
variable, require little or no initial investment and are settled in
thefuture.
Derivative nancial assets and liabilities are analysed between current
and xed assets and creditors on the face of the balance sheet,
depending on when they are expected to mature. For derivatives
thathave not been designated to a hedging relationship, all fair value
movements are recognised immediately in the prot and loss account.
See note k for the companys accounting policy on hedge accounting.
(iv) Trade creditors
Trade creditors are initially recognised at fair value and subsequently
measured at amortised cost.
Trade creditors are classied as creditors falling due within one year
unless the company has an unconditional right to defer settlement for
at least 12 months from the balance sheet date.
(v) Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs and are subsequently stated at amortised cost and include
accrued interest and prepaid interest. Borrowings are classied as
current liabilities unless the company has an unconditional right to
defer settlement of the liability for at least 12 months from the balance
sheet date. Borrowings classied as hedged items are subject to
hedge accounting requirements (see note k).
(vi) Financial guarantees
FRS 26 (Amendment) requires that issued nancial guarantees, other
than those previously asserted by the entity to be insurance contracts,
are to be initially recognised at their fair value and subsequently
measured at the higher of the amount initially recognised less
cumulative amortisation recognised and the amount determined in
accordance with FRS 12 Provisions, Contingent Liabilities and
Contingent Assets.
Financial guarantee contracts are dened in FRS 26 as contracts that
require the issuer to make specied payments to reimburse the holder
for a loss it incurs because a specied debtor fails to make payment
when due in accordance with the original or modied terms of a
debtinstrument.
Financial guarantees are amortised over the life of the guarantee,
oraccelerated if the third party obligation is settled early. The
amortisation is taken to the prot and loss account.
g) Revenue recognition
(i) Interest income
Interest income is recognised on an accruals basis using the effective
interest method.
(ii) Dividend income
Dividend income is recognised when the right to receive payment
isestablished.
h) Deferred taxation
Deferred tax is recognised in respect of all timing differences that
haveoriginated but not reversed at the balance sheet date, where
transactions or events that result in an obligation to pay more tax in
the future or a right to pay less tax in the future have occurred at the
balance sheet date.
A net deferred tax asset is regarded as recoverable and therefore
recognised only when, on the basis of all available evidence, it can
beregarded as more likely than not that there will be suitable taxable
prots against which to recover carried forward tax losses and from
which the future reversal of underlying timing differences can be
deducted.
Deferred tax is measured at the tax rates that are expected to apply
inthe periods in which the timing differences are expected to reverse,
based on tax rates and laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax is measured on a
non-discounted basis.
i) Dividend distributions
In accordance with FRS 21, dividend distributions to equity holders
are recognised as a liability in the nancial statements of the company
in the period in which the dividends are approved by the companys
shareholders. Interim dividends are recognised when paid. Dividends
declared after the balance sheet date are not recognised, as there is
no present obligation at the balance sheet date.
j) Share-based compensation
The company operates several equity-settled share-based
compensation schemes. These include share option plans (with and
without non-market performance conditions attached), performance
share award plans (with market conditions attached) and awards
related to the employee element of the Broad-Based Black Economic
Empowerment (BBBEE) scheme in the South Africa. In addition the
company has granted an equity-settled share-based payment to
retailers in relation to the retailer component of the BBBEE scheme.
In accordance with FRS 20, an expense is recognised to spread the
fair value at date of grant of each award granted after 7 November
2002 over the vesting period on a straight-line basis, after allowing
foran estimate of the share awards that will eventually vest. A
corresponding adjustment is made to equity over the remaining
vesting period. The estimate of the level of vesting is reviewed at least
annually, with any impact on the cumulative charge being recognised
immediately. The charge is based on the fair value of the award at the
date of grant, as calculated by binomial model calculations and Monte
Carlo simulations.
The charge is not reversed if the options have not been exercised
because the market value of the shares is lower than the option
priceat the date of grant. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal
value) and share premium when the options are exercised, unless
theoptions are satised by treasury or EBT shares.
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Notes to the company nancial statements continued
The issue by the company to employees of its subsidiaries of a grant
over the companys shares represents additional capital contributions
by the company to its subsidiaries, except to the extent the company
is reimbursed. An additional investment in subsidiaries results in a
corresponding increase in shareholders equity. The additional capital
contribution is based on the fair value of the grant issued allocated
over the underlying grants vesting period.
A new employee benet trust, the SABMiller Associated Companies
Employees Benet Trust (the AC-EBT), was established during the
year.The AC-EBT holds shares in SABMiller plc for the purposes of
providing share incentives for employees of companies in which
SABMiller has a signicant economic and strategic interest but over
which it does not have management control. These share options are
accounted for as cash-settled share-based payments in accordance
with FRS 20 Share-Based Payment. A liability is recognised at
fairvalue in the balance sheet over the vesting period with a
corresponding charge to the prot and loss account. The liability is
remeasured at each reporting date, on an actuarial basis using the
analytic method, to reect the revised fair value and to adjust for
changes in assumptions such as leavers. Changes in fair value of
the liability are recognised in the prot and loss account. Actual
settlement of the liability will be at its intrinsic value with the
differencerecognised in the prot and loss account.
k) Hedge accounting
The derivative instruments used by the company, which are used
solely for hedging purposes (i.e. to offset foreign exchange and
interest rate risks), comprise interest rate swaps, cross currency
swaps and forward foreign exchange contracts. Such derivative
instruments are used to alter the risk prole of an existing
underlyingexposure of the company in line with the companys
riskmanagement policies.
Derivatives are initially recorded at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair
value. The method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging instrument, and
if so, the nature of the hedging relationship.
In order to qualify for hedge accounting, the company is required
todocument the relationship between the hedged item and the
hedging instrument. The company is also required to document and
demonstrate that the relationship between the hedged item and the
hedging instrument will be highly effective. This effectiveness test is
reperformed at each period end to ensure that the hedge has
remained and will continue to remain highly effective.
The company designates certain derivatives as hedges of the fair
value of recognised assets or liabilities or a rm commitment (fair
valuehedge) or hedges of highly probable forecast transactions
orcommitments (cash ow hedge).
Where a derivative ceases to meet the criteria of being a hedging
instrument or the underlying exposure which it is hedging is sold,
matures or is extinguished, hedge accounting is discontinued and
amounts previously recorded in equity are recycled to the prot and
loss account. A similar treatment is applied where the hedge is of a
future transaction and that transaction is no longer likely to occur.
When the hedge is discontinued due to ineffectiveness, hedge
accounting is discontinued prospectively.
Certain derivative instruments, whilst providing effective economic
hedges under the companys policies, are not designated as hedges.
Changes in the fair value of any derivative instruments that do not
qualify or have not been designated as hedges are recognised
immediately in the prot and loss account. The company does not
hold or issue derivative nancial instruments for speculative purposes.
Fair value hedges comprise derivative nancial instruments designated
in a hedging relationship to manage the companys interest rate risk
towhich the fair value of certain assets and liabilities are exposed.
Changes in the fair value of the derivative offset the relevant changes
in the fair value of the underlying hedged item attributable to the
hedged risk in the prot and loss account in the period incurred. Gains
or losses on fair value hedges that are regarded as highly effective are
recorded in the prot and loss account together with the gain or loss
on the hedged item attributable to the hedged risk.
(ii) Cash ow hedges
Cash ow hedges comprise derivative nancial instruments
designated in a hedging relationship to manage currency and interest
rate risk to which the cash ows of certain liabilities are exposed. The
effective portion of changes in the fair value of the derivative that is
designated and qualies for hedge accounting is recognised as a
separate component of equity. The ineffective portion is recognised
immediately in the prot and loss account. Amounts accumulated in
equity are recycled to the prot and loss account in the period in
which the hedged item affects prot or loss. However, where a
forecasted transaction results in a non-nancial asset or liability, the
accumulated fair value movements previously deferred in equity are
included in the initial cost of the asset or liability.
Details of the groups nancial risk management objectives and
policies are provided in note 23 to the consolidated nancial
statements of the group.
l) Operating leases
Rentals paid on operating leases are charged to the prot and loss
account on a straight-line basis over the lease term.
m) Pension obligations
The company operates a dened contribution scheme. Contributions
to this scheme are charged to the prot and loss account as incurred.
2. Tangible xed assets

Assets in
course of
construction
US$m
Short
leasehold
land and
buildings
US$m
Ofce
equipment
and software
US$m
Total
US$m
Cost
At 1 April 2010 39 19 68 126
Additions 40 40
Transfers (47) 5 42
At 31 March 2011 32 24 110 166
Additions 27 9 4 40
Disposals (1) (1)
Transfers (5) 5
At 31 March 2012 54 32 119 205
Accumulated depreciation
At 1 April 2010 10 37 47
Depreciation charge for the year 3 16 19
At 31 March 2011 13 53 66
Depreciation charge for the year 4 16 20
At 31 March 2012 17 69 86
Net book amount
At 1 April 2010 39 9 31 79
At 31 March 2011 32 11 57 100
At 31 March 2012 54 15 50 119
3. Investment in subsidiary undertakings

Shares
US$m
Loans
US$m
Total
US$m
At 1 April 2010 12,797 3,627 16,424
Additions 599 599
Capital contribution relating to share-based payments 184 184
Repayments (162) (162)
At 31 March 2011 13,580 3,472 17,052
Exchange adjustments (10) (10)
Additions 95 95
Impairment provision
1
(140) (140)
At 31 March 2012 13,621 3,462 17,083
1
During the year the company recorded an impairment provision of US$90 million against its investment in SABMiller Management Services BV, US$45.5 million
against its investment in SABMiller Capital UK Ltd and US$0.5 million against its investment in SABMiller Asia Capital LLP.
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3. Investment in subsidiary undertakings continued
The investment in subsidiary undertakings is shown as follows (all interests are 100% direct investments unless stated otherwise):
Name Country of incorporation Principal activity
2012
US$m
2011
US$m
SABMiller Holdings Ltd United Kingdom Holding company 5,437 5,437
Miller Brands (UK) Ltd United Kingdom Sales and distribution 39 39
SAB Finance (Cayman Islands) Ltd Cayman Islands Finance company
Safari Ltd Jersey Finance company
SABMiller Management BV Netherlands Group management services 90
SABMiller Africa & Asia BV Netherlands Holding company 178 178
Appletiser International BV Netherlands Holding company
SABMiller (Safari) United Kingdom Finance company 506 506
Pilsner Urquell International BV Netherlands Holding company
SABMiller Holdings Europe Ltd United Kingdom Holding company 2,098 2,053
Racetrack Colombia Finance SA
1
Colombia Finance company
SABMiller Poland BV Netherlands Holding company 4,976 4,976
SABMiller Horizon Ltd United Kingdom Agent company
SABSA Holdings (Pty) Ltd
2
South Africa Holding company 5 5
SABMiller Capital UK Ltd United Kingdom Holding company
SABMiller Asia Capital LLP
3
United Kingdom Finance company
13,239 13,284
13,621 13,580
1
94.9% direct interest and 100% effective interest.
2
SABMiller plc contributed ZAR36 million towards the cost of guarantee fee to SABSA Holdings (Pty) Ltd, a fellow group undertaking. It has no direct interest in
the share capital of that company.
3
1% direct interest and 100% effective interest.
4. Debtors

2012
US$m
2011
US$m
Amounts owed by subsidiary undertakings 6,476 7,624
Amounts owed by associated undertakings 60
Other debtors 61 114
Deferred tax 24
6,621 7,738
Included in the table above are debtors due after more than one year of US$2 million (2011: US$nil).
5. Short-term deposits

2012
US$m
2011
US$m
Short-term deposits 293 695
The company has short-term deposits in US dollars (USD). The effective interest rates were USD 0.23% (2011: 0.88% and USD 1.04%).
6. Creditors amounts falling due within one year

2012
US$m
2011
US$m
Bank overdrafts 2 359
Bank loans 53
US$600 million 6.2% Notes due 2011 609
Amounts owed to subsidiary undertakings 846 1,432
Taxation and social security 29 20
Derivative nancial instruments (see note 8) 4 80
Trade and other creditors 55 41
Accruals and deferred income 80 58
Dividends payable to shareholders 2 2
Guarantee fee liability 63
1,081 2,654
7. Creditors amounts falling due after more than one year

2012
US$m
2011
US$m
1
1,099 1,116
1,000 million 4.5% Notes due 2015
2
1,367 1,417
2
416 361
2
960 943
2
588 594
2
811 759
PEN 150 million 6.75% Notes due 2015
2
56 53
140 million revolving credit facility
2
99
Loans from subsidiary undertakings
3
1,938 3,560
Derivative nancial instruments (see note 8) 38 14
Other creditors 9 4
Deferred income 7 7
Guarantee fee liability 357
7,646 8,927
The maturity of creditors falling due after more than one year is as follows:
Between 1 and 2 years 1,153 119
Between 2 and 5 years 5,007 6,764
After 5 years 1,486 2,044
7,646 8,927
1
On 30 June 2008, notes previously held by Miller Brewing Company and guaranteed by SABMiller plc and SABMiller Finance BV were novated to SABMiller plc
and the guarantee terminated. The notes mature on 15 August 2013. The notes are redeemable in whole or in part at any time at the option of the issuer at a
redemption price equal to the make whole amount. The notes are redeemable in whole but not in part at the option of the issuer upon occurrence of certain
changes in taxation at their principal amount with accrued and unpaid interest to the date of redemption.
In addition, interest rate swaps to pay oating and receive xed interest previously held by Miller Brewing Company have been novated to SABMiller plc which
have been designated as fair value hedges to hedge exposure to changes in the fair value of the xed rate borrowings. As a result, fair value gains or losses on
the hedged borrowings have been recognised in SABMiller plc from the date the interest rate swaps were novated (this differs from the date of inception in the
consolidated nancial statements of the group).
2
Further information relating to the revolving credit facility and the Notes is detailed in note 22 to the consolidated nancial statements of the group.
3
Loans from subsidiary undertakings are unsecured, repayable in 2015 and bear interest at a rate of 1.236%.
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8. Derivative nancial instruments

Assets
2012
US$m
Liabilities
2012
US$m
Assets
2011
US$m
Liabilities
2011
US$m
Current derivative nancial instruments
Forward foreign currency contracts 4 (4) 1 (21)
Forward foreign currency contracts as cash ow hedges 2 2
Cross currency swaps (59)
6 (4) 3 (80)
Non-current derivative nancial instruments
Forward foreign currency contracts 43 (31)
Interest rate swaps designated as fair value hedges 351 268 (4)
Cross currency swaps 105 (7) 57 (10)
499 (38) 325 (14)
Derivatives designated as hedging instruments
(i) Cash ow hedges
The company has entered into forward exchange contracts designed as cash ow hedges to manage short-term foreign currency exchange
exposures to future creditor payments. As at 31 March 2012, the notional amounts of these contracts was GBP119 million and AUD1 million
(2011: GBP120 million).
(ii) Fair value hedges
The company has entered into interest rate swaps to pay oating and receive xed interest which have been designated as fair value hedges
tomanage changes in the fair value of its xed rate borrowings. The borrowings and interest rate swaps have the same critical terms.
As at 31 March 2012, the xed interest rates received vary from 4.5% to 6.625% (2011: 4.5% to 6.625%) and oating interest rates paid vary
from LIBOR/EURIBOR plus 71.6 bps to LIBOR/EURIBOR plus 198.8 bps (2011: LIBOR/EURIBOR plus 71.6 bps to LIBOR/EURIBOR plus 198.8
bps) on the notional amount. As at 31 March 2012, the carrying value of the hedged borrowings was US$3,191 million (2011: US$3,187 million).
Standalone derivative nancial instruments
(i) Forward foreign currency contracts
The company has entered into several forward foreign currency contracts to manage the groups exposure to foreign exchange risk on the
investments in subsidiaries in South Africa, Colombia, the Czech Republic, Peru and Australia.
(ii) Cross currency swaps
The company has entered into several cross currency swaps to manage the groups exposure to foreign exchange risk relating to subsidiaries
in South Africa, Poland and the Netherlands.
(iii) Interest rate swaps
The company holds a number of interest rate swaps to receive oating rates and pay xed rates, held as an economic offset to a number of
interest rate swaps that receive xed rates and pay oating rates that were previously held in a fair value hedge relationship.
Analysis of notional amounts on all outstanding nancial instruments held by the company is as follows:

2012
m
2011
m
Forward foreign currency contracts
SA rand 245 1,525
Colombian peso 490,476
Australian dollar 500
Czech koruna 6,825 5,500
Peruvian nuevo sol 631
Euro 21
Pounds sterling 125
Russian rouble 2,530
Interest rate swaps
Fair value hedges
US dollar 1,750 2,225
Euro 500 500
SA rand 1,404 2,799
Polish zloty 433 1,092
Euro 317 317
Czech koruna 2,258
Russian rouble 1,400
Fair values of nancial assets and nancial liabilities

Book value
2012
US$m
Fair value
2012
US$m
Book value
2011
US$m
Fair value
2011
US$m
Current borrowings 2 2 1,021 1,021
Non-current borrowings 7,218 7,592 8,902 9,398
Derivatives, cash and cash equivalents, short-term deposits, debtors and creditors (excluding borrowings) are not included in the table
abovebecause their book values are an approximation of their fair values. The fair value of the companys xed rate loans are calculated by
discounting expected future cash ows using the appropriate yield curve. The book values of oating rate borrowings approximate to their
fairvalue.
Fair value loss on nancial instruments recognised in the prot and loss account

2012
US$m
2011
US$m
Derivative nancial instruments:
Forward foreign currency contracts (108) (53)
Interest rate swaps designated as cash ow hedges 1
Interest rate swaps designated as fair value hedges 100 13
Cross currency swaps 107 (71)
Guarantee fees 22 8
121 (102)
Other nancial instruments:
Non-current borrowings designated as the hedged item in a fair value hedge (156) (14)
Total fair value loss on nancial instruments recognised in the prot and loss account (35) (116)
Other nancial liabilities
Other nancial liabilities include guarantee fee liabilities as disclosed in notes 6 and 7.
The company has guaranteed the bank overdrafts and drawn components of bank loans of a number of subsidiaries. Under the terms of
thenancial guarantee contracts, the company will make payments to reimburse the lenders upon failure of the guaranteed entity to make
payments when due.
Terms and notional values of the liabilities guaranteed were as follows:
Year of maturity
2012
US$m
2011
US$m
2014 2,175
2015 1,000
2016 750
2017 2,054
2022 2,500
2042 1,500
9,979
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9. Reconciliation of movements in shareholders funds

Share
capital
US$m
Share
premium
US$m
Merger
relief
US$m
Hedging
reserve
US$m
EBT
US$m
Treasury
shares
US$m
Prot and
loss account
US$m
Total
US$m
At 1 April 2010 165 6,312 4,586 (4) (145) (1,097) 3,829 13,646
Issue of share capital 1 72 73
Cash ow hedges fair value gains 6 6
Capital contribution relating to share-based
payments 184 184
At 31 March 2011 166 6,384 4,586 2 (124) (1,097) 4,415 14,332
Issue of share capital 96 96
Purchases of EBT shares (52) (52)
Loan repayment from EBT 12 12
Capital contribution relating to share-based
payments 86 86
At 31 March 2012 166 6,480 4,586 2 (103) (1,097) 5,860 15,894
Foreign exchange differences recognised in the prot for the year, except for those arising on nancial instruments measured at fair value under
FRS 26, were gains of US$111 million (2011: losses of US$48 million).
Further information relating to the share capital, share premium, the treasury shares and the EBT reserve of the company is detailed in notes 26
and 27 to the consolidated nancial statements of the group. Details of share incentive schemes are provided in note 26 to the consolidated
nancial statements of the group. Details of dividends paid and proposed for the year are provided in note 9 to the consolidated nancial
statements of the group.
10. Prot and loss information
Employees
Employee costs recognised in the prot and loss during the year were as follows:

2012
US$m
2011
US$m
Wages and salaries 97 74
Social security costs 17 8
Other pension costs 7 6
157 117
Information relating to directors remuneration is included in the directors remuneration report on pages 68 to 83.
The average monthly number of employees for the year are shown on a full-time equivalent basis and includes executive directors.
2012 2011
Number of employees 405 357
Details of auditors remuneration are provided in note 3 to the consolidated nancial statements of the group.
Operating leases
Operating lease charges recognised in the prot and loss during the year were as follows:

2012
US$m
2011
US$m
Plant and machinery 4 5
Other 8 7
11. Other information
Deferred tax assets have not been recognised in respect of the following:

2012
US$m
2011
US$m
Tax losses 72 48
Capital allowances in excess of depreciation 11 10
Accruals and provisions 1 1
109 88

2012
US$m
2011
US$m
Capital expenditure contracted but not provided 2 7
The company has guaranteed borrowings in respect of certain subsidiary undertakings. Guarantee fees received from 100% owned
subsidiaries were US$22 million (2011: US$8 million). Refer to note 12 for guarantee fees paid to related parties.
At 31 March 2012 the company had annual commitments under non-cancellable operating leases as follows:

2012
US$m
2011
US$m
Land and buildings:
Within one year 1
Between two and ve years 1 2
After ve years 5 5
Other
Within one year 1
Between two and ve years 2
12. Related party transactions
Transactions with undertakings which are not wholly owned
The company has taken advantage of the exemption provided under FRS 8 not to disclose transactions with subsidiaries which are wholly
owned. During the year the company had transactions with undertakings in which it does not hold a 100% interest.

2012
US$m
2011
US$m
Interest received from subsidiaries 2 2
Guarantee fee income 1
Income from recharges to subsidiaries
1
134 76
Guarantee fee paid
2
(1) (1)
1
The company received income from recharges related to business capability programme costs.
2
The company paid guarantee fees to SABMiller Africa BV.

2012
US$m
2011
US$m
Amounts owed by subsidiaries 25 39
Amounts owed to subsidiaries (4) (6)
Loans to subsidiaries
1
60
Loans to associated undertakings
1
60
Loans from subsidiaries (36)
1
Loans to associated undertakings include balances due from BIH Angola which were previously loans to subsidiaries.
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2012
US$m
2011
1
US$m
2010
US$m
2009
US$m
2008
US$m
Income statements
Group revenue 31,388 28,311 26,350 25,302 23,828
Revenue 21,760 19,408 18,020 18,703 21,410
Operating prot 5,013 3,127 2,619 3,148 3,448
Net nance costs (562) (525) (563) (706) (456)
Share of post-tax results of associates and joint ventures 1,152 1,024 873 516 272
Taxation (1,126) (1,069) (848) (801) (976)
Non-controlling interests (256) (149) (171) (276) (265)
Prot attributable to owners of the parent 4,221 2,408 1,910 1,881 2,023
Adjusted earnings 3,400 3,018 2,509 2,065 2,147
Balance sheets
Non-current assets 50,909 34,870 33,604 28,156 31,947
Current assets 4,663 4,178 3,895 3,472 4,135
Assets of disposal group classied as held for sale 79 66
Total assets 55,651 39,114 37,499 31,628 36,082
Derivative nancial instruments (109) (135) (321) (142) (531)
Borrowings (19,226) (8,460) (9,414) (9,618) (9,658)
Other liabilities and provisions (10,296) (7,694) (7,171) (5,751) (7,649)
Liabilities of disposal group classied as held for sale (7) (66)
Total liabilities (29,638) (16,355) (16,906) (15,511) (17,838)
Net assets 26,013 22,759 20,593 16,117 18,244
Total shareholders equity 25,073 22,008 19,910 15,376 17,545
Non-controlling interests 940 751 683 741 699
Total equity 26,013 22,759 20,593 16,117 18,244
Cash ow statements
Adjusted EBITDA 6,183 5,617 5,020 4,667 4,537
EBITDA 4,979 4,502 3,974 4,164 4,518
Net working capital movements 258 66 563 (493) (242)
Net cash generated from operations 5,237 4,568 4,537 3,671 4,276
Net interest paid (407) (640) (640) (722) (502)
Tax paid (893) (885) (620) (766) (969)
Net cash inow from operating activities 3,937 3,043 3,277 2,183 2,805
Net capital expenditure and other investments (1,522) (1,245) (1,483) (2,082) (1,922)
Net investments in subsidiaries, joint ventures and associates (11,095) (183) (504) (533) (1,390)
Dividends received from joint ventures, associates and other investments 1,017 911 815 606 92
Net cash (outow)/inow before nancing and dividends (7,663) 2,526 2,105 174 (415)
Net cash inow/(outow) from nancing 8,819 (1,214) (804) 615 1,191
Dividends paid to shareholders of the parent (1,324) (1,113) (924) (877) (769)
Effect of exchange rates (39) 25 90 22 (113)
(Decrease)/increase in cash and cash equivalents (207) 224 467 (66) (106)
Per share information (US cents per share)
Basic earnings per share 266.6 152.8 122.6 125.2 134.9
Diluted earnings per share 263.8 151.8 122.1 124.6 134.2
Adjusted basic earnings per share 214.8 191.5 161.1 137.5 143.1
Net asset value per share
2
1,506.5 1,326.6 1,203.2 969.9 1,108.3
Total number of shares in issue (millions) 1,664.3 1,659.0 1,654.7 1,585.4 1,583.1
Other operating and nancial statistics
Return on equity (%)
3
13.6 13.7 12.6 13.4 12.2
EBITA margin (%) 17.9 17.8 16.6 16.3 17.4
Adjusted EBITDA margin (%) 23.0 22.9 21.7 20.9 21.2
Interest cover (times) 11.4 10.8 9.3 6.7 9.2
Free cash ow (US$m) 3,048 2,488 2,028 106 594
Total borrowings to total assets (%) 34.5 21.6 25.1 30.4 26.8
Net cash generated from operations to total borrowings (%) 27.2 54.0 48.2 38.2 44.3
Revenue per employee (US$000s) 305.9 280.4 256.9 272.5 309.8
Average monthly number of employees 71,144 69,212 70,131 68,635 69,116
1
Restated for the adjustments made to the provisional fair values relating to the CASA Isenbeck and Crown Beverages Ltd acquisitions.
2
Net asset value per share is calculated by dividing total shareholders equity by the closing number of shares in issue.
3
This is calculated by expressing adjusted earnings as a percentage of total shareholders equity.
Five-year nancial review
for the years ended 31 March
2012
US$m
2011
US$m
2010
US$m
2009
US$m
2008
US$m
Group revenue
Segmental analysis
Latin America 7,158 6,335 5,905 5,495 5,251
Europe 5,482 5,394 5,577 6,145 5,248
North America 5,250 5,223 5,228 5,227 5,120
Africa 3,686 3,254 2,716 2,567 n/a
Asia Pacic 3,510 2,026 1,741 1,565 n/a
Africa and Asia Pacic 3,367
South Africa:
Beverages 5,815 5,598 4,777 3,955 4,446
Hotels and Gaming 487 481 406 348 396
Group 31,388 28,311 26,350 25,302 23,828
Operating prot (excluding share of associates and joint ventures)
Segmental analysis
Latin America 1,736 1,497 1,270 1,057 953
Europe 804 857 840 900 947
North America 16 12 230 462
Africa 422 365 316 354 n/a
Asia Pacic 124 (22) (34) (2) n/a
Africa and Asia Pacic 330
South Africa: Beverages 1,091 997 826 704 962
Corporate (190) (147) (139) (97) (94)
Group operating prot before exceptional items 3,987 3,563 3,091 3,146 3,560
Exceptional credit/(charge)
Latin America (119) (106) (156) 45 (61)
Europe 1,135 (261) (202) (452)
North America 409 (51)
Africa 162 (4) (3) n/a
Asia Pacic (70) n/a
Africa and Asia Pacic
South Africa: Beverages (41) (188) (53)
Corporate (41) 123 (58)
1,026 (436) (472) 2 (112)
Group operating prot after exceptional items 5,013 3,127 2,619 3,148 3,448
EBITA
Segmental analysis
Latin America 1,865 1,620 1,386 1,173 1,071
Europe 836 887 872 944 952
North America 756 741 619 581 477
Africa 743 647 565 562 n/a
Asia Pacic 321 92 71 80 n/a
Africa and Asia Pacic 568
South Africa:
Beverages 1,168 1,067 885 764 1,026
Hotels and Gaming 135 137 122 122 141
Corporate (190) (147) (139) (97) (94)
Group 5,634 5,044 4,381 4,129 4,141
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Denitions
Financial denitions
Adjusted earnings
Adjusted earnings are calculated by adjusting headline earnings
(asdened below) for the amortisation of intangible assets (excluding
software), integration and restructuring costs, the fair value
movements in relation to capital items for which hedge accounting
cannot be applied and other items which have been treated as
exceptional but not included above or as headline earnings
adjustments together with the groups share of associates and joint
ventures adjustments for similar items. The tax and non-controlling
interests in respect of these items are also adjusted.
Adjusted EBITDA
This comprises EBITDA (as dened below) before cash ows
fromexceptional items and includes dividends received from our
jointventure, MillerCoors. Dividends received from MillerCoors
approximate to the groups share of the EBITDA of the MillerCoors
joint venture.
Adjusted EBITDA margin
This is calculated by expressing adjusted EBITDA as a percentage
ofrevenue plus the groups share of MillerCoors revenue.
Adjusted net nance costs
This comprises net nance costs excluding fair value movements in
relation to capital items for which hedge accounting cannot be applied
and any exceptional nance charges or income.
Adjusted prot before tax
This comprises EBITA less adjusted net nance costs and less the
groups share of associates and joint ventures net nance costs
onasimilar basis.
Constant currency
Constant currency results have been determined by translating the
local currency denominated results for the year ended 31 March at
theexchange rates for the prior year.
EBITA
This comprises operating prot before exceptional items, amortisation
of intangible assets (excluding software) and includes the groups
share of associates and joint ventures operating prot on a
similarbasis.
EBITA margin (%)
This is calculated by expressing EBITA as a percentage of group
revenue.
EBITDA
This comprises the net cash generated from operations before
working capital movements. This includes cash ows relating to
exceptional items incurred in the year.
EBITDA margin (%)
This is calculated by expressing EBITDA as a percentage of revenue.
Effective tax rate (%)
The effective tax rate is calculated by expressing tax before tax
onexceptional items and on amortisation of intangible assets
(excluding software), including the groups share of associates
andjoint ventures tax on the same basis, as a percentage of
adjustedprotbefore tax.
Free cash ow
This comprises net cash generated from operating activities less cash
paid for the purchase of property, plant and equipment, and intangible
assets, net investments in existing associates and joint ventures
(inboth cases only where there is no change in the groups effective
ownership percentage) and dividends paid to non-controlling interests
plus cash received from the sale of property, plant and equipment and
intangible assets and dividends received.
Group revenue
This comprises revenue together with the groups share of revenue
from associates and joint ventures.
Headline earnings
Headline earnings are calculated by adjusting prot for the nancial
period attributable to owners of the parent for items in accordance
with the South African Circular 3/2009 entitled Headline Earnings.
Such items include impairments of non-current assets and prots or
losses on disposals of non-current assets and their related tax and
non-controlling interests. This also includes the groups share of
associates and joint ventures adjustments on the same basis.
Interest cover
This is the ratio of adjusted EBITDA to adjusted net nance costs.
Net debt
This comprises gross debt (including borrowings, borrowings-related
derivative nancial instruments, overdrafts and nance leases) net of
cash and cash equivalents (excluding overdrafts).
Organic information
Organic results and volumes exclude the rst 12 months results and
volumes relating to acquisitions and the last 12 months results and
volumes relating to disposals.
Total Shareholder Return (TSR)
TSR is the measure of the returns that a company has provided for
itsshareholders, reecting share price movements and assuming
reinvestment of dividends.
Sales volumes
In the determination and disclosure of sales volumes, the group
aggregates 100% of the volumes of all consolidated subsidiaries and
its equity accounted percentage of all associates and joint ventures
volumes. Contract brewing volumes are excluded from volumes
although revenue from contract brewing is included within group
revenue. Volumes exclude intra-group sales volumes. This measure
ofvolumes is used for lager volumes, soft drinks volumes, other
alcoholic beverage volumes and beverage volumes and is used in the
segmental analyses as it more closely aligns with the consolidated
group revenue and EBITA disclosures.
In the determination and disclosure of aggregated sales volumes,
thegroup aggregates 100% of the volumes of all consolidated
subsidiaries, associated companies and joint ventures. Contract
brewing volumes are excluded from aggregated volumes although
revenue from contract brewing is included within group revenue.
Aggregated volumes exclude intra-group sales volumes. This
measureis used for aggregated beverage volumes and for
aggregated lager volumes.
KPI denitions How we measure
Total Shareholder Return (TSR) in excess of the median
ofpeer group over three-year periods
TSR performance is measured by taking the percentage growth in
ourTSR over the three-year period to the date aligned with the related
measurement date of performance share awards for the excom, and
deducting the percentage growth in the TSR of the median of our peer
group over the same period.
Growth in adjusted earnings per share (EPS)
Growth in adjusted EPS is measured by comparing the adjusted
EPSfor the current year with that of the prior year. Adjusted EPS is
measured using adjusted earnings divided by the basic number of
shares in issue. Adjusted earnings are measured using the denition
on page 180.
Free cash ow
Free cash ow is measured using the denition on page 180.
Proportion of our total lager volume from markets in which
wehave No. 1 or No. 2 national market share positions
Lager volumes generated in markets where we have a number one or
number two national beer market share position divided by total lager
volumes. Lager volumes are measured as dened on page 180.
Proportion of group EBITA from developing and emerging
economies
EBITA generated in developing and emerging economies divided by
group EBITA before corporate costs. EBITA is dened on page 180.
Developing and emerging economies are as dened by the
International Monetary Fund (IMF).
Organic growth in lager volumes
Organic growth in lager volumes is measured by comparing lager
volumes in the year with those in the prior year excluding the effects
ofacquisitions and disposals (organic information is dened on page
180). Lager volumes are measured as dened on page 180.
Group revenue growth (organic, constant currency)
Growth in group revenue compared with the prior year is measured on
a constant currency basis (as dened on page 180) and excluding the
effects of acquisitions and disposals (organic information is dened on
page 180). Group revenue is dened on page 180.
Revenue growth in premium brands (constant currency)
Growth in revenue from sales of premium brands compared with the
prior year is measured on a constant currency basis (as dened on
page 180). Premium brands are those in the premium segment as
dened on this page.
EBITA growth (organic, constant currency)
EBITA growth compared with the prior year is measured on a constant
currency basis (as dened on page 180) and excluding the effects of
acquisitions and disposals (organic information is dened on page
180). EBITA is dened on page 180.
EBITA margin
EBITA margin is dened on page 180.
Hectolitres of water used at our breweries per hectolitre
oflager produced
Water used at our breweries divided by the volume of lager produced.
All consolidated subsidiaries are included on a 100% basis together
with the equity accounted percentage share of the MillerCoors
jointventure.
Fossil fuel emissions from energy used at our breweries
perhectolitre of lager produced
Fossil fuel emissions are measured by the total amount of carbon
dioxide (CO2) in kilograms released to the atmosphere by our
breweryoperations divided by the volume of lager produced. The
totalamount of CO2 is the sum of direct emissions produced by
thecombustion of fuel (e.g. coal, oil, gas) and indirect emissions from
the use of electricity and steam. Emissions are calculated using the
internationally recognised WRI/WBCSD Greenhouse Gas Protocol.
Allconsolidated businesses are included on a 100% basis together
with the equity accounted percentage share of the MillerCoors
jointventure.
Cumulative nancial benets from our business capability
programme
Incremental cash ows generated as a result of the adoption of new
processes and systems including incremental revenues, reduced cost
of goods sold and overheads, reduced investment in working capital
and lower cost of capital investments.
Non-nancial denitions
Corporate Governance Code
The UK Corporate Governance Code, published by the UKFinancial
Reporting Council.
Direct economic value generated
Revenue plus interest and dividendreceipts, royalty income and
proceeds of sales of assets (inaccordance with guidance by the
Global Reporting Initiative GRIEC1).
Economy segment
Taking the leading brand in the most popular pack type as the
standard (=100), brands with a weighted average market price which
fall below an index of 90 form the economy segment. Normally, all
brands in this segment will be local brands.
International brewers index
The index of international brewers charts the share price
progressionof the companys closest peers in the global brewing
industry Anheuser-Busch InBev (Anheuser-Busch and InBev
included separately, until the acquisition of Anheuser-Busch by InBev
on 17November 2008), Carlsberg, Heineken and Molson Coors,
relative to 1 April 2008. The index is weighted relative to the market
capitalisation of the brewers as at 1 April 2008.
Mainstream segment
standard (=100), the mainstream segment is formed of brands with
aweighted average market price which fall into the 90-109 band.
Mainstream brands tend to be local.
PET
PET is short for polyethylene terephthalate, a form of plastic which
isused for bottling alcoholic and non-alcoholic drinks.
Premium segment (worthmore segment in the USA)
standard (=100), brands with a weighted average market price which
have an index of 110+ form the premium segment. The premium
segment comprises both local, regional and global brands.
STRATE
STRATE stands for Share Transactions Totally Electronic and is
anunlisted company owned by JSE Limited and Central Securities
Depository Participants (CSDP) and exists to allow share transactions
in South Africa to be settled electronically.
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Listed below are analyses of holdings extracted from the register of ordinary shareholders as at year end:
Number of
shareholders
Percentage of
share capital
Portfolio size
1 1,000 39,933 0.71
1,001 10,000 8,551 1.56
10,001 100,000 1,460 3.06
100,001 1,000,000 528 10.21
1,000,001 and over 147 84.46
50,619 100.00
Category
Banks 205 4.76
Endowment Funds 408 0.18
Individuals 36,303 1.70
Insurance Companies 96 1.03
Investment Companies 88 0.45
Medical Aid Schemes 25 0.03
Mutual Funds 462 4.52
Nominees & Trusts 10,894 52.23
Other Corporate Entities 1,578 27.47
Pension Funds 560 7.63
50,619 100.00
Substantial shareholdings
As at 8 June 2012, we had received the following notications of interests in voting rights of the issued share capital of the company pursuant
to Rule 5.1.2 of the Disclosure and Transparency Rules:
Date of
notication
Number of
shares
Percentage
of issued
share capital
Altria Group, Inc. 29 May 2009 430,000,000 27.39
BevCo Ltd 20 March 2007 225,000,000 14.98
Public Investment Corporation 13 January 2009 67,663,248 4.49
Kulczyk Holding S.A. 29 May 2009 60,000,000 3.82
The Companies Act requires disclosure of persons with signicant direct or indirect holdings of securities as at year end. At the year end we
were aware of the following shareholdings:
Percentage
of issued
share capital
Altria Group, Inc. 27.01
BevCo Ltd 14.13
Public Investment Corporation 5.01
Allan Gray Investment Council 3.18
Kulczyk Holding S.A. 3.01
Ordinary shareholding analyses
Financial reporting calendar and annual general meeting
Interim management statement and annual general meeting July 2012
Announcement of interim results, for half-year to September November 2012
Interim management statement January 2013
Preliminary announcement of annual results May 2013
Annual nancial statements published June 2013
Dividends Declared Paid
Ordinary:
Interim November December
Final May August
Unsolicited investment advice warning to shareholders
Many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment
matters. These are typically from overseas-based brokers who target UK shareholders offering to sell them what often turn out to be
worthless or high-risk shares in US or UK investments. They can be very persistent and extremely persuasive. A 2006 survey by the Financial
Services Authority (FSA) reported that the average amount lost by investors was around 20,000. It is not just the novice investor that has
been duped in this way; many of the victims had been successfully investing for several years. Shareholders are advised to be very wary of
anyunsolicited advice, offers to buy shares at a discount or offers of free reports into the company.
If you receive any unsolicited investment advice:
Make sure you get the correct name of the person and organisation.
Check that they are properly authorised by the FSA before getting involved. You can check at www.fsa.gov.uk/register/home.do.
The FSA also maintains on its website a list of unauthorised overseas rms who are targeting, or have targeted, UK investors and any
approach from such organisations should be reported to the FSA so that this list can be kept up to date and any other appropriate action
can be considered.
Report the matter to the FSA either by calling 0845 6061234 or by completing an online form at:
http://www.fsa.gov.uk/Pages/Doing/ Regulated/Law/Alerts/form.shtml.
If you deal with an unauthorised rm, you would not beeligible to receive payment under the Financial Services Compensation Scheme.
South African shareholders may report such approaches to the Financial Services Board (FSB) on:
Toll Free: 0800 110443 or 0800 202087
Facsimile: 012 346 6941
Email: [email protected]
Complete the FSB online complaint form which can be found on their website www.fsb.co.za.
Shareholders diary
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SABMiller plc
Incorporated in England and Wales (Registration No. 3528416)
General Counsel and
Group Company Secretary
John Davidson
Registered ofce
SABMiller House
Church Street West
Woking
Surrey, England
GU21 6HS
Facsimile +44 1483 264103
Telephone +44 1483 264000
Head ofce
One Stanhope Gate
London, England
W1K 1AF
Facsimile +44 20 7659 0111
Telephone +44 20 7659 0100
Internet address
www.sabmiller.com
Investor relations
Telephone +44 20 7659 0100
[email protected]
Sustainable development
Telephone +44 1483 264134
[email protected]
Independent auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London, England
WC2N 6RH
Facsimile +44 20 7212 4652
Telephone +44 20 7583 5000
Registrar (United Kingdom)
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, England
BR3 4TU
Facsimile +44 20 8658 2342
Telephone +44 20 8639 3399
(outside UK)
Telephone 0871 664 0300
(from UK calls cost 10p per minute
plus network extras, lines are open
8.30am-5.30pm Mon-Fri)
[email protected]
www.capitaregistrars.com
Registrar (South Africa)
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Facsimile +27 11 688 5248
Telephone +27 11 370 5000
United States ADR Depositary
BNY Mellon
Shareholder Services
PO Box 358516
Pittsburgh PA 15252-8516
United States of America
Telephone +1 888 269 2377
Telephone +1 888 BNY ADRS
(toll free within the USA)
Telephone: +1 201 680 6825 (outside USA)
[email protected]
www.adrbnymellon.com
Administration
The paper used in the report contains 75% recycled content, all of
whichis sourced from de-inked post-consumer waste. All of the pulp
isbleached using an elemental chlorine free process (ECF). Printed in
the UK by Pureprint using their environmental printing technology, and
vegetable inks were used throughout. Pureprint is a CarbonNeutral

company. Both manufacturing mill and the printer are registered to
theEnvironmental Management System ISO14001 and are Forest
Stewardship Council
(FSC) chain-of-custody certied.

Designed by Further
furthercreative.co.uk
Product photography by Jonathan Knowles
www.jknowles.co.uk
This document does not constitute an offer to sell or issue
orthe solicitation of an offer to buy or acquire ordinary shares
in the capital of SABMiller plc (the company) or any other
securities of the company in any jurisdiction or an inducement
to enter into investment activity.
This document is intended to provide information to shareholders.
Itshould not be relied upon by any other party or for any other
purpose. This document includes forward-looking statements
withrespect to certain of SABMiller plcs plans, current goals and
expectations relating to its future nancial condition, performance
andresults. These statements contain the words anticipate,
believe,intend, estimate, expect and words of similar meaning.
Allstatements other than statements of historical facts included in
thisdocument, including, without limitation, those regarding the
companys nancial position, business strategy, plans and objectives
of management for future operations (including development plans
and objectives relating to the companys products and services) are
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other important factors
that could cause the actual results, performance or achievements
ofthe company to be materially different from future results,
performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements are based on
numerous assumptions regarding the companys present and future
business strategies and the environment in which the company will
operate in the future. These forward-looking statements speak
onlyasat the date of this document. Factors which may cause
differences between actual results and those expected or implied
bythe forward-looking statements include, but are not limited to:
material adverse changes in the economic and business conditions
inthe markets which SABMiller operates; increased competition
andconsolidation within the global brewing and beverages industry;
changes in consumer preferences; changes to the regulatory
environment; failure to deliver the integration and cost-saving
objectives in relation to the Fosters acquisition; failure to derive
theexpected benets from the business capability programme;
anductuations in foreign currency exchange rates andinterest
rates.The company expressly disclaims any obligation orundertaking
to disseminate any updates or revisions to any forward-looking
statements contained herein to reect any change inthe companys
expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based. The past
business and nancial performance of SABMiller plc is not to be relied
on as an indication of its future performance.
Cautionary statement
SABMiller plc Annual Report 2012
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Registered ofce
SABMiller House
Church Street West
Woking
Surrey
England
GU21 6HS
Facsimile +44 1483 264103
Telephone +44 1483 264000
www.sabmiller.com

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