SABMiller Holdings Inc. fully and unconditionally guaranteed by SABMiller plc US$750,000,000 2.200% Notes due 2018 Issue Price: 99.753% US$350,000,000 Floating Rate Notes due 2018 Issue Price: 100.000% The US$750,000,000 2.200% notes due 2018 (the ‘‘Fixed Rate Notes’’) will bear interest at 2.200% per year. The US$350,000,000 floating rate notes due 2018 (the ‘‘Floating Rate Notes’’, and together with the Fixed Rate Notes, the ‘‘Notes’’) will bear interest at a floating rate per annum, equal to the then applicable three- month U.S. Dollar LIBOR rate, which will be reset quarterly on the first day of each interest period (as defined below), plus a spread of 0.690%, as determined by the calculation agent. The Notes are being offered by SABMiller Holdings Inc., a company organised under the laws of the State of Delaware in the of America (the ‘‘Issuer’’ or ‘‘SABMiller Holdings’’). The Notes will be fully and unconditionally guaranteed (the ‘‘Guarantees’’) by SABMiller plc, a public limited company organised under the laws of and Wales (the ‘‘Guarantor’’ or ‘‘SABMiller’’). The Notes and the Guarantees will rank pari passu with all other direct, unsecured and unsubordinated obligations (except those obligations preferred by statute or operation of law) of the Issuer and the Guarantor, respectively. The Fixed Rate Notes are redeemable in whole or in part at any time at the option of the Issuer or the Guarantor at a redemption price equal to the make-whole amount described on page 83. In addition, each series of the Notes is 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 with accrued and unpaid interest to the date of redemption. The Notes will be issued initially in fully registered form as beneficial interests in Global Notes (as defined herein). Except as set forth herein, Global Notes will not be exchangeable for Definitive Notes (as defined herein). This document is a prospectus (the ‘‘Prospectus’’) for the purpose of Directive 2003/71/EC (the ‘‘Prospectus Directive’’). The Prospectus has been approved by the Central Bank of Ireland (the ‘‘Central Bank’’) as competent authority under the Prospectus Directive. The Central Bank only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to the Irish Stock Exchange for the Notes to be admitted to the official list (the ‘‘Official List’’) and trading on its regulated market (the ‘‘Main Securities Market’’). The Main Securities Market is a regulated market for the purposes of Directive 2004/39/EC (the ‘‘Markets in Financial Instruments Directive’’). Such approval relates only to the Notes which are to be admitted to trading on a regulated market or for the purposes of Directive 2004/39/EC and/or which are to be offered to the public in any Member State of the European Economic Area. Investing in the Notes involves certain risks. For a discussion of certain factors that should be considered in connection with an investment in the Notes, see ‘‘Risk Factors’’ beginning on page 8. The Notes and the Guarantees have not been and will not be registered under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’), or any state securities laws and are being offered and sold within the United States only to ‘‘qualified institutional buyers’’ (‘‘QIBs’’) as defined in Rule 144A under the Securities Act (‘‘Rule 144A’’) and outside the United States to persons other than US persons as defined in and in reliance on Regulation S under the Securities Act (‘‘Regulation S’’). The Notes are being offered subject to various conditions and are expected to be delivered on or about 13 August 2013 through the facilities of The Depository Trust Company (‘‘DTC’’) and its participants, including Euroclear Bank, S.A./N.V. as operator of the Euroclear System (‘‘Euroclear’’) and Clearstream Banking, S.A. (‘‘Clearstream’’), against payment in immediately available funds. Joint Book-Running Managers Citigroup J.P. Morgan Mitsubishi UFJ Securities Mizuho Securities

Barclays BBVA Securities BofA Merrill Lynch Morgan Stanley RBS Santander 9 August 2013 ii

The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge of the Issuer (which has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. The Guarantor accepts responsibility only for the information contained in this Prospectus relating to the Group (as defined below) and to the Guarantees. To the best of the knowledge of the Guarantor (which has taken all reasonable care to ensure that such is the case), the information contained in those parts of the Prospectus relating to the Group and to the Guarantees is in accordance with the facts and does not omit anything likely to affect the import of such information. No dealer, salesperson or other person has been authorised to give any information or to make any representation not contained in this Prospectus and, if given or made, any such information or representation must not be relied upon as having been authorised by the Issuer, the Guarantor, or the Initial Purchasers (as defined under ‘‘Plan of Distribution’’) or any of their respective affiliates. This Prospectus does not constitute an offer of any securities other than those to which it relates or an offer to sell, or a solicitation of an offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this Prospectus nor any sale made under it shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantor since the date of this Prospectus or that the information contained in this Prospectus is correct as at any time subsequent to that date. This Prospectus is being provided to QIBs in the United States and to certain prospective investors other than US persons (as defined in Regulation S) outside the United States for use solely in connection with the offering of the Notes. Its use for any other purpose is not authorised. This Prospectus may not be copied or reproduced in whole or in part, nor may it be distributed or any of its contents be disclosed to any person other than the prospective investors to whom it is being provided. In making an investment decision, investors must rely on their own examination of the Issuer, the Guarantor and their respective affiliates, the terms of the Notes, the Guarantees and the financial information contained in this Prospectus and their own assessment of the merits and risks involved. None of the initial Purchasers or any of their directors, affiliates, advisers or agents has made an independent verification of the information contained in this Prospectus in connection with the issue or the offering of the Notes and no representation or warranty, express or implied is made by the Initial Purchasers or any of their directors, affiliates, advisers or agents with respect to the completeness or accuracy of such information. Investors acknowledge that they have not relied, and will not rely, on the Initial Purchasers in connection with their investigation of the accuracy of any information or their decision to invest in the Notes. The contents of this Prospectus are not to be considered as legal, business, financial, investment or tax advice. Prospective investors should consult their own counsel, accountants and other advisers as to legal, tax, business, financial, investment and related aspects of a purchase of the Notes. The contents of SABMiller’s website do not form any part of this Prospectus. The Initial Purchasers reserve the right to withdraw this offering of Notes at any time and to reject any commitment to subscribe for the Notes, in whole or in part. The Initial Purchasers also reserve the right to allot less than the full amount of the Notes sought by an investor. The Initial Purchasers and certain related entities may acquire a portion of the Notes for their own account. The laws of certain jurisdictions may restrict the distribution of this Prospectus and the offer and sale of the Notes. Persons who come into possession of this Prospectus or any of the Notes must inform themselves about, and observe, any such restrictions. None of the Issuer, the Guarantor, the Initial Purchasers or their respective representatives is making any representation to any offeree or any purchaser of the Notes regarding the legality of any investment in the Notes by such offeree or purchaser under applicable investment or similar laws or regulations. For a further description of certain restrictions on the offering and sale of the Notes and the distribution of this Prospectus, see ‘‘Plan of Distribution’’ and ‘‘Transfer Restrictions’’. IN CONNECTION WITH THE OFFERING OF THE NOTES, THE INITIAL PURCHASERS MAY OVER- ALLOT OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL FOR A LIMITED PERIOD AFTER THE DATE OF ISSUE OF THE NOTES, PROVIDED THE AGGREGATE PRINCIPAL c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD iii

AMOUNT OF THE NOTES ALLOTTED DOES NOT EXCEED 105 PERCENT OF THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTES THAT ARE THE SUBJECT OF THE OFFER. HOWEVER, THERE IS NO OBLIGATION ON THE INITIAL PURCHASERS TO DO THIS. SUCH STABILISING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME AND MUST BE BROUGHT TO AN END AFTER A LIMITED PERIOD. The Notes will be issued in fully registered form and only in denominations of US$200,000 and integral multiples of US$1,000 in excess thereof. The Notes will be issued initially in fully registered form as beneficial interests in Global Notes (defined below), which will be deposited with The Bank of New York Mellon, as custodian (the ‘‘Custodian’’) for DTC and registered in the name of Cede & Co., as nominee of DTC. The Notes initially sold within the United States to QIBs will be represented by interests in three or more global notes (collectively, the ‘‘Rule 144A Global Note’’), which will represent the Notes that are being sold within the United States to QIBs in reliance on the exemption from registration provided by Rule 144A. The Notes initially sold to persons other than US persons will be evidenced by interests in three or more global notes (collectively, the ‘‘Regulation S Global Note’’ and, together with the Rule 144A Global Note, the ‘‘Global Notes’’), which will represent the Notes that are being sold to persons other than US persons in reliance on Regulation S. See ‘‘Book-Entry, Delivery and Form’’.

Certain US matters This offering is being made in reliance upon an exemption from registration under the Securities Act for offers and sales of securities that do not involve a public offering. By purchasing the Notes, investors are deemed to have made the acknowledgements, representations, warranties and agreements set forth under ‘‘Transfer Restrictions’’. The Notes have not been and will not be registered with, recommended by or approved by the United States Securities and Exchange Commission (the ‘‘SEC’’) or any other federal, state or foreign securities commission or regulatory authority, nor has any such commission or regulatory authority reviewed or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence. The Notes have not been registered under the Securities Act or any state securities laws and, subject to certain exceptions, may not be offered or sold in the United States (see ‘‘Plan of Distribution’’ and ‘‘Transfer Restrictions’’). Investors should be aware that they may be required to bear the financial risks of their investment in the Notes for an indefinite period of time. Prospective purchasers are hereby notified that the seller of any Note may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The delivery of the Notes is expected to be made to investors on or about the fifth business day following the date of the pricing of the Notes (such settlement cycle being referred to as ‘‘T+5’’). Under Rule 15(c)6-1 under the U.S. Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’), trades in the secondary market are generally required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes prior to the delivery of the Notes under this Prospectus will be required, by virtue of the fact that the Notes initially settle in T+5, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement and should consult their advisors.

Notice to New Hampshire residents NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY PROSPECTUS FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD iv

Notice to investors in Japan The Notes have not been and will not be registered under the Securities and Exchange Law of Japan and are not being offered or sold and may not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law of Japan and (ii) in compliance with any other applicable requirements of Japanese law.

Notice to investors in Hong Kong The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. Persons who are invited to purchase or subscribe for the Notes or to whom this Prospectus is sent are advised to exercise caution in relation to the offer. Persons who are in any doubt about any of the contents of this the Prospectus should obtain independent professional advice. No action has been taken to authorise the offer of the Notes to the public in Hong Kong. Accordingly the Notes may not be offered or sold, or re-offered or resold, and this Prospectus may not be issued, circulated or distributed, in Hong Kong nor may any other advertisement, invitation or document related to the Notes be issued in Hong Kong.

Notice to investors in South Africa No action has been taken to authorise the offer of the Notes to the public in South Africa. Accordingly the Notes may not be offered or sold, or re-offered or resold to the public in South Africa, and this Prospectus may not be issued, circulated or distributed to the public in South Africa nor may any other advertisement, invitation or document related to the Notes be issued to the public in South Africa. Should a South African resident wish to participate in the offering, such participation would be subject to South African exchange control regulations.

Available information For so long as SABMiller is neither subject to Section 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, SABMiller will furnish to the holder of any Notes and to each prospective purchaser designated by any such holder, upon the request of such holder or prospective purchaser, the information required to be delivered pursuant to Rule 144A(d)(4) under the Exchange Act. As at the date of this Prospectus, SABMiller is exempt from reporting, pursuant to Rule 12g3-2(b) under the Exchange Act.

Special note regarding forward-looking statements This Prospectus contains certain forward-looking statements with respect to the financial condition, results of operations and business of SABMiller and certain of its plans and objectives. In particular, among other statements, certain statements under ‘‘Overview’’, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and ‘‘Description of the Group’’ about expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through use of words or phrases such as ‘‘will likely result’’, ‘‘are expected to’’, ‘‘will continue’’, ‘‘believe’’, ‘‘is anticipated’’, ‘‘estimated’’, ‘‘intends’’, ‘‘plans’’, ‘‘seek’’, ‘‘projection’’ and ‘‘outlook’’. Forward-looking statements are based on the current views and assumptions of SABMiller management (‘‘Management’’) and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Prospectus. Among the key factors that have a direct bearing on the results of operations are: * general economic conditions, including in particular economic conditions in Latin America, the United States, Europe, South Africa, Africa, Asia and ; * fluctuations in interest rates; * fluctuations in foreign currency exchange rates; * changes in laws and regulations; and * general competitive factors. These and other factors are discussed under ‘‘Risk Factors’’ and elsewhere in this Prospectus. c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD v

Any forward-looking statements contained in this Prospectus speak only as at the date hereof. SABMiller expressly disclaims any obligation or undertaking to release publicly any updating or revisions to any forward-looking statements, whether as a result of new information, future events or otherwise save as required under applicable laws and regulations. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Prospectus might not occur and actual results may differ materially from those described in the forward-looking statements.

Enforceability of civil liabilities The ability of an investor to bring action against SABMiller in respect of the Guarantees may be limited under law. SABMiller is a public limited company incorporated under the laws of England and Wales. The majority of the directors and the executive officers of SABMiller are citizens or residents of countries other than the United States. All or a substantial portion of the assets of such persons and substantially all of the assets of SABMiller are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against SABMiller judgments of US courts predicated upon civil liabilities under US federal or state securities laws. There is doubt as to the enforceability in England, in original actions or in actions for enforcement of judgments of the US courts, of civil liabilities predicated upon US federal or state securities laws.

Certain defined terms In this Prospectus, ‘‘2003 Miller Bonds’’ means the US$1,100 million 5.50% Notes due 2013 issued by Miller on 7 August 2003; ‘‘2003 SABMiller Bonds’’ means the US$300 million 6.625% Notes due 2033 issued by SABMiller on 7 August 2003; ‘‘2006 Commercial Paper Programme’’ means the commercial paper programme established by SABMiller on 11 October 2006 with a programme limit of US$1,000 million; ‘‘2006 SABMiller Bonds’’ means the US$850 million 6.50% notes due 2016 issued by SABMiller on 28 June 2006; ‘‘2008 EMTN Programme’’ means the Euro Medium Term Note Programme with a programme limit of US$5,000 million established by SABMiller on 25 July 2008; ‘‘2008 SABMiller Bonds’’ means the US$550 million 5.70% Notes due 2014 and the US$700 million 6.50% Notes due 2018 issued by SABMiller on 11 July 2008; ‘‘2009 GMTN Programme’’ means the Guaranteed Medium Term Note Programme with a programme limit of PEN1,500 million established by SABMiller and Racetrack Peru´ S.A. on 28 January 2009; ‘‘2009 SABMiller Bonds’’ means the c1,000 million 4.50% Notes due 2015 issued by SABMiller on 17 July 2009; ‘‘2010 SABMiller Bonds’’ means the PEN150 million 6.75% Notes due 2015 issued by SABMiller on 19 March 2010; ‘‘2012 Domestic Medium Term Note Programme’’ means the Domestic Medium Term Note Programme with a programme limit of ZAR6,000 million established by SABSA Holdings Limited as issuer and SABMiller as a guarantor on 13 December 2012; ‘‘2012 SABMiller Holdings Bonds’’ means the 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 4.95% Notes due January 2042, issued by the Issuer on 17 January 2012 and guaranteed by SABMiller; ‘‘2012 GEMTN Programme’’ means the Guaranteed Euro Medium Term Note Programme with a programme limit of US$3,000 million established by the Issuer on 12 October 2012 and guaranteed by SABMiller; ‘‘2013 SABSA Holdings Bonds’’ means the ZAR1,000 million 7.125% Notes due March 2018 issued by SABSA Holdings Limited on 28 March 2013 and guaranteed by SABMiller; ‘‘2012 SABMiller Holdings GEMTN Bonds’’ means the c1,000 million 1.875% Notes due January 2020 issued by the Issuer on 4 December 2012 and guaranteed by SABMiller; ‘‘Anadolu Efes’’ means Anadolu Efes Biracılık ve Malt Sanayii A.S¸.; ‘‘Backus’’ means Union de Cervecerı´as Peruanas Backus y Johnston S.A.A.; ‘‘Bavaria’’ means Bavaria S.A., a Colombian company in which SABMiller obtained a controlling interest through a transaction which completed on 12 October 2005 (the ‘‘Bavaria Transaction’’); ‘‘Bavaria Group’’ means Bavaria together with its subsidiaries and associated and affiliated companies; ‘‘Castel’’ or the ‘‘Castel Group’’ means Socie´te´ des Brasseries et Glacie`res Internationales and B.I.H. Brasseries Internationales Holding Limited; ‘‘CBC’’ means Coors Company and certain of its subsidiaries which are subsidiaries of Molson Coors; ‘‘CR ’’ means China Resources Snow Limited; ‘‘Dreher’’ means Dreher So¨rgya´rak Zrt, a Hungarian company acquired by the Group in 1993; ‘‘Foster’s’’ means Foster’s Group Pty. Ltd (formerly Foster’s Group Limited), an Australian company acquired by the Group in December 2011; the ‘‘Group’’ means SABMiller together with its subsidiaries, associated companies and joint venture companies; ‘‘Group Syndicated Loan Facilities’’ means the US$2,500 million five year syndicated revolving loan facility entered into by SABMiller on 7 April 2011 and the c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD vi

US$12,500 million term and revolving loan facilities entered into by the Issuer and SABMiller on 9 September 2011; ‘‘GRR’’ means Gold Reef Resorts Limited; ‘‘Miller’’ means , a corporation organised under the laws of the State of Wisconsin, United States of America; ‘‘MillerCoors’’ means MillerCoors LLC, which holds the combined US and Puerto Rico operations of Miller and CBC following completion of the MillerCoors Transaction; ‘‘MillerCoors Transaction’’ means the transaction between SABMiller and Molson Coors for the combination of the United States and Puerto Rico operations of Miller and CBC which completed on 1 July 2008; ‘‘Molson Coors’’ means Molson , the parent of CBC; ‘‘Moody’s’’ means Moody’s Investors Service Ltd; ‘‘Racetrack Peru’’ means Racetrack Peru´ S.A.; ‘‘Royal Grolsch’’ means Koninklijke Grolsch N.V.; ‘‘S&P’’ means Standard & Poor’s Credit Market Services France SAS; ‘‘Tsogo Sun / GRR Merger’’ means Tsogo Sun Holdings (Pty) Ltd all-share merger with GRR; and ‘‘Tsogo Sun’’ means Tsogo Sun Holdings Limited. c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD vii

Presentation of Information

Financial information The financial information relating to the Group contained in this Prospectus relates to the years ended 31 March 2013, 2012 and 2011 (the ‘‘Group Financial Information’’). The financial information as at and for the years ended 31 March 2013, 2012 and 2011 has been extracted without material adjustment from the annual reports and accounts of the Group for the years ended 31 March 2013 (the ‘‘Group 2013 Annual Report’’) and 31 March 2012 (the ‘‘Group 2012 Annual Report’’ and, together with the Group 2013 Annual Report, the ‘‘Group Annual Reports’’). The Group Financial Information was prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘‘IFRS’’). None of the financial information was prepared in accordance with accounting principles generally accepted in the United States (‘‘US GAAP’’) or audited in accordance with auditing standards generally accepted in the United States (‘‘US GAAS’’). No opinion or any other assurance with regard to the Group Annual Reports was expressed under US GAAP or US GAAS. The reporting currency of the Group is US dollars. The Group Financial Information, which has been extracted without material adjustment from the Group Annual Reports, contains independent auditors’ reports for each of the years ended 31 March 2013 and 2012 from PricewaterhouseCoopers LLP (‘‘PwC’’). These independent auditors’ reports purport to limit the scope of PwC’s duty of care in relation to such reports and the Group Financial Information to which they relate. If a US court (or any other court) were to give effect to this limitation, the recourse that investors in the Notes may have against PwC based on their reports or the Group Financial Information to which they relate could be limited. The SEC would not permit such limitation to be included in a registration statement or a prospectus used in connection with an offering of securities registered under the Securities Act or in a report filed under the Exchange Act. See ‘‘General Information – Auditors and nature of financial information’’ for a description of the independent auditors’ reports.

Group revenue, EBITA and EBITDA This Prospectus contains information in relation to group revenue, EBITA (on a Group-wide basis and in relation to the Group’s segments) and EBITDA (on a Group-wide basis). Group revenue comprises revenue together with the Group’s share of revenue from associates and joint ventures. EBITA derived from IFRS financial information comprises operating profit before exceptional items, amortisation of intangible assets (excluding software) and including the Group’s share of associates’ and joint ventures’ operating profit on a similar basis (i.e., before interest, tax and non-controlling interests). EBITDA derived from IFRS financial information comprises net cash generated from operations before working capital movements and after operating cash exceptional items. EBITA margin under IFRS is calculated by expressing EBITA as a percentage of group revenue (including share of associates’ and joint ventures’ revenue). Group revenue, EBITA, EBITA margin and EBITDA are non-IFRS financial measures, which the Group believes are measures commonly reported and widely used by investors in comparing performances with regard to depreciation and certain other items, which can vary significantly depending upon accounting methods, interest expense or taxation, or non-operating factors. Additionally, group revenue, EBITA, EBITA margin and EBITDA have been disclosed in this Prospectus to permit a more complete and comprehensive analysis of the Group’s operating performance and of the Group’s ability to service its debt. Further, on a segmental basis, EBITA allows for greater comparability between segments. The segmental disclosures accord with the manner in which the Group is managed. Segmental performance is reported after the specific apportionment of attributable head office service costs. Group revenue, EBITA, EBITA margin and EBITDA are not measurements of performance under IFRS, and they should not be considered as an alternative to (a) revenue (as determined in accordance with generally accepted accounting principles), (b) operating profit (as determined in accordance with generally accepted accounting principles), or as a measure of the Group’s operating performance, (c) cash flows from operating activities (as determined in accordance with generally accepted accounting principles), or as a measure of the Group’s ability to meet cash needs, or (d) any other measures of performance under generally accepted accounting principles. Group revenue, EBITA, EBITA margin and EBITDA may not be indicative of the Group’s historical operating results, nor are they meant to be projections or forecasts of future results. In addition, c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD viii because companies do not calculate EBITA or EBITDA identically, the Group’s presentation of group revenue, EBITA, EBITA margin and EBITDA may not be comparable to similarly-titled measures used by other companies.

Disposals Effective 1 January 2012 the Group completed the disposal of its Angolan operations, Coca-Cola Bottling Luanda SARL, Coca-Cola Bottling Sul de Angola SARL, Empresa de Cervejas N’Gola Norte SA, and its interest in Empresa de Cervejas N’Gola SARL, in Africa in exchange for a 27.5% interest in BIH Angola. On 6 March 2012 the Group 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. The Group completed the sale of its Italian distribution business on 13 June 2011. On 7 September 2012 the Group disposed of Foster’s interests in its Fijian beverage operations, Foster’s Group Pacific Limited, and on 28 September 2012 the group completed the disposal of Foster’s soft assets, both to Coca-Cola Amatil Limited (‘‘CCA’’).

Restatements The initial accounting under IFRS 3, ‘Business Combinations’, for the Cerverceria Argentina SA Isenbeck (‘‘CASA Isenbeck’’) and Crown Beverages Ltd (previously Crown Foods Ltd) acquisitions had not been completed as at 31 March 2011 and similarly for the Foster’s, the Pacific Beverages Pty Limited (‘‘Pacific Beverages’’) and the International Breweries plc (‘‘International Breweries’’) acquisitions as at 31 March 2012. Adjustments to provisional fair values in respect of the acquisitions have been made and, as a result, comparative information for the years ended 31 March 2011 and 2012 has been presented as if the further adjustments to provisional fair values had been made from the transaction dates. The financial information as at 31 March 2011 and as at 31 March 2012 contained within this Prospectus has been extracted from the comparative restated column of the Group 2012 Annual Report and the Group 2013 Annual Report respectively to reflect the adjustments.

Currencies All references to ‘‘pounds’’, ‘‘pounds sterling’’, ‘‘sterling’’ and ‘‘£’’ are to the lawful currency of the . All references to ‘‘dollars’’, ‘‘US dollars’’, ‘‘US$’’, ‘‘$’’ and ‘‘cents’’ are to the lawful currency of the United States. All references to ‘‘Colombian Pesos’’ or ‘‘COP’’ are to Colombian pesos, the lawful currency of Colombia. All references to ‘‘SA rand’’, ‘‘ZAR’’ and ‘‘R’’ are to the lawful currency of the Republic of South Africa. All references to ‘‘Peruvian Nuevos Soles’’ or ‘‘PEN’’ are to the lawful currency of Peru. All references to ‘‘euro’’ and ‘‘c’’ are to the currency introduced at the start of the third stage of the European economic and monetary union pursuant to the treaty establishing the European Community, as amended. All references to ‘‘Australian dollars’’ and ‘‘A$’’ are to the lawful currency of the Commonwealth of Australia. While the Group believes that the currency translations are fairly representative of the US dollar values of local currency amounts reported by the various segments, no representation is made that the local currency amounts have been, could have been or could be converted into US dollars on the date or at the rates indicated or at all.

Volume measurements Unless otherwise stated, volume measurements are stated in hectolitres (‘‘hl’’). References to the Group’s , sorghum and soft volumes, and rankings based on those volumes, include 100% of the volumes of all consolidated subsidiaries and the Group’s share of volumes of all associated undertakings and joint ventures.

Employees Annualised average numbers of employees include part-time employees on the basis of their full- time equivalents.

Trademarks and other proprietary marks This Prospectus contains trade names, trademarks, logos, devices, product names, service names and brands that are proprietary to the Group. Certain other trade names, product names and brands that are referred to in this Prospectus are proprietary to others and may be used by the c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD ix

Group only pursuant to specific contractual arrangements. Other trade names, product names and brands are used for identification purposes only, for example, to indicate specific competitors or competing products.

Other companies References made to companies and/or groups of companies not forming part of the Group include the companies trading under those names and any affiliates or associates thereof.

Sources of information Certain information has been extracted from third party sources. SABMiller Holdings and SABMiller confirm that such information has been accurately reproduced and that, so far as they are aware, and are able to ascertain from information published by such third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. The information includes statements contained in this Prospectus relating to the market positions and market shares of the Group and other companies in individual markets and the respective consumption figures and rates of growth in those markets. Unless otherwise stated, these statements are Management estimates, based, where available, on the most recent available industry reports relevant to those markets published on a worldwide or country basis. Other sources of information include Plato Logic Limited (‘‘Plato Logic’’), Euromonitor International Limited (‘‘Euromonitor’’), Canadean Limited (‘‘Canadean’’), the Czech Beer and Malt Association (‘‘CBMA’’), Nielsen Consumer (‘‘Nielsen’’), CCR Audit (‘‘CCR’’), Frontline Market Research (‘‘Frontline’’) and SymphonyIRI Group (‘‘SymphonyIRI’’). Although SABMiller believes these sources to be reliable, the accuracy or completeness of these materials has not been independently verified and, accordingly, SABMiller makes no representation with respect thereto. Similarly, while SABMiller believes that internal research is reliable, this research has not been assessed or confirmed by any independent sources.

Language The language of this Prospectus is English. Certain legislative references and technical terms have been cited in their original language in order that the correct technical meaning may be ascribed to them under applicable law. c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD x

Table of Contents

Overview ...... 1 Risk Factors ...... 8 Use of Proceeds...... 17 Consolidated Capitalisation and Indebtedness of SABMiller ...... 18 Selected Financial and Other Information...... 19 Management’s Discussion and Analysis of Financial Condition and Results of Operations.... 21 Description of the Group...... 52 Management ...... 74 Description of the Notes and the Guarantees...... 82 Book-Entry, Delivery and Form...... 99 Taxation...... 104 Plan of Distribution...... 110 Transfer Restrictions ...... 114 General Information ...... 116 Index to Financial Statements ...... F-1 c108736pu010 Proof 5: 8.8.13_13:31 B/L Revision: 0 Operator ChoD Overview

The following overview should be read as an introduction to this Prospectus, and in conjunction with, and as qualified in its entirety by, the more detailed information that appears elsewhere in this Prospectus. Before deciding to invest in the Notes, investors should read the entire Prospectus carefully, including the ‘‘Risk Factors’’, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and the Group’s financial statements and the more detailed information included elsewhere in this Prospectus. Any decision to invest in the Notes should be based on this Prospectus as a whole.

Overview SABMiller, together with the Issuer, its other subsidiaries, its associated companies and joint ventures, is, according to Canadean, one of the world’s largest brewers, occupying a top-two market position by volume in many markets in which it operates, with group revenue1, operating profit and lager volumes for the year ended 31 March 2013 of US$34,487 million, US$4,203 million and 242 million hectolitres respectively. As at 31 March 2013, the Group’s total assets were US$56,294 million. The Group is also one of the largest bottlers and distributors of Coca-Cola products outside the United States. SABMiller Holdings is incorporated in the State of Delaware in the United States of America and is an intermediate holding company that holds economic interests in the Group’s operations in North America, South America, Australia and South Africa, and obtains and provides funding to those operations. The Group has brewing interests and distribution agreements across six continents, with a balance between fast-growing developing markets and cash-generative mature markets. The Group has a diverse portfolio of local, regional and global brands, including international premium such as Urquell, Peroni Nastro Azzurro, Miller Genuine Draft (‘‘MGD’’) and Grolsch, along with leading local brands such as Aguila, , , Snow, and Bitter. SABMiller is a FTSE-100 company listed on the and the stock exchanges. The Group has demonstrated significant growth, with market capitalisation growing from US$5,421 million as at 31 December 2000 to approximately US$80,082 million as at 5 August 2013. Since the Group was first rated in 2003, and until 2 July 2012, SABMiller was rated Baa1/ stable outlook by Moody’s and BBB+/stable outlook by S&P. On 2 July 2012, S&P revised its rating to BBB+/positive outlook. Moody’s rating remains unchanged. The registered office of the Issuer is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, USA. The registered office of SABMiller is at SABMiller House, Church Street West, , Surrey, GU21 6HS, England.

Highlights of the Group’s Operations Latin America The Group initially invested in El Salvador and Honduras in 2001, gaining full ownership in 2005. On 12 October 2005, the Group completed a transaction through which it obtained a controlling interest in the second largest brewer in South America, Bavaria, a Colombian company (the ‘‘Bavaria Transaction’’), and on 24 November 2010 the Group acquired CASA Isenbeck, the third largest brewer in Argentina. As at 31 March 2013, Group companies were the number one brewer, in terms of lager market share, in Colombia, Ecuador, El Salvador, Honduras, Panama and Peru. The Group bottles soft drinks for The Coca-Cola Company in El Salvador and Honduras and for Pepsico International and Schweppes in Panama.

Europe The Group’s expansion into Europe began in 1993 with the acquisition of Dreher So¨rgya´rak Zrt (‘‘Dreher’’) in Hungary. On 6 March 2012, the Group completed its strategic alliance with Anadolu Efes. The Group’s Russian beer business, SABMiller RUS LLC, and Ukrainian beer business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes in exchange for a 24 per cent. equity stake in the enlarged Anadolu Efes. Anadolu Efes is now the vehicle for both groups’ investments in Turkey, Russia, the Commonwealth of Independent States (‘‘CIS’’), Central Asia and the Middle East. The Group now has brewing operations in eight countries in Europe: the Netherlands, ,

1 Group revenue comprises revenue together with the Group’s share of revenue from associates and joint ventures.

1 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD the , Italy, Romania, Hungary, Slovakia and the Canary Islands (Spain). The Group also sells significant volumes to a further seven European markets of which the largest are the United Kingdom and , and a further 16 countries including Russia, Turkey and the Ukraine are covered in the strategic alliance with Anadolu Efes through either brewing, soft drinks or export operations.

North America The Group acquired Miller, the United States’ second largest brewer, in 2002. On 1 July 2008, the MillerCoors joint venture was established through the combination of the operations of SABMiller’s and Molson Coors’ respective subsidiaries (Miller and CBC) located in the United States and Puerto Rico (the ‘‘MillerCoors Transaction’’). As a result, SABMiller has a 58 per cent. economic interest and Molson Coors has a 42 per cent. economic interest in MillerCoors. Voting interests in MillerCoors are shared equally between SABMiller and Molson Coors, and each of SABMiller and Molson Coors has equal board representation. The North America segment includes the Group’s 58 per cent. share in MillerCoors and 100 per cent. of Miller Brewing International.

Africa The Group operates in 15 countries in Africa: Botswana, Comores, Ethiopia, , Kenya, Lesotho, Malawi, Mayotte, Mozambique, Nigeria, , Swaziland, , Uganda and . In addition, the Group has a strategic alliance with Castel, pursuant to which Castel’s holding company has a 38 per cent. economic interest in SABMiller’s principal African holding company and the Group has a 20 per cent. economic interest in Castel’s African beverage operations. This alliance capitalises on the complementary nature of the companies’ geographic portfolios. Castel has lager and soft drinks interests in 22 largely French-speaking countries of West, Central and North Africa and the Indian Ocean. Its operations cover Algeria, Angola, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Coˆte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, Gambia, Guinea, Madagascar, Mali, Mauritius, Morocco, Niger, Senegal, Togo and Tunisia. With effect from 1 January 2012, the Group and Castel implemented a number of organisational changes in their African operations as part of their strategic alliance agreement. Operational management of the Nigerian businesses is now with SABMiller and the Angolan businesses with Castel, with the Group retaining an associate interest in the Angolan businesses. In addition, the Group has associated undertakings in Algeria, Morocco and Zimbabwe, and a procurement company in Mauritius.

Asia Pacific (formerly Asia) The Group has operations in Australia, India, South Korea and Vietnam, and in China through an associated company. On 16 December 2011, the Group completed the acquisition of Foster’s, and the Asia segment was renamed the Asia Pacific segment. Following the Foster’s acquisition, on 13 January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages. See ‘‘Group – Overview of Foster’s Acquisition.’’

South Africa The (Pty) Limited (‘‘SAB’’) is the Group’s original brewing company. Founded in 1895, SAB has since become one of South Africa’s leading companies as well as Africa’s largest brewer. The soft drinks division of SAB, ABI, is South Africa’s largest bottler for The Coca-Cola Company. The Group also has hotel and gaming interests through its associate, Tsogo Sun Holdings Limited, which is listed on the Johannesburg Stock Exchange and is also the largest black empowerment company in the leisure industry in South Africa.

Group Business Capability Programme In the year ended 31 March 2010, the Group commenced a major business capability programme that will simplify processes, reduce costs and allow local management teams to enhance focus on their markets. Information and processes will be standardised based on a single, integrated

2 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD information technology system across back, middle and front office and selectively certain back office activities will be outsourced. The programme will take four years to complete. SABMiller Procurement GmbH (formerly Trinity Procurement GmbH) (‘‘SABMiller Procurement’’), the Group’s global procurement organisation, is well established and is demonstrating its significant potential. The Group had incurred cumulative exceptional costs of US$1,014 million in relation to, and realised US$1,229 million of cumulative financial benefits from, the business capability programme by 31 March 2013.

Overview of Foster’s Acquisition On 16 December 2011, the Group acquired a 100 per cent. interest in Foster’s 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. Following the Foster’s acquisition, on 13 January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages for cash consideration of US$343 million. The acquisition took the Group’s effective interest in Pacific Beverages to 100 per cent. and Pacific Beverages has now been integrated into the Foster’s business. Subsequent to the Foster’s acquisition the Group sold to CCA, Foster’s interests in Foster’s Group Pacific Ltd, which was the holding company for Foster’s operations in Fiji and Samoa, on 7 September 2012 and on 28 September 2012 Foster’s non-alcoholic brands and inventory. On 7 November 2012, Foster’s sold its 49.9 per cent. interest in Foster’s USA LLC to MillerCoors. Foster’s USA LLC is now wholly owned by MillerCoors. As a result of the Foster’s acquisition, certain licence and import arrangements such as Corona, Stella Artois, Asahi, Carlsberg and Guinness with a combined annual volume base of approximately 915,000 hl were terminated towards the end of the year ended 31 March 2012. The loss of these rights was a known risk at the time of the acquisition, in light of typical change of control provisions applicable to those arrangements.

Business strategy The Group’s business strategy is based upon the following four 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 profitability of local businesses, sustainably; and * Leveraging the Group’s skills and global scale.

Financial strategy The Group is committed to maintaining a prudent financial profile that is reflected in a high quality investment-grade credit rating. Consistent with this commitment is the Group’s objective to optimise its overall capital structure, which it maintains by funding acquisitions where necessary through an appropriate mix of equity and debt. The Group’s strong financial structure also helps to ensure that adequate resources are available to it from a variety of market sources to meet ongoing business needs, as well as to provide medium-term flexibility to assess investments in appropriate markets.

Competitive strengths Management believes that the Group’s key competitive strengths are: * Leading market positions; * Geographic diversification; * A strong and comprehensive brand portfolio; * A strong cash generative business; * Conservative financial policies; and * A highly experienced management team with an outstanding track record in integrating and managing assets.

3 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Risk Factors The Issuer and SABMiller believe that the factors described below represent the principal risks inherent in investing in the Notes. Prospective investors should also read the detailed information set out elsewhere in this Prospectus and reach their own views prior to making any investment decision.

Risks relating to the Group * The Group may be negatively impacted by fluctuations in exchange rates. * The Group operates in many developing markets, which exposes it to certain political and economic risks in these markets. * The Group is exposed to the risks and effects of economic recession and to any reductions in per capita income, which could adversely affect the demand for its products. * The Group may be unable to influence its strategic partnerships. * The Group may not be able successfully to carry out further acquisitions, or to integrate acquired businesses, including Foster’s, with the Group’s businesses. * The Group may be impacted by changes in the availability or price of raw materials. * The Group is dependent on its senior management and may fail to identify, develop and retain its current and future global management capability. * The Group operates in highly competitive markets. * The jurisdictions in which the Group operates may adopt regulations that could increase costs and liabilities or could limit business activities. * Tax, fees and excise costs in excess of the Group’s existing provisions may arise from fiscal reforms, discriminatory excise taxes and restrictive legislative environments. * The Group is facing increasing restrictions on the marketing, distribution and sale of alcohol. * The Group is exposed to financial market risks, including fluctuations in foreign exchange and interest rates, which create volatility in relation to its derivative contracts. * The Group has exposure to the risk of litigation. * Negative publicity against consumption of alcoholic beverages in general and beer consumption in particular may adversely affect the Group. * The Group’s future capital needs may require that the Group seeks debt financing, refinancing or additional equity funding, which may not be available or may be materially more expensive. * The Group is subject to environmental regulation by national, state and local agencies, including, in certain cases, regulations that impose liability without regard to fault. * Change in the competition regulations in certain jurisdictions in which the Group has a leading market share may restrict the Group’s ability to expand through strategic acquisitions. * Certain of the Group’s operations depend on independent distributors to sell its products. * The Group is dependent on sole suppliers for some of its key materials. * If any of the Group’s products are found to contain contaminants, the Group may be subject to product recalls or other liabilities which could cause it to incur significant additional costs. * The Group’s results of operations depend heavily on maintaining good relations with its workforce. * There is a high incidence of HIV/AIDS in certain of the developing markets in which the Group operates. * The Group is reliant on the reputation of its brands and the protection of its intellectual property rights. * The Group is reliant on its information technology to conduct its business in the different regions in which the Group operates. * Failure by the Group to complete the delivery of its current business capability programme could have a negative impact. * Adverse weather conditions may reduce the demand for the Group’s products.

4 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD * The Group may be negatively impacted by natural and other disasters.

Risk factors relating to the Notes * Investors in the Notes may have limited recourse against the independent auditors. * If an active trading market does not develop for the Notes, holders of Notes may not be able to resell them. * The Notes and the Guarantees are unsecured obligations of the Issuer and the Guarantor, respectively. * The Issuer and SABMiller must rely on payments from their respective subsidiaries to fund payments on the Notes and under the Guarantees, respectively. * Holders of Notes may be subject to modification and waiver of the Terms and Conditions of the Notes. * Payments made by the Issuer may become subject to withholding under the EU Savings Directive or U.S. Foreign Account Tax Compliance Withholding. * The Terms and Conditions of the Notes may become subject to a change of law.

Risk factors relating to the market * The credit ratings assigned to the Notes may not accurately reflect all risks associated with the Notes. * Legal investment considerations may affect the treatment of Notes and may restrict certain investors purchasing or pledging any Notes.

5 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Principal Features of the Offering

Issuer SABMiller Holdings Inc., a company organised under the laws of the State of Delaware in the United States of America. Guarantor SABMiller plc, a company organised under the laws of England and Wales. Notes US$750,000,000 total principal amount of 2.200% fixed rate notes due 2018 (the ‘‘Fixed Rate Notes’’) and US$350,000,000 total principal amount of floating rate notes due 2018 (the ‘‘Floating Rate Notes’’). Guarantees The Notes will be fully and unconditionally guaranteed by SABMiller plc. Ratings As at the date of this Prospectus, the ratings of the Notes are BBB+/ positive (S&P) and Baa1/stable (Moody’s). Each of S&P and Moody’s is established in the European Union and registered under Regulation 1060/2009/EC. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revisions, suspension or withdrawal at any time by the relevant rating agency. Issue Price 99.753% of the total principal amount of the Fixed Rate Notes and 100.000% of the total principal amount of the Floating Rate Notes. The Offering The Notes are being offered and sold by the Initial Purchasers (i) within the United States only to QIBs in reliance on Rule 144A and (ii) outside the United States to persons other than US persons in reliance on Regulation S. Ranking The Notes will rank as direct, unsecured and unsubordinated indebtedness of the Issuer and the Guarantees will rank as direct, unsecured and unsubordinated obligations of the Guarantor, in each case ranking pari passu with all other direct, unsecured and unsubordinated obligations of the Issuer and the Guarantor, respectively. Maturity Unless previously purchased or redeemed in accordance with the applicable Conditions, the principal amount of the Fixed Rate Notes will mature and become due and payable on 1 August 2018, with accrued and unpaid interest to such date. The Floating Rate Notes will mature and become due and payable on 1 August 2018, with accrued and unpaid interest to such date. Interest The Fixed Rate Notes will bear interest from 13 August 2013 (the ‘‘Closing Date’’) at a rate of 2.200% per annum. The Floating Rate Notes will bear interest at a floating rate per annum, equal to the then applicable three-month U.S. Dollar LIBOR rate, which will be reset quarterly on the first day of each interest period (as defined below), plus a spread of 0.690%, as determined by the calculation agent. Form and Denomination of The Notes will be in registered form in denominations of Notes US$200,000 and integral multiples of US$1,000 in excess thereof. The Notes will be issued in the form of Global Notes in registered form and may be exchanged into definitive Notes only under the circumstances described in the applicable Conditions. The Notes sold to QIBs in the United States in reliance on Rule 144A will be represented by the Rule 144A Global Note. The Notes sold outside the United States to persons other than US persons in reliance on Regulation S will be represented by the Regulation S Global Note. The Global Notes will be deposited with the Custodian for DTC and registered in the name of Cede & Co., as nominee of DTC.

6 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Further Issues Subject to certain conditions, the Issuer may from time to time without the consent of the registered holders of a series of Notes issue additional securities having identical terms and conditions as the Notes of that series so that any further issue is consolidated and forms a single series of securities with the Notes. Redemption at the Option of The Fixed Rate Notes are redeemable in whole or in part at the the Issuer option of the Issuer or the Guarantor at any time at a redemption price equal to the make-whole amount described under ‘‘Description of the Notes – Redemption’’. Redemption for Tax Reasons The Issuer may redeem all but not part of each series of the Notes outstanding at their principal amount with accrued and unpaid interest to the applicable date of redemption if the Issuer or the Guarantor is required to pay Additional Amounts as a result of certain changes in the tax laws in the Relevant Jurisdiction (as defined under ‘‘Description of the Notes – Payment of Additional Amounts’’). Change of Control If a Put Event (as defined in ‘‘Description of the Notes – Certain Definitions’’) occurs, the holder of each Note will have the option (a ‘‘Put Option’’) (unless prior to the giving of the relevant Put Event Notice (as defined below) the Issuer or the Guarantor has given notice of redemption in accordance with the terms of the Notes) to require the Issuer or the Guarantor to redeem or, at the option of the Issuer or the Guarantor, purchase (or procure the purchase of) that Note at a repurchase price in cash equal to 101% of its principal amount together with interest accrued to (but excluding) the date which is seven days after the expiration of the Put Period (as defined below) on the Put Date (as defined below). Transfer Restrictions The Notes and the Guarantees have not been and will not be registered under the Securities Act and may not be offered or sold, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with all applicable laws. The Notes are subject to certain restrictions on transfer. Governing Law The Notes and the Guarantees will be governed by and construed in accordance with the laws of the State of New York. Listing and Trading Application has been made for the Notes to be admitted to listing on the Official List and to trading on the Main Securities Market of the Irish Stock Exchange. Use of Proceeds The net proceeds will be used to repay the Issuer’s debt obligations incurred to finance the acquisition of Foster’s and the balance will be used for the Group’s general corporate purposes.

7 Risk Factors

The Issuer and SABMiller believe that the following factors may affect their ability to fulfil their obligations under the Notes and the Guarantees respectively. All of these factors are contingencies which may or may not occur and neither the Issuer nor SABMiller is in a position to express a view on the likelihood of any such contingency occurring. Factors which the Issuer and SABMiller believe may be material for the purpose of assessing the market risks associated with the Notes are also described below. The Issuer and SABMiller believe that the factors described below represent the principal risks inherent in investing in the Notes, but the Issuer and SABMiller may be unable to pay interest, principal or other amounts on or in connection with any Notes for other reasons and neither the Issuer nor SABMiller represent that the statements below regarding the risks of holding any Notes are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Prospectus and reach their own views prior to making any investment decision.

Risk Factors relating to the Group The Group may be negatively impacted by fluctuations in exchange rates. The majority of the Group’s business is transacted in euro, South African rand, sterling, US dollars, Colombian pesos, Australian dollars and other local currencies. The functional and presentation currency of the Group is and will remain the US dollar, although dividends are also payable in sterling and rand. In each country of operation, the Group generates revenue and incurs costs primarily in local currency. Fluctuations in the relative values of these currencies, or of any other currency, may adversely affect the results of the Group when translated into US dollars. The Group seeks to manage currency exposure within a framework of policies including hedging and funding activity.

The Group operates in many developing markets, which exposes it to certain political and economic risks in these markets. A substantial proportion of the Group’s principal operations are in developing markets, including South Africa, China, India, Tanzania, Botswana, Mozambique, certain emerging European markets and Latin America. In particular, a significant proportion of the Group’s earnings comes from its lager and other operations in South Africa and Colombia. The Group’s operations in these markets are subject to the usual risks of operating in developing countries, which include potential political and economic uncertainty, application of exchange controls, nationalisation or expropriation, empowerment legislation and policy, crime and lack of law enforcement, political insurrection, external interference, currency fluctuations, lack of upkeep of public infrastructure and changes in government policy. Such factors could affect the Group’s results by causing interruptions to its operations or by increasing the costs of operating in those countries or by limiting the ability of the Group to extract profits from those countries. Moreover, the economies of developing countries are often affected by developments in other emerging market countries, and, accordingly, adverse changes in developing markets elsewhere in the world could have a negative impact on the markets in which the Group operates.

The Group is exposed to the risks and effects of economic recession and to any reductions in per capita income, which could adversely affect the demand for its products. The Group is exposed to the effects of global recession and a recession in one or more of its key markets, including lower revenue and reduced income. For the beer business, recession adversely affects demand, and therefore the prices that can be achieved for beer in the relevant markets. Beer consumption in many of the countries in which the Group operates is closely linked to general economic conditions, with levels of consumption tending to rise during periods of rising per capita income and fall during periods of declining per capita income. Additionally, per capita consumption is inversely related to the sale price of the Group’s products. Besides moving in concert with changes in per capita income, beer consumption also increases or decreases in accordance with changes in disposable income. Currently, disposable income is low in many of the countries in which the Group operates relative to disposable income in more developed countries. Any further decrease in disposable income resulting from an increase in

8 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD income taxes, the cost of living or other factors would be likely to have an adverse effect on the demand for beer. Changes or uncertainties in economic conditions may adversely impact the Group’s sales, earnings and financial position. Whilst the Group takes steps to alleviate the impact of adverse economic conditions on its business, there can be no guarantee that these will be effective, and to the extent that such conditions do not improve or any improvement takes place over an extended period of time, the Group’s business, results of operations and financial condition may be materially adversely affected.

The Group may be unable to influence its strategic partnerships. A proportion of the Group’s global portfolio consists of strategic partnerships in new or emerging markets such as China, Turkey and the CIS states, and a number of countries in Africa. There are challenges in influencing these diverse cultures to ensure that the Group integrates these business interests successfully into its wider global portfolio. In addition, the Group has a partnership in the United States, where decision making is shared equally. There can be challenges in ensuring that decisions are taken in such partnerships which promote the strategic and business objectives of the Group.

The Group may not be able successfully to carry out further acquisitions, or to integrate acquired businesses, including Foster’s, with the Group’s businesses. The Group’s overall business strategy and focus is to be a significant participant in the consolidation of the global beer industry. In recent years, the Group has made numerous acquisitions of companies and businesses, including in Europe, Africa, Asia, Latin America, the United States and Australia. Although further consolidation of the beer industry is expected, the Group will be able to make further acquisitions only if it identifies suitable targets and agrees on terms attractive to it. When considering an acquisition, the Group makes certain estimates as to economic, market and other conditions, including estimates relating to the value or potential value of the target and the potential return on investment. These estimates may prove to be incorrect, rendering the Group’s further consolidation unsuccessful, with consequent negative effects for the Group’s business, financial condition and results of operations. Any acquisition which the Group has completed (including its acquisition of Foster’s), or may complete in the future, is accompanied by the risks commonly encountered with acquisitions of companies or businesses, such as the difficulty of integrating the acquired businesses, the potential disruption to its own businesses, the retention of key management personnel, the assumption of unexpected liabilities and the possibility that indemnification agreements with the sellers of such assets may be insufficient to cover potential liabilities, the establishment and maintenance of common standards, controls, procedures and policies, and the impairment of relationships with employees and counterparties as a result of difficulties arising out of integration. In the case of any acquisition, there can be no assurance that these risks will not materialise, and such matters could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group may be impacted by changes in the availability or price of raw materials. The supply and price of raw materials used to produce the Group’s products can be affected by a number of factors beyond its control, including the level of crop production around the world, export demand, government regulations and legislation affecting agriculture, adverse weather conditions, currency fluctuations, economic factors affecting growth decisions, various plant diseases and pests. The Group cannot predict future availability or prices of the products and materials required for its products. The markets in the relevant commodities may continue to experience price increases or suffer from disruptions in supply. The foregoing may affect the price and availability of ingredients that the Group uses to produce its products as well as the cans and bottles in which the Group’s products are packaged. In particular, in recent years the Group has experienced significant input cost increases in the market prices of malt, barley and hops. Rising prices of oil, gasoline, natural gas and diesel fuel have also led to an increase in the cost of transport, glass and aluminium. The impact of this on the Group’s profitability has been tempered by savings achieved through its global procurement programme, through supply contracts for future requirements and an active hedging programme, combined with programmes to support development of local barley farming in India and China, and in similar initiatives in a number of countries in Africa. However, such measures may not provide complete protection over the longer

9 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD term. If the Group cannot recapture these price increases through its sales to customers, or if volumes decrease as a result, the Group’s revenues and/or profits may decrease, which could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, water availability is of utmost concern to the Group as the Group requires access to significant water resources to continue its operations. The Group has entered into partnerships with global, local and governmental partners in different regions to engineer a co-ordinated response to water stress. Despite these efforts, any stoppage, scarcity or interruption in water supply could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group is dependent on its senior management and may fail to identify, develop and retain its current and future global management capability. In order to develop, support and market its products, the Group must hire and retain skilled employees with particular expertise. Failure to maintain this capacity at a high level or maintain its effective organisational leadership process, which can capture shared learning and leverage global synergies and expertise, could jeopardise its growth potential. In addition, various aspects of the Group’s business depend on the continuing services and skills of key individuals of the Group, in particular, its senior management and executive directors. The Group has entered into employment contracts and taken other steps to encourage the retention of these individuals, and to identify and retain additional personnel, but if one or more of these key individuals retire or are unable or unwilling to continue in their present positions, the Group may not be able to replace them easily or at all and its business, results of operations and financial condition could be materially adversely affected if certain key individuals either cease to be employed by the Group or their services cease to be available to the Group.

The Group operates in highly competitive markets. Globally, brewers compete mainly on the basis of brand image, price, customer service, distribution networks and, particularly in developed markets, quality. While globally the beer industry is not highly concentrated, in many of the countries in which the Group has operations, including the United States, two or three brewers account for a very large proportion of the market and smaller local brewers make up the balance. Consolidation has significantly increased the capital base and geographic reach of the Group’s other competitors in some of the markets in which they operate, as well as increasing the cost of competition, and competition is expected to increase further as the trend towards consolidation among companies in the beer industry continues. Examples of this trend include the acquisition in 2008 by InBev S.A.-N.V. of Anheuser-Busch Companies Inc. to form Anheuser-Busch InBev S.A.-N.V. (‘‘A-B InBev’’), the acquisition by N.V. of the Mexican and Brazilian beer businesses of Fomento Econo´mico Mexicana S.A.B. de C.V. (‘‘FEMSA’’) in 2010 and Asia Pacific Breweries Limited in 2012, the Kirin Group’s acquisition of Lion Nathan National Foods in 2009 and the Schincariol Group in 2011, the acquisition by Molson Coors of StarBev LP in 2012, and the recently-completed acquisition by A-B InBev of the remaining 50 per cent. interest in , S.A.B. de C.V. not previously owned by it. In addition to competition among brewers, the Group competes against alternative beverages on the basis of factors over which the Group has little or no control and that may result in fluctuations in demand for the Group’s products. Such factors include variation and perceptions in health consciousness, changes in prevailing economic conditions, changes in the demographic make-up of target consumers, changing social trends and attitudes regarding alcoholic beverages and changes in consumer preferences for beverages. 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. Competition with brewers and producers of alternative beverages in its various markets could cause the Group to reduce pricing, increase capital, marketing and other expenditure or lose market share, any of which could have a material adverse effect on the Group’s business, financial condition and results of operations.

The jurisdictions in which the Group operates may adopt regulations that could increase costs and liabilities or could limit business activities. The Group’s business is highly regulated by the European Union and other national and local government entities and, in the case of MillerCoors, is subject to extensive regulation in the United

10 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD States by federal, state and quasi-governmental authorities. These regulations govern many parts of the Group’s operations, including brewing, bottling, branding, marketing and advertising, transportation, distributor relationships and sales. Other regulations governing taxation, environmental impact and labour relations also affect the Group’s operations. Changes in any of the relevant regulations could have a material adverse effect on the Group’s business, results of operations, cash flows or financial condition. There can be no assurance that the Group will not incur material costs or liabilities in connection with its compliance with current applicable regulatory requirements or that such regulations will not interfere with, restrict or affect the Group’s businesses. The level of regulation to which the businesses of the Group are subject can be affected by changes in the public perception of beer consumption. Governmental bodies may respond to any public criticism by implementing further regulatory restrictions on opening hours, drinking ages or advertising, by varying, revoking or suspending the licenses, permits or approvals under which the Group operates or by imposing minimum unit pricing requirements on alcohol retailers. Such steps could adversely affect the sale and consumption of beer and have a material adverse effect on the Group’s business, financial condition and results of operations.

Tax, fees and excise costs in excess of the Group’s existing provisions may arise from fiscal reforms, discriminatory excise taxes and restrictive legislative environments. Various legislative authorities in those countries in which the Group operates consider proposals from time to time to impose additional excise and other taxes or fees on the production and sale of alcoholic beverages, including beer. Changes in such duties applicable to the Group’s products affect the prices at which they are sold. Increases in the levels of fees, excise and other tax (either on an absolute basis or relative to the levels applicable to other alcoholic beverages) could have a significant adverse impact on sales volumes. In addition, there is no assurance that the operations of the Group’s breweries and other facilities will not become subject to increased taxation by national, local or foreign authorities. Changes in corporate income tax rates or regulations on repatriation of dividends and capital could also adversely affect the Group’s cash flow and its ability to distribute earnings to the Group.

The Group is facing increasing restrictions on the marketing, distribution and sale of alcohol. In recent years, there has been increased social and political attention directed at the alcoholic beverage industry, particularly in the United States. The Group believes that this attention is the result of public concern over alcohol-related problems, including drunk driving, underage drinking and the health consequences of the misuse of alcohol. Such public concerns and any resulting restrictions may cause consumption trends to shift away from beer to non-alcoholic beverages. If, as a result of such concerns and restrictions, the social acceptability of beer were to decline significantly, sales of the Group’s products could materially decrease.

The Group is exposed to financial market risks, including fluctuations in foreign exchange and interest rates, which create volatility in relation to its derivative contracts. The Group uses derivative financial instruments to manage foreign exchange rate and interest rate risks, which expose the Group to movements in foreign exchange and interest rates. The Group’s derivatives include interest rate swaps, cross currency swaps and forward foreign currency contracts. Such derivative instruments are used to alter the risk profile of an existing underlying exposure of the Group in line with its risk management policies. The accounting for these interest rate and foreign exchange rate hedging activities results in volatility in the Group’s net assets caused by marking to market these derivative contracts at each balance sheet date. In addition, if derivatives are fixed at rates in excess of actual market rates, this may in the future reduce the Group’s profitability. To the extent that the Group does not, or does not effectively, hedge its exposure to interest rate and foreign exchange rate fluctuations, the Group may incur higher than expected interest and foreign exchange expenses, which could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

The Group has exposure to the risk of litigation. Companies in the alcoholic beverage industry are, from time to time, exposed to litigation relating to , alcohol abuse problems or health consequences from the excessive consumption of alcohol. Increasing restrictions over the advertising of alcoholic beverages increases

11 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD the risk of non-compliance with applicable regulations, which may increase the likelihood of litigation claims. Moreover, changes in applicable laws regarding claimant’s rights and collective action and the growing claim culture potentially increase the risks of litigation. If any such litigation results in fines, liability to pay damages or reputational damage to SABMiller or any member of the Group or its brands, this could have a material adverse effect on the Group.

Negative publicity against consumption of alcoholic beverages in general and beer consumption in particular may adversely affect the Group. Negative publicity regarding alcohol consumption generally and beer consumption specifically, whether medical in nature or otherwise, could adversely affect public perception of alcoholic beverages and negatively impact demand for the Group’s products, which may result in a material adverse effect on the Group’s business, results of operations and financial condition.

The Group’s future capital needs may require that the Group seeks debt financing, refinancing or additional equity funding, which may not be available or may be materially more expensive. From time to time, the Group may be required to raise additional funds for its future capital needs or to refinance its current funding through public or private financing, strategic relationships or other arrangements. However, due to the continuing economic uncertainty and recent crises in the global financial markets, there can be no assurance that such funding, if needed, will be available on attractive terms, or at all. Furthermore, any additional financing arrangements may be dilutive to shareholders, and debt financing, if available, may involve restrictive covenants. In addition, debt financing, refinancing or additional equity funding may be materially more expensive due to a lack of liquidity or a general lack of confidence in the markets. The Group’s failure to raise capital when needed could have a material adverse effect on the Group’s business, results of operations and financial condition.

The Group is subject to environmental regulation by national, state and local agencies, including, in certain cases, regulations that impose liability without regard to fault. The Group’s operations are subject to environmental regulation by national and local agencies. These can result in liability or increased costs of operations which might adversely affect the Group’s profits. The environmental regulatory climate in the markets in which the Group operates is becoming stricter, with greater emphasis on enforcement. It is anticipated that, in the medium to long term, environmental controls in most of the jurisdictions in which the Group operates will be brought up to the same standards as those existing in the United States, Australia and Western Europe. While the Group has budgeted for future capital and operating expenditure to maintain compliance with environmental laws and regulations, there can be no assurance that the Group will not incur any environmental liability or that applicable environmental laws and regulations will not change or become more stringent in the future.

Change in the competition regulations in certain jurisdictions in which the Group has a leading market share may restrict the Group’s ability to expand through strategic acquisitions. In many of the countries in which the Group operates, including South Africa, Australia, the United States and countries in Africa, Europe and Latin America, the Group has a leading position in the local beer markets. There can be no assurance that the introduction of new competition regulations in these markets would not have a material adverse effect on the Group’s business by restricting the Group’s ability to expand its operations through strategic or incremental acquisitions.

Certain of the Group’s operations depend on independent distributors to sell its products. Certain of the Group’s operations, including MillerCoors, are highly dependent on independently owned wholesale distributors for distribution of their products for resale to retail outlets. There can be no assurance that these distributors, who often act both for the Group and its competitors, will not give the Group’s competitors’ products higher priority, thereby reducing their efforts to sell the Group’s products. In addition, the regulatory environment of many states in the United States makes it very difficult to change distributors. In most cases, poor performance by a distributor is not a ground for replacement. The consequent inability of the Group to replace unproductive or inefficient distributors could have a material adverse effect on the Group’s business.

12 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD The Group is dependent on sole suppliers for some of its key materials. Certain companies within the Group currently purchase nearly all of their key packaging materials from sole suppliers under multi-year contracts. The loss of or temporary discontinuity of supply from any of these suppliers without sufficient time to develop an alternative source could cause the Group to spend increased amounts on such supplies in the future.

If any of the Group’s products are found to contain contaminants, the Group may be subject to product recalls or other liabilities which could cause it to incur significant additional costs. The Group takes precautions to ensure that its beverage products are free from contaminants. Such precautions include quality-control programmes for primary materials, the production process and the Group’s final products. The Group has established procedures to correct any problems that are detected. Although the Group has not had any material problems in the past with contamination of any of its products, in the event that contamination occurs in the future, it may lead to business interruption, product recalls or liability, each of which could have an adverse effect on the Group’s business, reputation, prospects, financial condition and results of operations. Although the Group maintains insurance policies against certain of these risks, it may not be able to enforce its rights in respect of these policies and, in the event contamination occurs, any amounts that the Group does recover may not be sufficient to offset any damage it may suffer.

The Group’s results of operations depend heavily on maintaining good relations with its workforce. The success of the Group depends upon maintaining good relations with its workforce. Management believes that the Group’s relations with its employees and unions are satisfactory. A substantial majority of the Group’s workforce in various of its operations is unionised. Any work stoppages or strikes could adversely affect the Group’s ability to operate its businesses. There can be no assurance that any increase in labour costs would not have a material adverse effect on the Group’s business.

There is a high incidence of HIV/AIDS in certain of the developing markets in which the Group operates. The incidence of HIV/AIDS infection in developing markets, especially sub-Saharan Africa, is high, and prevalence rates are forecast to increase over the next decade, particularly in Africa, India and China. Those at risk may include both the Group’s employees, giving rise to increased sickness and disability costs for the Group, and customers and consumers, resulting in a reduction in sales. There can be no assurance that the incidence of HIV/AIDS infection in the markets in which the Group operates will not have a material adverse effect on the Group’s business.

The Group is reliant on the reputation of its brands and the protection of its intellectual property rights. An event, or a series of events, that materially damages the reputation of one or more of the Group’s brands could have an adverse effect on the value of that brand and subsequent revenue from that brand or business. The Group has invested considerable effort in protecting its brands, including the registration of trademarks and domain names. If the Group is unable to protect its intellectual property, any infringement or misappropriation could materially harm its future financial results, and its ability to develop its business. Also, if the Group fails to ensure the relevance and attractiveness of its brands, and the enhancement of brand marketing, there is a risk that significant growth opportunities may not be realised and this could have a material adverse effect on the Group’s business.

The Group is reliant on its information technology to conduct its business in the different regions in which the Group operates. The Group is increasingly reliant on its information technology and systems as the Group maintains operations in different regions and relies on its information systems to maintain and improve its operational efficiency. Although the Group takes preventative measures to protect and secure its information systems, these systems may be vulnerable to different operational or security challenges, including telecommunications failures, interruptions, security breaches and other types of interference. Any such interference may have a material adverse effect on the Group’s business, results of operations and financial condition.

13 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Failure by the Group to complete the delivery of its current business capability programme could have a negative impact. The Group is executing a major business capability programme designed to simplify its business processes, reduce costs and allow local management teams to focus more closely on their own markets. If the Group fails for any reason to successfully complete the delivery of this programme as planned or to derive the expected benefits from the programme, there is a risk of increased programme costs, delays in benefit realisation, disruption to the business or a reduced competitive advantage. This could have a material adverse effect on the Group’s business, results of operations and financial condition.

Adverse weather conditions may reduce the demand for the Group’s products. Demand for the Group’s products may be affected by adverse weather conditions. Demand is affected by seasonal consumption cycles whereby the Group experiences the strongest demand for its products during the summer months in each of the regions in which the Group operates. Adverse weather conditions, especially in the summer months when unseasonably cool or wet weather can affect sales volumes, therefore may have a material adverse effect on the Group’s results of operations and financial condition.

The Group may be negatively impacted by natural and other disasters. The Group’s business and operating results could be negatively impacted by natural, social, technical or physical risks or disruptions or disasters such as earthquakes, hurricanes, flooding, fire, water scarcity, power loss, loss of water supply, telecommunications failures, labour disputes, political instability, military conflict and uncertainties arising from terrorist attack, a global economic slowdown, the economic consequences of any military action and associated political instability.

Risk factors relating to the Notes Investors in the Notes may have limited recourse against the independent auditors. The Group Financial Information, which has been extracted without material adjustment from the Group Annual Reports, contains independent auditors’ reports for each of the years ended 31 March 2013 and 2012 from PwC. These independent auditors’ reports contain the following sentences: ‘‘This report, including the opinions, has been prepared for and only for the company’s 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 or into whose hands it may come save where expressly agreed by our prior consent in writing.’’ These sentences purport to limit the scope of the independent auditor’s duty of care in relation to such reports and the Group Financial Information to which they relate. If a US court (or any other court) were to give effect to this limitation, the recourse that investors in the Notes may have against PwC based on their reports or the Group Financial Information to which they relate could be limited. The US Securities and Exchange Commission would not permit such a limitation to be included in a registration statement or a prospectus used in connection with an offering of securities registered under the Securities Act or in a report filed under the Exchange Act. See ‘‘General Information – Auditors and nature of financial information’’ for a description of the independent auditors’ reports.

If an active trading market does not develop for the Notes, holders may not be able to resell them. The Notes and the Guarantees have not been registered under the Securities Act. Accordingly, the Notes can only be offered or sold pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Issuer and SABMiller do not intend subsequently to register the Notes for resale or to exchange a new series of registered notes for the Notes. There is no existing market for the Notes, and the Issuer and SABMiller can offer no assurance as to the liquidity of any market that may develop for the Notes, the ability of holders to sell their Notes or the prices at which Notes may be sold. Future trading prices of the Notes will depend on many factors, including, among other things, prevailing interest rates, the Group’s operating results and the market for similar securities. Certain of the Initial Purchasers have advised the Issuer and SABMiller that they currently intend to make a market in the Notes. However, they are not obligated to do so and they may discontinue any market-making at any time without notice.

14 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD The Notes and the Guarantees are unsecured obligations of the Issuer and the Guarantor, respectively. The Notes will be senior unsecured indebtedness of the Issuer and will rank junior to all of the Issuer’s existing and future secured obligations. Similarly, the Guarantees will be senior unsecured obligations of SABMiller and will rank junior to all of SABMiller’s existing and future secured obligations. The Notes will rank equally in right of payment with all existing and future unsecured indebtedness of the Issuer and will be effectively subordinated to all of the existing and future indebtedness and other liabilities of the subsidiaries and associated companies of the Issuer. Similarly, the Guarantees will rank equally in right of payment with all existing and future unsecured obligations of SABMiller and will be effectively subordinated to all of the existing and future indebtedness and other liabilities of the subsidiaries and associated companies of SABMiller. The terms of the Notes limit only the amount of additional indebtedness secured by principal properties or shares of companies that own principal properties that the Issuer or SABMiller can create, incur, assume or guarantee. For more information on the ranking of the Notes, see ‘‘Description of the Notes’’.

The Issuer and SABMiller must rely on payments from their respective subsidiaries to fund payments on the Notes and under the Guarantees, respectively. The Issuer and SABMiller are holding companies with limited assets and limited ability to generate revenues. As such, the Issuer and SABMiller are each wholly-dependent on funding arrangements with their respective subsidiaries to meet their cash requirements, including paying amounts due under the Notes or (as the case may be) the Guarantees. If payments of dividends or other distributions from the Issuer’s or (as the case may be) SABMiller’s subsidiaries are not made, for whatever reason, the Issuer or (as the case may be) SABMiller may not have sufficient sources of funds available to make payments on the Notes or (as the case may be) the Guarantees. Holders will not have a direct claim on the cash flows or assets of the Issuer’s or SABMiller’s subsidiaries and those subsidiaries have no obligation, contingent or otherwise, to pay amounts due under the Notes or the Guarantees, or to make funds available to the Issuer or SABMiller for those payments. In addition, the ability of the Issuer’s and SABMiller’s subsidiaries to make payments, loans or advances to the Issuer or SABMiller may be limited by the laws of the relevant jurisdiction in which such subsidiaries are organised or located.

Holders of Notes may be subject to modification and waiver of the Terms and Conditions of the Notes. The Notes contain provisions for calling meetings of holders of Notes to consider matters affecting their interests generally. These provisions permit defined majorities to bind all holders of Notes, including holders who did not attend and vote at the relevant meeting and holders who voted in a manner contrary to the majority.

Payments made by the Issuer may become subject to withholding under the EU Savings Directive. Under European Council Directive 2003/48/EC on the taxation of savings income (the ‘‘EU Savings Directive’’), each Member State is required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to (or for the benefit of) an individual or to certain other persons in that other Member State. However, for a transitional period Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). The European Commission has proposed certain amendments to the Directive, which may, if implemented, amend or broaden the scope of the requirements described above. A number of non-EU countries and territories have adopted similar measures with effect from the same date.

If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, none of the Issuer, SABMiller, any Paying Agent or any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. However, the Issuer is required to maintain a Paying Agent in a Member State that is not obliged to withhold or deduct tax pursuant to the Directive.

15 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD If the Notes were significantly modified after 30 June 2014, US Foreign Account Tax Compliance Withholding could in certain circumstances apply to payments to certain non-US holders. While FATCA is not expected to apply in this case, if the Notes are significantly modified after 30 June 2014, FATCA may affect payments to intermediaries in the payment chain or ultimate payments to investors if an intermediary or investor is generally not entitled to receive payments free of FATCA withholding or fails to provide the payor with any information, forms, other documentation or consents that may be necessary for a payment to be made free of FATCA withholding. While the Notes are held in global form FATCA would not affect the amount of any payment made under, or in respect of Notes, by the Issuer or the Guarantor to DTC and it is not expected that FATCA would affect the amount of payments received by Euroclear or Clearstream from DTC. See ‘‘Taxation – Certain United States Federal Income Tax Considerations – Non-U.S. Holders – FATCA Withholding.’’

The Terms and Conditions of the Notes may become subject to a change of law. The Terms and Conditions of the Notes are based on the laws of the State of New York in effect as at the date of issue of the Notes. No assurance can be given as to the impact of any possible judicial decision or change to such laws or administrative practice after the date of issue of the Notes.

Risk factors relating to the market The credit ratings assigned to the Notes may not accurately reflect all risks associated with the Notes. Credit ratings assigned to the Notes by rating agencies may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time. In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes, unless such ratings are issued by a credit rating agency established in the EU and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also apply in the case of credit ratings issued by non-EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU-registered credit rating agency or the relevant non-EU rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as the case may be, has not been withdrawn or suspended).

Legal investment considerations may affect the treatment of Notes and may restrict certain investors purchasing or pledging any Notes. The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (1) Notes are legal investments for it, (2) Notes can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Notes under any applicable risk- based capital or similar rules.

16 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Use of Proceeds

The estimated net proceeds of the offering of the Notes will be US$1,094,297,500 after deducting discounts and commissions, but before deducting any expenses associated with the offering. The net proceeds will be used to repay the Issuer’s debt obligations incurred to finance the acquisition of Foster’s and the balance will be used for the Group’s general corporate purposes.

17 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Consolidated Capitalisation and Indebtedness of SABMiller

The following table sets out the consolidated capitalisation and indebtedness of SABMiller as at 31 March 2013, unadjusted for the issue of the Notes. This table should be read in conjunction with the Group Financial Information and the other information in this Prospectus.

As at 31 March 2013

(audited) (in US$ millions) Current borrowings (51 year) ...... 2,469 Non-current borrowings (41 year) ...... 16,079

Total debt1...... 18,548 Shareholders’ equity Share capital ...... 167 Share premium and other reserves ...... 12,495 Retained earnings...... 13,710

Total shareholders’ equity...... 26,372 Equity non-controlling interests...... 1,088

Total capitalisation and indebtedness2 ...... 46,008

1 As at 31 March 2013, US$53 million of SABMiller’s consolidated indebtedness was secured. 2 Total capitalisation and indebtedness includes current and non-current borrowings, shareholders’ equity and equity non- controlling interests. There has been no material change in the consolidated capitalisation and indebtedness of SABMiller since 31 March 2013.

18 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Selected Financial and Other Information

The following table sets forth summary consolidated financial information for the Group as at and for the years ended 31 March 2013, 2012 and 2011 prepared in accordance with IFRS. The summary financial information in this section has been derived from the Group Financial Information included herein and should be read in conjunction with, and is qualified by reference to, such information. Such information is also qualified by reference to, and should be read in conjunction with, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and the other information relating to the Group included elsewhere in this Prospectus.

Years ended 31 March

2013 2012 2011

(audited) (in US$ millions) Consolidated income statement data Revenue ...... 23,213 21,760 19,408 Operating profit ...... 4,203 5,013 3,127 Net finance costs ...... (735) (562) (525) Share of post-tax results of associates and joint ventures ...... 1,244 1,152 1,024 Taxation...... (1,201) (1,126) (1,069)

Profit for the year...... 3,511 4,477 2,557

Profit attributable to non-controlling interests ...... 237 256 149 Profit attributable to owners of the parent ...... 3,274 4,221 2,408

3,511 4,477 2,557

Years ended 31 March

2013 2012 2011

(audited) (in US$ millions) Consolidated cash flows Net cash generated from operating activities...... 4,101 3,937 3,043 Net cash used in investing activities ...... (663) (11,600) (517) Net cash (used in)/generated from financing activities...... (2,034) 7,495 (2,327) Effects of exchange rate changes...... (51) (39) 25

Net increase/(decrease) in cash and cash equivalents...... 1,353 (207) 224 Cash and cash equivalents at 1 April...... 606 813 589

Cash and cash equivalents at end of period ...... 1,959 606 813

19 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Years ended 31 March

2013 20121 20111

(audited) (in US$ millions) Consolidated balance sheet Non-current assets...... 50,588 50,998 34,870 Current assets ...... 5,706 4,930 4,244

Total assets ...... 56,294 55,928 39,114 Current liabilities ...... (8,526) (7,263) (6,018) Non-current liabilities ...... (20,308) (22,633) (10,337)

Total liabilities ...... (28,834) (29,896) (16,355)

Net assets...... 27,460 26,032 22,759

Shareholders’ equity ...... 26,372 25,073 22,008 Non-controlling interests in equity...... 1,088 959 751

Total equity...... 27,460 26,032 22,759

Years ended 31 March

2013 20121 2011

(audited) Other financial data EBITA margin (%)2...... 18.6 17.9 17.8 Adjusted EBITDA margin (%)3 ...... 24.1 23.0 22.9 Interest cover4 ...... 9.1x 11.4x 10.8x Net debt to total equity (%)5 ...... 57.2 68.6 31.2 Cash flow to total borrowings (%)6...... 29.9 27.2 54.0

1 Restated to reflect adjustments to provisional fair values of business combinations that occurred in the year. 2 EBITA margin (%) is calculated by expressing EBITA as a percentage of group revenue (including the Group’s share of revenue from associates and joint ventures). 3 Adjusted EBITDA margin (%) is calculated by expressing adjusted EBITDA as a percentage of revenue plus the Group’s share of MillerCoors’ revenue. Adjusted EBITDA comprises EBITDA before cash flows from exceptional items and includes dividends received from the Group’s joint venture MillerCoors. 4 Interest cover is the ratio of adjusted EBITDA to adjusted net finance costs. Adjusted net finance costs comprises net finance costs excluding fair value movements in relation to capital items for which hedge accounting cannot be applied and any exceptional finance charges or income. 5 Net debt to total equity (%) is calculated by expressing gross debt (including borrowings, overdrafts, borrowings-related derivative financial instruments and finance leases) net of cash and cash equivalents (excluding overdrafts) as a percentage of total equity. 6 Cash flow to total borrowings (%) is calculated by expressing net cash generated from operations for the 12 months to the end of the period as a percentage of gross debt (including borrowings, overdrafts and finance leases).

20 c108736pu020 Proof 5: 8.8.13_13:32 B/L Revision: 0 Operator ChoD Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, the Group Financial Information. The discussion includes forward-looking statements which involve risks and uncertainties. Prospective investors should review the ‘‘Risk Factors’’ set forth elsewhere in this Prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein.

Overview SABMiller, together with its subsidiaries, associated companies and joint ventures, is, according to Canadean, one of the world’s largest brewers, occupying a top-two market position by volume in many markets in which it operates, with group revenue2, operating profit and lager volumes for the year ended 31 March 2013 of US$34,487 million, US$4,203 million and 242 million hl respectively. As at 31 March 2013, the Group’s total assets were US$56,294 million. The Group is also one of the largest bottlers and distributors of Coca-Cola products outside the United States. The Group has brewing interests and distribution agreements across six continents, with a balance between fast-growing developing markets and cash-generative mature markets. The Group has a diverse portfolio of local, regional and global brands, including international premium beers such as , Peroni Nastro Azzurro, MGD and Grolsch, along with leading local brands such as Aguila, Castle Lager, Miller Lite, Snow, Tyskie and . SABMiller is a FTSE-100 company listed on the London and the Johannesburg stock exchanges. The Group has demonstrated significant growth, with market capitalisation growing from US$5,421 million as at 31 December 2000 to approximately US$80,082 million as at 5 August 2013. Since the Group was first rated in 2003, SABMiller has been rated Baa1/stable outlook by Moody’s and, until 2 July 2012, BBB+/stable outlook by S&P. On 2 July 2012, S&P revised its rating to BBB+/positive outlook. Moody’s rating remains unchanged.

Segmental Reporting The Group operates its businesses in seven operating segments: Latin America, Europe, North America, Africa, Asia Pacific, South Africa: Beverages and South Africa: Hotels and Gaming. The operating segments reflect the management structure of the Group and the way performance is evaluated and resources allocated based on group revenue and EBITA by the Group’s chief operating decision maker, defined as the executive directors. An operating segment is a distinguishable business or geographical component of the Group that provides products or services that are different from those of other segments. Segments’ results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Reportable segments are operating segments that meet certain quantitative thresholds set out in accordance with IFRS. The Group is focused geographically and, while not meeting the definition of reportable segments, the Group reported separately as segments South Africa: Hotels and Gaming and Corporate as the Group believes this provided useful additional information.

Factors that affect the results of operations Seasonality Revenue across the Group’s operating segments tends to be stronger in the summer months but, because of the diverse geographical profile of the businesses, which are located in both the Northern and Southern hemispheres, the impact of any regional seasonality does not have a material effect on the Group as a whole.

Currency translation effects While translations of foreign currencies into US dollars impact the Group’s financial statements, changes in the relative values of the currencies of the respective jurisdictions in which the Group operates do not generally have a material direct impact on the operating performance of local operations, as the majority of the associated revenues and costs arise within such jurisdictions.

2 Group revenue comprises revenue together with the Group’s share of revenue from associates and joint ventures

21 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD SABMiller Group Financial Information The year ended 31 March 2013 compared with the year ended 31 March 2012

Year ended 31 March

2013 2012

(audited) (in US$ millions) Revenue...... 23,213 21,760 Net operating expenses ...... (19,010) (16,747)

Operating profit...... 4,203 5,013 Operating profit before exceptional items ...... 4,403 3,987 Exceptional items...... (200) 1,026 Net finance costs...... (735) (562) Finance costs...... (1,417) (1,093) Finance income ...... 682 531 Share of post-tax results of associates and joint ventures...... 1,244 1,152

Profit before taxation ...... 4,712 5,603 Taxation...... (1,201) (1,126)

Profit for the year...... 3,511 4,477

Profit attributable to non-controlling interests...... 237 256 Profit attributable to owners of the parent...... 3,274 4,221

3,511 4,477

Revenue Revenue, excluding the Group’s share of associates’ and joint ventures’ revenue, was US$23,213 million for the year ended 31 March 2013, representing an increase of 7% from US$21,760 million for the year ended 31 March 2012. Revenue increased principally as a result of volume growth, selective price increases and positive sales mix and the inclusion of Foster’s for the whole year. Group revenue, including the Group’s share of associates’ and joint ventures’ revenue of US$11,274 million, was US$34,487 million for the year ended 31 March 2013, representing an increase of 10% from US$31,388 million for the year ended 31 March 2012. This represents, on an organic, constant currency basis, an increase of 7% for the year, which was driven by volume growth of 4% and a 3% improvement in the prices of the Group’s products and the mix of products sold, with Latin America, Africa and South Africa: Beverages being the more significant contributors. Currency movements had an adverse impact of five percentage points on group revenue growth mainly due to the weakening of the South African rand and Central European currencies against the US dollar. The acquisition of Foster’s, the combination of the Group’s Angolan and Nigerian businesses with Castel, and the contribution of the Group’s Russian and Ukrainian businesses to Anadolu Efes in exchange for an equity stake in the enlarged Anadolu Efes, all in the prior year, contributed to the increase in group revenue for the year ended 31 March 2013.

Net operating expenses Net operating expenses were US$19,010 million for the year ended 31 March 2013, representing an increase of 14% from US$16,747 million for the year ended 31 March 2012. Net operating expenses included US$200 million of net exceptional charges for the year ended 31 March 2013 compared with US$1,026 million of net exceptional credits in the previous year. Excluding these exceptional items, net operating expenses increased by 6% for the year ended 31 March 2013 compared with the previous year as a result of higher volumes, higher raw material costs, higher marketing spend to support brand development and increased fixed costs, partly offset by on-going

22 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD cost efficiency initiatives, procurement and other savings, together with the impact of currency movements. Operating profit Operating profit was US$4,203 million for the year ended 31 March 2013, representing a decrease of 16% from US$5,013 million for the year ended 31 March 2012. Operating profit included US$200 million of net exceptional charges for the year ended 31 March 2013 compared with US$1,026 million of net exceptional credits in the previous year. Operating profit before exceptional items was US$4,403 million for the year ended 31 March 2013, representing an increase of 10% from US$3,987 million for the year ended 31 March 2012. Operating profit before exceptional items increased principally as a result of higher sales volumes, selective price increases, positive mix and the impact of acquisitions and business combinations in the second half of the prior year, partly offset by higher input, marketing and fixed costs, and the impact of adverse foreign exchange rate movements. Exceptional items Net exceptional charges of US$203 million before finance costs and tax were reported for the year ended 31 March 2013 compared with net exceptional credits of US$1,037 million for the year ended 31 March 2012. These included net exceptional charges of US$3 million in the year ended 31 March 2013 compared with net exceptional credits of US$11 million in the year ended 31 March 2012, which related to the Group’s share of associates’ and joint ventures’ exceptional charges. The net exceptional charges in the year ended 31 March 2013 included a US$141 million charge related to business capability programme costs in Latin America, Europe, South Africa: Beverages and the Corporate divisions; a charge of US$91 million in respect of integration and restructuring costs in Asia Pacific and South Africa: Beverages; a charge of US$30 million in respect of the impairment of the group’s business in Vietnam in Asia Pacific; and a charge of US$17 million in respect of the Broad-Based Black Economic Empowerment scheme in South Africa representing the on-going IFRS 2 share-based payment charge in respect of the employee element of the scheme, partially offset by a credit of US$79 million related to additional profit on the prior year disposal of the group’s Angolan operations in Africa. The Group’s share of associates’ and joint ventures’ exceptional items in the year ended 31 March 2013 included an impairment of US$3 million in Angola in Africa. The net exceptional credits in the year ended 31 March 2012 included a US$1,195 million gain on the disposal of the Group’s Russian and Ukrainian businesses to Anadolu Efes in Europe; a US$67 million gain on the disposal of the Group’s Angolan businesses to the Castel group in Africa; a US$66 million gain on the Pacific Beverages transaction in Asia Pacific; a US$103 million gain on the disposal of the Group’s Kenyan associate in Africa; a US$42 million gain on the repayment of an EU fine paid by Grolsch before the Group acquired Grolsch; a US$14 million loss on the disposal of a business in Europe; a US$235 million charge related to the business capability programme in Latin America, Europe, Africa, Asia Pacific, South Africa: Beverages and the Corporate divisions; US$109 million of transaction-related costs in relation to the Foster’s acquisition; a US$60 million charge related to integration and restructuring costs in Asia Pacific and Latin America; and a US$29 million charge related to the Broad-Based Black Economic Empowerment scheme in South Africa. The Group’s share of associates’ and joint ventures’ exceptional items in the year ended 31 March 2012 included a charge of US$35 million related to the Group’s share of MillerCoors’ Sparks brand impairment; a credit of US$10 million related to the Group’s share of South Africa: Hotels and Gaming’s gain on the Formula 1 transaction; a gain of US$13 million related to the Group’s share of South Africa: Hotels and Gaming’s release of deferred contingent consideration; and a gain of US$23 million related to the Group’s share of Castel’s gain on the disposal of its Nigerian subsidiary. EBITA EBITA is the Group’s operating profit before exceptional items and amortisation of intangible assets (excluding computer software) and includes the Group’s share of associates’ and joint ventures’ operating profit on a similar basis. EBITA was US$6,421 million for the year ended 31 March 2013, representing an increase of 14% from US$5,634 million for the year ended 31 March 2012, as a result of the contribution from Foster’s and other business combinations, partly offset by the impact of currency weakness. On an organic, constant currency basis, EBITA increased by 9% for

23 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD the year ended 31 March 2013, as a result of higher volumes and group revenue combined with some cost savings and efficiencies, partly offset by increased raw material costs, marketing spend and fixed costs.

The Group’s EBITA margin for the year ended 31 March 2013 was 18.6%, as compared with 17.9% for the year ended 31 March 2012.

Net finance costs Net finance costs were US$735 million for the year ended 31 March 2013, representing an increase of 31% from US$562 million for the year ended 31 March 2012, mainly as a result of a full year’s interest charge on the debt related to the Foster’s acquisition.

Finance costs for the year ended 31 March 2013 included a net gain of US$12 million compared with a US$2 million net gain for the year ended 31 March 2012 from the mark to market adjustments of various derivatives on capital items for which hedge accounting cannot be applied.

Finance costs for the year ended 31 March 2012 also included net exceptional finance costs of US$22 million including transaction-related net costs of US$26 million in relation to financing fees and premiums on derivative instruments used to hedge currency risk, partially offset by mark to market gains on derivative financial instruments connected with the Foster’s transaction, and exceptional interest income of US$4 million associated with the successful outcome of litigation in Europe.

Finance costs Finance costs were US$1,417 million for the year ended 31 March 2013, representing an increase of 30% from US$1,093 million for the year ended 31 March 2012. Finance costs increased principally as a result of the increase in net debt, primarily as a result of the Foster’s acquisition.

Finance income Finance income was US$682 million for the year ended 31 March 2013, representing an increase of 28% from US$531 million for the year ended 31 March 2012. Finance income increased principally as a result of fair value gains on derivative financial instruments, partly offset by the exceptional gain in the prior year.

Share of post-tax results of associates and joint ventures Share of post-tax results of associates and joint ventures was US$1,244 million for the year ended 31 March 2013, representing an increase of 8% from US$1,152 million for the year ended 31 March 2012. Share of post-tax results of associates and joint ventures increased principally as a result of higher profits generated by MillerCoors and the inclusion of the Group’s share of Anadolu Efes’ results following the completion of the strategic alliance in March 2012.

Profit before taxation Profit before taxation was US$4,712 million for the year ended 31 March 2013, representing a decrease of 16% from US$5,603 million for the year ended 31 March 2012. Profit before taxation included net exceptional charges of US$203 million for the year ended 31 March 2013 compared with net exceptional credits of US$1,015 million for the year ended 31 March 2012. Excluding these exceptional items, profit before taxation increased by 7% for the year ended 31 March 2013 primarily as a result of higher volumes, selective price increases, positive mix and the impact of acquisitions and business combinations made in the second half of the prior year more than offsetting higher input, marketing and fixed costs, increased finance costs and the impact of adverse foreign exchange rate movements.

Taxation Taxation was US$1,201 million for the year ended 31 March 2013, representing an increase of 7% from US$1,126 million for the year ended 31 March 2012. The effective tax rate, before the amortisation of intangible assets (excluding computer software) and exceptional items, of 27.0% was lower than the 27.5% for the year ended 31 March 2012 principally reflecting geographical mix changes in the Group’s taxable profit mix, together with decreases in the statutory tax rates in certain territories, partly offset by an increase in withholding taxes suffered.

24 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Profit for the period As a result of the balance of all of the foregoing, profit was US$3,511 million for the year ended 31 March 2013, representing a decrease of 22% from US$4,477 million for the year ended 31 March 2012. Profit attributable to non-controlling interests Profit attributable to non-controlling interests was US$237 million for the year ended 31 March 2013, representing a decrease of 7% from US$256 million for the year ended 31 March 2012. Profit attributable to non-controlling interests decreased principally as a result of the non- controlling interests’ share of the exceptional gain that arose in the year ended 31 March 2012 on the disposal of the Group’s investment in its associate, Kenya Breweries Ltd, in Africa. Profit attributable to owners of the parent Profit attributable to owners of the parent was US$3,274 million for the year ended 31 March 2013, representing a decrease of 22% from US$4,221 million for the year ended 31 March 2012. Profit attributable to owners of the parent decreased principally as a result of the impact of exceptional credits in the prior year. Excluding these exceptional items, profit attributable to owners of the parent increased by 7% for the year ended 31 March 2013 primarily as a result of higher volumes, selective price increases, positive mix and the impact of acquisitions and business combinations made in the second half of the prior year, partly offset by higher input, marketing and fixed costs, higher finance costs, increased tax charges and the impact of adverse foreign exchange rate movements.

The year ended 31 March 2012 compared with the year ended 31 March 2011

Years ended 31 March

2012 2011

(audited) (in US$ millions) Revenue...... 21,760 19,408 Net operating expenses ...... (16,747) (16,281)

Operating profit...... 5,013 3,127 Operating profit before exceptional items ...... 3,987 3,563 Exceptional items...... 1,026 (436) Net finance costs...... (562) (525) Finance costs...... (1,093) (883) Finance income ...... 531 358 Share of post-tax results of associates and joint ventures...... 1,152 1,024

Profit before taxation ...... 5,603 3,626 Taxation...... (1,126) (1,069)

Profit for the year...... 4,477 2,557

Profit attributable to non-controlling interests...... 256 149 Profit attributable to owners of the parent...... 4,221 2,408

4,477 2,557

Revenue Revenue, excluding the Group’s share of associates’ and joint ventures’ revenue, was US$21,760 million for the year ended 31 March 2012, representing an increase of 12% from US$19,408 million for the year ended 31 March 2011. Revenue increased principally as a result of higher volumes, focused price increases, favourable brand mix and the impact of acquisitions, primarily Foster’s. Group revenue, including the Group’s share of associates’ and joint ventures’ revenue of US$9,628 million, was US$31,388 million for the year ended 31 March 2012, representing an

25 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD increase of 11% from US$28,311 million for the year ended 31 March 2011. This represented, on an organic, constant currency basis, an increase of 7% for the year. Higher volumes and improved price/mix contributed evenly to the growth in group revenue, with price/mix gains in all divisions, most notably Africa, Asia Pacific and South Africa: Beverages. Currency movements for the year ended 31 March 2012 had no net effect on 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 and African currencies. Acquisitions positively impacted group revenue by almost 5% in the year ended 31 March 2012 on the prior year base as adjusted for disposals.

Net operating expenses Net operating expenses were US$16,747 million for the year ended 31 March 2012, representing an increase of 3% from US$16,281 million for the year ended 31 March 2011. Net operating expenses included US$1,026 million of exceptional credits for the year ended 31 March 2012 compared with US$436 million of exceptional charges in the previous year. Excluding these exceptional items, net operating expenses increased by 12% for the year ended 31 March 2012 compared with the previous year, principally as a result of higher volumes, increased raw material input costs and expenditure on sales, marketing and systems capabilities, together with the impact of acquisitions.

Operating profit Operating profit was US$5,013 million for the year ended 31 March 2012, representing an increase of 60% from US$3,127 million for the year ended 31 March 2011. Operating profit included US$1,026 million of net exceptional credits for the year ended 31 March 2012 as compared with US$436 million of net exceptional charges in the previous year. Operating profit before exceptional items was US$3,987 million for the year ended 31 March 2012, representing an increase of 12% from US$3,563 million for the year ended 31 March 2011. Operating profit before exceptional items increased principally as a result of higher volumes, price increases and improved mix, together with the impact of acquisitions, partially offset by increases in raw material costs and expenditure on sales, marketing and systems capabilities.

Exceptional items Net exceptional credits of US$1,037 million before finance costs and tax were recorded in the year ended 31 March 2012, compared with net exceptional charges of US$467 million in the year ended 31 March 2011. These included net exceptional credits of US$11 million in the year ended 31 March 2012 compared with net exceptional charges of US$31 million in the year ended 31 March 2011, which related to the Group’s share of associates’ and joint ventures’ exceptional charges. The net exceptional credits in the year ended 31 March 2012 included a US$1,195 million gain on the disposal of the Group’s Russian and Ukrainian businesses to Anadolu Efes in Europe; a US$67 million gain on the disposal of the Group’s Angolan businesses to the Castel group in Africa; a US$66 million gain on the Pacific Beverages transaction in Asia Pacific; a US$103 million gain on the disposal of the Group’s Kenyan associate in Africa; a US$42 million gain on the repayment of an EU fine paid by Grolsch before the Group acquired Grolsch; a US$14 million loss on the disposal of a business in Europe; a US$235 million charge related to the business capability programme in Latin America, Europe, Africa, Asia Pacific, South Africa: Beverages and the Corporate divisions; US$109 million of transaction-related costs in relation to the Foster’s acquisition; a US$60 million charge related to integration and restructuring costs in Asia Pacific and Latin America; and a US$29 million charge related to the Broad-Based Black Economic Empowerment scheme in South Africa. The Group’s share of associates’ and joint ventures’ exceptional items in the year ended 31 March 2012 included a charge of US$35 million related to the Group’s share of MillerCoors’ Sparks brand impairment; a credit of US$10 million related to the Group’s share of South Africa: Hotels and Gaming’s gain on the Formula 1 transaction; a gain of US$13 million related to the Group’s share of South Africa: Hotels and Gaming’s release of deferred contingent consideration; and a gain of US$23 million related to the Group’s share of Castel’s gain on the disposal of its Nigerian subsidiary. The net exceptional charge in the year ended 31 March 2011 included US$296 million related to business capability programme costs in Latin America, Europe, Africa, South Africa: Beverages and the Corporate divisions; US$98 million related to impairment charges following the classification of the in-house distribution business in Italy as held for sale and the closure of the Cluj in

26 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Romania; a charge of US$149 million in respect of the Broad-Based Black Economic Empowerment scheme in South Africa which included the one-off IFRS 2 ‘Share-based Payment Transactions’ charge in respect of the retailer element of the transaction and the ongoing IFRS 2 charge in respect of the employee element, together with the costs of the transaction; a profit of US$159 million related to the partial disposal of the Group’s shareholding in Tsogo Sun as part of the Tsogo Sun / GRR Merger; and a charge of US$52 million related to restructuring costs in Europe. The Group’s share of associates’ and joint ventures’ exceptional items in the year ended 31 March 2011 included a charge of US$5 million related to the Group’s share of MillerCoors’ integration and restructuring costs and US$26 million related to the Group’s share of the impairment loss on Tsogo Sun’s existing holding in GRR as a result of the Tsogo Sun / GRR Merger and costs associated with the transaction.

EBITA EBITA was US$5,634 million for the year ended 31 March 2012, which represented a 12% increase from US$5,044 million for the year ended 31 March 2011, principally as a result of higher volumes and revenue, together with the impact of acquisitions, partly offset by increased raw material input costs and expenditure on sales, marketing and systems capabilities. The Group’s EBITA margin for the year ended 31 March 2012 was 17.9%, as compared with 17.8% for the year ended 31 March 2011.

Net finance costs Net finance costs were US$562 million for the year ended 31 March 2012, representing an increase of 7% from US$525 million for the year ended 31 March 2011 mainly as a result of the increase in borrowings following the Foster’s acquisition. Finance costs for the year ended 31 March 2012 included a net gain of US$2 million, compared with a net loss of US$7 million for the year ended 31 March 2011, from the mark to market adjustments of various derivatives on capital items for which hedge accounting cannot be applied. Finance costs for the year ended 31 March 2012 also included net exceptional finance costs of US$22 million including transaction-related net costs of US$26 million in relation to financing fees and premiums on derivative instruments used to hedge currency risk, partially offset by mark to market gains on derivative financial instruments connected with the Foster’s transaction, and exceptional interest income of US$4 million associated with the successful outcome of litigation in Europe.

Finance costs Interest payable and similar charges were US$1,093 million for the year ended 31 March 2012, representing an increase of 24% from US$883 million for the year ended 31 March 2011. Interest payable and similar charges increased principally as a result of the increase in borrowings following the Foster’s acquisition, together with exceptional finance costs including fees and premiums.

Finance income Interest receivable and similar income was US$531 million for the year ended 31 March 2012, representing an increase of 48% from US$358 million for the year ended 31 March 2011. Interest receivable and similar income increased principally as a result of fair value gains on derivative financial instruments, including exceptional gains.

Share of post-tax results of associates and joint ventures Share of post-tax results of associates and joint ventures was US$1,152 million for the year ended 31 March 2012, representing an increase of 13% from US$1,024 million for the year ended 31 March 2011. Share of post-tax results of associates and joint ventures increased principally as a result of increased profits generated by the Group’s South African hotels and gaming associate and by Castel in Africa, together with the impact of associate interests acquired during the year including Anadolu Efes, BIH Angola and Foster’s associates.

Profit before taxation Profit before taxation was US$5,603 million for the year ended 31 March 2012, representing an increase of 55% from US$3,626 million for the year ended 31 March 2011. Profit before taxation included a net exceptional credit of US$1,015 million for the year ended 31 March 2012 compared

27 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD with a net exceptional charge of US$467 million in the previous year. Excluding these exceptional items, profit before taxation increased by 12% for the year ended 31 March 2012 as a result of higher volumes and revenues, the impact of acquisitions, partially offset by increases in operating expenses and interest charges. Taxation Taxation was US$1,126 million for the year ended 31 March 2012, representing an increase of 5% from US$1,069 million for the year ended 31 March 2011. The effective tax rate, before the amortisation of intangible assets (other than software) and exceptional items, was 27.5%, a decrease compared with 28.2% for the year ended 31 March 2011, principally as a result of the successful conclusion of the Group’s Russian court proceedings, reorganisation gains as a result of the Foster’s acquisition, changes in tax legislation, and the resolution of various uncertain tax positions. Profit for the year As a result of the balance of all the foregoing, profit was US$4,477 million for the year ended 31 March 2012, representing an increase of 75% from US$2,557 million for the year ended 31 March 2011. Profit attributable to non-controlling interests Profit attributable to non-controlling interests was US$256 million for the year ended 31 March 2012, representing an increase of 72% from US$149 million for the year ended 31 March 2011. Profit attributable to non-controlling interests increased principally as a result of higher profits in the Group’s African businesses. Profit attributable to owners of the parent Profit attributable to owners of the parent was US$4,221 million for the year ended 31 March 2012, representing an increase of 75% from US$2,408 million for the year ended 31 March 2011. Profit attributable to owners of the parent increased principally as a result of higher volumes and revenue, the impact of exceptional credits in the year, the impact of acquisitions, and a lower tax rate, partly offset by higher operating expenses and finance costs.

28 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Segmental analysis The following table shows Group revenue (including share of associates and joint ventures) and EBITA (including share of associates’ and joint ventures’ profit where relevant, but excluding operating exceptional items and corporate costs) for: (i) Latin America, (ii) Europe, (iii) North America, (iv) Africa, (v) Asia Pacific, (vi) South Africa: Beverages and (vii) South Africa: Hotels and Gaming and for the years ended 31 March 2013, 2012 and 2011, each in accordance with IFRS. Following the completion of the Foster’s acquisition in December 2011, the Asia segment was renamed the Asia Pacific segment.

Years ended 31 March

2013 2012 2011

(audited) (in US$ millions) Group revenue Latin America ...... 7,821 7,158 6,335 Europe...... 5,767 5,482 5,394 North America...... 5,355 5,250 5,223 Africa...... 3,853 3,686 3,254 Asia Pacific...... 5,685 3,510 2,026 South Africa: Beverages ...... 5,540 5,815 5,598 South Africa: Hotels and Gaming...... 466 487 481 EBITA Latin America ...... 2,112 1,865 1,620 Europe...... 784 836 887 North America...... 771 756 741 Africa...... 838 743 647 Asia Pacific...... 855 321 92 South Africa: Beverages ...... 1,129 1,168 1,067 South Africa: Hotels and Gaming...... 134 135 137 Latin America The Group’s brewing and beverage operations cover seven countries across South and Central America: Argentina, Colombia, Ecuador, El Salvador, Honduras, Panama and Peru. It is the largest brewer by market share in each of those countries except Argentina. The Group also bottles Coca- Cola products in El Salvador and Honduras and Pepsico and Schweppes products in Panama.

Discussion of results of operations for Latin America for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of associates’ revenue) was US$7,821 million for the year ended 31 March 2013, representing an increase of 9% from US$7,158 million for the year ended 31 March 2012. Revenues increased principally as a result of increased sales volumes, selected price increases and premium mix benefits. Lager and soft drinks (comprising malt beverages, sparkling soft drinks, water and juices) volumes were 43 million hl and 18 million hl, respectively, for the year ended 31 March 2013, representing an increase of 3%, across both categories compared with the prior year. The higher lager volumes were driven by the expansion of the Group’s bulk pack offerings, product innovation, increased consumer accessibility and continued focus on effective trade execution, with the increase in soft drinks volumes resulting from non-alcoholic malt beverages performing well in most markets due to wider availability and pack range extensions. In Colombia, which saw a softening of economic growth and private consumption, lager volumes grew by 3% for the year ended 31 March 2013, while the Group’s share of the alcohol market improved, reflecting the widening appeal of the Group’s brand and pack range. In line with the Group’s commercial strategy, the roll-out of bulk packs continued to drive incremental volume, while the December 2012 price increase on the Group’s mainstream single serve packs and selective price increases on the Group’s premium brands earlier in the year ended 31 March 2013, boosted revenue growth. The Group’s enhanced sales service model, with enhanced account development, helped to improve trade coverage and product availability. The segment

29 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD performed well on the back of A´ guila Light’s double digit volume growth, reflecting both the appeal of light beer and the success of the bulk pack. In the non-alcoholic malt beverages category, volumes declined by 3% as a result of price reductions in the soft drinks market, although our value share remained stable. In Peru, lager volumes grew by 5% for the year ended 31 March 2013. Lager share gains continued, notwithstanding price increases taken ahead of the peak period, supported by increased trade coverage and fridge investment. The Group’s flagship brand, Cristal, grew volumes by 15% reflecting the strong resonance of this brand with consumers, underpinned by its food and football communication platforms. Pilsen continued to expand by sourcing consumers from illegal alcohol, recording double digit volume growth for the year. In the premium segment the Group’s local premium brand, Cusquen˜a, saw softer volumes on the back of earlier price increases and the cycling of high growth in the prior year. In the soft drinks category, volume growth was strong, with the Group’s non-alcoholic malt brand, Maltin Power, up 32%, supported by digital campaigns and further penetration of the education channel. In Ecuador, lager volumes increased by 2% for the year ended 31 March 2013 despite increased trade restrictions and the loss of three trading days during Presidential elections in February 2013, while two price increases during the prior year boosted revenue growth. In the mainstream segment, Pilsener Light volumes more than doubled, reflecting the appeal of lighter beer in areas with warmer climates and benefiting the Group’s revenue mix. The Group’s local premium brand, Club, also saw double digit growth from the addition of the Club Roja red beer variant. The expanded direct service model improved trade presence and enabled healthy gains in the Group’s share of the alcohol market. The Group continued expansion of the new PET packs for the non- alcoholic malt brand, Pony Malta, resulting in volume growth of 25%. In Panama, lager volumes grew by 7% for the year ended 31 March 2013, underpinned by healthy economic growth and low unemployment. The Group’s brand portfolio development and market execution significantly boosted market share, with the premium segment seeing robust growth, driven by the strong adoption of MGD and Miller Lite. Miller Lite more than tripled its volumes, while both brands consolidated their positions as market leaders in their respective premium priced segments. The Group’s non-alcoholic malt brand, Malta Vigor, recorded 13% growth for the year ended 31 March 2013, while soft drinks volumes declined due to heightened price competition. In Honduras the Group’s focus on making beer more accessible to low income consumers using affordable bulk packs has solidified market position, with improvement in the Group’s share of the alcohol market. This is against the backdrop of the government’s fiscal deficit and continuing security concerns, which have impacted both the Group’s ability to trade and consumer spending patterns, where the Group has seen a structural shift over the last few years to more off-premise consumption. Nevertheless, volumes were marginally ahead of the prior year with healthy growth shown by Salva Vida and Miller Lite. Soft drinks volumes grew by 1%, aided by further fridge penetration and brand activations aimed at stimulating home consumption. El Salvador saw robust domestic lager volume growth of 12% in the year ended 31 March 2013, with bulk packs growing strongly. The Group’s flagship mainstream brand, Pilsener, grew by 19%, while Golden Light, which was repositioned in the upper mainstream segment, grew volumes by double digits. In the premium segment the Group’s local brand Suprema grew by 17%, assisted by the launch of the red beer variant Suprema Roja and increased market activations. Soft drinks volumes grew by 3% over the prior year, with particularly strong growth in non-alcoholic malts and juices.

EBITA EBITA increased by 13% to US$2,112 million for the year ended 31 March 2013 from US$1,865 million for the year ended 31 March 2012, driven by strong revenue growth and operating cost efficiencies. EBITA margin increased to 27.0% for the year ended 31 March 2013 from 26.1% for the year ended 31 March 2012.

Discussion of results of operations for Latin America for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of associates’ revenue) for the Group’s operations in Latin America was US$7,158 million for the year ended 31 March 2012, representing an increase of 13% from

30 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD US$6,335 million for the year ended 31 March 2011. Revenues increased principally as a result of volume growth combined with selective price increases and mix benefits. Lager and soft drinks (comprising malt beverages, sparkling soft drinks, water and juices) volumes were 42 million hl and 17 million hl respectively for the year ended 31 March 2012, representing an increase of 9% in lager volumes from the previous year, and an increase of 10% in soft drinks volumes from the previous year, which was attributable to the Group’s focus on the affordability of lager in a number of the markets in the region, differentiated brand portfolios and the expansion of the Group’s premium segment, in the context of economic growth across the region. In Colombia, lager volumes increased by 7% for the year ended 31 March 2012 as a result of increased consumer spending, the implementation of new marketing campaigns and the Group’s strategy of price restraint in mainstream brands. The light beer category continued to grow, with Aguila Light volumes increasing by 44%. The Group’s premium brands also grew, with the local premium brand, Club Colombia, increasing volumes by 30% and new variants attracting consumers to this category. The Group’s non-alcoholic malt products had double-digit volume growth following the successful introduction of a smaller pack for the brand Pony Malta, and the addition of the Group’s new more refreshing malt brand, Maltizz. In Peru, healthy economic growth aided the rise of lager volumes by 10% in the year ended 31 March 2012 as consumers continued to trade up from the informal alcohol sector. The roll-out in the year ended 31 March 2011 of the Group’s business capability programme enabled direct sales service model allowed the Group to capture growth opportunities while generating operational efficiencies and differentiated value propositions to the Group’s customers. The Group’s flagship mainstream brand, Cristal, increased volumes by 22%, reflecting the strong resonance of this brand underpinned by its support of national soccer. The Group’s premium portfolio had volume growth of 22%, and the Cusquen˜a 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. In the soft drinks category, volumes grew by 34%, as the Group’s non-alcoholic malt brand, Maltin Power, benefited from campaigns highlighting its nutritional attributes. Ecuador achieved lager volume growth of 7% in the year ended 31 March 2012 as the expanded direct service model assisted with the capture of new growth opportunities. The Group’s upper mainstream offering, Pilsener Light, achieved volume growth of 87%, supported by the introduction of a larger pack. The Group’s local premium brand, Club, further strengthened its position as the leading 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 as its PET and small packs performed well, and resulted in volume growth of 38%. In Honduras, lager volumes were up 9% in the year ended 31 March 2012 compared with the prior year. Growth was underpinned by the Group’s affordability strategy, in the traditional trade with a larger multiserve bottle, and in the modern trade with affordable can pricing, for both mainstream brands, Imperial and Salva Vida. The super premium category grew, with Miller Lite doubling its volumes. Soft drinks volumes grew by 7%, boosted by further cooler penetration and brand activations and the success of multiserve packs. During the year ended 31 March 2012, the Group launched Actimalta in the non-alcoholic malt category with good acceptance from target consumers. The juices and tea categories introduced in the prior year saw volume growth of over 40%. In Panama, the Group’s lager volume growth of 2% in the year ended 31 March 2012 and revenue mix benefited from the performance of premium brands, with Miller Lite and MGD showing strong acceptance among targeted customers. Mainstream brands, Atlas and Balboa, benefited from investment behind new brand campaigns and improved in-outlet execution. Soft drinks volumes grew by 4% in the year ended 31 March 2012 compared with the prior year, boosted by the milk category and a strong performance from sparkling soft drinks, through increased availability of cold products at the point of sale. In El Salvador, domestic lager volumes achieved double-digit growth in the year ended 31 March 2012, driven by the more affordable bulk pack of the Group’s flagship mainstream brand, Pilsener. The Group’s local premium brand, Suprema, achieved volume growth of 30%, which together with the repositioning of Golden Light in the upper mainstream segment, significantly improved revenue mix. Soft drinks volumes grew by 7%, mainly due to the success of multiserve packs. In January 2012, the Group expanded into the non-alcoholic malt category with the brand Actimalta.

31 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD In Argentina, the Group’s mainstream brand, Isenbeck, achieved volume growth of 13% on a full year comparative basis in the year ended 31 March 2012.

EBITA EBITA increased by 15% to US$1,865 million for the year ended 31 March 2012 from US$1,620 million for the year ended 31 March 2011, principally as a result of volume growth, selective price increases, mix benefits, manufacturing efficiencies and distribution gains, partly offset by higher commodity costs and increased marketing investment. EBITA margin increased to 26.1% for the year ended 31 March 2012 from 25.6% for the year ended 31 March 2011.

Europe The Group’s primary brewing operations cover eight European countries including Poland, the Czech Republic, Romania and Italy. In the majority of these countries the Group is the number one or two brewer by market share. The Group also sells significant volumes to a further seven European markets via in market operations, the largest being the United Kingdom and Germany, and a further 16 countries including Russia, Turkey and the Ukraine are covered in the strategic alliance with Anadolu Efes through either brewing, soft drinks or export operations.

Discussion of results of operations for Europe for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of associates’ revenue) was US$5,767 million for the year ended 31 March 2013, representing an increase of 5% from US$5,482 million for the year ended 31 March 2012. Revenues increased principally as a result of higher volumes and the successful launch of brand and pack innovations, partly offset by adverse currency movements, selective price reductions and above average growth in the economy segment. In Poland, lager volumes were up 8% for the year ended 31 March 2013 benefiting in the first half of the year from the Euro 2012 football tournament and the cycling of a weak comparative period with performance in the second half of the year assisted by brand innovations and buying ahead of price increases at the end of March 2013. Selective resetting of price points during the year ended 31 March 2013 assisted growth of the Group’s core brands. Tyskie gained market share supported by the successful ‘‘5th stadium’’ campaign and the launch of Tyskie Klasyczne while growth of mainstream brand Zubr was driven by effective promotional activities. The launch of Lech Shandy helped develop a new category and boosted the performance of premium brand Lech. In the Czech Republic, domestic volumes were down 3% for the year ended 31 March 2013. Channel dynamics affected performance with the continuing consumer shift from the high value on-premise channel to the off-premise channel, along with selective price increases in the off- premise channel in October 2012 which impacted the third quarter of the year ended 31 March 2013. Consequently, performance in the super-premium and mainstream segments was adversely impacted as Pilsner Urquell and , respectively, are heavily skewed to the on-premise channel. Growth in the premium segment was boosted by Kozel 11, with outlet expansion driving growth along with the successful launch of Gambrinus Radler. In Romania, lager volumes grew 24% for the year ended 31 March 2013, primarily driven by the growth of economy brand Ciucas in a new PET pack, launched at the end of the year ended 31 March 2012. Mainstream brand Timisoreana performed ahead of the prior year benefiting from growth in PET and marketing activity associated with the national football team sponsorship. The Group’s premium brand, Ursus, also grew assisted by the launch of a new bottle in the second half of the year ended 31 March 2013, along with a supporting promotional campaign. In Italy, domestic lager volumes grew 4% for the year ended 31 March 2013 despite a particularly challenging economic environment and poor consumer sentiment. Growth was mainly driven by the mainstream and economy segments with Peroni benefiting from the expansion of draught volumes and economy brand Wuhrer performing well in the off-premise channel. Premium brand Nastro Azzurro performance was ahead of the prior year with the subdued market impacting performance in the on-premise channel but off-premise growth was supported by promotional activities. In the United Kingdom the continued growth of Peroni Nastro Azzurro through on-premise expansion resulted in volume growth of 4% for the year ended 31 March 2013.

32 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD In the Netherlands, domestic lager volumes were up 1% for the year ended 31 March 2013 in a highly competitive environment impacted by low consumer confidence resulting from economic uncertainty. In this environment the on-premise channel was negatively impacted, but growth was delivered in the off-premise channel. In the Canaries, lager volumes grew 2% for the year ended 31 March 2013 against a backdrop of weak consumer sentiment in a challenging economic environment driven by strong performance in the off-premise channel while the on-premise channel continued to be subdued. In Slovakia, volumes grew 8% for the year ended 31 March 2013 driven by the successful launch of Smadny Mnich Radler along with growth of Kozel and Pilsner Urquell. In Hungary, volumes were up 5% for the year ended 31 March 2013 boosted by strong promotional support in the on-premise channel along with the successful launch of Hofbrau Radler. On a pro forma3 basis, the Group’s associate, Anadolu Efes, grew total volumes by 6% for the year ended 31 March 2013, with an 8% decline in beer more than offset by soft drinks growth of 14%.

EBITA EBITA declined by 6% to US$784 million for the year ended 31 March 2013 from US$836 million for the year ended 31 March 2012, principally impacted by the weakening of European currencies against the US dollar, with organic, constant currency EBITA up 1%. EBITA margin decreased to 13.6% for the year ended 31 March 2013 from 15.3% for the year ended 31 March 2012.

Discussion of results of operations for Europe for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of associates’ revenue) for the Group’s operations in Europe was US$5,482 million for the year ended 31 March 2012, representing an increase of 2% from US$5,394 million from the year ended 31 March 2011. Revenue increased principally as a result of favourable foreign exchange movements, price and mix benefits, partly offset by lower volumes particularly in Poland and Romania where volume fell by 4% and 8% respectively, and the net impact of acquisitions and disposals. 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. Organic information includes 11 months of trading for Russia and Ukraine prior to the conclusion of the Group’s transaction with Anadolu Efes and excludes the Group’s share of the enlarged Anadolu Efes group for the period since the transaction. Reported results include the Group’s share of March trading for Anadolu Efes. In Poland, lager volumes decreased by 4% in the year ended 31 March 2012 as the market continued to be affected by competitor price reductions and promotional activities along with planned destocking of wholesaler inventories. The beer market was increasingly characterised by downtrading together with continued development of the modern trade, especially discounters, resulting in growth of the economy segment. In this environment, the economy brand Wojak performed well. However, key mainstream brands and the premium segment were negatively affected. In the Czech Republic, lager volumes in the year ended 31 March 2012 remained level with the previous year despite ongoing weaknesses in the on-premise channel and a drop in consumer sentiment during the year. The Group’s super premium and premium segments performed well with Pilsner Urquell growing despite its on-premise bias, benefiting from strengthening brand equity, successful trade activities and expanded tank beer distribution. The Group’s premium segment performance was boosted by Kozel 11, with particularly strong performance in the on- premise channel as a result of outlet expansion. While the Group’s mainstream segment remained under pressure, the introduction of PET packaging for key brands enabled an improvement in the segment’s trends. In Romania, lager volumes declined by 8% in the year ended 31 March 2012 in an economy which has been slow to recover. The market continued to be affected by consumer downtrading and the emphasis on the economy segment and bulk packs involved heavy discounting and led to adverse brand and pack mix. The Group’s performance was also impacted by planned wholesaler destocking in the second half of the year. The Group’s mainstream brand Timisoreana has been most

3 Pro forma volumes are based on volume information for the period from 1 April 2011 to 31 March 2012 using SABMiller’s definition of volumes for the enlarged Anadolu Efes group as if the strategic alliance had commenced on 1 April 2011.

33 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD significantly impacted in this environment, although the rate of decline slowed in the second half of the year supported by effective promotional activity. The premium segment was also affected by competitor activities. The Group’s economy brand Ciucas grew slightly with strong performance of the 2.5L PET pack. In Russia, lager volumes grew 2% on an organic basis in the year ended 31 March 2012, with growth in the super premium segment as the Essa brand performed particularly well benefiting from a successful can launch. In the premium segment, the Group’s 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 the Group’s economy segment, and the Group successfully launched a new mainstream brand, Zwei Meister. In Ukraine, lager volumes grew 42% on an organic basis in the year ended 31 March 2012, as a result of the continued good performance of the Group’s core brands Sarmat, Zolotaya Bochka and the introduction of mainstream brand Amsterdam. In Italy, domestic lager volumes in the year ended 31 March 2012 remained level with the previous year despite the impact of a deteriorating economic outlook. Declines in the first half of the year were recovered in a stronger second half supported by increased promotional activity. Peroni grew ahead of the prior year benefiting from expansion of draught volumes. The Group disposed of its Italian distribution operation on 13 June 2011. In the United Kingdom, the continued growth of Peroni Nastro Azzurro through expansion in the on-premise channel resulted in lager volume growth of 8% in the year ended 31 March 2012. This was achieved despite a decline in the beer market and lower MGD volumes as distribution was refocused on key regions. In the Netherlands, domestic lager volumes remained level with the previous year in a competitive environment characterised by discounting and promotional activity in the highly consolidated off- premise channel and reflecting the impact of economic uncertainty on consumer confidence. In Hungary, lager volumes increased 5% in the year ended 31 March 2012 boosted by strong promotional support due to the Arany A´ szok ‘Golden Friday’ on-premise activation. The Group’s economy brands took advantage of downtrading trends, while the Group’s super premium brands performed well, led by Pilsner Urquell. In the Canaries, the trading environment remained challenging with the Group displaying an 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 the modern trade channel and in the super premium segment with a number of successful promotions for Pilsner Urquell.

EBITA EBITA in Europe decreased by 6% to US$836 million for the year ended 31 March 2012 from US$887 million for the year ended 31 March 2011. EBITA across the region was impacted by significant increases in raw material costs, negative brand mix, and the impact of disposals net of acquisitions partially offset by selective price increases, operational cost efficiencies, marginally lower marketing expenditure and the weakening of the US dollar against central and eastern European currencies. EBITA margin decreased to 15.3% for the year ended 31 March 2012 from 16.4% for the year ended 31 March 2011.

North America SABMiller has a 58% economic interest and Molson Coors has a 42% economic interest in MillerCoors. As part of the MillerCoors Transaction, Miller transferred substantially all of its operating assets (excluding its international assets, which represent a small percentage of Miller’s total operating assets) to MillerCoors. MillerCoors is accounted for as a joint venture by SABMiller using equity accounting. As a result, after the completion of the MillerCoors Transaction, the Group’s share of profits in MillerCoors is reflected in the Group’s share of post-tax results of joint ventures, but not in the Group’s revenue, operating profit or EBITDA. The North America segment includes the Group’s 58% share in MillerCoors and 100% of Miller Brewing International. In August 2010, MillerCoors established the Tenth and Blake Beer Company, its craft and import division. It imports Peroni Nastro Azzurro, Pilsner Urquell and Grolsch and features craft brews

34 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD from the Jacob Leinenkugel Brewing Company, Brewing Company and the Blitz- Weinhard Brewing Company.

Discussion of results of operations for North America for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of joint ventures’ revenue) was US$5,355 million for the year ended 31 March 2013, representing an increase of 2% from US$5,250 million for the year ended 31 March 2012. Revenue increased principally due to favourable pricing, beneficial brand mix and the positive impact of innovations during the year ended 31 March 2013, partially offset by a decrease in volumes. For the year ended 31 March 2013, MillerCoors’ US domestic sales to retailers (‘‘STRs’’) declined by 2% on a trading day adjusted basis amid weaker industry performance compared with the prior year. Domestic sales to wholesalers (‘‘STWs’’) were down by 2% on an organic basis for the year ended 31 March 2013. Premium light volumes were down by low single digits, as the continued growth in was offset by a mid single digit decline in Miller Lite. Coors Light has benefited from the brand’s ‘‘Refreshment as cold as the Rockies’’ campaign and focus on multicultural outreach, while Miller Lite has continued to invest in the ‘‘It’s Miller Time’’ campaign. The Tenth and Blake division saw double digit volume growth, driven by Blue Moon and Leinenkugel’s and their seasonal variants, with Leinenkugel’s Summer Shandy performing particularly well. The economy segment declined by mid single digits, driven by Light and Miller High Life, as consumers continued to trade up to other categories. The premium regular segment was also down by mid single digits, with a double digit decline in MGD partly offset by mid single digit growth in Coors Banquet. Other brands in the above premium segment grew by low single digits following the national launch of Redd’s Apple Ale and Third Shift Amber Lager. MillerCoors’ revenue per hectolitre grew by 3%, as a result of strong pricing and favourable brand mix, following growth in the Tenth and Blake division and the above premium segment, together with a decline in the economy segment.

EBITA EBITA increased to US$771 million for the year ended 31 March 2013 representing a 2% increase from US$756 million for the year ended 31 March 2012, primarily driven by favourable pricing and beneficial brand mix, partially offset by lower volumes, increased costs of goods sold and higher marketing and administrative spend. EBITA margin was 14.4% for both the year ended 31 March 2013 and the year ended 31 March 2012.

Discussion of results of operations for North America for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of joint ventures’ revenue) was US$5,250 million for the year ended 31 March 2012, representing an increase of 1% from US$5,223 million for the year ended 31 March 2011. Revenue increased principally as a result of the Group’s strong revenue management, favourable mix and focused sales and marketing execution, in a market where consumer sentiment remained cautious. For the year ended 31 March 2012, MillerCoors’ US domestic volume STRs declined by 2%, as the mainstream beer segment continued to be impacted by economic pressure on key consumer demographics. Domestic STWs were down by 3%. The Group’s premium light brand volumes declined slightly, 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 Leinenkugel’s and their seasonal variants, together with Peroni Nastro Azzurro. The Group’s below premium segment also declined slightly as consumers continued to trade up to other segments.

35 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD EBITA EBITA increased by 2% to US$756 million for the year ended 31 March 2012 from US$741 million for the year ended 31 March 2011, driven by strong revenue management and focused sales and marketing execution, the impact of integration synergies and other cost savings partially offset by higher freight costs, brand mix, rising commodity prices and packaging innovations. In the year ended 31 March 2012, 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 was completed on 30 June 2011. Other cost savings of US$88 million were realised, driven by various initiatives, primarily in the integrated supply chain function. 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, consisting 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. EBITA margin increased to 14.4% for the year ended 31 March 2012 from 14.2% for the year ended 31 March 2011.

Africa The Group operates in 15 countries in Africa: Botswana, Comores, Ethiopia, Ghana, Kenya, Lesotho, Malawi, Mayotte, Mozambique, Nigeria, South Sudan, Swaziland, Tanzania, Uganda and Zambia. In addition, the Group has a strategic alliance with Castel, pursuant to which Castel’s holding company has a 38 per cent. economic interest in SABMiller’s principal African holding company and the Group has a 20 per cent. economic interest in Castel’s African beverage operations. This alliance capitalises on the complementary nature of the companies’ geographic portfolios. Castel has lager and soft drinks interests in 22 largely French-speaking countries of West, Central and North Africa and the Indian Ocean. Its operations cover Algeria, Angola, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Coˆte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, Gambia, Guinea, Madagascar, Mali, Mauritius, Morocco, Niger, Senegal, Togo and Tunisia. With effect from 1 January 2012, the Group and Castel implemented a number of organisational changes in their African operations as part of their strategic alliance agreement. Operational management of the Nigerian businesses is now with SABMiller and the Angolan businesses with Castel, with the Group retaining an associate interest in the Angolan businesses. In addition, the Group has associated undertakings in Algeria, Morocco and Zimbabwe, and a procurement company in Mauritius.

Discussion of results of operations for Africa for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of associates’ revenue) was US$3,853 million for the year ended 31 March 2013, representing an increase of 5% from US$3,686 million for the year ended 31 March 2012. Revenues increased principally as a result of higher volumes, selective price increases, positive segment mix in lager and higher premium brand sales, partially offset by adverse currency movements and the net impact of disposals and acquisitions. Lager volumes grew 6% in the year ended 31 March 2013 as compared with the year ended 31 March 2012. Double digit volume growth was achieved in a number of African markets, partially offset by the impact of a significant excise increase in Tanzania, as well as a softer trading in Uganda driven by a weaker economy. The Castle brand family continued to deliver robust growth, in particular the premium offering Castle Lite which grew by 43% for the year ended 31 March 2013. Soft drinks volumes for the year ended 31 March 2013 declined by 4% (grew by 9% on an organic basis), with the decline principally a result of the prior year management ownership changes related to the Angolan businesses. Soft drinks volumes on an organic basis grew strongly at 9% supported by continued growth in the non-alcoholic malt beverages category, most notably in Nigeria and Tanzania, and sparkling soft drinks growth in Ghana, Zambia, Zimbabwe and Castel. In Tanzania, where the Group was cycling a strong comparative, lager volumes declined by 8% for the year ended 31 March 2013, primarily due to the negative impact of a 25% excise increase and softer consumer spending in the year. Despite the tough trading conditions, Castle Lite outperformed the market with growth of 17% for the year ended 31 March 2013. The wines and spirits business continued to grow driven by new product and pack innovations.

36 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD In Mozambique, lager volumes grew by 11% for the year ended 31 March 2013, underpinned by robust growth in the mainstream brands 2M and Manica, while Castle Lite grew at a significantly higher rate in the premium segment in the first full year since its launch. The affordable cassava- based brand Impala continued to impress as the Group began to expand its reach. Capacity constraints that had previously limited growth in Zambia have now been alleviated with the commissioning of the brewhouse at Ndola in November 2012. Lager volume growth of 12% was achieved for the year ended 31 March 2013 through improved availability and an improved economic environment. The premium portfolio benefited from strong growth of Castle Lite, while Castle Lager and Mosi performed well in the mainstream segment. Soft drinks also delivered strong volume growth and traditional beer volumes also posted good growth aided by the launch of Chibuku Super, which has begun to revolutionise the category, in the first half of the year ended 31 March 2013. In Nigeria, lager volumes grew significantly due to the additional capacity provided by the commissioning of the Group’s greenfield brewery in Onitsha in August 2012, the successful launch of Hero lager and the continued growth of the Trophy lager brand. Botswana continued to feel the impact of anti-alcohol sentiment with the introduction of zoning legislation and a further increase in the alcohol levy. Total alcoholic beverage volumes declined during the year with market share gains in lager volumes more than offset by the decline in traditional beer volumes as a result of the impact of the new zoning regulations. In Uganda, lager volumes for the year ended 31 March 2013 grew in line with the prior year as a result of softer consumer spending following a sustained period of high inflation. In Ghana, lager volumes grew 15% for the year ended 31 March 2013 driven by the continued growth of Club lager. In addition the Group launched its second African cassava-based lager in March 2013. Despite a difficult political and economic period, South Sudan continued to deliver strong double digit growth in lager volumes, led by the White Bull brand. In Zimbabwe, lager volumes at the Group’s associate, Delta, were dampened by excise-related pricing in November 2012 and a more subdued economic landscape. Lager volume growth of 4%, on an organic basis, was achieved through an increased focus on market activations on premium brands, while traditional beer volumes declined marginally. The Group’s Castel associate delivered pro forma4 lager volume growth of 6% for the year ended 31 March 2013 with good volume performances in Cameroon, Ethiopia and Burkino-Faso. Pro forma4 soft drinks volumes grew by 9%. EBITA EBITA grew by 13% to US$838 million for the year ended 31 March 2013 from US$743 million for the year ended 31 March 2012, driven by increased lager volumes, increases in local sourcing of materials, efficiencies gained through capacity expansion, and as a result of synergy benefits from the combination of the Group’s Angolan and Nigerian businesses with those of Castel, despite the adverse impact of currency movements. EBITA margin improved to 21.7% for the year ended 31 March 2013 from 20.2% for the year ended 31 March 2012.

Discussion of results of operations for Africa for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of associates’ revenue) was US$3,686 million for the year ended 31 March 2012, representing an increase of 13% from US$3,254 million from the year ended 31 March 2011. Revenues increased principally as a result of higher volumes, price increases, improved mix with growth in the premium segment, partially offset by adverse currency movements and the net impact of disposals and acquisitions. Lager volumes grew 14% assisted by increased investment in sales and marketing to support differentiated brand portfolios and an expansion of the Group’s geographic footprint, underpinned by broadly favourable economic conditions. The Castle portfolio continued to grow strongly across

4 Pro forma volumes are based on volume information for the period from 1 April 2011 to 31 March 2012 for the Castel business as if the management combinations in Angola and Nigeria and the Castel acquisition in Madagascar had occurred on 1 April 2011.

37 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD the region, with volumes up 27%. Focus was given to the Group’s affordable products with the introduction of draught formats, smaller pack offerings and innovative products like Impala, a cassava-based beer. Soft drinks volumes grew by 9%. In Tanzania, lager volumes grew by 15% in the year ended 31 March 2012 compared with the prior year, attributable to the successful mainstream brand renovations of Safari and Kilimanjaro, as well as strong premium segment growth driven by Castle Lite. The Group’s Mbeya brewery continues to serve the incremental growth in the south while an enhanced sales force, as well as increased cooler penetration, led to market share gains. Grand Malt, a non-alcoholic offering, performed particularly well. In Mozambique, robust mainstream growth driven by a packaging upgrade for 2M and the continued expansion of the Group’s footprint in the north enabled by the Group’s Nampula Brewery helped grow lager volumes by 9%. The Group has focused on expanding the affordable offerings with the launch of Manica draught and the innovative cassava-based Impala. In Zambia, improved availability, a wider geographical distribution reach and healthy economic conditions enabled lager volume growth of 17% despite production capacity constraints. The Group’s key mainstream brands, Mosi and Castle Lager, continued to perform well while the premium Castle Lite experienced very strong growth. Soft drinks volumes grew by 10%. In Uganda, lager volumes grew by 19% supported by an enhanced distribution network into western Uganda, rigorous in-trade execution and a strong mainstream and affordable portfolio. The Group’s mainstream brands, Nile Special and Club Pilsener, both performed well. The rate of growth slowed in the second half of the year as a result of capacity constraints. In Ghana, the consistent growth of Club lager helped drive further volume gains while soft drinks volume growth remained buoyant. South Sudan delivered strong lager and soft drinks volume growth. Delta experienced strong double digit growth across all beverage categories, which was achieved by improved availability assisted by previous capacity upgrades. Castel’s full year lager volumes, excluding the management combination of the Group’s Angola businesses and Castel’s Madagascar acquisition, grew by 11% with good volume performances in Cameroon, the Democratic Republic of Congo, Ethiopia and Tunisia. EBITA EBITA increased by 15% to US$743 million for the year ended 31 March 2012 from US$647 million for the year ended 31 March 2011, as a result of volume growth, price increases, improved mix despite the expansion of sales and marketing capability and adverse currency movements. EBITA margin increased to 20.2% for the year ended 31 March 2012 from 19.9% for the year ended 31 March 2011.

Asia Pacific In Asia Pacific, the Group conducts business primarily in Australia, China and India, with operations also in South Korea and Vietnam. In December 2011, the Group completed the acquisition of a 100 per cent. interest in Foster’s and in January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages. Pacific Beverages has been integrated into Foster’s Australian business Carlton & United Breweries (‘‘CUB’’). In China, the Group’s operations are owned through CR Snow, an associated company in which the Group has a 49% interest, and which is the biggest brewer by volume in China. The Group is the second largest brewer by volume in India. The Group has subsidiaries in South Korea and Vietnam.

Discussion of results of operations for Asia Pacific for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of associates’ revenue) for the Group’s operations in Asia Pacific was US$5,685 million for the year ended 31 March 2013, representing an increase of 62% from US$3,510 million for the year ended 31 March 2012. Revenues increased principally as a result of the acquisition of Foster’s.

38 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD In Australia, lager volumes on a pro forma5 continuing basis6 delivered an improving trend, with 3% growth in the fourth quarter of the year ended 31 March 2013 versus the prior year. The strong performance was underpinned by flagship brand, Victoria Bitter, returning a second consecutive quarter of sales growth since its relaunch in October 2012; the first such growth in over a decade. The fourth quarter performance was further supported by strong growth in the contemporary mainstream and premium segments, with brands such as Carlton Dry, Great Northern Brewing Co, Peroni and Miller all performing strongly. Full year volumes were lower by 5% on a pro forma5 continuing basis6 for the year ended 31 March 2013, while total volumes, including discontinued brands, were down 13% for the year. Weak underlying market growth in the first three quarters of the year ended 31 March 2013 underpinned the majority of the pro forma5 decline. The Group’s strategy to restore the core has resulted in strong volume resurgence by both Victoria Bitter in the second half of the year ended 31 March 2013 and for the full year ended 31 March 2013, while Carlton Dry continued with solid growth compared with the prior year. Focus on premium growth opportunities has seen volumes for Peroni and MGD grow on a pro forma5 basis compared with the prior year, due to increased marketing campaigns and from leveraging CUB’s extensive distribution network. In addition the Group has introduced a number of innovative cider variants to continue the strong growth within this premium margin market segment, delivering full year pro forma5 volume growth of 7% for the year ended 31 March 2013. Promotional optimisation strategies implemented post acquisition focused on delivering greater value both for the Group’s customers and the Group, resulting in pro forma5 group revenue per hl up 4% for the year ended 31 March 2013. This result was underpinned by an increased focus on profitable revenue growth, as well as strong execution behind the Group’s premium portfolio. In China, lager volumes grew by 6% for the year ended 31 March 2013. The Group’s associate, CR Snow, continued to expand its national market share although market growth was affected by heavy and prolonged rains and cooler temperatures that affected certain key provinces particularly during the first and third quarters of the year ended 31 March 2013. Market share increases were delivered in Jiangsu, Guizhou, Shanxi, Inner Mongolia, Guangdong and Heilongjiang, although market share was lost in Sichuan, Anhui and Zhejiang provinces. Volumes were also assisted by acquisitions in the prior year. Group revenue per hl was broadly level with the prior year impacted by provincial mix. The underlying trend continues to be positive in most provinces driven by CR Snow’s strategy of premiumisation of the portfolio underpinned by the growth of key Snow variants, notably Snow Draft and Snow Brave the World. In India, lager volumes grew by 20% for the year ended 31 March 2013 with strong performance across the year and the cycling of trade restrictions in Andhra Pradesh to the end of August 2012. Good growth was achieved in most states in which the business operates including the key states of Karnataka, Haryana, Madhya Pradesh, Punjab, Maharashtra and Andhra Pradesh underpinned by strong performance from the core mainstream brands and innovation in the premium segment with the continued roll-out of Miller High Life. Group revenue per hl increased by 7% on a constant currency basis for the year ended 31 March 2013, reflecting price increases in certain states and a continued focus on higher margin brands, packs and states.

EBITA EBITA increased 166% to US$855 million for the year ended 31 March 2013 from US$321 million for the year ended 31 March 2012, principally due to the full year impact of the Foster’s acquisition and some acquisitions in China in the prior year. The integration programme continues to progress well and ahead of expectations, with half the anticipated annual net operating profit synergies already delivered for the Group. Initiatives driving this benefit include the integration of the Pacific Beverages business, world class manufacturing and procurement programmes and grid and logistics improvement initiatives. The integration

5 Pro forma volumes and financial information are based on results reported under IFRS and SABMiller accounting policies for the period from 1 April 2011 to 31 March 2012, as if the Foster’s and Pacific Beverages transactions had occurred on 1 April 2011. 6 Pro forma continuing basis adjusts for the impact of discontinued licensed brands in all comparative information.

39 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD programme has also increased capability across all functions, with deliberate prioritisation of revenue and people management, marketing and manufacturing via the roll out of SABMiller’s Capability Ways. EBITA margin increased to 15.0% in the year ended 31 March 2013 from 9.1% in the year ended 31 March 2012.

Discussion of results of operations for Asia Pacific for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of associates’ and joint ventures’ revenue) was US$3,510 million for the year ended 31 March 2012, representing an increase of 73% from US$2,026 million from the year ended 31 March 2011. Revenue increased principally as a result of higher organic lager volumes in India and China, and the inclusion of Foster’s and regional acquisitions in China. In China, lager volumes grew by 9% in the year ended 31 March 2012. CR Snow sold in excess of 100 million hectolitres in a 12 month period for the first time. Volumes grew in all regions with CR Snow’s newly acquired breweries in Jiangsu, Liaoning, Henan and Shanghai, together with new breweries commissioned in the year, contributing positively to the reported volume growth. Organic growth was affected by heavy and prolonged rains that affected certain key provinces. In India, lager volumes grew 3% in the year ended 31 March 2012. Volumes declined in the first half of the year as a result of dampened consumer demand, following substantial excise increases in key states, and certain trading restrictions imposed in Andhra Pradesh which were subsequently removed in September 2011. In the second half of the year volumes grew by 16%. In Vietnam, lager volumes in the year ended 31 March 2012 declined in comparison to the previous year, but revenue increased reflecting 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, Pacific 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 the Group’s key premium brand Peroni Nastro Azzurro, as well as continued growth in the off-premise channel nationally. CUB lager volumes in Australia were 4% below the prior year on a pro forma full year basis, reflecting continued subdued consumer sentiment. CUB continued to grow its presence in the expanding New World regular mainstream segment with robust growth of Carlton Dry and the successful launch of the Great Northern Brewing Co brand. The traditional regular mainstream segment, which includes Victoria Bitter, declined at a higher rate than the market, however managed to consolidate its market share. Premium volumes performed more strongly, with encouraging results from focused execution and expansion of the owned premium portfolio including Crown Lager. Volume improvements in the rapidly expanding craft segment were driven by Matilda Bay Fat Yak Pale Ale. EBITA EBITA increased by 247% to US$321 million for the year ended 31 March 2012 from US$92 million for the year ended 31 March 2011, largely as a result of the inclusion of Foster’s and regional acquisitions in China. EBITA increased by 30%, on an organic, constant currency basis, driven by favourable growth in both China and India. EBITA margin increased to 9.1% for the year ended 31 March 2012 from 4.6% for the year ended 31 March 2011.

South Africa: Beverages South Africa: Beverages accounted for approximately 90% of the total beer market in South Africa by volume for the year ended 31 March 2013, broadly in line with the year ended 31 March 2012. ABI, the soft drinks division of SAB, is South Africa’s largest bottler of products for The Coca-Cola Company.

40 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Discussion of results of operations for South Africa: Beverages for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of associates’ revenue) was US$5,540 million for the year ended 31 March 2013, representing a decrease of 5% from US$5,815 million for the year ended 31 March 2012. The decrease in revenue was principally a result of adverse currency movements due to the continued depreciation of the rand, with lager revenue in rand having benefited from strong growth in the premium beer portfolio and a moderate price increase executed towards the end of the year ended 31 March 2012, which was partly offset by an above inflation excise increase in February 2012. In the soft drinks portfolio, revenue growth was tempered by the below inflationary price increases across the portfolio. Lager volumes for the year ended 31 March 2013 grew 2% compared with the year ended 31 March 2012, despite the worsening consumer environment, driven by effective through-the-line promotional campaigns and innovative retail execution. Castle Lite gained additional market share in the premium segment, increasing the brand’s share of the total beer industry to more than 10% by continuing to leverage its unique ‘‘Extra Cold’’ brand positioning. Castle Lager grew strongly following the success of the ‘‘It all comes together with a Castle’’ campaign which draws on its combination of the finest home-grown ingredients. ’s rate of volume decline was reversed, supported by the award winning marketing campaign ‘‘Carling Cup’’. Lager sales also benefited from continued innovation in retail execution as well as continuing improvements in customer service. There was a strong focus on key trade marketing and customer loyalty programmes tailored to specific key classes of trade, a significant increase in the sales force and the role of the customer interaction centre was enhanced. Soft drinks volumes grew 2% in the year ended 31 March 2013, cycling a strong performance in the second half of the year ended 31 March 2012 and despite a more challenging consumer landscape and a double-digit price increase on the core returnable glass pack in December 2012. Volume growth was also driven by increased market penetration, improved customer service levels and focused channel execution, with particularly strong growth in two litre PET packs. Improved market penetration was achieved through the use of market logistics partnerships and reward structures. Growth in the still drinks portfolio was well above the portfolio average, with strong performances from Powerade and Play. The Group’s associate, Distell, reported a decline in group revenue, although on a constant currency basis, group revenue grew in double digits, driven by an increase in sales volumes in both domestic and international markets, with the latter benefiting from a weaker rand.

EBITA EBITA decreased by 3% to US$1,129 million for the year ended 31 March 2013 from US$1,168 million for the year ended 31 March 2012. EBITA was affected by the impact of adverse currency movements and the share of the Group’s associate Distell’s EBITA which fell, impacted by a one-off excise charge, caused by the reclassification of wine aperitifs by the South African Revenue Service. EBITA margin increased to 20.4% for the year ended 31 March 2013 from 20.1% for the year ended 31 March 2012.

Discussion of results of operations for South Africa: Beverages for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of associates’ revenue) for the Group’s operations in South Africa relating to its beverage interests was US$5,815 million for the year ended 31 March 2012, representing an increase of 4% from US$5,598 million for the year ended 31 March 2011. This was as a result of price increases to recover beer excise increases, as well as the strong performance of the local premium brands, partly offset by the impact of adverse currency movements. Lager volumes in the year ended 31 March 2012 were 2% higher than the prior year, as a result of sustained brand investment, improved retail execution and better customer service. The Group’s targeted brand investments included product and packaging innovations and actions to meet the demands of specific market segments. Lager volume growth was further supported by the expanded distribution footprint and effective supply chain management. Continued intensive

41 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD 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 country’s most popular premium brand driven by the continued communication of its ‘Extra Cold’ proposition. The premium category also benefited from Castle Milk ’s good growth following its repositioning as a local premium brand during the year. Castle Lager’s volume growth accelerated to double digits during the second half of the year. Carling Black Label further slowed its decline, with volumes level with the prior year during the second half of the year. Soft drinks volumes grew by 2% for the full year, as the second half of the year saw benefits from the continued execution of focused channel plans, improved customer service and better weather conditions. Sparkling soft drinks volumes benefited 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, reflecting strong gains in the Glaceau and Powerade brands. Appletiser volumes benefited from the introduction of new PET packs, driving strong revenue growth. Distell’s 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 with the prior year. EBITA EBITA increased by 9% to US$1,168 million for the year ended 31 March 2012 from US$1,067 million for the year ended 31 March 2011, primarily as a result of higher volumes, reduced operating costs and productivity gains, partially offset by increased commodity costs and adverse currency movements. EBITA margin increased to 20.1% for the year ended 31 March 2012 from 19.1% for the year ended 31 March 2011.

South Africa: Hotels and Gaming Until February 2011, the Group owned 49% of Tsogo Sun, which in turn held 100% of Southern Sun Hotels (Pty) Limited (‘‘Southern Sun Hotels’’) and 100% of Tsogo Sun Gaming (Pty) Limited (‘‘Tsogo Sun Gaming’’). In February 2011 Tsogo Sun merged with GRR through an all-share merger. As a result SABMiller exchanged its 49% interest in Tsogo Sun for a 39.7% interest in the enlarged business, which was renamed Tsogo Sun Holdings Limited.

Discussion of results of operations for South Africa: Hotels and Gaming for the two years ended 31 March 2013 and 2012 Group revenue Group revenue (including share of associates’ revenue) was US$466 million for the year ended 31 March 2013, representing a decrease of 4% from US$487 million for the year ended 31 March 2012, principally as a result of adverse currency movements due to the weakening of the rand, with both hotels and gaming divisions reporting improved revenue in local currency. Gaming revenues were 8% up in rand for the year ended 31 March 2013, adversely impacted by the weakening of the rand against the US dollar. The gaming industry in the major provinces of South Africa experienced varying levels of growth over the prior year with the largest province in terms of gaming win, Gauteng, reporting 7% growth and the KwaZulu-Natal province growing by 9%. Three of Tsogo Sun’s four large casinos in these provinces outperformed the market growth for the year ended 31 March 2013. The South African hotel industry continued to show signs of improvement during the year ended 31 March 2013. South African market occupancies averaged 61% in the year ended 31 March 2013 compared with 57% in the prior year. Group-wide occupancies increased to 65% for the year ended 31 March 2013 from 62% for the year ended 31 March 2012. EBITA EBITA declined by 1% to US$134 million for the year ended 31 March 2013 from US$135 million for the year ended 31 March 2012, impacted by the weakening rand, with underlying growth driven by improved gaming and hotel revenues together with cost savings. EBITA margin increased to 28.8% for the year ended 31 March 2013 from 27.7% for the year ended 31 March 2012.

42 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Discussion of results of operations for South Africa: Hotels and Gaming for the two years ended 31 March 2012 and 2011 Group revenue Group revenue (including share of associates’ revenue) was US$487 million for the year ended 31 March 2012, an increase of 1% from US$481 million for the year ended 31 March 2011. Revenue increased principally as a result of growth in the gaming industry with growth adversely impacted by a strong prior year performance boosted by the 2010 FIFA World Cup and by adverse currency movements due to the weakening of the rand. The gaming industry in South Africa experienced a satisfactory first 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 reflecting signs of improvement. South African market occupancies averaged 57% in the year compared with 58% for the prior year including the impact of the 2010 FIFA World Cup. Group-wide occupancies ended the year at 62% against prior year occupancy rates of 59%. US dollar revenue per available room declined by 6% and by 2% on a constant currency basis, as a result of higher rates achieved during the 2010 FIFA World Cup in the prior year. EBITA EBITA decreased by 2% to US$135 million for the year ended 31 March 2012 from US$137 million for the year ended 31 March 2011, as utility price increases and other cost increases outstripped the rate of revenue growth. Currency impacts also had an adverse impact. EBITA margin declined to 27.7% for the year ended 31 March 2012 from 28.5% for the year ended 31 March 2011.

Liquidity and capital resources Liquid assets The Group uses cash in hand, cash from operations and short-term borrowings to manage its liquidity. The Group has been able, and expects to continue to be able, to manage its cash positions between segments and across operations through a combination of dividends, intra-Group loans and cash pooling structures. As at 31 March 2013, the Group had cash and cash equivalent investments of US$2,171 million, as compared with US$745 million as at 31 March 2012. The following table sets forth a summary of contributing factors to the Group’s net cash flow for the years ended 31 March 2013, 2012 and 2011 in accordance with IFRS. Years ended 31 March

2013 2012 2011

(audited) (in US$ millions) Net cash generated from operations ...... 5,554 5,237 4,568 Net cash generated from operating activities...... 4,101 3,937 3,043 Net cash used in investing activities ...... (663) (11,600) (517) Net cash (used in)/generated from financing activities...... (2,034) 7,495 (2,327) Net increase/(decrease) in cash and cash equivalents...... 1,353 (207) 224

Net cash from generated from operating activities Year ended 31 March 2013 compared with the year ended 31 March 2012 Net cash generated from operations increased by 6% to US$5,554 million for the year ended 31 March 2013 from US$5,237 million for the year ended 31 March 2012. Net cash generated from operations before working capital movements and after operating cash exceptional items (EBITDA) increased by 16% to US$5,758 million for the year ended 31 March 2013 from US$4,979 million for the year ended 31 March 2012, primarily due to higher revenue which led to higher operating

43 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD cash flows, cost efficiencies and the inclusion of Foster’s for a full year. Net outflows in working capital for the year ended 31 March 2013 were US$204 million, compared with net inflows of US$258 million for the year ended 31 March 2012, principally as a result of the utilisation of restructuring and onerous contract provisions, primarily in Australia, together with the impact of higher sales in March 2013 on debt collection, partially offset by the extension of supplier payment terms. The Group’s net cash generated from operating activities increased by 4% to US$4,101 million for the year ended 31 March 2013 from US$3,937 million for the year ended 31 March 2012, primarily reflecting improved EBITDA and lower tax paid due to the receipt of a non-recurring tax refund in Australia, partially offset by cash outflow from working capital and higher net interest paid.

Year ended 31 March 2012 compared with the year ended 31 March 2011 Net cash generated from operations increased by 15% to US$5,237 million for the year ended 31 March 2012 from US$4,568 million for the year ended 31 March 2011. Net cash generated from operations before working capital movements and after operating cash exceptional items (EBITDA) increased by 11% to US$4,979 million for the year ended 31 March 2012 from US$4,502 million for the year ended 31 March 2011, primarily due to improved operating results assisted by favourable currency movements. Net inflows in working capital were US$258 million for the year ended 31 March 2012, compared with US$66 million for the year ended 31 March 2011. The level of cash inflows from working capital increased for the year ended 31 March 2012 principally as a result of the extension of supplier payment terms as contracts were renegotiated by the Group’s procurement organisation. The Group’s net cash generated from operating activities increased by 29% to US$3,937 million for the year ended 31 March 2012 from US$3,043 million for the year ended 31 March 2011 primarily reflecting improved EBITDA, positive cash inflow from working capital and lower net interest paid.

Capital expenditure Capital expenditure for the year ended 31 March 2013 of US$1,335 million decreased compared with US$1,473 million for the year ended 31 March 2012. The Group continued to invest selectively in its operations to support future growth, especially in Africa where capacity constraints have been experienced. New breweries were commissioned in Nigeria, Uganda and Zambia during the year ended 31 March 2013 with further capacity expansion completed in Ghana and South Sudan. Capital expenditure including the purchase of intangible assets was US$1,479 million for the year ended 31 March 2012, compared with US$1,639 million of the year ended 31 March 2012. Capital expenditure for the year ended 31 March 2012 was US$1,473 million, increased from US$1,189 million for the year ended 31 March 2011. Selectively the Group continued to make investments, particularly in Africa where capacity constraints had been experienced. New breweries were under construction in Nigeria, Uganda and Zambia and there was capacity expansion in Peru and South Sudan. Capital expenditure including the purchase of intangible assets was US$1,639 million for the year ended 31 March 2012, compared with US$1,315 million of the year ended 31 March 2011.

Acquisitions and disposals For the year ended 31 March 2013, the net cash outflow for acquisitions and disposals, including the acquisition and disposal of businesses, and the investments in associates and joint ventures, decreased to US$223 million from US$11,095 million for the year ended 31 March 2012, principally due to the acquisition of Foster’s in the year ended 31 March 2012. For the year ended 31 March 2012, the net cash outflow for acquisitions and disposals, including the acquisition and disposal of businesses, and the investments in associates and joint ventures, increased to US$11,095 million from US$183 million for the year ended 31 March 2011, principally due to the acquisition of Foster’s and Pacific Beverages, partially offset by the disposal of the Group’s interest in its Kenyan associate.

Free cash flow Operating free cash flow 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 (in both cases only where there is no change in the Group’s 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.

44 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Year ended 31 March 2013 compared with the year ended 31 March 2012 The Group achieved operating free cash flow of US$3,230 million for the year ended 31 March 2013, compared with US$3,048 million for the year ended 31 March 2012, reflecting higher cash generated from operating activities and decreased capital expenditure.

Year ended 31 March 2012 compared with the year ended 31 March 2011 The Group achieved operating free cash flow of US$3,048 million for the year ended 31 March 2012, compared with US$2,488 million for the year ended 31 March 2011, reflecting higher cash generated from operating activities, increased dividend receipts from joint ventures and associates, partly offset by higher capital expenditure and investments in joint ventures.

Dividend policy The Group’s guidance with respect to the payment of dividends to shareholders of SABMiller is to achieve dividend cover of between 2.0 and 2.5 times adjusted earnings on a full year basis. Following an interim dividend of 24 US cents per share paid on 14 December 2012, a final dividend of 77 US cents per share, which will result in a total dividend of 101 US cents per share for the year ended 31 March 2013, was declared on 22 May 2013 and will be paid on 23 August 2013. The total dividend paid in respect of the year ended 31 March 2012 was 91 US cents per share, and 81 US cents per share for the year ended 31 March 2011.

External funding, financing and indebtedness Group indebtedness The Group finances 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 with a range of maturity dates. In this way, the Group ensures that it is not overly reliant on any particular liquidity source and that the maturities of its borrowings are not overly concentrated. The following table summarises the Group’s funding structure as at 31 March 2013. As at 31 March 2013

(audited) (in US$ millions) Short term borrowings-related derivative financial assets ...... 98 Short term borrowings-related derivative financial liabilities...... (5) Non-current borrowings-related derivative financial assets...... 619 Non-current borrowings-related derivative financial liabilities...... (36) Cash and cash equivalents ...... 2,171 Short term borrowings and overdrafts...... (2,469) Non-current borrowings...... (16,079)

Net debt...... (15,701)

Undrawn borrowing facilities – expiring within one year...... 281 – expiring between one and two years...... 17 – expiring between two and five years...... 554 – expiring in five years or more...... 2,500

Total available borrowing facilities ...... 3,352

Maturity of borrowings (including borrowings-related derivative financial instruments) Within one year...... (205) Between one and two years ...... (4,135) Between two and five years...... (4,811) In five years or more ...... (6,550)

Total ...... (15,701)

45 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Gross debt, comprising borrowings of the Group together with the fair value of derivative assets and liabilities held to manage interest rate and foreign currency risk of borrowings for the Group, decreased by 4% to US$17,872 million as at 31 March 2013 from US$18,607 million as at 31 March 2012. Short-term borrowings (i.e., due within one year) as at 31 March 2013 comprised 13% of interest-bearing debt, as compared with 6% as at 31 March 2012. The Group’s medium and long- term borrowings (i.e., due in more than one year) (excluding derivative financial instruments) amounted to US$16,079 million as at 31 March 2013 and US$18,164 million as at 31 March 2012, while the Group had undrawn committed borrowing facilities in place totalling US$3,352 million and US$3,810 million as at such dates, respectively. Net debt (comprising gross debt net of cash and cash equivalents) decreased to US$15,701 million as at 31 March 2013 from US$17,862 million as at 31 March 2012, resulting from a partial repayment of the Foster’s acquisition facilities and the repayment on maturity of bonds in Colombia and South Africa. As at 31 March 2013, the weighted average maturity of the Group’s gross committed debt portfolio was 6.7 years, while the weighted average interest rate on the Group’s gross debt portfolio was 4.1%, having decreased from 4.9% as at 31 March 2012, principally reflecting reductions in euro and Australian dollar interest rates as well as the repayment of some higher cost debt, principally in Australian dollars, Colombian peso and South African rand. The Group’s gearing ratio (which is calculated as net debt to equity) was 57.2% as at 31 March 2013, compared with 68.6% as at 31 March 2012. As at the date of this Prospectus, the Group had the following principal debt facilities in place: 2003 Miller Bonds On 7 August 2003, Miller issued US$1,100 million 5.50% notes due 2013. In June 2008, SABMiller assumed Miller’s obligations with respect to these notes, as a result of which Miller was released from its obligations and SABMiller became the sole obligor with respect to these notes. The notes mature on 15 August 2013. The notes are redeemable in whole, or in part, at any time at the option of SABMiller at a redemption price equal to the make-whole amount. 2003 SABMiller Bonds On 7 August 2003, SABMiller issued US$300 million 6.625% notes due 2033. Since September 2010, SABMiller has been the sole obligor with respect to the notes following the release of all guarantees in respect of the notes. The notes mature on 15 August 2033. The notes are redeemable in whole, or in part, at any time at the option of SABMiller at a redemption price equal to the make-whole amount. 2006 SABMiller Bonds On 28 June 2006, SABMiller issued US$850 million 6.50% notes due 2016. Since June 2008, SABMiller has been the sole obligor with respect to the notes following the release of all guarantees in respect of the notes. The notes mature on 1 July 2016. The notes are redeemable in whole, or in part, at any time at the option of SABMiller at a redemption price equal to the make- whole amount. 2006 Commercial Paper Programme On 11 October 2006, SABMiller entered into the 2006 Commercial Paper Programme with a programme limit of US$1,000 million (or its equivalent in other currencies). Since July 2008, commercial paper issued under the 2006 Commercial Paper Programme has not been guaranteed. 2008 SABMiller Bonds On 11 July 2008, SABMiller issued US$550 million 5.70% notes due 2014. The notes mature on 15 January 2014. The notes are redeemable in whole, or in part, at any time at the option of SABMiller at a redemption price equal to the make-whole amount. On 11 July 2008, SABMiller issued US$700 million 6.50% notes due 2018. The notes mature on 15 July 2018. The notes are redeemable in whole, or in part, at any time at the option of SABMiller at a redemption price equal to the make-whole amount. 2008 Euro Medium Term Note (EMTN) Programme and 2009 SABMiller Bonds On 25 July 2008, SABMiller established the 2008 EMTN Programme with a programme limit of US$5,000 million (or its equivalent in other currencies). On 9 July 2009, an updated prospectus was

46 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD issued and on 17 July 2009 SABMiller issued c1,000 million 4.50% notes due 2015. The notes mature on 20 January 2015. The notes are redeemable in whole, or in part, at any time at the option of SABMiller at a redemption price equal to the make-whole amount. The most recent updated prospectus under the Programme was issued on 12 October 2012. The net proceeds of any further notes issued under the 2008 EMTN Programme will be applied by SABMiller for general corporate purposes.

2009 Guaranteed Medium Term Note (GMTN) Programme and 2010 SABMiller Bonds On 28 January 2009, SABMiller and Racetrack Peru established the 2009 GMTN Programme with a programme limit of PEN1,500 million (or its equivalent in other currencies), which in the case of notes issued by Racetrack Peru is guaranteed by SABMiller. On 8 March 2010, an updated programme memorandum was issued and on 19 March 2010 SABMiller issued PEN150 million 6.75% notes due 2015. The notes mature on 19 March 2015. Unless otherwise stated in the applicable final terms, the net proceeds of any further notes issued under the 2009 GMTN Programme by Racetrack Peru will be used to fund investments, working capital, and/or other financing requirements of Racetrack Peru and the net proceeds of any further notes issued by SABMiller will be used for the repayment of loans incurred to fund the acquisition of securities of Backus and for general corporate purposes.

2012 SABMiller Holdings Bonds On 17 January 2012, SABMiller Holdings 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, all guaranteed by SABMiller. The notes are redeemable in whole, or in part, at any time at the option of SABMiller Holdings or SABMiller at a redemption price equal to the make-whole amount.

2012 Guaranteed Euro Medium Term Note (GEMTN) Programme and 2012 SABMiller Holdings GEMTN Bonds On 12 October 2012, SABMiller Holdings and SABMiller established the 2012 GEMTN programme with a programme limit of US$3,000 million (or its equivalent in other currencies). Notes under the GEMTN Programme are issued by SABMiller Holdings and guaranteed by SABMiller. On 6 December 2012 SABMiller Holdings issued c1,000 million 1.875% notes due 2020. The notes mature on 20 January 2020.

2012 Domestic Medium Term Note (DMTN) Programme and 2013 SABSA Holdings Limited Bonds On 13 December 2012, SABMiller and SABSA Holdings Limited (formerly SABSA Holdings Proprietary Limited) established the 2012 DMTN Programme with a programme limit of ZAR6,000 million (or its equivalent in other currencies), under which both bonds and commercial paper may be issued. Debt issued under the 2012 DMTN Programme is issued by SABSA Holdings Limited and guaranteed by SABMiller. The 2012 DMTN Programme replaced a Domestic Medium Term Note Programme established on 17 July 2007, all borrowings under which have been repaid. On 28 March 2013, SABSA Holdings Limited issued ZAR1,000 million 7.125% notes due 2018. The notes mature on 28 March 2018.

Bavaria COP Bonds Bavaria has in issue a number of unsecured Colombian peso bonds. The interest rates payable on these bonds are based on IPC, the consumer price index published by the Departamento Administravo Nacional de Estadistica of Colombia. The bonds comprise long and medium term borrowings with a nominal value of COP 1,201,800 million, repayment dates between May 2014 and January 2015 and interest rates ranging between IPC+6.52% and IPC+7.30%. With effect from 31 March 2011, 85.5% of the bonds due 2014 and 94.0% of the bonds due 2015 have been guaranteed by SABMiller.

Foster’s Bonds On 3 June 1996, FBG Finance Ltd issued US$300 million 7.875% notes due 2016 and 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 2035. All of these bonds are guaranteed by Foster’s. On 5 October 2004, Foster’s Finance Corp issued US$300 million 4.875% notes due October 2014, guaranteed by Foster’s.

47 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Group Syndicated Loan Facilities On 7 April 2011, SABMiller entered into a five-year US$2,500 million committed syndicated bank loan facility, with the option of two one-year extensions. In March 2012, the maturity of US$2,236 million of this facility was extended to April 2017 and in March 2013 the maturity of the whole facility was extended to April 2018. This facility is available for general corporate purposes of the Group. On 9 September 2011, the Group entered into a US$12,500 million committed syndicated facility primarily to finance the acquisition of Foster’s 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 five-year term facility; and a US$1,000 million five-year revolving credit facility. SABMiller Holdings is the borrower under the term facilities and SABMiller Holdings and SABMiller are borrowers under the revolving credit facility. SABMiller Holdings and SABMiller guarantee each other’s obligations under these facilities. In December 2011, SABMiller Holdings drew US$7,850 million under the one-year term facility; A$2,000 million (approximately US$2,021 million) and US$100 million under the three-year term facility and US$750 million under the five-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 used the proceeds of the 2012 SABMiller Holdings Bonds described above to repay US$7,000 million under the one-year term facility. In March 2012, SABMiller Holdings repaid the remaining US$850 million balance outstanding under the one-year term facility, which was then cancelled. In September 2012, SABMiller Holdings repaid A$500 million (approximately US$496 million) of the A$2,000 million balance outstanding under the three-year term facility. In December 2012, SABMiller Holdings used the proceeds of its c1,000 million 1.875% notes due 2020 described above to repay A$1,000 million (approximately US$1,049 million) and US$100 million of the three-year term facility and US$126 million of the five-year term facility. On 11 June 2012, SABMiller Holdings entered into a contingent guarantee of the obligations of SABMiller in respect of the SABMiller bonds and loan facilities described above and certain of SABMiller’s other present and future external borrowings. This guarantee takes effect upon the occurrence of certain insolvency events in relation to SABMiller.

Contractual commitments and contingent obligations In addition to its principal debt facilities, the Group has a number of obligations and commitments to make future payments of amounts due.

Operating lease obligations The Group had minimum lease rentals under non-cancellable operating leases expiring within one year, between two and five years and over five years of US$119 million, US$281 million and US$124 million, respectively, as at 31 March 2013, as compared with commitments of US$120 million, US$297 million and US$129 million, respectively, as at 31 March 2012.

Finance leases As at 31 March 2013, the Group had obligations under finance leases totalling US$35 million, of which US$8 million was due and payable within one year, US$22 million was due and payable between one and five years and US$5 million was due and payable in more than five years. As at 31 March 2012, the Group had obligations under finance leases totalling US$21 million, of which US$5 million was due and payable within one year and US$16 million was due and payable between one and five years. The Group does not have any material off-balance sheet commitments or other arrangements.

Contracts placed for future expenditure As at 31 March 2013, the Group was party to a number of contracts under which it has committed to make future expenditure in a total amount of US$3,301 million including the Group’s share of commitments of joint ventures, of which US$290 million related to contracts for future capital expenditure, and US$3,011 million related to other non-capital commitments where no provision has been made in the financial information. Contracts placed for future expenditure as at 31 March 2013 primarily related to minimum purchase commitments for raw materials and packaging materials, which were principally due between 2013 and 2019. Additionally, as part of the business capability programme the Group had entered into contracts for the provision of IT,

48 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD communications and consultancy services and in relation to which the Group had commitments of US$120 million at 31 March 2013. The Group’s share of joint ventures’ other commitments primarily related to MillerCoors’ various long-term non-cancellable advertising and promotion commitments.

Contingent liabilities The commitments, contingencies and guarantees of the Group as at 31 March 2013 are described in Note 30 to the Group Financial Information.

Disclosure regarding risk The Group’s activities expose it to the following financial risks: * market risk (including foreign exchange, interest rate and price risk) * credit risk * liquidity risk The directors are ultimately responsible for the establishment and oversight of the Group’s 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 financial officer, 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. The Board also receives a quarterly report on treasury activities, including confirmation of compliance with treasury risk management policies. The Group treasury function is responsible for the management of cash, borrowings and the financial 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 SABMiller Procurement, the Group’s centralised procurement function. Risk management of key brewing and packaging materials has now been substantially transferred to SABMiller Procurement. Some of the risk management strategies include the use of derivatives, 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 Group’s 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, the Group also sells put options to reduce or eliminate the cost of purchased options. It is the policy of the Group that no trading in financial instruments be undertaken. The Group’s treasury policies are established to identify and analyse the financial risks faced by the Group, to set appropriate risk limits and controls and to monitor exposures and adherence to limits. The Group’s assessment of its vulnerability to financial risks as at 31 March 2013 is more fully described in Note 22 to the Group Financial Information. 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 Group’s 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. As at 31 March 2013, an approximate nominal value of US$4,589 million of US dollar borrowings and c351 million of euro borrowings had 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 financial derivatives, US$2,882 million and c351 million were accounted for as net investment hedges and US$1,300 million were accounted for as fair value hedges. The Group does not hedge currency exposures from the translation of profits earned in foreign currency subsidiaries, associates and joint ventures. 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

49 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD or currency market limitations, hedge a proportion of their foreign currency exposure estimated to arise over a period of up to 18 months. Committed transactional exposures that are certain are hedged fully without limitation in time. The Group principally uses forward exchange contracts to hedge currency risk. Interest rate risk The Group borrows principally in US dollars, Australian dollars, euros, Colombian pesos and South African rand. The Group’s policy is to borrow (direct or synthetically) in floating rates, reflecting the fact that floating rates are generally lower than fixed rates in the medium term. However, a minimum of 25% of consolidated net borrowings is required to be in fixed rates for a minimum duration of 12 months and the extent to which Group borrowings may be in floating rates is restricted to the lower of 75% of consolidated net borrowings and that amount of net borrowings in floating rates that with a 1% increase in interest rates would increase finance 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 inflation-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 31 March 2013, on a policy adjusted basis, excluding borrowings from recent acquisitions and any inflation-linked debt, 56% of consolidated net borrowings were in fixed rates compared with 50% as at 31 March 2012. The impact of a 1% rise in interest rates on borrowings in floating rates would have been equivalent to 1.01% of adjusted EBITDA at 31 March 2013 compared with 0.44% as at 31 March 2012. 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 finished 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 fixed 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 five years. Where derivative contracts are used the Group manages exposures principally through exchange-traded futures, forwards and swaps. At 31 March 2013 the notional value of commodity derivatives amounted to US$89 million compared with US$36 million as at 31 March 2012. Equity securities price risk The Group is exposed to equity securities price risk because of investments held by the Group and classified on the balance sheet as available for sale investments. Credit risk The Group is exposed to credit risk if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments The Group limits its exposure to financial institutions by setting credit limits on a sliding scale based on their credit ratings and generally only with counterparties with a minimum credit rating of BBB- by Standard & Poor’s and Baa3 from Moody’s. For banks with a lower credit rating, or with no international credit rating, a maximum limit of US$5 million is applied, unless specific approval is obtained from either the chief financial officer 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 financial derivatives, which permit net settlement of assets and liabilities in certain circumstances. Trade and other receivables There is no significant 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.

50 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD The Group considered its maximum credit risk to be US$5,052 million at 31 March 2013 which was the total of the Group’s financial assets at that date, compared with US$3,705 million as at 31 March 2012. Liquidity risk The Group finances 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. As at 31 March 2013 the Group had the following core lines of credit that were available for general corporate purposes: * SABMiller: US$2,500 million committed syndicated revolving credit facility, which is due to expire in April 2018. * SABMiller Holdings: US$500 million revolving credit facility, which is due to expire in September 2016. Liquidity risk faced by the Group is mitigated by having diverse sources of finance available to it and by maintaining substantial unutilised banking facilities and reserve borrowing capacity, as indicated by the level of undrawn facilities.

51 c108736pu030 Proof 5: 8.8.13_13:33 B/L Revision: 0 Operator ChoD Description of the Group

Overview SABMiller, together with its subsidiaries, associated companies and joint ventures, is, according to Canadean, one of the world’s largest brewers, occupying a top-two market position by volume in many markets in which it operates, with group revenue7 operating profit and lager volumes for the year ended 31 March 2013 of US$34,487 million, US$4,203 million and 242 million hl respectively. As at 31 March 2013, the Group’s total assets were US$56,294 million. The Group is also one of the largest bottlers and distributors of Coca-Cola products outside the United States. The Group has brewing interests and distribution agreements across six continents, with a balance between fast-growing developing markets and cash-generative mature markets. The Group has a diverse portfolio of local, regional and global brands, including international premium beers such as Pilsner Urquell, Peroni Nastro Azzurro, MGD and Grolsch, along with leading local brands such as Aguila, Castle Lager, Miller Lite, Snow, Tyskie and Victoria Bitter. SABMiller is a FTSE-100 company listed on the London and the Johannesburg stock exchanges. The Group has demonstrated significant growth, with market capitalisation growing from US$5,421 million as at 31 December 2000 to approximately US$80,082 million as at 5 August 2013. Since the Group was first rated in 2003, and until 2 July 2012, SABMiller was rated Baa1/ stable outlook by Moody’s and BBB+/stable outlook by S&P. On 2 July 2012, S&P revised its rating to BBB+/positive outlook; Moody’s rating remains unchanged. The registered office of SABMiller is SABMiller House, Church Street West, Woking, Surrey, England, GU21 6HS and its telephone number is +44 (0) 1483 264000.

Highlights of the Group’s Operations Latin America The Group initially invested in El Salvador and Honduras in 2001, gaining full ownership in 2005. On 12 October 2005, the Group completed the Bavaria Transaction through which it obtained a controlling interest in the second largest brewer in South America, Bavaria, and on 24 November 2010 the Group acquired CASA Isenbeck, the third largest brewer in Argentina. As at 31 March 2013, Group companies were the number one brewer, in terms of lager market share, in Colombia, Ecuador, El Salvador, Honduras, Panama and Peru. The Group bottles soft drinks for The Coca-Cola Company in El Salvador and Honduras and for Pepsico International and Schweppes in Panama.

Europe The Group’s expansion into Europe began in 1993 with the acquisition of Dreher in Hungary. On 6 March 2012, the Group completed its strategic alliance with Anadolu Efes. The Group’s Russian beer business, SABMiller RUS LLC, and Ukrainian beer business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes in exchange for a 24 per cent. equity stake in the enlarged Anadolu Efes. Anadolu Efes is now the vehicle for both groups’ investments in Turkey, Russia, the CIS, Central Asia and the Middle East. The Group now has brewing operations in eight countries in Europe: the Netherlands, Poland, the Czech Republic, Italy, Romania, Hungary, Slovakia and the Canary Islands (Spain). The Group also sells significant volumes to a further seven European markets of which the largest are the United Kingdom and Germany, and a further 16 countries including Russia, Turkey and the Ukraine are covered in the strategic alliance with Anadolu Efes through either brewing, soft drinks or export operations.

North America The Group acquired Miller, the United States’ second largest brewer, in 2002. On 1 July 2008, the MillerCoors joint venture was established through the MillerCoors Transaction. As a result, SABMiller has a 58 per cent. economic interest and Molson Coors has a 42 per cent. economic interest in MillerCoors. Voting interests in MillerCoors are shared equally between SABMiller and Molson Coors, and each of SABMiller and Molson Coors has equal board representation. The North America segment includes the Group’s 58 per cent. share in MillerCoors and 100 per cent. of Miller Brewing International.

7 Group revenue comprises revenue together with the Group’s share of revenue from associates and joint ventures.

52 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Africa The Group operates in 15 countries in Africa: Botswana, Comores, Ethiopia, Ghana, Kenya, Lesotho, Malawi, Mayotte, Mozambique, Nigeria, South Sudan, Swaziland, Tanzania, Uganda and Zambia. In addition, the Group has a strategic alliance with Castel, pursuant to which Castel’s holding company has a 38 per cent. economic interest in SABMiller’s principal African holding company and the Group has a 20 per cent. economic interest in Castel’s African beverage operations. This alliance capitalises on the complementary nature of the companies’ geographic portfolios. Castel has lager and soft drinks interests in 22 largely French-speaking countries of West, Central and North Africa and the Indian Ocean. Its operations cover Algeria, Angola, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Coˆte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, Gambia, Guinea, Madagascar, Mali, Mauritius, Morocco, Niger, Senegal, Togo and Tunisia. With effect from 1 January 2012, the Group and Castel implemented a number of organisational changes in their African operations as part of their strategic alliance agreement. Operational management of the Nigerian businesses is now with SABMiller and the Angolan businesses with Castel, with the Group retaining an associate interest in the Angolan business. In addition, the Group has associated undertakings in Algeria, Morocco and Zimbabwe, and a procurement company in Mauritius.

Asia Pacific The Group has operations in Australia, India, South Korea and Vietnam, and in China through an associated company. On 16 December 2011, the Group completed the acquisition of Foster’s, and the Asia segment was renamed the Asia Pacific segment. Following the Foster’s acquisition, on 13 January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages. See ‘‘Group – Overview of Foster’s Acquisition.’’

South Africa SAB is the Group’s original brewing company. Founded in 1895, SAB has since become one of South Africa’s leading companies as well as Africa’s largest brewer. The soft drinks division of SAB, ABI, is South Africa’s largest bottler for The Coca-Cola Company. The Group also has hotel and gaming interests through its associate, Tsogo Sun Holdings Limited, which is listed on the Johannesburg Stock Exchange and is also the largest black empowerment company in the leisure industry in South Africa.

Group Business Capability Programme In the year ended 31 March 2010, the Group commenced a major business capability programme that will simplify processes, reduce costs and allow local management teams to enhance focus on their markets. Information and processes will be standardised based on a single, integrated information technology system across back, middle and front office and selectively certain back office activities will be outsourced. The programme will take four years to complete. SABMiller Procurement, the Group’s global procurement organisation, is well established and is demonstrating its significant potential. The Group had incurred cumulative exceptional costs of US$1,014 million in relation to, and realised US$1,229 million of cumulative financial benefits from, the business capability programme by 31 March 2013.

Overview of Foster’s Acquisition On 16 December 2011, the Group acquired a 100 per cent. interest in Foster’s 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. Following the Foster’s acquisition, on 13 January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages for cash consideration of US$343 million. The acquisition took the Group’s effective interest in Pacific Beverages to 100 per cent. and Pacific Beverages has now been integrated into the Foster’s business.

53 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Subsequent to the Foster’s acquisition the Group sold to CCA, Foster’s interests in Foster’s Group Pacific Ltd, which was the holding company for Foster’s operations in Fiji and Samoa, on 7 September 2012 and on 28 September 2012 Foster’s non-alcoholic brands and inventory. On 7 November 2012, Foster’s sold its 49.9 per cent. interest in Foster’s USA LLC to MillerCoors. Foster’s USA LLC is now wholly owned by MillerCoors. As a result of the Foster’s acquisition, certain licence and import arrangements such as Corona, Stella Artois, Asahi, Carlsberg and Guinness with a combined annual volume base of approximately 915,000 hl were terminated towards the end of the year ended 31 March 2012. The loss of these rights was a known risk at the time of the acquisition, in light of typical change of control provisions applicable to those arrangements.

Strategy Business strategy The Group’s business strategy is based upon the following four strategic priorities:

Creating a balanced and attractive global spread of businesses The wide geographic spread of the Group’s operations allows it to benefit from growth in volumes and value in beer markets around the world. The Group continues to look for opportunities to strengthen its geographic footprint in both developing and developed markets through greenfield entries, alliances, mergers and acquisitions.

Developing strong, relevant brand portfolios that win in the local market The Group seeks to develop attractive brand portfolios that meet consumers’ needs in each of its markets. This includes expanding its offerings to address new consumer segments and drinking occasions, strengthening its 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.

Constantly raising the profitability of local businesses, sustainably The Group’s aim is to keep enhancing its operational performance through top-line growth and continuous improvement in costs and productivity. It is also important that it maintains and advances its reputation, protects its licence to trade and develops its businesses sustainably for the benefit of its stakeholders.

Leveraging the Group’s skills and global scale The Group’s global spread presents increasing opportunities to gain value from the scale and skills of the Group, not least by leveraging its scale and expertise in procurement, standardising its back- office functions and integrating its front-office systems. The Group is also benefiting from ongoing collaboration and the sharing of skills between its businesses.

Financial strategy The Group is committed to maintaining a prudent financial profile that is reflected in a high quality investment-grade credit rating. Consistent with this commitment is the Group’s objective to optimise its overall capital structure, which it maintains by funding acquisitions where necessary through an appropriate mix of equity and debt. The Group’s strong financial structure also helps to ensure that adequate resources are available to it from a variety of market sources to meet ongoing business needs, as well as to provide medium-term flexibility to assess investments in appropriate markets.

Competitive strengths Management believes that the Group’s key competitive strengths are:

Leading market positions The Group is one of the world’s largest brewers, occupying a top-two market position by volume in many markets in which it operates. Group associates and joint ventures hold the number one position in China and the number two position in the United States by volume, the two largest markets for beer globally. The U.S. market accounts for the largest profit pool in the global beer market, and the Chinese market is among the fastest growing markets globally in terms of volume.

54 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD The Group enjoys a leading position in South Africa, with a 90 per cent. market share by volume, and it holds strong market positions in the countries in which it operates in Europe, Latin America, Africa and Asia Pacific. The Group is also one of the largest bottlers and distributors of Coca-Cola products outside the United States.

Geographic diversification The Group believes it has a well-balanced spread of brewing interests and major distribution agreements across six continents with a balance between fast-growing developing markets and cash-generative mature markets, which reduces the Group’s exposure to any single market, currency or brand.

A strong and comprehensive brand portfolio The Group has a broad portfolio of local lager brands, with more than 200 brands and strong regional and local market positions. In the longer term, the Group expects to see a natural consumer move towards higher value, global brands and Management believes that Pilsner Urquell, Peroni Nastro Azzurro, MGD and Grolsch provide the Group with a strong global brand portfolio well placed to capture growth.

A strong cash generative business The Group has historically provided a strong and stable source of sales and operating cash flows from its breadth of product offerings, diversity of consumers and broad international operations in geographical regions following different economic cycles.

Conservative financial policies The Group has consistently implemented conservative financial policies and maintained a strong financial profile, with minimal working capital requirements and strong interest cover. The Group maintains a strong liquidity position with cash balances and short-term investments and access to significant undrawn committed borrowing facilities, allowing the Group a high degree of financial flexibility.

A highly experienced management team with an outstanding track record in integrating and managing assets Management has a proven track record in successfully integrating acquisitions and through the breadth of its operations is experienced in managing a diverse portfolio of markets in highly- competitive business environments. The current management team is highly experienced and is recognised within the industry for successfully driving the Group’s strong growth in recent years through organic growth and acquisitions.

Licences Within Europe, Compan˜´ıa Cervec¸era de Canarias (in the Canary Islands) brews Carlsberg under licence and Dreher (in Hungary) brews Hofbra¨u and Hofbra¨u Radler under licence. Additionally Compan˜´ıa Cervec¸era de Canarias has an agreement to distribute Guinness (Guinness, Smithwick and Kilkenny brands) in the Canary Islands. Also in Europe, the Group has an agreement to distribute beer under the St Stefanus brand. MillerCoors produces and markets Molson Ice, Molson Golden, Old , Foster’s Lager, Foster’s Premium Ale, Redd’s Apple Ale and George Killian’s under licence in the United States of America. Honduras, El Salvador, ABI and certain businesses in Africa are reliant on franchise agreements with The Coca-Cola Company for their soft drinks businesses. The business in Panama produces and bottles PepsiCo soft drinks under an exclusive bottling agreement, and also bottles Schweppes soft drinks under licence. CASA Isenbeck in Argentina produces and distributes the Warsteiner brand under a long-term licence agreement. The business in Honduras distributes Corona Extra under a licence agreement that is expected to terminate in 2020. In June 2013, SABMiller and Kopparberg Brewery AB entered into a cooperation agreement for the long term licensing of Kopparberg cider products in selected markets where Kopparberg does not have an existing interest. The first of the Group’s operations to sign an exclusive local distribution agreement was Australia.

New products, research and development The Group invests in research and development enabling it to develop new products, packaging and processes, as well as new manufacturing technologies to improve overall operational

55 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD effectiveness. The Group’s upstream scientific research yields solid progress in brewing, raw materials, flavour stability, packaging materials and energy and water saving. The aggregate amount spent by the Group on research and development was US$4 million for the year ended 31 March 2013 and US$7 million in each of the years ended 31 March 2012 and 31 March 2011.

Recent developments Trading update for the first quarter ended 30 June 2013 The Group’s first quarter revenue growth was held back by unseasonably cold and wet conditions in many of its northern hemisphere markets, which negatively impacted beer consumption. This was offset by continued growth in the Group’s Latin America and Africa divisions. Group revenue grew by 2 per cent. on an organic, constant currency basis and total beverage volumes on an organic basis were level with the same quarter in the prior year, with lager volumes on an organic basis declining by 1 per cent. and soft drinks volumes on an organic basis growing by 8 per cent. The Group’s underlying financial performance for the first quarter was in line with Management’s expectations, though the depreciation of key currencies against the US dollar will adversely impact reported results. The first quarter results have not been audited, reviewed or verified by the Group’s independent auditors, are based solely on management accounts and remain subject to change.

Overview by business segment

Year ended 31 March

(audited)

2013 2012 2011

(US$ millions) Group Revenue (including share of associates and joint ventures) Latin America ...... 7,821 7,158 6,335 Europe...... 5,767 5,482 5,394 North America...... 5,355 5,250 5,223 Africa...... 3,853 3,686 3,254 Asia Pacific...... 5,685 3,510 2,026 South Africa: Beverages ...... 5,540 5,815 5,598 South Africa: Hotels and Gaming...... 466 487 481

Total ...... 34,487 31,388 28,311

Year ended 31 March

(audited)

2013 2012 2011

(US$ millions) Revenue Latin America ...... 7,821 7,148 6,324 Europe...... 4,292 5,347 5,379 North America...... 141 134 117 Africa...... 2,267 2,299 2,059 Asia Pacific...... 3,797 1,682 564 South Africa: Beverages ...... 4,895 5,150 4,965 South Africa: Hotels and Gaming...... — — —

Total ...... 23,213 21,760 19,408

56 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Latin America From 2002 to 2005, the Group conducted business activities in Central America through Bevco Limited (‘‘Bevco’’), the leading brewer and soft drinks bottler in Honduras and El Salvador, and in November 2005, the Group acquired the remaining 41.8 per cent. non-controlling interest in Bevco, increasing SABMiller’s interest to 100 per cent.

In October 2005, the Group completed the Bavaria Transaction, involving the second largest brewer in South America in terms of volume of beer and malt beverage sales, with established local brands, an established production footprint and an efficient distribution network. This extended the Group’s operations in the region to Colombia, Peru, Ecuador and Panama and provided a strong platform for further expansion. In addition, these operations have a presence in the non-alcoholic beverage markets in all these countries.

In November 2010, the Group acquired CASA Isenbeck, the third largest brewer in Argentina. CASA Isenbeck produces and distributes the Warsteiner brand under a long-term licence agreement.

In May 2013, the Group disposed of its non-core milk and juice business in Panama. The disposal will streamline the Panama business and allow Management to focus on its core lager and soft drinks businesses.

As at 31 March 2013, Group companies were the number one brewer, in terms of lager market share, in Colombia, Ecuador, El Salvador, Honduras, Panama and Peru. The Group bottles soft drinks for The Coca-Cola Company in El Salvador and Honduras and for Pepsico International and Schweppes in Panama. The Group had a total of 17 breweries and 15 soft drinks bottling plants in Latin America. Key local lager brands include: A´ guila, A´ guila Light, Arequipen˜a, Atlas, Balboa, Barena, Club, Club Colombia, Cordillera, Costen˜a, Costen˜ita, Cristal, Cusquen˜a, Golden, Imperial, Isenbeck, Pilsen, Pilsen Callao, Pilsen Trujillo, Pilsener, Poker, Poker Ligera and Salva Vida. The Group also distributes and sells Group international brands such as Miller Lite, MGD, Peroni Nastro Azzurro and Redd’s in the region.

Details of the Group’s operations in Latin America are shown in the table below:

Total Total soft lager drinks volume volume for year Number of for year ended soft drinks ended Number of 31 March bottling 31 March breweries1 20132 plants1 20132

(million hl) (million hl) Country Colombia ...... 6 19.9 5 2.6 Peru...... 5 13.0 3 2.0 Ecuador...... 2 5.6 2 0.4 Panama...... 1 1.9 2 1.4 Honduras...... 1 1.1 1 5.3 El Salvador...... 1 0.9 2 6.2 Argentina ...... 1 0.6 — —

Total ...... 17 43.0 15 17.9

Source: SABMiller Notes: 1 Breweries and soft drinks bottling plants relate to subsidiaries only. Following the disposal of the Group’s non-core milk and juice business in Panama, the number of soft drinks bottling plants in Latin America reduced to 14 2 Includes 100 per cent. of subsidiaries’ volumes, and the Group’s share of associates’ volumes

The Group’s average number of employees in Latin America for the year ended 31 March 2013 was approximately 29,882.

57 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Colombia The Group carries out its lager and soft drinks operations in Colombia principally through Bavaria. As at 31 March 2013, the Group had an effective economic interest of 99 per cent. in Bavaria. Bavaria is the largest beverage company in Colombia based on sales volumes according to Canadean. Lager production is Bavaria’s principal operating activity in Colombia, generating sales volumes of 19.9 million hl for the year ended 31 March 2013. Bavaria also produces non-alcoholic malt beverages for the Colombian market.

Lager Bavaria currently operates six breweries in Colombia. Bavaria serves all the provinces of Colombia and its brands are A´ guila, Poker, Costen˜a, Pilsen, Pilsen Night, Costen˜ita, Cola y Pola, A´ guila Light, Poker Ligera, Club Colombia, Club Colombia Roja, Club Colombia Negra, Peroni Nastro Azzurro, MGD and Redd’s. Poker and A´ guila Light are Bavaria’s leading Colombian beer brands, accounting for 41 per cent. and 22 per cent. respectively of Bavaria’s total beer sales in Colombia for the year ended 31 March 2013. Bavaria’s share of the total Colombian alcohol market in that period was approximately 63 per cent. according to Nielsen. Bavaria’s distribution fleet is operated by third party crews who deliver Bavaria’s products to a fragmented customer base across most of the country. Van selling exists in some rural areas, but is being gradually replaced by a combination of presales and telesales.

Soft drinks Bavaria produces malt beverages under the Pony Malta and Maltizz brands. For the year ended 31 March 2013, these brands constituted approximately 8 per cent. volume share of the Colombian total non-alcoholic beverages market, and approximately 100 per cent. of the non-alcoholic malt beverages market according to Nielsen. Bavaria’s sales volume of malt beverages for the year ended 31 March 2013 was 2.6 million hl. Bavaria’s average number of employees in Colombia for the year ended 31 March 2013 was approximately 8,349.

Peru The Group carries out its lager and soft drinks operations in Peru principally through Backus. As at 31 March 2013, the Group had an effective economic interest of 93.6 per cent. in Backus. Backus is the largest beer company in Peru by volume according to CCR.

Lager Backus currently operates five breweries in Peru. Backus’ most popular brand in Peru is Cristal which accounted for 50 per cent. of Backus’ Peruvian lager sales for the year ended 31 March 2013 and 41 per cent. of the total Peruvian beer market according to CCR. Backus’ volume share of the total Peruvian beer market for the year ended 31 March 2013 was approximately 94 per cent. according to the same source. Backus’ other main brands in Peru include Cusquen˜a, Malta Cusquen˜a, Pilsen Polar, MGD and Peroni Nastro Azzurro in the premium segment, Arequipen˜a, Pilsen Callao, San Juan and Barena in the mainstream market and Pilsen Trujillo in the economy segment. Backus also produces the Cordillera brand for export to Bolivia.

Soft drinks Backus produces, bottles and distributes the Agua To´nica Backus, Guarana´ Backus, and Viva Backus soft drinks brands throughout Peru. According to Management estimates, these brands represented approximately 7 per cent. of the Peruvian sparkling soft drinks market in the year ended 31 March 2013. Backus also produces both sparkling and still bottled water under the Cristalina Backus and San Mateo brands. In the year ended 31 March 2013, Backus’ water brands represented approximately 19 per cent. of the Peruvian bottled water market according to Management estimates. In addition, Backus produces a malt-based non-alcoholic beverage, Maltin Power, being the only producer in this category. Backus’ average number of employees in Peru for the year ended 31 March 2013 was approximately 9,680.

58 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Ecuador The Group carries out its operations in Ecuador through Cervecerı´a Nacional (CN) SA (‘‘CN Ecuador’’). As at 31 March 2013, the Group’s effective interest in CN Ecuador was 95.6 per cent.

Lager According to Management estimates, the Group had approximately a 56 per cent. share of the alcohol market in Ecuador for the year ended 31 March 2013. The principal brands sold in Ecuador are Pilsener, Club, Conquer, Pilsener Light, Dorada and MGD.

Soft drinks CN Ecuador produces malt beverages under the Pony Malta brand and bottles both still and sparkling water under the Manantial brand. The average number of employees in Ecuador for the year ended 31 March 2013 was approximately 3,410.

Panama Cervecerı´a Nacional SA (‘‘Cervecerı´a Nacional’’) is the Group’s principal lager and beverage producer in Panama. As at 31 March 2013, the Group’s effective interest in Cervecerı´a Nacional was 97.6 per cent.

Lager Cervecerı´a Nacional’s beer sales in Panama represented approximately 71 per cent. of the total Panamanian beer market for the year ended 31 March 2013, according to Management estimates. Cervecerı´a Nacional produces the Atlas, Balboa and Miller Lite brands in Panama. Cervecerı´a Nacional also imports and distributes MGD. The distribution agreement for Corona Extra was terminated on 31 December 2012. Cervecerı´a Nacional’s most popular brand in Panama is Balboa, which accounted for approximately 40 per cent. of Cervecerı´a Nacional’s lager sales for the year ended 31 March 2013.

Soft drinks The Group’s Panamanian subsidiaries produce, bottle and distribute Malta Vigor, a non-alcoholic malt beverage brand. For the year ended 31 March 2013, Malta Vigor constituted approximately 87 per cent. of the non-alcoholic malt beverages market according to Nielsen. Cervecerı´a Nacional also produces and bottles PepsiCo soft drinks, including Pepsi, Mirinda and 7UP, pursuant to exclusive bottling agreements with Pepsico International dating back to 1946 and also produces and bottles Schweppes soft drinks including Orange Crush, Squirt and Canada Dry Ginger Ale. The Group has approximately 33 per cent. by volume share of the Panamanian sparkling soft drinks market. The Group’s average number of employees in Panama for the year ended 31 March 2013 was approximately 1,773.

Honduras The Group operates in Honduras principally through its subsidiary Cervecerı´a Honduren˜aSAdeCV (‘‘CHSA’’). As at 31 March 2013, the Group’s effective interest in CHSA was 99.6 per cent.

Lager According to Nielsen, the Group’s brands account for approximately 59 per cent. of the Honduran alcohol market by volume for the year ended 31 March 2013. CHSA is the sole domestic brewer in Honduras. The Group’s proprietary domestic brands in Honduras include Barena, Imperial, Port Royal and Salva Vida. In addition, CHSA imports and distributes Miller Lite, MGD and Corona Extra, with the distribution agreement for the latter expected to terminate in 2020.

Soft drinks According to Nielsen, CHSA is the market leader for sparkling soft drinks in Honduras, accounting for approximately 56 per cent. of the Honduran sparkling soft drinks market by volume for the year ended 31 March 2013. CHSA is the exclusive bottler in Honduras of the Coca-Cola, Coca-Cola Light, Sprite, Fanta, Fresca, Powerade and Canada Dry brands. CHSA started producing and selling a licensed flavoured tea, Nestea, in September 2010, and in December 2010 launched Jugos del Valle. Both brands are owned by The Coca-Cola Company. CHSA also owns, produces and sells Tropical,

59 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD which is a sparkling soft drinks brand, and launched ActiMalta in the non-alcoholic malt beverages category. The Group’s average number of employees in Honduras for the year ended 31 March 2013 was approximately 3,376.

El Salvador The Group operates in El Salvador principally through its wholly owned subsidiary, Industrias la Constancia SA de CV (‘‘ILC’’). Lager The Group’s brands accounted for approximately 90 per cent. of the Salvadoran beer market by volume for the year ended 31 March 2013, according to Nielsen. The Group’s domestic brands in El Salvador include Suprema, Golden, Pilsener, Pilsener Lite and Regia Extra. It also imports and distributes MGD. The distribution agreement for Corona Extra was terminated on 31 December 2012. Soft drinks ILC is also a significant producer and distributor of sparkling soft drinks in El Salvador, with approximately 54 per cent. by volume of the market for the year ended 31 March 2013 according to Nielsen. It has the exclusive bottling and distribution rights for all of The Coca-Cola Company’s brands in El Salvador including Coca-Cola, Coca-Cola Light, Sprite, Fanta, Fresca, Powerade and Tropical. In addition, the Cristal water division is primarily a bottler and distributor of purified water to homes and offices. It also produces and distributes a wide range of still soft drinks, including the Jugos del Valle brand in the juices category and flavoured teas. ILC launched ActiMalta in the non-alcoholic malt beverages category. The Group’s average number of employees in El Salvador for the year ended 31 March 2013 was approximately 2,502.

Argentina The Group operates in Argentina principally through its subsidiary, CASA Isenbeck. Lager The Group’s brands accounted for approximately 3 per cent. of the Argentinian beer market by volume for the year ended 31 March 2013, according to Nielsen. The Group’s brands in Argentina include Isenbeck, Isenbeck Dark, Diosa Tropical and MGD. CASA Isenbeck produces and distributes the Warsteiner brand under a long-term licence agreement. The Group’s average number of employees in Argentina for the year ended 31 March 2013 was approximately 507.

Europe The Group’s expansion into mainland Europe began in 1993 with the acquisition of Dreher in Hungary, followed by further significant investments in Poland, the Czech Republic, Italy and the Netherlands. On 6 March 2012, the Group completed its strategic alliance with Anadolu Efes. In March 2012, the Group’s Russian beer business, SABMiller RUS LLC, and Ukrainian beer business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes in exchange for a 24 per cent. equity stake in the enlarged Anadolu Efes. Anadolu Efes is now the vehicle for both groups’ investments in Turkey, Russia, the CIS, Central Asia and the Middle East. Anadolu Efes is the leading beverage producer in Turkey and has leading market positions in the growth beer markets of Kazakhstan, Moldova and . The Group is one of the region’s leading brewers, with brewing operations in eight countries: the Netherlands, Poland, the Czech Republic, Italy, Romania, Hungary, Slovakia and the Canary Islands (Spain). The Group currently owns 17 breweries across Europe. The Group also sells significant volumes to a further seven European markets, of which the largest are the United Kingdom and Germany. A further 16 countries including Russia, Turkey and the Ukraine are covered in the strategic alliance with Anadolu Efes through either brewing, soft drinks or export operations. At the end of 2012, Group companies held the number one or two market position, by volume, in six European countries in which the Group operated, according to Canadean. The Group’s earnings in Europe are principally derived from its operations in the Czech Republic and Poland.

60 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Operations Details of the Group’s lager operations in Europe are shown in the table below:

Total lager volume for year ended Number of 31 March breweries1 20132

(million hl) Country Poland ...... 3 14.5 Czech Republic ...... 3 6.7 Romania...... 3 5.6 Italy ...... 3 3.4 Hungary ...... 1 2.1 The Netherlands...... 1 1.6 Miller Brands (UK)3 ...... — 1.4 Slovakia...... 1 1.4 Anadolu Efes4 ...... — 6.6 Brands Europe (including Dubai)5...... — 1.1 Canary Islands...... 2 0.9

Total ...... 17 45.3

Source: SABMiller Notes: 1 Breweries relate to subsidiaries only 2 Includes 100 per cent. of subsidiaries’ volumes and the Group’s share of associates’ volumes 3 The Group has no brewery facilities in the United Kingdom 4 In March 2012, the Group entered into a strategic alliance with Anadolu Efes which is now the vehicle for both groups’ investments in Turkey, Russia, the CIS, Central Asia and the Middle East 5 With effect from 1 October 2012, the Group’s associate distribution business in Dubai previously reported as part of Australia was transferred to the Group’s Europe division

Employees The Group’s average number of employees in Europe for the year ended 31 March 2013 was approximately 10,489.

Poland The Group owns 100 per cent. of SA in Poland. In Poland, beer consumption per capita grew by 65 per cent. between 1999 and 2012, according to Canadean. According to Nielsen, the Group’s volume market share in Poland was 36 per cent. for the year ended 31 March 2013. As at 31 March 2013, the Group had three Polish breweries: one in Poznan in Western Poland, one in in Southern Poland and one in Bialystok in North Eastern Poland. The Group’s Tyskie brand is the leading beer brand in Poland, with sales of 5.5 million hl for the year ended 31 March 2013. The Zubr brand remained the number two beer brand in Poland for the year ended 31 March 2013 according to Nielsen. The Group’s average number of employees in Poland for the year ended 31 March 2013 was approximately 3,393.

Czech Republic The Group owns 100 per cent. of Plzenˇsky´ Prazdroj a.s. in the Czech Republic. The Group is the leading brewer in the Czech Republic according to CBMA, with an estimated 49 per cent. share of the beer market by volume, primarily due to the Group’s brands, Gambrinus and

61 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Kozel, which are number one and two brands in the country, respectively. It also brews Pilsner Urquell, the brand leader in the premium segment. The Group’s operations comprise three breweries: Plzenˇsky´ Prazdroj, Pivovar and Pivovar Velke´ Popovice. Major brands sold in the Czech Republic are Pilsner Urquell, Gambrinus, Radegast and Kozel, and the non-alcoholic Birell. The Group aims to establish the Pilsner Urquell brand among the leading international beer brands. Management believes this brand is the world’s oldest ‘‘golden’’ beer and is leveraging this heritage in the development of the brand internationally through focused positioning and the targeting of particular countries (including the United States, Germany and the United Kingdom) as well as specific cities in other countries. The Group’s average number of employees in the Czech Republic for the year ended 31 March 2013 was approximately 2,053.

Romania The Group’s Romanian business, S.A. (‘‘Ursus’’), had a market share of approximately 29 per cent. for the year ended 31 March 2013. Its main proprietary domestic brands are Ursus Premium, Timisoreana and Ciucas, and it is expanding its premium portfolio by selectively rolling out Peroni Nastro Azzurro and Grolsch. Timisoreana is the leading brand in the Romanian beer market according to Nielsen. Ursus has three breweries located in Buzau, Timisoara and Brasov. The Group’s average number of employees in Romania for the year ended 31 March 2013 was approximately 1,477.

Italy The Group’s effective interest in Birra Peroni is 99.9 per cent. According to Canadean, in 2012 the Italian beer market was Western Europe’s fifth largest by volume. According to SymphonyIRI, Birra Peroni had an approximate 20 per cent. share of the Italian beer market for branded volume at 31 March 2013. According to the same source, the Peroni brand is number one in Italy with an estimated 14 per cent. share of the market in the year ended 31 March 2013 and is one of the oldest brands in the country, dating back to 1846. Nastro Azzurro, another of the Birra Peroni brands, is among the top premium brands in the country, with an estimated 13 per cent. share of the Italian market premium segment in the year ended 31 March 2013. Birra Peroni primarily exports its brands to the United Kingdom and the United States, and continues to develop and grow its export revenues. Birra Peroni has three breweries in Italy located in Rome, Padua and Bari. The Group’s average number of employees in Italy for the year ended 31 March 2013 was approximately 804.

The Netherlands The Group owns 100 per cent. of Royal Grolsch, a brewer based in the Netherlands. According to Canadean, in 2012 the Netherlands beer market was Western Europe’s sixth largest by volume (and is now estimated at 12 million hl). According to Management estimates, Royal Grolsch had an estimated 13 per cent. share of the Netherlands beer market by volume for the year ended 31 March 2013. Its primary brand is Grolsch Premium Lager, which is an iconic Dutch brand with almost 400 years of brewing heritage and represents approximately 87 per cent. of Royal Grolsch’s domestic volumes. Other Group brands sold in the Netherlands are Peroni Nastro Azzurro, Pilsner Urquell, Tyskie, Lech, Grolsch Premium Weizen, Lentebok and Herfstbok. Grolsch Premium Lager is currently sold in approximately 60 countries, including Russia, Poland, Romania, South Africa, the United States of America, the United Kingdom, Canada and Australia. Potential growth of the Grolsch Premium Lager brand is expected across Africa and Latin America, where the premium segment is still in its infancy, and in the more developed markets of Central and Eastern Europe. The average number of employees for Royal Grolsch for the year ended 31 March 2013 was 711.

Anadolu Efes In March 2012, the Group completed its strategic alliance with the Turkish beer and soft drinks business, Anadolu Efes, under which the Group transferred its Russian and Ukrainian beer

62 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD businesses to Anadolu Efes in return for a 24 per cent. equity stake in the enlarged Anadolu Efes. The Group accounts for its investment in Anadolu Efes as an associate using equity accounting. As a result, the Group’s share of profits in Anadolu Efes is reflected in the Group’s share of post-tax results of associates, but not in the Group’s revenue, operating profit or EBITDA. The Europe segment includes the Group’s 24 per cent. share of Anadolu Efes from the date of acquisition. Anadolu Efes’s activities are conducted by three divisions, Turkey beer; International beer; and soft drinks. Anadolu Efes is Turkey’s largest brewer controlling approximately 78 per cent. of the local market as of 31 March 2013. Outside Turkey, Anadolu Efes has brewing operations in Russia, Kazakhstan, Ukraine, Moldova, and Georgia. Following the strategic alliance, the combined business has a number four position, by volume, in Russia for the year ended 31 March 2013, which according to Canadean is the world’s fourth largest beer market. Anadolu Efes’s international beer operations are carried out through its wholly-owned subsidiary, Efes Breweries International N.V. Anadolu Efes also exports its primary brand Efes to more than 70 countries. Anadolu Efes owns a 50.3 per cent. share in Coca-Cola˙ Ic¸ecek A.S¸. (‘‘CCI˙’’), which is the sixth largest bottler in the Coca-Cola system, based on volume. CCI˙ manufactures, sells and distributes The Coca-Cola Company branded beverages in Turkey, Azerbaijan, Jordan, Kazakhstan, Kyrgyzstan, Pakistan, Iraq and Turkmenistan. Management estimates that CCI˙ is the market leader in Turkey, Kazakhstan, Azerbaijan, Kyrgyzstan and Turkmenistan and ranks second in Jordan and Pakistan. Its products are also exported to Syria and Tajikistan. Following a change in control, Anadolu Efes has fully consolidated CCI˙ with effect from 1 January 2013.

Other European operations In Hungary, the Group’s subsidiary, Dreher, maintains a well-positioned portfolio of brands covering all popular lager segments, including the Dreher brand, which is a leading local premium brand, and Arany A´ szok. Dreher also brews Hofbra¨u under licence. Dreher had a market share of approximately 32 per cent. for the year ended 31 March 2013, according to Nielsen. In Slovakia, Pivovary is the second largest brewing company by volume according to Canadean. The premium brand, Pilsner Urquell, and several of the Group’s Czech brands are sold alongside Sˇarisˇ, Topvar and Smadny Mnich in the Slovakian brand portfolio. Compan˜´ıa Cervecera de Canarias (‘‘CCC’’) in the Canary Islands produces Dorada and Tropical, which are local brands, and Carlsberg under licence, and distributes certain of the Group’s global brands. In addition, CCC also produces Appletiser and economy beer brands (Kelson and Saturday) for the local market, and has an agreement to distribute Guinness and Red Bull. In 2005, the Group established Miller Brands (UK) Limited (‘‘Miller Brands’’) for the sale, marketing and distribution of the Group’s international premium brands in the United Kingdom. Miller Brands sells Peroni Nastro Azzurro, MGD and Pilsner Urquell and other Group brands such as Tyskie, Lech and Kozel, in a variety of formats for consumption in both the on-premise and off-premise channels. In 2011, the Group established SABMiller Brands Europe a.s. (‘‘SABMiller Brands’’) for the sale, marketing and distribution of the Group’s global premium brands in Europe and the Middle East where the Group does not have breweries, such as Germany, France, Sweden, Spain, Austria and the United Arab Emirates. SABMiller Brands sells the Group’s global brands and other Group brands such as Tyskie, Lech and Kozel.

North America Until 30 June 2008, the Group’s subsidiary Miller conducted its operations predominantly in the United States, where it was the second-largest brewing company. Up to that date Miller’s results were consolidated within the Group’s financial statements. On 1 July 2008, the MillerCoors Transaction was completed, resulting in the creation of the MillerCoors joint venture. As a result, SABMiller has a 58 per cent. economic interest and Molson Coors has a 42 per cent. economic interest in MillerCoors. As part of the MillerCoors Transaction, Miller transferred substantially all of its operating assets (excluding its international assets, which represent a small percentage of Miller’s total operating assets) to MillerCoors. MillerCoors is accounted for as a joint venture using equity accounting by SABMiller. As a result, after the completion of the MillerCoors Transaction, the Group’s share of profits in MillerCoors is reflected in the Group’s share of post-tax results of joint ventures, but not in the Group’s revenue, operating profit or EBITDA. The North America segment includes the Group’s 58 per cent. share in MillerCoors and 100 per cent. of Miller Brewing International and various North American holding companies.

63 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Products MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the U.S. and Puerto Rico. It competes in every major category of the U.S. beer industry, including the Import, Premium Light, Premium Regular, Economy and Craft categories. MillerCoors’ core brand families, Miller Lite, Coors Light and Miller64 (Premium Light), MGD and Coors Banquet (Premium Regular), Miller High Life, Keystone and ’s Best (Economy) accounted for approximately 83 per cent. of MillerCoors’ total domestic shipment volume in the United States during the year ended 31 March 2013, excluding contract brewing. In August 2010, MillerCoors established the Tenth and Blake Beer Company, its craft and import division. It imports Peroni Nastro Azzurro, Pilsner Urquell and Grolsch and features craft brews from the Jacob Leinenkugel Brewing Company, Blue Moon Brewing Company and the Blitz- Weinhard Brewing Company. To expand its portfolio, Tenth and Blake acquired The Crispin Cider Company, including its affiliate Cider Company, in February 2012 to capitalise on the fact that cider is now the fastest growing category in the U.S. malt beverage and cider industry. MillerCoors believes that the enhanced brand portfolio, scale and combined management strength of the joint venture allows the combined businesses to compete more vigorously in the aggressive and rapidly changing U.S. marketplace and thus improves the operational and financial performance through: * building a stronger brand portfolio and giving consumers more choice; * cost reductions and improving productivity; * creating a more effective competitor; * improving the route to market and benefiting distributors and retailers; and * optimising organisational strength.

Employees MillerCoors had approximately 8,900 employees as at 31 March 2013.

Sales and Distribution In the United States, beer is generally distributed through a three-tier system consisting of manufacturers, distributors and retailers. A national network of approximately 450 independent distributors purchases MillerCoors’ products and distributes them to retail accounts.

Brewing Facilities MillerCoors operates eight major breweries in the U.S., as well as the Leinenkugel’s craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee, the Blue Moon Brewing Company at Coors Field in and The Crispin Cider Company cidery in Colfax, .

Contract Manufacturing MillerCoors has contract brewing agreements with a number of other companies, including Pabst Brewing Company. Additionally, MillerCoors produces beer under contract for Miller Brewing International and Molson Coors.

Competitive Conditions The beer industry in the United States is highly competitive. U.S. beer industry shipments had a low single digit annual growth rate for the 10 years ended 2009. After low single digit declines in 2010 and 2011, the industry returned to low single digit growth in 2012. Front-line pricing pressure and discounting in the U.S. beer industry has been less intense in recent years. The combination of Miller and Coors in mid-2008 was designed to create a stronger U.S. brewer with the scale, operational efficiency and distribution platform to compete more effectively against larger brewers, both domestic and global. The MillerCoors’ portfolio of beers competes with numerous above premium, premium, low-calorie, popular priced, non-alcoholic, and imported brands. These competing brands are produced by international, national, regional and local brewers. MillerCoors competes most directly with A-B InBev, but also competes with imported and craft beer brands. According to Nielsen estimates, MillerCoors is the nation’s second-largest brewer

64 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD by volume, selling approximately 29 per cent. of the total 2012 U.S. brewing industry volume in off-premise channels. This compares with A-B InBev’s 52 per cent. share according to Nielsen. MillerCoors’ alcoholic malt beverages also compete with other alcoholic beverages, including wine and spirits, and thus its competitive position is affected by consumer preferences between and among these other categories. Sales of wine and spirits have grown faster than sales of beer in recent years, resulting in a reduction in the beer segment’s lead in the overall alcoholic beverage market.

Africa The Group operates in 15 countries in Africa and as at 31 March 2013 had 19 lager breweries, 17 soft drinks bottling plants and 19 sorghum breweries. Tanzania has the highest volume of lager sales in the Group’s Africa subsidiary operations. The Group has a strategic alliance with Castel pursuant to which Castel has a 38 per cent. economic interest in SABMiller’s principal African holding company and the Group has a 20 per cent. economic interest in Castel. This alliance capitalises on the complementary nature of the companies’ geographic portfolios. Castel has lager and soft drinks interests in 22 largely French- speaking countries of West, Central and North Africa and the Indian Ocean. Its operations cover Algeria, Angola, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Coˆte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, Gambia, Guinea, Madagascar, Mali, Mauritius, Morocco, Niger, Senegal, Togo and Tunisia. With effect from 1 January 2012, the Group and Castel implemented a number of organisational changes in their African operations as part of their strategic alliance agreement. Operational management of the Nigerian businesses is now with SABMiller and the Angolan businesses with Castel, with the Group retaining an associate interest in the Angolan businesses. In addition, the Group has associated undertakings in Algeria, Morocco and Zimbabwe, and a procurement company in Mauritius. It is intended that any future entry into the remaining African markets will be undertaken in conjunction with Castel, with day to day management allocated according to geographical proximity to their respective operations and language capabilities. For the year ended 31 March 2013, the Group’s share of Castel’s African beverage operations’ lager volumes was 6.4 million hl and the Group’s share of Castel’s African beverage operations’ soft drinks volumes was 5.6 million hl. The Group also bottles soft drinks for The Coca-Cola Company in 20 African markets (in alliance with Castel in 14 of these markets). The Group’s average number of employees in Africa for the year ended 31 March 2013 was approximately 12,652.

65 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Operations Details of the Group’s operations in Africa are shown below:

Total Total soft lager drinks volume volume for year Number of for year ended soft drinks ended Number of 31 March bottling 31 March breweries1 20132 plants1 20132

(million hl) (million hl) Country Algeria...... — 0.2 — 0.5 Botswana...... 1 0.5 1 0.7 Comores ...... — — 1 — Ethiopia...... — — 1 0.4 Ghana ...... 1 0.5 3 1.3 Kenya...... — — 1 0.3 Lesotho ...... 1 0.4 1 0.2 Mayotte ...... — — 1 0.1 Morocco ...... — 0.2 — 0.1 Mozambique ...... 3 2.1 — — Nigeria...... 3 1.0 2 0.8 South Sudan...... 1 0.3 1 0.2 Swaziland ...... 1 0.2 1 0.2 Tanzania ...... 4 2.9 — 0.1 Uganda...... 2 1.7 1 0.8 Zambia ...... 2 1.2 3 1.0 Zimbabwe...... — 0.8 — 0.7 Castel (including Angola) ...... — 6.4 — 5.6

Total ...... 19 18.4 17 13.0

Source: SABMiller Notes: 1 Breweries and soft drinks bottling plants relate to subsidiaries only; excludes sorghum breweries but includes water and maheu plants 2 Includes 100 per cent. of subsidiaries’ volumes and the Group’s share of associates’ volumes

Tanzania Tanzania Breweries Limited (‘‘Tanzania Breweries’’), which is listed on the Dar-es-Salaam Stock Exchange, owns Tanzania’s most popular beer brands (Kilimanjaro and Safari Lager) according to Management estimates and is licensed to produce and distribute other brands, including Castle Lager and Castle Lite in Tanzania. The Group has an effective economic interest of 36 per cent. in Tanzania Breweries Limited. In March 2013, the Group completed the acquisition of a 60 per cent. interest in Darbrew Limited, a traditional beer business, in Tanzania. According to Plato Logic, the Tanzanian beer market has experienced a steady rate of growth in per capita consumption in recent years, although the per capita beer consumption in 2012 remained low at 8.8 litres per annum. The Group’s share of the Tanzanian beer market was approximately 72 per cent. for the year ended 31 March 2013, according to Frontline.

Mozambique The Group has an effective economic interest of 49 per cent. in its listed operation in Mozambique. The Group’s share of the beer market in the area of the capital city of Mozambique, Maputo, was approximately 92 per cent. for the year ended 31 March 2013, according to Frontline.

66 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD The Group’s portfolio of brands in Mozambique includes 2M, Laurentina Preta, Manica and Impala (a cassava-based lager).

Uganda The Group has an effective economic interest of 62 per cent. in Uganda’s Nile Breweries Limited, which has a strong portfolio of brands including Nile Special, Nile Gold, Club Pilsener, Chairman’s ESB, Eagle Extra and Eagle Lager. The Group’s share of the Ugandan beer market was approximately 57 per cent. for the year ended 31 March 2013, according to Frontline. A new brewery located in Mbarara in west Uganda was commissioned in March 2013.

Zambia The Group has an effective economic interest of 54 per cent. in Zambian Breweries plc, a company listed on the Lusaka Stock Exchange. The Group’s share of the Zambian beer market was approximately 87 per cent. for the year ended 31 March 2013, according to Frontline. The Group’s key local brand in Zambia is Mosi. Castle Lager and Castle Lite are produced and sold under licence in Zambia. In November 2012, a new brewhouse was commissioned at Ndola in Zambia within the Copperbelt region.

Nigeria Until 31 December 2011, the Group had an effective economic interest of 59 per cent. in Pabod Breweries Ltd (‘‘Pabod’’) in Nigeria, an effective economic interest of 80 per cent. in Voltic Nigeria Ltd (‘‘Voltic Nigeria’’) in Nigeria and an effective economic interest of 41 per cent. in Intafact Beverages Limited (‘‘Intafact’’). With effect from 1 January 2012, together with Castel the Group implemented a number of organisational changes in its African operations as part of its strategic alliance agreement. As a result the Group acquired a 65 per cent. interest (effective 33 per cent. interest) in International Breweries in Nigeria, from Brasseries Internationales Holding Ltd, part of the Castel group, in exchange for cash and a dilution of the Group’s effective interests in its existing Nigerian businesses, Pabod and Voltic Nigeria. As at 31 March 2013, the Group had an effective economic interest of 38 per cent. in Pabod, an effective economic interest of 50 per cent. in Voltic Nigeria, an effective economic interest of 38 per cent. in Intafact and an effective economic interest of 36 per cent. in International Breweries, which is listed on the Nigerian Stock Exchange. The Group’s key local brands in Nigeria are Grand Lager, Trophy and Hero which is gaining popularity. A new greenfield brewery located in Onitsha in south eastern Nigeria was commissioned in August 2012.

Botswana Kgalagadi Breweries (Pty) Limited is the only domestic producer of lager in Botswana, with an overall market share of approximately 84 per cent. for the year ended 31 March 2013, according to Frontline. Its main brands are St. Louis, Castle Lager, Castle Lite, Carling Black Label and Hansa Pilsener. The Group has an effective economic interest of 31 per cent. in Kgalagadi Breweries (Pty) Limited.

Lesotho The Group is the only brewer in Lesotho, operating through Maluti Mountain Brewery (Pty) Limited (‘‘Maluti Mountain Brewery’’). The Group has an effective economic interest of 24 per cent. in Maluti Mountain Brewery. The Group had an approximate 99 per cent. share of the beer market in Lesotho for the year ended 31 March 2013, according to Management estimates. The key local brand in Lesotho is Maluti.

67 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Ghana The Group has an effective economic interest of 60 per cent. in Accra Brewery Limited, which in the year ended 31 March 2013 had an approximate 42 per cent. share, by volume, of the Ghanaian beer market, according to Management estimates. The Group’s key local brands in Ghana are Club and Stone. In addition the Group launched its second African cassava-based lager in March 2013.

Swaziland The Group is the only brewer in Swaziland, operating through Swaziland Beverages Limited, in which it has an effective economic interest of 37 per cent. The Group’s share of the beer market in Swaziland was approximately 87 per cent. for the year ended 31 March 2013, according to Frontline. The Group’s key local brand in Swaziland is Sibebe.

South Sudan In May 2009, the Group’s subsidiary Southern Sudan Beverages Limited commenced production of the region’s first locally produced beer from its new brewery in South Sudan’s capital city, Juba. The Group has an effective economic interest of 80 per cent. in Southern Sudan Beverages Limited. The Group’s key local brand in South Sudan is White Bull.

Zimbabwe The Group has an effective economic interest of 25 per cent. in Delta, which is listed on the Zimbabwe Stock Exchange, and in the year ended 31 March 2013, had an approximate 99 per cent. share, by volume, of the Zimbabwean beer market, according to Frontline. Its largest brands are Castle Lager, Lion, Carling Black Label and Golden Pilsener.

Angola With effect from 1 January 2012, together with Castel the Group implemented a number of organisational changes in its African operations as part of its strategic alliance agreement. As a result operational management of the Angolan businesses is now with Castel, with the Group retaining an associate interest in the Angolan businesses.

Kenya On 25 November 2011, the Group disposed of its 20 per cent. interest (12 per cent. effective economic interest) in its associate Kenya Breweries Limited.

Other operations – soft drinks The Group has an effective economic interest of 54 per cent. in Zambian Breweries plc, the operator of the Zambian Coca-Cola franchise. The Group also bottles and distributes Coca-Cola products in Botswana, Comores, Lesotho, Mayotte and Swaziland. The Group has an effective interest of 80 per cent. in the Voltic (GH) Limited water business in Ghana, a 50 per cent. effective interest in the Voltic Nigeria water business in Nigeria, a 40 per cent. effective interest in the Ambo Mineral Water Share Company in Ethiopia, a 62 per cent. effective interest in a maheu business in Zambia, an 80 per cent. effective interest in the Rwenzori water business in Uganda and an 80 per cent. effective economic interest in the Crown Beverages Limited water bottling and distribution business in Kenya.

Other operations As at 31 March 2013, the Group operated 19 sorghum beer breweries: five in Zambia, four each in Botswana and Malawi, two in Mozambique and one in Ghana, Swaziland, Tanzania and Uganda. Total sales volumes for the year ended 31 March 2013 included 5.5 million hl of sorghum beer and 0.3 million hl of wines and spirits.

Asia Pacific In Asia Pacific, the Group conducts business primarily in Australia, China and India, with operations also in South Korea and Vietnam. In December 2011, the Group completed the acquisition of a 100

68 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD per cent. interest in Foster’s and in January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages. In Australia, the Group operates principally through CUB, which is the Australian beverage business of Foster’s, and the second largest brewer in Australia with a portfolio of brands that includes the leaders in the traditional regular and domestic premium segments. Now in its nineteenth year, the Group’s associate in China is the biggest brewer by volume in China. The Group is the second largest brewer by volume in India. The Group also has subsidiaries in South Korea and Vietnam. The Group’s average number of employees in Asia Pacific for the year ended 31 March 2013 was approximately 5,128.

Australia On 16 December 2011, the Group acquired a 100 per cent. interest in Foster’s. Until 13 January 2012, the Group owned 50 per cent. of Pacific Beverages, a joint venture with CCA in Australia. Pacific Beverages commenced trading during the second half of the financial year ended 31 March 2007. Pacific Beverages invested in the construction of a new brewery at Warnervale in the Central Coast region of which was commissioned in June 2010. Following the Foster’s acquisition, on 13 January 2012 the Group acquired the 50 per cent. interest which it did not already own in Pacific Beverages. The acquisition took the Group’s effective interest in Pacific Beverages to 100 per cent. and Pacific Beverages has now been integrated into CUB. Subsequent to the Foster’s acquisition, the Group reached agreement with CCA for the sale of Foster’s interests in Foster’s Group Pacific Ltd, the holding company for Foster’s operations in Fiji and Samoa, and of Foster’s non-alcoholic brands and inventory. The Group completed the disposal of Foster’s interests in Foster’s Group Pacific Ltd on 7 September 2012, and of Foster’s non- alcoholic brands and inventory on 28 September 2012. With effect from 1 October 2012, the Group’s associate distribution business in Dubai, previously reported as part of Australia, was transferred to the Group’s Europe division, and on 7 November 2012, Foster’s sold its 49.9 per cent. interest in Foster’s USA LLC to MillerCoors. Foster’s USA LLC is now wholly owned by MillerCoors. CUB is the second largest brewer in Australia and has a portfolio of beer, cider and spirits/ready- to-drink beverage master brands. CUB’s brand portfolio includes iconic Australian beer brands such as Victoria Bitter (number one selling beer, according to Nielsen scanned data), Carlton Draught (number one draught beer, according to Canadean) and Crown Lager (number one domestic premium beer, according to Nielsen scanned data). It also includes craft beer brands such as Matilda Bay’s Redback, Fat Yak and Big Helga. CUB also leads the market in the Australian cider category with popular cider brands , Mercury, Bulmers Original, and Matilda Bay’s Dirty Granny. The Group’s key brands in Australia, other than CUB brands, are Peroni Nastro Azzurro, Miller Chill, Peroni Leggera, MGD and Grolsch. As a result of the Foster’s acquisition, certain licence and import arrangements such as Corona, Stella Artois, Asahi, Carlsberg and Guinness with a combined annual volume base of approximately 915,000 hl were terminated towards the end of the year ended 31 March 2012. The loss of these rights was a known risk at the time of the acquisition, in light of typical change of control provisions applicable to those arrangements. According to Nielsen, CUB’s share of the national beer market by volume, excluding private label brands, was 41 per cent. for the year ended 31 March 2013. As at 31 March 2013, the Group had five Australian breweries: the Yatala Brewery in , the Abbotsford Brewery in Melbourne, the in , the Bluetongue Brewery in Warnervale NSW and a craft brewery in Melbourne, as well as cideries in Hobart, Campbelltown NSW and New Zealand. The Group also operated two breweries in Fiji, and one in Samoa, all of which were sold on 7 September 2012. The Group’s average number of employees in Australia for the year ended 31 March 2013 was approximately 1,856.

China According to Canadean, China is the largest beer market in the world by volume, with volumes in excess of 522 million hl for the year ended 31 December 2012. Between 1999 and 2012, the Chinese beer market grew by 155 per cent. and accounted for 51.1 per cent. of growth in the world beer market, according to Canadean. The Chinese beer industry is consolidating with a number of Chinese brewers being acquired by the leading international brewers. In China, the Group owns 49 per cent. of CR Snow, a partnership with China Resources Enterprise Limited (‘‘CRE’’), which holds the remaining 51 per cent. CRE is listed on the Hong Kong Stock

69 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Exchange and is included in the Hang Seng Index. In February 2013 CR Snow entered into an agreement to acquire the brewery business of Kingway Brewery Holdings Limited. The transaction was approved by shareholders of Kingway on 9 May 2013 but remains subject to regulatory approval. Through CR Snow, the Group operates in 24 provinces in China. According to Canadean, CR Snow is the largest brewer in China by volume with strong market positions in both the northeast and the west and a growing market position in the central region. For the year ended 31 March 2013, the Group’s share of CR Snow’s lager volumes was 53.7 million hl. The Group’s lager volume growth in China for the year ended 31 March 2013 was 6 per cent., within which underlying organic growth of 5 per cent. was achieved with acquisitions in the previous financial year enhancing market share. In 2011 CR Snow sold in excess of 100 million hl in a 12 month period for the first time. During the year ended 31 March 2013, CR Snow’s national brand, Snow, grew by 8 per cent. and now constitutes 91 per cent. of the Group’s total China lager volumes. Snow is the top-selling lager brand (by volume) in China. CR Snow also continued to expand its presence in the premium segment. In 2012 CR Snow’s national market share was approximately 22 per cent. according to Management estimates.

India The Group operates in India principally through SABMiller India Limited. As at 31 March 2013, the Group’s effective interest in SABMiller India Limited was 99 per cent. In September 2006, the Group acquired a 100 per cent. interest in Foster’s operations and brand in India which has been integrated into the existing Indian business. In 2012 the Group’s brewing operations in India were the country’s second largest by volume according to Canadean. The Group has 11 breweries in India. During the year ended 31 March 2013, the Group sold 5.5 million hl of lager in India. The Group’s key brands in India include Haywards, Royal Challenge, Knockout, Foster’s and Indus Pride. The Group’s average number of employees in India for the year ended 31 March 2013 was approximately 2,945.

Vietnam The Group initially commenced operations in Vietnam through a joint venture which was established in 2006 and commenced trading in the second half of the year ended 31 March 2007 following the establishment of a greenfield brewery near Ho Chi Minh City. In March 2009, the Group acquired its joint venture partner’s interest and now owns 100 per cent. of SABMiller Vietnam Company Ltd. The Group’s key brand in Vietnam is Zorok. During the year ended 31 March 2013, a US$30 million impairment charge was incurred in respect of the Vietnam business. The Group’s average number of employees in Vietnam for the year ended 31 March 2013 was approximately 254.

South Africa: Beverages SAB is the founding business of the Group and has been operating since 1895. It is the leading brewer in South Africa and competes in every segment of the brewing industry. Major local brands include Castle Lager, Carling Black Label, Castle Milk Stout, Hansa Pilsener and Castle Lite. This segment also includes the Group’s non-beer beverage operations in South Africa. The non-beer beverage operations currently comprise: * 100 per cent. of ABI, the soft drinks division of SAB, the largest bottler for The Coca-Cola Company in South Africa; * 100 per cent. of Appletiser, an international producer of non-alcoholic fruit drinks; and * 29 per cent. of Distell, a major manufacturer and distributor in the South African wines and spirits sector.

Black Economic Empowerment Transaction In July 2009, the Group entered into a broad-based black economic empowerment transaction in South Africa (the ‘‘Black Economic Empowerment Transaction’’), with the purpose of placing

70 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD approximately 10 per cent. of SAB under black ownership. The initial allocation of shares in the Black Economic Empowerment Transaction was made on 9 June 2010 and placed 8.45 per cent. of SAB under black ownership, in three groups comprising employees (‘‘Employees’’); licensed liquor retailers, liquor licence applicants and customers of ABI (‘‘Retailers’’); and the broader South African community, through the creation of the SAB Foundation. Employees now own 3.39 per cent. of SAB through The SAB Zenzele Employee Trust, participation rights in which have been granted to 11,003 Employees. Retailers in aggregate own 3.52 per cent. of SAB through SAB Zenzele Holdings Limited in which there are 29,461 black shareholders. The SAB Foundation owns 1.54 per cent. of SAB. At the end of the ten year transaction period, participants will exchange their shareholdings in SAB for shares in SABMiller. Rationale for the Black Economic Empowerment Transaction SABMiller believes that broad-based black economic empowerment is a key requirement for the promotion of sustainable growth and social development in South Africa. The Black Economic Empowerment Transaction is designed to increase black participation in SAB by providing long term economic benefits to a broad range of black South Africans. SABMiller believes that the Black Economic Empowerment Transaction, through the inclusion of Employees, Retailers and the SAB Foundation as shareholders, has facilitated the closer alignment of SAB’s interests with its many stakeholders and will maximise long-term shareholder value. The SAB Foundation is primarily focusing on supporting entrepreneurship development, as SABMiller believes this will deliver broader economic benefits for South Africa. It is targeting historically disadvantaged people with a priority on women and the youth, particularly in rural areas. The Black Economic Empowerment Transaction has also enhanced SAB’s compliance with the South African Government’s Codes of Good Practice on Black Economic Empowerment and, in addition, seeks to support the normalisation of the South African liquor industry by supporting liquor licensing in South Africa. The Black Economic Empowerment Transaction is contributing towards achieving SAB’s committed objective of attaining Level Four Contributor status on the basis of the scorecard contained in the Codes of Good Practice.

Impact on SABMiller The Black Economic Empowerment Transaction became effective in the financial year which began on 1 April 2010. Under IFRS 2, the Black Economic Empowerment Transaction results in a share- based payment expense being reflected in the income statement of SABMiller over the transaction period with the majority of this expense having been charged in the financial year ended 31 March 2011.

Market According to Euromonitor in respect of 2012, South Africa is the 10th largest beer market in the world by volume. As at 31 March 2013, South Africa: Beverages’ sales represented approximately 90 per cent. of total lager beer consumption in South Africa, according to Management estimates. South Africa: Beverages’ main competition is from other liquor products, including wines, spirits and sorghum. A significant percentage of wine sold in South Africa is in the form of low priced wine which does interact with beer. The beer category share of alcohol has been largely stable over the last 10 years. The increasing urbanisation of the South African population has also contributed to a move from sorghum to clear beer. Within the beer market, the largest competitor is Brandhouse Beverages (Pty) Ltd (‘‘Brandhouse’’), a joint venture between Heineken International, Diageo and Namibia Breweries Ltd, selling such brands as Heineken, Windhoek and Amstel. Brandhouse opened its first South African brewery during 2009. ABI produces and bottles products in South Africa under franchise agreements with The Coca-Cola Company, which give ABI exclusive distribution rights in certain geographic areas. These areas cover approximately 51 per cent. of the South African population and currently generate approximately 56 per cent. of total South African Coca-Cola sales volumes. Coca-Cola and Schweppes products have a combined market share of approximately 88 per cent. of the soft drinks market in ABI’s territories in South Africa and 70 per cent. of the total soft drinks including waters, sports and energy drinks and iced tea.

Operations The principal activity of South Africa: Beverages is the production, marketing and distribution of beer, soft drinks and non-alcoholic beverages throughout South Africa. For the year ended

71 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD 31 March 2013, South Africa: Beverages sold 27.3 million hl of lager and 18.4 million hl of soft drinks (including sparkling soft drinks, fruit juices and water).

Products Lager South Africa: Beverages has ten brands of lager and four flavoured alcoholic beverages (‘‘FAB’’) brands. The three mainstream lager brands are Castle Lager, Carling Black Label and Hansa Pilsener, with Castle Lager being the company’s flagship brand. There are three brands in the Local Premium category: Castle Lite, Castle Milk Stout and Hansa Marzen Gold. There are four brands in the Global Brands category: MGD, Pilsner Urquell, Peroni Nastro Azzurro and Grolsch. The brands in the FAB segment are Redd’s Premium Cold, Redd’s Premium Dry, Brutal Fruit and Sarita.

Soft drinks Coca-Cola products ABI conducts essentially all of its business under five-year renewable franchise agreements with The Coca-Cola Company, and this relationship is fundamental to ABI’s business. Management believes that ABI enjoys an open and constructive relationship with The Coca-Cola Company. ABI’s current franchise agreements with The Coca-Cola Company expire on 31 March 2018.

Appletiser Appletiser produces natural and non-alcoholic sparkling fruit juices. The core brands of Appletiser are ‘‘Appletiser’’, ‘‘Grapetiser’’ and ‘‘Peartiser’’ sparkling fruit juices.

Marketing, sales and distribution In respect of its beer-related operations, South Africa: Beverages maintains an extensive distribution network throughout South Africa, comprising 40 depots, 14 appointed independent distributorships and an expanding network of owner-drivers. The owner-driver initiative has enabled South Africa: Beverages to reduce delivery fleet sizes and head-count and to benefit from higher delivery volumes from motivated entrepreneurial drivers. South Africa: Beverages sells beer to approximately 50,000 licensed customers, who are in turn licensed to sell beer and other alcohol for either on-premise or off-premise consumption. However, South Africa: Beverages estimates that there are around 180,000 informal outlets which are unlicensed, commonly referred to as shebeens, in South Africa. This is a phenomenon peculiar to the history of South Africa where prohibition was effectively enforced on black South Africans. South Africa: Beverages is doing its utmost to work with the South African Government to normalise the industry. Whilst South Africa: Beverages does not sell directly to these shebeens, Management estimates that approximately 40 per cent. of its volume is consumed within these informal channels. Coca-Cola and Schweppes products are marketed jointly by ABI and The Coca-Cola Company, with The Coca-Cola Company undertaking all national and primary media advertising while ABI undertakes promotion and marketing on a local level in its own territories. ABI sells to approximately 95,000 customers, varying from large retail outlets to small rural stores. Approximately 49,000 outlets receive direct delivery via Direct Sales Distribution or market logistic partners and distributors, while the balance obtain stock indirectly through the wholesale channel.

Manufacturing and properties South Africa: Beverages operates seven breweries. In order to ensure world-class standards of production, South Africa: Beverages’ breweries are regularly upgraded and refurbished, and brewing capacity is continually under review. Four of the seven breweries could be expanded at an incremental cost. South Africa: Beverages also has two malting plants and one hop-processing plant. ABI has five bottling plants and Appletiser has one bottling plant.

Employees South Africa: Beverages’ average number of employees for the year ended 31 March 2013 was approximately 11,438.

72 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD South Africa: Hotels and Gaming Tsogo Sun Holdings Limited (‘‘Tsogo Sun’’) is Southern Africa’s premier gaming, hotel and entertainment company and the largest black empowerment company in the leisure industry in South Africa. It is listed on the Johannesburg Stock Exchange. In February 2011, Tsogo Sun Holdings (Pty) Ltd merged into GRR, a listed casino operator in which it had a 25 per cent. interest, through an all-share merger. As a result, SABMiller exchanged its 49 per cent. interest in Tsogo Sun Holdings (Pty) Ltd for a 39.7 per cent. interest in the enlarged business, which was renamed Tsogo Sun Holdings Limited. The Tsogo Sun Group operates two separately focused divisions: Tsogo Sun Gaming and Tsogo Sun Hotels. Tsogo Sun Gaming owns 13 and operates 14 casinos in South Africa, including Montecasino and Gold Reef City casinos in Johannesburg and the Suncoast Casino in Durban, with a total of approximately 9,000 slot machines and 320 gaming tables. Tsogo Sun Hotels operates 92 hotels comprising 14,347 rooms. The hotels cover all segments of the industry from 5 star deluxe to budget hotels. The company operates primarily under its own brands, including Southern Sun, Garden Court and StayEasy, and in addition operates two Intercontinental hotels in South Africa. In March 2012, the Tsogo Sun Group completed the acquisition of the remaining 53 per cent. interest in the local Formula 1 hotel chain, giving it an effective shareholding of 100 per cent. in that business. Tsogo Sun Hotels trades primarily in South Africa, but also in six other countries across Africa. Tsogo Sun’s hotel portfolio includes owned hotels, properties leased from third parties and operated for Tsogo Sun’s own account and hotels managed on behalf of third parties in return for a management fee.

73 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Management

The Board of Directors The directors of SABMiller, each of whose business address is One Stanhope Gate, London W1K 1AF, United Kingdom are:

Date of Date most recent Date last Date next appointed to letter of elected/ due for the board appointment re-elected re-election

EAG Mackay ...... 08/02/1999 27/02/1999 25/07/2013 24/07/2014 A-J Clark ...... 26/07/2012 26/07/2012 25/07/2013 24/07/2014 JS Wilson...... 21/07/2011 17/08/2011 25/07/2013 24/07/2014 MH Armour ...... 01/05/2010 14/04/2010 25/07/2013 24/07/2014 GC Bible ...... 01/08/2002 27/09/2002 25/07/2013 24/07/2014 DS Devitre...... 16/05/2007 16/05/2007 25/07/2013 24/07/2014 GR Elliott ...... 01/07/2013 04/04/2013 25/07/2013 24/07/2014 LMS Knox...... 19/05/2011 17/05/2011 25/07/2013 24/07/2014 PJ Manser ...... 01/06/2001 20/06/2001 25/07/2013 24/07/2014 JA Manzoni ...... 01/08/2004 12/05/2004 25/07/2013 24/07/2014 MQ Morland...... 08/02/1999 23/02/1999 25/07/2013 24/07/2014 DF Moyo...... 01/06/2009 26/05/2009 25/07/2013 24/07/2014 CA Pe´rez...... 09/11/2005 12/10/2005 25/07/2013 24/07/2014 A Santo Domingo...... 09/11/2005 12/10/2005 25/07/2013 24/07/2014 HA Weir...... 19/05/2011 17/05/2011 25/07/2013 24/07/2014 HA Willard III ...... 01/08/2009 01/08/2009 25/07/2013 24/07/2014

* Cyril Ramaphosa retired from the Board on 25 July 2013 having been appointed on 8 February 1999.

Graham Mackay BSc (Eng), BCom Chairman Graham Mackay joined the South 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 and Chief Executive of South African Breweries plc upon its listing on the London Stock Exchange in 1999. In July 2012 he was appointed Executive Chairman of SABMiller plc. He is director of Philip Morris International Inc. and from 2005 until May 2013, he was a non-executive director of Reckitt Benckiser Group plc. Mr Mackay was diagnosed with a brain tumour in April 2013, leading the Board to accelerate the planned promotion of Alan Clark to Chief Executive with Mr Mackay becoming non-executive Chairman. At the date of this Prospectus Mr Mackay is on medical leave of absence while continuing treatment.

John Manser CBE, DL, FCA Acting Chairman and Senior Independent Director John Manser joined the Board in 2001, was appointed Senior Independent Director in July 2010 and became Deputy Chairman in 2012. He is a fellow of the Institute of Chartered Accountants and was, until his retirement in February 2013, Chairman of Shaftesbury plc. He has formerly held a number of senior positions, both in listed companies and the financial services industry, including Chairman of Robert Fleming Holdings and Chairman of the London Investment Banking Association. He is currently the Chairman of Trustees for Marlborough College and is Deputy Chairman of the College Council. He has assumed the role of acting Chairman while Mr Mackay is on medical leave of absence. In light of his additional responsibilities and time commitment as acting Chairman, he stood down as Chairman of the Audit Committee and as a member of the Audit and Remuneration Committees on 5 June 2013.

74 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Alan Clark MA, DLitt et Phil Chief Executive Alan Clark was appointed as Chief Executive in April 2013. He joined SAB Ltd in 1990 as Training and Development Manager. He has since held a number of senior positions in the Group, including Chief Operating Officer, SABMiller plc; Managing Director, SABMiller Europe; Marketing Director, SAB Ltd; Managing Director, Amalgamated Beverage Industries Ltd (SAB Ltd’s soft drinks division) and Chairman, Appletiser South Africa (Pty) Ltd. Before joining the Group, he received his Doctorate of Psychology degree from the University of South Africa.

Jamie Wilson LL.B.(hons), CA, ATII Chief Financial Officer Jamie Wilson was appointed as Chief Financial Officer in 2011. He joined SABMiller in 2005 and has held a number of senior positions in the Group, including Senior Vice President, Market Development and Strategy, Miller Brewing Company, USA; Managing Director, SABMiller Russia; Managing Director for SABMiller’s Central European businesses, and Finance Director for SABMiller Europe. Before joining SABMiller he held a number of senior roles in the global beverage industry.

Mark Armour MA, FCA Mark Armour joined the Board in 2010. He is a non-executive director of the Financial Reporting Council. He was Chief Financial Officer of Reed Elsevier Group plc and of its two parent companies, Reed Elsevier PLC and Reed Elsevier NV, from 1996 to 2012. Prior to joining Reed Elsevier in 1995 he was a partner in the London office of Price Waterhouse. He was a member of the Finance and Reporting Working Group of the UK Government’s Company Law Review Steering Group, which reported in 2001. He succeeded John Manser as Chairman of the Audit Committee on 5 June 2013.

Geoffrey Bible FCA (Aust), ACMA Geoffrey Bible joined the Board in 2002 as a nominee of Group, Inc. (Altria) following completion of the Miller Brewing Company transaction. He served as Chief Executive Officer of Altria 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 2002.

Dinyar Devitre BA (hons), MBA Dinyar Devitre joined the Board in 2007 as a nominee of Altria. He is a member of the board of Altria, a director of Western Union Company and a special advisor to General Atlantic LLC. He was senior vice president and Chief Financial Officer of Altria between 2002 and 2008 and was a director of Kraft Foods Inc. between 2002 and 2007. He is a director of Pratham USA, serves as a Trustee of the Brooklyn Academy of Music and is a Trustee Emeritus of the Asia Society.

Guy Elliott MA, MBA Guy Elliott joined the Board on 1 July 2013 and become a member of the Audit and Remuneration Committees. He is a senior executive director of Rio Tinto plc and Rio Tinto Limited and served as Chief Financial Officer from 2002 until April 2013. He has been a non-executive director of Royal Dutch Shell plc since 2010 and the chairman of its audit committee since May 2011. He has been on the UK Takeover Panel since 2012. He was previously a non-executive director of Cadbury plc from 2007 until its acquisition by Kraft in 2010, and during his tenure he served as chairman of the audit committee until April 2009 and as senior independent director from 2008 until 2010.

Lesley Knox MA Lesley Knox joined the Board in 2011. She is a non-executive director of Centrica plc and is a Trustee of the Grosvenor Estates and Chairman of Grosvenor Group Limited. She originally qualified as a solicitor, and then spent 15 years with Kleinwort Benson before becoming Governor of the British Linen Bank and a founder director of British Linen Advisers. Most recently, she was Chairman of Alliance Trust plc. She is involved with a number of arts and charitable organisations. She succeeded Miles Morland as Chairman of the Remuneration Committee following the 2013 annual general meeting.

75 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD John Manzoni BEng, MEng, MBA John Manzoni joined the Board in 2004. Between 2007 and 2012 he was President and Chief Executive Officer of Talisman Energy Inc. Prior to joining Talisman he was Chief Executive of Refining 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.

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. He stood down as chairman and as a member of the Remuneration Committee following the 2013 annual general meeting.

Dambisa Moyo BSc, MPA, MBA, Ph.D Dambisa Moyo joined the Board in June 2009. She is an international economist who writes on the macro economy and global affairs, and is a non-executive director of Barclays PLC and Barrick Gold Corporation. She is a contributing editor to CNBC, the business and finance news network. She has previously worked at Goldman Sachs and the World Bank in D.C.

Carlos Alejandro Pe´rez Da´vila BA, MPhil Carlos Pe´rez joined the Board in 2005 as a nominee of the Santo Domingo Group following completion of the Bavaria transaction. He is a Managing Director at Quadrant Capital Advisors, Inc., Chairman of the Board 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 Sofia Spanish Institute. He was previously an investment banker at Goldman Sachs & Co., S.G. Warburg & Co. and Violy, Byorum & Partners.

Alejandro Santo Domingo BA Alejandro Santo Domingo joined the Board in 2005, as a nominee of the Santo Domingo Group 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. and Millicom International Cellular 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, MA, MBA, FCMA Helen Weir joined the Board in 2011. She is Group Finance Director of the John Lewis Partnership. Between 2008 and 2011 she was Group Executive Director – Retail at Lloyds Banking Group plc. She has formerly held a number of senior positions in both Lloyds TSB plc and Kingfisher plc and was a non-executive director of Royal Mail Holdings and the City of London Investment Trust. She replaced Cyril Ramaphosa as a member of the Nomination Committee following the 2013 annual general meeting. She is a member of the Said Business School Advisory Council and was previously a member of the Accounting Standards Board.

Howard Willard BA(hons), MBA Howard Willard joined the Board in 2009 as a nominee of Altria. He is Executive Vice President and Chief Financial Officer of Altria and also oversees the financial services business of Philip Morris Capital Corporation and the Strategy and Business Development organisation. Prior to this he was Executive Vice President, Strategy and Business Development for Altria and has held various leadership positions at Philip Morris USA Inc. Before joining the Altria family of companies in 1992 he worked at Bain & Company and Salomon Brothers Inc. He currently serves on the Executive Advisory Council for the Robins School of Business at the University of Richmond.

The Board and Board committees The Board sets the strategic objectives of the Group, determines investment policies, agrees on performance criteria and delegates to Management the detailed planning and implementation of those objectives and policies, in accordance with appropriate risk parameters. The Board monitors

76 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD compliance with policies, and achievement against objectives, by holding Management accountable for its activities through monthly and quarterly performance reporting and budget updates. The Executive Directors are responsible for proposing strategy and for making and implementing operational decisions. Non-executive Directors complement the skills and experience of the Executive Directors and contribute to the formulation of strategy, policy and decision-making through their independent judgement, and knowledge and experience of other businesses and sectors. The Board met six times during the year ended 31 March 2013 and ad hoc sub-committees of the Board met from time to time to deal with investment, financing and reporting issues. Specific responsibilities have been delegated to Board committees with defined terms of reference. The General Counsel and Group Company Secretary acts as secretary to the Board and its committees and attends all meetings during the year. The principal Board committees are described below.

The Audit Committee The Audit Committee was chaired by Mr Manser, and also comprised Mr Morland, Mr Devitre, Mr Armour, Ms Knox and Ms Weir. Mr Elliott joined the Audit Committee on 1 July 2013. Mr Armour succeeded Mr Manser as Chairman of the Audit Committee with effect from 5 June 2013, when Mr Manser stood down from the Audit Committee. The Audit Committee met four times during the year ended 31 March 2013. The external auditors, the Chairman (Mr Kahn in May 2012 and Mr Mackay thereafter), the Chief Operating Officer, the Chief Financial Officer and the Chief Internal Auditor attended each meeting by invitation. Other members of the management team attended as required. The Audit Committee has the power to examine any financial, operating and strategic matters in and relating to the Group in accordance with its written terms of reference. This includes reviewing the annual accounts, internal control procedures, accounting policies, compliance and regulatory matters, reviewing and making recommendations on the appointment of the external auditors and other related issues. Under its terms of reference, the Audit Committee’s duties include: * to review, and challenge where necessary, the annual financial statements and interim and preliminary announcements before their submission to the Board for approval; * to examine and review the internal control environment and risk management systems within the Group and review the Group’s statement on internal control systems prior to endorsement by the Board; * to review the independence, objectivity and effectiveness of the external auditors; * to make recommendations to the Board regarding the appointment, re-appointment and removal of the external auditors and to approve and recommend to the Board the remuneration and terms of engagement of the external auditors; * to review annually the effectiveness of the internal audit function throughout the Group, with particular focus on the charter, annual work plans, activities, staffing, organisational and reporting structure and status of the function; and * to review the effectiveness of the system for monitoring compliance with laws and regulations (including the Group’s biannual letters of representation) and the results of Management’s investigation and follow-up (including disciplinary action) of any instances of non-compliance. The Audit Committee ensures that adequate and suitable internal controls are in place and are appropriate to meet future needs; that significant business, strategic, statutory and financial risks have been identified and are being monitored and managed; and that appropriate standards of governance, reporting and compliance are in operation. It also advises the Board on issues relating to the application of accounting standards to published financial information. The Audit Committee has access to the reports of the Finance Control and Assurance Committees.

The Disclosure Committee The Disclosure Committee consists of the Chairman, the Chief Executive, the Chief Financial Officer, the Deputy Chairman, one other non-executive director, and the General Counsel and Company Secretary or the Deputy Company Secretary. The function of the Disclosure Committee, in accordance with the Group’s inside information policy, is to meet as and when required in order to

77 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD 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 Executive Committee members, the Disclosure Committee, the General Counsel’s office, the company secretarial office 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 Group is able to comply fully with its continuing obligations under the Disclosure and Transparency Rules and the Listing Rules.

The Nomination Committee The Nomination Committee was chaired by Mr Kahn until his retirement in July 2012 when the role of Chairman was taken by Mr Manser. Mr Bible, Mr Manser, Mr Manzoni, Mr Morland, Mr Ramaphosa and Mr Santo Domingo were members of the Nomination Committee throughout the year ending 31 March 2013, and Mr Mackay joined the Nomination Committee on his appointment as Executive Chairman. It had been planned that he would succeed Mr Manser as Chairman of the Nomination Committee at the conclusion of the 2013 annual general meeting, although Mr Manser will continue to chair the Nomination Committee during Mr Mackay’s medical leave of absence if it should be necessary for the Nomination Committee to meet during that period. Ms Weir became a member of the Nomination Committee at the conclusion of the 2013 annual general meeting, in place of Mr Ramaphosa who retired as a Director. The Nomination Committee considers the composition of the Board and its committees, the retirement, appointment and replacement of Directors, and makes appropriate recommendations to the Board. All Directors are subject to retirement and re-election by shareholders at least once every three years in accordance with SABMiller’s Articles of Association. However the Board has determined that all Directors will stand for re-election annually as recommended by the UK Corporate Governance Code, published by the UK Financial Reporting Council (the ‘‘Corporate Governance Code’’). The Nomination Committee meets as often as required, and at least once a year.

The Remuneration Committee The Remuneration Committee was chaired by Mr Morland and comprised Mr Armour, Ms Knox, Mr Manser and Mr Manzoni throughout the year ended 31 March 2013. Ms Knox succeeded Mr Morland as Chairman of the Remuneration Committee at the conclusion of the 2013 annual general meeting, when Mr Morland stood down from the Remuneration Committee. Mr Elliott joined the Remuneration Committee on 1 July 2013. Mr Manser stood down from the Remuneration Committee with effect from 5 June 2013. The Remuneration Committee sets short-term and long-term remuneration for the Executive Directors. More generally, the Remuneration Committee is responsible for the assessment and approval of a broad remuneration strategy for the Group and for the operation of the Company’s share-based incentive plans. This includes determination of short-term and long-term incentive pay structures for Group executives, the positioning of executive pay levels relative to local and international industry benchmarks and is empowered by the Board to set short-term and long-term remuneration for the Executive Directors and members of the Executive Committee.

The Corporate Accountability and Risk Assurance Committee The Corporate Accountability and Risk Assurance Committee (‘‘CARAC’’) was chaired by Dr Moyo and comprised Mr Bible, Mr Clark, Mr Mackay, Mr Manser, Mr Manzoni, Mr Ramaphosa and Mr Wilson throughout the year ended 31 March 2013. Additionally, the Director of Corporate Affairs, Ms May met regularly with the Chairman of CARAC to discuss implementation and planning issues and has attended all meetings of CARAC since her appointment. CARAC’s main objective is to assist the Board in the discharge of its responsibilities in relation to the Group’s alcohol policies and corporate accountability including sustainable development, corporate social responsibility, corporate social investment and ethical commercial behaviour. CARAC also provides independent and objective oversight and reviews information presented by Management on corporate accountability and specifically associated risk, also taking account of reports by Management and the Audit Committee to the Board on financial, business and strategic risk.

Application of the Corporate Governance Code SABMiller applied all the principles and provisions of the Corporate Governance Code throughout the year ended 31 March 2013, except in three respects. First, in July 2012, the Chief Executive, Mr

78 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Mackay, was appointed as Executive Chairman with the intention that he would hold this position for an interim period of one year. The Code recommends that a chief executive should not go on to be chairman of the same company and that the chairman should on appointment meet the independence criteria set out in the Code. Mr Mackay does not meet these criteria as a result of having been Chief Executive. Mr Mackay’s proposed appointment was announced in April 2012, when the Board set out a number of changes to the composition of the Board to take effect at the 2012 annual general meeting, including the retirement of the then Chairman, Mr Kahn, and of Mr Pieterse, an independent non-executive director; the appointment of Mr Mackay as Executive Chairman; and the appointment of Mr Clark as an executive director and Chief Operating Officer, with the intention that he would succeed Mr Mackay as Chief Executive at the end of the interim period, when Mr Mackay would become non-executive Chairman. Before announcing these changes, SABMiller discussed them with its major institutional shareholders, and at the time of their announcement SABMiller’s Senior Independent Director, Mr Manser, wrote on behalf of the Board to all shareholders to explain the process that had been followed and to set out the Board’s reasons for these changes. These changes were welcomed by the overwhelming majority of shareholders, and the explanation of the decision not to apply the Code in this respect under the ‘‘comply or explain’’ principle was cited by the Association of British Insurers, in a report in December 2012, as a ‘‘best in practice’’ example. Subsequently, Mr Mackay was diagnosed in April 2013 with a brain tumour, which led the Board to accelerate the planned promotion of Mr Clark to Chief Executive. The transition of management responsibilities from Mr Mackay to Mr Clark was accordingly well advanced when Mr Clark assumed the role of Chief Executive on 23 April 2013, three months earlier than was originally planned. Mr Manser has assumed the role of acting Chairman while Mr Mackay, who is currently on a medical leave of absence, continues his treatment. Secondly, the Audit Committee did not consist solely of independent directors. Under the relationship agreement, as approved by shareholders in 2002 and in 2005, 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. Lastly, two directors, Mr Armour and Ms Weir, were unable to attend the 2012 annual general meeting because of long-standing prior commitments.

Conflict of interest – Board of Directors No Director has any potential conflict of interest between his or her duties to SABMiller and his or her private interests or other duties.

Transactions with Directors No Director has, or has had, any interest in any transaction which is or was unusual in its nature or conditions or which is, or was, significant in relation to the business of the Group and which was effected by any member of the Group during the current or immediately preceding financial year, or during any earlier financial year, and remains in any respect outstanding or unperformed.

Arm’s length transactions No members of the Group have entered into any transactions during the financial year ended 31 March 2013 other than in SABMiller’s ordinary course of business and on arm’s length terms. No outstanding loans or guarantees have been granted by any member of the Group to any of the Directors.

Executive Committee The members of the Executive Committee of SABMiller, in addition to Alan Clark, Chief Executive and Jamie Wilson, Chief Financial Officer, are:

Norman Adami BBusSc (hons), MBA Chairman, SABMiller Beverages South Africa Norman Adami was appointed to the role of Chairman, SABMiller Beverages South Africa in January 2013 and has overall strategic responsibility for SABMiller’s beverage business in South

79 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Africa. Prior to this he was Chairman and Managing Director of SAB Ltd. He first joined SAB Ltd in 1979 and has held a number of senior positions in the Group. These include Regional Director, Operations Director, Chairman and Managing Director, SAB Ltd, President and Chief Executive Officer, Miller Brewing Company and President and Chief Executive Officer, 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 SABMiller’s beer division in 1993 and has held various senior positions in the Group. These include Managing Director of SABMiller’s Polish subsidiary Kompania Piwowarska S.A., Managing Director of Amalgamated Beverage Industries Ltd (now ABI, the soft drinks division of SAB Ltd) and Chairman of Appletiser. He is an independent non-executive director of Tiger Brands Limited.

Sue Clark BSc (hons), MBA Managing Director, SABMiller Europe Sue Clark was appointed Managing Director, SABMiller Europe in June 2012, previously having held the position of Corporate Affairs Director, SABMiller since 2003. Prior to this, 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 is a Trustee of the Clore Social Leadership Programme.

John Davidson MA, BCL General Counsel and Group Company 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 career at Lovells, a leading international law firm, where he had been a partner since 1991 specialising in international corporate finance, cross-border mergers and acquisitions, and corporate governance advisory work. He 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 Finance and Development, SABMiller plc Domenic De Lorenzo joined SABMiller’s corporate finance 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 the Director of the global team in 2010.

Nick Fell BA (hons) Marketing Director, SABMiller plc Nick Fell was appointed Marketing Director, SABMiller in 2006. Prior to this, he worked 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 in a number of senior roles including Global Brands Director, Johnnie Walker, and Group 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 Group in October 2008. He joined SAB Ltd in 1982 and has held a number of senior positions in the Group. These include Operations Director and Marketing Director, SAB Ltd, Chairman and Chief Executive Officer, Plzenˇsky´ 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 the Group in 1992 and has extensive experience in the global brewing industry. Prior to his appointment as

80 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD President of Bavaria S.A. in Colombia in 2006, 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.

Catherine May BA (hons) Corporate Affairs Director, SABMiller plc Catherine May was appointed Corporate Affairs Director, SABMiller in October 2012. She joined SABMiller from Centrica plc, where she served as Corporate Affairs Director from 2006 until December 2011, having previously been Group Director of Corporate Relations at the global information publishing business Reed Elsevier Group plc. She is a non-executive director of the English National Opera and a trustee of the UK National Funding Scheme and the Foundation for World Capitals of Culture.

Ari Mervis BCom Managing Director, SABMiller Asia Pacific and Chief Executive Officer, Carlton & United Breweries Ari Mervis was appointed Managing Director: Asia Pacific and Chief Executive Officer of Carlton & United Breweries in 2011, having been Managing Director of SABMiller Asia since 2007. He joined SAB Ltd’s soft drinks division, Amalgamated Beverages Industries Ltd in 1989 and has held various senior positions in sales, marketing, finance and general management. He has been Managing Director of Swaziland Bottling Company and Appletiser as well as Managing Director of SABMiller operations in Russia and Australia. He is a director of the Melbourne Business School, and Chairman of China Resources Snow Breweries.

Conflict of Interest – Executive Committee No member of the Executive Committee has any potential conflict of interest between his or her interest in SABMiller and his or her private interests or other duties.

Business Address – Executive Committee The business address of each of John Davidson, Domenic De Lorenzo, Nick Fell, Tony van Kralingen and Catherine May is One Stanhope Gate, London W1K 1AF, United Kingdom. The business address of each of Norman Adami and Mark Bowman is 2 Jan Smuts Avenue, Johannesburg 2000, South Africa. The business address of Sue Clark is Neuhofstrasse 4, CH6341, Baar, Switzerland. The business address of Karl Lippert is 1450 Brickell Avenue, Ste 3400, Miami, Florida 33131, USA. The business address of Ari Mervis is 77 Southbank Boulevard, Melbourne, Victoria 3006, Australia.

81 c108736pu040 Proof 5: 8.8.13_13:34 B/L Revision: 0 Operator ChoD Description of the Notes and the Guarantees

The following is a summary of the material provisions of the Notes, the Guarantees and the Fiscal and Paying Agency Agreements (as defined below). This summary does not purport to be complete and is qualified in its entirety by reference to all of the provisions of the Notes, the Guarantees and the Fiscal and Paying Agency Agreements. Copies of the Fiscal and Paying Agency Agreements will be available for inspection during normal business hours at any time after the Closing Date at the offices of the Fiscal Agent currently located at One Canada Square, London E14 5AL, United Kingdom. Any capitalised term used herein but not defined shall have the meaning assigned to such term in the Notes, the Guarantees or the Fiscal and Paying Agency Agreements.

General The Fixed Rate Notes will be issued pursuant to a Fiscal and Paying Agency Agreement (the ‘‘Fixed Rate Fiscal and Paying Agency Agreement’’) to be dated as of 13 August 2013, among the Issuer, the Guarantor, The Bank of New York Mellon, acting through its London office, as Fiscal Agent and London Paying Agent, and The Bank of New York Mellon, as Principal Paying Agent, Registrar and Transfer Agent. The Floating Rate Notes will be issued pursuant to a Fiscal and Paying Agency Agreement (the ‘‘Floating Rate Fiscal and Paying Agency Agreement’’, and collectively with the Fixed Rate Fiscal and Paying Agency Agreement, the ‘‘Fiscal and Paying Agency Agreements’’ or individually the ‘‘Fiscal and Paying Agency Agreement’’) to be dated as of 13 August 2013, among the Issuer, the Guarantor, The Bank of New York Mellon, acting through its London office, as Fiscal Agent and London Paying Agent, and The Bank of New York Mellon, as Principal Paying Agent, Registrar and Transfer Agent. References to the ‘‘Notes’’ are to the Fixed Rate Notes and the Floating Rate Notes, collectively. References to the ‘‘Guarantees’’ are to the Guarantee related to the Fixed Rate Notes and the Guarantee related to the Floating Rate Notes, collectively. References to the Fiscal Agent and London Paying Agent or the Principal Paying Agent, Registrar and Transfer Agent include any successor fiscal agent and any successor or additional London paying agents, principal paying agents, registrars or transfer agents appointed from time to time in connection with the Notes and the related Guarantees. References to the ‘‘Agents’’ are to the Fiscal Agent and London Paying Agent and the Principal Paying Agent, Registrar and Transfer Agent, collectively. Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mitsubishi UFJ Securities (USA), Inc., Mizuho Securities USA Inc., Barclays Capital Inc., BBVA Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, RBS Securities Inc. and Santander Investment Securities Inc. propose to resell the Rule 144A Global Notes in registered form to certain institutions in the United States in reliance upon Rule 144A. The Rule 144A Global Notes may not be sold or otherwise transferred except pursuant to registration under the Securities Act or in accordance with Rule 144A or Rule 904 of Regulation S thereunder or in a resale transaction that is otherwise exempt from such registration requirements, and will bear a legend to this effect. In light of current US securities laws, subject to certain exceptions, an exemption should be available for a Rule 144A Global Note after its Specified Date. The ‘‘Specified Date’’ means, with respect to any Rule 144A Global Note, the date following the expiration of the applicable required holding period determined pursuant to Rule 144 of the Securities Act (such period, the ‘‘applicable holding period’’) after the later of (a) the original issue date of such Rule 144A Global Note and (b) the last date on which the Issuer or any affiliate of the Issuer was the beneficial owner of such Rule 144A Global Note, in each case demonstrated to the reasonable satisfaction of the Issuer (which may require delivery of legal opinions). Unless a holder of a Rule 144A Global Note holds such Rule 144A Global Note for the entire applicable holding period, such holder may not be able to determine the Specified Date because such holder may not be able to determine the last date on which the Issuer or any affiliate of the Issuer was the beneficial owner of such holder’s Rule 144A Global Note. The Agents will not be required to accept for registration or transfer any Rule 144A Global Notes, except upon presentation of satisfactory evidence (which may include legal opinions) that the restrictions on transfer have been complied with, all in accordance with such reasonable regulations as the Issuer may from time to time agree with such Agents. For so long as any Notes remain outstanding and are ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer will, during any period in which it is neither

82 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, make available to any registered holder of Notes (or any beneficial owner of a book-entry interest in such Notes designated by the registered holder thereof) and to any prospective purchaser of Notes or a book-entry interest in Notes designated by such registered holder, in each case upon request of such registered holder, beneficial owner or prospective purchaser, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act. As at the date of this Prospectus, the Issuer is exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act. The Regulation S Global Notes will be resold outside the United States in offshore transactions in reliance on Regulation S.

Principal, Maturity and Interest The Fixed Rate Notes and the Floating Rate Notes are initially issuable in an aggregate principal amount not to exceed $750,000,000 and $350,000,000, respectively, and will mature on 1 August 2018.

Fixed Rate Notes The Fixed Rate Notes will bear interest at 2.200% per annum from the date of the initial issue or from the most recent interest payment date to which interest has been paid or provided for, payable semi-annually in arrears on 1 February and 1 August commencing 1 February 2014 to the person in whose name any Fixed Rate Note is registered at the close of business on the 15 January or 15 July (whether or not a business day) immediately preceding such interest payment date (each, a ‘‘record date’’), notwithstanding any transfer or exchange of such Notes subsequent to the record date and prior to such interest payment date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months and in the case of an incomplete month, the number of days elapsed. If the date on which any interest payment or principal payment is to be made is not a business day in New York City or London, England, such payment will be made on the next day which is a business day in New York City and London, England without any further interest or other amounts being paid or payable in connection therewith. Notwithstanding the foregoing, if and to the extent the Issuer shall default in the payment of the interest due on an interest payment date and the applicable grace period shall have expired, such defaulted interest may at the option of the Issuer be paid to the persons in whose names Notes are registered at the close of business on a subsequent record date (which shall not be less than five days which are business days in New York prior to the date of payment of such defaulted interest) established by notice given as provided in the Notes by or on behalf of the Issuer to the holders (which term means registered holders) of the Notes not less than 15 days preceding such subsequent record date.

Floating Rate Notes The Floating Rate Notes will bear interest at a floating rate per annum, equal to the then applicable three-month U.S. Dollar LIBOR rate, which will be reset quarterly on the first day of each interest period (as defined below), plus a spread of 0.690%, as determined by the calculation agent. Interest on the Floating Rate Notes will be paid on 1 February, 1 May, 1 August and 1 November of each year, beginning on 1 November 2013 to the holders in whose name the Floating Rate Notes are registered as at the close of business on 15 January, 15 April, 15 July and 15 October, respectively, immediately preceding the relevant interest payment date. Except as described below for the first interest period, on each interest payment date for the Floating Rate Notes, the Issuer shall pay interest for the period commencing on and including the immediately preceding interest payment date and ending on the day immediately preceding the next succeeding interest payment date (an ‘‘interest period’’). The first interest period will begin on and include the Closing Date and will end on but exclude the first interest payment date. As long as any Floating Rate Notes are outstanding, the Issuer shall maintain a calculation agent for calculating the interest rates on the Floating Rate Notes. The Bank of New York Mellon, acting through its London office, will act as calculation agent. The calculation agent will determine the rate of interest on the relevant Floating Rate Notes on each interest payment date (each also an ‘‘Interest Reset Date’’). The interest rate set for such Floating Rate Notes on a particular Interest Reset Date will remain in effect during the interest period commencing on that Interest Reset Date.

83 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD The calculation agent will determine the interest rate applicable to the Floating Rate Notes in any interest period on the second London Banking Day (as defined below) immediately preceding the Interest Reset Date for that period (each an ‘‘Interest Determination Date’’). The interest rate determined on an Interest Determination Date will become effective on and as of the next interest period; provided that the interest rate applicable during the first interest period will become effective from and including the issue date of the relevant Floating Rate Notes. ‘‘London Banking Day’’ means a day on which commercial banks are open for business in London, England. The calculation agent will calculate the accrued interest payable on the Floating Rate Notes for any interest period by multiplying the principal amount of the relevant Floating Rate Notes by an accrued interest factor, which will equal the interest rate for the interest period times a fraction, the numerator of which is the number of days in the period and the denominator of which is 360. The calculation agent will determine the applicable three-month U.S. Dollar LIBOR rate for any interest period according to the following provisions: The three-month U.S. Dollar LIBOR rate (expressed as a percentage per annum) will be the offered rate for three-month deposits in U.S. dollars beginning on the Interest Reset Date for that interest period as it appears on the Screen ‘‘LIBOR 01’’ Page, or any successor service (or any other service or services of major banks for the purpose of displaying the London interbank offered rates for U.S. dollar deposits) (‘‘Designated LIBOR Page’’) at approximately 11:00 a.m., London time, on the Interest Determination Date for that interest period. If, on the Interest Determination Date, the three-month U.S. Dollar LIBOR rate does not appear on the indicated Designated LIBOR Page, or if that Designated LIBOR Page is unavailable, then the calculation agent will determine LIBOR as follows: * The calculation agent will select the principal London offices of four major banks in the London interbank market. The calculation agent will then request each bank to provide its offered quotation of its rate of interest for deposits in U.S. dollars with a three-month maturity (expressed as a percentage per annum) beginning on the Interest Reset Date to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the Interest Determination Date. * If at least two of these banks provide a quotation, the calculation agent will compute LIBOR as the arithmetic mean of the quotations provided. * If fewer than two of these banks provide a quotation, the calculation agent will request from three major banks in New York City at approximately 11:00 a.m., New York time, on the Interest Determination Date, quotations of their rates of interest for three-month loans (expressed as a percentage per annum), in U.S. dollars to leading European banks, beginning on the Interest Reset Date. If the calculation agent receives at least two of these quotations, the calculation agent will compute LIBOR as the arithmetic mean of the quotations provided. * If none of these banks provide a quotation as mentioned, LIBOR will be the rate determined on the immediately preceding Interest Determination Date. The interest rate payable on the Floating Rate Notes will not be higher than the maximum rate permitted by New York state law as modified by U.S. law of general application. The calculation agent will, upon the request of any holder of a Floating Rate Note, provide the interest rate for the current interest period and the amount of interest to be paid on such note for such interest period. The calculations of the calculation agent will, in the absence of manifest error, be conclusive for all purposes and binding on the holders of the relevant Floating Rate Notes. All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards). If an interest payment date in respect of the Floating Rate Notes is not a Business Day (defined below) in the place of payment, the relevant interest payment date will be postponed to the next succeeding Business Day, except that if such next Business Day falls in the next succeeding calendar month, to the immediately preceding Business Day. If the maturity date in respect of the notes is not a Business Day in the place of payment, the relevant interest payment date will be postponed to the next succeeding Business Day. Payments postponed to the next Business Day in

84 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD this situation will be treated under the fiscal and paying agency agreement as if they were made on the original due date. Postponement of this kind will not result in a default under the notes or the fiscal and paying agency agreement, and no interest will accrue on the postponed amount from the original due date to the next day that is a Business Day. The term ‘‘Business Day’’ means any day other than a Saturday, a Sunday or a day on which banking institutions in New York City or London, England or a place of payment are authorized by law, regulation or executive order to close. The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

Further Issuances The Issuer may from time to time without the consent of the holders of the Notes issue additional notes having identical terms and conditions as the Fixed Rate Notes or the Floating Rate Notes, as the case may be, in all respects or in all respects except for the first payment of interest on such further securities provided that any further issue is a ‘‘qualified reopening’’ (or the new notes are issued with no more than a de minimis original issue discount) for US federal income tax purposes if it is consolidated and forms a single series of securities with the Fixed Rate Notes or the Floating Rate Notes, as the case may be.

Status of the Notes and the Guarantees The Notes will be unsecured and unsubordinated obligations of the Issuer and rank pari passu with all other unsecured and unsubordinated obligations of the Issuer. Each Note will benefit from an unconditional and irrevocable guarantee by the Guarantor (collectively, the ‘‘Guarantees’’). Under the Guarantees, the Guarantor is unconditionally and irrevocably guaranteeing on an unsecured, unsubordinated basis the due and punctual payment of the principal of and interest on the Notes and Additional Amounts (defined below), if any. The Guarantees are unsecured and unsubordinated obligations of the Guarantor and rank pari passu in right of payment with all other unsecured and unsubordinated obligations of the Guarantor (except those obligations preferred by statute or operation of law).

Payment of Additional Amounts All payments by the Issuer or the Guarantor of principal, any premium and interest in respect of the Notes will be made without withholding or deduction for or on account of any present or future tax, levy, impost or other governmental charge whatsoever imposed, assessed, levied or collected by or for the account of the United States, the United Kingdom or any political subdivision thereof or any authority thereof having the power to tax, or any other Relevant Jurisdiction (as defined below) (‘‘Taxes’’) unless such withholding or deduction is required by law. The Issuer and the Guarantor will pay, in respect of any payment of principal of, and any premium and interest on the Notes, to a holder or beneficial owner thereof that, in the case of payment by the Issuer, is not a resident of the jurisdiction of incorporation or residence for tax purposes of the Issuer or any successor entity, or any political subdivision or taxing authority thereof or therein (the ‘‘Issuer Jurisdiction’’), or in the case of payment by the Guarantor, is not a resident of the jurisdiction of incorporation or residence for tax purposes of the Guarantor or any successor entity, or any political subdivision or taxing authority thereof or therein (the ‘‘Guarantor Jurisdiction’’, and together with the Issuer Jurisdiction, the ‘‘Relevant Jurisdictions’’) for purposes of taxation, such additional amounts (‘‘Additional Amounts’’) as may be necessary so that the net amount received by such holder, after deduction or withholding for any and all present and future Taxes will not be less than the amount such holder would have received if such Taxes had not been withheld or deducted; provided, however, that neither the Issuer nor the Guarantor shall be required to pay any Additional Amounts for or on account of: (a) Any present or future Tax that would not have been so imposed, assessed, levied or collected but for the fact that the holder of the applicable Note (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such holder, if such holder is an estate, trust, partnership or corporation) is or has been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in the

85 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Relevant Jurisdiction or otherwise having or having had some connection with the Relevant Jurisdiction other than the mere holding or ownership of, or the collection of principal of, and interest on, a Note; (b) Any present or future Tax that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later; (c) Any estate, inheritance, gift, transfer, personal property or similar Tax; (d) Any present or future Tax that is payable otherwise than by deduction or withholding from payments on or in respect of the applicable Note; (e) Any present or future Tax that would not have been so imposed, assessed, levied or collected but for the failure by the holder or the beneficial owner of the applicable Note to comply, (following a written request addressed to the holders), with any certification, identification or other reporting requirements concerning the nationality, residence or identity of such holder (or beneficial owner) or its connection with the Relevant Jurisdiction if compliance is required by statute, regulation or administrative practice of the Relevant Jurisdiction, as a condition to relief or exemption from such Tax; (f) Any withholding or deduction imposed on a payment to an individual that is required to be made pursuant to European Union Directive 2003/48/EC on the taxation of savings or any law implementing or complying with, or introduced in order to conform to, such Directive; (g) Any withholding or deduction imposed on a payment to any person that is required to be made pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended, or any amended or successor provisions, or in either case any current or future Treasury regulations thereunder, official interpretations thereof, published administrative guidance implementing such Sections or regulations whenever promulgated or published, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections or the Code (‘‘FATCA’’); or (h) Any withholding or deduction that is imposed on the applicable Note that is presented for payment, where presentation is required, by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another paying agent; or (i) Any combination of the Taxes described in (a) through (g) above, nor will Additional Amounts be paid in respect of any payment in respect of the applicable Notes to any holder of the Notes that is a fiduciary or partnership or any person other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the Relevant Jurisdiction to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner that would not have been entitled to such amounts had such beneficiary, settlor, member or beneficial owner been the holder of such Notes. References herein to ‘‘principal’’, ‘‘premium’’ or ‘‘interests’’ shall be deemed to include references to Additional Amounts payable with respect thereto. References to the ‘‘Issuer’’ shall be deemed to include references to any person into or with which the Issuer merges or consolidates or to which the Issuer transfers or leases its assets substantially as an entity and references to the ‘‘Guarantor’’ shall be deemed to include references to any person into or with which the Guarantor merges or consolidates or to which the Guarantor transfers or leases its assets substantially as an entity.

Redemption Optional Redemption The Issuer or the Guarantor may redeem the Fixed Rate Notes in whole or in part, at the option of the Issuer or the Guarantor, at any time and from time to time at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) as determined by the Independent Investment Banker, the sum of the present values of the applicable Remaining Scheduled Payments (as defined below) discounted to the date of redemption (the ‘‘Redemption Date’’) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months or in the case of an incomplete month, the number of days elapsed) at the Treasury Rate plus 15 basis

86 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD points in each case, plus accrued and unpaid interest on the principal amount of the Fixed Rate Notes to be redeemed to the Redemption Date. In connection with such optional redemption the following defined terms apply: * ‘‘Treasury Rate’’ means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity (computed as at the third business day immediately preceding that Redemption Date) of the Comparable Treasury issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that Redemption Date. * ‘‘Comparable Treasury Issue’’ means the United States Treasury security selected by the Independent Investment Banker that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. * ‘‘Comparable Treasury Price’’ means, with respect to any Redemption Date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding that Redemption Date, as set forth in the daily statistical release designated H.15 (519) (or any successor release) published by the Federal Reserve Bank of New York and designated ‘‘Composite 3:30 p.m. Quotations for US Government Notes’’ or (ii) if such release (or any successor release) is not published or does not contain such prices on such business day, (A) the average of the Reference Treasury Dealer Quotations for that Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations or (B) if the Independent Investment Banker for the relevant Notes obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations. * ‘‘Independent Investment Banker’’ means one of the Reference Treasury Dealers appointed by the Issuer to act as the ‘‘Independent Investment Banker’’. * ‘‘Reference Treasury Dealer’’ means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, RBS Securities Inc., a Primary Treasury Dealer (as defined below) selected by Mitsubishi UFJ Securities (USA), Inc., a Primary Treasury Dealer as selected by BBVA Securities Inc., a Primary Treasury Dealer as selected by Santander Investment Securities Inc. and their respective successors and two other nationally recognised investment banking firms that are Primary Treasury Dealers specified from time to time by the Issuer; provided, however, that if any of the foregoing shall cease to be a primary US Government securities dealer in New York City (a ‘‘Primary Treasury Dealer’’), the Issuer shall substitute therefor another nationally recognised investment banking firm that is a Primary Treasury Dealer. * ‘‘Reference Treasury Dealer Quotation’’ means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding that Redemption Date. * ‘‘Remaining Scheduled Payments’’ means, with respect to each Note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related Redemption Date but for such redemption; provided, however, that if that Redemption Date is not an interest payment date with respect to such Notes, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to that Redemption Date. Notice of any redemption will be given in accordance with ‘‘Notice’’ below at least 30 days but not more than 60 days before the Redemption Date to each holder of the Notes to be redeemed. On and after any Redemption Date, interest will cease to accrue on the Notes or any portion thereof called for redemption. Upon presentation of any Note redeemed in part only, the Issuer will execute and the Fiscal Agent will authenticate and deliver to or on the order of the holder thereof, at the expense of the Issuer, a new Note or Notes, of authorised denominations, in principal amount equal to the unredeemed portion of the Note so presented.

87 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD On or before any Redemption Date, the Issuer shall deposit with the Fiscal Agent money sufficient to pay the redemption price of and accrued interest on the Notes to be redeemed on such date. If less than all the Notes are to be redeemed, the Notes to be redeemed shall be selected by the Fiscal Agent by such method as the Fiscal Agent shall deem fair and appropriate. The redemption price shall be calculated by the Independent Investment Banker and the Issuer, and the Fiscal Agent shall be entitled to rely on such calculation.

Maturity Unless previously purchased or redeemed by the Issuer or the Guarantor, the principal amount of the Fixed Rate Notes and the Floating Rate Notes will mature and become due and payable on 1 August 2018 with accrued and unpaid interest to such date.

Reacquisition There is no restriction on the ability of the Issuer, the Guarantor or any of their Subsidiaries to purchase or repurchase Notes.

Redemption for Tax Reasons The Issuer may redeem each series of Notes in whole but not in part in an amount equal to their respective principal amounts together with accrued and unpaid interest to the applicable Redemption Date and any Additional Amounts, at the option of the Issuer at any time prior to their maturity if due to a Change in Tax Law (as defined below) (i) the Issuer or the Guarantor, in accordance with the terms of the Notes, has, or would, become obligated to pay to the holder or beneficial owner of any Note any Additional Amounts; and (ii) such obligation cannot be avoided by the Issuer or the Guarantor taking reasonable measures available to it. In such case, the Issuer may redeem each series of Notes as a whole but not in part, upon not less than 30 nor more than 60 days’ notice as provided in ‘‘Notice’’ below, in an amount equal to their respective principal amounts with accrued and unpaid interest to the Redemption Date and any Additional Amounts; provided that, (a) no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or the Guarantor would be obligated to pay any such Additional Amounts were a payment in respect of the Notes then due and (b) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. The right of the Issuer to redeem the Notes shall continue as long as the Issuer or the Guarantor is obligated to pay such Additional Amounts, notwithstanding that the Issuer or the Guarantor shall have made payments of Additional Amounts. Prior to the giving of any such notice of redemption, the Issuer must deliver to the Fiscal Agent (1) a certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred and (2) an opinion of independent counsel of recognised standing selected by the Issuer or the Guarantor to the effect that the Issuer or the Guarantor has, or would, become obligated to pay such Additional Amounts as a result of such change or amendment. The Fiscal Agent shall be entitled to accept such certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set out above in which event they shall be conclusive and binding on the holders of Notes. For purposes hereof, ‘‘Change in Tax Law’’ shall mean (i) any change in, or amendment to, any law of a Relevant Jurisdiction (including any regulations or rulings promulgated thereunder) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective on or after 13 August 2013 or (ii) if the Issuer or the Guarantor consolidates or merges with, or transfers or leases its assets substantially as an entirety to, any Person that is incorporated or tax resident under the laws of any jurisdiction other than the initial Relevant Jurisdiction and as a consequence thereof such Person becomes the successor obligor to the Issuer or the Guarantor in respect of Additional Amounts that may become payable (in which case, for purposes of this redemption provision, all references to the Issuer or the Guarantor hereunder shall be deemed to be and include references to such Person), any change in, or amendment to, any law of the jurisdiction of incorporation or tax residence of such Person, or any political subdivision or taxing authority thereof or thereon for purposes of taxation (including any regulations or rulings promulgated thereunder) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective on or after the date of such consolidation, merger or transfer or lease.

88 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Change of Control Put If a Put Event (as defined below in ‘‘–Certain Definitions’’) occurs, the holder of each Note will have the option (a ‘‘Put Option’’) (unless prior to the giving of the relevant Put Event Notice (as defined below) the Issuer or the Guarantor has given notice of redemption in accordance with the terms of the Notes) to require the Issuer or the Guarantor to redeem or, at the option of the Issuer or the Guarantor, purchase (or procure the purchase of) that Note at a repurchase price in cash equal to 101% of its principal amount together with interest accrued to (but excluding) the date which is seven days after the expiration of the Put Period (as defined below) (the ‘‘Put Date’’) on the Put Date. Promptly following the end of any Change of Control Period the Issuer shall give notice (a ‘‘Put Event Notice’’) to holders of Notes in accordance with the terms of the Notes specifying the nature of the relevant Put Event and the procedure for exercising the Put Option. To exercise the Put Option, the holder of the Note must deliver such Note at the specified office of any Paying Agent at any time during normal business hours of such Paying Agent falling within the period (the ‘‘Put Period’’) of 30 days after a Put Event Notice is given, accompanied by a duly signed and completed notice of exercise in the form (for the time being current) obtainable from the specified office of any Paying Agent (a ‘‘Change of Control Put Notice’’). The Issuer or the Guarantor shall redeem or purchase (or procure the purchase of) the relevant Notes in respect of which the Put Option has been validly exercised in accordance with the terms of the Notes on the Put Date unless previously redeemed (or purchased) and cancelled. Any Change of Control Put Notice shall be irrevocable except where prior to the Put Date an Event of Default shall have occurred and be continuing in which event such holder, at its option, may elect by notice to the Issuer or the Guarantor to withdraw the Change of Control Put Notice and instead to declare such Note forthwith due and payable. If 85 per cent. or more in principal amount of the Notes of a series then outstanding have been redeemed or purchased pursuant to Change of Control Put Notices, the Issuer or the Guarantor may, on giving not less than 30 nor more than 60 days’ notice to holders of Notes of such series (such notice being given within 30 days after the Put Date), redeem or purchase (or procure the purchase of), at its option, all but not some only of the remaining outstanding Notes of such series at their principal amount, together with interest accrued to (but excluding) the date fixed for such redemption or purchase. If the rating designations employed by any of Moody’s or S&P are changed from those which are described in paragraph (ii) of the definition of ‘‘Put Event’’, or if a rating is procured from a Substitute Rating Agency, the Issuer or the Guarantor shall determine the rating designations of Moody’s or S&P or such Substitute Rating Agency (as appropriate) as are most equivalent to the prior rating designations of Moody’s or S&P and the provisions relating to change of control shall be construed accordingly.

Certain Definitions Set forth below is a summary of certain of the defined terms used in the Notes and the Fiscal and Paying Agency Agreements. Investors should refer to the Notes and the Fiscal and Paying Agency Agreements for the full definition of all defined terms. ‘‘Attributable Value’’ means, as to any particular lease under which any Person is at any time liable, and at any date as at which the amount of the payment is to be determined, the total net amount of rent required to be paid by that Person under the lease during the remaining term of the lease (excluding any subsequent renewal or other extension option held by the lessee, but, in the case of any lease which is terminable by the lessee upon the payment of a penalty, the amount of such penalty), discounted from the respective due dates to the date of determination at a rate equivalent to the rate used for the purposes of financial reporting in accordance with generally accepted accounting principles and practices applicable to the type of business in which such Person is engaged (as determined in good faith by the principal accounting officer of such Person). The net amount of rent required to be paid under the lease for any period will be the aggregate amount of rent payable by the lessee with respect to that period, excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, utility, operating and labour costs and similar charges and as reduced by the present value of the rent, if any (determined on the foregoing basis), that any sublessee is required to pay for all or part of the leased property for the relevant period.

89 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD ‘‘Consolidated Net Tangible Assets of the Guarantor’’ means the total amount of assets of the Guarantor on a consolidated basis, including deferred pension costs included within total assets, and deferred tax assets, after deducting therefrom: * all current liabilities (excluding any indebtedness and obligations under capital leases classified as a current liability); * all goodwill and intangible assets, all as set forth in the most recent consolidated balance sheet of the Guarantor and computed in accordance with IFRS; and * appropriate adjustments on account of non-controlling interests of other Persons holding stock in any Subsidiary of the Guarantor, all as set forth in the most recent consolidated balance sheet of the Guarantor and its Subsidiaries (but, in any event, as at a date within 150 days of the date of determination) and computed in accordance with IFRS. ‘‘Change of Control Period’’ means the period commencing on the Relevant Announcement Date and ending 90 days after the Change of Control (or such longer period for which the applicable Notes are under consideration (such consideration having been announced publicly within the period ending 90 days after the Change of Control) for rating review or, as the case may be, rating by a Rating Agency, such period not to exceed 60 days after the public announcement of such consideration). ‘‘Lien’’ means any mortgage or deed of trust, pledge, lien, charge, encumbrance or other security interest. A‘‘Negative Rating Event’’ shall be deemed to have occurred, at any time, if at such time as there is no rating assigned to the applicable Notes by a Rating Agency (i) the Guarantor does not, either prior to, or not later than 21 days after, the occurrence of the Change of Control seek, and thereafter throughout the Change of Control Period use all reasonable endeavours to obtain, a rating of the applicable Notes, or any other unsecured and unsubordinated debt of the Guarantor or (ii) if the Guarantor does so seek and use such endeavours, it is unable to obtain such a rating of at least investment grade by the end of the Change of Control Period. ‘‘Permitted Liens’’ of any Person at any particular time means: (a) Liens existing on the date of issue of the Notes; (b) Liens arising by operation of law (including in favour of a tax authority in any jurisdiction) or incidental to the conduct of the business of that Person or any Subsidiary of that Person or the ownership of their property or assets, that do not materially impair the usefulness or marketability of those property or assets to that Person; (c) Liens securing taxes, assessments, governmental charges, levies or claims, which are not yet delinquent or which are being contested in good faith by appropriate proceedings, if adequate reserves or provisions, if any, as shall be required in conformity with applicable generally accepted accounting principles shall have been established or made; (d) Liens in favour of the Issuer or the Guarantor or Liens in favour of a Restricted Subsidiary securing debt owed by another Restricted Subsidiary to such Restricted Subsidiary; (e) Purchase Money Mortgages; (f) Liens on property or assets or shares or stock or other equity equivalents existing at the time the property or assets or shares or stock or other equity equivalents were acquired by that Person; provided that those Liens were not incurred or increased in anticipation of the acquisition; (g) Liens on property or assets or shares or stock or other equity equivalents of a corporation or other legal entity existing at the time that corporation or other legal entity becomes a Subsidiary of that Person, or is liquidated or merged into, or amalgamated or consolidated with, that Person or a Subsidiary of that Person or at the time of the sale, lease or other disposition to that Person or a Subsidiary of that Person of all or substantially all of the properties and assets of a corporation or other legal entity; (h) Any Lien created by or relating to legal proceedings so long as that Lien is discharged, vacated or bonded within 90 days of attachment; (i) Liens on any Principal Property subject to Sale and Leaseback Transactions not otherwise prohibited by the Notes;

90 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD (j) Liens in favour of a governmental entity or holders of securities issued by a governmental entity pursuant to any contract or statute, including (but not limited to) Liens securing or relating to industrial revenue, pollution control or other tax exempt bonds; (k) Liens required in connection with state or local governmental programmes which provide financial tax benefits, as long as substantially all of the obligations secured are in lieu of or reduce an obligation that would have been secured by a Lien otherwise permitted hereunder; (l) Liens constituted by rights of set-off or netting in the ordinary course of the Guarantor’s or any Restricted Subsidiary’s banking arrangements or for the provision of clearing bank facilities or overdraft facilities for the purpose of netting debit and credit balances (other than cash collateral); and (m) Any renewal, refunding or extension of any Lien referred to in the foregoing clauses (a) through (l); provided that the principal amount of indebtedness secured by that Lien after the renewal, refunding or extension is not increased and the Lien is limited to the property or assets originally subject to the Lien and any improvements on the property or assets. ‘‘Principal Property’’ means any building, structure or other facility, together with the land upon which it is erected and fixtures comprising a part thereof that (i) is owned by the Guarantor or a Subsidiary of the Guarantor, (ii) has a gross book value (without deduction of any applicable depreciation reserves) on a date as at which the determination is being made of more than 2% of the Consolidated Net Tangible Assets of the Guarantor and (iii) has not been determined in good faith by the Board of Directors of the Guarantor not to be materially important to the total business conducted by the Guarantor and its Subsidiaries, taken as a whole. ‘‘Purchase Money Mortgage’’ of any Person means any Lien created upon any property or assets of the Person or any shares or stock of a Restricted Subsidiary to secure or securing the whole or any part of the purchase price of the property or assets or shares or stock or the whole or any part of the cost of constructing or installing fixed improvements on that property or assets or to secure or securing the repayment of money borrowed to pay the whole or any part of such purchase price or cost or any vendor’s privilege or Lien on that property or assets or shares or stock securing all or any part of the purchase price or cost including title retention agreements and leases in the nature of title retention agreements when recourse is limited solely to such Lien. ‘‘Put Event’’ will be deemed to occur if: (a) any person or any persons acting in concert (as defined in the United Kingdom City Code on Takeovers and Mergers), other than a holding company (as defined in Section 1159 of the United Kingdom Companies Act 2006 (as amended)) whose shareholders are or are to be substantially similar to the pre-existing shareholders of the Guarantor, shall become interested (within the meaning of Part 22 of the Companies Act 2006 (as amended)) in (A) more than 50 per cent. of the issued or allotted ordinary share capital of the Guarantor or (B) shares in the capital of the Guarantor carrying more than 50 per cent. of the voting rights normally exercisable at a general meeting of the Guarantor (each such event being, a ‘‘Change of Control’’); and (b) on the date (the ‘‘Relevant Announcement Date’’) that is the earlier of (1) the date of the first public announcement of the relevant Change of Control and (2) the date of the earliest Relevant Potential Change of Control Announcement (if any), the applicable Notes carry: (A) an investment grade credit rating (Baa3/BBB-, or equivalent, or better) from any Rating Agency and such rating is, within the Change of Control Period, either downgraded to a non-investment grade credit rating (Ba1/BB+, or equivalent, or worse) (a ‘‘Non- Investment Grade Rating’’) or withdrawn and is not, within the Change of Control Period, subsequently (in the case of a downgrade) upgraded or (in the case of a withdrawal) reinstated to an investment grade credit rating by such Rating Agency; or (B) a Non-Investment Grade Rating from any Rating Agency and such rating is, within the Change of Control Period, either downgraded by one or more rating categories (by way of example, Ba1 to Ba2 being one rating category) or withdrawn and is not, within the Change of Control Period, subsequently (in the case of a downgrade) upgraded or (in the case of a withdrawal) reinstated to its earlier credit rating or better by such Rating Agency; or (C) no credit rating and a Negative Rating Event also occurs within the Change of Control Period,

91 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD provided that if at the time of the occurrence of the Change of Control the applicable Notes carry a credit rating from more than one Rating Agency, at least one of which is investment grade as specified in sub-paragraph (A) above, then sub-paragraph (A) only will apply; and (c) in making any decision to downgrade or withdraw a credit rating pursuant to sub-paragraphs (A) or (B) above or not to award a credit rating of at least investment grade as described in paragraph (ii) of the definition of Negative Rating Event, the relevant Rating Agency announces publicly or confirms in writing to the Guarantor (whether at the request of the Guarantor or otherwise) that such decision(s) resulted, in whole or in part, from the occurrence of the Change of Control or the Relevant Potential Change of Control Announcement. ‘‘Rating Agency’’ means Moody’s Investors Service Ltd (‘‘Moody’s’’) or Standard & Poor’s Credit Market Services France SAS (‘‘S&P’’) or any of their respective successors or any rating agency (a ‘‘Substitute Rating Agency’’) substituted for any of them by the Guarantor from time to time. Each of S&P and Moody’s is established in the European Union and registered under Regulation 1060/ 2009/EC. ‘‘Relevant Potential Change of Control Announcement’’ means any public announcement or statement by the Guarantor, any actual or potential bidder or any adviser acting on behalf of any actual or potential bidder relating to any potential Change of Control where within 180 days following the date of such announcement or statement, a Change of Control occurs. ‘‘Restricted Subsidiary’’ means any Subsidiary of the Guarantor which owns a Principal Property. ‘‘Sale and Leaseback Transaction’’ of any Person means an arrangement with any lender or investor or to which that lender or investor is a party providing for the leasing by that Person of any property or asset of that Person which has been or is being sold or transferred by the Person more than 12 months after the acquisition of that property or asset or the completion of construction or commencement of operation thereof to that lender or investor or to any Person to whom funds have been or are to be advanced by that lender or investor on the security of that property or asset. The stated maturity of this type of arrangement shall be the date of the last payment of rent or any other amount due under the arrangement prior to the first date on which the arrangement may be terminated by the lessee without payment of a penalty. ‘‘Subsidiary’’ of any Person means any corporation, partnership or other business entity of which more than 50% of the outstanding shares or other equity interests (as the case may be) carrying the right to vote in the election of directors, managers or trustees (without regard to the occurrence of any contingency), as the case may be, are directly or indirectly, owned by that Person or by one or more Subsidiaries of that Person.

Covenants Limitation on Liens So long as any Notes are outstanding, the Issuer and the Guarantor will not, and will not permit any Subsidiary to, create, incur or assume any Lien on any Principal Property or upon any shares or stock of any Restricted Subsidiary securing any indebtedness for borrowed money (‘‘Debt’’) or interest on any Debt (or any liability of the Issuer or the Guarantor or any of the Guarantor’s Subsidiaries under any guarantee or endorsement or other instrument under which the Issuer, the Guarantor or any of its Subsidiaries is contingently liable, either directly or indirectly, for Debt or interest on Debt), other than Permitted Liens, without also at the same time or prior to that time securing, or causing such Subsidiary to secure, the applicable Notes so that such Notes are secured equally and rateably with or prior to the other Debt or liability, except that the Issuer, the Guarantor and any Subsidiary may incur a Lien on any Principal Property to secure Debt or interest on any Debt (or any such liability) or enter into a Sale and Leaseback Transaction on any Principal Property without securing the applicable Notes if the sum of: * the amount of Debt outstanding at the time secured by Liens on any Principal Property or upon any shares or stock of any Restricted Subsidiary created, incurred or assumed after the date of the Notes and otherwise prohibited by the Notes; and * the Attributable Value at the time of all Sale and Leaseback Transactions on any Principal Property entered into after the date of the applicable Notes and otherwise prohibited by the Notes,

92 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD does not exceed the greater of US$625 million or 10% of the Consolidated Net Tangible Assets of the Guarantor.

Limitation on Sale and Leaseback Transactions So long as any Notes are outstanding, the Issuer and the Guarantor will not, and the Issuer and the Guarantor will not permit any Subsidiary to, enter into any Sale and Leaseback Transaction of any Principal Property, other than any such transaction involving a lease for a term of not more than three years or any transaction between each of the Issuer, the Guarantor and any of the Guarantor’s Subsidiaries, or between Subsidiaries of the Guarantor, unless: * The Issuer, the Guarantor or the Subsidiary, as the case may be, would be entitled under the covenant described above under ‘‘–Covenants–Limitation on Liens’’, to enter into a Sale and Leaseback Transaction of such Principal Property or to incur Debt secured by a Lien on such Principal Property without securing the Notes; or * The Issuer, the Guarantor or the Subsidiary, as the case may be, applies, within 120 days after the effective date of any arrangement, an amount equal to the Attributable Value of such Sale and Leaseback Transaction to either (or a combination of) (i) the prepayment, repayment, redemption, reduction or retirement of indebtedness which matures more than 12 months after the date of the creation of the indebtedness or (ii) expenditures for the acquisition, construction, improvement, development or expansion of any Principal Property.

Limitation on Mergers and Consolidations So long as any Notes are outstanding, the Issuer and the Guarantor may not consolidate with or merge into any other Person or sell, convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any Person (other than any sale or conveyance by way of a temporary lease in the ordinary course of business), unless (i) any successor Person assumes the Issuer’s or the Guarantor’s obligations on the Notes or the Guarantees, as the case may be, and under the Fiscal and Paying Agency Agreements, (ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing, (iii) such successor Person is organised under the laws of the United States, the United Kingdom or any other country that is a member of the Organisation for Economic Cooperation and Development as at the date of such succession, (iv) such successor Person agrees to pay any Additional Amounts in respect of taxes imposed by the jurisdiction in which such successor Person is incorporated or resident for tax purposes and resulting therefrom or otherwise and (v) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer or the Guarantor would become subject to a Lien which would not be permitted by the Notes or under the Fiscal and Paying Agency Agreements, the Issuer or the Guarantor, or such successor Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Notes equally and rateably with (or prior to) all indebtedness secured thereby. The Notes will not contain covenants or other provisions to afford protection to holders of the Notes in the event of a highly leveraged transaction or a change in control of the Issuer or the Guarantor except as provided above. Upon certain mergers or consolidations involving the Issuer or the Guarantor, or upon certain sales or conveyances of the respective properties of the Issuer or the Guarantor as an entirety or substantially as an entirety, the obligations of the Issuer or the Guarantor under the Notes or the Guarantees, as the case may be, shall be assumed by the Person formed by such merger or consolidation or which shall have acquired such property and upon such assumptions such Person shall succeed to and be substituted for the Issuer or the Guarantor and then the Issuer or the Guarantor will be relieved from all obligations under the Notes or the Guarantees. The terms ‘‘Issuer’’ and ‘‘Guarantor’’, as used in the Notes and the Fiscal and Paying Agency Agreements, also refer to any such successors or assigns so substituted.

Assumption of the Issuer’s obligations by the Guarantor The Guarantor may directly assume the obligations of the Issuer under the Notes and upon such assumption succeed to and be substituted for the Issuer thereunder. In the event of any such assumption, the Guarantor will pay all amounts of principal, interest and any premium without deduction or withholding for any and all present and future Taxes or, if such deduction or

93 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD withholding is required, the Guarantor will pay any Additional Amounts in the same manner and subject to the same exceptions described under ‘‘Payment of Additional Amounts’’ above. An assumption of the Issuer’s obligations under the Notes may be considered for US federal income tax purposes to be a taxable exchange of the Notes for new notes by the beneficial owners, resulting in recognition of taxable gain or loss for US federal income tax purposes and other possible adverse tax consequences. Beneficial owners should consult their own tax advisers regarding the US federal, state, local and other tax consequences of any assumption.

Events of Default The following will be Events of Default (each an ‘‘Event of Default’’) with respect to the applicable Notes: (a) default in the payment of any instalment of interest (excluding Additional Amounts) upon the applicable Notes as and when the same shall become due and payable, and continuance of such default for 30 days; or (b) default in the payment of the applicable Additional Amounts as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (c) default in the payment of all or any part of the principal of the applicable Notes as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise and continuance of such default for three business days; or (d) default in the performance or breach of any covenant or warranty of the Issuer or the Guarantor in respect of the applicable Notes or the applicable Fiscal and Paying Agency Agreement (other than those described in paragraphs (a), (b) and (c) above), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Guarantor, and the Fiscal Agent by the holders of at least 25% in principal amount of the outstanding Notes affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a ‘‘Notice of Default’’ under the applicable Notes; or (e) any present or future indebtedness of the Issuer or the Guarantor, or any Principal Subsidiary, other than the applicable Notes, having a then outstanding principal amount in excess of US$125,000,000 is accelerated by any holder or holders thereof or any trustee or agent acting on behalf of such holder or holders in accordance with any agreement or instrument evidencing such indebtedness; or (f) a distress, attachment, execution or other legal process is levied, enforced or sued out on or against any part of the property, assets or revenues of the Issuer or the Guarantor or any Principal Subsidiary where such distress, attachment, execution or other legal process relates to an obligation that exceeds US$125,000,000 following upon a decree or judgment of a court of competent jurisdiction and is not discharged or stayed within 90 days; or (g) the Issuer or the Guarantor or any Principal Subsidiary admits in writing that it is unable to pay its debts generally; or a resolution is passed by the Board of Directors of the Issuer or the Guarantor to be wound up or dissolved; or (h) certain events in bankruptcy, insolvency or reorganisation involving the Issuer or the Guarantor or any Principal Subsidiary. The following terms will be defined under the Notes to mean: ‘‘Consolidated Subsidiary’’ means, in relation to a company, a Subsidiary of that company or any other Person whose affairs are required to be consolidated in the audited consolidated accounts of that company; and ‘‘Principal Subsidiary’’ means, at any relevant time, a Consolidated Subsidiary of the Guarantor whose gross assets (consolidated if such Consolidated Subsidiary itself has Consolidated Subsidiaries) attributable to the Guarantor are not less than 10% of the consolidated gross assets of the Guarantor and all of its Consolidated Subsidiaries taken as a whole (attributable to the shareholders of the Guarantor) as at the date of the most recent published consolidated audited balance sheet of the Guarantor and all of its Consolidated Subsidiaries; provided that, if a Principal Subsidiary shall, since the date of the most recent published consolidated audited balance sheet of the Guarantor and all of its Consolidated Subsidiaries (a) have ceased to be a Consolidated Subsidiary of the Guarantor (if such Principal Subsidiary was, at such date, a Consolidated

94 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Subsidiary of the Guarantor) or (b) have transferred all or substantially all of its business or assets to one or more other Consolidated Subsidiaries of the Guarantor, it shall cease to be a Principal Subsidiary, all as more particularly defined under the Notes. If an Event of Default occurs and is continuing, then and in each and every such case (other than certain Events of Default specified in paragraph (h) above with respect to the Issuer or the Guarantor), unless the principal of all the applicable Notes shall have already become due and payable, the holders of not less than 25% in aggregate principal amount of the applicable Notes then outstanding, by notice in writing to the Guarantor and the Fiscal Agent, may declare the entire principal amount of all applicable Notes issued pursuant to the applicable Fiscal and Paying Agency Agreement and interest accrued and unpaid thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If certain Events of Default described in paragraph (h) above occur with respect to the Issuer or the Guarantor and are continuing, the principal amount of and accrued and unpaid interest on all the Notes issued pursuant to the applicable Fiscal and Paying Agency Agreement shall become immediately due and payable, without any declaration or other act on the part of any holder. Under certain circumstances, the holders of a majority in aggregate principal amount of the applicable Notes then outstanding under the applicable Fiscal and Paying Agency Agreement, by written notice to the Issuer and the Fiscal Agent, may waive defaults and rescind and annul declarations of acceleration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impart any right consequent thereon.

Defeasance The Issuer will have the option either (a) to be deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the applicable Notes and to have satisfied all the obligations under the applicable Fiscal and Paying Agency Agreement, (except for certain obligations, including those relating to the defeasance trust and obligations to register the transfer or exchange of Notes, to replace mutilated, destroyed, lost or stolen Notes, to pay Additional Amounts and to maintain paying agencies) on the 91st day after the applicable conditions described below have been satisfied or (b) to cease to be under any obligation to comply with the covenants described above under ‘‘-Covenants-Limitation on Liens’’ and ‘‘–Covenants–Limitation on Sale and Leaseback Transactions’’ and the condition relating to the absence of any events of default under ‘‘–Covenants–Limitation on Mergers and Consolidations’’ under the applicable Notes, and non-compliance with such covenants and the occurrence of certain events described above under ‘‘–Events of Default’’ will not give rise to any Event of Default under the applicable Notes, at any time after the applicable conditions described below have been satisfied. In order to exercise either defeasance option, the Issuer must (i) deposit with a defeasance agent, irrevocably in trust, money or Government Obligations for the payment of principal of and interest on the outstanding Notes to and including the Redemption Date irrevocably designated by the Issuer on or prior to the date of deposit of such money or Government Obligations and (ii) comply with certain other conditions, including delivering to a defeasance agent either an opinion of US counsel of recognized standing with regard to US federal income tax matters or a ruling received from or published by the United States Internal Revenue Service, to the effect that beneficial owners of the Notes will not recognise income, gain or loss for United States federal income tax purposes as a result of the exercise of such option and will be subject to United States federal income tax on the same amount and in the same manner and at the same time as would have been the case if such option had not been exercised and which, in the case of (a) above, is based on a change of law after 13 August 2013.

Modification and Waiver Without Consent of holders of Notes The Fiscal and Paying Agency Agreements contain provisions for convening meetings of holders to consider any matters affecting their interests. The Issuer, the Guarantor and the Fiscal Agent may, without the consent of the holders of any of the applicable Notes at any time outstanding, from time to time and at any time, enter into an agreement * to convey, transfer, assign, mortgage or pledge to the Fiscal Agent as security for the applicable Notes any property or assets;

95 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD * to evidence the succession of another Person to the Issuer or the Guarantor or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Issuer or the Guarantor, as the case may be, pursuant to the applicable Fiscal and Paying Agency Agreement (or to evidence any assumption by the Guarantor of the Issuer’s obligations under the applicable Fiscal and Paying Agency Agreement); * to evidence and provide for the acceptance of appointment of a successor Fiscal Agent, London Paying Agent, Transfer Agent, Principal Paying Agent or Registrar, as the case may be; * to add to the covenants of the Issuer or the Guarantor such further covenants, restrictions, conditions or provisions as the Issuer, the Guarantor and the Fiscal Agent shall consider to be for the protection of the holders of Notes issued pursuant to the applicable Fiscal and Paying Agency Agreement, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in the applicable Notes; provided that, in respect of any such additional covenant, restriction, condition or provision, the relevant agreement may provide for a particular period of grace after default (which may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the right of the holders of a majority in aggregate principal amount of the applicable Notes to waive such an Event of Default; * to modify the restrictions on, and procedures for, resale and other transfers of the applicable Notes pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally; * to cure any ambiguity or to correct or supplement any provision contained in the applicable Notes which may be defective or inconsistent with any other provision contained therein or to make such other provision in regard to matters or questions arising under the applicable Notes as the Issuer or the Guarantor may deem necessary or desirable and which will not adversely affect the interests of the holders of the applicable Notes in any respect; and * to issue further securities having identical terms and conditions in all respects (or in all respects except for the first payment of interest on such further securities) as the Notes so that the further issue is consolidated and forms a single series with the applicable Notes.

With Consent of holders of Notes The Issuer, the Guarantor and the Fiscal Agent may, with the consent of the holders of not less than a majority in aggregate principal amount of the applicable Notes at the time outstanding (including consents obtained in connection with a tender offer or exchange offer for the applicable Notes), from time to time and at any time, enter into an agreement to add any provisions to or change in any manner or eliminate any of the provisions of the applicable Notes or the applicable Fiscal and Paying Agency Agreement or to modify in any manner the rights of the holders of the applicable Notes; provided that no such amendment of the Notes or the applicable Fiscal and Paying Agency Agreement may, without the consent of the holder of each of the Notes so affected: * change the stated maturity of the principal of or the date for payment of any instalment of interest on any applicable Note; or * reduce the principal amount of or Additional Amounts or interest on any applicable Note payable with respect thereto or reduce the amount payable thereon in the event of redemption or default; or * change the method of computing the amount of principal thereof or interest or premium, if any, payable thereon on any date; or * change the currency of payment of principal of or Additional Amount or interest on any Note payable with respect thereto; or * change the obligation of the Issuer or the Guarantor to pay Additional Amounts; or * impair the right to institute suit for the enforcement of any such payment on or with respect to any applicable Note; or

96 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD * reduce the above stated aggregate principal amount of any applicable Note outstanding necessary to modify or amend any Fiscal and Paying Agency Agreement or the applicable Conditions of any applicable Notes or to waive any future compliance or past default or reduce the quorum requirements or the percentage of aggregate principal amount of any applicable Notes outstanding required for the adoption of any action at a meeting of holders of such Notes or reduce the percentage of the aggregate principal amount of such Notes outstanding necessary to rescind or annul any declaration of the principal of and all accrued and unpaid interest on any applicable Notes to be due and payable; provided that no consent of any holder of any Note shall be necessary to permit the Fiscal Agent, the Issuer and the Guarantor to execute a supplemental Fiscal and Paying Agency Agreement described under ‘‘Modification and Waiver – Without Consent of holders of Notes’’ above. Any modifications, amendments or waivers to applicable Fiscal and Paying Agency Agreement or to the Conditions will be conclusive and binding on all holders of the applicable Notes, whether or not they have consented to such action or were present at the meeting at which such action was taken, and on all future holders of the applicable Notes, whether or not notation of such modifications, amendments or waivers is made upon such Notes. Any instrument given by or on behalf of any holder of such a Note in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent registered holders of such Note.

Prescription Under New York’s statute of limitations, any legal action upon the Notes in respect of interest or principal must be commenced within six years after the payment thereof is due. Thereafter the Notes will become generally unenforceable.

Notice So long as the Notes are listed on the Official List and admitted to trading on the Main Securities Market, notices to holders of Notes will be given by filing all such notices in the Companies Announcement Office of the Irish Stock Exchange. All notices to holders of Notes shall be deemed to be duly given if they are filed with the Companies Announcements Office. Notices to holders of Notes will also be given by first-class mail postage prepaid to the last addresses of such holders as they appear in the Notes register. Such notices will be deemed to have been given on the date of such publication or mailing.

Listing The Issuer has applied to list the Notes on the Official List and for the admission of the Notes to trading on the Main Securities Market, which is the exchange regulated market of the Irish Stock Exchange. The Issuer has agreed to use its reasonable best efforts to maintain any such listing and admission to trading of the Notes for so long as any of the Notes remain outstanding.

Consent to Service Each of the Issuer and the Guarantor will initially designate CT Corporation System as its authorised agent for service of process in any legal suit, action or proceeding arising out of or relating to the performance of its obligations under the Notes brought in any state or federal court in the Borough of Manhattan, the City of New York, and will irrevocably submit (but for those purposes only) to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding.

Governing Law The Notes, the Guarantees and the Fiscal and Paying Agency Agreements shall be governed by and construed in accordance with the laws of the State of New York.

Regarding the Principal Paying Agent, Registrar and Transfer Agent and London Paying Agent In acting under the Fiscal and Paying Agency Agreements and in connection with the Notes, the Principal Paying Agent, Registrar and Transfer Agent and the London Paying Agent are acting solely as agents of the Issuer and do not assume any obligation towards or relationship of agency or trust for or with the owners or holders of the Notes, except that any funds held by any Principal Paying Agent, Registrar and Transfer Agent, or London Paying Agent for payment of

97 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD principal of or interest on the Notes or Additional Amounts with respect thereto shall be held in trust by it for such owners and such holders and applied as set forth in the Notes but need not be segregated from other funds held by it except as required by law. For a description of the duties and immunities and rights of the Principal Paying Agent, Registrar and Transfer Agent and the London Paying Agent under the Fiscal and Paying Agency Agreements, reference is made to the Fiscal and Paying Agency Agreements, and the obligations of the Principal Paying Agent, Registrar and Transfer Agent and the London Paying Agent to the holder of any Note are subject to such immunities and rights.

98 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Book-Entry, Delivery and Form

The Notes that are initially offered and sold in the United States to QIBs will be represented by beneficial interests in two or more Rule 144A Global Notes in registered form without interest coupons, which will be deposited on or about the Closing Date with the Custodian and registered in the name of Cede & Co. as nominee of DTC. The Notes that are offered and sold in reliance on Regulation S will be represented by beneficial interests in two or more Regulation S Global Notes in registered form without interest coupons, which will be deposited on or about the Closing Date with the Custodian, and registered in the name of Cede & Co., as nominee of DTC. Investors may hold their interests in the Global Notes directly through DTC if they are participants in, or indirectly through organisations which are participants in, such systems. Euroclear and Clearstream will hold interests in the Regulation S Global Notes on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositaries, which are participants in DTC. So long as DTC or its nominee is the registered holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by the applicable Global Note for all purposes under the Fiscal and Paying Agency Agreement and the Notes (except as the context otherwise requires in respect of Additional Amounts). The Notes (including beneficial interests in the Global Notes) will be subject to certain restrictions on transfer set forth therein and in the Fiscal and Paying Agency Agreement and will bear a legend regarding such restrictions as set forth under ‘‘Transfer Restrictions’’. Under certain circumstances, transfers may be made only upon receipt by the Transfer Agent of a written certification (in the form set out in the Fiscal and Paying Agency Agreement).

Transfers within the Global Notes Subject to the procedures and limitations described herein, transfers of beneficial interests within a Global Note may be made without delivery to the Issuer or the Fiscal Agent of any written certifications or other documentation by the transferor or transferee.

Transfers between the Global Notes A beneficial interest in a Rule 144A Global Note may be transferred to a person who wishes to take delivery of such beneficial interest through the applicable Regulation S Global Note only upon receipt by the Transfer Agent of a written certification (in the form set out in the Fiscal and Paying Agency Agreement) from the transferor to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or, in the case of an exchange occurring following the expiration of the distribution compliance period, Rule 144. Prior to the expiration of the distribution compliance period, a beneficial interest in a Regulation S Global Note may be transferred to a person who wishes to take delivery of such beneficial interest through the applicable Rule 144A Global Note only upon receipt by the Transfer Agent of a written certification (in the form set out in the Fiscal and Paying Agency Agreement) from the transferor to the effect that such transfer is being made to a person whom the transferor reasonably believes is a QIB within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States and any other jurisdiction. After the expiration of the distribution compliance period, such certification requirements will no longer apply to such transfers, but such transfers will continue to be subject to applicable transfer restrictions under the Securities Act and the laws of any state of the United States and other jurisdictions. Any beneficial interest in a Rule 144A Global Note or a Regulation S Global Note that is transferred to a person who takes delivery in the form of a beneficial interest in the other Global Note will, upon transfer, cease to be a beneficial interest in such Global Note and become a beneficial interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to a beneficial interest in such other Global Note for so long as such person retains such an interest.

99 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Transfers or Exchanges from a Global Note to Definitive Notes No Global Note may be exchanged in whole or in part for Notes in definitive registered form (‘‘Definitive Notes’’) unless: * DTC notifies the Issuer that it is unwilling or unable to hold the applicable Global Note or DTC ceases to be a clearing agency registered under the Exchange Act, and in each case the Issuer does not appoint a successor depositary that is registered under the Exchange Act within 90 days; * a payment default has occurred and is continuing; * in the event of a bankruptcy default, the Issuer fails to make payment on the Notes when due; or * the Issuer shall have determined in its sole discretion that the Notes shall no longer be represented by the applicable Global Notes. The holder of a Definitive Note may transfer such Note by surrendering it at the specified office of the Registrar or any Transfer Agent. Upon the transfer, exchange or replacement of Definitive Notes bearing the applicable legend set forth under ‘‘Transfer Restrictions’’, or upon specific request for removal of such legend on a Definitive Note, the Issuer will deliver only Definitive Notes that bear such legend, or will refuse to remove such legend, as the case may be, unless there is delivered to the Issuer and the Registrar such satisfactory evidence, which may include an opinion of counsel as may reasonably be required by the Issuer, that neither the legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act. Except as set forth in this paragraph, no Global Note may be exchanged in whole or in part for Definitive Notes.

Clearing and Settlement The information set out below in connection with DTC is subject to any change in or reinterpretation of the rules, regulations and procedures of DTC currently in effect. The information about DTC set forth below has been obtained from sources that the Issuer believes to be reliable, but neither the Issuer nor any of the Initial Purchasers takes any responsibility for the accuracy of the information. Neither the Issuer nor any of the Initial Purchasers will have any responsibility or liability for any aspect of the records relating to, or payments made on account of interests in Notes held through the facilities of any clearing system or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. DTC has advised the Issuer as follows: DTC is a limited purpose trust company organised under the laws of the State of New York, a member of the Federal Reserve System, a ‘‘clearing corporation’’ within the meaning of the New York Uniform Commercial Code and a ‘‘clearing agency’’ registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for DTC participants and to facilitate the clearance and settlement of transactions between DTC participants through electronic book entry changes in accounts of DTC participants, thereby eliminating the need for physical movement of certificates. DTC participants include certain of the Initial Purchasers, securities brokers and dealers, banks, trust companies, clearing corporations and may in the future include certain other organisations (‘‘DTC participants’’). Indirect access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly (‘‘indirect DTC participants’’). Under the rules, regulations, and procedures creating and affecting DTC and its operations (the ‘‘Rules’’), DTC is required to make book-entry transfers of Notes among DTC participants on whose behalf it acts with respect to Notes accepted into DTC’s book-entry settlement system as described below (the ‘‘DTC Notes’’) and to receive and transmit distributions of the nominal amount and interest on the DTC Notes. DTC participants and indirect DTC participants with which beneficial owners of DTC Notes (‘‘Owners’’) have accounts with respect to the DTC Notes similarly are required to make book-entry transfers and receive and transmit such payments on behalf of their respective Owners. Accordingly, although Owners who hold DTC Notes through DTC participants or indirect DTC participants will not possess Notes, the Rules by virtue of the requirements described above, provide a mechanism by which such Owners will receive payments and will be able to transfer their interests with respect to the Notes.

100 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Transfers of ownership or other interests in the Notes in DTC may be made only through DTC participants. Indirect DTC participants are required to effect transfers through a DTC participant. DTC has no knowledge of the actual beneficial owners of the Notes. DTC’s records reflect only the identity of the DTC participants to whose accounts the Notes are credited, which may not be the beneficial owners. DTC participants will remain responsible for keeping account of their holdings on behalf of their customers and for forwarding all notices concerning the Notes to their customers. So long as DTC, or its nominee, is the registered holder of a Global Note, payments on the Notes will be made in immediately available funds to DTC. DTC’s practice is to credit DTC participants’ accounts on the applicable payment date in accordance with their respective holdings shown on its records, unless DTC has reason to believe that it will not receive payment on that date. Payments by DTC participants to beneficial owners will be governed by standing instructions and customary practices, and will be the responsibility of the DTC participants and not of DTC, or any other party, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is the responsibility of the Fiscal Agent. Disbursement of payments for DTC participants will be DTC’s responsibility, and disbursement of payments to the beneficial owners will be the responsibility of DTC participants and indirect DTC participants. Because DTC can only act on behalf of DTC participants, who in turn act on behalf of indirect DTC participants, and because owners of beneficial interests in the Notes holding through DTC will hold interests in the Notes through DTC participants or indirect DTC participants, the ability of the owners of the beneficial interests to pledge Notes to persons or entities that do not participate in DTC, or otherwise take actions with respect to the Notes, may be limited. DTC will take any action permitted to be taken by an Owner only at the direction of one or more DTC participants to whose account with DTC such Owner’s DTC Notes are credited. Additionally, DTC has advised the Issuer that it will take such actions with respect to any percentage of the beneficial interest of Owners who hold Notes through DTC participants or Indirect Participants only at the direction of and on behalf of DTC participants whose account holders include undivided interests that satisfy any such percentage. To the extent permitted under applicable law and regulations, DTC may take conflicting actions with respect to other undivided interests to the extent that such actions are taken on behalf of DTC participants whose account holders include such undivided interests. Ownership of interests in the Rule 144A Global Notes and the Regulation S Global Notes will be shown on, and the transfer of that ownership will be effected only through records maintained by, DTC, the DTC participants and the indirect DTC participants, including Euroclear and Clearstream. Transfers between participants in DTC, as well as transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with DTC rules. Subject to compliance with the transfer restrictions applicable to the Notes, cross-market transfers between DTC, on the one hand, and participants in Euroclear or Clearstream on the other hand, will be effected in DTC in accordance with DTC rules on behalf of Euroclear or Clearstream as the case may be. Such cross-market transactions, however, will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with its rules and procedures and within its established deadlines. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to DTC to take action to effect final settlement on its behalf by delivering or receiving payment in accordance with DTC’s Same-Day Funds Settlement System. According to DTC, the foregoing information with respect to DTC has been provided to the industry for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind. Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, Euroclear and Clearstream they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at anytime. Neither the Issuer nor the Fiscal Agent will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants, of their respective obligations under the rules and procedures governing their operations.

Initial Settlement in Relation to DTC Notes Upon the issue of a Regulation S Global Note and/or a Restricted Global Note deposited with DTC or a custodian therefor, DTC or its custodian, as the case may be, will credit, on its internal system,

101 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD the respective nominal amount of the individual beneficial interest represented by such relevant DTC Note or Notes to the accounts of Persons who have accounts with DTC. Such accounts initially will be designated by or on behalf of the relevant Dealers. Ownership of beneficial interest in a DTC Note will be limited to DTC participants, including Euroclear and Clearstream or indirect DTC participants. Ownership of beneficial interests in DTC Notes will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of DTC participants) and the records of DTC Participants (with respect to interests of indirect DTC participants). Investors that hold their interests in a DTC Note will follow the settlement procedures applicable to global bond issues. Investors’ securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Secondary Market Trading in Relation to DTC Notes Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date. Although DTC has agreed to the following procedures in order to facilitate transfers of interests in Global Notes deposited with DTC or a custodian therefor among participants of DTC, DTC is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Issuer nor any agent of the Issuer will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. Secondary market trading between DTC participants will be settled using the procedures applicable to global bond issues in same-day funds.

Payments So long as any of the Notes remains outstanding, the Issuer will maintain in New York City, and in London so long as the Notes are admitted to trading on the Irish Stock Exchange’s market for listed securities, an office or agency (a) where the Notes may be presented for payment, (b) where the Notes may be presented for registration of transfer and for exchange and (c) where notices and demands to or upon the Issuer in respect of the Notes, or the Fiscal and Paying Agency Agreement may be served. The Issuer will give the Fiscal Agent written notice of the location of any such office or agency and of any change of location thereof. The Issuer will initially designate The Bank of New York Mellon, in the Borough of Manhattan, City of New York and The Bank of New York Mellon, acting through its London office, for such purposes. The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes or where such notices or demands may be served and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of any obligation to maintain an office or agency in the City of New York and in London for such purposes; and provided further, however, that the Issuer will, to the extent possible as a matter of law, maintain a paying agent with a specified office in a Member State of the European Union that will not be obligated to withhold or deduct tax pursuant to European Union Directive 2003/48/EC on the taxation of savings or any law implementing or complying with, or introduced in order to conform to, the Directive. The Issuer shall give written notice to the Agents of any such designation or rescission and of any such change in the location of any other office or agency. A holder of Notes may transfer or exchange Notes in accordance with their terms. The Registrar and Transfer Agent for the Notes will not be required to accept for registration or transfer any Notes, except upon presentation of satisfactory evidence (which may include legal opinions) that the restrictions on transfer have been complied with, all in accordance with such reasonable regulations as the Issuer may from time to time agree with such Registrar and Transfer Agent. Notwithstanding any statement herein, the Issuer reserves the right to impose or remove such transfer, certification, substitution or other requirements, and to require such restrictive legends on the Notes, as they may determine are necessary to ensure compliance with the securities laws of the United States and the states therein and any other applicable laws or as may be required by any stock exchange on which the Notes are listed.

102 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD The Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Notes and any other expenses (including the fees and expenses of the Agents). No service charge will be made for any such transaction. The Registrar and Transfer Agent will not be required to exchange or register a transfer of (i) any Notes for a period of 15 calendar days ending the due date for any payment of principal in respect of the Notes or the first mailing of any notice of redemption of Notes to be redeemed or (ii) any Notes selected, called or being called for redemption. The Notes will be issued in registered form without coupons and transferable in denominations of US$200,000 and integral multiples of US$1,000 in excess thereof. The laws of some jurisdictions require that certain persons take physical delivery in definitive form of securities which they own. Consequently, the ability to transfer beneficial interests in the Global Notes is limited to such extent.

103 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Taxation

THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED HEREIN SOLELY FOR INFORMATIONAL PURPOSES. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE. NO REPRESENTATION WITH RESPECT TO THE CONSEQUENCES TO ANY PARTICULAR PURCHASER OF THE NOTES IS MADE HEREBY. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN TAX ADVISERS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES AND THE EFFECTS OF NATIONAL, STATE OR LOCAL TAX LAWS TO WHICH THEY MAY BE SUBJECT.

Certain United Kingdom Tax Considerations The comments below are of a general nature based on current United Kingdom tax law and Her Majesty’s Revenue and Customs practice (which may not be binding on Her Majesty’s Revenue and Customs). They do not necessarily apply where the income is deemed for tax purposes to be the income of any other person. They relate only to the position of persons who are the absolute beneficial owners of their Notes. They are not intended to be exhaustive and may not apply to certain classes of persons such as collective investment schemes, financial traders or dealers, or persons connected with the Issuer. Any holders of Notes who are in doubt as to their tax position should consult their professional advisers.

Interest The interest on the Notes should not be treated as arising in the United Kingdom and therefore should not be subject to any withholding or deduction for or on account of United Kingdom income tax. If the interest were treated as arising in the United Kingdom, provided the Notes are and continue to be listed on a recognised stock exchange within the meaning of Section 1005 Income Tax Act 2007, payments of interest by the Issuer (including payments of interest made through paying or collecting agents) would be made without withholding or deduction for or on account of United Kingdom income tax in any event. The Main Securities Market of the Irish Stock Exchange is a recognised stock exchange for these purposes. Securities will be treated as listed on the Irish Stock Exchange if they are listed and admitted to trading on the regulated market of the Irish Stock Exchange. The interest on the Notes should not be treated as having a United Kingdom source and accordingly should not be chargeable to United Kingdom tax unless the Noteholder is resident or ordinarily resident in the United Kingdom for tax purposes or carries on a trade in the United Kingdom through a branch or agency to which the Note is attributable. Persons in the United Kingdom paying interest to or receiving interest on behalf of another person may be required to provide certain information to Her Majesty’s Revenue and Customs regarding the identity of the payee or person entitled to the interest and, in certain circumstances, such information may be exchanged with tax authorities in other countries. A transfer of a Note by a Noteholder who is resident or ordinarily resident in the United Kingdom for tax purposes or who carries on a trade in the United Kingdom through a branch or agency to which the Note is attributable may give rise to a charge to United Kingdom income tax on an amount representing interest on the Note which has accrued since the preceding interest payment date. Holders of Notes within the charge to United Kingdom corporation tax will not be taxed in accordance with the preceding paragraph above but will generally be charged to tax as income in each accounting period by reference to interest which, in accordance with generally accepted accounting practices, is applicable to that period. Under EU Council Directive 2003/48/EC on the taxation of savings income, each EU Member State is required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain other persons in that other Member State; however, for a transitional period, Austria and Luxembourg may, unless they elect otherwise, instead apply a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). On 10 April 2013, the Luxembourg Ministry of France announced that Luxembourg’s transitional period will end with effect from 1 January 2015. A number of non-EU

104 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland). The European Commission has proposed certain amendments to the EU Savings Directive which may, if implemented, amend or broaden the scope of the requirements described above.

Guarantee payments If the Guarantor is required to make payments under a Guarantee, it is possible that any such payment may have to be paid under deduction of United Kingdom income tax (currently at the rate of 20%), subject to the availability of exemptions including any relief available pursuant to the provisions of an applicable double tax treaty.

Disposal (including Redemption) Holders of Notes within the charge to United Kingdom corporation tax For holders of Notes within the charge to United Kingdom corporation tax, the Notes will constitute ‘‘qualifying corporate bonds’’ within Section 117 of the Taxation of Chargeable Gains Act 1992. On a disposal (including redemption) of the Notes, such corporate holders of Notes will normally recognise any gain or loss for United Kingdom corporation tax purposes under the ‘‘loan relationships’’ rules in Part 5 of the Corporation Tax Act 2009. Under these rules, all interest, profits, gains and losses, including exchange gains or losses, measured and recognised in accordance with generally accepted accounting practices, are taxed or relieved as income.

Other United Kingdom Resident holders of Notes A disposal (including redemption) of a Note by a Noteholder who is resident or ordinarily resident for tax purposes in the United Kingdom or who carries on a trade, profession or vocation in the United Kingdom through a United Kingdom branch or agency to which the Note is attributable may give rise to a chargeable gain or an allowable loss for the purposes of the United Kingdom taxation of chargeable gains. In calculating any gain or loss on disposal (including redemption) of a Note, the sterling values of the amounts paid and received for the Notes are compared. Accordingly, a taxable profit can arise even where the US dollar amount received on a disposal (including redemption) is less than or the same as the amount paid for the Note. As mentioned above, a transfer of a Note by a holder resident or ordinarily resident for tax purposes in the United Kingdom or who carries on a trade in the United Kingdom through a United Kingdom branch or agency to which the Note is attributable may give rise to a charge to tax on income in respect of an amount representing interest on the Note which has accrued since the preceding interest payment date. This amount will be taken into account and excluded in determining any capital gain or loss arising on the disposal (including redemption) of the Notes.

Non-United Kingdom Resident holders of Notes Holders of Notes who are not resident or (if an individual) ordinarily resident for tax purposes in the United Kingdom and who do not carry on a trade, profession or vocation in the United Kingdom through a United Kingdom branch or agency, or in the case of a corporate noteholder, a United Kingdom permanent establishment to which the Notes are attributable will not be subject to United Kingdom taxation on any gains realised on the disposal (including redemption) of the Notes.

Certain United States Federal Income Tax Considerations To ensure compliance with Treasury Department Circular 230, prospective investors are hereby notified that: (a) any discussion of United States federal tax issues in this Prospectus is not intended or written to be relied upon, and cannot be relied upon, by prospective investors for the purpose of avoiding penalties that may be imposed on them under the Internal Revenue Code of 1986, as amended (the ‘‘Code’’); (b) such discussion is included herein by the Issuer in connection with the promotion or marketing (within the meaning of Circular 230) by the Issuer of the Notes; and (c) prospective investors should seek advice based on their particular circumstances from an independent tax adviser. The following discussion describes certain US federal income tax (‘‘US tax’’) consequences to you of the acquisition, ownership and disposition of the Notes. This discussion applies to you only if you hold your Notes as capital assets for US tax purposes (generally assets held for investment) and purchase the Notes for cash in the original offering at their issue price, which will equal the first

105 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD price to the public (not including bond houses, brokers or similar persons or organisations acting in their capacity of underwriters, placement agents or wholesalers) at which a substantial amount of the Notes is sold for money. The description is based on the Code, US Treasury regulations issued and proposed under the Code, and administrative and judicial interpretations of the Code and Treasury regulations, each as of the date of this Prospectus. All of these authorities are subject to change, possibly with retroactive effect. This discussion does not address all aspects of US tax that may be relevant to a particular holder of the Notes based on such holder’s particular circumstances. For example, the following discussion does not address all of the US tax consequences of the acquisition, ownership and disposition of the Notes to the following types of US holders: * certain pass-through entities and their investors * partnerships or other entities classified as partnerships for US tax purposes * broker-dealers * insurance companies * tax-exempt organizations * real estate investment trusts * regulated investment companies * certain other financial institutions * dealers in securities or foreign currency * traders in securities that elect to use a mark-to-market method of accounting for their securities holdings * holders whose functional currency is not the US dollar * holders who hold the Notes as part of an integrated investment (including a ‘‘straddle’’) comprised of the Notes and one or more other position. This discussion also does not address US federal alternative minimum tax consequences, and does not describe any tax consequences arising under US federal gift and estate or other federal tax laws, or under the tax law of any state, local or foreign jurisdiction. The US tax consequences to a holder of a Note that is classified as a partnership for U.S. federal income tax purposes may depend on the activity of the partnership and the status of the partner. Prospective purchasers of Notes that are classified as partnerships for U.S. federal income tax purposes are urged to consult their own tax advisers with regard to the application of the US tax laws to their particular situation. You are urged to consult your tax adviser concerning the US tax consequences (including any reporting requirements) to you of acquiring, owning and disposing of the Notes, as well as the application of any state, local, non-US and other tax laws. A‘‘Non-US Holder’’ is a beneficial owner of a Note that for US tax purposes is not a US Holder and is not a partnership. A‘‘US Holder’’ is a beneficial owner of a Note that for US tax purposes is: * a citizen or resident of the United States; * a corporation or other entity taxable as a corporation created or organised in or under the laws of the United States or any State (including the District of Columbia); * an estate if its income is subject to US tax regardless of source; * a trust if (1) a US court can exercise primary supervision over its administration and (2) one or more US persons have the authority to control all of its substantial decisions, or if the trust has elected validly to be treated as a US person.

US Holders Payments of Interest It is expected that the Notes will not be issued with original issue discount. Assuming this is the case, interest on a Note will generally be includible in your income as ordinary interest income when you receive the payment of interest (if you use the cash method of tax accounting), or when it properly accrues (if you use the accrual method of tax accounting). Interest (including any

106 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD payment under a Guarantee) and additional amounts (if any) paid with respect to your Note generally will be income from sources within the United States for foreign tax credit purposes.

Sale or Other Taxable Disposition of the Notes Upon the sale, redemption, retirement or other taxable disposition of a Note, you will recognise gain or loss equal to the difference between the amount realised upon the sale, redemption, retirement or other taxable disposition (less an amount equal to any accrued but unpaid interest that has not been previously included in your income, which will be taxable as interest income) and your tax basis in the Note. Your tax basis in a Note will, in general, be your original purchase price for the Note. Your gain or loss generally will be capital gain or loss and will be long-term capital gain or loss, respectively, if you have held your Note for more than one year at the time of the sale, redemption, retirement or other taxable disposition. Gain or loss recognised by a US Holder on the sale, redemption, retirement or other taxable disposition of a Note will generally be treated as United States source gain or loss. Capital gains of certain non-corporate holders derived with respect to capital assets held for more than one year are eligible for reduced rates of US taxation. The deductibility of capital losses is subject to limitations.

Medicare Surtax US Holders who are individuals, estates or trusts will be required to pay a 3.8% Medicare surtax on all or part of the US Holder’s ‘‘net investment income’’, which includes, among other items, interest on, and capital gains from the sale or other taxable disposition of, the Notes.

Information reporting and backup withholding Information reporting requirements generally will apply with respect to certain payments (including interest) and the proceeds of sales or other dispositions (including a retirement or redemption) of the Notes unless you are an exempt recipient and provided the exemptions are properly established. In addition, backup withholding may apply to such payments and proceeds if a US Holder fails to provide its correct taxpayer identification number and certify that it is exempt from backup withholding. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be credited against a US Holder’s US federal income tax liability (or refunded), provided that the required information is timely provided to the Internal Revenue Service. US Holders should consult their own tax advisers regarding the application of backup withholding in their particular situation, the availability of an exemption from backup withholding and the procedure for obtaining such an exemption, if available.

Non-US Holders Interest Under US federal income tax law, and subject to the discussion below concerning backup withholding and FATCA, no withholding of US federal income tax generally will be required with respect to the payment of interest on a Note owned by a Non-US Holder (or payments with respect thereto under the Guarantee), provided that the interest qualifies as portfolio interest. Interest on a Note owned by a Non-US Holder will qualify as portfolio interest only if (1) such interest is not effectively connected with the conduct of such Non-US Holder’s US trade or business, (2) such Non-US Holder does not actually or constructively own a 10% or greater interest in SABMiller’s combined voting power of all classes of shares entitled to vote for purposes of the Code and the applicable US Treasury regulations, (3) such Non-US Holder is not a controlled foreign corporation that is related to us actually or constructively through stock ownership within the meaning of the Code and the applicable US Treasury regulations (4) such Non-US Holder is not a bank whose receipt of interest on the notes is described in Section 881(c)(3)(A) of the Code, and (5) either (a) such Non-US Holder provides an IRS Form W-8BEN (or other applicable form), and certifies, under penalties of perjury, that it is not a United States person as defined under the Code or (b) such Non-US Holder holds Notes through certain financial intermediaries and the certification requirements of applicable US Treasury regulations are satisfied. A Non-US Holder with interest income that does not qualify as portfolio interest will be subject to a 30% US federal withholding tax unless, under current procedures, it timely delivers (i) a properly completed IRS Form W-8ECI (or successor form) stating that interest paid on its Notes is not

107 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD subject to withholding tax because it is effectively connected to the conduct of the trade or business in the United States (or, in the case of an applicable tax treaty, is not attributable to a US ‘‘permanent establishment’’ or ‘‘fixed base’’) or (ii) a properly completed IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in withholding tax under an applicable income tax treaty. Interest that is effectively connected with a Non-US Holder’s US trade or business (and in the case of an applicable tax treaty, is attributable to a US ‘‘permanent establishment’’ or ‘‘fixed base’’) generally will be taxable on a net basis as if the Non-US Holder were a US Holder. Moreover, a Non-US Holder that is a corporation may be subject to a branch profits tax of 30% (or a lower applicable treaty rate) on such Non-US Holder’s effectively connected earnings and profits.

Sale or Other Disposition of a Note Subject to the discussion below concerning backup withholding, a Non-US Holder will generally not be subject to US federal income tax on any gain realized on the sale, exchange or redemption of a Note unless (l) such gain is effectively connected with the conduct by the Non-US Holder of a trade or business in the United States (or if an income tax treaty applies, is attributable to a US ‘‘permanent establishment’’ or ‘‘fixed base’’) in which case the Non-US Holder will be taxed on a net basis as if the Non-US Holder were a US Holder (and, in the case of a Non-US Holder that is a corporation, branch profits tax may also apply, subject to the provisions of any applicable income tax treaty), or (2) in the case of gain realised by an individual Non-US Holder, the Non-US Holder is present in the United States for 183 days or more in the taxable year of the retirement or disposition and certain other conditions are met, in which case the Non-US Holder generally will be subject to US federal income tax on any gain recognised (unless an applicable income tax treaty provides otherwise).

Information Reporting and Backup Withholding In general a Non-US Holder will not be subject to backup withholding with respect to payments of interest on the Notes or under the Guarantees, provided that the Non-US Holder provides the required certification described above that it is a Non-US Holder. Generally, the amount of interest paid to a Non-US Holder and the amount of tax, if any, withheld in connection with payments on the Notes will be required to be reported yearly to the IRS and to such Non-US Holder. Copies of the US information returns reporting such payments with respect to the Notes and any US tax withholding also may be made available to the tax authorities in the country in which the Non-US Holder resides under the provision of a treaty, agreement or otherwise. In addition, information reporting and, depending on the circumstances, backup withholding, will apply to the proceeds of sale or other disposition (including a retirement or redemption) of the Notes within the United States or conducted through certain US-related financial intermediaries, unless the Non-US Holder certifies to the payor, under penalties of perjury, that such holder is a Non-US Holder or otherwise establishes an exemption. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be allowed as a credit against the Non-US Holder’s US federal income tax liability and may entitle the Non-US Holder to a refund, provided that the required information and appropriate claim for a refund is timely and properly furnished to the Internal Revenue Service. Non-US Holders should consult their tax advisers regarding the application of information reporting and backup withholding in their particular situation, the availability of an exemption from backup withholding and the procedure for obtaining such an exemption, if available.

FATCA Withholding FATCA imposes a withholding tax of 30 per cent. on a portion of certain payments by U.S. entities (such as the Issuer), to persons that fail to meet requirements under FATCA. FATCA imposes withholding on payments of U.S.-source interest (beginning on 1 July 2014) and sales or redemption proceeds (beginning 1 January 2017) to (a) certain holders or beneficial owners of Notes that do not provide certain information requested by the Issuer (or any relevant intermediary), (b) any recipient (including an intermediary) of a payment that is a non-U.S. financial institution and has not (or the relevant financial institution has not) entered into an agreement with the IRS under FATCA and (c) any recipient or intermediary that has not otherwise established an exemption from FATCA.

108 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Neither a holder nor a beneficial owner of Notes will be entitled to any additional amounts in the event such withholding tax is imposed. Certain beneficial owners may be eligible for a refund of amounts withheld as a result of FATCA. Withholding under FATCA would generally not apply to payments on debt obligations outstanding on 1 July 2014. Consequently, FATCA should not apply to the Notes provided they are issued on or before 30 June 2014 and are not significantly modified for US tax purposes thereafter. Additionally, even were the Notes to be significantly modified after 30 June 2014, while the Notes are held in global form FATCA would not affect the amount of any payment made under, or in respect of Notes, by the Issuer or the Guarantor to DTC and it is not expected that FATCA would affect the amount of payments received by Euroclear or Clearstream from DTC. Nevertheless, if the Notes are significantly modified after 30 June 2014, FATCA may affect payments to intermediaries in the payment chain or ultimate payments to investors if an intermediary or investor is generally not entitled to receive payments free of FATCA withholding or fails to provide the payor with any information, forms, other documentation or consents that may be necessary for a payment to be made free of FATCA withholding. The Paying Agent shall be entitled to deduct FATCA withholding tax, and shall have no obligation to gross-up any payment under the Notes or to pay any additional amount as a result of such FATCA withholding tax. FATCA is particularly complex and its application to the Issuer, the Notes and the holders is uncertain at this time. Each holder of Notes should consult its own tax adviser to obtain a more detailed explanation of FATCA and to learn how it might affect such holder in its particular circumstance.

109 c108736pu050 Proof 5: 8.8.13_13:35 B/L Revision: 0 Operator ChoD Plan of Distribution

Pursuant to a purchase agreement dated 6 August 2013 (the ‘‘Purchase Agreement’’), the initial purchasers named below (the ‘‘Initial Purchasers’’) have severally and not jointly agreed with the Issuer and the Guarantor, subject to the satisfaction of certain conditions, to purchase the Notes. The principal amounts of the Notes to be purchased by each of the Initial Purchasers from the Issuer are set forth opposite their names below:

Principal Principal Amount of Amount of Fixed Rate Floating Rate Notes Notes

Citigroup Global Markets Inc...... $86,250,000 $40,250,000 J.P. Morgan Securities LLC ...... $86,250,000 $40,250,000 Mitsubishi UFJ Securities (USA), Inc...... $86,250,000 $40,250,000 Mizuho Securities USA Inc...... $86,250,000 $40,250,000 Barclays Capital Inc...... $67,500,000 $31,500,000 BBVA Securities Inc...... $67,500,000 $31,500,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated ...... $67,500,000 $31,500,000 Morgan Stanley & Co. LLC ...... $67,500,000 $31,500,000 RBS Securities Inc...... $67,500,000 $31,500,000 Santander Investment Securities Inc...... $67,500,000 $31,500,000

Total ...... $750,000,000 $350,000,000

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mitsubishi UFJ Securities (USA), Inc., Mizuho Securities USA Inc., Barclays Capital Inc., BBVA Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, RBS Securities Inc. and Santander Investment Securities Inc. are the Initial Purchasers for the offering. The Purchase Agreement entitles the Initial Purchasers to terminate the issue of the Notes in certain circumstances prior to payment to the Issuer. The Issuer and the Guarantor have agreed to indemnify the Initial Purchasers against certain liabilities in connection with the offer and sale of the Notes and may be required to contribute to payments the Initial Purchasers may be required to make in respect thereof. The Initial Purchasers, or certain of their respective affiliates as selling agents, initially propose to offer the Notes at the offering prices set forth on the cover page hereof. After the initial offering of the Notes, the offering prices may from time to time be varied by the Initial Purchasers. The Issuer and the Guarantor have agreed with the Initial Purchasers that neither it nor any person acting on its behalf will, without the prior written consent of the Initial Purchasers (which consent shall not be unreasonably withheld or delayed), for the period from and including the date of the Purchase Agreement through and including the Closing Date, offer, sell, contract to sell or otherwise dispose of any debt securities (other than short-term debt securities or the Notes) of the Issuer. The Notes are new issues of securities with no established trading market. The Notes are expected to be admitted to trading on the Market. Although the Initial Purchasers have indicated they would make a market in the Notes, they are not obligated to do so and may cease doing so at any time. Accordingly, no assurance can be given as to the liquidity of, or trading market for, the Notes. In connection with the offering of the Notes, Initial Purchasers may over-allot or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail for a limited period after the date of issue of the Notes. However, there may be no obligation on Initial Purchasers to do this. Such stabilising, if commenced, may be discontinued at any time without notice, and must be brought to an end after a limited period. No action has been or will be taken in any jurisdiction that would permit a public offering of the Notes or the possession, circulation or distribution of any material relating to the Issuer in any

110 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD jurisdiction where action for such purpose is required. Accordingly, the Notes may not be offered or sold, directly or indirectly, nor may any offering material or advertisement in connection with the Notes (including this Prospectus and any amendment or supplement hereto) be distributed or published, in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. Certain of the Initial Purchasers and their affiliates have performed and may continue to perform certain investment and commercial banking or financial advisory services for the Issuer and its affiliates from time to time, for which they have received customary fees and commissions, and they expect to provide these services to the Issuer and its affiliates in the future, for which they expect to receive customary fees and commissions. Some of the Initial Purchasers (or their affiliates) are lenders under the Group Syndicated Loan Facilities. See ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations – Net cash from operating activities – External Funding, financing and indebtedness, and Use of Proceeds.’’ In addition, in the ordinary course of their business activities, the Initial Purchasers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer, the Guarantor and/or their affiliates. If any of the Initial Purchasers or their affiliates have a lending relationship with the Issuer, the Guarantor and/or their affiliates, certain of those Initial Purchasers or their affiliates routinely hedge, and certain other of those Initial Purchasers or their affiliates may hedge, their credit exposure to the Issuer and/or the Guarantor consistent with their customary risk management policies. Typically, such Initial Purchasers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in the Issuer’s and/or Guarantor’s securities, including potentially the Notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of the Notes offered hereby. The Initial Purchasers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

United States The Notes have not been and will not be registered under the Securities Act and may not be offered, sold or delivered within the United States or to, or for the account or benefit of, US persons except in certain transactions exempt from the registration requirements of the Securities Act. Accordingly, the Notes are being offered and sold only (i) within the United States to ‘‘qualified institutional buyers’’ as defined in Rule 144A, and (ii) outside the United States to persons other than US persons in reliance on Regulation S. Each Initial Purchaser has represented and agreed with the Issuer that, except as permitted by the Purchase Agreement, it will not offer, sell or deliver the Notes, (i) as part of their distribution at any time or (ii) otherwise until and including the fortieth day after the later of the commencement of the offering and the closing date for the sale of any Notes pursuant to the Purchase Agreement (the ‘‘distribution compliance period’’), within the United States or to, or for the account or benefit of, US persons except in accordance with Rule 144A or Rule 903 of Regulation S. Each Initial Purchaser has also agreed that it, each of its affiliates and each person acting on its or their behalf have complied and will comply with the offering restriction requirements of Regulation S; and that at or prior to confirmation of a sale of Notes (other than a sale pursuant to Rule 144A, if permitted) it will have sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration to which it sells Notes during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, US persons. Each Initial Purchaser has also represented and agreed with the Issuer that no directed selling efforts (as defined in Regulation S) have been made or will be made in the United States by the Initial Purchasers, any of their affiliates or any person acting on behalf of any of the Initial Purchasers or their affiliates with respect to the Notes; and none of it, any of its affiliates, or anyone acting on its or their behalf has solicited offers for, offered or sold the Notes by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in the United States

111 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD in connection with the offering of the Notes or otherwise in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. Terms used in the preceding two paragraphs have the meanings ascribed to them by Regulation S. In addition, until 40 days after the commencement of the offering of the Notes, an offer or sale of Notes within the United States by any dealer (whether or not participating in the offering of the Notes) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A or another exemption from the registration requirements under the Securities Act. The Purchase Agreement also provides that the Initial Purchasers or their affiliates may arrange for the placing of a portion of the Notes to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A.

United Kingdom Each Initial Purchaser has represented and agreed with the Issuer that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the ‘‘FSMA’’)) received by it in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantor; and (b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

Japan The Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the ‘‘Financial Instruments and Exchange Law’’). Accordingly, each of the Initial Purchasers has represented and agreed that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any Notes in Japan or to, or for the benefit of, a resident of Japan or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and other relevant laws and regulations of Japan. As used in this paragraph, ‘‘resident of Japan’’ means any person resident in Japan, including any corporation or other entity organised under the laws of Japan.

Hong Kong Each Initial Purchaser has represented and agreed that: (a) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Notes other than (i) to ‘‘professional investors’’ as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (ii) in other circumstances which do not result in the document being a ‘‘prospectus’’ as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and (b) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Notes, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to ‘‘professional investors’’ as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. WARNING – The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this Prospectus, you should obtain independent professional advice.

112 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD South Africa Each Initial Purchaser has represented and agreed with the Issuer that: (a) this Prospectus will not be registered as a prospectus in terms of the South African Companies Act, 1973, as amended, in South Africa and as such, any offer of the Notes in South Africa may only be made if it shall not be capable of being construed as an offer to the public as envisaged by such Act; and (b) any offer or sale of the Notes shall be subject to compliance with South African exchange control regulations. Singapore Each Initial Purchaser has acknowledged and agreed that this Prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, chapter 289 of Singapore (the ‘‘SFA’’). Accordingly, each Initial Purchaser has represented and agreed that it has not offered or sold any Notes or caused the Notes to be made the subject of an invitation for subscription or purchase nor will it offer or sell the Notes or cause the Notes to be made the subject of an invitation for subscription or purchase, nor has it circulated or distributed nor will it circulate or distribute this Prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Notes, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor under Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1 A) of the SFA, and in accordance with the conditions, specified in Section 275 of the SFA, or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the Notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the Notes under Section 275 of the SFA except: (l) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), or any person pursuant to Section 275(1) of the SFA and Section 275(1A) of the SFA, respectively, and in accordance with the conditions specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; (3) where the transfer is by operation of law; or (4) pursuant to Section 276(7) of the SFA. Other Each Initial Purchaser has represented and agreed with the Issuer that it will, to the best of its knowledge and belief, comply with all relevant laws, regulations and directives in each jurisdiction in which it purchases, offers, sells or delivers Notes or has in its possession or distributes this Prospectus or any amendment or supplement thereto, in so far as such laws, regulations and directives relate to the purchase, offer, sale or delivery of the Notes or the possession or distribution of this Prospectus or any amendment or supplement thereto, and the Issuer shall not have any responsibility therefor. CUSIP Fixed Rate Global Note: Rule 144A: 78573A AE0 Regulation S: U7787R AF8 Floating Rate Global Note: Rule 144A: 78573A AG5 Regulation S: U7787R AG6 ISIN Fixed Rate Global Note: Rule 144A: US78573AAE01 Regulation S: USU7787RAF83 Floating Rate Global Note: Rule 144A: US78573AAG58 Regulation S: USU7787RAG66

113 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD Transfer Restrictions

The following restrictions will apply to the Notes. Prospective investors are advised to consult legal counsel prior to making any offer, sale, resale, pledge or transfer of the Notes offered hereby. The Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, US persons, except pursuant to an effective registration statement or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Notes are being offered and sold only to QIBs in accordance with Rule 144A, and to persons other than US persons (as defined in Rule 902) (‘‘Foreign Purchasers’’) in offshore transactions (as defined in Rule 902) in compliance with Regulation S. In addition, until 40 days after the later of the commencement of the offering and the Closing Date an offer or sale of the Notes within the United States by a dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than pursuant to Rule 144A. Each purchaser of the Notes offered hereunder (other than each of the Initial Purchasers) will be deemed to have represented and agreed as follows (terms used in this section that are defined in Rule 144A or Regulation S are used herein as defined therein): (a) it is not an ‘‘affiliate’’, as defined in Rule 405 and in rule 501(b) of Regulation D under the Securities Act, of the Issuer or the Guarantor or acting on their behalf and that it is purchasing the Notes for its own account or an account with respect to which it exercises sole investment discretion, and it and any such account is a QIB (and is acquiring such Notes for its own account or for the account of another QIB), and is aware that the sale to it is being made in reliance on Rule 144A or is a Foreign Purchaser and is aware that the sale is being made in accordance with Regulation S; (b) it acknowledges and understands that the Notes have not been and will not be registered under the Securities Act or with any securities regulatory authority of any jurisdiction and may not be offered or sold except as set forth below; (c) it acknowledges that none of the Issuer or the Guarantor or any person representing them, has made any representation to it with respect to the offering or sale of any of the Notes, other than the information contained in this Prospectus which has been delivered to it and upon which it is relying in making its investment decision with respect to the Notes; and acknowledges that is has had access to such financial and other information concerning the Issuer and the Guarantor as it has deemed necessary in connection with its decision to purchase any of the Notes; (d) it understands and agrees that if it decides to offer, sell, resell, pledge or otherwise transfer any Notes or any beneficial interests in any Notes prior to the date which is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of the Notes (or any predecessor thereto), it will do so only (A)(i) to the Issuer or the Guarantor or any of their respective Subsidiaries, (ii) to a person whom the seller, and any person acting on its behalf, reasonably believes is a QIB that is purchasing for its own account or for the account of a QIB or QIBs, in a transaction complying with Rule 144A, (iii) in an offshore transaction in compliance with Regulation S or (iv) pursuant to any other available exemption from registration under the Securities Act, or (B) pursuant to an effective registration statement under the Securities Act, and in each of such cases in accordance with any applicable securities law of any state of the United States; (e) it agrees to, and each subsequent holder is required to, notify any purchaser of the Notes from it of the resale restrictions referred to in clause (c) above, if then applicable; (f) if it is a person other than a Foreign Purchaser, it understands and agrees that Notes initially offered to QIBs in reliance on Rule 144A will be represented by the Rule 144A Global Note, and that before any interest in the Rule 144A Global Note may be offered, sold, resold, pledged or otherwise transferred, the transferee will be required to provide the Fiscal Agent with a written certification (in the form set out in the Fiscal and Paying Agency Agreement obtained from the Fiscal Agent) as to compliance with the transfer restriction referred to above); (g) if it is a Foreign Purchaser, it understands and agrees that the Notes initially offered in offshore transactions under Regulation S will be represented by the Regulation S Global Note and that before any interest in the Regulation S Global Note may be offered, sold, resold,

114 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD pledged or otherwise transferred, the transferee will be required to provide the Fiscal Agent with written confirmation (in the form set out in the Fiscal and Paying Agency Agreement) as to compliance with the transfer restrictions above; (h) it understands that the Notes being sold pursuant to Rule 144A will bear a legend to the following effect: NEITHER THIS NOTE NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’) OR OTHER SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF SABMILLER HOLDINGS INC. (THE ‘‘ISSUER’’) AND SABMILLER PLC (THE ‘‘GUARANTOR’’), AND ANY OF THEIR RESPECTIVE SUCCESSORS IN INTEREST, THAT THIS NOTE MAY BE OFFERED, SOLD, ASSIGNED, PLEDGED, ENCUMBERED OR OTHERWISE TRANSFERRED ONLY (1) TO THE ISSUER, THE GUARANTOR OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (‘‘RULE 144A’’), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF ONE OR MORE OTHER QUALIFIED INSTITUTIONAL BUYERS IN ACCORDANCE WITH RULE 144A, (3) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF APPLICABLE), (5) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH SUCH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER AND ANY OF ITS SUCCESSORS IN INTEREST, THAT IT WILL NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD UNDER RULE 144 UNDER THE SECURITIES ACT. (i) it understands that the Notes being sold in reliance on Regulation S will bear a legend to the following effect: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY US PERSON, UNLESS SUCH NOTES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF FORTY DAYS FROM THE LATER OF (i) THE DATE ON WHICH THESE NOTES WERE FIRST OFFERED AND (ii) THE DATE OF ISSUE OF THESE NOTES. (j) it acknowledges that prior to any proposed transfer of Notes or beneficial interests in Global Notes (in each case other than pursuant to an effective registration statement) the holder of such Notes or beneficial interests in Global Notes may be required to provide certifications and other documentation relating to the manner of such transfer and submit such certifications and other documentation as provided in the Notes; and (k) it acknowledges that the Issuer, the Initial Purchasers, the Agents and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that if any of the acknowledgments, representations or agreements deemed to have been made by it by virtue of its purchase of Notes is no longer accurate, it shall promptly notify the Issuer, the Initial Purchasers and the Agents. If it is acquiring any Notes as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account. For further discussion of the requirements (including the presentation of transfer certificates) under the Notes and the Fiscal and Paying Agency Agreement to effect exchanges or transfer of interests in Global Notes, see ‘‘Book-Entry, Delivery and Form’’. No representation can be made as to the availability of any exemptions from the registration requirements under the Securities Act, including Rule 144 for resale of the Notes.

115 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD General Information

Authorisation The issue of the Notes was duly authorised by resolutions of a Committee of the Board of Directors of SABMiller Holdings dated 5 August 2013. Board of Directors of the Issuer The directors of SABMiller Holdings are:

Date Date last appointed to elected/ the board re-elected

Mathew Dunn ...... 01/01/2012 26/04/2013 John Radi ...... 30/06/2008 26/04/2013 Stephen Rogers ...... 30/06/2008 26/04/2013 Garth Saunders...... 01/01/2012 26/04/2013 Jonathan Solesbury...... 01/01/2012 26/04/2013 Jamie Wilson...... 17/10/2011 26/04/2013 The business address of John Radi and Stephen Rogers is 3939 West Highland Blvd., Milwaukee, Wisconsin, 53210, USA. The business address of Jamie Wilson is One Stanhope Gate, London W1K 1AF, United Kingdom. The business address of Jonathan Solesbury is 1450 Brickell Avenue, Ste 3400, Miami, Florida, 33131, USA. The business address of Garth Saunders is 65 Park Lane, Sandown, Sandton 2146, South Africa. The business address of Mathew Dunn is Room 3404-06, 34/F, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong. No director has any potential conflict of interest between his duties to SABMiller Holdings and his private interests or other duties.

Share Capital of the Issuer The issued share capital in SABMiller Holdings is legally and beneficially owned and controlled indirectly by SABMiller, a public limited company incorporated in England and Wales with registered number 3528416. The rights of the shareholder in SABMiller Holdings are contained in the by-laws of SABMiller Holdings and SABMiller Holdings will be managed by its directors in accordance with those by-laws and with the provisions of the laws of the State of Delaware.

Listing Transactions will normally be effected for settlement in US dollars and, under current practice, for delivery on the third business day after the day of the transaction. It is expected that listing on the Official List and admission of the Notes to trading on the Main Securities Market will be granted on or about 9 August 2013 subject only to the issue of the Notes. If the Notes are not issued as mentioned in this Prospectus, the listing and admission to trading of the Notes may be cancelled. The Issuer has agreed to use its reasonable efforts to maintain any such listing and admission to trading of the Notes for so long as any of the Notes remain outstanding. The Issuer believes the listing fee for the listing and admission to trading of the Notes will be approximately c3,190. Arthur Cox Listing Services Limited is acting solely in its capacity as listing agent for the Issuer in relation to the Notes and is not itself seeking admission of the Notes to the Official List of the Irish Stock Exchange or to trading on the regulated market of the Irish Stock Exchange for the purposes of the Prospectus Directive.

Clearing reference numbers The Notes evidenced from time to time by the Rule 144A Global Notes and the Regulation S Notes have been accepted for clearance through DTC’s book-entry system. The CUSIP number for the Fixed Rate Notes represented by the Rule 144A Global Note is 78573A AE0, the CUSIP number for the Floating Rate Notes represented by the Rule 144A Global Note is 78573A AG5. The CUSIP number for the Fixed Rate Notes represented by the Regulation S Global Note is U7787R AF8, the

116 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD CUSIP number for the Floating Rate Notes represented by the Regulation S Global Note is U7787R AG6. The ISIN number for the Fixed Rate Notes represented by the Rule 144A Global Note is US78573AAE01, the ISIN number for the Floating Rate Notes represented by the Rule 144A Global Note is US78573AAG58. The ISIN number for the Fixed Rate Notes represented by the Regulation S Global Note is USU7787RAF83, the ISIN number for the Floating Rate Notes represented by the Regulation S Global Note is USU7787RAG66.

Incorporation, registered office, head office and principal objects The Issuer SABMiller Holdings is a holding company incorporated in the State of Delaware in the United States of America and is an indirectly wholly owned subsidiary of SABMiller. SABMiller Holdings was incorporated on 3 July 2002. The registered office of SABMiller Holdings is care of The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, USA, its telephone number is +1 800 677 3394, and its employer identification number is 51-0439595. The purpose of SABMiller Holdings is to engage in any lawful act or activity for which a corporation may be organised under the General Corporation Law of Delaware, as set forth in its Certificate of Incorporation, which is available for inspection at the registered office address of SABMiller as set forth below.

The Guarantor SABMiller is the holding company of the Group. SABMiller was incorporated and registered in England and Wales with registered number 3528416 on 17 March 1998 as a public limited company under the Companies Act 1985 with the name Blastaway 2000 plc. Its name was changed to South African Breweries plc on 9 December 1998 and to SABMiller plc on 9 July 2002. On 9 February 1999, a certificate to do business was granted to SABMiller under section 117 of the Companies Act. The registered office of SABMiller is at SABMiller House, Church Street West, Woking, Surrey GU21 6HS England and its telephone number is +44 (0) 1483 264000. The head office of SABMiller is at One Stanhope Gate, London W1K 1AF England and its telephone number is +44 (0) 20 7659 0100. Unless otherwise stated or the context otherwise requires, the text in the following paragraphs does not distinguish between the activity and operations of SABMiller or those of its subsidiary undertakings.

Share Capital of the Guarantor As at 31 March 2013, the called up, allotted and fully paid share capital of SABMiller was as follows:

US$ Called-up, allotted and fully paid share capital millions

1,669,731,799 ordinary shares of 10 US cents each (2012: 1,664,323,483)...... 167 50,000 deferred shares of £1.00 each (2011: 50,000)...... —

167

Summary of principal investments Details of SABMiller’s principal investments for the financial years ended 31 March 2013, 2012 and 2011 together with any future investments on which the board of directors have already made firm commitments are set out in ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Expenditure’’.

Principal shareholders SABMiller is not aware of any person who, prior to, or immediately following the publication of this Prospectus, directly or indirectly, jointly or severally, exercises or could exercise control over SABMiller or any arrangement the operation of which may, following the publication of this Prospectus, result in a change of control of SABMiller.

117 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD In so far as is known to SABMiller, as at 26 July 2013 (the latest practicable date prior to the publication of this Prospectus), the following are beneficially interested, directly or indirectly, in 3% or more of SABMiller’s issued voting share capital or could directly or indirectly, jointly or severally exercise control over SABMiller:

As at 26 July 2013 %

Altria Group, Inc...... 26.82 BevCo Limited...... 14.04 Public Investment Corporation...... 3.75 Kulczyk Holding S.A...... 2.99 SABMiller is neither owned nor controlled directly or indirectly by any person.

Financial and Trading Positions and Prospects There has been no significant change in the financial or trading position of SABMiller or the Group as a whole since 31 March 2013. There has been no material adverse change in the prospects of SABMiller or the Group as a whole since 31 March 2013.

Outlook Future trading conditions are expected by Management to remain broadly unchanged, affording opportunities to grow the Group’s categories further, particularly in developing markets. The Group will continue to develop and differentiate its beer and soft drinks brand portfolios, leveraging local insights to bring the right products to each market and capture value. The Group will take price increases selectively and unit input costs are expected by Management to rise in low to mid-single digits in constant currency terms. Focus will be maintained on cost effectiveness, including continued synergy delivery in Australia and expanding the scope of globally-managed procurement. Cash generation will remain a priority. Targeted investments in production capacity, marketing and sales capacity will continue in order to drive growth. For further information about uncertainties, demands, commitments and events that may have a material effect on SABMiller’s prospects for the current financial year, see ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and ‘‘Risk Factors – Risk Factors relating to the Group’’.

Material contracts With the exception of the agreements referred to below, neither SABMiller, nor any member of the Group, has entered into any contract which could result in any Group member being under an obligation or entitlement that is material to the Issuer’s ability to meet its obligations to holders of the Notes in respect of the Notes: (a) on 30 May 2002, SABMiller and Altria entered into a tax matters agreement (the ‘‘Tax Matters Agreement’’) 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 Tax Matters Agreement, subject to certain exceptions; (b) on 18 July 2005, SABMiller entered into an agreement and plan of merger with Racetrack LLC (a subsidiary of SABMiller), BevCo LLC and BevCo Sub LLC (‘‘BevCo Sub’’), a subsidiary of BevCo LLC), under which the parties agreed to merge BevCo Sub with and into Racetrack in consideration for the issue by SABMiller to BevCo LLC of 225,000,000 new ordinary shares in SABMiller. BevCo Sub indirectly owned 71.77% of the outstanding ordinary shares in Bavaria. The new SABMiller shares represented an economic interest of approximately 15.04% in SABMiller; (c) on the completion of the Bavaria Transaction on 12 October 2005, SABMiller and BevCo LLC entered into the BevCo LLC Relationship Agreement to regulate certain aspects of the relationship between SABMiller and BevCo LLC. Under this agreement, BevCo LLC has the

118 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD right to nominate two representatives as non-executive directors of SABMiller, subject to the level of its economic interest in SABMiller. The BevCo LLC Relationship Agreement has no fixed term but ceases to apply if BevCo LLC no longer has the right to nominate any representatives as non-executive directors of SABMiller; (d) also on 12 October 2005, the existing relationship agreement between SABMiller and Altria was amended, pursuant to an Amended and Restated Altria Relationship Agreement, which granted Altria the right to nominate the same number of representatives for appointment as non-executive directors of SABMiller at the same levels of economic interest as BevCo LLC, and ensured a degree of equality of treatment between Altria and BevCo LLC as significant non-portfolio shareholders of SABMiller. Under this agreement, Altria has the right to nominate three representatives as non-executive directors of SABMiller, subject to the level of its economic interest in SABMiller, and any disposals of shares in SABMiller are subject to orderly market arrangements. The Altria Relationship Agreement has no fixed term but ceases to apply if Altria no longer has the right to nominate any representatives as non-executive directors of SABMiller; (e) Group companies are parties to a shareholders’ agreement with China Resources Enterprise, Limited and CR Snow in relation to the holding of shares in the Group’s associate in China. The agreement is CR Snow’s primary operating document and contains understandings and agreements of the parties reflecting the governance and operations of CR Snow. The agreement contains provisions regulating a shareholder’s sale of shares in CR Snow to a third party. The agreement also contains provisions relating to deadlock resolution, confidentiality, non-competition and non-solicitation and other provisions that are customary for an agreement of this nature. The shareholder agreement runs for an indefinite period of time, but can be terminated upon the occurrence of certain events; (f) Group companies are parties to a strategic alliance and joint venture agreement with Castel in relation to their alcoholic brewery, soft drink and mineral water interests in certain countries in Africa. Pursuant to the agreement, the Group transferred a 38% interest in its African holding company to Castel’s holding company in exchange for a 20% interest in Castel. The agreement contains provisions relating to the management of the relevant businesses, deadlock resolution, pre-emptive rights, confidentiality, and other provisions that are customary for an agreement of this nature. With effect from 1 January 2012, the Group and Castel implemented changes to the agreement to provide for the combination of the operational management of the Castel and SABMiller businesses in Nigeria and Angola, with the Nigerian businesses now being managed by SABMiller, and the Angolan businesses now being managed by Castel, to reflect that in future the groups will share, at the strategic alliance level, the aggregate profits and cash flows of their operations in Nigeria and Angola based primarily on the relative contributions of their businesses in each country, and to amend certain other terms of the strategic alliance agreement to provide for improved sharing of best practice and technical expertise, and a more precise methodology for the existing mutual pre-emptive rights over their respective beverage operations in Africa (excluding South Africa and Namibia); (g) on 20 December 2007, SABMiller and Miller entered into the MillerCoors Transaction Agreement with Molson Coors and CBC. Under the terms of the agreement, the parties agreed to contribute to MillerCoors substantially all of their US and Puerto Rico beer and related operations. Pursuant to the MillerCoors Transaction Agreement SABMiller has a 58% economic ownership and a 50% voting interest in MillerCoors and Molson Coors has a 42% economic ownership and a 50% voting interest in MillerCoors. Closing of the MillerCoors Transaction occurred on 1 July 2008. Pursuant to the MillerCoors Transaction Agreement, the parties made customary representations and warranties and gave customary indemnities; (h) on 1 July 2008, SABMiller, Miller, Molson Coors and CBC entered into the MillerCoors LLC Operating Agreement (the ‘‘Operating Agreement’’). The Operating Agreement is MillerCoors’ primary operating document and contains understandings and agreements of the parties reflecting the governance and operations of MillerCoors following the closing of the MillerCoors Transaction. The Operating Agreement contains a list of approval rights reserved solely for the board of MillerCoors, including approval of strategic, operating, integration and synergy plans; material changes to brands; changes to the name or headquarters location of MillerCoors; appointment and removal of the Chief Executive Officer; mergers acquisitions or dispositions; alteration of brand rights including licensing, sales or royalties; and material

119 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD agreements related to intellectual property or trade secrets. The Operating Agreement contains provisions relating to the management of MillerCoors and the appointment of the Chairman, Vice Chairman and senior executives of MillerCoors as well as provisions relating to deadlock resolution, capital structure and pre-emptive rights, confidentiality, non-compete and non-solicitation and other provisions that are customary for an agreement of this nature. Pursuant to the Operating Agreement, each of SABMiller and Molson Coors has agreed not to transfer its respective economic or voting interests in MillerCoors for a period of five years, and certain rights of first refusal will apply to any subsequent assignment of such interests. Both SABMiller and Molson Coors have entered into appropriate contract brewing and service arrangements with MillerCoors; (i) on the completion of the acquisition by SABMiller of the outstanding 28.1 per cent. interest in Kompania Piwowarska SA from Kulczyk on 29 May 2009, SABMiller entered into a shareholding agreement with Kulczyk (the ‘‘Shareholding Agreement’’) to regulate certain aspects of the relationship between SABMiller and Kulczyk. Under the Shareholding Agreement, Kulczyk agreed not to sell any shares in SABMiller for a three year period, subject to certain exceptions including the right to sell up to (i) six million shares during the period from 29 August 2009 to 29 November 2009; (ii) six million shares during the period from 30 November 2009 to 29 May 2010; (iii) 24 million shares during the period from 30 May 2010 to 29 May 2011; and (iv) 24 million shares during the period from 30 May 2011 to 29 May 2012. Any disposals of shares in SABMiller will also be subject to orderly marketing arrangements. The Shareholding Agreement has no fixed term but ceases to apply if Kulczyk no longer holds any SABMiller shares; (j) for a description of the 2003 Miller Bonds, 2003 SABMiller Bonds, 2006 SABMiller Bonds, 2006 Commercial Paper Programme, 2008 SABMiller Bonds, 2008 EMTN Programme and 2009 SABMiller Bonds, 2009 GMTN Programme and 2010 SABMiller Bonds, 2012 SABMiller Holdings Bonds, 2012 Guaranteed Euro Medium Term Note Programme and 2012 SABMiller Holdings GEMTN Bonds, 2012 Domestic Medium Term Note Programme and 2013 SABSA Holdings Limited Bonds, Bavaria COP Bonds, Foster’s Bonds and Group Syndicated Loan Facilities: See ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and capital resources’’; (k) on 21 September 2011, SABMiller and SABMiller Beverage Investments (Pte) Limited entered into a Scheme Implementation Deed with Foster’s under which (as amended on 25 October 2011) SABMiller Beverage Investments (Pte) Limited agreed to pay Foster’s shareholders a total of A$5.40 cash per fully paid share in exchange for the acquisition of all of Foster’s shares, to be implemented by means of a Scheme of Arrangement. The Scheme of Arrangement was approved by Foster’s shareholders on 1 December 2011 and by the Supreme Court of Victoria on 2 December 2011 and the acquisition was completed on 16 December 2011; (l) in June 2011, the Group reached an agreement with CCA to acquire CCA’s remaining 50 per cent. interest in Pacific Beverages after completion of the Foster’s acquisition and granted CCA the right to acquire certain operations of Foster’s, including the Spirits Brands and the Spirits RTD Brands, certain of Foster’s non-alcoholic beverages brands, its beverages businesses in Fiji and Foster’s interest in Samoa Breweries Limited, together with certain assets and trading liabilities attributable to these operations. Following the completion of the Foster’s acquisition, the Group completed the acquisition of CCA’s 50 per cent. interest in Pacific Beverages on 13 January 2012 and, following the receipt of necessary regulatory approvals, the Group completed the disposal to CCA of Foster’s operations in Fiji and Samoa on 7 September 2012 and the disposal to CCA of Foster’s non-alcoholic brands and inventory on 28 September 2012; and (m) in January 2012, SABMiller entered into a definitive transaction agreement with Anadolu Endu¨stri Holding A.S¸., Yazicilar Holding A.S¸. and O¨ zilhan Sinai Yatirim A.S¸. (collectively, the ‘‘Anadolu Group’’) and Anadolu Efes for the establishment of a strategic alliance in Turkey, Russia, the CIS, Central Asia and the Middle East. The strategic alliance was completed on 6 March 2012. Pursuant to the agreement, SABMiller transferred its Russian and Ukrainian beer business to Anadolu Efes in return for a 24 per cent. stake in the enlarged issued share capital of Anadolu Efes. Customary representations, warranties and indemnities were given by the parties. Pursuant to a relationship agreement entered into at completion, the Anadolu Group continues to exercise majority control over Anadolu Efes, while SABMiller is

120 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD represented on the Anadolu Efes Board and on its committees, has customary minority investment protection rights and is represented on the board of the combined business in Russia. In addition, each of SABMiller and the Anadolu Group must provide rights of first offer to the other at fair market value if it wishes to sell any shares in Anadolu Efes.

Litigation Neither SABMiller nor any other Group member is, or has been, engaged in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which SABMiller is aware) during the 12 months preceding the date of this Prospectus, which may have, or have had in the recent past, significant effects on the financial position or profitability of the Group.

Auditors The annual audited accounts of SABMiller for each of the years ended 31 March 2013, 2012 and 2011 were audited by PricewaterhouseCoopers LLP, of 1 Embankment Place, London WC2N 6RH, England. The auditors of SABMiller are PricewaterhouseCoopers LLP, Chartered Accountants and Registered Auditors of 1 Embankment Place, London WC2N 6RH, England.

Documents on display For so long as any Notes shall be outstanding, copies of the following documents (with English translations where necessary) will be available in physical form, during usual business hours on any weekday (Saturdays and public holidays excepted), for inspection at the Registered Office of the Guarantor and the specified offices of each of the Agents: (a) the Group Annual Reports; (b) the Certificate of Incorporation and By-laws of SABMiller Holdings; (c) the Certificate of Incorporation and Articles of Association of SABMiller; (d) this Prospectus together with any supplement to this Prospectus; (e) the Guarantees; and (f) all reports, letters and other documents, balance sheets, valuations and statements by any expert any part of which is extracted or referred to in this Prospectus or any supplement to this Prospectus.

Legal Matters Certain legal matters in connection with the offering of the Notes and the related Guarantees with respect to US Federal and New York State law will be opined upon for the Issuer and the Guarantor by Hogan Lovells International LLP and for the Initial Purchasers by Davis Polk & Wardwell London LLP. Certain legal matters in connection with the Notes and the related Guarantees with respect to English law will be opined upon for the Guarantor by Hogan Lovells International LLP.

121 c108736pu060 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD Index to Financial Statements

The following financial statements have been extracted without modification from the Group Annual Reports. There are references in these extracts to page numbers in the Group Annual Reports which will not correspond to the Prospectus page numbers.

Audited Consolidated Annual Financial Statements of the Group Annual financial statements of the Group as at and for the years ended 31 March 2013 and 2012, prepared in accordance with IFRS, together with the auditors’ report as at and for the year ended 31 March 2013. Annual financial statements of the Group as at and for the years ended 31 March 2012 and 2011, prepared in accordance with IFRS, together with the auditors’ report as at and for the year ended 31 March 2012. Capitalised terms used in the Consolidated Annual Financial Statements included herein may be defined differently than in the remainder of this Prospectus. References in the Consolidated Annual Financial Statements to the ‘‘previous year’’ are to the financial year ended 31 March of the year immediately preceding that indicated in the reference.

F-1 c108736pu070 Proof 5: 8.8.13_13:36 B/L Revision: 0 Operator ChoD Independent auditors’ report to the members of SABMiller plc

We have audited the consolidated fi nancial statements of SABMiller Opinion on other matter prescribed by the plc for the year ended 31 March 2013 which comprise the Companies Act 2006 consolidated income statement, the consolidated statement of In our opinion, the information given in the directors’ report for the

comprehensive income, the consolidated balance sheet, the fi nancial year for which the consolidated fi nancial statements are Overview consolidated cash fl ow statement, the consolidated statement of prepared is consistent with the consolidated fi nancial statements. changes in equity and the related notes. The fi nancial reporting framework that has been applied in their preparation is applicable law Matters on which we are required to report by exception and International Financial Reporting Standards (IFRSs) as adopted We have nothing to report in respect of the following: by the European Union. Under the Companies Act 2006 we are required to report to you if, in Respective responsibilities of directors and auditors our opinion: As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the consolidated • certain disclosures of directors’ remuneration specifi ed by law are Business review fi nancial statements and for being satisfi ed that they give a true and not made; or fair view. Our responsibility is to audit and express an opinion on the • we have not received all the information and explanations we fi nancial statements in accordance with applicable law and require for our audit. International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Under the Listing Rules we are required to review: Standards for Auditors. • the directors’ statement in relation to going concern on page 86; This report, including the opinions, has been prepared for and only for and the company’s members as a body in accordance with Chapter 3 of • the part of the corporate governance report relating to the Part 16 of the Companies Act 2006 and for no other purpose. We do company’s compliance with the nine provisions of the UK not, in giving these opinions, accept or assume responsibility for any Corporate Governance Code specifi ed for our review; and other purpose or to any other person to whom this report is shown or • certain elements of the directors’ remuneration report. into whose hands it may come save where expressly agreed by our prior consent in writing. Other matter We have reported separately on the company fi nancial statements Scope of the audit of the fi nancial statements of SABMiller plc for the year ended 31 March 2013 and on the

An audit involves obtaining evidence about the amounts and information in the directors’ remuneration report that is described Governance disclosures in the fi nancial statements suffi cient to give reasonable as having been audited. assurance that the fi 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 group’s circumstances and have been consistently applied and Richard Hughes (Senior Statutory Auditor) adequately disclosed; the reasonableness of signifi cant accounting for and on behalf of PricewaterhouseCoopers LLP estimates made by the directors; and the overall presentation of the Chartered Accountants and Statutory Auditors fi nancial statements. In addition, we read all the fi nancial and London non-fi nancial information in the SABMiller plc Annual Report to Financial statements identify material inconsistencies with the audited fi nancial statements. 5 June 2013 If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on fi nancial statements In our opinion the consolidated fi nancial statements:

• give a true and fair view of the state of the group’s affairs as at 31 March 2013 and of its profi t and cash fl ows for the year then ended; • 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. Shareholder information

F-2 SABMiller plc Annual Report 2013 – 87 Consolidated income statement for the year ended 31 March

2013 2012 Notes US$m US$m Revenue 2 23,213 21,760 Net operating expenses 3 (19,010) (16,747)

Operating profi t 2 4,203 5,013 Operating profi t before exceptional items 2 4,403 3,987 Exceptional items 4 (200) 1,026

Net fi nance costs 5 (735) (562) Finance costs 5a (1,417) (1,093) Finance income 5b 682 531 Share of post-tax results of associates and joint ventures 2 1,244 1,152

Profi t before taxation 4,712 5,603 Taxation 7 (1,201) (1,126) Profi t for the year 27a 3,511 4,477

Profi t attributable to non-controlling interests 237 256 Profi t attributable to owners of the parent 26a 3,274 4,221 3,511 4,477

Basic earnings per share (US cents) 8 205.9 266.6 Diluted earnings per share (US cents) 8 203.5 263.8

The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.

88 – SABMiller plc Annual Report 2013 F-3 Consolidated statement of comprehensive income for the year ended 31 March

2013 2012 Notes US$m US$m Profi t for the year 3,511 4,477

Other comprehensive loss: Overview Currency translation differences on foreign currency net investments (700) 136 – (Decrease)/increase in foreign currency translation reserve during the year (700) 153 – Recycling of foreign currency translation reserve on disposals – (17)

Net actuarial losses on defi ned benefi t plans 31 (21) (9)

Available for sale investments: – Fair value losses arising during the year 26b (1) – Business review Net investment hedges: – Fair value gains/(losses) arising during the year 26b 63 (1)

Cash fl ow hedges: 26b (5) 6 – Fair value losses arising during the year (8) – – Fair value losses transferred to inventory 8 2 – Fair value (gains)/losses transferred to profi t or loss (5) 4

Tax on items included in other comprehensive loss 7 34 101

Share of associates’ and joint ventures’ other comprehensive loss 13,14 (70) (256) Other comprehensive loss for the year, net of tax (700) (23) Total comprehensive income for the year 2,811 4,454

Attributable to:

Non-controlling interests 233 255 Governance Owners of the parent 2,578 4,199 Total comprehensive income for the year 2,811 4,454

The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements. Financial statements Shareholder information

F-4 SABMiller plc Annual Report 2013 – 89 Consolidated balance sheet at 31 March

2013 20121 Notes US$m US$m Assets Non-current assets Goodwill 10 19,862 20,171 Intangible assets 11 9,635 9,958 Property, plant and equipment 12 9,059 9,162 Investments in joint ventures 13 5,547 5,520 Investments in associates 14 5,416 5,072 Available for sale investments 22 30 Derivative fi nancial instruments 23 732 732 Trade and other receivables 16 144 136 Deferred tax assets 20 71 117 Loan participation deposit 17 100 100 50,588 50,998

Current assets Inventories 15 1,175 1,248 Trade and other receivables 16 2,067 2,204 Current tax assets 159 629 Derivative fi nancial instruments 23 111 24 Available for sale investments – 1 Cash and cash equivalents 17 2,171 745 5,683 4,851 Assets of disposal group classifi ed as held for sale 18a 23 79 5,706 4,930 Total assets 56,294 55,928

Liabilities Current liabilities Derivative fi nancial instruments 23 (34) (40) Borrowings 21 (2,469) (1,062) Trade and other payables 19 (4,004) (4,127) Current tax liabilities (1,460) (1,323) Provisions 24 (558) (704) (8,525) (7,256) Liabilities of disposal group classifi ed as held for sale 18b (1) (7) (8,526) (7,263)

Non-current liabilities Derivative fi nancial instruments 23 (52) (69) Borrowings 21 (16,079) (18,164) Trade and other payables 19 (132) (112) Deferred tax liabilities 20 (3,507) (3,719) Provisions 24 (538) (569) (20,308) (22,633) Total liabilities (28,834) (29,896) Net assets 27,460 26,032

Equity Share capital 25 167 166 Share premium 6,581 6,480 Merger relief reserve 4,586 4,586 Other reserves 26b 1,328 1,978 Retained earnings 26a 13,710 11,863 Total shareholders’ equity 26,372 25,073 Non-controlling interests 1,088 959 Total equity 27,460 26,032

1 As restated (see note 28).

The balance sheet of SABMiller plc is shown on page 167. The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements. The fi nancial statements were authorised for issue by the board of directors on 5 June 2013 and were signed on its behalf by:

Alan Clark Jamie Wilson Chief Executive Chief Financial Offi cer

90 – SABMiller plc Annual Report 2013 F-5 Consolidated cash fl ow statement for the year ended 31 March

2013 2012 Notes US$m US$m Cash fl ows from operating activities

Cash generated from operations 27a 5,554 5,237 Overview Interest received 468 516 Interest paid (1,238) (923) Tax paid (683) (893) Net cash generated from operating activities 27b 4,101 3,937

Cash fl ows from investing activities Purchase of property, plant and equipment (1,335) (1,473)

Proceeds from sale of property, plant and equipment 30 116 Business review Purchase of intangible assets (144) (166) Proceeds from sale of intangible assets 4 – Purchase of available for sale investments – (1) Proceeds from disposal of available for sale investments 5 2 Proceeds from disposal of associates 21 205 Proceeds from disposal of businesses (net of cash disposed) 57 (23) Acquisition of businesses (net of cash acquired) (6) (10,951) Investments in joint ventures (272) (288) Investments in associates (23) (52) Repayment of investments by associates – 14 Dividends received from joint ventures 13 886 896 Dividends received from associates 113 120 Dividends received from other investments 1 1 Net cash used in investing activities (663) (11,600)

Cash fl ows from fi nancing activities Proceeds from the issue of shares 25 102 96 Governance Proceeds from the issue of shares in subsidiaries to non-controlling interests 36 107 Purchase of own shares for share trusts 26a (53) (52) Purchase of shares from non-controlling interests – (27) Proceeds from borrowings 2,318 19,000 Repayment of borrowings (2,878) (10,139) Proceeds from associate in relation to loan participation deposit 17 100 – Capital element of fi nance lease payments (6) (5) Net cash payments on derivative fi nancial instruments (5) (52) Financial statements Dividends paid to shareholders of the parent 9 (1,517) (1,324) Dividends paid to non-controlling interests (131) (109) Net cash (used in)/generated from fi nancing activities (2,034) 7,495

Net cash infl ow/(outfl ow) from operating, investing and fi nancing activities 1,404 (168) Effects of exchange rate changes (51) (39) Net increase/(decrease) in cash and cash equivalents 1,353 (207) Cash and cash equivalents at 1 April 606 813 Cash and cash equivalents at 31 March 27c 1,959 606

The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.

Shareholder information

F-6 SABMiller plc Annual Report 2013 – 91 Consolidated statement of changes in equity for the year ended 31 March

Called up Share Merger Total Non- share premium relief Other Retained shareholders’ controlling Total capital account reserve reserves earnings equity interests equity Notes US$m US$m US$m US$m US$m US$m US$m US$m At 1 April 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 Profi t for the year – – – – 4,221 4,221 256 4,477 Other comprehensive income/(loss) – – – 97 (119) (22) (1) (23) Dividends paid 9 – – – – (1,324) (1,324) (159) (1,483) Issue of SABMiller plc ordinary shares 25 – 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 – – – – – – 84 84 Dilution of non-controlling interests as a result of business combinations 26a – – – – (5) (5) 5 – Payment for purchase of own shares for share trusts 26a – – – – (52) (52) – (52) Buyout of non-controlling interests 26a – – – – (7) (7) (20) (27) Credit entry relating to share-based payments 26a – – – – 158 158 – 158 At 31 March 20121 166 6,480 4,586 1,978 11,863 25,073 959 26,032 Total comprehensive income – – – (650) 3,228 2,578 233 2,811 Profi t for the year – – – – 3,274 3,274 237 3,511 Other comprehensive loss – – – (650) (46) (696) (4) (700) Dividends paid 9 – – – – (1,517) (1,517) (128) (1,645) Issue of SABMiller plc ordinary shares 25 1 101 – – – 102 – 102 Proceeds from the issue of shares in subsidiaries to non-controlling interests – – – – – – 36 36 Non-controlling interests disposed of via business disposal – – – – – – (13) (13) Arising on business combinations – – – – – – 1 1 Payment for purchase of own shares for share trusts 26a – – – – (53) (53) – (53) Credit entry relating to share-based payments 26a – – – – 189 189 – 189 At 31 March 2013 167 6,581 4,586 1,328 13,710 26,372 1,088 27,460

1 As restated (see note 28).

The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.

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 group’s Polish business.

92 – SABMiller plc Annual Report 2013 F-7 Notes to the consolidated fi nancial statements

1. Accounting policies The group has yet to assess the full impact of the following standards and amendments to existing standards mandatory for the group’s The principal accounting policies adopted in the preparation of accounting periods beginning on or after 1 April 2014 or later periods.

the group’s fi nancial statements are set out below. These policies Overview have been consistently applied to all the years presented, unless • Amendment to IAS 32, ‘Offsetting fi nancial instruments asset and otherwise stated. liability’, is effective from 1 January 2014. • IAS 27 (revised), ‘Separate Financial Statements’, is effective from a) Basis of preparation 1 January 2014. The consolidated fi nancial statements of SABMiller plc have been • IAS 28 (revised), ‘Associates and Joint Ventures’, is effective from prepared in accordance with International Financial Reporting 1 January 2014. Standards as adopted by the European Union (IFRSs as adopted • IFRS 9, ‘Financial Instruments’, is effective from 1 January 20151. by the EU), and the Companies Act 2006 applicable to companies • IFRS 10, ‘Consolidated Financial Statements’, is effective from reporting under IFRS. 1 January 2014. Business review • IFRS 11, ‘Joint Arrangements’, is effective from 1 January 2014. The fi nancial statements are prepared under the historical cost • IFRS 12, ‘Disclosures of Interests in Other Entities’ is effective from convention, except for the revaluation to fair value of certain fi nancial 1 January 2014. assets and liabilities, and post-retirement assets and liabilities as described in the accounting policies below. The accounts have 1 Not yet endorsed by the EU. been prepared on a going concern basis. c) Signifi cant judgements and estimates In determining and applying accounting policies, judgement is The preparation of fi nancial statements in conformity with IFRS often required where the choice of specifi c policy, assumption or requires the use of certain critical accounting estimates. It also accounting estimate to be followed could materially affect the requires management to exercise its judgement in the process of reported results or net position of the group, should it later be applying the group’s accounting policies. Actual results could differ determined that a different choice be more appropriate. from those estimates. Management considers the following to be areas of signifi cant b) Recent accounting developments judgement and estimation for the group due to greater complexity (i) New standards, amendments and interpretations of and/or particularly subject to the exercise of judgement: existing standards adopted by the group

There were no standards, interpretations and amendments adopted (i) Impairment reviews Governance by the group since 1 April 2012 which had a signifi cant impact on the Goodwill arising on business combinations is allocated to the relevant group’s consolidated results or fi nancial position. cash generating unit (CGU). Impairment reviews in respect of the relevant CGUs are performed at least annually or more regularly if (ii) New standards, amendments and interpretations of events indicate that this is necessary. Impairment reviews are based existing standards that are not yet effective and have not on future cash fl ows discounted using the weighted average cost of been early adopted by the group capital for the relevant country with terminal values calculated The following standards, interpretations and amendments to existing applying a long-term growth rate. The future cash fl ows which are standards have been published and are mandatory for the group’s based on business forecasts, the long-term growth rates and the accounting periods beginning on or after 1 April 2013 or later periods, Financial statements discount rates used are dependent on management estimates and but which have not been early adopted by the group. judgements. Future events could cause the assumptions used in these impairment reviews to change with a consequent adverse The amendment to IAS 19 will be adopted by the group impact on the results and net position of the group. Details of the retrospectively from 1 April 2013. Under the amended standard, the estimates used in the impairment reviews for the year are set out interest charge on retirement benefi t liabilities and the expected return in note 10. on plan assets will be replaced by a net interest income or expense on net defi ned benefi t assets or liabilities based on high quality (ii) Taxation corporate bond rates. The group estimates the adoption of the The group operates in many countries and is subject to taxes amended IAS 19 would have resulted in a reduction in profi t for the in numerous jurisdictions. Signifi cant judgement is required in year ended 31 March 2013 of approximately US$20 million (after tax). determining the provision for taxes as the tax treatment is often by The change is not expected to have a material impact on the group’s its nature complex, and cannot be fi nally determined until a formal net assets. resolution has been reached with the relevant tax authority which may take several years to conclude. Amounts provided are accrued based The following standards, interpretations and amendments to existing on management’s interpretation of country specifi c tax laws and the standards mandatory for the group’s accounting periods beginning likelihood of settlement. Actual liabilities could differ from the amount on or after 1 April 2013 are not expected to have a material impact provided which could have a consequent adverse impact on the

on the consolidated results of operations or fi nancial position of Shareholder information results and net position of the group. the group. (iii) Pension and post-retirement benefi ts • Amendment to IAS 1, ‘Financial statement presentation’, is effective Pension accounting requires certain assumptions to be made in order from 1 July 2012. to value the group’s pension and post-retirement obligations in the • Amendment to IFRS 7, ‘Financial instruments: Disclosures’, is balance sheet and to determine the amounts to be recognised in the effective from 1 January 2013. income statement and in other comprehensive income in accordance • IFRS 13, ‘Fair Value Measurement’, is effective from 1 January 2013. with IAS 19. The calculations of these obligations and charges are • Annual improvements to IFRS 2009-2011, are effective from based on assumptions determined by management which include 1 January 2013. discount rates, salary and pension infl ation, healthcare cost infl ation, mortality rates and expected long-term rates of return on assets. Details of the assumptions used are set out in note 31. The selection of different assumptions could affect the net position of the group and future results.

F-8 SABMiller plc Annual Report 2013 – 93 Notes to the consolidated fi nancial statements continued

1. Accounting policies continued On the subsequent disposal or termination of a business, the results of the business are included in the group’s results up to the effective (iv) Property, plant and equipment date of disposal. The profi t or loss on disposal or termination is The determination of the useful economic life and residual values of calculated after charging the amount of any related goodwill to the property, plant and equipment is subject to management estimation. extent that it has not previously been taken to the income statement. The group regularly reviews all of its depreciation rates and residual values to take account of any changes in circumstances, and any Intra-group balances, and any unrealised gains and losses or income changes that could affect prospective depreciation charges and and expenses arising from intra-group transactions, are eliminated in asset carrying values. preparing the consolidated fi nancial statements. Unrealised losses are eliminated unless the transaction provides evidence of an impairment (v) Business combinations of the asset transferred. On the acquisition of a company or business, a determination of the fair value of the assets acquired and liabilities assumed, and the Some of the company’s subsidiaries have a local statutory balance useful life of intangible assets and property, plant and equipment sheet date of 31 December. These are consolidated using acquired is performed, which requires the application of management management prepared information on a basis coterminous with judgement. Future events could cause the assumptions used by the the company’s balance sheet date. group to change which could have a signifi cant impact on the results and net position of the group. (ii) Associates Associates are entities in which the group has a long-term interest (vi) Exceptional items and over which the group has directly or indirectly signifi cant Exceptional items are expense or income items recorded in a period infl uence, where signifi cant infl uence is the ability to infl uence which have been determined by management as being material by the fi nancial and operating policies of the entity. their size or incidence and are presented separately within the results of the group. The determination of which items are disclosed as The associate, Distell Group Ltd, has a statutory balance sheet date exceptional items will affect the presentation of profi t measures of 30 June. In respect of each year ending 31 March, this company including EBITA and adjusted earnings per share, and requires a is included based on fi nancial statements drawn up to the previous degree of judgement. Details relating to exceptional items reported 31 December, but taking into account any changes in the subsequent during the year are set out in note 4. period from 1 January to 31 March that would materially affect the results. All other associates are included on a coterminous basis. d) Segmental reporting Operating segments refl ect the management structure of the group (iii) Joint ventures and the way performance is evaluated and resources allocated based Joint ventures are contractual arrangements which the group has on group revenue and EBITA by the group’s chief operating decision entered into with one or more parties to undertake an economic maker, defi ned as the executive directors. The group is focused activity that is subject to joint control. Joint control is the contractually geographically, and while not meeting the defi nition of reportable agreed sharing of control over an economic activity, and exists only segments, the group reports separately as segments South Africa: when the strategic, fi nancial and operating decisions relating to the Hotels and Gaming and Corporate as this provides useful additional activity require the unanimous consent of the parties sharing the information. control. e) Basis of consolidation The group’s share of the recognised income and expenses of SABMiller plc (the company) is a public limited company incorporated associates and joint ventures are accounted for using the equity in Great Britain and registered in England and Wales. The method from the date signifi cant infl uence or joint control commences consolidated fi nancial statements include the fi nancial information to the date it ceases based on present ownership interests. of the subsidiary, associate and joint venture entities owned by the company. The group recognises its share of associates’ and joint ventures’ post-tax results as a one line entry before profi t before taxation in (i) Subsidiaries the income statement and its share of associates’ and joint ventures’ Subsidiaries are entities controlled by the company, where control is equity movements as a one line entry under other comprehensive the power directly or indirectly to govern the fi nancial and operating income in the statement of comprehensive income. policies of the entity so as to obtain benefi t from its activities, regardless of whether this power is actually exercised. Where the When the group’s interest in an associate or joint venture has been company’s interest in subsidiaries is less than 100%, the share reduced to nil because the group’s share of losses exceeds its attributable to outside shareholders is refl ected in non-controlling interest in the associate or joint venture, the group only provides for interests. Subsidiaries are included in the fi nancial statements from additional losses to the extent that it has incurred legal or constructive the date control commences until the date control ceases. obligations to fund such losses, or make payments on behalf of the associate or joint venture. Where the investment in an associate or Control is presumed to exist when the group owns, directly or joint venture is disposed, the investment ceases to be equity accounted. indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly (iv) Transactions with non-controlling interests demonstrated that such ownership does not constitute control. Transactions with non-controlling interests are treated as transactions Control also exists where the group has the ability to direct or with equity owners of the group. For purchases from non-controlling dominate decision-making in an entity, regardless of whether interests, the difference between any consideration paid and the this power is actually exercised. 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 is no loss of control.

94 – SABMiller plc Annual Report 2013 F-9 1. Accounting policies continued (ii) Transactions and balances The fi nancial statements for each group company have been (v) Reduction in interests prepared on the basis that transactions in foreign currencies are

When the group ceases to have control, joint control or signifi cant recorded in their functional currency at the rate of exchange ruling at Overview infl uence, any retained interest in the entity is remeasured to its fair the date of the transaction. Monetary items denominated in foreign value, with the change in carrying amount recognised in profi t or loss. currencies are retranslated at the rate of exchange ruling at the The fair value is the initial carrying amount for the purposes of balance sheet date with the resultant translation differences being subsequently accounting for the retained interest as an associate, included in operating profi t in the income statement other than those joint venture or fi nancial asset. In addition, certain amounts previously arising on fi nancial assets and liabilities which are recorded within net recognised in other comprehensive income in respect of that entity fi nance costs and those which are deferred in equity as qualifying are accounted for as if the group had directly disposed of the related cash fl ow hedges and qualifying net investment hedges. Translation assets or liabilities. This may mean that certain amounts previously differences on non-monetary assets such as equity investments recognised in other comprehensive income are reclassifi ed to profi t classifi ed as available for sale assets are included in other Business review or loss. comprehensive income.

If the ownership interest in an associate is reduced but signifi cant (iii) Overseas subsidiaries, associates and joint ventures infl uence is retained, or if the ownership interest in a joint venture is One-off items in the income and cash fl ow statements of overseas reduced but joint control is retained, only the proportionate share of subsidiaries, associates and joint ventures expressed in currencies the carrying amount of the investment and of the amounts previously other than the US dollar are translated to US dollars at the rates of recognised in other comprehensive income are reclassifi ed to profi t exchange prevailing on the day of the transaction. All other items are or loss where appropriate. translated at weighted average rates of exchange for the relevant reporting period. Assets and liabilities of these undertakings are f) Foreign exchange translated at closing rates of exchange at each balance sheet date. (i) Foreign exchange translation All translation exchange differences arising on the retranslation of Items included in the fi nancial statements of each of the group’s opening net assets together with differences between income entities are measured using the currency of the primary economic statements translated at average and closing rates are recognised environment in which the entity operates (the functional currency). as a separate component of equity. For these purposes net assets The consolidated fi nancial statements are presented in US dollars include loans between group companies that form part of the net which is the group’s presentational currency. The key exchange investment, for which settlement is neither planned nor likely to occur

rates to the US dollar used in preparing the consolidated fi nancial in the foreseeable future. When a foreign operation is disposed of, any Governance statements were as follows: related exchange differences in equity are reclassifi ed to the income Year ended Year ended statement as part of the gain or loss on disposal. 31 March 2013 31 March 2012 Average rate Goodwill and fair value adjustments arising on the acquisition of a Australian dollar (AUD) 0.97 0.95 foreign entity are treated as assets and liabilities of the foreign entity South African rand (ZAR) 8.51 7.48 and translated at the closing rate. Colombian peso (COP) 1,796 1,831 Euro (€) 0.78 0.72 (iv) Hyperinfl ationary economies Czech koruna (CZK) 19.65 17.65 In hyperinfl ationary economies, when translating the results of Financial statements Peruvian nuevo sol (PEN) 2.61 2.73 operations into US dollars, adjustments are made to local currency Polish zloty (PLN) 3.26 2.99 denominated non-monetary assets, liabilities, income statement and Turkish lira (TRY) 1.80 1.73 equity accounts to refl ect the changes in purchasing power. South Sudan is considered to be a hyperinfl ationary economy in the year Closing rate ended 31 March 2013. The effect of infl ation accounting in South Australian dollar (AUD) 0.96 0.97 Sudan for the year ended 31 March 2013 was not material. South African rand (ZAR) 9.24 7.67 Colombian peso (COP) 1,832 1,792 g) Business combinations Euro (€) 0.78 0.75 (i) Subsidiaries Czech koruna (CZK) 20.07 18.52 The acquisition method is used to account for business Peruvian nuevo sol (PEN) 2.59 2.67 combinations. The identifi able net assets (including intangibles) are Polish zloty (PLN) 3.26 3.13 incorporated into the fi nancial statements on the basis of their fair Turkish lira (TRY) 1.81 1.78 value from the effective date of control, and the results of subsidiary undertakings acquired during the fi nancial year are included in the group’s results from that date. The average exchange rates have been calculated based on the average of the exchange rates during the relevant year which have

On the acquisition of a company or business, fair values refl ecting Shareholder information been weighted according to the phasing of revenue of the group’s conditions at the date of acquisition are attributed to the identifi able businesses. assets (including intangibles), liabilities and contingent liabilities acquired. Fair values of these assets and liabilities are determined by reference to market values, where available, or by reference to the current price at which similar assets could be acquired or similar obligations entered into, or by discounting expected future cash fl ows to present value, using either market rates or the risk-free rates and risk-adjusted expected future cash fl ows.

F-10 SABMiller plc Annual Report 2013 – 95 Notes to the consolidated fi nancial statements continued

1. Accounting policies continued Intangible assets with fi nite lives are amortised over their estimated useful economic lives, and only tested for impairment where there The consideration transferred is measured as the fair value of the is a triggering event. The group regularly reviews all of its amortisation assets given, equity instruments issued and liabilities incurred or rates and residual values to take account of any changes in assumed at the date of the acquisition, and also includes the group’s circumstances. The directors’ assessment of the useful life of estimate of the fair value of any deferred consideration payable. intangible assets is based on the nature of the asset acquired, the Acquisition-related costs are expensed as incurred. Where the durability of the products to which the asset attaches and the business combination is achieved in stages and results in a change in expected future impact of competition on the business. control, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the (i) Brands acquisition date through profi t or loss. Where the business Brands are recognised as an intangible asset where the brand has combination agreement provides for an adjustment to the cost that a long-term value. Acquired brands are only recognised where title is contingent on future events, the consideration transferred includes is clear or the brand could be sold separately from the rest of the the fair value of any asset or liability resulting from a contingent business and the earnings attributable to it are separately identifi able. consideration arrangement. On an acquisition by acquisition basis, the group recognises any non-controlling interest in the acquiree Acquired brands are amortised. In respect of brands currently held either at fair value or at the non-controlling interest’s proportionate the amortisation period is 10 to 40 years, being the period for which share of the acquiree’s net assets. the group has exclusive rights to those brands, up to a maximum of 40 years. (ii) Associates and joint ventures On acquisition the investment in associates and joint ventures is (ii) Contract brewing and other licences recognised as part recorded initially at cost. Subsequently the carrying amount is of a business combination increased or decreased to recognise the group’s share of the Contractual arrangements for contract brewing and competitor associates’ and joint ventures’ income and expenses after the licensing arrangements are recognised as an intangible asset at date of acquisition. a fair value representing the remaining contractual period with an assumption about the expectation that such a contract will be Fair values refl ecting conditions at the date of acquisition are renewed, together with a valuation of this extension. attributed to the group’s share of identifi able assets (including intangibles), liabilities and contingent liabilities acquired. The Acquired licences or contracts are amortised. In respect of licences consideration transferred is measured as the fair value of the assets or contracts currently held, the amortisation period is the period for given, equity instruments issued and liabilities incurred or assumed which the group has exclusive rights to these assets or income at the date of the acquisition, and also includes the group’s estimate streams. of the fair value of any deferred consideration payable. (iii) Customer lists and distributor relationships recognised The date signifi cant infl uence or joint control commences is not as part of a business combination necessarily the same as the closing date or any other date named The fair value of businesses acquired may include customer lists and in the contract. distributor relationships. These are recognised as intangible assets and are calculated by discounting the future revenue stream (iii) Goodwill attributable to these lists or relationships. Goodwill arising on consolidation represents the excess of the consideration transferred, the amount of any non-controlling interest Acquired customer lists or distributor relationships are amortised. in the acquiree and the acquisition-date fair value of any previous In respect of contracts currently held, the amortisation period is the equity interest in the acquiree over the fair value of the identifi able period for which the group has the benefi t of these assets. assets (including intangibles), liabilities and contingent liabilities of the acquired entity at the date of acquisition. Where the fair value of the (iv) Computer software group’s share of identifi able net assets acquired exceeds the fair value Where computer software is not an integral part of a related item of the consideration, the difference is recognised immediately in the of property, plant and equipment, the software is capitalised as an income statement. intangible asset.

Goodwill is stated at cost less impairment losses and is reviewed Acquired computer software licences are capitalised on the basis for impairment on an annual basis. Any impairment identifi ed is of the costs incurred to acquire and bring them to use. Direct costs recognised immediately in the income statement and is not reversed. associated with the production of identifi able and unique internally generated software products controlled by the group that will The carrying amount of goodwill in respect of associates and joint probably generate economic benefi ts exceeding costs beyond one ventures is included in the carrying value of the investment in the year are capitalised. Direct costs include software development associate or joint venture. employment costs (including those of contractors used), capitalised interest and an appropriate portion of overheads. Capitalised h) Intangible assets computer software, licence and development costs are amortised Intangible assets are stated at cost less accumulated amortisation over their useful economic lives of between three and eight years. on a straight-line basis (if applicable) and impairment losses. Cost is usually determined as the amount paid by the group, unless the asset Internally generated costs associated with maintaining computer has been acquired as part of a business combination. Intangible software programmes are expensed as incurred. assets acquired as part of a business combination are recognised at their 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 computer software and applied development costs referred to under computer software and research and development below.

96 – SABMiller plc Annual Report 2013 F-11 1. Accounting policies continued (iv) Depreciation No depreciation is provided on freehold land or assets in the course (v) Research and development of construction. In respect of all other property, plant and equipment,

Research and general development expenditure is written off in the depreciation is provided on a straight-line basis at rates calculated to Overview period in which it is incurred. write off the cost, less the estimated residual value, of each asset over its expected useful life as follows: Certain applied development costs are only capitalised as internally generated intangible assets where there is a clearly defi ned project, Freehold buildings 20 – 50 years separately identifi able expenditure, an outcome assessed with Leasehold buildings Shorter of the lease term reasonable certainty (in terms of feasibility and commerciality), or 50 years expected revenues exceed expected costs and the group has the Plant, vehicles and systems 2 – 30 years resources to complete the task. Such assets are amortised on a Returnable containers straight-line basis over their useful lives once the project is complete. (non-returnable containers Business review are recorded as inventory) 1 – 14 years i) Property, plant and equipment Assets held under fi nance leases Lower of the lease term or Property, plant and equipment are stated at cost net of accumulated life of the asset depreciation and any impairment losses. The group regularly reviews all of its depreciation rates and residual Cost includes expenditure that is directly attributable to the values to take account of any changes in circumstances. When acquisition of the assets. Subsequent costs are included in the setting useful economic lives, the principal factors the group takes asset’s carrying value or recognised as a separate asset as into account are the expected rate of technological developments, appropriate, only when it is probable that future economic benefi ts expected market requirements for the equipment and the intensity associated with the specifi c asset will fl ow to the group and the cost at which the assets are expected to be used. can be measured reliably. Repairs and maintenance costs are charged to the income statement during the fi nancial period in The profi t or loss on the disposal of an asset is the difference which they are incurred. between the disposal proceeds and the net book amount.

(i) Assets in the course of construction (v) Capitalisation of borrowing costs Assets in the course of construction are carried at cost less any Financing costs incurred, before tax, on major capital projects during

impairment loss. Cost includes professional fees and for qualifying the period of development or construction that necessarily take a Governance assets certain borrowing costs as determined below. When these substantial period of time to be developed for their intended use, assets are ready for their intended use, they are transferred into the are capitalised up to the time of completion of the project. appropriate category. At this point, depreciation commences on the same basis as on other property, plant and equipment. j) Advance payments made to customers (principally hotels, restaurants, bars and clubs) (ii) Assets held under fi nance leases Advance payments made to customers are conditional on the Assets held under fi nance leases which result in the group bearing achievement of contracted sales targets or marketing commitments. substantially all the risks and rewards incidental to ownership are The group records such payments as prepayments initially at fair capitalised as property, plant and equipment. Finance lease assets value and amortises them in the income statement over the relevant Financial statements are initially recognised at an amount equal to the lower of their fair period to which the customer commitment is made (typically three to value and the present value of the minimum lease payments at fi ve years). These prepayments are recorded net of any impairment inception of the lease, then depreciated over the lower of the lease losses. term or their useful lives. The capital element of future obligations under the leases is included as a liability in the balance sheet Where there is a volume target the amortisation of the advance is classifi ed, as appropriate, as a current or non-current liability. The included in sales discounts as a reduction to revenue and where there interest element of the lease obligations is charged to the income are specifi c marketing activities/commitments the amortisation is statement over the period of the lease term to refl ect a constant included as an operating expense. The amounts capitalised are rate of interest on the remaining balance of the obligation for each reassessed annually for achievement of targets and are impaired fi nancial period. where there is objective evidence that the targets will not be achieved.

(iii) Returnable containers Assets held at customer premises are included within property, plant Returnable containers in circulation are recorded within property, and equipment and are depreciated in line with group policies on plant and equipment at cost net of accumulated depreciation less similar assets. any impairment loss. k) Inventories

Depreciation of returnable bottles and containers is recorded to write Inventories are stated at the lower of cost incurred in bringing each Shareholder information the containers off over the course of their economic life. This is product to its present location and condition, and net realisable value, typically undertaken in a two stage process: as follows:

• The excess over deposit value is written down over a period of • Raw materials, consumables and goods for resale: Purchase cost 1 to 10 years. net of discounts and rebates on a fi rst-in fi rst-out basis (FIFO). • Provisions are made against the deposit values for breakages and • Finished goods and work in progress: Raw material cost plus direct losses in trade together with a design obsolescence provision held costs and a proportion of manufacturing overhead expenses on a to write off the deposit value over the expected container design FIFO basis. period – which is a period of no more than 14 years from the inception of a container design. This period is shortened where Net realisable value is based on estimated selling price less further appropriate by reference to market dynamics and the ability of the costs expected to be incurred to completion and disposal. Costs of entity to use containers for different brands. inventories include the transfer from equity of any gains or losses on matured qualifying cash fl ow hedges of purchases of raw materials.

F-12 SABMiller plc Annual Report 2013 – 97 Notes to the consolidated fi nancial statements continued

1. Accounting policies continued Derivative fi nancial assets and liabilities are analysed between current and non-current assets and liabilities on the face of the balance l) Financial assets and fi nancial liabilities sheet, depending on when they are expected to mature. Financial assets and fi nancial liabilities are initially recorded at fair value (plus any directly attributable transaction costs, except in the For derivatives that have not been designated to a hedging case of those classifi ed at fair value through profi t or loss). For those relationship, all fair value movements are recognised immediately in fi nancial instruments that are not subsequently held at fair value, the the income statement. (See note x for the group’s accounting policy group assesses whether there is any objective evidence of on hedge accounting). impairment at each balance sheet date. (ii) Loans and receivables Financial assets are recognised when the group has rights or other Loans and receivables are non-derivative fi nancial assets with fi xed or access to economic benefi ts. Such assets consist of cash, equity determinable payments that are not quoted on an active market. They instruments, a contractual right to receive cash or another fi nancial arise when the group provides money, goods or services directly to a asset, or a contractual right to exchange fi nancial instruments with debtor with no intention of trading the receivable. They are included in another entity on potentially favourable terms. Financial assets are current assets, except for maturities of greater than 12 months after derecognised when the right to receive cash fl ows from the asset the balance sheet date which are classifi ed as non-current assets. have expired or have been transferred and the group has transferred Loans and receivables are initially recognised at fair value including substantially all risks and rewards of ownership. originating fees and transaction costs, and subsequently measured at amortised cost using the effective interest method less provision Financial liabilities are recognised when there is an obligation to for impairment. Loans and receivables include trade receivables, transfer benefi ts and that obligation is a contractual liability to deliver amounts owed by associates, amounts owed by joint ventures – cash or another fi nancial asset or to exchange fi nancial instruments trade, accrued income and cash and cash equivalents. with another entity on potentially unfavourable terms. Financial liabilities are derecognised when they are extinguished, that is a. Trade receivables discharged, cancelled or expired. Trade receivables are initially recognised at fair value and subsequently measured at amortised cost less provision If a legally enforceable right exists to set off recognised amounts of for impairment. fi nancial assets and liabilities, which are in determinable monetary amounts, and there is the intention to settle net, the relevant fi nancial A provision for impairment of trade receivables is established when assets and liabilities are offset. 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 Interest costs are charged to the income statement in the year in of the provision is the difference between the asset’s carrying value which they accrue. Premiums or discounts arising from the difference and the present value of the estimated future cash fl ows discounted between the net proceeds of fi nancial instruments purchased or at the original effective interest rate. This provision is recognised in the issued and the amounts receivable or repayable at maturity are income statement. included in the effective interest calculation and taken to net fi nance costs over the life of the instrument. b. Cash and cash equivalents In the consolidated balance sheet, cash and cash equivalents There are four categories of fi nancial assets and fi nancial liabilities. includes cash in hand, bank deposits repayable on demand and other These are described as follows: short-term highly liquid investments with original maturities of three months or less. In the consolidated cash fl ow statement, cash and (i) Financial assets and fi nancial liabilities at fair value cash equivalents also includes bank overdrafts which are shown through profi t or loss within borrowings in current liabilities on the balance sheet. Financial assets and fi nancial liabilities at fair value through profi t or loss include derivative assets and derivative liabilities not designated (iii) Available for sale investments as effective hedging instruments. Available for sale investments are non-derivative fi nancial assets that are either designated in this category or not classifi ed as fi nancial All gains or losses arising from changes in the fair value of fi nancial assets at fair value through profi t or loss, or loans and receivables. assets or fi nancial liabilities within this category are recognised in Investments in this category are included in non-current assets unless the income statement. management intends to dispose of the investment within 12 months of the balance sheet date. They are initially recognised at fair value a. Derivative fi nancial assets and fi nancial liabilities plus transaction costs and are subsequently remeasured at fair value Derivative fi nancial assets and fi nancial liabilities are fi nancial and tested for impairment. Gains and losses arising from changes in instruments whose value changes in response to an underlying fair value including any related foreign exchange movements are variable, require little or no initial investment and are settled in recognised in other comprehensive income. On disposal or the future. impairment of available for sale investments, any gains or losses in other comprehensive income are reclassifi ed to the income statement. These include derivatives embedded in host contracts. Such embedded derivatives need not be accounted for separately if Purchases and sales of investments are recognised on the date on the host contract is already fair valued; if it is not considered as a which the group commits to purchase or sell the asset. Investments derivative if it was freestanding; or if it can be demonstrated that are derecognised when the rights to receive cash fl ows from the it is closely related to the host contract. There are certain currency investments have expired or have been transferred and the group has exemptions which the group has applied to these rules which limit the transferred substantially all risks and rewards of ownership. need 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.

98 – SABMiller plc Annual Report 2013 F-13 1. Accounting policies continued Goodwill is tested annually for impairment. Assets subject to amortisation are reviewed for impairment if circumstances or (iv) Financial liabilities held at amortised cost events change to indicate that the carrying value may not be

Financial liabilities held at amortised cost include trade payables, fully recoverable. Overview accruals, amounts owed to associates, amounts owed to joint ventures – trade, other payables and borrowings. n) Non-current assets (or disposal groups) held for sale Non-current assets and all assets and liabilities classifi ed as held for a. Trade payables sale are measured at the lower of carrying value and fair value less Trade payables are initially recognised at fair value and subsequently costs to sell. measured at amortised cost using the effective interest method. Trade payables are analysed between current and non-current Such assets are classifi ed as held for resale if their carrying amount liabilities on the face of the balance sheet, depending on when the will be recovered through a sale transaction rather than through obligation to settle will be realised. continued use. This condition is regarded as met only when a sale is Business review highly probable, the asset or disposal group is available for immediate b. Borrowings sale in its present condition and when management is committed to Borrowings are recognised initially at fair value, net of transaction the sale which is expected to qualify for recognition as a completed costs and are subsequently stated at amortised cost and include sale within one year from date of classifi cation. accrued interest and prepaid interest. Borrowings are classifi ed as current liabilities unless the group has an unconditional right to defer o) Provisions settlement of the liability for at least 12 months from the balance sheet Provisions are recognised when there is a present obligation, whether date. Borrowings classifi ed as hedged items are subject to hedge legal or constructive, as a result of a past event for which it is accounting requirements (see note x). Bank overdrafts are shown probable that a transfer of economic benefi ts will be required to settle within borrowings in current liabilities and are included within cash the obligation and a reliable estimate can be made of the amount of and cash equivalents on the face of the cash fl ow statement as they the obligation. Such provisions are calculated on a discounted basis form an integral part of the group’s cash management. where the effect is material to the original undiscounted provision. The carrying amount of the provision increases in each period to refl ect m) Impairment the passage of time and the unwinding of the discount and the This policy covers all assets except inventories (see note k), fi nancial movement is recognised in the income statement within net assets (see note l), non-current assets classifi ed as held for sale (see fi nance costs.

note n), and deferred tax assets (see note u). Governance Restructuring provisions comprise lease termination penalties and Impairment reviews are performed by comparing the carrying value employee termination payments. Provisions are not recognised for of the non-current asset to its recoverable amount, being the higher future operating losses. Provisions are recognised for onerous of the fair value less costs to sell and value in use. The fair value less contracts where the unavoidable cost exceeds the expected benefi t. 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 p) Share capital the future post-tax cash fl ows generated from continuing use of the Ordinary shares are classifi ed as equity. Incremental costs directly cash generating unit (CGU) using a post-tax discount rate, as this attributable to the issue of new shares or options are shown in equity closely approximates to applying pre-tax discount rates to pre-tax as a deduction, net of tax, from the proceeds. Financial statements cash fl ows. Where a potential impairment is identifi ed using post-tax cash fl ows and post-tax discount rates, the impairment review is q) Investments in own shares (treasury and shares held by reperformed on a pre-tax basis in order to determine the impairment employee benefi t trusts) loss to be recorded. Shares held by employee share ownership plans, employee benefi t trusts and in treasury are treated as a deduction from equity until the Where the asset does not generate cash fl ows that are independent shares are cancelled, reissued, or disposed. from the cash fl ows of other assets, the group estimates the recoverable amount of the CGU to which the asset belongs. For the Purchases of such shares are classifi ed in the cash fl ow statement as purpose of conducting impairment reviews, CGUs are considered to a purchase of own shares for share trusts or purchase of own shares be groups of assets that have separately identifi able cash fl ows. They for treasury within net cash from fi nancing activities. also include those assets and liabilities directly involved in producing the income and a suitable proportion of those used to produce more Where such shares are subsequently sold or reissued, any than one income stream. consideration received, net of any directly attributable incremental costs and related tax effects, is included in equity attributable to the An impairment loss is held fi rstly against any specifi cally impaired company’s equity shareholders. assets. Where an impairment is recognised against a CGU, the

impairment is fi rst taken against goodwill balances and if there is a r) Revenue recognition Shareholder information remaining loss it is set against the remaining intangible and tangible (i) Sale of goods and services assets on a pro-rata basis. Revenue represents the fair value of consideration received or receivable for goods and services provided to third parties and is Should circumstances or events change and give rise to a reversal of recognised when the risks and rewards of ownership are substantially a previous impairment loss, the reversal is recognised in the income transferred. statement 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 The group presents revenue gross of excise duties because unlike is restricted to the amount that it would have been had the original value added tax, excise is not directly related to the value of sales. It is impairment not occurred. Impairment losses in respect of goodwill not generally recognised as a separate item on invoices, increases in are irreversible. 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 refl ects it as a production cost. Consequently, any excise that is recovered in the sale price is included in revenue.

F-14 SABMiller plc Annual Report 2013 – 99 Notes to the consolidated fi nancial statements continued

1. Accounting policies continued Deferred tax is provided in full using the liability method, in respect of all temporary differences arising between the tax bases of assets and Revenue excludes value added tax. It is stated net of price discounts, liabilities and their carrying values in the consolidated fi nancial promotional discounts, settlement discounts and after an appropriate statements, except where the temporary difference arises from amount has been provided to cover the sales value of credit notes yet goodwill (in the case of deferred tax liabilities) or from the initial to be issued that relate to the current and prior periods. recognition (other than a business combination) of other assets and liabilities in a transaction that affects neither accounting nor taxable The same recognition criteria also apply to the sale of by-products profi t. and waste (such as spent grain, malt dust and yeast) with the exception that these are included within other income. Deferred tax liabilities are recognised where the carrying value of an asset is greater than its tax base, or where the carrying value of (ii) Interest income a liability is less than its tax base. Deferred tax is recognised in full Interest income is recognised on an accruals basis using the effective on temporary differences arising from investment in subsidiaries, interest method. associates and joint ventures, except where the timing of the reversal of the temporary difference is controlled by the group and it is When a receivable is impaired the group reduces the carrying amount probable that the temporary difference will not reverse in the to its recoverable amount by discounting the estimated future cash foreseeable future. This includes taxation in respect of the retained fl ows at the original effective interest rate, and continuing to unwind earnings of overseas subsidiaries only to the extent that, at the the discount as interest income. balance sheet date, dividends have been accrued as receivable or a binding agreement to distribute past earnings in future periods has (iii) Royalty income been entered into by the subsidiary. Deferred income tax is also Royalty income is recognised on an accruals basis in accordance recognised in respect of the unremitted retained earnings of overseas with the relevant agreements and is included in other income. associates and joint ventures as the group is not able to determine when such earnings will be remitted and when such additional tax (iv) Dividend income such as withholding taxes might be payable. Dividend income is recognised when the right to receive payment is established. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it is s) Operating leases probable that future taxable profi t will be available against which the Rentals paid and incentives received on operating leases are charged temporary differences (including carried forward tax losses) can be or credited to the income statement on a straight-line basis over the utilised. lease term. Deferred tax is measured at the tax rates expected to apply in the t) Exceptional items periods in which the timing differences are expected to reverse based Where certain expense or income items recorded in a period are on tax rates and laws that have been enacted or substantively material by their size or incidence, the group refl ects such items as enacted at balance sheet date. Deferred tax is measured on a exceptional items within a separate line on the income statement non-discounted basis. except for those exceptional items that relate to associates, joint ventures, net fi nance costs and tax. (Associates’ and joint ventures’ v) Dividend distributions net fi nance costs and tax exceptional items are only referred to in Dividend distributions to equity holders of the parent are recognised the notes to the consolidated fi nancial statements). as a liability in the group’s fi nancial statements in the period in which the dividends are approved by the company’s shareholders. Interim Exceptional items are also summarised in the segmental analyses, dividends are recognised when paid. Dividends declared after the excluding those that relate to net fi nance costs and tax. balance sheet date are not recognised, as there is no present obligation at the balance sheet date. The group presents alternative earnings per share calculations on a headline and adjusted basis. The adjusted earnings per share fi gure w) Employee benefi ts excludes the impact of amortisation of intangible assets (excluding (i) Wages and salaries computer software), certain non-recurring items and post-tax Wages and salaries for current employees are recognised in the exceptional items in order to present an additional measure of income statement as the employees’ services are rendered. performance for the years shown in the consolidated fi nancial statements. Headline earnings per share is calculated in accordance (ii) Vacation and long-term service awards costs with the South African Circular 3/2012 entitled ‘Headline Earnings’ The group recognises a liability and an expense for accrued vacation which forms part of the listing requirements for the JSE Ltd (JSE). pay when such benefi ts are earned and not when these benefi ts are paid. u) Taxation The tax expense for the period comprises current and deferred tax. The group also recognises a liability and an expense for long-term Tax is recognised in the income statement, except to the extent that it service awards where cash is paid to the employee at certain relates to items recognised in other comprehensive income or directly milestone dates in a career with the group. Such accruals are in equity, in which case it is recognised in other comprehensive appropriately discounted to refl ect the future payment dates at income or directly in equity, respectively. discount rates determined by reference to local high-quality corporate bonds. Current tax expense is based on the results for the period as adjusted for items that are not taxable or not deductible. The group’s liability for current taxation is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

100 – SABMiller plc Annual Report 2013 F-15 1. Accounting policies continued Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in full as they arise (iii) Profi t-sharing and bonus plans outside of the income statement and are charged or credited to

The group recognises a liability and an expense for bonuses and equity in other comprehensive income in the period in which they Overview profi t-sharing, based on a formula that takes into consideration arise, with the exception of gains or losses arising from changes in the profi t attributable to the company’s shareholders after the benefi ts regarding past services, which are recognised in the certain adjustments. income statement.

The group recognises a provision where contractually obliged Past service costs are recognised immediately in the income or where there is a past practice that has created a constructive statement, unless the changes to the pension plan are conditional on obligation. At a mid-year point an accrual is maintained for the the employees remaining in service for a specifi ed period of time (the appropriate proportion of the expected bonuses which would vesting period). In this case, the past service costs are amortised on become payable at the year end. a straight-line basis over the vesting period. Business review

(iv) Share-based compensation The contributions to defi ned contribution plans are recognised as The group operates a variety of equity-settled share-based an expense as the costs become payable. The contributions are compensation plans and a cash-settled share-based recognised as employee benefi t expense when they are due. Prepaid compensation plan. contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. The equity-settled plans comprise share option plans (with and without market performance conditions attached), performance share award (vi) Other post-employment obligations plans (with market conditions attached) and awards related to the Some group companies provide post-retirement healthcare benefi ts employee element of the Broad-Based Black Economic Empowerment to qualifying employees. The expected costs of these benefi ts are (BBBEE) scheme in South Africa. An expense is recognised to spread assessed in accordance with the advice of qualifi ed actuaries and the fair value of each award granted after 7 November 2002 over the contributions are made to the relevant funds over the expected vesting period on a straight-line basis, after allowing for an estimate service lives of the employees entitled to those funds. Actuarial gains of the share awards that will eventually vest. A corresponding and losses arising from experience adjustments, and changes in adjustment is made to equity over the remaining vesting period. actuarial assumptions are recognised in full as they arise outside the The estimate of the level of vesting is reviewed at least annually, with income statement and are charged or credited to equity in other

any impact on the cumulative charge being recognised immediately. comprehensive income in the period in which they arise. These Governance In addition the group has granted an equity-settled share-based obligations are valued annually by independent qualifi ed actuaries. payment to retailers in relation to the retailer element of the BBBEE scheme. A one-off charge has been recognised based on the fair (vii) Termination benefi ts value at the grant date with a corresponding adjustment to equity. Termination benefi ts are payable when employment is terminated The charge will not be adjusted in the future. before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefi ts. The group The charges are based on the fair value of the awards as at the date recognises termination benefi ts when it is demonstrably committed of grant, as calculated by various binomial model calculations and to terminating the employment of current employees according to a

Monte Carlo simulations. detailed formal plan without possibility of withdrawal, or providing Financial statements termination benefi ts as a result of an offer made to encourage The charges are not reversed if the options and awards are not voluntary redundancy. Benefi ts falling due more than 12 months exercised because the market value of the shares is lower than after balance sheet date are discounted to present value in a similar the option price at the date of grant. manner to all long-term employee benefi ts.

The proceeds received net of any directly attributable transaction x) Derivative fi nancial instruments – hedge accounting costs are credited to share capital (nominal value) and share premium Financial assets and fi nancial liabilities at fair value through profi t when the options are exercised. or loss include all derivative fi nancial instruments. The derivative instruments used by the group, which are used solely for hedging For the cash-settled plan a liability is recognised at fair value in the purposes (i.e. to offset foreign exchange, commodity price and balance sheet over the vesting period with a corresponding charge interest rate risks), comprise interest rate swaps, cross currency to the income statement. The liability is remeasured at each reporting swaps, forward foreign exchange contracts, commodity contracts date, on an actuarial basis using the analytic method, to refl ect the and other specifi c instruments as necessary under the approval of the revised fair value and to adjust for changes in assumptions such as board. Such derivative instruments are used to alter the risk profi le of leavers. Changes in the fair value of the liability are recognised in the an existing underlying exposure of the group in line with the group’s income statement. Actual settlement of the liability will be at its risk management policies. The group also has derivatives embedded

intrinsic value with the difference recognised in the income statement. in other contracts primarily cross border foreign currency supply Shareholder information contracts for raw materials. (v) Pension obligations The group has both defi ned benefi t and defi ned contribution plans. Derivatives are initially recorded at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair The liability recognised in the balance sheet in respect of defi ned value. The method of recognising the resulting gain or loss depends benefi t pension plans is the present value of the defi ned benefi t on whether the derivative is designated as a hedging instrument, and obligation at the balance sheet date less the fair value of plan assets, if so, the nature of the hedging relationship. together with adjustments for unrecognised past service costs. The defi ned benefi t obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defi ned benefi t obligation is determined by discounting the estimated future cash outfl ows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefi ts will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

F-16 SABMiller plc Annual Report 2013 – 101 Notes to the consolidated fi nancial statements continued

1. Accounting policies continued Gains or losses on hedging instruments that are regarded as highly effective are recognised in other comprehensive income. These In order to qualify for hedge accounting, the group is required to largely offset foreign currency gains or losses arising on the document at inception, the relationship between the hedged item and translation of net investments that are recorded in equity, in the the hedging instrument as well as its risk management objectives and foreign currency translation reserve. The ineffective portion of gains strategy for undertaking hedging transactions. The group is also or losses on hedging instruments is recognised immediately in the required to document and demonstrate that the relationship between income statement. Amounts accumulated in equity are only the hedged item and the hedging instrument will be highly effective. reclassifi ed to the income statement upon disposal of the net This effectiveness test is reperformed at each period end to ensure investment. that the hedge has remained and will continue to remain highly effective. Where a derivative ceases to meet the criteria of being a hedging instrument or the underlying exposure which it is hedging is sold, The group designates certain derivatives as either: hedges of the fair matures or is extinguished, hedge accounting is discontinued and value of recognised assets or liabilities or a fi rm commitment (fair amounts previously recorded in equity are reclassifi ed to the income value hedge); hedges of highly probable forecast transactions or statement. A similar treatment is applied where the hedge is of a commitments (cash fl ow hedge); or hedges of net investments in future transaction and that transaction is no longer likely to occur. foreign operations (net investment hedge). When the hedge is discontinued due to ineffectiveness, hedge accounting is discontinued prospectively. (i) Fair value hedges Fair value hedges comprise derivative fi nancial instruments Certain derivative instruments, while providing effective economic designated in a hedging relationship to manage the group’s interest hedges under the group’s policies, are not designated as hedges. rate risk and foreign exchange risk to which the fair value of certain Changes in the fair value of any derivative instruments that do not assets and liabilities are exposed. Changes in the fair value of the qualify or have not been designated as hedges are recognised derivative offset the relevant changes in the fair value of the underlying immediately in the income statement. The group does not hold hedged item attributable to the hedged risk in the income statement or issue derivative fi nancial instruments for speculative purposes. in the period incurred. y) Deposits by customers Gains or losses on fair value hedges that are regarded as highly Returnable containers in circulation are recorded within property, effective are recorded in the income statement together with the plant and equipment and a corresponding liability is recorded in gain or loss on the hedged item attributable to the hedged risk. respect of the obligation to repay the customers’ deposits. Deposits paid by customers for branded returnable containers are refl ected in (ii) Cash fl ow hedges the balance sheet within current liabilities. Any estimated liability that Cash fl ow hedges comprise derivative fi nancial instruments may arise in respect of deposits for unbranded containers is shown designated in a hedging relationship to manage currency and interest in provisions. rate risk to which the cash fl ows of certain liabilities are exposed. The effective portion of changes in the fair value of the derivative that z) Earnings per share is designated and qualifi es for hedge accounting is recognised in Basic earnings per share represents the profi t on ordinary activities other comprehensive income. The ineffective portion is recognised after taxation attributable to the equity shareholders of the parent immediately in the income statement. Amounts accumulated in equity entity, divided by the weighted average number of ordinary shares in are reclassifi ed to the income statement in the period in which the issue during the year, less the weighted average number of ordinary hedged item affects profi t or loss. However, where a forecasted shares held in the group’s employee benefi t trusts and in treasury transaction results in a non-fi nancial asset or liability, the accumulated during the year. fair value movements previously deferred in equity are included in the initial cost of the asset or liability. Diluted earnings per share represents the profi t on ordinary activities after taxation attributable to the equity shareholders of the parent, (iii) Hedges of net investments in foreign operations divided by the weighted average number of ordinary shares in issue Hedges of net investments in foreign operations comprise either during the year, less the weighted average number of ordinary shares foreign currency borrowings or derivatives (typically forward held in the group’s employee benefi t trusts and in treasury during the exchange contracts and cross currency swaps) designated in a year, plus the weighted average number of dilutive shares resulting hedging relationship. from share options and other potential ordinary shares outstanding during the year.

102 – SABMiller plc Annual Report 2013 F-17 2. Segmental analysis

Operating segments refl ect the management structure of the group and the way performance is evaluated and resources allocated based

on group revenue and EBITA by the group’s chief operating decision maker, defi ned as the executive directors. The group is focused Overview geographically and, while not meeting the defi nition 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 group’s performance.

Income statement

Group Group revenue EBITA revenue EBITA Business review 2013 2013 2012 2012 US$m US$m US$m US$m Latin America 7,821 2,112 7,158 1,865 Europe 5,767 784 5,482 836 North America 5,355 771 5,250 756 Africa 3,853 838 3,686 743 Asia Pacifi c 5,685 855 3,510 321 South Africa: 6,006 1,263 6,302 1,303 – Beverages 5,540 1,129 5,815 1,168 – Hotels and Gaming 466 134 487 135 Corporate – (202) – (190) 34,487 6,421 31,388 5,634

Amortisation of intangible assets (excluding computer software) – group and share of associates’ and joint ventures’ (483) (264) Exceptional items in operating profi t – group and share of associates’ and joint ventures’ (205) 1,015

Net fi nance costs – group and share of associates’ and joint ventures’ Governance (excluding exceptional items) (779) (570) Share of associates’ and joint ventures’ taxation (164) (170) Share of associates’ and joint ventures’ non-controlling interests (78) (42) Profi t before taxation 4,712 5,603

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. Financial statements

Share of Share of associates’ associates’ and joint and joint ventures’ Group ventures’ Group Revenue revenue revenue Revenue revenue revenue 2013 2013 2013 2012 2012 2012 US$m US$m US$m US$m US$m US$m Latin America 7,821 – 7,821 7,148 10 7,158 Europe 4,292 1,475 5,767 5,347 135 5,482 North America 141 5,214 5,355 134 5,116 5,250 Africa 2,267 1,586 3,853 2,299 1,387 3,686 Asia Pacifi c 3,797 1,888 5,685 1,682 1,828 3,510 South Africa: 4,895 1,111 6,006 5,150 1,152 6,302 – Beverages 4,895 645 5,540 5,150 665 5,815 – Hotels and Gaming – 466 466 – 487 487 23,213 11,274 34,487 21,760 9,628 31,388 Shareholder information

F-18 SABMiller plc Annual Report 2013 – 103 Notes to the consolidated fi nancial statements continued

2. Segmental analysis continued

Operating profi t The following table provides a reconciliation of operating profi t to operating profi t before exceptional items.

Operating Operating profi t before profi t before Operating Exceptional exceptional Operating Exceptional exceptional profi t items items profi t items items 2013 2013 2013 2012 2012 2012 US$m US$m US$m US$m US$m US$m Latin America 1,920 63 1,983 1,617 119 1,736 Europe 588 64 652 1,939 (1,135) 804 North America 7 – 7 – – – Africa 518 (79) 439 584 (162) 422 Asia Pacifi c 358 104 462 54 70 124 South Africa: Beverages 1,040 22 1,062 1,050 41 1,091 Corporate (228) 26 (202) (231) 41 (190) 4,203 200 4,403 5,013 (1,026) 3,987

EBITA (segment result) This comprises operating profi t before exceptional items, amortisation of intangible assets (excluding computer software) and includes the group’s share of associates’ and joint ventures’ operating profi t on a similar basis. The following table provides a reconciliation of operating profi t before exceptional items to EBITA.

Amortisation Amortisation of intangible of intangible assets assets Share of (excluding Share of (excluding associates’ computer associates’ computer and joint software) and joint software) Operating ventures’ – group and Operating ventures’ – group and profi t operating share of profi t operating share of before profi t before associates’ before profi t before associates’ exceptional exceptional and joint exceptional exceptional and joint items items ventures’ EBITA items items ventures’ EBITA 2013 2013 2013 2013 2012 2012 2012 2012 US$m US$m US$m US$m US$m US$m US$m US$m Latin America 1,983 – 129 2,112 1,736 – 129 1,865 Europe 652 76 56 784 804 11 21 836 North America 7 721 43 771 – 711 45 756 Africa 439 392 7 838 422 318 3 743 Asia Pacifi c 462 156 237 855 124 132 65 321 South Africa: 1,062 190 11 1,263 1,091 211 1 1,303 – Beverages 1,062 67 – 1,129 1,091 77 – 1,168 – Hotels and Gaming – 123 11 134 – 134 1 135 Corporate (202) – – (202) (190) – – (190) 4,403 1,535 483 6,421 3,987 1,383 264 5,634

The group’s share of associates’ and joint ventures’ operating profi t is reconciled to the share of post-tax results of associates and joint ventures in the income statement as follows. 2013 2012 US$m US$m Share of associates’ and joint ventures’ operating profi t (before exceptional items) 1,535 1,383 Share of associates’ and joint ventures’ exceptional items in operating profi t (5) 11 Share of associates’ and joint ventures’ net fi nance costs (44) (30) Share of associates’ and joint ventures’ taxation (164) (170) Share of associates’ and joint ventures’ non-controlling interests (78) (42) Share of post-tax results of associates and joint ventures 1,244 1,152

104 – SABMiller plc Annual Report 2013 F-19 2. Segmental analysis continued

EBITDA

The following table provides a reconciliation of EBITDA (the net cash generated from operations before working capital movements) to adjusted Overview EBITDA. A reconciliation of profi t for the year for the group to EBITDA after cash exceptional items for the group can be found in note 27a.

Dividends Dividends Cash received Cash received exceptional from Adjusted exceptional from Adjusted EBITDA items MillerCoors EBITDA EBITDA items MillerCoors EBITDA 2013 2013 2013 2013 2012 2012 2012 2012 US$m US$m US$m US$m US$m US$m US$m US$m Latin America 2,382 61 – 2,443 2,068 112 – 2,180 Europe 884 61 – 945 1,067 58 – 1,125 Business review North America 29 – 886 915 22 – 896 918 Africa 583 – – 583 564 13 – 577 Asia Pacifi c 754 34 – 788 159 88 – 247 South Africa: Beverages 1,257 10 – 1,267 1,267 13 – 1,280 Corporate (131) 25 – (106) (168) 24 – (144) 5,758 191 886 6,835 4,979 308 896 6,183

Other segmental information

Capital Capital expenditure expenditure excluding excluding investment Investment investment Investment activity¹ activity2 Total activity1 activity2 Total 2013 2013 2013 2012 2012 2012 US$m US$m US$m US$m US$m US$m Latin America 528 – 528 522 (34) 488 Europe 216 – 216 324 17 341

North America – 272 272 – 288 288 Governance Africa 391 29 420 398 (82) 316 Asia Pacifi c 88 (78) 10 69 10,931 11,000 South Africa: 228 – 228 284 – 284 – Beverages 228 – 228 284 – 284 – Hotels and Gaming – – – – – – Corporate 28 (5) 23 42 1 43 1,479 218 1,697 1,639 11,121 12,760 Financial statements 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

2013 2012 US$m US$m Latin America 467 445 Europe 226 298 Africa 104 128 Asia Pacifi c 316 117 South Africa: Beverages 172 168 Corporate 32 26 1,317 1,182

Depreciation and amortisation exclude amounts relating to impairment charges. Shareholder information

F-20 SABMiller plc Annual Report 2013 – 105 Notes to the consolidated fi nancial statements continued

2. Segmental analysis continued

Geographical information The UK is the parent company’s country of domicile. Those countries which account for more than 10% of the group’s total revenue and/or non-current assets are considered individually material and are reported separately below.

Revenue 2013 2012 US$m US$m UK 378 359 Australia 3,064 1,025 Colombia 3,742 3,481 South Africa 4,896 5,150 USA 129 124 Rest of world 11,004 11,621 23,213 21,760

Non-current assets 2013 20121 US$m US$m UK 388 354 Australia 14,351 14,511 Colombia 8,465 8,727 South Africa 2,368 2,760 USA 5,804 5,777 Rest of world 18,409 18,020 49,785 50,149

1 As restated (see note 28).

Non-current assets by location exclude amounts relating to derivative fi nancial instruments and deferred tax assets.

106 – SABMiller plc Annual Report 2013 F-21 3. Net operating expenses 2013 2012 US$m US$m

Cost of inventories recognised as an expense 5,043 5,049 Overview – Changes in inventories of fi nished goods and work in progress 93 18 – Raw materials and consumables used 4,950 5,031 Excise duties¹ 5,755 5,047 Employee costs (see note 6a) 2,693 2,502 Depreciation of property, plant and equipment 867 909 – Containers 226 237 – Other 641 672 Net profi t on disposal of businesses (79) (1,242) Business review Profi t on disposal of investment in associate – (103) Gain on dilution of investment in associate (4) – Gain on remeasurement of existing interest in joint venture on acquisition – (66) Loss/(profi t) on disposal of property, plant and equipment 13 (15) Amortisation of intangible assets 450 273 – Intangible assets (excluding computer software) 394 218 – Computer software 56 55 Other expenses 4,634 4,906 – Selling, marketing and distribution costs 2,582 2,562 – Repairs and maintenance expenditure on property, plant and equipment 333 325 – Impairment of goodwill 11 – – Impairment of property, plant and equipment 39 – – Impairment of trade and other receivables 23 25 – Operating lease rentals – land and buildings 64 60 – Operating lease rentals – plant, vehicles and systems 95 84 – Research and development expenditure 4 7 – Acquisition-related costs – 109 – Other operating expenses 1,483 1,734 Governance Total net operating expenses by nature 19,372 17,260

Other income (362) (513) – Revenue received from royalties (55) (43) – Dividends received from investments (1) (1) – Other operating income (306) (469) Net operating expenses 19,010 16,747 Financial statements

1 Excise duties of US$5,755 million (2012: US$5,047 million) have been incurred during the year as follows: Latin America US$2,019 million (2012: US$1,843 million); Europe US$995 million (2012: US$1,204 million); North America US$4 million (2012: US$3 million); Africa US$418 million (2012: US$408 million); Asia Pacifi c US$1,369 million (2012: US$626 million) and South Africa US$950 million (2012: US$963 million). The group’s share of MillerCoors’ excise duties incurred during the year was US$695 million (2012: US$703 million).

Foreign exchange differences recognised in the profi t for the year, except for those arising on fi nancial instruments measured at fair value under IAS 39, were a loss of US$14 million (2012: US$27 million). Shareholder information

F-22 SABMiller plc Annual Report 2013 – 107 Notes to the consolidated fi nancial statements continued

3. Net operating expenses continued

The following fees were paid to a number of different accounting fi rms as auditors of various parts of the group. 2013 2012 US$m US$m Group auditors Fees payable to the company’s auditor and its associates for the audit of parent company and consolidated fi nancial statements 2 3 Fees payable to company’s auditor and its associates for other services: The audit of the company’s subsidiaries 9 8 Total audit fees payable to the company’s auditor 11 11 Audit-related assurance services 1 2 Taxation compliance services 1 1 Taxation advisory services 1 6 Services relating to corporate fi nance transactions – 3 Other non-audit services Services relating to information technology1 1 4 Other 1 2 Total fees payable to the company’s auditor 16 29

Other audit fi rms Fees payable to other auditor fi rms for: The audit of the company’s subsidiaries 1 1 Taxation advisory services 3 2 Services relating to corporate fi nance transactions – 1 Internal audit services 1 1 Other non-audit services Services relating to information technology1 12 8 Other 12 7 Total fees payable to other audit fi rms 29 20

1 Principally relating to the business capability programme.

4. Exceptional items 2013 2012 US$m US$m Exceptional items included in operating profi t: Net profi t on disposal of businesses 79 1,248 Business capability programme costs (141) (235) Integration and restructuring costs (91) (60) Impairments (30) – Broad-Based Black Economic Empowerment scheme charges (17) (29) Profi t on disposal of investment in associate – 103 Gain on remeasurement of existing interest in joint venture on acquisition – 66 Litigation – 42 Transaction-related costs – (109) Net exceptional (losses)/gains included within operating profi t (200) 1,026

Exceptional items included in net fi nance costs: Litigation-related fi nance income – 4 Transaction-related net fi nance costs – (26) Net exceptional losses included within net fi nance costs – (22)

Share of associates’ and joint ventures’ exceptional items: Impairments (5) (35) Profi ts on transactions in associates – 46 Share of associates’ and joint ventures’ exceptional (losses)/gains (5) 11 Non-controlling interests’ share of associates’ and joint ventures’ exceptional (losses)/gains 2 – Group’s share of associates’ and joint ventures’ exceptional (losses)/gains (3) 11

Net taxation credits relating to subsidiaries’ and the group’s share of associates’ and joint ventures’ exceptional items 20 24

108 – SABMiller plc Annual Report 2013 F-23 4. Exceptional items continued

Exceptional items included in operating profi t

Net profi t on disposal of businesses Overview During 2013 an additional profi t of US$79 million was realised in Africa in relation to the disposal in the prior year of the group’s Angolan operations in exchange for a 27.5% interest in BIH Angola, following the successful resolution of certain matters leading to the release of provisions.

In 2012 a profi t of US$1,195 million arose in Europe on the disposal of the group’s Russian and Ukrainian businesses in exchange for a 24% interest in the enlarged Anadolu Efes group; a profi t of US$67 million arose in Africa on the disposal of the group’s 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.

Business capability programme costs Business review The business capability programme will streamline fi 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$141 million have been incurred in the year (2012: US$235 million).

Integration and restructuring costs During 2013 US$74 million of integration and restructuring costs were incurred in Asia Pacifi c following the Foster’s and the Pacifi c Beverages acquisitions, including the closure of certain beverage lines, and US$17 million of restructuring costs were incurred in South Africa: Beverages.

In 2012 US$34 million of restructuring costs were incurred in Latin America, principally in Ecuador, Peru and the regional offi ce, and US$26 million of integration costs were incurred in Asia Pacifi c following the Foster’s and Pacifi c Beverages acquisitions.

Impairments During 2013 a US$30 million (2012: US$nil) impairment charge was incurred in respect of the Vietnam business in Asia Pacifi c. The impairment charge comprised US$11 million against goodwill and US$19 million against property, plant and equipment.

Broad-Based Black Economic Empowerment scheme charges

US$17 million (2012: US$29 million) of charges have been incurred in relation to the Broad-Based Black Economic Empowerment (BBBEE) Governance scheme in South Africa. This represents the continuing IFRS 2 share-based payment charge in respect of the employee element of the scheme.

Profi t on disposal of investment in associate In 2012 a profi t of US$103 million was realised on the disposal of the group’s investment in its associate, Kenya Breweries Ltd, in Africa.

Gain on remeasurement of existing interest in joint venture on acquisition In 2012 the group acquired the remaining 50% interest which it did not already own in Pacifi c Beverages from Coca-Cola Amatil Limited.

This resulted in a US$66 million gain arising on the remeasurement to fair value of the group’s existing interest. Financial statements

Litigation In 2012 in Europe a US$42 million anti-trust fi ne paid by Grolsch prior to its acquisition by SABMiller plc was annulled by the EU General Court and the payment refunded.

Transaction-related costs In 2012 costs of US$109 million were incurred in relation to the Foster’s transaction.

Exceptional items included in net fi nance costs Litigation-related interest income In 2012 US$4 million of interest was received in relation to the refund of the anti-trust fi ne in Europe.

Transaction-related net fi nance costs In 2012 net costs of US$26 million were incurred primarily related to the Foster’s transaction and included fees relating to fi nancing facilities and premiums on derivative instruments which were partially offset by mark to market gains on derivative fi nancial instruments taken out in anticipation of the transaction and where hedge accounting could not be applied. Shareholder information Share of associates’ and joint ventures’ exceptional items Impairments During 2013 an impairment of a soft drinks plant in BIH Angola amounted to US$5 million. After taking account of non-controlling interests, the group’s share was US$3 million.

In 2012 the group’s share of MillerCoors’ impairment of the Sparks brand amounted to US$35 million.

Profi ts on transactions in associates In 2012 Tsogo Sun released deferred consideration relating to a prior acquisition of which the group’s share was US$13 million; US$10 million profi t arose on Tsogo Sun’s 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 profi t arose in Africa being the group’s share of Castel’s profi t on disposal of its subsidiary in Nigeria.

Net taxation credits relating to subsidiaries’ and the group’s share of associates’ and joint ventures’ exceptional items Net taxation credits of US$20 million (2012: US$24 million) arose in relation to exceptional items during the year and include US$nil (2012: US$13 million) in relation to MillerCoors although the tax credit is recognised in Miller Brewing Company (see note 7).

F-24 SABMiller plc Annual Report 2013 – 109 Notes to the consolidated fi nancial statements continued

5. Net fi nance costs 2013 2012 US$m US$m a. Finance costs Interest payable on bank loans and overdrafts 183 170 Interest payable on derivatives 255 156 Interest payable on corporate bonds 677 463 Interest element of fi nance lease payments 1 1 Net exchange losses on fi nancing activities 25 13 Fair value losses on fi nancial instruments: – Fair value losses on standalone derivative fi nancial instruments 220 144 – Ineffectiveness of net investment hedges¹ – 4 Exceptional interest payable and similar charges¹ – 96 Other fi nance charges 56 46 Total fi nance costs 1,417 1,093 b. Finance income Interest receivable 39 55 Interest receivable on derivatives 355 226 Fair value gains on fi nancial instruments: – Fair value gains on standalone derivative fi nancial instruments 272 170 – Fair value gains on dividend-related derivatives¹ 10 3 Net exchange gains on dividends¹ 2 3 Exceptional interest receivable and similar income¹ – 74 Other fi nance income 4 – Total fi nance income 682 531 Net fi nance costs 735 562

1 These items have been excluded from the determination of adjusted earnings per share. Adjusted net fi nance costs are therefore US$747 million (2012: US$542 million).

Refer to note 22 – Financial risk factors for interest rate risk information.

6. Employee and key management compensation costs a. Employee costs 2013 2012 US$m US$m Wages and salaries 2,154 2,038 Share-based payments 201 161 Social security costs 215 193 Pension costs 128 112 Post-retirement benefi ts other than pensions 11 13 2,709 2,517

Of the US$2,709 million employee costs shown above, US$16 million (2012: US$15 million) has been capitalised within intangible assets and property, plant and equipment.

110 – SABMiller plc Annual Report 2013 F-25 6. Employee and key management compensation costs continued b. Employee numbers

The average monthly number of employees are shown on a full-time equivalent basis, excluding employees of associated and joint venture Overview undertakings and including executive directors. 2013 2012 Number Number Latin America 29,882 26,933 Europe 10,489 14,095 North America 82 76 Africa 12,652 13,596 Asia Pacifi c 5,128 3,804 South Africa 11,438 11,939 Business review Corporate 815 701 70,486 71,144 c. Key management compensation The directors of the group and members of the executive committee (excom) are defi ned as key management. At 31 March 2013 there were 26 (2012: 27) key management. 2013 2012 US$m US$m Salaries and short-term employee benefi ts 34 32 Post-employment benefi ts 2 2 Share-based payments 61 36 97 70 d. Directors

2013 2012 Governance US$m US$m Aggregate emoluments £6,689,562 (2012: £6,087,153) 11 10 Aggregate gains made on the exercise of share options or vesting of share awards 12 15 Notional contributions to unfunded retirement benefi ts scheme £767,000 (2012: £562,679) 1 1 24 26

At 31 March 2013 two directors (2012: one) had retirement benefi ts accruing under money purchase pension schemes. Company contributions to money purchase pension schemes during the year amounted to £11,364 (2012: £nil). Financial statements

Full details of individual directors’ remuneration are given in the directors’ remuneration report on pages 66 to 85. Shareholder information

F-26 SABMiller plc Annual Report 2013 – 111 Notes to the consolidated fi nancial statements continued

7. Taxation 2013 2012 US$m US$m Current taxation 1,118 957 – Charge for the year 1,131 986 – Adjustments in respect of prior years (13) (29) Withholding taxes and other remittance taxes 170 137 Total current taxation 1,288 1,094

Deferred taxation (87) 32 – (Credit)/charge for the year (28) 60 – Adjustments in respect of prior years 5 (3) – Rate change (64) (25) Taxation expense 1,201 1,126

Tax credit relating to components of other comprehensive loss is as follows: Deferred tax credit on actuarial gains and losses (28) (71) Deferred tax credit on fi nancial instruments (6) (30) (34) (101)

Total current tax 1,288 1,094 Total deferred tax (121) (69) Total taxation 1,167 1,025

Effective tax rate (%) 27.0 27.5

UK taxation included in the above Current taxation – – Withholding taxes and other remittance taxes 133 39 Total current taxation 133 39 Deferred taxation 24 (24) UK taxation expense 157 15

See the fi nancial defi nitions section for the defi nition 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 computer software) was US$135 million (2012: US$72 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 subsidiary’s tax charge includes tax (including deferred tax) on the group’s share of the taxable profi ts of MillerCoors and includes tax in other comprehensive income on the group’s share of MillerCoors’ taxable items included within other comprehensive income.

Tax rate reconciliation 2013 2012 US$m US$m Profi t before taxation 4,712 5,603 Less: Share of post-tax results of associates and joint ventures (1,244) (1,152) 3,468 4,451

Tax charge at standard UK rate of 24% (2012: 26%) 832 1,157 Exempt income (242) (413) Other incentive allowances (20) (63) Expenses not deductible for tax purposes 157 47 Deferred tax asset not recognised 51 30 Initial recognition of deferred taxation (28) (10) Tax impact of MillerCoors joint venture 180 179 Withholding taxes and other remittance taxes 170 137 Other taxes 35 28 Adjustments in respect of foreign tax rates 124 90 Adjustments in respect of prior periods (8) (32) Deferred taxation rate change (64) (25) Deferred taxation on unremitted earnings 14 1 Total taxation expense 1,201 1,126

112 – SABMiller plc Annual Report 2013 F-27 8. Earnings per share 2013 2012 US cents US cents

Basic earnings per share 205.9 266.6 Overview Diluted earnings per share 203.5 263.8 Headline earnings per share 204.5 179.8 Adjusted basic earnings per share 238.7 214.8 Adjusted diluted earnings per share 236.0 212.5

The weighted average number of shares was: Business review 2013 2012 Millions of Millions of shares shares Ordinary shares 1,667 1,661 Treasury shares (72) (72) EBT ordinary shares (5) (6) Basic shares 1,590 1,583 Dilutive ordinary shares 19 17 Diluted shares 1,609 1,600

The calculation of diluted earnings per share excludes 6,332,436 (2012: 8,362,920) 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, 21,226,441 (2012: 14,799,716) share awards that were non-dilutive for the year because the performance conditions attached to the share awards have not been met and nil (2012: nil) shares in relation 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 10,601,120 shares were granted after 31 March 2013 and before the date of signing of these fi nancial statements. Governance

Adjusted and headline earnings The group presents an adjusted earnings per share fi gure which excludes the impact of amortisation of intangible assets (excluding computer 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 fi nancial statements. Adjusted earnings per share has been based on adjusted earnings for each fi 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 3/2012 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. Financial statements 2013 2012 US$m US$m Profi t for the year attributable to owners of the parent 3,274 4,221 Headline adjustments Impairment of goodwill 11 – Impairment of property, plant and equipment 39 – Loss/(profi t) on disposal of property, plant and equipment 13 (15) Net profi t on disposal of businesses (79) (1,242) Profi t on disposal of investments in associates – (103) Gain on dilution of investments in associates (4) – Gain on remeasurement of existing interest in joint venture on acquisition – (66) Tax effects of these items (14) 12 Non-controlling interests’ share of the above items (3) 40 Share of associates’ and joint ventures’ headline adjustments, net of tax and non-controlling interests 15 – Headline earnings 3,252 2,847 Business capability programme costs 141 235

Broad-Based Black Economic Empowerment scheme charges 17 29 Shareholder information Integration and restructuring costs 71 60 Net gain on fair value movements on capital items¹ (12) (2) Amortisation of intangible assets (excluding computer software) 394 218 Transaction-related costs – 109 Litigation – (42) Litigation-related fi nance income – (4) Transaction-related net fi nance costs – 26 Tax effects of the above items (137) (101) Non-controlling interests’ share of the above items (8) (7) Share of associates’ and joint ventures’ headline adjustments, net of tax and non-controlling interests 78 32 Adjusted earnings 3,796 3,400

1 This does not include all fair value movements but includes those in relation to capital items for which hedge accounting cannot be applied.

F-28 SABMiller plc Annual Report 2013 – 113 Notes to the consolidated fi nancial statements continued

9. Dividends 2013 2012 US$m US$m Equity 2012 Final dividend paid: 69.5 US cents (2011: 61.5 US cents) per ordinary share 1,125 973 2013 Interim dividend paid: 24.0 US cents (2012: 21.5 US cents) per ordinary share 392 351 1,517 1,324

In addition, the directors are proposing a fi nal dividend of 77 US cents per share in respect of the fi nancial year ended 31 March 2013 which will absorb an estimated US$1,227 million of shareholders’ funds. If approved by shareholders, the dividend will be paid on 23 August 2013 to shareholders registered on the London and Johannesburg registers as at 16 August 2013. The total dividend per share for the year is 101 US cents (2012: 91 US cents).

Treasury shares do not attract dividends and the employee benefi t trusts have both waived their right to receive dividends (further information can be found in note 26).

10. Goodwill

US$m Cost At 1 April 2011 12,309 Exchange adjustments 188 Acquisitions – through business combinations 8,091 Disposals (63) Transfers to disposal group classifi ed as held for sale (29) At 31 March 20121 20,496 Exchange adjustments (301) Acquisitions – through business combinations (provisional) (see note 29) 3 Transfers to disposal group classifi ed as held for sale (see note 18) (13) At 31 March 2013 20,185

Accumulated impairment At 1 April 2011 355 Exchange adjustments (20) Disposals (10) At 31 March 2012 325 Exchange adjustments (13) Impairment 11 At 31 March 2013 323

Net book amount At 1 April 2011 11,954 At 31 March 20121 20,171 At 31 March 2013 19,862

1 As restated (see note 28).

2013 Provisional goodwill arose on the acquisition through business combination in the year of Darbrew Limited in Tanzania. The fair value exercise in respect of this business combination has yet to be completed.

2012 Goodwill arose on the acquisition through business combinations of Foster’s and Pacifi c Beverages in Australia and International Breweries plc in Nigeria. The fair value exercises in respect of these business combinations are now complete.

114 – SABMiller plc Annual Report 2013 F-29 10. Goodwill continued

Goodwill is monitored principally on an individual country basis and the net book value is allocated by cash generating unit (CGU) as follows.

2013 20121 Overview US$m US$m CGUs: Latin America: – Central America 803 819 – Colombia 4,706 4,809 – Peru 1,796 1,744 – Other Latin America 224 243 Europe: – Czech Republic 901 976 Business review – Netherlands 100 104 – Italy 414 431 – Poland 1,168 1,218 – Other Europe 75 77 North America 256 256 Africa 250 252 Asia Pacifi c: – Australia 8,319 8,262 – India 335 350 – Other Asia Pacifi c 1 12 South Africa 514 618 19,862 20,171

1 As restated (see note 28).

Assumptions The recoverable amount for a CGU is determined based on value in use calculations. Value in use is determined by discounting the future Governance post-tax cash fl ows generated from continuing use of the CGU using a post-tax discount rate, as this closely approximates to applying pre-tax discount rates to pre-tax cash fl ows. Where a potential impairment is identifi ed using post-tax cash fl ows and post-tax discount rates, the impairment review is reperformed on a pre-tax basis and the fair value less cost to sell calculated, in order to determine the impairment loss to be recorded. The key assumptions for the value in use calculations are as follows.

Expected volume compound annual growth rate (CAGR) – Cash fl ows are based on fi nancial forecasts approved by management for each CGU covering fi ve-year periods and are dependent on management’s expected volume CAGRs which have been determined based on past experience and planned initiatives, and with reference to external sources in respect of macroeconomic assumptions. Expected growth Financial statements rates over the fi ve-year forecast period are generally higher than the long-term average growth rates for the economies in which the CGUs operate as a steady state is not necessarily expected to be reached in this period.

Discount rate – The discount rate (weighted average cost of capital) is calculated using a methodology which refl ects the returns from United States Treasury notes with a maturity of 20 years, an equity risk premium adjusted for specifi c industry and country risks, and infl ation differentials. The group applies local post-tax discount rates to local post-tax cash fl ows.

Long-term growth rate – Cash fl ows after the fi rst fi ve-year period are extrapolated using a long-term growth rate, in order to calculate the terminal recoverable amount. The long-term growth rate is estimated using historical trends and expected future trends in infl ation rates, based on external data.

The following table presents the key assumptions used in the value in use calculations in each of the group’s operating segments:

Expected volume CAGRs Post-tax Long-term 2014–2018 discount rates growth rates % % % Latin America 4.3–6.4 7.6–13.2 2.0–5.1

Europe 1.3–6.0 6.6–10.8 2.0–3.0 Shareholder information North America 8.5 6.7 2.5 Africa 7.6–8.8 13.5–16.8 6.0–9.5 Asia Pacifi c 2.1–6.3 7.4–12.7 3.0–6.5 South Africa 3.3 10.6 4.5

The most material balance is in Australia. For the goodwill in Australia to be at risk of impairment the following situations would need to occur: future compound revenue growth to reduce to a level where operating profi t growth is limited to the long-term growth rate; or long-term growth in nominal terms to fall below 1.5%; or the discount rate to rise to 8.7% or higher.

F-30 SABMiller plc Annual Report 2013 – 115 Notes to the consolidated fi nancial statements continued

10. Goodwill continued

Impairment reviews results A US$30 million impairment loss has been recognised in respect of SABMiller Vietnam Company Limited in Asia Pacifi c, which was principally due to a deterioration in trading. The impairment loss has been allocated to goodwill (US$11 million) and property, plant and equipment (US$19 million).

Sensitivities to assumptions The group’s impairment reviews are sensitive to changes in the key assumptions described above. Based on the group’s sensitivity analysis, a reasonably possible change in a single assumption will not cause an impairment loss in any of the group’s CGUs.

11. Intangible assets

Computer Brands software Other Total US$m US$m US$m US$m Cost At 1 April 2011 4,860 540 48 5,448 Exchange adjustments 304 (32) 12 284 Additions – separately acquired 6 165 – 171 Acquisitions – through business combinations 4,832 – 595 5,427 Transfers from property, plant and equipment – 3 – 3 Disposals (28) (30) – (58) At 31 March 2012¹ 9,974 646 655 11,275 Exchange adjustments (11) (36) 2 (45) Additions – separately acquired – 149 – 149 Acquisitions – through business combinations (see note 29) 2 – – 2 Transfers to disposal group classifi ed as held for sale (see note 18) (9) – – (9) Disposals (4) (7) – (11) At 31 March 2013 9,952 752 657 11,361

Accumulated amortisation and impairment At 1 April 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 Exchange adjustments (9) (18) (1) (28) Amortisation 335 56 59 450 Transfers to disposal group classifi ed as held for sale (see note 18) (7) – – (7) Disposals – (6) – (6) At 31 March 2013 1,307 319 100 1,726

Net book amount At 1 April 2011 4,078 265 21 4,364 At 31 March 2012¹ 8,986 359 613 9,958 At 31 March 2013 8,645 433 557 9,635

1 As restated (see note 28).

At 31 March 2013 signifi cant individual brands included within the carrying value of intangible assets are as follows. Amortisation period 2013 2012 remaining US$m US$m (years) Brand carrying value Carlton (Australia) 2,139 2,181 39 Águila (Colombia) 1,478 1,557 32 Victoria Bitter (Australia) 1,080 1,101 39 Cristal (Peru) 646 646 32 Grolsch (Netherlands) 421 451 35

116 – SABMiller plc Annual Report 2013 F-31 12. Property, plant and equipment

Assets in Plant, course of Land and vehicles Returnable

construction buildings and systems containers Total Overview US$m US$m US$m US$m US$m Cost At 1 April 2011 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 54 347 373 12 786 Breakages and shrinkage – – – (73) (73) Transfers (563) 118 383 62 – Transfers to intangible assets (3) – – – (3) Business review Transfers to disposal group classifi ed as held for sale – (10) (44) – (54) Disposals (48) (354) (1,268) (379) (2,049) At 31 March 2012¹ 584 3,765 8,250 2,067 14,666 Exchange adjustments (18) (163) (505) (147) (833) Additions 720 25 324 296 1,365 Acquisitions – through business combinations (see note 29) – 1 1 – 2 Breakages and shrinkage – – – (71) (71) Transfers (733) 115 532 86 – Transfers from other assets – – 3 – 3 Transfers to disposal group classifi ed as held for sale (see note 18) – (2) (10) – (12) Disposals (11) (18) (313) (138) (480) At 31 March 2013 542 3,723 8,282 2,093 14,640

Accumulated depreciation and impairment At 1 April 2011 – 667 4,016 1,119 5,802 Exchange adjustments – (29) (174) (57) (260) Governance Provided during the year – 78 594 237 909 Breakages and shrinkage – – – (26) (26) Transfers to disposal group classifi ed as held for sale – (2) (25) – (27) Disposals – (42) (635) (217) (894) At 31 March 2012 – 672 3,776 1,056 5,504 Exchange adjustments – (43) (273) (82) (398) Provided during the year – 78 563 226 867

Breakages and shrinkage – – – (24) (24) Financial statements Impairment – 4 35 – 39 Transfers to disposal group classifi ed as held for sale (see note 18) – (1) (6) – (7) Disposals – (8) (293) (99) (400) At 31 March 2013 – 702 3,802 1,077 5,581

Net book amount At 1 April 2011 358 3,076 4,771 1,126 9,331 At 31 March 2012¹ 584 3,093 4,474 1,011 9,162 At 31 March 2013 542 3,021 4,480 1,016 9,059

1 As restated (see note 28).

As a result of the annual impairment reviews, US$19 million of impairment losses have been recognised in the year (2012: US$nil) (see note 10).

Included in land and buildings is freehold land with a cost of US$725 million (2012: US$742 million) which is not depreciated. Shareholder information

F-32 SABMiller plc Annual Report 2013 – 117 Notes to the consolidated fi nancial statements continued

12. Property, plant and equipment continued

Included in plant, vehicles and systems are the following amounts relating to assets held under fi nance leases. 2013 2012 US$m US$m Net book amount 40 34

Included in the amounts above are the following amounts in respect of borrowing costs capitalised. 2013 2012 US$m US$m At 1 April 53 56 Exchange adjustments (4) (2) Amortised during the year – (1) At 31 March 49 53

Borrowing costs of US$nil (2012: US$nil) were capitalised during the year.

Borrowings are secured by various of the group’s property, plant and equipment with an aggregate net book value of US$21 million (2012: US$20 million).

13. Investments in joint ventures

A list of the group’s signifi cant investments in joint ventures, including the name, country of incorporation and proportion of ownership interest is given in note 34 to the consolidated fi nancial statements.

US$m At 1 April 2011 5,813 Investments in joint ventures 288 Transfer to subsidiary undertaking (100) Share of results retained 671 Share of other comprehensive loss (256) Dividends received (896) At 31 March 2012 5,520 Investments in joint ventures 272 Share of results retained 717 Share of other comprehensive loss (76) Dividends received (886) At 31 March 2013 5,547

On 13 January 2012 the remaining 50% interest in Pacifi c Beverages was purchased and from this date the company has been accounted for as a subsidiary.

Summarised fi nancial information for the group’s interest in joint ventures is shown below. 2013 2012 US$m US$m Revenue 5,214 5,174 Expenses (4,497) (4,502) Profi t after tax 717 672

Non-current assets 5,626 5,613 Current assets 593 573 Current liabilities (521) (528) Non-current liabilities (829) (801)

118 – SABMiller plc Annual Report 2013 F-33 14. Investments in associates

A list of the group’s signifi cant investments in associates, including the name, country of incorporation and proportion of ownership interest is

given in note 34 to the consolidated fi nancial statements. Overview

US$m At 1 April 2011 2,719 Exchange adjustments (102) Investments in associates 2,056 Repayment of investments by associates (14) Acquisitions – through business combinations 186 Disposal of investments in associates (104) Share of results retained 481 Business review Dividends receivable (150) At 31 March 20121 5,072 Exchange adjustments (161) Investments in associates 106 Disposal of investments in associates (21) Share of results retained 527 Share of gains recognised in other comprehensive loss 6 Dividends receivable (113) At 31 March 2013 5,416

1 As restated (see note 28).

2013 On 7 November 2012 Foster’s sold its 49.9% interest in Foster’s USA LLC to MillerCoors LLC at no gain or loss to the group. Foster’s LLC is now wholly owned by MillerCoors LLC. Governance 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 N’Gola 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 group’s Russian business, SABMiller RUS LLC, and Ukrainian business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes, in exchange for a 24% equity stake in the enlarged Anadolu Efes group. Financial statements On 25 November 2011 the group disposed of its effective 12% investment in Kenya Breweries Ltd, generating a profi t of US$103 million.

The analysis of associate undertakings between listed and unlisted investments is shown below. 2013 20121 US$m US$m Listed 2,580 2,536 Unlisted 2,836 2,536 5,416 5,072

As at 31 March the market value of listed investments included above is: – Anadolu Efes 2,318 1,985 – Distell Group Ltd 704 574 – Ltd 351 204 – Tsogo Sun Holdings Ltd 1,166 1,032

1 As restated (see note 28). Shareholder information

Summarised fi nancial information for associates for total assets, total liabilities, revenue and profi t or loss on a 100% basis is shown below. 2013 20121 US$m US$m Total assets 23,249 18,731 Total liabilities (8,890) (6,231) Revenue 19,046 12,963 Net profi t 2,155 1,760

Some of the group’s 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.

F-34 SABMiller plc Annual Report 2013 – 119 Notes to the consolidated fi nancial statements continued

15. Inventories 2013 20121 US$m US$m Raw materials and consumables 691 670 Work in progress 123 122 Finished goods and goods for resale 361 456 1,175 1,248

1 As restated (see note 28).

The following amount of inventories are expected to be utilised after 12 months. 2013 2012 US$m US$m Raw materials and consumables 48 43

There were no borrowings secured on the inventories of the group (2012: US$nil).

An impairment charge of US$15 million was recognised in respect of inventories during the year (2012: US$12 million).

16. Trade and other receivables 2013 20121 US$m US$m Trade receivables 1,740 1,545 Less: provision for impairment (140) (140) Trade receivables – net 1,600 1,405 Other receivables 392 492 Less: provision for impairment (12) (12) Other receivables – net 380 480 Amounts owed by associates 68 205 Amounts owed by joint ventures – trade 5 6 Prepayments and accrued income 158 244 Total trade and other receivables 2,211 2,340

Analysed as: Current Trade receivables – net 1,584 1,389 Other receivables – net 274 370 Amounts owed by associates 59 205 Amounts owed by joint ventures – trade 5 6 Prepayments and accrued income 145 234 2,067 2,204

Non-current Trade receivables – net 16 16 Other receivables – net 106 110 Amounts owed by associates 9 – Prepayments and accrued income 13 10 144 136

1 As restated (see note 28).

The net carrying values of trade and other receivables are considered a close approximation of their fair values.

120 – SABMiller plc Annual Report 2013 F-35 16. Trade and other receivables continued

At 31 March 2013 trade and other receivables of US$466 million (2012: US$441 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. Overview

Past due

Fully Within Over performing 30 days 30-60 days 60-90 days 90-180 days 180 days US$m US$m US$m US$m US$m US$m At 31 March 2013 Trade receivables 1,255 181 62 15 18 42 Other receivables 290 44 18 5 4 15 Amounts owed by associates 6 2 – 3 4 53 Business review Amounts owed by joint ventures – trade 5 – – – – –

At 31 March 20121 Trade receivables 1,140 129 58 15 23 29 Other receivables 353 16 13 4 18 3 Amounts owed by associates 72 8 6 – 12 107 Amounts owed by joint ventures – trade 6 – – – – –

1 As restated (see note 28).

The group holds collateral as security for past due trade receivables to the value of US$17 million (2012: US$28 million). Collateral held primarily includes bank guarantees and charges over assets.

At 31 March 2013 trade receivables of US$167 million (2012: US$151 million) were determined to be specifi cally impaired and provided for. The amount of the provision at 31 March 2013 was US$140 million (2012: US$140 million) and refl ects trade receivables from customers which are considered to be experiencing diffi cult economic situations. It was assessed that a portion of these receivables is expected to be recovered. The group holds collateral as security against specifi cally impaired trade receivables with a fair value of US$1 million (2012: US$1 million). Governance

At 31 March 2013 other receivables of US$16 million (2012: US$13 million) were determined to be specifi cally impaired and provided for. The amount of the provision at 31 March 2013 was US$12 million (2012: US$12 million) and refl ects loans to customers which are considered to be experiencing diffi cult economic situations. It was assessed that a portion of these receivables is expected to be recovered. The group held collateral as security against specifi cally impaired other receivables at 31 March 2013 of US$1 million (2012: US$nil).

The carrying amounts of trade and other receivables are denominated in the following currencies. 2013 20121 US$m US$m Financial statements SA rand 340 413 US dollars 238 355 Australian dollars 260 385 Euro 246 241 Colombian peso 167 162 Czech koruna 91 89 British pound 81 79 Polish zloty 211 142 Indian rupee 136 110 Other currencies 441 364 2,211 2,340

1 As restated (see note 28).

Movements on the provisions for impairment of trade receivables and other receivables are as follows.

Trade receivables Other receivables Shareholder information 2013 2012 2013 2012 US$m US$m US$m US$m At 1 April (140) (147) (12) (14) Provision for receivables impairment (23) (25) – – Receivables written off during the year as uncollectible 12 7 – 1 Acquisitions – through business combinations – (5) – – Disposals 4 20 – – Transfers to disposal group classifi ed as held for sale – 1 – – Exchange adjustments 7 9 – 1 At 31 March (140) (140) (12) (12)

The creation of provisions for impaired receivables is included in net operating expenses in the income statement (see note 3).

F-36 SABMiller plc Annual Report 2013 – 121 Notes to the consolidated fi nancial statements continued

17. Cash and cash equivalents 2013 2012 US$m US$m Short-term deposits 1,684 103 Cash at bank and in hand 487 642 2,171 745

Cash and short-term deposits of US$146 million (2012: US$144 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 on the 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. All of the Angolan businesses, in which the group retains an associate interest, have been managed from that date by Castel. As a result, a participation in a bank loan of US$100 million previously owed by an Angolan subsidiary of the group was no longer entitled to be offset within borrowings.

During the year ended 31 March 2013 Castel has paid US$100 million to the group to cover the group’s exposure in respect of the loan participation deposit. This has resulted in a payable to associate being recorded in the consolidated balance sheet, as the loan participation deposit and the payable to associate are held with different counterparties and therefore are unable to be offset. In accordance with IAS 7 ‘Statement of Cash Flows’, the loan participation has been separately disclosed on the balance sheet as a loan participation deposit, and in the cash fl ow statement has not been treated as a cash and cash equivalent as it is not readily convertible into cash.

18. Disposal group held for sale

During 2013 the group agreed to sell its milk and juice business in Panama, subject to regulatory approvals. Accordingly the assets and liabilities related to the milk and juice business in Panama have been presented as held for sale, and the disposal group presented within the Latin America segment in accordance with IFRS 8 ‘Operating segments’.

In 2012 the assets and liabilities related to Foster’s interests in its Fijian beverage operations, Foster’s Group Pacifi c Limited, were presented as held for sale, and the disposal group presented within Asia Pacifi c. The Fijian beverage operations were disposed of on 7 September 2012. a. Assets of disposal group classifi ed as held for sale 2013 2012 US$m US$m Goodwill 13 29 Intangible assets 2 – Property, plant and equipment 5 27 Inventories 3 18 Trade and other receivables – 5 23 79 b. Liabilities of disposal group classifi ed as held for sale 2013 2012 US$m US$m Borrowings – 1 Trade and other payables – 3 Provisions – 1 Deferred tax liabilities 1 2 1 7

122 – SABMiller plc Annual Report 2013 F-37 19. Trade and other payables 2013 20121 US$m US$m

Trade payables 1,236 1,262 Overview Accruals 873 1,076 Deferred income 9 14 Containers in the hands of customers 504 449 Amounts owed to associates 150 42 Amounts owed to joint ventures – trade 14 17 Deferred consideration for acquisitions 10 12 Excise duty payable 363 383 VAT and other taxes payable 239 248 Business review Other payables 738 736 Total trade and other payables 4,136 4,239

Analysed as: Current Trade payables 1,236 1,262 Accruals 873 1,076 Deferred income 5 6 Containers in the hands of customers 504 449 Amounts owed to associates – trade 50 42 Amounts owed to joint ventures – trade 14 17 Deferred consideration for acquisitions 4 3 Excise duty payable 363 383 VAT and other taxes payable 239 248 Other payables 716 641 4,004 4,127 Governance

Non-current Deferred income 4 8 Amounts owed to associates 100 – Deferred consideration for acquisitions 6 9 Other payables 22 95 132 112 Financial statements 1 As restated (see note 28).

20. Deferred taxation

The movement on the net deferred tax liability is shown below. 2013 20121 US$m US$m At 1 April 3,602 2,394 Exchange adjustments (45) 52 Acquisitions – through business combinations (see note 29) 1 1,270 Transfers to disposal group classifi ed as held for sale (see note 18) (1) (2) Disposals – (26) Rate change (64) (25) Transfers to current tax – (17) Charged to the income statement (23) 57 Deferred tax on items charged to other comprehensive loss: – Financial instruments (6) (30) Shareholder information – Actuarial gains and losses (28) (71) At 31 March 3,436 3,602

1 As restated (see note 28).

F-38 SABMiller plc Annual Report 2013 – 123 Notes to the consolidated fi nancial statements continued

20. Deferred taxation continued

The movements in deferred tax assets and liabilities (after offsetting of balances as permitted by IAS 12) during the year are shown below.

Pensions and post- retirement Investment in Fixed asset benefi t Financial MillerCoors Other timing allowances provisions Intangibles instruments joint venture differences Total US$m US$m US$m US$m US$m US$m US$m Deferred tax liabilities At 1 April 2011 711 (16) 1,187 (48) 748 (4) 2,578 Exchange adjustments (34) (1) 95 – – (13) 47 Acquisitions – through business combinations (36) – 1,600 5 – (297) 1,272 Disposals (49) – (2) – – (4) (55) Rate change – – – – – (25) (25) Transfers to current tax 1 – – – – (16) (15) Transfers to/(from) deferred tax assets 2 – – – – (23) (21) Transfers to disposal group classifi ed 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 loss: – Financial instruments – – – (1) (29) – (30) – Actuarial gains and losses – (2) – – (69) – (71) At 31 March 20121 707 (14) 2,818 (46) 687 (433) 3,719 Exchange adjustments (51) – 2 – – 2 (47) Acquisitions – through business combinations – – 1 – – – 1 Rate change (64) – – – – – (64) Transfers from deferred tax assets (11) – – – – (14) (25) Transfers to disposal group classifi ed as held for sale – – (1) – – – (1) Charged/(credited) to the income statement 104 22 (125) (2) 44 (85) (42) Deferred tax on items charged/(credited) to other comprehensive loss: – Financial instruments – – – 1 (7) – (6) – Actuarial gains and losses – (6) – – (22) – (28) At 31 March 2013 685 2 2,695 (47) 702 (530) 3,507

1 As restated (see note 28). Provisions Fixed asset and Other timing allowances accruals differences Total US$m US$m US$m US$m Deferred tax assets At 1 April 2011 – 60 124 184 Exchange adjustments 1 (1) (5) (5) Acquisitions – through business combinations 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 Exchange adjustments – (1) (1) (2) Transfers (to)/from deferred tax liabilities (11) (20) 6 (25) Charged to the income statement (4) (2) (13) (19) At 31 March 2013 (15) 34 52 71

124 – SABMiller plc Annual Report 2013 F-39 20. Deferred taxation continued

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 Overview intention to settle the balances on a net basis.

The deferred tax asset arises due to timing differences in Europe, Africa, Asia Pacifi c, and Latin America and, in the prior year, also Corporate. Given both recent and forecast trading, the directors are of the opinion that the level of profi ts in the foreseeable future is more likely than not to be suffi cient to recover these assets.

Deferred tax liabilities of US$3,449 million (2012: US$3,662 million, restated) are expected to fall due after more than one year.

Deferred tax assets of US$52 million (2012: US$71 million) are expected to be recovered after more than one year. Business review 2013 2012 US$m US$m Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Tax losses 345 161 Tax credits 1,318 242 Depreciation in excess of capital allowances 16 13 Share-based payments 29 25 Other deductible temporary differences 60 107 1,768 548

Deferred tax assets in respect of tax losses are not recognised unless there is convincing evidence that there will be suffi cient profi ts in future years to recover the assets. A signifi cant part of the tax losses arises in the UK and the value has been calculated at the substantively enacted rate of 23%. It has been announced that the rate will fall to 20% commencing 1 April 2015. The impact of this reduction is not anticipated to have a material impact on the fi nancial statements. The tax losses do not expire. Governance Deferred tax assets in respect of tax credits arising which are carried forward for offset against future profi ts are not recognised unless there is absolute certainty that future profi ts will arise. US$968 million (2012: US$242 million) of such tax credits expire within 10 years.

Deferred tax is recognised on the unremitted earnings of overseas subsidiaries where there is an intention to distribute those reserves. A deferred tax liability of US$16 million (2012: US$37 million) has been recognised. A deferred tax liability of US$80 million (2012: US$51 million) has also been recognised in respect of unremitted profi ts of associates where a dividend policy is not in place. No deferred tax has been recognised on unremitted earnings of overseas subsidiaries where the group is able to control the timing of the reversal of these differences and it is not probable that they will not reverse in the foreseeable future. Similarly no tax is provided where there are plans to remit overseas earnings of subsidiaries but it is not expected that such distributions will give rise to a tax liability. Financial statements

As a result of UK legislation which largely exempts overseas dividends from tax, the temporary differences arising on unremitted profi ts are unlikely to lead to additional corporate taxes. However, remittance to the UK of those earnings may still result in a tax liability, principally as a result of withholding taxes levied by the overseas tax jurisdictions in which those subsidiaries operate.

Shareholder information

F-40 SABMiller plc Annual Report 2013 – 125 Notes to the consolidated fi nancial statements continued

21. Borrowings 2013 2012 US$m US$m Current Secured Overdrafts 9 10 Obligations under fi nance leases 8 5 Other secured loans 5 6 22 21 Unsecured US$1,100 million 5.5% Notes due 20131,2,3,4 1,111 – COP338,520 million IPC + 7.5% Ordinary Bonds due 20135 200 – US$550 million 5.7% Notes due 20141,2,4,6 570 – ZAR1,600 million 9.935% Notes due 20122,7 – 209 COP370,000 million IPC + 8.18% Ordinary Bonds due 20125 – 220 Other unsecured loans 363 484 Overdrafts 203 128 2,447 1,041 Total current borrowings 2,469 1,062

The fair value of current borrowings equals the carrying amount, as the impact of discounting is not signifi cant.

1 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.

2 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 with accrued and unpaid interest to the date of redemption.

3 On 13 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 the sole obligor of the notes.

4 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. The guarantee takes effect upon the occurrence of certain insolvency events in relation to SABMiller plc.

5 With effect from 31 March 2011 98.7% of the 2012 bonds and 97.4% of the 2013 bonds issued by Bavaria SA have been guaranteed by SABMiller plc.

6 On 17 July 2008 SABMiller plc issued US$550 million, 5.7% Notes due January 2014.

7 On 19 July 2007 SABSA Holdings (Pty) Ltd issued ZAR1,600 million, 9.935% Notes due July 2012. 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 and guaranteed by SABMiller plc.

126 – SABMiller plc Annual Report 2013 F-41 21. Borrowings continued 2013 2012 US$m US$m

Non-current Overview Secured Obligations under fi nance leases 27 16 Other secured loans 4 12 31 28 Unsecured ZAR1,000 million 7.125% Notes due 20181,2 108 – €1,000 million 1.875% Notes due 20202,3,4 1,275 – Business review US$1,000 million 1.85% Notes due 20152,4,5 1,004 1,000 US$2,000 million 2.45% Notes due 20172,4,5 2,020 1,993 US$2,500 million 3.75% Notes due 20222,4,5 2,506 2,483 US$1,500 million 4.95% Notes due 20422,4,5 1,485 1,484 US$1,100 million 5.5% Notes due 20132,4,6,7 – 1,124 €1,000 million 4.5% Notes due 20152,7,8 1,317 1,367 US$300 million 6.625% Notes due 20332,4,7,9 440 416 US$850 million 6.5% Notes due 20162,4,7,10 937 960 US$550 million 5.7% Notes due 20142,4,7,11 – 588 US$700 million 6.5% Notes due 20182,4,7,11 792 811 PEN150 million 6.75% Notes due 20152,7,12 59 56 US$300 million 4.875% Notes due 20142,4,13 312 335 US$700 million 5.125% Notes due 20152,4,14 762 730 US$300 million 7.875% Notes due 20162,15 364 383 US$300 million 5.875% Notes due 20352,4,14 344 358 COP640,000 million IPC + 7.3% Ordinary Bonds due 201416 396 391 COP561,800 million IPC + 6.52% Ordinary Bonds due 201516 330 320

COP338,520 million IPC + 7.5% Ordinary Bonds due 201316 – 205 Governance US$521 million (2012: US$2,169 million) unsecured loan due December 201417 523 2,180 US$624 million (2012: US$750 million) unsecured loan due September 201617 621 744 Other unsecured loans 453 208 16,048 18,136 Total non-current borrowings 16,079 18,164 Total current and non-current borrowings 18,548 19,226 Financial statements Analysed as: Borrowings 18,301 19,067 Obligations under fi nance leases 35 21 Overdrafts 212 138 18,548 19,226

The fair value of non-current borrowings is US$16,679 million (2012: US$18,821 million). The fair values are based on a combination of market quoted prices and cash fl ows discounted using prevailing interest rates.

1 On 28 March 2013 SABSA Holdings Ltd issued ZAR1,000 million, 7.125% Notes due March 2018. The notes were issued under the ZAR6,000 million Domestic Medium Term Note Programme established on 13 December 2012 and guaranteed by SABMiller plc.

2 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 with accrued and unpaid interest to the date of redemption.

3 On 6 December 2012 SABMiller Holdings Inc issued €1,000 million, 1.875% Notes due January 2020. The notes were issued under the SABMiller Holdings Inc US$3,000 million Euro Medium Term Note Programme guaranteed by SABMiller plc.

4 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. Shareholder information

5 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.

6 On 13 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 the sole obligor of the notes.

7 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. The guarantee takes effect upon the occurrence of certain insolvency events in relation to SABMiller plc.

8 On 17 July 2009 SABMiller plc issued €1,000 million, 4.5% Notes due January 2015. The notes were issued under the SABMiller plc US$5,000 million Euro Medium Term Note Programme.

9 On 13 August 2003 SABMiller plc issued US$300 million, 6.625% Guaranteed Notes due August 2033. Since 10 September 2010 the principal and interest in respect of the notes has not been guaranteed.

10 On 5 July 2006 SABMiller plc issued US$850 million, 6.5% Notes due July 2016.

11 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.

F-42 SABMiller plc Annual Report 2013 – 127 Notes to the consolidated fi nancial statements continued

21. Borrowings continued

12 On 19 March 2010 SABMiller plc issued PEN150 million, 6.75% Notes due March 2015.

13 On 5 October 2004 Foster’s Finance Corp issued US$300 million, 4.875% Notes due October 2014, guaranteed by Foster’s Group Pty Ltd.

14 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 Foster’s Group Pty Ltd.

15 On 3 June 1996 FBG Finance Ltd issued US$300 million, 7.875% Notes due June 2016, guaranteed by Foster’s Group Pty Ltd.

16 With effect from 31 March 2011 85.5% of the 2014 bonds, 94.0% of the 2015 bonds and 97.4% of the 2013 bonds, all issued by Bavaria SA, have been guaranteed by SABMiller plc.

17 On 9 September 2011 the group entered into US$12,500 million, multicurrency committed syndicated facilities primarily for the purpose of acquiring Foster’s. By 31 March 2013 US$10,855 million (2012: US$9,081 million) of this facility had been voluntarily cancelled. Of the remaining US$1,645 million (2012: US$3,419 million) facility, US$500 million (2012: US$500 million) is a revolving credit facility and undrawn.

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. 2013 2012 US$m US$m Amounts expiring: Within one year 281 774 Between one and two years 17 12 Between two and fi ve years 554 788 In fi ve years or more 2,500 2,236 3,352 3,810

In April 2011 the group entered into a fi ve-year US$2,500 million committed syndicated revolving credit facility, with the option of two one-year extensions. In March 2013 the maturity of this facility was extended to April 2018. The contingent guarantee referred to in footnote 7 on page 127 extends to the obligations of SABMiller plc in respect of this facility.

Maturity of obligations under fi nance leases Obligations under fi nance leases are as follows. 2013 2012 US$m US$m The minimum lease payments under fi nance leases fall due as follows. Within one year 9 6 Between one and fi ve years 24 17 In fi ve years or more 10 – 43 23 Future fi nance charges (8) (2) Present value of fi nance lease liabilities 35 21

Maturity of non-current fi nancial liabilities The maturity profi le of the carrying amount of the group’s non-current fi nancial liabilities at 31 March was as follows.

Net derivative Net derivative Borrowings fi nancial Borrowings fi nancial and Finance assets1 2013 and Finance assets1 2012 overdrafts leases (note 23) Total overdrafts leases (note 23) Total US$m US$m US$m US$m US$m US$m US$m US$m Amounts falling due: Between one and two years 4,173 7 (45) 4,135 1,964 2 (8) 1,958 Between two and fi ve years 5,031 15 (235) 4,811 10,605 14 (356) 10,263 In fi ve years or more 6,848 5 (303) 6,550 5,579 – (254) 5,325 16,052 27 (583) 15,496 18,148 16 (618) 17,546

1 Net borrowings-related derivative fi nancial instruments only.

128 – SABMiller plc Annual Report 2013 F-43 22. Financial risk factors

Financial risk management

Overview Overview In the normal course of business, the group is exposed to the following fi nancial risks:

• Market risk • Credit risk • Liquidity risk

This note explains the group’s exposure to each of the above risks, aided by quantitative disclosures included throughout these consolidated fi 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. Business review

The directors are ultimately responsible for the establishment and oversight of the group’s 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 fi nancial offi cer, who in this regard is supported by the treasury committee and the group treasury function. Among 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. The board also receives a quarterly report on treasury activities, including confi rmation of compliance with treasury risk management policies.

The group treasury function is responsible for the management of cash, borrowings and the fi 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 SABMiller Procurement GmbH (SABMiller Procurement, formerly Trinity Procurement GmbH), the group’s centralised procurement function. Risk management of key brewing and packaging materials has now been substantially transferred to SABMiller Procurement. Some of the risk management strategies include the use of derivatives, 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 group’s 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, the group also sells put options to reduce or eliminate the cost of purchased options. It is the policy of the group that no trading in fi nancial instruments be undertaken. Governance The group’s treasury policies are established to identify and analyse the fi 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 group’s 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$4,589 million of US dollar borrowings and €351 million of Financial statements euro borrowings (2012: 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 fi nancial derivatives US$2,882 million and €351 million (2012: US$2,406 million and €255 million) are accounted for as net investment hedges and US$1,300 million (2012: US$1,600 million) are accounted for as fair value hedges.

The group does not hedge currency exposures from the translation of profi ts earned in foreign currency subsidiaries, associates and joint ventures.

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 18 months. Committed transactional exposures that are certain are hedged fully without limitation in time. The group principally uses forward exchange contracts to hedge currency risk.

The tables below set out the group’s currency exposures from fi 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. Shareholder information

F-44 SABMiller plc Annual Report 2013 – 129 Notes to the consolidated fi nancial statements continued

22. Financial risk factors continued

Other Latin SA Australian European American US dollars rand dollars Euro currencies currencies Other Total US$m US$m US$m US$m US$m US$m US$m US$m Financial assets Trade and other receivables 21 135 3 36 134 165 21 515 Derivative fi nancial instruments¹ 2,023 61 – 1,034 352 – – 3,470 Cash and cash equivalents 25 2 – 8 16 9 2 62 Intra-group assets 190 8 115 1,062 802 – 2 2,179 At 31 March 2013 2,259 206 118 2,140 1,304 174 25 6,226

Potential impact on earnings – (loss)/gain 20% increase in functional currency (305) (26) (20) (200) (160) (29) (4) (744) 20% decrease in functional currency 365 31 24 240 192 35 5 892

Potential impact on other comprehensive income – (loss)/gain 20% increase in functional currency (72) (8) – (157) (57) – – (294) 20% decrease in functional currency 86 10 – 188 69 – – 353

Financial liabilities Trade and other payables (260) (47) (19) (143) (415) (215) (5) (1,104) Derivative fi nancial instruments1 (58) (565) (1,331) (431) (1,023) (428) – (3,836) Borrowings (1,533) – (521) (2,557) (9) (58) (113) (4,791) Intra-group liabilities (45) (41) (400) (103) (114) – (1) (704) At 31 March 2013 (1,896) (653) (2,271) (3,234) (1,561) (701) (119) (10,435)

Potential impact on earnings – gain/(loss) 20% increase in functional currency 316 17 70 200 90 36 20 749 20% decrease in functional currency (379) (20) (84) (240) (108) (43) (24) (898)

Potential impact on other comprehensive income – gain/(loss) 20% increase in functional currency – 92 309 339 171 81 – 992 20% decrease in functional currency – (110) (370) (407) (205) (97) – (1,189)

1 These represent the notional amounts of derivative fi nancial instruments.

130 – SABMiller plc Annual Report 2013 F-45 22. Financial risk factors continued

Other Latin SA Australian European American

US dollars rand dollars Euro currencies currencies Other Total Overview US$m US$m US$m US$m US$m US$m US$m US$m Financial assets Trade and other receivables 25 130 4 46 155 – 61 421 Derivative fi nancial instruments¹ 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 Business review 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 fi nancial instruments1 (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) Governance

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)

Potential impact on other comprehensive income – gain/(loss) 20% increase in functional currency – 82 517 17 118 95 – 829 20% decrease in functional currency – (98) (621) (20) (142) (113) – (994) Financial statements

1 These represent the notional amounts of derivative fi nancial instruments.

Foreign currency sensitivity analysis Currency risks arise on account of fi nancial instruments being denominated in a currency that is not the functional currency and being of a monetary nature.

The group holds foreign currency cash fl ow hedges totalling US$1,317 million at 31 March 2013 (2012: US$1,224 million). The foreign exchange gains or losses on these contracts are recorded in the cash fl 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$5,937 million at 31 March 2013 (2012: US$5,312 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 group’s foreign currency net assets. Shareholder information

F-46 SABMiller plc Annual Report 2013 – 131 Notes to the consolidated fi nancial statements continued

22. Financial risk factors continued

(ii) Interest rate risk As at 31 March 2013 46% (2012: 43%) of consolidated gross borrowings were in fi xed rates taking into account interest rate swaps and forward rate agreements.

The group’s policy is to borrow (directly or synthetically) in fl oating rates, refl ecting the fact that fl oating rates are generally lower than fi xed rates in the medium term. However, a minimum of 25% of consolidated net borrowings is required to be in fi xed rates for a minimum duration of 12 months and the extent to which group borrowings may be in fl oating rates is restricted to the lower of 75% of consolidated net borrowings and that amount of net borrowings in fl oating rates that with a 1% increase in interest rates would increase fi nance costs by an amount equal to (but not more than) 1.20% of adjusted EBITDA. The policy excludes any infl ation-linked debt, where there will be a natural hedge within business operations, and also excludes borrowings arising from acquisitions in the previous six months.

Exposure to movements in interest rates in group borrowings is managed through interest rate swaps and forward rate agreements. As at 31 March 2013 on a policy adjusted basis, 56% (2012: 50%) of consolidated net borrowings were in fi xed rates. The impact of a 1% rise in interest rates on borrowings in fl oating rates would be equivalent to 1.01% (2012: 0.44%) of adjusted EBITDA.

The cash fl ow interest rate risk sensitivities on variable debt and interest rate swaps were. Other SA Australian European Colombian US dollars rand dollars Euro currencies peso Other Total US$m US$m US$m US$m US$m US$m US$m US$m At 31 March 2013 Net debt1 11,745 148 523 2,539 (19) 884 557 16,377 Less: fi xed rate debt (11,085) (108) – (2,592) – – (265) (14,050) Variable rate debt 660 40 523 (53) (19) 884 292 2,327 Adjust for: Financial derivatives 2,662 152 1,017 934 558 – – 5,323 Net variable rate debt exposure 3,322 192 1,540 881 539 884 292 7,650 +/- 100 bps change Potential impact on earnings 34 2 16 9 5 9 3 78 +/- 100 bps change Potential impact on other comprehensive income – – 8 – – – – 8

At 31 March 2012 Net debt1 13,141 192 2,226 1,359 (34) 1,148 450 18,482 Less: fi 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

1 Excluding net borrowings-related derivative instruments.

Fair value sensitivity analysis for fi xed income instruments Changes in the market interest rates of non-derivative fi nancial instruments with fi xed interest rates only affect income if these are measured at their fair value. As such, all fi nancial instruments with fi xed rates of interest that are accounted for at amortised cost are not subject to interest rate risk as defi ned in IFRS 7.

The group holds derivative contracts with a nominal value of US$6,704 million as at 31 March 2013 (2012: US$6,217 million) which are designated as fair value hedges. In the case of these instruments and the underlying fi 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 fl 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. The analysis was performed on the same basis for 2012.

132 – SABMiller plc Annual Report 2013 F-47 22. Financial risk factors continued

Interest rate profi les of fi nancial liabilities

The following table sets out the contractual repricing included within the underlying borrowings (excluding net borrowings-related derivatives) Overview exposed to either fi xed interest rates or fl oating interest rates and revises this for the repricing effect of interest rate and cross currency swaps.

2013 2012

Total Effect of Total Total Effect of Total borrowings derivatives exposure borrowings derivatives exposure US$m US$m US$m US$m US$m US$m Financial liabilities Repricing due: Within one year 4,823 5,515 10,338 5,138 5,981 11,119 Business review Between one and two years 1,375 (946) 429 1,712 (900) 812 Between two and fi ve years 5,508 (2,816) 2,692 6,824 (3,874) 2,950 In fi ve years or more 6,842 (1,753) 5,089 5,552 (1,207) 4,345 Total interest bearing 18,548 – 18,548 19,226 – 19,226

Analysed as: Fixed rate interest 14,050 (5,515) 8,535 14,314 (5,981) 8,333 Floating rate interest 4,498 5,515 10,013 4,912 5,981 10,893 Total interest bearing 18,548 – 18,548 19,226 – 19,226

(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 fi 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 fi 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 fi ve years. Where derivative contracts are used the group manages exposures principally through Governance exchange-traded futures, forwards and swaps.

At 31 March 2013 the notional value of commodity derivatives amounted to US$89 million (2012: US$36 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 classifi ed 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. Financial statements b. Credit risk Credit risk is the risk of fi nancial loss to the group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations.

Financial instruments The group limits its exposure to fi 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 & Poor’s and Baa3 from Moody’s. For banks with a lower credit rating, or with no international credit rating, a maximum limit of US$5 million is applied, unless specifi c approval is obtained from either the chief fi nancial offi cer 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 fi nancial derivatives, which permit net settlement of assets and liabilities in certain circumstances.

Trade and other receivables There is no signifi cant 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. Shareholder information The group considers its maximum credit risk to be US$5,052 million (2012: US$3,705 million, as restated) which is the total of the group’s fi nancial assets. c. Liquidity risk Liquidity risk is the risk that the group will not be able to meet its fi nancial obligations as they fall due.

The group fi 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 2013 the group had the following core lines of credit that were available for general corporate purposes.

F-48 SABMiller plc Annual Report 2013 – 133 Notes to the consolidated fi nancial statements continued

22. Financial risk factors continued

SABMiller plc: • US$2,500 million committed syndicated revolving credit facility, which is due to expire in April 2018.

SABMiller Holdings Inc: • US$500 million revolving credit facility, which is due to expire in September 2016.

Liquidity risk faced by the group is mitigated by having diverse sources of fi 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 2013 the borrowing capacity under committed bank facilities amounted to US$3,352 million (2012: US$3,810 million).

The table below analyses the group’s fi nancial liabilities which will be settled on a net basis into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual settlement date. The amounts disclosed in the table are the contractual undiscounted cash fl ows. The amounts disclosed for fi nancial guarantee contracts represent the maximum possible cash outfl ows for guarantees provided in respect of associates’ bank facilities, which would only be payable upon the occurrence of certain default events. Should such events occur, certain remedies are available that could mitigate the impact. Balances due within 12 months equal their carrying balances as the impact of discounting is not signifi cant.

Between Between Less than 1 and 2 2 and 5 Over 1 year years years 5 years US$m US$m US$m US$m At 31 March 2013 Borrowings (3,466) (4,468) (5,881) (9,407) Derivative fi nancial instruments (11) (13) (13) – Trade and other payables (3,391) (119) – – Financial guarantee contracts (234) – – –

At 31 March 2012 Borrowings (1,803) (2,904) (11,763) (8,361) Derivative fi nancial instruments (18) 16 (11) (35) Trade and other payables1 (3,489) (95) (7) (4) Financial guarantee contracts (174) – – –

1 As restated (see note 28).

The table below analyses the group’s derivative fi 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 settlement date. The amounts disclosed in the table are the contractual undiscounted cash fl ows. Balances due within 12 months equal their carrying balances as the impact of discounting is not signifi cant. Forward foreign currency swaps have been included for the fi rst time in the table below for the year ended 31 March 2013, along with the comparative for the prior year.

Between Between Less than 1 and 2 2 and 5 Over 1 year years years 5 years US$m US$m US$m US$m At 31 March 2013 Forward foreign currency swaps Outfl ow (2,944) (43) – – Infl ow 2,982 43 – –

Forward foreign exchange contracts Outfl ow (1,308) (63) – – Infl ow 1,306 63 – –

Cross currency swaps Outfl ow (325) (466) (1,730) (874) Infl ow 332 451 1,816 864

At 31 March 2012 Forward foreign currency swaps Outfl ow (2,492) (87) – – Infl ow 2,527 82 – –

Forward foreign exchange contracts Outfl ow (399) (12) – – Infl ow 401 12 – –

Cross currency swaps Outfl ow (278) (346) (1,686) (866) Infl ow 216 331 1,637 877

134 – SABMiller plc Annual Report 2013 F-49 22. Financial risk factors continued

Capital management

The capital structure of the group consists of net debt (see note 27c) and shareholders’ equity. Overview

The group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confi dence and to sustain future development of the business.

Besides the minimum capitalisation rules that may apply to subsidiaries in different countries, the group’s only externally imposed capital requirement relates to the group’s core lines of credit which include a net debt to EBITDA fi nancial covenant which was complied with throughout the year.

The group monitors its fi nancial capacity and credit ratings by reference to a number of key fi nancial ratios and cash fl ow metrics including net debt Business review to adjusted EBITDA and interest cover. These provide a framework within which the group’s capital base is managed including dividend policy.

If the group fails to meet the fi 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/stable outlook by Moody’s Investors Service and BBB+/positive outlook by Standard & Poor’s Ratings Services.

Fair value estimation The following table presents the group’s fi nancial assets and liabilities that are measured at fair value. Level 1 Level 2 Level 3 Total US$m US$m US$m US$m At 31 March 2013 Assets Derivative fi nancial instruments – 843 – 843 Available for sale investments – 10 12 22 Total assets – 853 12 865 Governance

Liabilities Derivative fi nancial instruments – (86) – (86) Total liabilities – (86) – (86)

At 31 March 2012 Assets

Derivative fi nancial instruments – 756 – 756 Financial statements Available for sale investments 1 18 12 31 Total assets 1 774 12 787

Liabilities Derivative fi nancial instruments – (109) – (109) Total liabilities – (109) – (109)

The levels of the fair value hierarchy and its application to the group’s fi nancial assets and liabilities are described below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities:

The fair value of fi 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, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for fi nancial assets held by the group is the current bid price. Shareholder information

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 from prices):

The fair values of fi 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 specifi c estimates. If all signifi cant 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:

Specifi c valuation techniques, such as discounted cash fl ow analysis, are used to determine fair value of the remaining fi nancial instruments.

F-50 SABMiller plc Annual Report 2013 – 135 Notes to the consolidated fi nancial statements continued

22. Financial risk factors continued

The following table presents the changes in level 3 instruments for the years ended 31 March. Available for sale investments

2013 2012 US$m US$m At 1 April 12 15 Exchange adjustments – (1) Disposals – (2) At 31 March 12 12

23. Derivative fi nancial instruments

Current derivative fi nancial instruments 2013 2012

Assets Liabilities Assets Liabilities US$m US$m US$m US$m Embedded derivatives 1 – – (1) Interest rate swaps – on borrowings1 25 (4) –– Forward foreign currency contracts – on operating items 11 (13) 7 (13) Forward foreign currency contracts – on borrowings1 26 (1) 14 (12) Forward foreign currency contracts designated as cash fl ow hedges 1 (12) 3 (12) Cross currency swaps – on borrowings1 47 – – – Commodity contracts designated as cash fl ow hedges – (4) – (2) 111 (34) 24 (40)

1 Borrowings-related derivative fi nancial instruments amounting to a net asset of US$93 million (2012: US$2 million).

Non-current derivative fi nancial instruments 2013 2012

Assets Liabilities Assets Liabilities US$m US$m US$m US$m Interest rate swaps designated as fair value hedges1 428 (13) 394 (18) Interest rate swaps designated as cash fl ow hedges1 – (10) – (4) Interest rate swaps – on borrowings1 – (11) 55 (9) Forward foreign currency contracts – on borrowings1 5 – 5 – Forward foreign currency contracts – on operating items designated as net investment hedges 32 (14) 42 (21) Forward foreign currency contracts – on borrowings designated as net investment hedges1 4 (2) – (10) Cross currency swaps – on borrowings1 45 – 74 – Cross currency swaps designated as cash fl ow hedges1 59 – 18 – Cross currency swaps designated as fair value hedges1 78 – 113 – Cross currency swaps designated as net investment hedges 81 – 31 (7) Commodity contracts designated as cash fl ow hedges – (2) – – 732 (52) 732 (69)

1 Borrowings-related derivative fi nancial instruments amounting to a net asset of US$583 million (2012: US$618 million).

Derivatives designated as hedging instruments (i) Fair value hedges The group has entered into several interest rate swaps to pay fl oating and receive fi 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 fi xed rate borrowings. 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 2013 the notional amount of the US dollar interest rate swaps was US$4,250 million (2012: US$3,950 million). The fi xed interest rates received vary from 1.85% to 6.625% (2012: 1.85% to 6.625%) and the fl oating interest rates paid vary from LIBOR plus 47.2 bps to LIBOR plus 177.8 bps (2012: LIBOR plus 71.6 bps to LIBOR plus 177.8 bps) on the notional amount.

As at 31 March 2013 the notional amount of the euro interest rate swaps was €900 million (2012: €500 million). The fi xed interest rates received are 1.875% to 4.5% (2012: 4.5%) and fl oating interest rates paid vary from EURIBOR plus 71 bps to EURIBOR plus 178 bps (2012: EURIBOR plus 177 bps to EURIBOR plus 178 bps) on the notional amount.

136 – SABMiller plc Annual Report 2013 F-51 23. Derivative fi nancial instruments continued

The group has entered into interest rate swaps and cross currency interest rate swaps, the cumulative effect of which is to receive fi xed US

dollar interest and pay Australian dollar fl oating interest, and to convert the profi le of the US dollar borrowings into Australian dollars. These Overview swaps have been designated as a combination of fair value and cash fl ow hedges to hedge the exposure of the Australian operations to changes in the fair value of the US dollar borrowings.

As at 31 March 2013 the notional amount of the interest rate swaps was US$300 million (2012: US$600 million). The fi xed interest rates received are 7.875% (2012: 4.875% to 7.875%) and the fl oating interest rates paid vary from LIBOR plus 69.2 bps to LIBOR plus 72.8 bps (2012: LIBOR plus 47 bps to LIBOR plus 73 bps) on the notional amount.

The notional amount of the cross currency interest rate swaps was US$1,300 million (2012: US$1,600 million). These were: Business review • US$1,000 million (2012: US$1,000 million) received US dollar fi xed rate interest varying from 5.125% to 5.875% (2012: 5.125% to 5.875%) and paid fl oating Australian dollar interest with rates varying from Australian bank bills plus 268 bps to Australian bank bills plus 410 bps (2012: Australian bank bills plus 268 bps to Australian bank bills plus 410 bps); and • US$300 million (2012: US$600 million) received fl oating US dollar interest with rates of LIBOR plus 71 bps (2012: LIBOR plus 47 bps to LIBOR plus 71 bps) and paid fl oating Australian dollar interest with rates of Australian bank bills plus 117 bps (2012: Australian bank bills plus 87 bps to Australian bank bills plus 117 bps).

As at 31 March 2013 the carrying value of the hedged borrowings was US$7,202 million (2012: US$6,827 million).

(ii) Cash fl ow hedges The group has entered into Australian dollar interest rate swaps designated as cash fl ow hedges to manage the interest rate on borrowings. The notional amount of these interest rate swaps was US$521 million equivalent (2012: US$515 million). The fair value of these interest rate swaps was a liability of US$10 million (2012: US$4 million). The fi xed interest rate paid varies from 4.27% to 4.38% (2012: 4.27% to 4.38%) and the fl oating rates received are Australian bank bills plus zero bps (2012: Australian bank bills plus zero bps). As at 31 March 2013 the carrying value of the hedged borrowings was US$523 million (2012: US$535 million).

The group has entered into forward exchange contracts designated as cash fl ow hedges to manage short-term foreign currency exposures Governance to expected net operating costs including future trade imports and exports. As at 31 March 2013 the notional amounts of these contracts were €383 million, US$432 million, GBP144 million, Swiss franc (CHF) 70 million, ZAR464 million and CZK674 million (2012: €317 million, US$557 million, GBP128 million, CHF15 million, ZAR405 million and CZK12 million).

The group has entered into commodity contracts designated as cash fl ow hedges to manage the future price of commodities. As at 31 March 2013 the notional amount of forward contracts for the purchase price of corn was US$13 million (2012: US$3 million), the notional amount of forward contracts for the purchase price of aluminium was US$75 million (2012: US$33 million) and the notional amount of forward contracts for the purchase price of sugar was US$1 million (2012: US$nil). Financial statements The following table indicates the period in which the cash fl ows associated with derivatives that are cash fl ow hedges are expected to occur and impact the income statement.

Carrying Expected Less than Between 1 Between 2 amount cash fl ows 1 year and 2 years and 5 years US$m US$m US$m US$m US$m At 31 March 2013 Interest rate swaps: Liabilities (10) (10) (4) (6) – Forward foreign currency contracts: Assets 1 1 1 – – Liabilities (12) (12) (12) – – Commodity contracts: Liabilities (6) (8) (4) (3) (1) (27) (29) (19) (9) (1) Shareholder information 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: Liabilities (2) (2) (2) – – (15) (15) (12) (2) (1)

F-52 SABMiller plc Annual Report 2013 – 137 Notes to the consolidated fi nancial statements continued

23. Derivative fi nancial instruments continued

(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 net investments in its foreign subsidiaries in South Africa, Australia, the Czech Republic, Poland, Colombia and Peru to hedge the group’s exposure to foreign exchange risk on these investments. Net gains relating to forward foreign currency contracts and cross currency swaps of US$63 million (2012: losses of US$1 million) have been recognised in other comprehensive income.

Analysis of notional amounts on fi nancial instruments designated as net investment hedges: 2013 2012 m m Forward foreign currency contracts: SA rand 3,681 2,374 Czech koruna 5,575 6,825 Peruvian nuevo sol 480 631 Australian dollar 1,000 1,000 Polish zloty 611 630 Colombian peso 445,500 490,476 Cross currency swaps: SA rand 1,404 1,404 Australian dollar 277 – Polish zloty 585 433 Czech koruna 7,600 –

Standalone derivative fi 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 fl ows with gains and losses taken to the income statement. As at 31 March 2013 the notional amounts of these contracts were €32 million, US$61 million and ZAR28 million (2012: €91 million, US$150 million and ZAR37 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 fl ows with gains and losses taken to the income statement. As at 31 March 2013 the notional amounts of these contracts were US$108 million, €3 million, GBP31 million, Romanian lei (RON) 454 million, PLN863 million, CHF34 million, ZAR251 million, CZK6,340 million, AUD415 million and Hungarian forints (HUF)14,500 million (2012: US$110 million, €60 million, GBP34 million, RON196 million, PLN189 million, CHF15 million, ZAR632 million, CZK1,425 million and AUD209 million).

(ii) Cross currency swaps The group has entered into cross currency swaps to manage foreign currency exposures on intercompany loan balances. These derivatives are fair valued based on discounted future cash fl ows with gains and losses taken to the income statement. As at 31 March 2013 the notional amounts of these contracts were €317 million (2012: €317 million).

Fair value gain on fi nancial instruments recognised in the income statement 2013 2012 US$m US$m Derivative fi nancial instruments: Interest rate swaps 8 (8) Interest rate swaps designated as fair value hedges (7) 104 Forward foreign currency contracts 12 76 Forward foreign currency contracts designated as fair value hedges 3 8 Cross currency swaps 19 27 Cross currency swaps designated as net investment hedges – (4) Other fair value gains 18 30 53 233 Other fi nancial instruments: Non-current borrowings designated as the hedged item in a fair value hedge 7 (104) Total fair value gain on fi nancial instruments recognised in the income statement 60 129

Fair value gains or losses on borrowings, derivative fi nancial instruments held to hedge interest rate risk on borrowings and derivative fi nancial instruments acquired to hedge the risks of the Foster’s acquisition were recognised as part of net fi nance costs. Fair value gains or losses on all other derivative fi nancial instruments are recognised in operating profi t.

138 – SABMiller plc Annual Report 2013 F-53 23. Derivative fi nancial instruments continued

Reconciliation of total fi nancial instruments

The table below reconciles the group’s accounting categorisation of fi nancial assets and liabilities (based on initial recognition) to the classes of Overview assets and liabilities as shown on the face of the balance sheet. Financial Fair value liabilities Not through held at categorised income Loans and Available amortised as a fi nancial Non- statement receivables for sale cost instrument Total current Current US$m US$m US$m US$m US$m US$m US$m US$m At 31 March 2013 Assets Available for sale investments – – 22 – – 22 22 – Business review Derivative fi nancial instruments 843 – – – – 843 732 111 Trade and other receivables – 1,916 – – 295 2,211 144 2,067 Loan participation deposit – 100 – – – 100 100 – Cash and cash equivalents – 2,171 – – – 2,171 – 2,171 Liabilities Derivative fi nancial instruments (86) – – – – (86) (52) (34) Borrowings – – – (18,548) – (18,548) (16,079) (2,469) Trade and other payables – – – (3,524) (612) (4,136) (132) (4,004)

At 31 March 20121 Assets Available for sale investments – – 31 – – 31 30 1 Derivative fi nancial instruments 756 – – – – 756 732 24 Trade and other receivables – 2,073 – – 267 2,340 136 2,204 Loan participation deposit – 100 – – – 100 100 – Cash and cash equivalents – 745 – – – 745 – 745 Governance Liabilities Derivative fi nancial instruments (109) – – – – (109) (69) (40) Borrowings – – – (19,226) – (19,226) (18,164) (1,062) Trade and other payables – – – (3,594) (645) (4,239) (112) (4,127)

1 As restated (see note 28). Financial statements Shareholder information

F-54 SABMiller plc Annual Report 2013 – 139 Notes to the consolidated fi nancial statements continued

24. Provisions Demerged Post- entities and retirement Taxation- Payroll- Onerous litigation benefi ts related Restructuring related contracts Other Total US$m US$m US$m US$m US$m US$m US$m US$m At 1 April 2011 94 310 302 70 46 7 44 873 Exchange adjustments (2) (1) (2) 2 – 7 2 6 Acquisitions – through business combinations 34 1 37 160 29 211 26 498 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 loss – 9 – – – – – 9 Transfers to disposal group classifi ed as held for sale – – – – (1) – – (1) Transfer between categories 3 – 5 4 (4) – (8) – At 31 March 20121 125 309 265 217 71 214 72 1,273 Exchange adjustments (4) (16) (3) (1) (3) 1 (1) (27) Charged/(credited) to the income statement – Additional provision in year 1 30 21 19 14 2 18 105 – Unused amounts reversed – – (25) (5) – – (1) (31) Utilised in the year (4) (43) (7) (110) (13) (56) (19) (252) Actuarial losses recorded in other comprehensive loss – 21 – – – – – 21 Transfer from current tax liabilities – – 7 – – – – 7 Transfer between categories 7 – (10) (6) 9 (1) 1 – At 31 March 2013 125 301 248 114 78 160 70 1,096

2013 2012 US$m US$m Analysed as: Current 558 704 Non-current 538 569 1,096 1,273

1 As restated (see note 28).

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 in relation 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 2013 US$1 million (2012: US$2 million) of this provision was utilised in regard to costs associated with SAB Ltd’s previously disposed of remaining retail interests. The residual balance of US$10 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$115 million (2012: US$90 million) of provisions in respect of outstanding litigation within various operations, based on management’s expectation that the outcomes of these disputes are expected to be resolved within the forthcoming fi 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 benefi ts The provision for post-retirement benefi ts represents the provision for medical benefi ts for retired employees and their dependants in South Africa, for post-retirement medical and life insurance benefi ts for eligible employees and their dependants in North America and Europe, medical and other benefi ts in Latin America, and pension provisions for employees in North America, Latin America, Europe, Africa and Asia Pacifi c. The principal assumptions on which these provisions are based are disclosed in note 31.

140 – SABMiller plc Annual Report 2013 F-55 24. Provisions continued

Taxation-related

The group has recognised various provisions in relation to taxation exposures it believes may arise. The provisions principally relate to Overview 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 fi 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 four years, and provisions for costs related to pre-existing demerger costs and demerger warranties in Foster’s in Australia which are expected to be utilised within one year.

Payroll-related Business review This principally relates to employee long service awards of US$17 million (2012: US$19 million) within South Africa and US$3 million (2012: US$15 million) within Latin America, which are expected to be utilised over time when service awards fall due. Payroll-related provisions also include US$37 million (2012: US$32 million, restated) within Asia Pacifi c relating to employee entitlement provisions, and US$18 million (2012: US$4 million) of cash-settled share-based payment provisions within Corporate which are expected to be utilised within one year.

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 expects to be utilised within seven years.

Other provisions Included within other provisions are environmental provisions and other provisions. These are primarily expected to be utilised within four years.

25. Share capital 2013 2012 US$m US$m Group and company Governance Called up, allotted and fully paid share capital 1,669,731,799 ordinary shares of 10 US cents each (2012: 1,664,323,483) 167 166 50,000 deferred shares of £1.00 each (2012: 50,000) – – 167 166

Ordinary shares of Deferred Nominal 10 US cents shares of value each £1 each US$m Financial statements At 1 April 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 Issue of shares – share incentive plans 5,408,316 – 1 At 31 March 2013 1,669,731,799 50,000 167

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 share plans.

Changes to issued share capital During the year the company issued 5,408,316 (2012: 5,283,469) new ordinary shares of 10 US cents to satisfy the exercise of options granted under the various share incentive plans, for consideration of US$102 million (2012: US$96 million). Shareholder information

F-56 SABMiller plc Annual Report 2013 – 141 Notes to the consolidated fi nancial statements continued

25. 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 Altria’s 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 be taken by the company in relation to ordinary shares unless the same action is taken in respect of the convertible participating shares. On distribution of the profi ts (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 for every 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 company’s 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 the creation 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 each convertible 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 of the convertible participating shares shall be required to be convened or passed.

Upon a transfer of convertible participating shares by Altria other than to an affi liate, 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 party’s 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 Altria’s 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 fi rst convert into ordinary shares the lesser of:

(i) such number of convertible participating shares as would result in Altria’s voting shareholding being such percentage as would, in the event of Altria subsequently acquiring one additional ordinary share, require Altria to make a mandatory offer in terms of rule 9 of the City Code; and

(ii) all of its remaining convertible participating shares.

142 – SABMiller plc Annual Report 2013 F-57 25. Share capital continued

The company must use its best endeavours to procure that the ordinary shares arising on conversion of the convertible participating shares

are admitted to the Offi cial List and to trading on the London Stock Exchange’s market for listed securities, admitted to listing and trading on Overview the 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 of a winding-up deferred shareholders would receive no more than the nominal value. Deferred shares represent the only non-equity share capital of the group. Business review Share-based payments The group operates various share incentive plans. The share incentives outstanding are summarised as follows. 2013 2012 Scheme Number Number GBP share options 17,809,920 16,622,334 ZAR share options 12,939,245 13,024,503 GBP stock appreciation rights (SARs) 1,955,529 2,820,144 GBP performance share awards 7,505,723 6,880,114 GBP value share awards 11,721,564 6,877,784 GBP cash settled awards – 335,940 Total share incentives outstanding1 51,931,981 46,560,819

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 66 to 85.

The exercise prices of incentives outstanding at 31 March 2013 ranged from £0 to £28.28 and ZAR53.30 to ZAR401.06 (2012: £0 to £25.48 Governance and ZAR53.30 to ZAR290.23). 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.

Weighted Weighted Financial statements average average fair exercise value at Number price grant date of options GBP GBP Outstanding at 1 April 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 – Outstanding at 31 March 2012 16,622,334 15.91 – Granted 4,637,730 24.01 5.85 Lapsed (583,250) 20.28 – Exercised (2,866,894) 12.52 – Outstanding at 31 March 2013 17,809,920 18.42 – Shareholder information

F-58 SABMiller plc Annual Report 2013 – 143 Notes to the consolidated fi nancial statements continued

25. Share capital continued

ZAR share options Share options designated in ZAR include share options granted under the South African Executive Share Option Plan 2008 and the Mirror Executive Share Purchase Scheme (South Africa). No further grants can be made under the Mirror Executive Share Purchase Scheme (South Africa) although outstanding grants may still be exercised until they reach their expiry date. Weighted Weighted average average fair exercise value at Number price grant date of options ZAR ZAR Outstanding at 1 April 2011 13,686,079 169.64 – Granted 2,943,373 283.07 105.43 Lapsed (524,849) 218.17 – Exercised (3,080,100) 138.30 – Outstanding at 31 March 2012 13,024,503 200.73 – Granted 2,912,565 381.88 134.46 Lapsed (456,401) 263.02 – Exercised (2,541,422) 154.55 – Outstanding at 31 March 2013 12,939,245 248.38 –

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. Weighted Weighted average average fair exercise value at Number price grant date of SARs GBP GBP Outstanding at 1 April 2011 3,575,370 9.72 – Granted 64,900 22.50 6.47 Lapsed (26,583) 11.44 – Exercised (793,543) 8.85 – Outstanding at 31 March 2012 2,820,144 10.25 – Granted 60,600 23.95 5.81 Lapsed (9,600) 15.94 – Exercised (915,615) 8.66 – Outstanding at 31 March 2013 1,955,529 11.39 –

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 of their respective performance conditions on their vesting date. Weighted Weighted average average fair exercise value at Number price grant date of awards GBP GBP Outstanding at 1 April 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 – – Granted 3,471,222 – 22.32 Lapsed (254,284) – – Released to participants (2,591,329) – – Outstanding at 31 March 2013 7,505,723 – –

144 – SABMiller plc Annual Report 2013 F-59 25. Share capital continued

GBP value share awards

The 4,843,780 (2012: 4,034,340) value share awards granted during the year ended 31 March 2013 represent the theoretical maximum number Overview of awards that could possibly vest in the future, although in practice it is extremely unlikely that this number of awards would be released. Weighted Number of Weighted average fair value shares Theoretical average value at (per £10 million of maximum exercise price grant date additional value) shares at cap GBP GBP Outstanding at 1 April 2011 1,022 3,168,200 – – Granted 1,205 4,034,340 – 7.27 Lapsed (97) (324,756) – – Business review Outstanding at 31 March 2012 2,130 6,877,784 – – Granted 1,270 4,843,780 – 7.02 Outstanding at 31 March 2013 3,400 11,721,564 – –

GBP cash-settled awards GBP share incentives included under the Associated Companies’ Cash Award Plan 2011. Weighted Weighted average average fair exercise value at Number price grant date of awards GBP GBP Outstanding at 1 April 2011 – – – Granted 335,940 – 20.35 Outstanding at 31 March 2012 335,940 – – Released to participants (335,940) – – Outstanding at 31 March 2013 – – – Governance

Outstanding share incentives The following table summarises information about share incentives outstanding at 31 March. Weighted Weighted average average remaining remaining contractual contractual Number life in years Number life in years Range of exercise prices 2013 2013 2012 2012 GBP share options Financial statements £4 – £5 – – 204,850 1.0 £5 – £6 9,000 0.6 73,418 1.6 £6 – £7 356,310 1.1 401,993 2.1 £8 – £9 452,944 2.1 622,494 3.1 £9 – £10 78,275 5.6 78,275 6.6 £10 – £11 942,994 3.4 1,097,744 4.4 £11 – £12 1,117,686 4.1 1,456,403 5.1 £12 – £13 3,311,385 5.7 4,781,927 6.8 £17 – £18 17,200 6.6 28,700 7.6 £19 – £20 3,072,050 7.2 3,603,984 8.2 £20 – £21 46,950 7.7 66,950 8.7 £22 – £23 3,872,096 8.2 4,185,596 9.2 £23 – £24 4,443,930 9.2 – – £25 – £26 20,000 8.7 20,000 9.7 £28 – £29 69,100 9.7 – – 17,809,920 7.0 16,622,334 7.1 Shareholder information

F-60 SABMiller plc Annual Report 2013 – 145 Notes to the consolidated fi nancial statements continued

25. Share capital continued Weighted Weighted average average remaining remaining contractual contractual Number life in years Number life in years Range of exercise prices 2013 2013 2012 2012 ZAR share options R50 – R60 7,500 0.1 172,932 1.1 R60 – R70 49,900 0.6 229,400 1.2 R70 – R80 40,500 1.1 68,500 2.1 R80 – R90 – – 10,000 0.2 R90 – R100 363,507 2.0 519,607 3.0 R110 – R120 – – 40,000 3.4 R120 – R130 527,300 2.9 757,940 3.9 R140 – R150 931,600 5.3 1,292,300 6.3 R150 – R160 426,100 6.0 629,600 7.0 R160 – R170 362,150 4.1 461,100 5.1 R180 – R190 1,041,100 4.9 1,377,700 5.9 R210 – R220 1,665,750 6.8 2,455,350 7.8 R220 – R230 1,985,700 7.7 2,140,000 8.7 R250 – R260 519,600 8.2 542,400 9.2 R290 – R300 2,155,793 8.7 2,327,674 9.7 R310 – R320 625,850 9.2 – – R400 – R410 2,236,895 9.7 – – 12,939,245 7.2 13,024,503 7.2

GBP SARs £4 – £5 – – 219,168 1.1 £6 – £7 243,734 1.1 344,018 2.1 £8 – £9 299,010 2.1 460,085 3.1 £9 – £10 2,275 5.6 9,100 6.6 £10 – £11 384,784 3.1 522,934 4.1 £11 – £12 485,283 4.1 651,500 5.1 £12 – £13 355,943 5.3 481,839 6.3 £13 – £14 12,400 4.6 16,700 5.6 £19 – £20 49,900 7.2 49,900 8.2 £22 – £23 61,600 8.2 64,900 9.2 £23 – £24 60,600 8.2 – – 1,955,529 3.8 2,820,144 4.3

GBP performance share awards £0 7,505,723 1.5 6,880,114 1.1

GBP value share awards £0 11,721,564 2.6 6,877,784 3.0

GBP cash-settled awards £0 – – 335,940 1.0 Total share incentives outstanding 51,931,981 5.1 46,560,819 5.4

Exercisable share incentives The following table summarises information about exercisable share incentives outstanding at 31 March.

Weighted Weighted average average exercise exercise Number price Number price 2013 2013 2012 2012 GBP share options 5,792,390 11.27 5,103,986 10.46 ZAR share options 4,915,057 164.84 5,004,479 140.97 GBP SARs 1,783,429 10.35 2,705,344 9.80

146 – SABMiller plc Annual Report 2013 F-61 25. Share capital continued

Share incentives exercised or vested

The weighted average market price of the group’s shares at the date of exercise or vesting for share incentives exercised or vested during the Overview year were: Weighted Weighted average market average market Number price Number price 2013 2013 2012 2012 Share incentives designated in GBP 6,709,778 26.81 5,410,802 23.01 Share incentives designated in ZAR 2,541,422 385.70 3,080,100 278.19 Total share incentives exercised or vested during the year 9,251,200 8,490,902 Business review

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 (Pty) Limited (SAB), representing 8.45% of SAB’s 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 by projecting SABMiller plc’s 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. Governance

The following weighted average assumptions were used in these option pricing models during the year.

2013 2012 Share price1 – South African share option scheme (ZAR) 379.21 280.49 – All other schemes (£) 23.76 22.33 Exercise price1

– South African share option scheme (ZAR) 381.88 283.07 Financial statements – All other schemes (£) 8.71 9.35 Expected volatility (all schemes)2 (%) 26.1 23.1 Dividend yield (all schemes) (%) 2.4 2.3 Annual forfeiture rate – South African share option scheme (%) 5.0 5.0 – All other schemes (%) 3.0 3.0 Risk-free interest rate – South African share option scheme (%) 7.3 7.9 – All other schemes (%) 1.0 2.3

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. Shareholder information

F-62 SABMiller plc Annual Report 2013 – 147 Notes to the consolidated fi nancial statements continued

26. Retained earnings and other reserves a. Retained earnings Treasury and Retained EBT shares earnings Total US$m US$m US$m At 1 April 2011 (657) 9,648 8,991 Profi t for the year – 4,221 4,221 Other comprehensive loss – (119) (119) Actuarial losses taken to other comprehensive loss – (9) (9) Share of associates’ and joint ventures’ other comprehensive loss – (181) (181) Deferred tax credit on items taken to other comprehensive loss – 71 71 Dividends paid – (1,324) (1,324) 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) Utilisation of EBT shares 48 (48) – Credit entry relating to share-based payments – 158 158 At 31 March 2012 (661) 12,524 11,863 Profi t for the year – 3,274 3,274 Other comprehensive loss – (46) (46) Actuarial losses taken to other comprehensive loss – (21) (21) Share of associates’ and joint ventures’ other comprehensive loss – (53) (53) Deferred tax credit on items taken to other comprehensive loss – 28 28 Dividends paid – (1,517) (1,517) Payment for purchase of own shares for share trusts (53) – (53) Utilisation of EBT shares 71 (71) – Credit entry relating to share-based payments – 189 189 At 31 March 2013 (643) 14,353 13,710

The group’s retained earnings includes amounts of US$734 million (2012: US$709 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. On 26 March 2013 an additional 4,600,000 treasury shares were transferred to the EBT at no gain or loss to the group. These shares will be used to satisfy awards outstanding under the various share incentive plans. As at 31 March 2013 a total of 67,468,338 shares (2012: 72,068,338) were held in treasury.

There are two employee benefi t trusts currently in operation, being the SABMiller Employees’ Benefi t Trust (the EBT) and the SABMiller Associated Companies’ Employees’ Benefi t Trust (the AC-EBT). The EBT holds shares in SABMiller plc for the purposes of the various share incentive plans, further details of which are disclosed in the directors’ remuneration report. At 31 March 2013 the EBT held 8,339,106 shares (2012: 5,605,746 shares) which cost US$126 million (2012: US$98 million) and had a market value of US$438 million (2012: US$225 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 a signifi cant 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 2013 the AC-EBT held no (2012: 335,940) shares which cost US$nil (2012: US$11 million) and had a market value of US$nil (2012: 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, a wholly 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, but in both cases the trustees have elected to waive dividends and to decline from voting shares, except in circumstances where they may be holding shares benefi cially owned by a participant. There were no benefi cially owned shares in either EBT as at 31 March 2013 (2012: nil).

148 – SABMiller plc Annual Report 2013 F-63 26. Retained earnings and other reserves continued b. Other reserves

The analysis of other reserves is as follows. Overview Foreign Net currency Cash fl ow investment Available translation hedging hedging for sale reserve reserve reserve reserve Total US$m US$m US$m US$m US$m At 1 April 2011 2,183 35 (340) 3 1,881 Currency translation differences 137 – – – 137 Net investment hedges – – (1) – (1) Cash fl ow hedges – 6 – – 6

Deferred tax on items taken to other comprehensive loss – 30 – – 30 Business review Share of associates’ and joint ventures’ other comprehensive loss – (75) – – (75) At 31 March 2012 2,320 (4) (341) 3 1,978 Currency translation differences (696) – – – (696) Net investment hedges – – 63 – 63 Cash fl ow hedges – (5) – – (5) Available for sale investments – – – (1) (1) Deferred tax on items taken to other comprehensive loss – 6 – – 6 Share of associates’ and joint ventures’ other comprehensive (loss)/income – (23) – 6 (17) At 31 March 2013 1,624 (26) (278) 8 1,328

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.

27a. Reconciliation of profi t for the year to net cash generated from operations Governance 2013 2012 US$m US$m Profi t for the year 3,511 4,477 Taxation 1,201 1,126 Share of post-tax results of associates and joint ventures (1,244) (1,152) Finance income (682) (531) Finance costs 1,417 1,093

Operating profi t 4,203 5,013 Financial statements Depreciation: – Property, plant and equipment 641 672 – Containers 226 237 Container breakages, shrinkages and write-offs 38 34 Profi t on disposal of businesses (79) (1,258) Gain on remeasurement of existing interest in joint venture on acquisition – (66) Profi t on disposal of investment in associate – (103) Gain on dilution of investment in associate (4) – Loss/(profi t) on disposal of property, plant and equipment 13 (15) Amortisation of intangible assets 450 273 Impairment of goodwill 11 – Impairment of property, plant and equipment 39 – Impairment of working capital balances 31 16 Amortisation of advances to customers 45 24 Unrealised net gain from fair value hedges – (20) Dividends received from other investments (1) (1) Charge with respect to share options 184 132 Shareholder information Charge with respect to Broad-Based Black Economic Empowerment scheme 17 29 Other non-cash movements (56) 12 Net cash generated from operations before working capital movements (EBITDA) 5,758 4,979 Increase in inventories (14) (45) Increase in trade and other receivables (107) (25) Increase in trade and other payables 82 374 Decrease in provisions (177) (46) Increase in post-retirement benefi t provisions 12 – Net cash generated from operations 5,554 5,237

F-64 SABMiller plc Annual Report 2013 – 149 Notes to the consolidated fi nancial statements continued

27a. Reconciliation of profi t for the year to net cash generated from operations continued

Profi t for the year and cash generated from operations before working capital movements includes cash fl ows relating to exceptional items of US$191 million (2012: US$308 million), comprising US$140 million (2012: US$228 million) in respect of business capability programme costs, US$51 million (2012: US$50 million) in respect of integration and restructuring costs, US$nil (2012: US$72 million) in respect of transaction- related costs, partially offset by US$nil (2012: US$42 million) in respect of a litigation-related credit.

The following table provides a reconciliation of EBITDA to adjusted EBITDA. 2013 2012 US$m US$m EBITDA 5,758 4,979 Cash exceptional items 191 308 Dividends received from MillerCoors 886 896 Adjusted EBITDA 6,835 6,183

27b. Reconciliation of net cash generated from operating activities to free cash fl ow 2013 2012 US$m US$m Net cash generated from operating activities 4,101 3,937 Purchase of property, plant and equipment (1,335) (1,473) Proceeds from sale of property, plant and equipment 30 116 Purchase of intangible assets (144) (166) Proceeds from sale of intangible assets 4 – Investments in joint ventures (272) (288) Investments in associates (23) – Repayment of investments by associates – 14 Dividends received from joint ventures 886 896 Dividends received from associates 113 120 Dividends received from other investments 1 1 Dividends paid to non-controlling interests (131) (109) Free cash fl ow 3,230 3,048

27c. Analysis of net debt

Cash and cash equivalents on the balance sheet are reconciled to cash and cash equivalents on the cash fl ow statement as follows. 2013 2012 US$m US$m Cash and cash equivalents (balance sheet) 2,171 745 Overdrafts (212) (138) Overdrafts of disposal group classifi ed as held for sale – (1) Cash and cash equivalents (cash fl ow statement) 1,959 606

150 – SABMiller plc Annual Report 2013 F-65 27c. Analysis of net debt continued

Net debt is analysed as follows.

Cash and Overview cash equivalents Derivative Total (excluding fi nancial Finance gross Net overdrafts) Overdrafts Borrowings instruments leases borrowings debt US$m US$m US$m US$m US$m US$m US$m At 1 April 2011 1,071 (258) (8,193) 298 (9) (8,162) (7,091) Exchange adjustments 10 (49) (38) 9 – (78) (68) Cash fl ow (246) 157 (8,861) (43) 5 (8,742) (8,988) Acquisitions – through business combinations 12 – (1,844) 259 (2) (1,587) (1,575) Business review 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) Exchange adjustments (83) 32 131 – 1 164 81 Cash fl ow 1,512 (105) 560 4 6 465 1,977 Disposals (3) – – – – – (3) Other movements – – 75 52 (21) 106 106 At 31 March 2013 2,171 (212) (18,301) 676 (35) (17,872) (15,701)

27d. Major non-cash transactions

2013 Major non-cash transactions in the year included the following. The additional profi t realised on the disposal in the prior year of the group’s Angolan operations in Africa. Governance 2012 Major non-cash transactions in the year included the following. The disposal of the group’s Angolan operations, Coca-Cola Bottling Luanda SARL, Coca-Cola Bottling Sul de Angola SARL, Empresa De Cervejas N’Gola Norte SA, and its interest in Empresa de Cervejas N’Gola SARL, in Africa in exchange for a 27.5% interest in BIH Angola.

The contribution of the group’s 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 group’s existing 50% interest in the Pacifi c Beverages joint venture to fair value on the acquisition of the Financial statements remaining 50% interest. Shareholder information

F-66 SABMiller plc Annual Report 2013 – 151 Notes to the consolidated fi nancial statements continued

28. Restatement of the balance sheet at 31 March 2012

The initial accounting under IFRS 3, ‘Business Combinations’, for the Foster’s, the Pacifi c Beverages and the International Breweries acquisitions had not been completed as at 31 March 2012. During the year ended 31 March 2013 adjustments to provisional fair values in respect of these acquisitions were made. As a result comparative information for the year ended 31 March 2012 has been presented in the consolidated fi nancial statements as if the adjustments to provisional fair values had been made from the respective transaction dates. The fair value exercises in respect of these acquisitions are now complete.

The following table reconciles the impact on the balance sheet reported as at 31 March 2012 to the comparative balance sheet presented in the consolidated fi nancial statements. No material adjustments to the income statement for the year ended 31 March 2012 have been required as a result of the adjustments to provisional fair values.

Adjustments At 31 March At 31 March to provisional 2012 2012 fair values As restated US$m US$m US$m Assets Non-current assets Goodwill 20,128 43 20,171 Intangible assets 9,901 57 9,958 Property, plant and equipment 9,299 (137) 9,162 Investments in joint ventures 5,520 – 5,520 Investments in associates 4,946 126 5,072 Available for sale investments 30 – 30 Derivative fi nancial instruments 732 – 732 Trade and other receivables 136 – 136 Deferred tax assets 117 – 117 Loan participation deposit 100 – 100 50,909 89 50,998 Current assets Inventories 1,255 (7) 1,248 Trade and other receivables 2,156 48 2,204 Current tax assets 482 147 629 Derivative fi nancial instruments 24 – 24 Available for sale investments 1 – 1 Cash and cash equivalents 745 – 745 4,663 188 4,851 Assets of disposal group classifi ed as held for sale 79 – 79 4,742 188 4,930 Total assets 55,651 277 55,928

Liabilities Current liabilities Derivative fi nancial instruments (40) – (40) Borrowings (1,062) – (1,062) Trade and other payables (4,054) (73) (4,127) Current tax liabilities (910) (413) (1,323) Provisions (717) 13 (704) (6,783) (473) (7,256) Liabilities of disposal group classifi ed as held for sale (7) – (7) (6,790) (473) (7,263)

Non-current liabilities Derivative fi nancial instruments (69) – (69) Borrowings (18,164) – (18,164) Trade and other payables (112) – (112) Deferred tax liabilities (3,917) 198 (3,719) Provisions (586) 17 (569) (22,848) 215 (22,633) Total liabilities (29,638) (258) (29,896) Net assets 26,013 19 26,032

Total equity 26,013 19 26,032

152 – SABMiller plc Annual Report 2013 F-67 29. Acquisitions and disposals

The group completed the acquisition of a 60% interest in Darbrew Limited in Tanzania in March 2013 for total cash consideration of

US$6 million. The business combination has been accounted for using the acquisition method. The residual value over the net assets Overview acquired is recognised as goodwill of US$3 million in the fi nancial statements.

Disposals On 7 September 2012 the group completed the disposal of Foster’s interests in its Fijian beverage operations, Foster’s Group Pacifi c Limited, and on 28 September 2012 the group completed the disposal of Foster’s soft drink assets, both to Coca-Cola Amatil Limited (CCA). There was no gain or loss on disposal.

30. Commitments, contingencies and guarantees Business review a. Operating lease commitments The minimum lease rentals to be paid under non-cancellable leases at 31 March are as follows. 2013 2012 US$m US$m Land and buildings Within one year 65 65 Later than one year and less than fi ve years 152 171 After fi ve years 33 42 250 278

Plant, vehicles and systems Within one year 54 55 Later than one year and less than fi ve years 129 126 After fi ve years 91 87

274 268 Governance b. Other commitments 2013 2012 US$m US$m Capital commitments not provided in the fi nancial information Contracts placed for future expenditure for property, plant and equipment 239 277 Contracts placed for future expenditure for intangible assets 3 1 Share of capital commitments of joint ventures 48 44 Financial statements

Other commitments not provided in the fi nancial information Contracts placed for future expenditure 2,632 3,164 Share of joint ventures’ other commitments 379 512

Contracts placed for future expenditure in 2013 primarily relate to minimum purchase commitments for raw materials and packaging materials, which are principally due between 2013 and 2019. Additionally, as part of the business capability programme the group has entered into contracts for the provision of IT, communications and consultancy services and in relation to which the group had commitments of US$120 million at 31 March 2013 (2012: US$193 million).

The group’s share of joint ventures’ other commitments primarily relate to MillerCoors’ various long-term non-cancellable advertising and promotion commitments. Shareholder information

F-68 SABMiller plc Annual Report 2013 – 153 Notes to the consolidated fi nancial statements continued

30. Commitments, contingencies and guarantees continued c. Contingent liabilities and guarantees 2013 2012 US$m US$m Guarantees to third parties provided in respect of trade loans1 2 4 Share of joint ventures’ contingent liabilities – 4 Litigation2 15 23 Other contingent liabilities 2 9 19 40

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. In the 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 group’s fi nancial position, except insofar as already provided in the consolidated fi nancial statements. These include claims made by certain former employees in Ecuador arising out of events which took place before the group’s investment in Ecuador 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 diffi cult to predict the group’s 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 group’s fi nancial position, except insofar as already provided in the consolidated fi nancial statements.

31. Pensions and post-retirement benefi ts

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 defi ned contribution and defi ned benefi t schemes. The majority of the schemes are funded and the schemes’ assets are held independently of the group’s fi nances. The assets of the schemes do not include any of the group’s own fi nancial instruments, nor any property occupied by or other assets used by the group. Pension and post-retirement benefi t costs are assessed in accordance with the advice of independent professionally qualifi ed actuaries. Generally, the projected unit method is applied to measure the defi ned benefi t scheme liabilities.

The group also provides medical benefi ts, which are mainly unfunded, for retired employees and their dependants in South Africa, the Netherlands and Latin America.

The total pension and post-retirement medical benefi t costs recognised in the income statement, and related net liabilities on the balance sheet are as follows. 2013 2012 US$m US$m Defi ned contribution scheme costs 110 97 Defi ned benefi t pension plan costs 18 15 Post-retirement medical and other benefi t costs 11 13 Accruals for defi ned contribution plans (balance sheet) 7 3 Provisions for defi ned benefi t pension plans (balance sheet) 206 197 Provisions for other post-retirement benefi ts (balance sheet) 95 112

154 – SABMiller plc Annual Report 2013 F-69 31. Pensions and post-retirement benefi ts continued

The group operates various defi ned contribution and defi ned benefi t schemes. Details of the main defi ned benefi t schemes are provided below. Overview 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 defi ned benefi t 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 fi 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 qualifi ed actuaries at 28 February 2013 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. Business review

Grolsch pension scheme The Grolsch pension plan, named Stichting Pensioenfonds van de Grolsche Bierbrouwerij, is a funded scheme of the defi ned benefi t 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 2013 by an independent actuary using the projected unit credit method.

Other Details of other defi ned benefi t pension schemes are provided below.

Carlton & United Breweries pension scheme The Carlton & United Breweries pension fund, named AusBev Superannuation Fund, provides accumulation style and defi ned benefi ts to the employees. The company funds the defi ned benefi ts, administration and insurance costs of the fund as a benefi t to employees who elect to be members of this fund. The latest valuation of the Carlton & United Breweries pension fund was carried out at 30 June 2011 by an independent actuary using the projected unit credit method. The valuation update for the fund was carried out at 31 March 2013 by an independent actuary. The defi ned benefi ts section is now closed to new members.

South Africa pension schemes Governance 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 defi ned benefi t 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 benefi ts. Once the surplus liabilities have been settled, the Funds will be deregistered and liquidated. The latest valuation of the South African pension schemes was carried out at 31 March 2013 by Financial statements an independent actuary.

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 Rules of the Fund have been amended to allow for paid-up benefi ts for each of the members. This would allow for each member to be paid their benefi t, valued as at 1 July 2005, upon their exit. Shareholder information

F-70 SABMiller plc Annual Report 2013 – 155 Notes to the consolidated fi nancial statements continued

31. Pensions and post-retirement benefi ts continued

Principal actuarial assumptions at 31 March (expressed as weighted averages) Medical and other Defi ned benefi t pension plans post-retirement benefi ts

Latin America Grolsch Other South Africa Other At 31 March 2013 Discount rate (%) 5.0 3.8 4.6 8.8 4.9 Salary infl ation (%) 2.5 2.0 3.9 – – Pension infl ation (%) 2.5 0.7 3.2 – – Healthcare cost infl ation (%) – – – 7.5 2.3 Mortality rate assumptions – Retirement age: Males 55 65 62 63 57 Females 50 65 61 63 53 – Life expectations on retirement age: Retiring today: Males 27 21 22 16 25 Females 36 24 23 20 32 Retiring in 20 years: Males 27 23 22 16 25 Females 36 25 23 20 32

At 31 March 2012 Discount rate (%) 7.5 4.8 6.0 9.3 7.0 Salary infl ation (%) 3.5 2.0 3.8 – – Pension infl ation (%) 3.5 2.0 3.2 – – Healthcare cost infl ation (%) – – – 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 22 16 24 Females 36 24 23 20 31 Retiring in 20 years: Males 27 23 22 16 24 Females 36 25 23 20 32

The present value of defi ned benefi t pension plan and post-employment medical benefi t liabilities are as follows. Medical and other Defi ned benefi t pension plans post-retirement benefi ts

Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m US$m Present value of scheme liabilities at 1 April 2011 175 305 48 528 71 43 114 – Portion of defi ned benefi t obligation that is unfunded 175 – 13 188 71 43 114 – Portion of defi ned benefi t obligation that is partly or wholly funded – 305 35 340 – – – Benefi ts 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 defi ned benefi t obligation that is unfunded 172 – 13 185 66 46 112 – Portion of defi ned benefi t obligation that is partly or wholly funded – 319 89 408 – – – Benefi ts paid (17) (11) (9) (37) – (5) (5) Contributions paid by plan participants – 3 – 3 (2) – (2) Current service cost 1 4 3 8 1 1 2 Interest costs 12 14 4 30 6 3 9 Actuarial losses/(gains) 17 (19) 2 – (14) 5 (9) Settlements and curtailments – – (3) (3) – – – Exchange adjustments (4) (12) (6) (22) (10) (2) (12) Present value of scheme liabilities at 31 March 2013 181 298 93 572 47 48 95 – Portion of defi ned benefi t obligation that is unfunded 181 – 12 193 47 48 95 – Portion of defi ned benefi t obligation that is partly or wholly funded – 298 81 379 – – –

156 – SABMiller plc Annual Report 2013 F-71 31. Pensions and post-retirement benefi ts continued

The fair value reconciliations of opening plan assets to closing plan assets, on an aggregated basis, are as follows.

Defi ned benefi t pension plans Overview

Grolsch Other Total US$m US$m US$m Plan assets at 1 April 2011 333 52 385 Expected return on plan assets 16 8 24 Benefi ts paid (11) (14) (25) Employer contributions/(employer assets recognised) 9 (5) 4 Actuarial gains/(losses) 26 (3) 23

Acquisitions – 51 51 Business review Exchange adjustments (21) (5) (26) Plan assets at 31 March 2012 352 84 436 Expected return on plan assets 15 5 20 Benefi ts paid (11) (8) (19) Employer contributions 17 2 19 Actuarial gains 18 – 18 Settlements – (3) (3) Exchange adjustments (14) (4) (18) Plan assets at 31 March 2013 377 76 453

The fair value of assets in pension schemes and the expected rates of return were.

Latin America Grolsch Other Total

Long- Long- Long- term term term rate of rate of rate of return return return

US$m % US$m % US$m % US$m Governance At 31 March 2013 Equities – – 126 7.0 20 8.0 146 Bonds – – 235 3.0 21 8.0 256 Cash – – – – 31 7.0 31 Property and other – – 16 7.0 4 9.0 20 Total fair value of assets – 377 76 453 Present value of scheme liabilities (181) (298) (93) (572) Financial statements (Defi cit)/surplus in the scheme (181) 79 (17) (119) Unrecognised pension asset due to limit – (79) (8) (87) Pension liability recognised (181) – (25) (206)

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) (Defi cit)/surplus in the scheme (172) 33 (18) (157) Unrecognised pension asset due to limit – (33) (7) (40) Pension liability recognised (172) – (25) (197) Shareholder information The expected returns on plan assets is determined by considering the expected returns available on each major asset class and the asset mix underlying the current investment policy.

F-72 SABMiller plc Annual Report 2013 – 157 Notes to the consolidated fi nancial statements continued

31. Pensions and post-retirement benefi ts continued

The amounts recognised in the balance sheet are as follows. Medical and other Defi ned benefi t pension plans post-retirement benefi ts

Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m US$m At 31 March 2013 Present value of scheme liabilities (181) (298) (93) (572) (47) (48) (95) Fair value of plan assets – 377 76 453 – – – (181) 79 (17) (119) (47) (48) (95) Unrecognised assets due to limit – (79) (8) (87) – – – Net liability recognised on balance sheet (181) – (25) (206) (47) (48) (95)

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)

In respect of defi ned benefi t 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 been completed.

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.

The amounts recognised in net operating expenses in the income statement are as follows. Medical and other Defi ned benefi t pension plans post-retirement benefi ts

Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m US$m At 31 March 2013 Current service cost (1) (4) (3) (8) (1) (1) (2) Interest costs (12) (14) (4) (30) (6) (3) (9) Expected return on plan assets – 15 5 20 – – – (13) (3) (2) (18) (7) (4) (11)

At 31 March 2012 Current service cost – (4) (2) (6) (2) (1) (3) Interest costs (13) (15) (5) (33) (6) (4) (10) Expected return on plan assets – 16 8 24 – – – (13) (3) 1 (15) (8) (5) (13)

158 – SABMiller plc Annual Report 2013 F-73 31. Pensions and post-retirement benefi ts continued

The amounts recognised in the statement of comprehensive income are as follows.

Medical and other Overview Defi ned benefi t pension plans post-retirement benefi ts

Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m US$m At 31 March 2013 Actual return on plan assets – 33 5 38 – – – Less: expected return on plan assets – (15) (5) (20) – – – Experience gains arising on Business review – scheme assets – 18 – 18 – – – – scheme liabilities – 19 1 20 – – – Changes in actuarial assumptions (17) – (1) (18) 14 (5) 9 Unrecognised gains due to limit – (49) (1) (50) – – – (17) (12) (1) (30) 14 (5) 9

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) – Governance The cumulative amounts recognised in other comprehensive income are as follows. 2013 2012 US$m US$m Cumulative actuarial losses recognised at beginning of year (212) (203) Net actuarial losses recognised in the year (21) (9) Cumulative actuarial losses recognised at end of year (233) (212) Financial statements History of actuarial gains and losses 2013 2012 2011 2010 2009 US$m US$m US$m US$m US$m Experience gains/(losses) of plan assets 18 23 14 33 (77) Percentage of plan assets 4% 5% 4% 10% 26% Experience gains/(losses) of scheme liabilities 20 (30) 16 (44) 28 Percentage of scheme liabilities 3% 4% 2% 7% 6% Fair value of plan assets 453 436 385 344 299 Present value of scheme liabilities (667) (705) (642) (612) (499) Defi cit in the schemes (214) (269) (257) (268) (200) Unrecognised assets due to limit (87) (40) (53) (22) (17) Net liability recognised in balance sheet (301) (309) (310) (290) (217)

Contributions expected to be paid into the group’s major defi ned benefi t schemes during the annual period after 31 March 2013 are US$25 million. Shareholder information A 1% increase and a 1% decrease in the assumed healthcare cost of infl ation will have the following effect on the group’s major post- employment medical benefi ts. 2013

Increase Decrease US$m US$m Current service costs – – Interest costs 1 (1) Accumulated post-employment medical benefi t costs 9 (7)

F-74 SABMiller plc Annual Report 2013 – 159 Notes to the consolidated fi nancial statements continued

32. Related party transactions a. Parties with signifi cant infl uence 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 26.8% 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 14.0% equity shareholding in SABMiller plc. There were no transactions with SDG during the year. During the year ended 31 March 2012 the group made donations of US$33 million to the Fundación Mario Santo Domingo, pursuant to the contractual arrangements entered into at the time of the Bavaria transaction in 2005, under which it was agreed that the proceeds of the sale of surplus non-operating property assets owned by Bavaria SA and its subsidiaries would be donated to various charities, including the Fundación Mario Santo Domingo. No donations were made to the Fundación Mario Santo Domingo during the year ended 31 March 2013. At 31 March 2013 US$nil (2012: US$nil) was owing to the SDG. b. Associates and joint ventures Details relating to transactions with associates and joint ventures are analysed below. 2013 2012 US$m US$m Purchases from associates1 (227) (214) Purchases from joint ventures2 (97) (86) Sales to associates3 46 39 Sales to joint ventures4 25 28 Dividends receivable from associates5 113 150 Dividends received from joint ventures6 886 896 Royalties received from associates7 27 13 Royalties received from joint ventures8 2 2 Management fees, guarantee fees and other recoveries received from associates9 17 24 Management fees paid to joint ventures10 (2) (1) Sale of associate to joint venture11 21 –

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 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, Delta Corporation Ltd (Delta), Anadolu Efes Biracılık ve Malt Sanayii A¸S (Anadolu Efes), and Distell, and in the prior year also to Empresa Cervejas De N’Gola SARL (ECN), and Société des Brasseries et Glacières Internationales and Brasseries Internationales Holding Ltd (Castel).

4 The group made sales to MillerCoors, and in the prior year also to Pacifi c Beverages Pty Ltd.

5 The group had dividends receivable from Castel of US$21 million (2012: US$60 million), Coca-Cola Canners US$11 million (2012: US$6 million), Distell US$21 million (2012: US$22 million), Tsogo Sun US$33 million (2012: US$41 million), Delta US$12 million (2012: US$3 million), International Trade and Supply Limited $14 million (2012: US$6 million), Grolsch (UK) Ltd US$1 million (2012: US$2 million) and Kenya Breweries Ltd US$nil (2012: US$9 million).

6 The group received dividends from MillerCoors.

7 The group received royalties from Delta and Anadolu Efes and in the prior year also Kenya Breweries Ltd.

8 The group received royalties from MillerCoors.

9 The group received management fees from Delta, guarantee fees from Delta and BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola), and other recoveries from AFP. In the prior year management fees were also received from ECN.

10 The group paid management fees to MillerCoors.

11 The group sold its interest in Foster’s USA LLC to MillerCoors for cash consideration. 2013 2012 At 31 March US$m US$m Amounts owed by associates – trade1 68 145 Amounts owed by associates – loans2 – 60 Amounts owed by joint ventures3 5 6 Amounts owed to associates4 (150) (42) Amounts owed to joint ventures5 (14) (17)

1 Amounts owed by AFP, Delta, BIH Angola and Anadolu Efes.

2 Amounts owed by BIH Angola in the prior year.

3 Amounts owed by MillerCoors.

4 Amounts owed to Coca-Cola Canners, Castel and Tsogo Sun. At 31 March 2013 this balance included US$100 million received in compensation for the loan participation deposit relating to the Angolan businesses managed by Castel (see note 17).

5 Amounts owed to MillerCoors.

Guarantees provided in respect of associates’ bank facilities are detailed in note 22. 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 2013 there were 26 (2012: 27) members of key management. Key management compensation is provided in note 6c.

160 – SABMiller plc Annual Report 2013 F-75 33. Post balance sheet events

In January 2013 the group agreed to sell its non-core milk and juice business in Panama, subject to regulatory approval. The regulatory

approval for the sale was received and the sale completed in May 2013. Overview

34. Principal subsidiaries, associates and joint ventures

The principal subsidiary undertakings of the group as at 31 March were as follows. Effective interest Country of Principal Name incorporation activity 2013 2012 Corporate Business review SABMiller Holdings Ltd United Kingdom Holding company 100% 100% SABMiller Africa and Asia BV1 Netherlands Holding company 100% 100% SABMiller Holdings SA Ltd United Kingdom Holding company 100% 100% SABMiller Holdings SH Ltd United Kingdom Holding company 100% 100% SABMiller International BV Netherlands Trademark owner 100% 100% SABMiller SAF Limited United Kingdom Holding company/Financing 100% 100% SABMiller Southern Investments Ltd United Kingdom Holding company 100% 100% SABMiller Procurement GmbH2 Switzerland Procurement 100% 100% SABSA Holdings Ltd South Africa Holding company 100% 100%

Latin American operations Bavaria SA3 Colombia Brewing/Soft drinks 99% 99% Cervecería Argentina SA Isenbeck Argentina Brewing 100% 100% Cervecería del Valle SA Colombia Brewing 99% 99% Cervecería Hondureña, SA de CV Honduras Brewing/Soft drinks 99% 99% Cervecería Nacional (CN) SA3 Ecuador Brewing 96% 96% Cervecería Nacional SA3 Panama Brewing 98% 97%

Cervecería San Juan SA3 Peru Brewing/Soft drinks 92% 92% Governance Cervecería Unión SA Colombia Brewing 98% 98% Industrias La Constancia, SA de CV El Salvador Brewing/Soft drinks 100% 100% Unión de Cervecerías Peruanas Backus y Johnston SAA3 Peru Brewing 94% 94%

European operations SABMiller Europe BV1 Netherlands Holding company 100% 100% SABMiller Holdings Europe Ltd United Kingdom Holding company 100% 100% SABMiller Netherlands Cooperatieve WA Netherlands Holding company 100% 100% Birra Peroni Srl Italy Brewing 100% 100% Financial statements Compañia Cervecera de Canarias SA Spain Brewing 51% 51% Dreher Sörgyárak Zrt Hungary Brewing 100% 100% Grolsche Bierbrouwerij Nederland BV Netherlands Brewing 100% 100% Kompania Piwowarska SA4 Poland Brewing 100% 100% Miller Brands (UK) Ltd United Kingdom Sales and distribution 100% 100% Pivovary Topvar as Slovakia Brewing 100% 100% Plze ˇnský Prazdroj as Czech Republic 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% Shareholder information SABMiller Investments Ltd Mauritius Holding company 80% 80% SABMiller Investments II BV Netherlands Holding company 80% 80%

F-76 SABMiller plc Annual Report 2013 – 161 Notes to the consolidated fi nancial statements continued

34. Principal subsidiaries, associates and joint ventures continued Effective interest Country of Principal Name incorporation activity 2013 2012 African operations continued SABMiller Nigeria Holdings BV Netherlands Holding company 50% 50% 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 Moçambique SARL3 Mozambique Brewing 49% 49% Chibuku Products Ltd Malawi Sorghum brewing 31% 31% Crown Beverages Ltd Kenya Soft drinks 80% 80% Heinrich’s Syndicate Ltd Zambia Soft drinks 62% 62% Intafact Beverages Ltd Nigeria Brewing 38% 41% International Breweries plc3 Nigeria Brewing 36% 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 plc3 Zambia Sorghum brewing 43% 43% Nile Breweries Ltd Uganda Brewing 62% 62% Pabod Breweries Ltd Nigeria Brewing 38% 38% 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 Ltd3 Tanzania Brewing 36% 36% Voltic (GH) Ltd Ghana Soft drinks 80% 80% Voltic Nigeria Ltd Nigeria Soft drinks 50% 50% Zambian Breweries plc3 Zambia Brewing/Soft drinks 54% 54%

Asia Pacifi c 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% 100% SKOL Beer Manufacturing Company Ltd5 India Holding company 100% 100% Foster’s Group Pty Ltd Australia Holding company 100% 100% Bulmer Australia Pty Ltd Australia Brewing 100% 100% Cascade Brewery Company Pty Ltd Australia Brewing 100% 100% CUB Pty Ltd6 Australia Brewing 100% 100% FBG Treasury (Aust.) Pty Ltd Australia Financing 100% 100% Foster’s Group Pacifi c Ltd3,7 Fiji Brewing - 89% Pacifi c Beverages Pty Ltd Australia Brewing 100% 100% Queensland Breweries Pty Ltd Australia Brewing 100% 100% SABMiller Breweries Private Ltd India Brewing 100% 100% SABMiller Vietnam Company Ltd Vietnam Brewing 100% 100% SABMiller India Ltd8 India Brewing 99% 99%

South African operations The South African Breweries (Pty) Ltd South Africa Brewing/Soft drinks/Holding 100% 100% company 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 Trinity Procurement GmbH.

3 Listed in country of incorporation.

4 SABMiller Poland BV, a wholly owned subsidiary of the group, holds 100% of Kompania Piwowarska SA.

5 Previously SABMiller India Ltd.

6 Previously Foster’s Australia Ltd.

7 On 7 September 2012 the group completed the disposal of Foster’s Group Pacifi c Ltd.

8 Previously Skol Breweries Ltd.

162 – SABMiller plc Annual Report 2013 F-77 34. Principal subsidiaries, associates and joint ventures continued

The group comprises a large number of companies. The list above includes those subsidiary undertakings which most signifi cantly affect the

profi t or net assets of the group, or a business segment, together with the principal intermediate holding companies of the group. With the Overview 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 group’s 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 group’s 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 group’s African beverage interests. Investments in Business review new territories are generally being made with the Castel group’s African beverage operations on an 80:20 basis. The operations continue to be consolidated due to SABMiller Africa BV’s, SABMiller Investment Ltd’s, SABMiller Botswana BV’s, SABMiller Nigeria Holdings BV’s and SABMiller Investment II BV’s majority shareholdings, and ability to control the operations.

Botswana Breweries (Pty) Ltd (BBL) and Kgalagadi Breweries (Pty) Ltd (KBL) SABMiller Botswana held a 40% interest in each of Botswana Breweries (Pty) Ltd and Kgalagadi Breweries (Pty) Ltd with the remaining 60% interest in each held by Ltd. SABMiller Botswana’s shares entitle the holder to twice the voting rights of those shares held by Sechaba Brewery Holdings Ltd. SABMiller Africa BV’s 10.1% indirect interest (2012: 10.1%) is held via a 16.8% interest (2012: 16.8%) in Sechaba Brewery Holdings Ltd. In April 2013 BBL and KBL merged into a single entity, with KBL the surviving legal entity. The shareholding interests in KBL remain unchanged.

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 group’s 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. Governance Financial statements Shareholder information

F-78 SABMiller plc Annual Report 2013 – 163 Notes to the consolidated fi nancial statements continued

34. Principal subsidiaries, associates and joint ventures continued

Associates and joint ventures The principal associates and joint ventures of the group as at 31 March are as set out below. Where the group’s 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.

Effective interest Country of Nature of Principal Name incorporation relationship activity 2013 2012 European operations Anadolu Efes Biracılık ve Malt Sanayii A ¸S1,2 Turkey Associate Brewing/Soft drinks 24% 24% Grolsch (UK) Ltd United Kingdom Associate Brewing 50% 50% International Trade and Supply Limited2 British Virgin Islands Associate Sales and distribution 40% 40%

North American operations MillerCoors LLC2,3 USA Joint venture Brewing 58% 58%

African operations BIH Brasseries Internationales Gibraltar Associate Holding company for subsidiaries 20% 20% Holding Ltd2 principally located in Africa Société des Brasseries et Glacières France Associate Holding company for subsidiaries 20% 20% Internationales SA2 principally located in Africa Algerienne de Bavaroise Spa2,4 Algeria Associate Brewing 40% 40% BIH Brasseries Internationales Holding Gibraltar Associate Brewing/Soft drinks 27% 27% (Angola) Ltd2 Delta Corporation Ltd1,5 Zimbabwe Associate Brewing/Soft drinks 25% 25% Marocaine d’Investissements et de Morocco Associate Brewing 40% 40% Services SA1,6 Skikda Bottling Company SARL2,4 Algeria Associate Soft drinks 40% 40% Société de Boissons de I’Ouest Algeria Associate Soft drinks 40% 40% Algerien SARL2,4 Société des Nouvelles Brasseries2,4 Algeria Associate Brewing 40% 40%

Asia Pacifi c operations China Resources Snow Breweries Ltd2 British Virgin Islands Associate Holding company for brewing 49% 49% subsidiaries located in China

South African operations Coca-Cola Canners of Southern Africa South Africa Associate Canning of beverages 32% 32% (Pty) Ltd2 Distell Group Ltd1,7 South Africa Associate Wines and spirits 29% 29%

Hotels and Gaming Tsogo Sun Holdings Ltd1 South Africa Associate Holding company for Hotels and 40% 40% Gaming operations

1 Listed in country of incorporation.

2 These entities report their fi nancial results for each 12 month period ending 31 December.

3 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.

4 Effective 18 March 2004 SABMiller acquired 25% of the Castel group’s holding in these entities. Together with its 20% interest in the Castel group’s African beverage interests, this gives SABMiller participation on a 40:60 basis with the Castel group.

5 Interests in this company is held by SABMiller Africa BV which is held 62% by SABMiller Holdings Ltd.

6 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 group’s African beverage interests, gives SABMiller an effective participation of 40% and the other 60% is held by the Castel group’s Africa beverage interests.

7 This entity reports its fi nancial results for each 12 month period ending 30 June.

The principal country in which each of the above associated undertakings operates is the same as the country in which each is incorporated. However, Société des Brasseries et Glacières Internationales, BIH Brasseries Internationales Holding Ltd’s (Castel) and BIH Brasseries Internationales Holding (Angola) Ltd’s principal subsidiaries are in Africa, China Resources Snow Breweries Ltd’s principal subsidiaries are in the People’s Republic of China and International Trade and Supply Limited operates in the United Arab Emirates.

164 – SABMiller plc Annual Report 2013 F-79 Independent auditors’ report to the members of SABMiller plc

We have audited the company fi nancial statements of SABMiller plc Opinion on other matters prescribed by the for the year ended 31 March 2013 which comprise the company Companies Act 2006 balance sheet and the related notes. The fi nancial reporting In our opinion: framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom • the part of the directors’ remuneration report to be audited has Generally Accepted Accounting Practice). been properly prepared in accordance with the Companies Act 2006; and Respective responsibilities of directors and auditors • the information given in the directors’ report for the fi nancial year for As explained more fully in the statement of directors’ responsibilities, which the company fi nancial statements are prepared is consistent the directors are responsible for the preparation of the company with the company fi nancial statements. fi nancial statements and for being satisfi ed that they give a true and fair view. Our responsibility is to audit and express an opinion on the Matters on which we are required to report by exception company fi nancial statements in accordance with applicable law and We have nothing to report in respect of the following matters where International Standards on Auditing (UK and Ireland). Those standards the Companies Act 2006 requires us to report to you if, in our opinion: require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. • adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from This report, including the opinions, has been prepared for and only for branches not visited by us; or the company’s members as a body in accordance with Chapter 3 of • the company fi nancial statements and the part of the directors’ Part 16 of the Companies Act 2006 and for no other purpose. We do remuneration report to be audited are not in agreement with the not, in giving these opinions, accept or assume responsibility for any accounting records and returns; or other purpose or to any other person to whom this report is shown or • certain disclosures of directors’ remuneration specifi ed by law are into whose hands it may come save where expressly agreed by our not made; or prior consent in writing. • we have not received all the information and explanations we require for our audit. Scope of the audit of the fi nancial statements An audit involves obtaining evidence about the amounts and Other matter disclosures in the fi nancial statements suffi cient to give reasonable We have reported separately on the consolidated fi nancial statements assurance that the fi nancial statements are free from material of SABMiller plc for the year ended 31 March 2013. misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of signifi cant accounting Richard Hughes (Senior Statutory Auditor) estimates made by the directors; and the overall presentation of the for and on behalf of PricewaterhouseCoopers LLP fi nancial statements. In addition, we read all the fi nancial and Chartered Accountants and Statutory Auditors non-fi nancial information in the SABMiller plc Annual Report to London identify material inconsistencies with the audited fi nancial statements. If we become aware of any apparent material misstatements or 5 June 2013 inconsistencies we consider the implications for our report.

Opinion on fi nancial statements In our opinion the company fi nancial statements:

• give a true and fair view of the state of the company’s affairs as at 31 March 2013; • 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.

166 – SABMiller plc Annual Report 2013 F-80 Balance sheet of SABMiller plc at 31 March

2013 2012 Notes US$m US$m Fixed assets

Tangible fi xed assets 2 126 119 Overview Investments in subsidiary undertakings 3 13,840 17,083 Derivative fi nancial instruments 9 445 499 14,411 17,701 Current assets Debtors: amounts falling due after more than one year 4 1,954 2 Debtors: amounts falling due within one year 5 4,566 6,619 Derivative fi nancial instruments 9 75 6 Cash at bank and in hand 6 1,647 293 Business review 8,242 6,920

Creditors: amounts falling due within one year 7 (2,325) (1,081)

Net current assets 5,917 5,839

Total assets less current liabilities 20,328 23,540 Creditors: amounts falling due after more than one year 8 (3,998) (7,646) Net assets 16,330 15,894

Capital and reserves Share capital 167 166 Share premium 6,581 6,480 Merger relief reserve 4,586 4,586 Other reserves (1,190) (1,198) Profi t and loss account 6,186 5,860 Governance Total shareholders’ funds 10 16,330 15,894

The fi nancial statements on pages 167 to 177 were approved by the board of directors on 5 June 2013 and were signed on its behalf by:

Alan Clark Jamie Wilson Chief Executive Chief Financial Offi cer

Advantage has been taken of the provisions of section 408(3) of the Companies Act, 2006 which permit the omission of a separate profi t and Financial statements loss account for SABMiller plc. The profi t for the parent company for the year was US$1,710 million (2012: US$2,661 million).

The consolidated fi nancial statements of the group include a consolidated cash fl ow statement which includes the cash fl ows of the company. The company has therefore taken advantage of the exemption granted by FRS 1 (Revised 1996) not to present a cash fl ow statement. Shareholder information

F-81 SABMiller plc Annual Report 2013 – 167 Notes to the company fi nancial statements

1. Accounting policies d) Investments in subsidiary undertakings These comprise investments in shares and loans that the directors a) Basis of preparation intend to hold on a continuing basis in the company’s business. SABMiller plc (the company) is a public limited company incorporated The investments are stated at cost, together with subsequent in Great Britain and registered in England and Wales. The company capital contributions, less provisions for impairment. fi nancial statements have been prepared in accordance with the Companies Act 2006 and with accounting standards applicable in e) Impairment the United Kingdom (UK GAAP). In accordance with FRS 11 ‘Impairment of fi xed assets and goodwill’, long-term assets are subject to an impairment review if circumstances The fi nancial statements are prepared on the going concern basis, or events change to indicate that the carrying value may not be fully under the historical cost convention, as modifi ed by certain fi nancial recoverable. The review is performed by comparing the carrying value assets and fi nancial liabilities (including derivative instruments) at fair of the long-term asset to its recoverable amount, being the higher of value through profi t and loss. The principal accounting policies, which the net realisable value and value in use. The net realisable value is have been applied consistently throughout the year are set out below. 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, b) Foreign currencies at a market based discount rate, the expected future cash fl ows The fi nancial statements are presented in US dollars which is the resulting from its continued use, including those arising from its fi nal company’s functional and presentational currency. disposal. When the carrying values of long-term assets are written down by any impairment amount, the loss is recognised in the profi t The South African rand (ZAR) and British pound (GBP) exchange and loss account in the period in which it is incurred. rates to the US dollar used in preparing the company fi nancial statements were as follows: Should circumstances or events change and give rise to a reversal of Weighted average rate Closing rate a previous impairment loss, the reversal is recognised in the profi t and ZAR GBP ZAR GBP loss 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 Year ended 31 March 2013 8.51 0.63 9.24 0.66 will only be up to the amount that it would have been had the original Year ended 31 March 2012 7.48 0.63 7.67 0.62 impairment not occurred.

Monetary assets and liabilities denominated in foreign currencies are For the purpose of conducting impairment reviews, income retranslated at the rate of exchange ruling at the balance sheet date generating units are considered to be groups of assets and liabilities or at the related forward contractual rate with the resultant translation that generate income, and are largely independent of other income differences being included in operating profi t, other than those arising streams. They also include those assets and liabilities directly involved on fi nancial liabilities which are recorded within net fi nance costs. in producing the income and a suitable proportion of those used to produce more than one income stream. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rate of exchange ruling at the f) Financial assets and fi nancial liabilities date of the transaction. All other non-monetary items denominated in Financial assets and fi nancial liabilities are initially recorded at fair a foreign currency are translated at the rate of exchange ruling at the value (plus any directly attributable transaction costs except in the balance sheet date. case of those classifi ed at fair value through profi t or loss). For those fi nancial instruments that are not subsequently held at fair value, the c) Tangible fi xed assets and depreciation company assesses whether there is any objective evidence of Tangible fi xed assets are stated at cost net of accumulated impairment at each balance sheet date. depreciation and impairment losses. Cost includes the original purchase price of the assets and the costs attributable to bringing Financial assets are recognised when the company has rights or the asset to its working condition for its intended use. other access to economic benefi ts. Such assets consist of cash, equity instruments, a contractual right to receive cash or another No depreciation is provided on assets in the course of construction. fi nancial asset, or a contractual right to exchange fi nancial In respect of all other tangible fi xed assets, depreciation is provided instruments with another entity on potentially favourable terms. on a straight-line basis at rates calculated to write off the cost, less Financial assets are derecognised when the rights to receive cash the estimated residual value of each asset, evenly over its expected fl ows from the asset have expired or have been transferred and useful life as follows: the company has transferred substantially all risks and rewards of ownership. Offi ce equipment and software 2-30 years Leasehold land and buildings Shorter of the lease term or 50 years Financial liabilities are recognised when there is an obligation to transfer benefi ts and that obligation is a contractual liability to deliver The company regularly reviews its depreciation rates to take account cash or another fi nancial asset or to exchange fi nancial instruments of any changes in circumstances. When setting useful economic lives, with another entity on potentially unfavourable terms. Financial the principal factors the company takes into account are the expected liabilities are derecognised when they are extinguished, that is rate of technological developments, expected market requirements discharged, cancelled or expired. If a legally enforceable right exists for the equipment and the intensity at which the assets are expected to set off recognised amounts of fi nancial assets and liabilities, which to be used. The profi t or loss on the disposal of an asset is the are in determinable monetary amounts, and there is the intention to difference between the disposal proceeds and the net book value settle net, the relevant fi nancial assets and liabilities are offset. Interest of the asset. costs are charged to the profi t and loss account in the year in which they accrue. Premiums or discounts arising from the difference between the net proceeds of fi nancial instruments purchased or issued and the amounts receivable or repayable at maturity are included in the effective interest calculation and taken to net interest payable over the life of the instrument.

168 – SABMiller plc Annual Report 2013 F-82 1. Accounting policies continued g) Revenue recognition (i) Interest income (i) Loans and receivables Interest income is recognised on an accruals basis using the effective

Loans and receivables are non-derivative fi nancial assets with fi xed or interest method. Overview determinable payments that are not quoted in an active market. They arise when the company provides money, goods or services directly (ii) Dividend income to a debtor with no intention of trading the receivable. Loans and Dividend income is recognised when the right to receive payment receivables are included in debtors in the balance sheet. is established.

(ii) Cash at bank and in hand h) Deferred taxation Cash at bank and in hand includes cash in hand, bank deposits Deferred tax is recognised in respect of all timing differences that repayable on demand, other short-term highly liquid investments with have originated but not reversed at the balance sheet date, where original maturities of three months or less. Bank overdrafts are shown transactions or events that result in an obligation to pay more tax in Business review within creditors – amounts falling due within one year. the future or a right to pay less tax in the future have occurred at the balance sheet date. (iii) Derivative fi nancial assets and fi nancial liabilities Derivative fi nancial assets and fi nancial liabilities are fi nancial A net deferred tax asset is regarded as recoverable and therefore instruments whose value changes in response to an underlying recognised only when, on the basis of all available evidence, it can be variable, require little or no initial investment and are settled in regarded as more likely than not that there will be suitable taxable the future. profi ts against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can Derivative fi nancial assets and liabilities are analysed between current be deducted. and fi xed assets and creditors on the face of the balance sheet, depending on when they are expected to mature. For derivatives that Deferred tax is measured at the tax rates that are expected to apply have not been designated to a hedging relationship, all fair value in the periods in which the timing differences are expected to reverse, movements are recognised immediately in the profi t and loss based on tax rates and laws that have been enacted or substantively account. See note k for the company’s accounting policy on enacted by the balance sheet date. Deferred tax is measured on a hedge accounting. non-discounted basis.

(iv) Trade creditors i) Dividend distributions Governance Trade creditors are initially recognised at fair value and subsequently In accordance with FRS 21 ‘Events after the balance sheet date’, measured at amortised cost. dividend distributions to equity holders are recognised as a liability in the fi nancial statements of the company in the period in which the Trade creditors are classifi ed as creditors falling due within one year dividends are approved by the company’s shareholders. Interim unless the company has an unconditional right to defer settlement dividends are recognised when paid. Dividends declared after the for at least 12 months from the balance sheet date. balance sheet date are not recognised, as there is no present obligation at the balance sheet date. (v) Borrowings

Borrowings are recognised initially at fair value, net of transaction j) Share-based compensation Financial statements costs and are subsequently stated at amortised cost and include The company operates several equity-settled share-based accrued interest and prepaid interest. Borrowings are classifi ed as compensation schemes. These include share option plans (with and current liabilities unless the company has an unconditional right to without non-market performance conditions attached), performance defer settlement of the liability for at least 12 months from the share award plans (with market conditions attached) and awards balance sheet date. Borrowings classifi ed as hedged items are related to the employee element of the Broad-Based Black Economic subject to hedge accounting requirements (see note k). Empowerment (BBBEE) scheme in the South Africa. In addition the company has granted an equity-settled share-based payment to (vi) Financial guarantees retailers in relation to the retailer component of the BBBEE scheme. FRS 26 (Amendment) ‘Financial Instruments-Measurement’ requires that issued fi nancial guarantees, other than those previously asserted In accordance with FRS 20 ‘Share-based Payments’, an expense by the entity to be insurance contracts, are to be initially recognised is recognised to spread the fair value at date of grant of each at their fair value and subsequently measured at the higher of the award granted after 7 November 2002 over the vesting period on a amount initially recognised less cumulative amortisation recognised straight-line basis, after allowing for an estimate of the share awards and the amount determined in accordance with FRS 12 ‘Provisions, that will eventually vest. A corresponding adjustment is made to Contingent Liabilities and Contingent Assets’. equity over the remaining vesting period. The estimate of the level of vesting is reviewed at least annually, with any impact on the

Financial guarantee contracts are defi ned in FRS 26 as contracts that cumulative charge being recognised immediately. The charge is Shareholder information require the issuer to make specifi ed payments to reimburse the holder based on the fair value of the award at the date of grant, as calculated for a loss it incurs because a specifi ed debtor fails to make payment by binomial model calculations and Monte Carlo simulations. when due in accordance with the original or modifi ed terms of a debt instrument. The charge is not reversed if the options have not been exercised because the market value of the shares is lower than the option Financial guarantees are amortised over the life of the guarantee, price at the date of grant. The proceeds received net of any directly or accelerated if the third party obligation is settled early. The attributable transaction costs are credited to share capital (nominal amortisation is taken to the profi t and loss account. value) and share premium when the options are exercised, unless the options are satisfi ed by treasury or EBT shares.

F-83 SABMiller plc Annual Report 2013 – 169 Notes to the company fi nancial statements continued

1. Accounting policies continued Certain derivative instruments, while providing effective economic hedges under the company’s policies, are not designated as hedges. The issue by the company to employees of its subsidiaries of a grant Changes in the fair value of any derivative instruments that do not over the company’s shares represents additional capital contributions qualify or have not been designated as hedges are recognised by the company to its subsidiaries, except to the extent the company immediately in the profi t and loss account. The company does not is reimbursed. An additional investment in subsidiaries results in a hold or issue derivative fi nancial instruments for speculative purposes. corresponding increase in shareholders’ equity. The additional capital contribution is based on the fair value of the grant issued allocated (i) Fair value hedges over the underlying grant’s vesting period. Fair value hedges comprise derivative fi nancial instruments designated in a hedging relationship to manage the company’s The company has an employee benefi t trust, the SABMiller interest rate risk to which the fair value of certain assets and liabilities Associated Companies’ Employees’ Benefi t Trust (the AC-EBT). The are exposed. Changes in the fair value of the derivative offset the AC-EBT holds shares in SABMiller plc for the purposes of providing relevant changes in the fair value of the underlying hedged item share incentives for employees of companies in which SABMiller has attributable to the hedged risk in the profi t and loss account in the a signifi cant economic and strategic interest but over which it does period incurred. Gains or losses on fair value hedges that are not have management control. These share options are accounted for regarded as highly effective are recorded in the profi t and loss as cash-settled share-based payments in accordance with FRS 20. account together with the gain or loss on the hedged item attributable to the hedged risk. For the cash-settled plan a liability is recognised at fair value in the balance sheet over the vesting period with a corresponding charge (ii) Cash fl ow hedges to the profi t and loss account. The liability is remeasured at each Cash fl ow hedges comprise derivative fi nancial instruments reporting date, on an actuarial basis using the analytic method, designated in a hedging relationship to manage currency and interest to refl ect the revised fair value and to adjust for the changes in rate risk to which the cash fl ows of certain assets and liabilities are assumptions such as leavers. Changes in fair value of the liability are exposed. The effective portion of changes in the fair value of the recognised in the profi t and loss account. Actual settlement of the derivative that is designated and qualifi es for hedge accounting is liability will be at its intrinsic value with the difference recognised in recognised as a separate component of equity. The ineffective portion the profi t and loss account. is recognised immediately in the profi t and loss account. Amounts accumulated in equity are recycled to the profi t and loss account in Shares held by employee benefi t trusts and in treasury are treated as the period in which the hedged item affects profi t or loss. However, a deduction from equity until the shares are utilised. where a forecasted transaction results in a non-fi nancial asset or liability, the accumulated fair value movements previously deferred k) Hedge accounting in equity are included in the initial cost of the asset or liability. The derivative instruments used by the company, which are used solely for hedging purposes (i.e. to offset foreign exchange and Details of the group’s fi nancial risk management objectives and interest rate risks), comprise interest rate swaps, cross currency policies are provided in note 22 to the consolidated fi nancial swaps and forward foreign exchange contracts. Such derivative statements of the group. instruments are used to alter the risk profi le of an existing underlying exposure of the company in line with the company’s risk management l) Operating leases policies. Rentals paid on operating leases are charged to the profi t and loss account on a straight-line basis over the lease term. Derivatives are initially recorded at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair m) Pension obligations value. The method of recognising the resulting gain or loss depends The company operates a defi ned contribution scheme. Contributions on whether the derivative is designated as a hedging instrument, and to this scheme are charged to the profi t and loss account as incurred. if so, the nature of the hedging relationship.

In order to qualify for hedge accounting, the company is required to document 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 fi rm commitment (fair value hedge) or hedges of highly probable forecast transactions or commitments (cash fl 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 profi t 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.

170 – SABMiller plc Annual Report 2013 F-84 2. Tangible fi xed assets

Short Assets in leasehold Offi ce

course of land and equipment Overview construction buildings and software Total US$m US$m US$m US$m Cost At 1 April 2012 54 32 119 205 Additions 18 5 10 33 Disposals – (3) (3) (6) Transfers (16) 2 14 – At 31 March 2013 56 36 140 232 Business review

Accumulated depreciation At 1 April 2012 – 17 69 86 Disposals – (3) (3) (6) Charge for the year – 4 22 26 At 31 March 2013 – 18 88 106

Net book amount At 1 April 2012 54 15 50 119 At 31 March 2013 56 18 52 126

3. Investment in subsidiary undertakings Shares Loans Total US$m US$m US$m Governance Cost At 1 April 2012 13,761 3,462 17,223 Additions1 5,100 – 5,100 Capital contribution relating to share-based payments 95 – 95 Repayments1 – (3,462) (3,462) Disposals2 (4,976) – (4,976) At 31 March 2013 13,980 – 13,980 Financial statements Accumulated impairment At 1 April 2012 and at 31 March 2013 140 – 140

Net book value At 31 March 2012 13,621 3,462 17,083 At 31 March 2013 13,840 – 13,840

1 During the year the company increased its investment in SABMiller Holdings Ltd by US$5,000 million. As part of this transaction the loan from the company to SABMiller Holdings Ltd of US$3,462 million was repaid. The investment in SABMiller Africa & Asia BV was increased by US$100 million.

2 During the year the company sold its investment in SABMiller Poland BV to another group company at net book value. The investment in Safari Ltd was liquidated with no gain or loss on the disposal. Shareholder information

F-85 SABMiller plc Annual Report 2013 – 171 Notes to the company fi nancial statements continued

3. Investment in subsidiary undertakings continued

Country of Principal 2013 2012 Name incorporation activity US$m US$m SABMiller Holdings Ltd United Kingdom Holding company 10,437 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 – – SABMiller Africa & Asia BV Netherlands Holding company 278 178 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 2,098 Racetrack Colombia Finance SA1 Colombia Finance company – – SABMiller Poland BV Netherlands Holding company – 4,976 SABMiller Horizon Ltd United Kingdom Agent company – – SABSA Holdings Ltd2 South Africa Holding company 5 5 SABMiller Capital UK Ltd United Kingdom Holding company – – SABMiller Asia Capital LLP3 United Kingdom Finance company – – 13,363 13,239 Capital contribution relating to share-based payments 477 382 13,840 13,621

1 94.9% direct interest and 100% effective interest.

2 SABMiller plc contributed ZAR36 million towards the cost of a guarantee fee to SABSA Holdings 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: amounts falling due after more than one year 2013 2012 US$m US$m Loan owed by subsidiary undertakings 1,743 – Amounts owed by subsidiary undertakings 109 2 Loan participation deposit 100 – Financial guarantee asset 2 – 1,954 2

The interest on the loan owed by subsidiary undertakings is fl oating one month LIBOR plus 180 bps. The loan is repayable in 2017.

The presentation of the loan participation deposit at 31 March 2013 within Debtors: amounts falling due after one year is consistent with the treatment in the current year and prior year consolidated balance sheets as described in note 17 to the consolidated fi nancial statements of the group. At 31 March 2012 this loan participation deposit was presented on the company balance sheet as a short-term deposit. The comparative has not been restated on the grounds of materiality.

5. Debtors: amounts falling due within one year 2013 2012 US$m US$m Amounts owed by subsidiary undertakings 4,499 6,474 Amounts owed by associated undertakings – 60 Other debtors 32 61 Deferred tax – 24 Financial guarantee asset 3 – Loan participation deposit 32 – 4,566 6,619

Interest on loans owed by subsidiary undertakings are at either fi xed interest rates up to maximum 5.5% or fl oating rates of one or six month LIBOR plus up to 175 bps, depending upon the country where the company receiving the loan is located.

172 – SABMiller plc Annual Report 2013 F-86 6. Cash at bank and in hand 2013 2012 US$m US$m

Short-term deposits 1,647 293 Overview

The company has short-term deposits in US dollars (USD). The effective interest rates were 0.15% (2012: USD 0.23%).

7. Creditors: amounts falling due within one year 2013 2012 US$m US$m Business review Bank loans and overdrafts – 2 Trade and other creditors 27 55 Amounts owed to subsidiary undertakings 425 846 Taxation and social security 76 29 Derivative fi nancial instruments (see note 9) 7 4 Accruals and deferred income 84 80 Dividends payable to shareholders 1 2 US$1,100 million 5.5% Notes due 20131 (note 8) 1,078 – US$550 million 5.7% Notes due 20142 (note 8) 570 – Guarantee fee liability 57 63 2,325 1,081

Amounts owed to subsidiary undertakings are at either fi xed rates or fl oating rates of one or six month LIBOR minus 13 bps to plus 175 bps. All amounts owed are unsecured and repayable on demand.

8. Creditors: amounts falling due after more than one year Governance 2013 2012 US$m US$m US$1,100 million 5.5% Notes due 20131 – 1,099 €1,000 million 4.5% Notes due 20152 1,317 1,367 US$300 million 6.625% Notes due 20332 440 416 US$850 million 6.5% Notes due 20162 937 960 US$550 million 5.7% Notes due 20142 – 588 US$700 million 6.5% Notes due 20182 792 811 Financial statements PEN 150 million 6.75% Notes due 20152 59 56 Loans from subsidiary undertakings – 1,938 Amounts owed to associated undertakings 100 – Derivative fi nancial instruments (see note 9) 25 38 Other creditors 6 9 Deferred income 6 7 Guarantee fee liability 316 357 3,998 7,646

The maturity of creditors falling due after more than one year is as follows: Between one and two years 234 1,153 Between two and fi ve years 2,364 5,007 After fi ve years 1,400 1,486 3,998 7,646

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 Shareholder information 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 fl oating and receive fi 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 fi 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 fi nancial statements of the group).

2 Further information relating to the Notes is detailed in note 21 to the consolidated fi nancial statements of the group.

F-87 SABMiller plc Annual Report 2013 – 173 Notes to the company fi nancial statements continued

9. Derivative fi nancial instruments Assets Liabilities Assets Liabilities 2013 2013 2012 2012 US$m US$m US$m US$m Current derivative fi nancial instruments Forward foreign currency contracts 26 – 4 (4) Forward foreign currency contracts as cash fl ow hedges 47 – 2 – Interest rate swaps designated as fair value hedges 2 (7) – – 75 (7) 6 (4)

Non-current derivative fi nancial instruments Forward foreign currency contracts 34 (15) 43 (31) Interest rate swaps designated as fair value hedges 304 (10) 351 – Cross currency swaps 107 – 105 (7) 445 (25) 499 (38)

Derivatives designated as hedging instruments (i) Cash fl ow hedges The company has entered into forward exchange contracts designed as cash fl ow hedges to manage short-term foreign currency exchange exposures to future creditor payments. As at 31 March 2013 the notional amounts of these contracts was GBP72 million and CHF43 million (2012: GBP119 million and AUD1 million).

(ii) Fair value hedges The company has entered into interest rate swaps to pay fl oating and receive fi xed interest which have been designated as fair value hedges to manage changes in the fair value of its fi xed rate borrowings. The borrowings and interest rate swaps have the same critical terms.

As at 31 March 2013 the fi xed interest rates received vary from 1.6675% to 6.625% (2012: 4.5% to 6.625%) and fl oating interest rates paid vary from LIBOR/EURIBOR plus 47.2 bps to LIBOR/EURIBOR plus 197.8 bps (2012: LIBOR/EURIBOR plus 71.6 bps to LIBOR/EURIBOR plus 198.8 bps) on the notional amount. As at 31 March 2013 the carrying value of the hedged borrowings was US$3,272 million (2012: US$3,191 million).

Standalone derivative fi nancial instruments (i) Forward foreign currency contracts The company has entered into several forward foreign currency contracts to manage the group’s exposure to foreign exchange risk on the investments in subsidiaries in South Africa, the Czech Republic, Peru, Australia, Poland and Colombia.

(ii) Cross currency swaps The company has entered into several cross currency swaps to manage the group’s exposure to foreign exchange risk relating to subsidiaries in South Africa, Australia, Poland, and the Netherlands.

(iii) Interest rate swaps The company holds a number of interest rate swaps to receive fl oating rates and pay fi xed rates, held as an economic offset to a number of interest rate swaps that receive fi xed rates and pay fl oating rates that were previously held in a fair value hedge relationship.

Analysis of notional amounts on all outstanding fi nancial instruments held by the company is as follows: 2013 2012 m m Forward foreign currency contracts – SA rand 2,136 245 – Czech koruna 1,095 6,825 – Peruvian nuevo sol 310 631 – Australian dollar 500 500 – Pounds sterling 72 119 – Swiss franc 43 – – Polish zloty 11 – – Colombian peso 445,500 490,476 Cross currency swaps – SA rand 1,404 1,404 – Australian dollar 46 – – Polish zloty 235 433 – Euro 317 317 Interest rate swaps – Fair value hedges – US dollar 2,500 1,750 – Euro 500 500

174 – SABMiller plc Annual Report 2013 F-88 9. Derivative fi nancial instruments continued Book value Fair value Book value Fair value 2013 2013 2012 2012 US$m US$m US$m US$m Overview Current borrowings 1,648 1,659 2 2 Non-current borrowings 3,545 3,675 7,218 7,592

Current borrowings in the table above exclude amounts owed to subsidiary undertakings. Non-current borrowings in the table above include amounts owed to subsidiary undertakings.

Derivatives, cash and cash equivalents, short-term deposits, loan participation deposit, debtors and creditors (excluding borrowings) are not

included in the table above because their book values are an approximation of their fair values. The fair value of the company’s fi xed rate loans Business review are calculated by discounting expected future cash fl ows using the appropriate yield curve. The book values of fl oating rate borrowings approximate to their fair value.

Fair value gain/(loss) on fi nancial instruments recognised in the profi t and loss account 2013 2012 US$m US$m Derivative fi nancial instruments: Forward foreign currency contracts 35 (108) Interest rate swaps designated as fair value hedges (51) 100 Cross currency swaps 48 107 Guarantee fees 62 22 94 121 Other fi nancial instruments: Non-current borrowings designated as the hedged item in a fair value hedge 42 (156) Total fair value gain/(loss) on fi nancial instruments recognised in the profi t and loss account 136 (35) Governance

Other fi nancial liabilities Other fi nancial liabilities include guarantee fee liabilities as disclosed in notes 7 and 8.

The company has guaranteed the bank overdrafts and drawn components of bank loans of a number of subsidiaries. Under the terms of the fi nancial 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: Financial statements 2013 2012 Year of maturity US$m US$m 2014 581 2,175 2015 1,060 1,000 2016 684 750 2017 2,054 2,054 2020 1,282 – 2022 2,500 2,500 2042 1,500 1,500 9,661 9,979 Shareholder information

F-89 SABMiller plc Annual Report 2013 – 175 Notes to the company fi nancial statements continued

10. Reconciliation of movements in shareholders’ funds

Share Share Merger Hedging Treasury Profi t and capital premium relief reserve EBT shares loss account Total US$m US$m US$m US$m US$m US$m US$m US$m At 1 April 2012 166 6,480 4,586 2 (103) (1,097) 5,860 15,894 Issue of share capital 1 101 – – – – – 102 Profi t for the year – – – – – – 1,710 1,710 Dividends paid – – – – – – (1,504) (1,504) Cash fl ow hedges – fair value losses – – – (8) – – – (8) Transfer into EBT – – – – (70) 70 – – Purchases of EBT shares – – – – (53) – (53) Utilisation of EBT shares – – – – 69 – (69) – Credit entry relating to share-based payments – – – – – – 94 94 Capital contribution relating to share-based payments –––––– 95 95 At 31 March 2013 167 6,581 4,586 (6) (157) (1,027) 6,186 16,330

Foreign exchange differences recognised in the profi t for the year, except for those arising on fi nancial instruments measured at fair value under FRS 26, were gains US$1 million (2012: US$111 million).

In March 2013 4.6 million treasury shares with an original cost to the company of US$70 million were transferred into the EBT reserve at no gain or loss to the company.

Further information relating to the share capital, share premium, the treasury shares and the EBT reserve of the company is detailed in notes 25 and 26 to the consolidated fi nancial statements of the group. Details of share incentive schemes are provided in note 25 to the consolidated fi nancial statements of the group. Details of dividends paid and proposed for the year are provided in note 9 to the consolidated fi nancial statements of the group.

11. Profi t and loss information

Information relating to directors’ remuneration is included in the directors’ remuneration report on pages 66 to 85.

Details of auditors’ remuneration are provided in note 3 to the consolidated fi nancial statements of the group.

Operating leases Operating lease charges recognised in the profi t and loss during the year were as follows: 2013 2012 US$m US$m Plant and machinery 4 4 Other 8 8

176 – SABMiller plc Annual Report 2013 F-90 12. Other information a. Deferred tax assets have not been recognised in respect of the following:

2013 2012 Overview US$m US$m Tax losses 92 72 Depreciation in excess of capital allowances 12 11 Accruals and provisions 1 1 Share-based payments 30 25 135 109

b. Contingent liabilities and guarantees Business review 2013 2012 US$m US$m Capital expenditure contracted but not provided – 2

The company has guaranteed borrowings in respect of certain subsidiary undertakings. Guarantee fees received from 100% owned subsidiaries were US$63 million (2012: US$22 million). Guarantees to third parties provided in respect of bank facilities were US$174 million. Note 13 details guarantee fees paid to related parties.

At 31 March 2013 the company had annual commitments under non-cancellable operating leases as follows: 2013 2012 US$m US$m Land and buildings Within one year – 1 Between two and fi ve years 1 1 After fi ve years 5 5 Governance

Other Within one year 1 1

13. 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 Financial statements owned. During the year the company had transactions with undertakings in which it does not hold a 100% interest. 2013 2012 US$m US$m Interest received from subsidiary undertakings – 2 Guarantee fee income from subsidiary undertakings 1 1 Loan participation deposit compensation from an associated undertaking 100 – Income from recharges to subsidiary undertakings1 119 134 Guarantee fees paid to subsidiary undertakings (1) (1)

1 The company received income from recharges related to business capability programme costs. 2013 2012 At 31 March US$m US$m Amounts owed by subsidiary undertakings 23 25 Amounts owed to subsidiary undertakings (12) (4) Amounts owed to associated undertakings1 (100) – Loans to associated undertakings – 60 Shareholder information

1 Amounts owed to associated undertakings relates to compensation received from Castel in recognition of a loan participation deposit advanced to the Angolan businesses by SABMiller plc. The Angolan businesses are managed by Castel.

F-91 SABMiller plc Annual Report 2013 – 177 Five-year fi nancial review for the years ended 31 March

2013 20121 2011 2010 2009 US$m US$m US$m US$m US$m Income statements Group revenue 34,487 31,388 28,311 26,350 25,302 Revenue 23,213 21,760 19,408 18,020 18,703 Operating profi t 4,203 5,013 3,127 2,619 3,148 Net fi nance costs (735) (562) (525) (563) (706) Share of post tax results of associates and joint ventures 1,244 1,152 1,024 873 516 Taxation (1,201) (1,126) (1,069) (848) (801) Non-controlling interests (237) (256) (149) (171) (276) Profi t for the year attributable to owners of the parent 3,274 4,221 2,408 1,910 1,881 Adjusted earnings 3,796 3,400 3,018 2,509 2,065

Balance sheets Non-current assets 50,588 50,998 34,870 33,604 28,156 Current assets 5,683 4,851 4,178 3,895 3,472 Assets of disposal group classifi ed as held for sale 23 79 66 – – Total assets 56,294 55,928 39,114 37,499 31,628 Derivative fi nancial instruments (86) (109) (135) (321) (142) Borrowings (18,548) (19,226) (8,460) (9,414) (9,618) Other liabilities and provisions (10,199) (10,554) (7,694) (7,171) (5,751) Liabilities of disposal group classifi ed as held for sale (1) (7) (66) – – Total liabilities (28,834) (29,896) (16,355) (16,906) (15,511) Net assets 27,460 26,032 22,759 20,593 16,117

Total shareholders’ equity 26,372 25,073 22,008 19,910 15,376 Non-controlling interests in equity 1,088 959 751 683 741 Total equity 27,460 26,032 22,759 20,593 16,117

Cash fl ow statements Adjusted EBITDA 6,835 6,183 5,617 5,020 4,667 EBITDA 5,758 4,979 4,502 3,974 4,164 Net working capital movements (204) 258 66 563 (493) Net cash generated from operations 5,554 5,237 4,568 4,537 3,671 Net interest paid (770) (407) (640) (640) (722) Tax paid (683) (893) (885) (620) (766) Net cash infl ow from operating activities 4,101 3,937 3,043 3,277 2,183 Net capital expenditure and other investments (1,440) (1,522) (1,245) (1,483) (2,082) Net investments in subsidiaries, joint ventures and associates (223) (11,095) (183) (504) (533) Dividends received from joint ventures, associates and other investments 1,000 1,017 911 815 606 Net cash infl ow/(outfl ow) before fi nancing and dividends 3,438 (7,663) 2,526 2,105 174 Net cash (outfl ow)/infl ow from fi nancing (517) 8,819 (1,214) (804) 615 Dividends paid to shareholders of the parent (1,517) (1,324) (1,113) (924) (877) Effect of exchange rates (51) (39) 25 90 22 Increase/(decrease) in cash and cash equivalents 1,353 (207) 224 467 (66)

Per share information (US cents per share) Basic earnings per share 205.9 266.6 152.8 122.6 125.2 Diluted earnings per share 203.5 263.8 151.8 122.1 124.6 Adjusted basic earnings per share 238.7 214.8 191.5 161.1 137.5 Net asset value per share2 1,579.4 1,506.5 1,326.6 1,203.2 969.9 Total number of shares in issue (millions) 1,669.7 1,664.3 1,659.0 1,654.7 1,585.4

Other operating and fi nancial statistics Return on equity (%)3 14.4 13.6 13.7 12.6 13.4 EBITA margin (%) 18.6 17.9 17.8 16.6 16.3 Adjusted EBITDA margin (%) 24.1 23.0 22.9 21.7 20.9 Interest cover (times) 9.1 11.4 10.8 9.3 6.7 Free cash fl ow (US$m) 3,230 3,048 2,488 2,028 106 Total borrowings to total assets (%) 32.9 34.4 21.6 25.1 30.4 Net cash generated from operations to total borrowings (%) 29.9 27.2 54.0 48.2 38.2 Revenue per employee (US$000) 329.3 305.9 280.4 256.9 272.5 Average monthly number of employees 70,486 71,144 69,212 70,131 68,635

¹ Restated for the adjustments made to the provisional fair values relating to the Foster’s, the Pacifi c Beverages and the International Breweries acquisitions. ² Net asset value per share is calculated by dividing 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.

178 – SABMiller plc Annual Report 2013 F-92 2013 2012 2011 2010 2009 US$m US$m US$m US$m US$m Group revenue

Segmental analysis Overview Latin America 7,821 7,158 6,335 5,905 5,495 Europe 5,767 5,482 5,394 5,577 6,145 North America 5,355 5,250 5,223 5,228 5,227 Africa 3,853 3,686 3,254 2,716 2,567 Asia Pacifi c 5,685 3,510 2,026 1,741 1,565 South Africa: – Beverages 5,540 5,815 5,598 4,777 3,955 – Hotels and Gaming 466 487 481 406 348 Business review 34,487 31,388 28,311 26,350 25,302

Operating profi t (excluding share of associates and joint ventures) Segmental analysis Latin America 1,983 1,736 1,497 1,270 1,057 Europe 652 804 857 840 900 North America 7 – 16 12 230 Africa 439 422 365 316 354 Asia Pacifi c 462 124 (22) (34) (2) South Africa: Beverages 1,062 1,091 997 826 704 Corporate (202) (190) (147) (139) (97) Operating profi t – before exceptional items 4,403 3,987 3,563 3,091 3,146

Exceptional (charge)/credit Latin America (63) (119) (106) (156) 45 Europe (64) 1,135 (261) (202) (452) North America – – – – 409 Governance Africa 79 162 (4) (3) – Asia Pacifi c (104) (70) – – – South Africa: Beverages (22) (41) (188) (53) – Corporate (26) (41) 123 (58) – (200) 1,026 (436) (472) 2 Operating profi t – after exceptional items 4,203 5,013 3,127 2,619 3,148 Financial statements EBITA Segmental analysis Latin America 2,112 1,865 1,620 1,386 1,173 Europe 784 836 887 872 944 North America 771 756 741 619 581 Africa 838 743 647 565 562 Asia Pacifi c 855 321 92 71 80 South Africa: – Beverages 1,129 1,168 1,067 885 764 – Hotels and Gaming 134 135 137 122 122 Corporate (202) (190) (147) (139) (97) 6,421 5,634 5,044 4,381 4,129 Shareholder information

F-93 SABMiller plc Annual Report 2013 – 179 Defi nitions

Financial defi nitions Free cash fl ow This comprises net cash generated from operating activities less Adjusted earnings cash paid for the purchase of property, plant and equipment, and Adjusted earnings are calculated by adjusting headline earnings (as intangible assets, net investments in existing associates and joint defi ned below) for the amortisation of intangible assets (excluding ventures (in both cases only where there is no change in the group’s computer software), integration and restructuring costs, the fair value effective ownership percentage) and dividends paid to non-controlling movements in relation to capital items for which hedge accounting interests plus cash received from the sale of property, plant and cannot be applied and other items which have been treated as equipment and intangible assets and dividends received. exceptional but not included above or as headline earnings adjustments together with the group’s share of associates’ and joint Group revenue ventures’ adjustments for similar items. The tax and non-controlling This comprises revenue together with the group’s share of revenue interests in respect of these items are also adjusted. from associates and joint ventures.

Adjusted EBITDA Headline earnings This comprises EBITDA (as defi ned below) before cash fl ows from Headline earnings are calculated by adjusting profi t for the fi nancial exceptional items and includes dividends received from our joint period attributable to owners of the parent for items in accordance venture, MillerCoors. Dividends received from MillerCoors with the South African Circular 3/2012 entitled ‘Headline Earnings’. approximate to the group’s share of the EBITDA of the MillerCoors Such items include impairments of non-current assets and profi ts or joint venture. losses on disposals of non-current assets and their related tax and non-controlling interests. This also includes the group’s share of Adjusted EBITDA margin associates’ and joint ventures’ adjustments on the same basis. This is calculated by expressing adjusted EBITDA as a percentage of revenue plus the group’s share of MillerCoors’ revenue. Interest cover This is the ratio of adjusted EBITDA to adjusted net fi nance costs. Adjusted net fi nance costs This comprises net fi nance costs excluding fair value movements in Net debt relation to capital items for which hedge accounting cannot be This comprises gross debt (including borrowings, borrowings-related applied and any exceptional fi nance charges or income. derivative fi nancial instruments, overdrafts and fi nance leases) net of cash and cash equivalents (excluding overdrafts). Adjusted profi t before tax This comprises EBITA less adjusted net fi nance costs and less the Organic information group’s share of associates’ and joint ventures’ net fi nance costs on Organic results and volumes exclude the fi rst 12 months’ results and a similar basis. volumes relating to acquisitions and the last 12 months’ results and volumes relating to disposals. Constant currency Constant currency results have been determined by translating the Total Shareholder Return (TSR) local currency denominated results for the year ended 31 March at TSR is the measure of the returns that a company has provided for the exchange rates for the prior year. its shareholders, refl ecting share price movements and assuming reinvestment of dividends. EBITA This comprises operating profi t before exceptional items, amortisation Sales volumes of intangible assets (excluding computer software) and includes the In the determination and disclosure of sales volumes, the group group’s share of associates’ and joint ventures’ operating profi t on a aggregates 100% of the volumes of all consolidated subsidiaries and similar basis. its equity accounted percentage of all associates’ and joint ventures’ volumes. Contract brewing volumes are excluded from volumes EBITA margin (%) although revenue from contract brewing is included within group This is calculated by expressing EBITA as a percentage of group revenue. Volumes exclude intra-group sales volumes. This measure revenue. of volumes is used for lager volumes, soft drinks volumes, other alcoholic beverage volumes and beverage volumes and is used in the EBITDA segmental analyses as it more closely aligns with the consolidated This comprises the net cash generated from operations before group revenue and EBITA disclosures. working capital movements. This includes cash fl ows relating to exceptional items incurred in the year. KPI defi nitions – How we measure EBITDA margin (%) This is calculated by expressing EBITDA as a percentage of revenue. Total Shareholder Return (TSR) in excess of the median of peer group over fi ve-year periods Effective tax rate (%) (2012 and 2011: three-year periods) The effective tax rate is calculated by expressing tax before tax on TSR performance is measured by taking the percentage growth in exceptional items and on amortisation of intangible assets (excluding our TSR over the fi ve-year period (2012 and 2011: three-year period) computer software), including the group’s share of associates’ and to the date aligned with the related measurement date of performance joint ventures’ tax on the same basis, as a percentage of adjusted share awards for the excom, and deducting the percentage growth in profi t before tax. the TSR of the median of our peer group over the same period.

180 – SABMiller plc Annual Report 2013 F-94 Growth in adjusted earnings per share (EPS) Cumulative fi nancial benefi ts from our business Growth in adjusted EPS is measured by comparing the adjusted capability programme EPS for the current year with that of the prior year. Adjusted EPS is Incremental cash fl ows generated as a result of the adoption of new

measured using adjusted earnings divided by the basic number of processes and systems including incremental revenues, reduced cost Overview shares in issue. Adjusted earnings are measured using the defi nition of goods sold and overheads, reduced investment in working capital on page 180. and lower cost of capital investments.

Free cash fl ow Free cash fl ow is measured using the defi nition on page 180. KPI explanation of change We have moved to a fi ve-year TSR measurement period for the Proportion of our total lager volume from markets in which purpose of the TSR KPI as the performance share awards with we have No. 1 or No. 2 national market share positions three-year TSR measurement periods for the excom have all

Lager volumes generated in markets where we have a number one or now vested and only awards with fi ve-year TSR measurements Business review number two national beer market share position divided by total lager periods remain. The change has had no signifi cant impact on volumes. Lager volumes are measured as defi ned on page 180. the TSR trend.

Proportion of group EBITA from developing and emerging economies Non-fi nancial defi nitions EBITA generated in developing and emerging economies divided by group EBITA before corporate costs. EBITA is defi ned on page 180. Corporate Governance Code Developing and emerging economies are as defi ned by the The UK Corporate Governance Code, as adopted by the Financial International Monetary Fund (IMF). Reporting Council.

Organic growth in lager volumes Direct economic value generated Organic growth in lager volumes is measured by comparing lager Revenue plus interest and dividend receipts, royalty income and volumes in the year with those in the prior year excluding the effects proceeds of sales of assets (in accordance with guidance by the of acquisitions and disposals (organic information is defi ned on Global Reporting Initiative GRI EC1). page 180). Lager volumes are measured as defi ned on page 180. Economy segment

Group revenue growth (organic, constant currency) Taking the leading brand in the most popular pack type as the Governance Growth in group revenue compared with the prior year is measured standard (=100), brands with a weighted average market price which on a constant currency basis (as defi ned on page 180) and excluding fall below an index of 90 form the economy segment. Normally, all the effects of acquisitions and disposals (organic information is brands in this segment will be local brands. defi ned on page 180). Group revenue is defi ned on page 180. International brewers index Revenue growth in premium brands (constant currency) The index of international brewers charts the share price progression Growth in revenue from sales of premium brands compared with the of the company’s closest peers in the global brewing industry – prior year is measured on a constant currency basis (as defi ned on Anheuser-Busch InBev, Carlsberg, Heineken and Molson Coors, page 180). Premium brands are those in the premium segment as relative to 1 April 2010. The index is weighted relative to the market Financial statements defi ned on this page. capitalisation of the brewers as at 1 April 2010.

EBITA growth (organic, constant currency) Mainstream segment EBITA growth compared with the prior year is measured on a Taking the leading brand in the most popular pack type as the constant currency basis (as defi ned on page 180) and excluding standard (=100), the mainstream segment is formed of brands with the effects of acquisitions and disposals (organic information is a weighted average market price which fall into the 90-109 band. defi ned on page 180). EBITA is defi ned on page 180. Mainstream brands tend to be local.

EBITA margin PET EBITA margin is defi ned on page 180. PET is short for polyethylene terephthalate, a form of plastic which is used for bottling alcoholic and non-alcoholic drinks. Hectolitres of water used at our breweries per hectolitre of lager produced Premium segment (worthmore segment in the USA) Water used at our breweries divided by the volume of lager produced. Taking the leading brand in the most popular pack type as the This includes 100% of all consolidated subsidiaries together with the standard (=100), brands with a weighted average market price which equity accounted percentage share of the MillerCoors joint venture. have an index of 110+ form the premium segment. The premium

segment comprises local, regional and global brands. Shareholder information Fossil fuel emissions from energy used at our breweries per hectolitre of lager produced STRATE Fossil fuel emissions are measured by the total amount of carbon STRATE stands for Share Transactions Totally Electronic, an unlisted dioxide (CO2) in kilograms released to the atmosphere by our brewery company owned by JSE Limited and Central Securities Depository operations divided by the volume of lager produced. The total amount Participants (CSDP), which exists to allow share transactions in South of CO2 is the sum of direct emissions produced by the combustion Africa to be settled electronically. 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. This includes 100% of all consolidated businesses together with the equity accounted percentage share of the MillerCoors joint venture.

F-95 SABMiller plc Annual Report 2013 – 181 SABMiller plc Annual Report 2012 85

Independent auditors’ report to the members of SABMiller plc

We have audited the consolidated financial statements of Opinion on other matter prescribed by the SABMiller plc for the year ended 31 March 2012 which comprise Companies Act 2006 the consolidated income statement, the consolidated statement In our opinion, the information given in the directors’ report for the of comprehensive income, the consolidated balance sheet, the financial year for which the consolidated financial statements are consolidated cash flow statement, the consolidated statement prepared is consistent with the consolidated financial statements. of changes in equity and the related notes. The financial reporting Overview framework that has been applied in their preparation is applicable law Matters on which we are required to report by exception and International Financial Reporting Standards (IFRSs) as adopted We have nothing to report in respect of the following: by the European Union. Under the Companies Act 2006 we are required to report to you if, Respective responsibilities of directors and auditors in our opinion: As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the consolidated • certain disclosures of directors’ remuneration specified by law financial statements and for being satisfied that they give a true are not made; or and fair view. Our responsibility is to audit and express an opinion • we have not received all the information and explanations we Business review on the financial statements in accordance with applicable law and require for our audit. International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Under the Listing Rules we are required to review: Standards for Auditors. • the directors’ statement in relation to going concern; and This report, including the opinions, has been prepared for and only for • the part of the corporate governance report relating to the company’s members as a body in accordance with Chapter 3 of the company’s compliance with the nine provisions of the Part 16 of the Companies Act 2006 and for no other purpose. We do UK Corporate Governance Code specified for our review; and not, in giving these opinions, accept or assume responsibility for any • certain elements of the directors’ remuneration report. other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by Other matter our prior consent in writing. We have reported separately on the company financial statements of SABMiller plc for the year ended 31 March 2012 and on the Scope of the audit of the financial statements information in the directors’ remuneration report that is described An audit involves obtaining evidence about the amounts and as having been audited. disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material Richard Hughes (Senior Statutory Auditor) misstatement, whether caused by fraud or error. This includes an for and on behalf of PricewaterhouseCoopers LLP assessment of: whether the accounting policies are appropriate to Chartered Accountants and Statutory Auditors the group’s circumstances and have been consistently applied and London Governance adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of 11 June 2012 the financial statements. In addition, we read all the financial and non-financial information in the SABMiller plc Annual Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements Financial statements In our opinion the consolidated financial statements:

• give a true and fair view of the state of the group’s affairs as at 31 March 2012 and of its profit and cash flows for the year then ended; • 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. Shareholder information

F-96 86 SABMiller plc Annual Report 2012

Consolidated income statement for the year ended 31 March

2012 2011 Notes US$m US$m Revenue 2 21,760 19,408 Net operating expenses 3 (16,747) (16,281)

Operating profit 2 5,013 3,127 Operating profit before exceptional items 2 3,987 3,563 Exceptional items 4 1,026 (436)

Net finance 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

Profit before taxation 5,603 3,626 Taxation 7 (1,126) (1,069) Profit for the year 28a 4,477 2,557

Profit attributable to non-controlling interests 256 149 Profit 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 financial statements.

F-97 SABMiller plc Annual Report 2012 87

Consolidated statement of comprehensive income for the year ended 31 March

2012 2011 Notes US$m US$m Profit for the year 4,477 2,557 Other comprehensive income: Currency translation differences on foreign currency net investments 136 644 Overview – Increase in foreign currency translation reserve during the year 153 644 – Recycling of foreign currency translation reserve on disposals (17) –

Net actuarial losses on defined benefit plans 32 (9) (28)

Net investment hedges: – Fair value losses arising during the year 27b (1) (137)

Cash flow hedges: 27b 6 39

– Fair value gains arising during the year – 16 Business review – Fair value losses transferred to inventory 2 2 – Fair value losses transferred to profit 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

The notes on pages 91 to 164 are an integral part of these consolidated financial statements. Governance Financial statements Shareholder information

F-98 88 SABMiller plc Annual Report 2012

Consolidated balance sheet at 31 March

2012 20111 Notes US$m US$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 financial 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 Derivative financial instruments 24 24 16 Available for sale investments 15 1 – Cash and cash equivalents 18 745 1,067 4,663 4,178 Assets of disposal group classified as held for sale 19a 79 66 4,742 4,244 Total assets 55,651 39,114

Liabilities Current liabilities Derivative financial 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 classified as held for sale 19b (7) (66) (6,790) (6,018)

Non-current liabilities Derivative financial 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 notes on pages 91 to 164 are an integral part of these consolidated financial statements. The financial 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 Officer

F-99 SABMiller plc Annual Report 2012 89

Consolidated cash flow statement for the year ended 31 March

2012 2011 Notes US$m US$m Cash flows from operating activities Cash generated from operations 28a 5,237 4,568 Interest received 516 293 Overview Interest paid (923) (933) Tax paid (893) (885) Net cash generated from operating activities 28b 3,937 3,043

Cash flows 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) Business review 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 flows from financing 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) Governance Capital element of finance lease payments (5) (5) Net cash payments on derivative financial 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) financing activities 7,495 (2,327)

Net cash (outflow)/inflow from operating, investing and financing activities (168) 199 Effects of exchange rate changes (39) 25

Net (decrease)/increase in cash and cash equivalents (207) 224 Financial statements Cash and cash equivalents at 1 April 28c 813 589 Cash and cash equivalents at 31 March 28c 606 813

The notes on pages 91 to 164 are an integral part of these consolidated financial statements. Shareholder information

F-100 90 SABMiller plc Annual Report 2012

Consolidated statement of changes in equity for the year ended 31 March

Share Merger Total Non- Called up premium relief Other Retained shareholders’ controlling Total share capital account reserve reserves earnings equity interests equity US$m US$m US$m US$m US$m US$m US$m US$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 Profit 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 Profit 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

The notes on pages 91 to 164 are an integral part of these consolidated financial statements.

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 group’s Polish business.

F-101 SABMiller plc Annual Report 2012 91

Notes to the consolidated financial statements

1. Accounting policies Management considers the following to be areas of significant judgement and estimation for the group due to greater complexity The principal accounting policies adopted in the preparation of and/or particularly subject to the exercise of judgement: the group’s financial statements are set out below. These policies have been consistently applied to all the years presented, unless (i) Impairment reviews otherwise stated. Goodwill arising on business combinations is allocated to the relevant Overview cash generating unit (CGU). Impairment reviews in respect of the a) Basis of preparation relevant CGUs are performed at least annually or more regularly if The consolidated financial statements of SABMiller plc have been events indicate that this is necessary. Impairment reviews are based prepared in accordance with International Financial Reporting on future cash flows discounted using the weighted average cost Standards as adopted by the European Union (IFRSs as adopted of capital for the relevant country with terminal values calculated by the EU), and the Companies Act 2006 applicable to companies applying the long-term growth rate. The future cash flows which are reporting under IFRS. 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

The financial statements are prepared under the historical cost Business review convention, except for the revaluation to fair value of certain financial these impairment reviews to change with a consequent adverse assets and liabilities, and post-retirement assets and liabilities as impact on the results and net position of the group. Details of the described in the accounting policies below. The accounts have estimates used in the impairment reviews for the year are set out been prepared on a going concern basis. in note 10.

The preparation of financial statements in conformity with IFRS (ii) Taxation requires the use of certain critical accounting estimates. It also The group operates in many countries and is subject to taxes requires management to exercise its judgement in the process in numerous jurisdictions. Significant judgement is required in of applying the group’s accounting policies. Actual results could determining the provision for taxes as the tax treatment is often by differ from those estimates. its nature complex, and cannot be finally determined until a formal resolution has been reached with the relevant tax authority which may b) Recent accounting developments take several years to conclude. Amounts provided are accrued based (i) New standards, amendments and interpretations of on management’s interpretation of country specific tax laws and the existing standards adopted by the group likelihood of settlement. Actual liabilities could differ from the amount There were no standards, interpretations and amendments adopted provided which could have a consequent adverse impact on the by the group since 1 April 2011 which had a significant impact on the results and net position of the group. group’s consolidated results or financial position. (iii) Pension and post-retirement benefits (ii) New standards, amendments and interpretations of Pension accounting requires certain assumptions to be made in order Governance existing standards that are not yet effective and have not to value the group’s pension and post-retirement obligations in the been early adopted by the group balance sheet and to determine the amounts to be recognised in the The following standards, interpretations and amendments to existing income statement and in other comprehensive income in accordance standards have been published and are mandatory for the group’s with IAS 19. The calculations of these obligations and charges are accounting periods beginning on or after 1 April 2012 or later periods, based on assumptions determined by management which include but which have not been early adopted by the group and in relation discount rates, salary and pension inflation, healthcare cost inflation, to which the group is yet to assess the full impact: mortality rates and expected long-term rates of return on assets. Details of the assumptions used are set out in note 32. The selection • Amendment to IAS 19, ‘Employee Benefits’ is effective from of different assumptions could affect the net position of the group 1 and future results. 1 January 2013 . Financial statements • IFRS 9, ‘Financial Instruments’, is effective from 1 January 2015¹. • IFRS 10, ‘Consolidated Financial Statements’, is effective from (iv) Property, plant and equipment 1 January 20131. The determination of the useful economic life and residual values of • IFRS 11, ‘Joint Arrangements’, is effective from 1 January 2013¹. property, plant and equipment is subject to management estimation. • IFRS 12, ‘Disclosures of Interests in Other Entities’ is effective from The group regularly reviews all of its depreciation rates and residual 1 January 20131. values to take account of any changes in circumstances, and any • IFRS 13, ‘Fair Value Measurement’, is effective from changes that could affect prospective depreciation charges and 1 January 20131. asset carrying values.

¹ Not yet endorsed by the EU. (v) Business combinations On the acquisition of a company or business, a determination of the There are no other standards, interpretations and amendments to fair value and the useful life of intangible assets acquired is performed, existing standards that are not yet effective that would be expected which requires the application of management judgement. Future to have a material impact on the consolidated results of operations events could cause the assumptions used by the group to change or financial position of the group. which would have a significant impact on the results and net position of the group. c) Significant judgements and estimates In determining and applying accounting policies, judgement is (vi) Exceptional items often required where the choice of specific policy, assumption or Exceptional items are expense or income items recorded in a period accounting estimate to be followed could materially affect the reported which have been determined by management as being material by Shareholder information results or net position of the group, should it later be determined that their size or incidence and are presented separately within the results a different choice be more appropriate. of the group. The determination of which items are disclosed as exceptional items will affect the presentation of profit 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.

F-102 92 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

1. Accounting policies continued (iii) Joint ventures Joint ventures are contractual arrangements which the group has d) Segmental reporting entered into with one or more parties to undertake an economic Operating segments reflect the management structure of the group activity that is subject to joint control. Joint control is the contractually and the way performance is evaluated and resources allocated agreed sharing of control over an economic activity, and exists only based on group revenue and EBITA by the group’s chief operating when the strategic, financial and operating decisions relating to decision maker, defined as the executive directors. The group is the activity require the unanimous consent of the parties sharing focused geographically, and while not meeting the definition of the control. reportable segments, the group reports separately as segments South Africa: Hotels and Gaming and Corporate as this provides The group’s share of the recognised income and expenses of useful additional information. associates and joint ventures are accounted for using the equity method from the date significant influence or joint control commences e) Basis of consolidation to the date it ceases based on present ownership interests. SABMiller plc (the company) is a public limited company incorporated in Great Britain and registered in England and Wales. The The group recognises its share of associates’ and joint ventures’ consolidated financial statements include the financial information post-tax results as a one line entry before profit before taxation in of the subsidiary, associate and joint venture entities owned by the income statement and its share of associates’ and joint ventures’ the company. equity movements as a one line entry under other comprehensive income in the statement of comprehensive income. (i) Subsidiaries Subsidiaries are entities controlled by the company, where control is When the group’s interest in an associate or joint venture has been the power directly or indirectly to govern the financial and operating reduced to nil because the group’s share of losses exceeds its policies of the entity so as to obtain benefit from its activities, interest in the associate or joint venture, the group only provides regardless of whether this power is actually exercised. Where the for additional losses to the extent that it has incurred legal or company’s interest in subsidiaries is less than 100%, the share constructive obligations to fund such losses, or make payments attributable to outside shareholders is reflected in non-controlling on behalf of the associate or joint venture. Where the investment interests. Subsidiaries are included in the financial statements from in an associate or joint venture is disposed, the investment ceases the date control commences until the date control ceases. to be equity accounted.

Control is presumed to exist when the group owns, directly or (iv) Transactions with non-controlling interests indirectly through subsidiaries, more than half of the voting power Transactions with non-controlling interests are treated as transactions of an entity unless, in exceptional circumstances, it can be clearly with equity owners of the group. For purchases from non-controlling demonstrated that such ownership does not constitute control. interests, the difference between any consideration paid and the Control also exists where the group has the ability to direct or relevant share acquired of the carrying value of net assets of the dominate decision-making in an entity, regardless of whether this subsidiary is recorded in equity. Gains or losses on disposals to power is actually exercised. non-controlling interests are also recorded in equity where there is no loss of control. On the subsequent disposal or termination of a business, the results of the business are included in the group’s results up to the effective (v) Reduction in interests date of disposal. The profit or loss on disposal or termination is When the group ceases to have control, joint control or significant calculated after charging the amount of any related goodwill to the influence, any retained interest in the entity is remeasured to its fair extent that it has not previously been taken to the income statement. value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes Intra-group balances, and any unrealised gains and losses or income of subsequently accounting for the retained interest as an associate, and expenses arising from intra-group transactions, are eliminated in joint venture or financial asset. In addition, certain amounts previously preparing the consolidated financial statements. Unrealised losses are recognised in other comprehensive income in respect of that entity eliminated unless the transaction provides evidence of an impairment are accounted for as if the group had directly disposed of the related of the asset transferred. assets or liabilities. This may mean that certain amounts previously recognised in other comprehensive income are reclassified to profit Some of the company’s subsidiaries have a local statutory accounting or loss. reference date of 31 December. These are consolidated using management prepared information on a basis coterminous with the If the ownership interest in an associate is reduced but significant company’s accounting reference date. influence is retained, or if the ownership interest in a joint venture is reduced but joint control is retained, only the proportionate share of (ii) Associates the carrying amount of the investment and of the amounts previously Associates are entities in which the group has a long-term interest and recognised in other comprehensive income are reclassified to profit over which the group has directly or indirectly significant influence, or loss where appropriate. where significant influence is the ability to influence the financial and operating policies of the entity.

The associate, Distell Group Ltd, has a statutory accounting reference date of 30 June. In respect of each year ending 31 March, this company is included based on financial statements drawn up to the previous 31 December, but taking into account any changes in the subsequent period from 1 January to 31 March that would materially affect the results. All other associates are included on a coterminous basis.

F-103 SABMiller plc Annual Report 2012 93

1. Accounting policies continued g) Business combinations (i) Subsidiaries f) Foreign exchange The acquisition method is used to account for business combinations. (i) Foreign exchange translation The identifiable net assets (including intangibles) are incorporated into Items included in the financial statements of each of the group’s the financial statements on the basis of their fair value from the entities are measured using the currency of the primary economic effective date of control, and the results of subsidiary undertakings Overview environment in which the entity operates (the functional currency). acquired during the financial year are included in the group’s results The consolidated financial statements are presented in US dollars from that date. which is the group’s presentational currency. The exchange rates to the US dollar used in preparing the consolidated financial statements On the acquisition of a company or business, fair values reflecting were as follows: conditions at the date of acquisition are attributed to the identifiable assets (including intangibles), liabilities and contingent liabilities Year ended Year ended acquired. Fair values of these assets and liabilities are determined 31 March 2012 31 March 2011 by reference to market values, where available, or by reference to the current price at which similar assets could be acquired or similar

Average rate Business review Australian dollar (AUD) 0.95 1.06 obligations entered into, or by discounting expected future cash flows South African rand (ZAR) 7.48 7.15 to present value, using either market rates or the risk-free rates and Colombian peso (COP) 1,831 1,881 risk-adjusted expected future cash flows. Euro (€) 0.72 0.76 Czech koruna (CZK) 17.65 19.04 The consideration transferred is measured as the fair value of the Peruvian nuevo sol (PEN) 2.73 2.81 assets given, equity instruments issued and liabilities incurred or Polish zloty (PLN) 2.99 3.01 assumed at the date of the acquisition, and also includes the group’s estimate of the fair value of any deferred consideration payable. Closing rate Acquisition-related costs are expensed as incurred. Where the Australian dollar (AUD) 0.97 0.97 business combination is achieved in stages and results in a change South African rand (ZAR) 7.67 6.77 in control, the acquisition date fair value of the acquirer’s previously Colombian peso (COP) 1,792 1,879 held equity interest in the acquiree is remeasured to fair value at Euro (€) 0.75 0.71 the acquisition date through profit or loss. Where the business Czech koruna (CZK) 18.52 17.27 combination agreement provides for an adjustment to the cost that Peruvian nuevo sol (PEN) 2.67 2.80 is contingent on future events, the consideration transferred includes Polish zloty (PLN) 3.13 2.84 the fair value of any asset or liability resulting from a contingent consideration arrangement. On an acquisition by acquisition basis, the group recognises any non-controlling interest in the acquiree The average exchange rates have been calculated based on the either at fair value or at the non-controlling interest’s proportionate average of the exchange rates during the relevant year which have share of the acquiree’s net assets. Governance been weighted according to the phasing of revenue of the group’s businesses. (ii) Associates and joint ventures On acquisition the investment in associates and joint ventures (ii) Transactions and balances is recorded initially at cost. Subsequently the carrying amount The financial statements for each group company have been prepared is increased or decreased to recognise the group’s share of the on the basis that transactions in foreign currencies are recorded in associates’ and joint ventures’ income and expenses after the their functional currency at the rate of exchange ruling at the date of date of acquisition. the transaction. Monetary items denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date Fair values reflecting conditions at the date of acquisition are with the resultant translation differences being included in operating Financial statements attributed to the group’s share of identifiable assets (including profit in the income statement other than those arising on financial intangibles), liabilities and contingent liabilities acquired. The assets and liabilities which are recorded within net finance costs consideration transferred is measured as the fair value of the assets and those which are deferred in equity as qualifying cash flow hedges given, equity instruments issued and liabilities incurred or assumed and qualifying net investment hedges. Translation differences on at the date of the acquisition, and also includes the group’s estimate non-monetary assets such as equity investments classified as of the fair value of any deferred consideration payable. available for sale assets are included in other comprehensive income. The date significant influence or joint control commences is not (iii) Overseas subsidiaries, associates and joint ventures necessarily the same as the closing date or any other date named One-off items in the income and cash flow statements of overseas in the contract. subsidiaries, associates and joint ventures expressed in currencies other than the US dollar are translated to US dollars at the rates of (iii) Goodwill exchange prevailing on the day of the transaction. All other items are Goodwill arising on consolidation represents the excess of the translated at weighted average rates of exchange for the relevant consideration transferred, the amount of any non-controlling interest reporting period. Assets and liabilities of these undertakings are in the acquiree and the acquisition-date fair value of any previous translated at closing rates of exchange at each balance sheet date. equity interest in the acquiree over the fair value of the identifiable All translation exchange differences arising on the retranslation of assets (including intangibles), liabilities and contingent liabilities of the opening net assets together with differences between income acquired entity at the date of acquisition. Where the fair value of the statements translated at average and closing rates are recognised group’s share of identifiable net assets acquired exceeds the fair value

as a separate component of equity. For these purposes net assets Shareholder information of the consideration, the difference is recognised immediately in the include loans between group companies that form part of the net income statement. investment, for which settlement is neither planned nor likely to occur in the foreseeable future. When a foreign operation is disposed of, any Goodwill is stated at cost less impairment losses and is reviewed related exchange differences in equity are reclassified to the income for impairment on an annual basis. Any impairment identified is statement as part of the gain or loss on disposal. recognised immediately in the income statement and is not reversed. 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. F-104 94 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

1. Accounting policies continued Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring them to use. Direct costs The carrying amount of goodwill in respect of associates and joint associated with the production of identifiable and unique internally ventures is included in the carrying value of the investment in the generated software products controlled by the group that will associate or joint venture. probably generate economic benefits exceeding costs beyond one year are capitalised. Direct costs include software development h) Intangible assets employment costs (including those of contractors used), capitalised Intangible assets are stated at cost less accumulated amortisation interest and an appropriate portion of overheads. Capitalised on a straight-line basis (if applicable) and impairment losses. Cost is computer software, licence and development costs are amortised usually determined as the amount paid by the group, unless the asset over their useful economic lives of between three and eight years. has been acquired as part of a business combination. Intangible assets acquired as part of a business combination are recognised Internally generated costs associated with maintaining computer at their fair value at the date of acquisition. Amortisation is included software programmes are expensed as incurred. within net operating expenses in the income statement. Internally generated intangibles are not recognised except for software and (v) Research and development applied development costs referred to under software and research Research and general development expenditure is written off in the and development below. period in which it is incurred.

Intangible assets with finite lives are amortised over their estimated Certain applied development costs are only capitalised as internally useful economic lives, and only tested for impairment where there is generated intangible assets where there is a clearly defined project, a triggering event. The group regularly reviews all of its amortisation separately identifiable expenditure, an outcome assessed with rates and residual values to take account of any changes in reasonable certainty (in terms of feasibility and commerciality), circumstances. The directors’ assessment of the useful life of expected revenues exceed expected costs and the group has the intangible assets is based on the nature of the asset acquired, resources to complete the task. Such assets are amortised on a the durability of the products to which the asset attaches and straight-line basis over their useful lives once the project is complete. the expected future impact of competition on the business. i) Property, plant and equipment (i) Brands Property, plant and equipment are stated at cost net of accumulated Brands are recognised as an intangible asset where the brand has depreciation and any impairment losses. a long-term value. Acquired brands are only recognised where title is clear or the brand could be sold separately from the rest of the Cost includes expenditure that is directly attributable to the acquisition business and the earnings attributable to it are separately identifiable. of the assets. Subsequent costs are included in the asset’s carrying value or recognised as a separate asset as appropriate, only when it Acquired brands are amortised. In respect of brands currently held is probable that future economic benefits associated with the specific the amortisation period is 10 to 40 years, being the period for which asset will flow to the group and the cost can be measured reliably. the group has exclusive rights to those brands. Repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred. (ii) Contract brewing and other licences recognised as part of a business combination (i) Assets in the course of construction Contractual arrangements for contract brewing and competitor Assets in the course of construction are carried at cost less any licensing arrangements are recognised as an intangible asset at impairment loss. Cost includes professional fees and for qualifying a fair value representing the remaining contractual period with an assets certain borrowing costs as determined below. When these assumption about the expectation that such a contract will be assets are ready for their intended use, they are transferred into the renewed, together with a valuation of this extension. appropriate category. At this point, depreciation commences on the same basis as on other property, plant and equipment. Acquired licences or contracts are amortised. In respect of licences or contracts currently held, the amortisation period is the period for which (ii) Assets held under finance leases the group has exclusive rights to these assets or income streams. Assets held under finance leases which result in the group bearing substantially all the risks and rewards incidental to ownership are (iii) Customer lists and distributor relationships recognised capitalised as property, plant and equipment. Finance lease assets as part of a business combination are initially recognised at an amount equal to the lower of their fair The fair value of businesses acquired may include customer lists and value and the present value of the minimum lease payments at distributor relationships. These are recognised as intangible assets inception of the lease, then depreciated over the lower of the lease and are calculated by discounting the future revenue stream term or their useful lives. The capital element of future obligations attributable to these lists or relationships. under the leases is included as a liability in the balance sheet classified, as appropriate, as a current or non-current liability. The Acquired customer lists or distributor relationships are amortised. interest element of the lease obligations is charged to the income In respect of contracts currently held, the amortisation period is statement over the period of the lease term to reflect a constant the period for which the group has the benefit of these assets. rate of interest on the remaining balance of the obligation for each financial period. (iv) Software Where computer software is not an integral part of a related item (iii) Returnable containers of property, plant and equipment, the software is capitalised as Returnable containers in circulation are recorded within property, an intangible asset. plant and equipment at cost net of accumulated depreciation less any impairment loss.

F-105 SABMiller plc Annual Report 2012 95

1. Accounting policies continued k) Inventories Inventories are stated at the lower of cost incurred in bringing each Depreciation of returnable bottles and containers is recorded product to its present location and condition, and net realisable value, to write the containers off over the course of their economic life. as follows: This is typically undertaken in a two stage process: • Raw materials, consumables and goods for resale: Purchase cost Overview • The excess over deposit value is written down over a period of net of discounts and rebates on a first-in first-out basis (FIFO). 1 to 10 years. • Finished goods and work in progress: Raw material cost plus direct • Provisions are made against the deposit values for breakages and costs and a proportion of manufacturing overhead expenses on a losses in trade together with a design obsolescence provision held FIFO basis. to write off the deposit value over the expected container design period – which is a period of no more than 14 years from the Net realisable value is based on estimated selling price less further inception of a container design. This period is shortened where costs expected to be incurred to completion and disposal. Costs of appropriate by reference to market dynamics and the ability of inventories include the transfer from equity of any gains or losses on matured qualifying cash flow hedges of purchases of raw materials.

the entity to use containers for different brands. Business review

(iv) Depreciation l) Financial assets and financial liabilities No depreciation is provided on freehold land or assets in the course Financial assets and financial liabilities are initially recorded at fair of construction. In respect of all other property, plant and equipment, value (plus any directly attributable transaction costs, except in the depreciation is provided on a straight-line basis at rates calculated to case of those classified at fair value through profit or loss). For those write off the cost, less the estimated residual value, of each asset over financial instruments that are not subsequently held at fair value, the its expected useful life as follows: group assesses whether there is any objective evidence of impairment at each balance sheet date. Freehold buildings 20 – 50 years Leasehold buildings Shorter of the lease term Financial assets are recognised when the group has rights or other or 50 years access to economic benefits. Such assets consist of cash, equity Plant, vehicles and systems 2 – 30 years instruments, a contractual right to receive cash or another financial Returnable containers asset, or a contractual right to exchange financial instruments with (non‑returnable containers another entity on potentially favourable terms. Financial assets are are recorded as inventory) 1 – 14 years derecognised when the right to receive cash flows from the asset Assets held under finance leases Lower of the lease term or have expired or have been transferred and the group has transferred life of the asset substantially all risks and rewards of ownership.

The group regularly reviews all of its depreciation rates and residual Financial liabilities are recognised when there is an obligation to values to take account of any changes in circumstances. When transfer benefits and that obligation is a contractual liability to deliver Governance setting useful economic lives, the principal factors the group takes cash or another financial asset or to exchange financial instruments into account are the expected rate of technological developments, with another entity on potentially unfavourable terms. Financial expected market requirements for the equipment and the intensity liabilities are derecognised when they are extinguished, that is at which the assets are expected to be used. discharged, cancelled or expired.

The profit or loss on the disposal of an asset is the difference between If a legally enforceable right exists to set off recognised amounts of the disposal proceeds and the net book amount. financial assets and liabilities, which are in determinable monetary amounts, and there is the intention to settle net, the relevant financial assets and liabilities are offset. (v) Capitalisation of borrowing costs Financial statements Financing costs incurred, before tax, on major capital projects during the period of development or construction that necessarily Interest costs are charged to the income statement in the year in take a substantial period of time to be developed for their intended which they accrue. Premiums or discounts arising from the difference use, are capitalised up to the time of completion of the project. between the net proceeds of financial instruments purchased or issued and the amounts receivable or repayable at maturity are j) Advance payments made to customers (principally included in the effective interest calculation and taken to net finance hotels, restaurants, bars and clubs) costs over the life of the instrument. Advance payments made to customers are conditional on the achievement of contracted sales targets or marketing commitments. There are four categories of financial assets and financial liabilities. The group records such payments as prepayments initially at fair value These are described as follows: and amortises them in the income statement over the relevant period to which the customer commitment is made (typically three to five (i) Financial assets and financial liabilities at fair value years). These prepayments are recorded net of any impairment losses. through profit or loss Financial assets and financial liabilities at fair value through profit or Where there is a volume target the amortisation of the advance is loss include derivative assets and derivative liabilities not designated included in sales discounts as a reduction to revenue and where there as effective hedging instruments. are specific marketing activities/commitments the amortisation is included as an operating expense. The amounts capitalised are All gains or losses arising from changes in the fair value of financial reassessed annually for achievement of targets and are impaired assets or financial liabilities within this category are recognised in the Shareholder information where there is objective evidence that the targets will not be achieved. income statement.

Assets held at customer premises are included within property, plant a. Derivative financial assets and financial liabilities and equipment and are depreciated in line with group policies on Derivative financial assets and financial liabilities are financial similar assets. instruments whose value changes in response to an underlying variable, require little or no initial investment and are settled in the future.

F-106 96 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

1. Accounting policies continued (iii) Available for sale investments Available for sale investments are non-derivative financial assets that These include derivatives embedded in host contracts. Such are either designated in this category or not classified as financial embedded derivatives need not be accounted for separately if assets at fair value through profit or loss, or loans and receivables. the host contract is already fair valued; if it is not considered as a Investments in this category are included in non-current assets unless derivative if it was freestanding; or if it can be demonstrated that it management intends to dispose of the investment within 12 months is closely related to the host contract. There are certain currency of the balance sheet date. They are initially recognised at fair value exemptions which the group has applied to these rules which limit plus transaction costs and are subsequently remeasured at fair value the need to account for certain potential embedded foreign exchange and tested for impairment. Gains and losses arising from changes derivatives. These are: if a contract is denominated in the functional in fair value including any related foreign exchange movements currency of either party; where that currency is commonly used in are recognised in other comprehensive income. On disposal or international trade of the good traded; or if it is commonly used for impairment of available for sale investments, any gains or losses in local transactions in an economic environment. other comprehensive income are reclassified to the income statement.

Derivative financial assets and liabilities are analysed between current Purchases and sales of investments are recognised on the date on and non-current assets and liabilities on the face of the balance sheet, which the group commits to purchase or sell the asset. Investments depending on when they are expected to mature. are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group For derivatives that have not been designated to a hedging has transferred substantially all risks and rewards of ownership. relationship, all fair value movements are recognised immediately in the income statement. (See note x for the group’s accounting policy (iv) Financial liabilities held at amortised cost on hedge accounting). Financial liabilities held at amortised cost include trade payables, accruals, amounts owed to associates – trade, amounts owed to (ii) Loans and receivables joint ventures – trade, other payables and borrowings. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. They a. Trade payables arise when the group provides money, goods or services directly to Trade payables are initially recognised at fair value and subsequently a debtor with no intention of trading the receivable. They are included measured at amortised cost using the effective interest method. Trade in current assets, except for maturities of greater than 12 months after payables are analysed between current and non-current liabilities on the balance sheet date which are classified as non-current assets. the face of the balance sheet, depending on when the obligation to Loans and receivables are initially recognised at fair value including settle will be realised. originating fees and transaction costs, and subsequently measured at amortised cost using the effective interest method less provision b. Borrowings for impairment. Loans and receivables include trade receivables, Borrowings are recognised initially at fair value, net of transaction amounts owed by associates – trade, amounts owed by joint costs and are subsequently stated at amortised cost and include ventures – trade, accrued income and cash and cash equivalents. accrued interest and prepaid interest. Borrowings are classified as current liabilities unless the group has an unconditional right to defer a. Trade receivables settlement of the liability for at least 12 months from the balance sheet Trade receivables are initially recognised at fair value and date. Borrowings classified as hedged items are subject to hedge subsequently measured at amortised cost less provision for accounting requirements (see note x). Bank overdrafts are shown impairment. within borrowings in current liabilities and are included within cash and cash equivalents on the face of the cash flow statement as they form A provision for impairment of trade receivables is established when an integral part of the group’s cash management. 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 m) Impairment of the provision is the difference between the asset’s carrying value This policy covers all assets except inventories (see note k), financial and the present value of the estimated future cash flows discounted assets (see note l), non-current assets classified as held for sale at the original effective interest rate. This provision is recognised in (see note n), and deferred tax assets (see note u). the income statement. Impairment reviews are performed by comparing the carrying value b. Cash and cash equivalents of the non-current asset to its recoverable amount, being the higher In the consolidated balance sheet, cash and cash equivalents of the fair value less costs to sell and value in use. The fair value less includes cash in hand, bank deposits repayable on demand and other costs to sell is considered to be the amount that could be obtained on short-term highly liquid investments with original maturities of three disposal of the asset. Value in use is determined by discounting the months or less. In the consolidated cash flow statement, cash and future post-tax cash flows generated from continuing use of the cash cash equivalents also includes bank overdrafts which are shown generating unit (CGU) using a post-tax discount rate, as this closely within borrowings in current liabilities on the balance sheet. approximates to applying pre-tax discount rates to pre-tax cash flows. Where a potential impairment is identified using post-tax cash flows 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.

Where the asset does not generate cash flows that are independent from the cash flows 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 identifiable cash flows. 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-107 SABMiller plc Annual Report 2012 97

1. Accounting policies continued r) Revenue recognition (i) Sale of goods and services An impairment loss is held firstly against any specifically impaired Revenue represents the fair value of consideration received or assets. Where an impairment is recognised against a CGU, the receivable for goods and services provided to third parties and impairment is first taken against goodwill balances and if there is a is recognised when the risks and rewards of ownership are remaining loss it is set against the remaining intangible and tangible substantially transferred. Overview assets on a pro-rata basis. The group presents revenue gross of excise duties because unlike Should circumstances or events change and give rise to a reversal of value added tax, excise is not directly related to the value of sales. It is a previous impairment loss, the reversal is recognised in the income not generally recognised as a separate item on invoices, increases in statement in the period in which it occurs and the carrying value of excise are not always directly passed on to customers, and the group the asset is increased. The increase in the carrying value of the asset cannot reclaim the excise where customers do not pay for product is restricted to the amount that it would have been had the original received. The group therefore considers excise as a cost to the group impairment not occurred. Impairment losses in respect of goodwill and reflects it as a production cost. Consequently, any excise that is recovered in the sale price is included in revenue. are irreversible. Business review

Goodwill is tested annually for impairment. Assets subject to Revenue excludes value added tax. It is stated net of price discounts, amortisation are reviewed for impairment if circumstances or events promotional discounts, settlement discounts and after an appropriate change to indicate that the carrying value may not be fully recoverable. amount has been provided to cover the sales value of credit notes yet to be issued that relate to the current and prior periods. n) Non-current assets (or disposal groups) held for sale Non-current assets and all assets and liabilities classified as held for The same recognition criteria also apply to the sale of by-products sale are measured at the lower of carrying value and fair value less and waste (such as spent grain, malt dust and yeast) with the costs to sell. exception that these are included within other income.

Such assets are classified as held for resale if their carrying amount (ii) Interest income will be recovered through a sale transaction rather than through Interest income is recognised on an accruals basis using the effective continued use. This condition is regarded as met only when a sale is interest method. highly probable, the asset or disposal group is available for immediate sale in its present condition and when management is committed to When a receivable is impaired the group reduces the carrying amount the sale which is expected to qualify for recognition as a completed to its recoverable amount by discounting the estimated future cash sale within one year from date of classification. flows at the original effective interest rate, and continuing to unwind the discount as interest income. o) Provisions Governance Provisions are recognised when there is a present obligation, whether (iii) Royalty income legal or constructive, as a result of a past event for which it is probable Royalty income is recognised on an accruals basis in accordance that a transfer of economic benefits will be required to settle the with the relevant agreements and is included in other income. obligation and a reliable estimate can be made of the amount of the obligation. Such provisions are calculated on a discounted basis (iv) Dividend income where the effect is material to the original undiscounted provision. Dividend income is recognised when the right to receive payment The carrying amount of the provision increases in each period to is established. reflect the passage of time and the unwinding of the discount and the movement is recognised in the income statement within net s) Operating leases Rentals paid and incentives received on operating leases are charged finance costs. Financial statements or credited to the income statement on a straight-line basis over the Restructuring provisions comprise lease termination penalties and lease term. employee termination payments. Provisions are not recognised for future operating losses, however, provisions are recognised for t) Exceptional items onerous contracts where the unavoidable cost exceeds the Where certain expense or income items recorded in a period are expected benefit. material by their size or incidence, the group reflects such items as exceptional items within a separate line on the income statement p) Share capital except for those exceptional items that relate to associates, joint Ordinary shares are classified as equity. Incremental costs directly ventures, net finance costs and tax. (Associates’, joint ventures’, net attributable to the issue of new shares or options are shown in equity finance costs and tax exceptional items are only referred to in the as a deduction, net of tax, from the proceeds. notes to the consolidated financial statements). q) Investments in own shares (treasury and shares held by Exceptional items are also summarised in the segmental analyses, employee benefit trusts) excluding those that relate to net finance costs and tax. Shares held by employee share ownership plans, employee benefit trusts and in treasury are treated as a deduction from equity until the The group presents alternative earnings per share calculations on a shares are cancelled, reissued, or disposed. headline and adjusted basis. The adjusted earnings per share figure excludes the impact of amortisation of intangible assets (excluding Purchases of such shares are classified in the cash flow statement as software), certain non-recurring items and post-tax exceptional items Shareholder information a purchase of own shares for share trusts or purchase of own shares in order to present an additional measure of performance for the years for treasury within net cash from financing activities. shown in the consolidated financial statements. Headline earnings per share is calculated in accordance with the South African Circular Where such shares are subsequently sold or reissued, any 3/2009 entitled ‘Headline Earnings’ which forms part of the listing consideration received, net of any directly attributable incremental requirements for the JSE Ltd (JSE). costs and related tax effects, is included in equity attributable to the company’s equity shareholders.

F-108 98 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

1. Accounting policies continued w) Employee benefits (i) Wages and salaries u) Taxation Wages and salaries for current employees are recognised in the The tax expense for the period comprises current and deferred tax. income statement as the employees’ services are rendered. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly (ii) Vacation and long-term service awards costs in equity, in which case it is recognised in other comprehensive The group recognises a liability and an expense for accrued income or directly in equity, respectively. vacation pay when such benefits are earned and not when these benefits are paid. Current tax expense is based on the results for the period as adjusted for items that are not taxable or not deductible. The group’s liability for The group also recognises a liability and an expense for long-term current taxation is calculated using tax rates and laws that have been service awards where cash is paid to the employee at certain enacted or substantively enacted by the balance sheet date. milestone dates in a career with the group. Such accruals are appropriately discounted to reflect the future payment dates at Deferred tax is provided in full using the liability method, in respect discount rates determined by reference to local high-quality of all temporary differences arising between the tax bases of assets corporate bonds. and liabilities and their carrying values in the consolidated financial statements, except where the temporary difference arises from (iii) Profit-sharing and bonus plans goodwill (in the case of deferred tax liabilities) or from the initial The group recognises a liability and an expense for bonuses and recognition (other than a business combination) of other assets profit-sharing, based on a formula that takes into consideration and liabilities in a transaction that affects neither accounting nor the profit attributable to the company’s shareholders after taxable profit. certain adjustments.

Deferred tax liabilities are recognised where the carrying value of The group recognises a provision where contractually obliged or an asset is greater than its tax base, or where the carrying value of where there is a past practice that has created a constructive a liability is less than its tax base. Deferred tax is recognised in full obligation. At a mid-year point an accrual is maintained for the on temporary differences arising from investment in subsidiaries, appropriate proportion of the expected bonuses which would associates and joint ventures, except where the timing of the become payable at the year end. reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the (iv) Share-based compensation foreseeable future. This includes taxation in respect of the retained The group operates a variety of equity-settled share-based earnings of overseas subsidiaries only to the extent that, at the compensation plans and a cash-settled share-based balance sheet date, dividends have been accrued as receivable compensation plan. or a binding agreement to distribute past earnings in future periods has been entered into by the subsidiary. Deferred income tax is also The equity-settled plans comprise share option plans (with and recognised in respect of the unremitted retained earnings of overseas without market performance conditions attached), performance associates and joint ventures as the group is not able to determine share award plans (with market conditions attached) and awards when such earnings will be remitted and when such additional tax related to the employee element of the Broad-Based Black Economic such as withholding taxes might be payable. Empowerment (BBBEE) scheme in South Africa. An expense is recognised to spread the fair value of each award granted after A net deferred tax asset is regarded as recoverable and therefore 7 November 2002 over the vesting period on a straight-line basis, after recognised only when, on the basis of all available evidence, it is allowing for an estimate of the share awards that will eventually vest. probable that future taxable profit will be available against which A corresponding adjustment is made to equity over the remaining the temporary differences (including carried forward tax losses) vesting period. The estimate of the level of vesting is reviewed at least can be utilised. annually, with any impact on the cumulative charge being recognised immediately. In addition the group has granted an equity-settled Deferred tax is measured at the tax rates expected to apply in the share-based payment to retailers in relation to the retailer element of periods in which the timing differences are expected to reverse the BBBEE scheme. A one-off charge has been recognised based on based on tax rates and laws that have been enacted or substantively the fair value at the grant date with a corresponding adjustment to enacted at balance sheet date. Deferred tax is measured on a equity. The charge will not be adjusted in the future. non-discounted basis. The charges are based on the fair value of the awards as at the date v) Dividend distributions of grant, as calculated by various binomial model calculations and Dividend distributions to equity holders of the parent are recognised Monte Carlo simulations. as a liability in the group’s financial statements in the period in which the dividends are approved by the company’s shareholders. Interim The charges are not reversed if the options and awards are not dividends are recognised when paid. Dividends declared after the exercised because the market value of the shares is lower than the balance sheet date are not recognised, as there is no present option price at the date of grant. obligation at the balance sheet date. 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 to the income statement. The liability is remeasured at each reporting date, on an actuarial basis using the analytic method, to reflect 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.

F-109 SABMiller plc Annual Report 2012 99

1. Accounting policies continued x) Derivative financial instruments – hedge accounting Financial assets and financial liabilities at fair value through profit (v) Pension obligations or loss include all derivative financial instruments. The derivative The group has both defined benefit and defined contribution plans. instruments used by the group, which are used solely for hedging purposes (i.e. to offset foreign exchange and interest rate risks), The liability recognised in the balance sheet in respect of defined comprise interest rate swaps, cross currency swaps, forward foreign Overview benefit pension plans is the present value of the defined benefit exchange contracts and other specific instruments as necessary obligation at the balance sheet date less the fair value of plan assets, under the approval of the board. Such derivative instruments are used together with adjustments for unrecognised past service costs. The to alter the risk profile of an existing underlying exposure of the group defined benefit obligation is calculated annually by independent in line with the group’s risk management policies. The group also has actuaries using the projected unit credit method. The present value derivatives embedded in other contracts primarily cross border foreign of the defined benefit obligation is determined by discounting the currency supply contracts for raw materials. estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the Derivatives are initially recorded at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair benefits will be paid, and that have terms to maturity approximating Business review to the terms of the related pension liability. value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and Actuarial gains and losses arising from experience adjustments and if so, the nature of the hedging relationship. changes in actuarial assumptions are recognised in full as they arise outside of the income statement and are charged or credited to In order to qualify for hedge accounting, the group is required to equity in other comprehensive income in the period in which they document at inception, the relationship between the hedged item arise, with the exception of gains or losses arising from changes and the hedging instrument as well as its risk management objectives in the benefits regarding past services, which are recognised in and strategy for undertaking hedging transactions. The group is the income statement. also required to document and demonstrate that the relationship between the hedged item and the hedging instrument will be highly Past service costs are recognised immediately in the income effective. This effectiveness test is reperformed at each period end statement, unless the changes to the pension plan are conditional to ensure that the hedge has remained and will continue to remain on the employees remaining in service for a specified period of time highly effective. (the vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period. The group designates certain derivatives as either: hedges of the fair value of recognised assets or liabilities or a firm commitment The contributions to defined contribution plans are recognised (fair value hedge); hedges of highly probable forecast transactions as an expense as the costs become payable. The contributions are or commitments (cash flow hedge); or hedges of net investments recognised as employee benefit expense when they are due. Prepaid in foreign operations (net investment hedge). Governance contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. (i) Fair value hedges Fair value hedges comprise derivative financial instruments designated (vi) Other post-employment obligations in a hedging relationship to manage the group’s interest rate risk Some group companies provide post-retirement healthcare benefits to which the fair value of certain assets and liabilities are exposed. to qualifying employees. The expected costs of these benefits are Changes in the fair value of the derivative offset the relevant changes assessed in accordance with the advice of qualified actuaries and in the fair value of the underlying hedged item attributable to the contributions are made to the relevant funds over the expected hedged risk in the income statement in the period incurred. service lives of the employees entitled to those funds. Actuarial gains Gains or losses on fair value hedges that are regarded as highly and losses arising from experience adjustments, and changes in Financial statements actuarial assumptions are recognised in full as they arise outside effective are recorded in the income statement together with the the income statement and are charged or credited to equity in other gain or loss on the hedged item attributable to the hedged risk. comprehensive income in the period in which they arise. These obligations are valued annually by independent qualified actuaries. (ii) Cash flow hedges Cash flow hedges comprise derivative financial instruments (vii) Termination benefits designated in a hedging relationship to manage currency and interest Termination benefits are payable when employment is terminated rate risk to which the cash flows of certain liabilities are exposed. The before the normal retirement date, or whenever an employee accepts effective portion of changes in the fair value of the derivative that is voluntary redundancy in exchange for these benefits. The group designated and qualifies for hedge accounting is recognised in recognises termination benefits when it is demonstrably committed other comprehensive income. The ineffective portion is recognised to terminating the employment of current employees according to a immediately in the income statement. Amounts accumulated in equity detailed formal plan without possibility of withdrawal, or providing are reclassified to the income statement in the period in which the termination benefits as a result of an offer made to encourage hedged item affects profit or loss. However, where a forecasted voluntary redundancy. Benefits falling due more than 12 months transaction results in a non-financial asset or liability, the accumulated after balance sheet date are discounted to present value in a fair value movements previously deferred in equity are included in the similar manner to all long-term employee benefits. initial cost of the asset or liability. Shareholder information

F-110 100 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

1. Accounting policies continued y) Deposits by customers Returnable containers in circulation are recorded within property, (iii) Hedges of net investments in foreign operations plant and equipment and a corresponding liability is recorded in Hedges of net investments in foreign operations comprise either respect of the obligation to repay the customers’ deposits. Deposits foreign currency borrowings or derivatives (typically forward paid by customers for branded returnable containers are reflected in exchange contracts and cross currency swaps) designated in the balance sheet within current liabilities. Any estimated liability that a hedging relationship. may arise in respect of deposits for unbranded containers is shown in provisions. Gains or losses on hedging instruments that are regarded as highly effective are recognised in other comprehensive income. These z) Earnings per share largely offset foreign currency gains or losses arising on the translation Basic earnings per share represents the profit on ordinary activities of net investments that are recorded in equity, in the foreign currency after taxation attributable to the equity shareholders of the parent translation reserve. The ineffective portion of gains or losses on entity, divided by the weighted average number of ordinary shares in hedging instruments is recognised immediately in the income issue during the year, less the weighted average number of ordinary statement. Amounts accumulated in equity are only reclassified shares held in the group’s employee benefit trusts and in treasury to the income statement upon disposal of the net investment. during the year.

Where a derivative ceases to meet the criteria of being a hedging Diluted earnings per share represents the profit on ordinary activities instrument or the underlying exposure which it is hedging is sold, after taxation attributable to the equity shareholders of the parent, matures or is extinguished, hedge accounting is discontinued and divided by the weighted average number of ordinary shares in issue amounts previously recorded in equity are reclassified to the income during the year, less the weighted average number of ordinary shares statement. A similar treatment is applied where the hedge is of a held in the group’s employee benefit trusts and in treasury during the future transaction and that transaction is no longer likely to occur. year, plus the weighted average number of dilutive shares resulting When the hedge is discontinued due to ineffectiveness, hedge from share options and other potential ordinary shares outstanding accounting is discontinued prospectively. during the year.

Certain derivative instruments, whilst providing effective economic hedges under the group’s 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 financial instruments for speculative purposes.

F-111 SABMiller plc Annual Report 2012 101

2. Segmental analysis

Operating segments reflect the management structure of the group and the way performance is evaluated and resources allocated based on group revenue and EBITA by the group’s chief operating decision maker, defined as the executive directors. The group is focused geographically and, while not meeting the definition of reportable segments, the group reports separately as segments South Africa: Hotels and Gaming and Corporate as this provides useful additional information. Overview

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 group’s performance.

Income statement

Group Group revenue EBITA revenue EBITA 2012 2012 2011 2011 US$m US$m US$m US$m Business review 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 Pacific 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’ and joint ventures’ (264) (209) Exceptional items – group and share of associates’ and joint ventures’ 1,015 (467) Net finance costs – group and share of associates’ and joint ventures’ (excluding exceptional items) (570) (560) Share of associates’ and joint ventures’ taxation (170) (139) Share of associates’ and joint ventures’ non-controlling interests (42) (43) Governance Profit before taxation 5,603 3,626

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.

Share of Share of associates’ associates’ and joint and joint ventures’ Group ventures’ Group

Revenue revenue revenue Revenue revenue revenue Financial statements 2012 2012 2012 2011 2011 2011 US$m US$m US$m US$m US$m US$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 Pacific 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 Shareholder information

F-112 102 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

2. Segmental analysis continued

Operating profit The following table provides a reconciliation of operating profit to operating profit before exceptional items.

Operating Operating profit before profit before Operating Exceptional exceptional Operating Exceptional exceptional profit items items profit items items 2012 2012 2012 2011 2011 2011 US$m US$m US$m US$m US$m US$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 Pacific 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 profit before exceptional items, amortisation of intangible assets (excluding software) and includes the group’s share of associates’ and joint ventures’ operating profit on a similar basis. The following table provides a reconciliation of operating profit before exceptional items to EBITA.

Amortisation Amortisation of intangible of intangible Share of assets Share of assets associates’ (excluding associates’ (excluding and joint software) and joint software) Operating ventures’ – group and Operating ventures’ – group and profit operating share of profit operating share of before profit before associates’ before profit before associates’ exceptional exceptional and joint exceptional exceptional and joint items items ventures’ EBITA items items ventures’ EBITA 2012 2012 2012 2012 2011 2011 2011 2011 US$m US$m US$m US$m US$m US$m US$m US$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 Pacific 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 group’s share of associates’ and joint ventures’ operating profit is reconciled to the share of post-tax results of associates and joint ventures in the income statement as follows.

2012 2011 US$m US$m Share of associates’ and joint ventures’ operating profit (before exceptional items) 1,383 1,272 Share of associates’ and joint ventures’ exceptional items 11 (31) Share of associates’ and joint ventures’ net finance 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

F-113 SABMiller plc Annual Report 2012 103

2. Segmental analysis continued

EBITDA The following table provides a reconciliation of EBITDA (the net cash generated from operations before working capital movements) to adjusted EBITDA. A reconciliation of profit for the year for the group to EBITDA after cash exceptional items for the group can be found in note 28a. Overview

Dividends Dividends Cash received Cash received exceptional from Adjusted exceptional from Adjusted EBITDA items MillerCoors EBITDA EBITDA items MillerCoors EBITDA 2012 2012 2012 2012 2011 2011 2011 2011 US$m US$m US$m US$m US$m US$m US$m US$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 Business review Asia Pacific 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 Capital expenditure expenditure excluding excluding investment Investment investment Investment activity1 activity2 Total activity1 activity2 Total 2012 2012 2012 2011 2011 2011 US$m US$m US$m US$m US$m US$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 Pacific 69 10,931 11,000 54 15 69 South Africa: 284 – 284 275 (68) 207 – Beverages 284 – 284 275 – 275 Governance – 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. Financial statements

Depreciation and amortisation

2012 2011 US$m US$m Latin America 445 461 Europe 298 309 Africa 128 126 Asia Pacific 117 29 South Africa: Beverages 168 176 Corporate 26 23 Group 1,182 1,124 Shareholder information

F-114 104 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

2. Segmental analysis continued

Geographical information The UK is the parent company’s country of domicile. Those countries which account for more than 10% of the group’s total revenue and/or non-current assets are considered individually material and are reported separately below.

Revenue

2012 2011 US$m US$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 20111 US$m US$m UK 354 333 Australia 14,577 101 Colombia 8,727 8,355 South Africa 2,760 2,939 USA 5,777 5,968 Rest of world 17,865 16,660 Group 50,060 34,356

1 As restated (see note 29).

Non-current assets by location exclude amounts relating to derivative financial instruments and deferred tax assets.

F-115 SABMiller plc Annual Report 2012 105

3. Net operating expenses

2012 2011 US$m US$m Cost of inventories recognised as an expense 5,049 4,640 – Changes in inventories of finished goods and work in progress 18 25 Overview – Raw materials and consumables used 5,031 4,615 Excise duties¹ 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 finance lease 3 3 – Containers 237 239 Net profit on disposal of businesses (1,242) – Profit on disposal of investment in associate (159)

(103) Business review Gain on remeasurement of existing interest in joint venture on acquisition (66) – Profit 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) Governance – 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); Asia Pacific US$626 million (2011: US$219 million) and South Africa US$963 million (2011: US$919 million). The group’s share of MillerCoors’ excise duties incurred during the year was US$703 million (2011: US$719 million).

Foreign exchange differences recognised in the profit for the year, except for those arising on financial instruments measured at fair value under IAS 39, were a loss of US$27 million (2011: gain of US$4 million). Financial statements Shareholder information

F-116 106 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

3. Net operating expenses continued

The following fees were paid to a number of different accounting firms as auditors of various parts of the group.

2012 2011 US$m US$m Group auditors Fees payable to the group’s auditor and their associates for: The audit of parent company and consolidated financial 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 technology1 4 1 Services relating to corporate finance transactions 3 – Other services1 3 5 29 20

Other audit firms Fees payable to other audit firms for: Auditing of subsidiaries, pursuant to legislation 1 2 Services relating to taxation 2 3 Services relating to information technology1 8 5 Services relating to corporate finance transactions 1 – Services relating to internal audit 1 – Other services1 7 9 20 19

1 Principally relating to the business capability programme.

4. Exceptional items

2012 2011 US$m US$m Exceptional items included in operating profit: Net profit on disposal of businesses 1,248 – Profit 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 profit 1,026 (436)

Exceptional items included in net finance costs: Litigation-related interest income 4 – Transaction-related net costs (26) – Net exceptional losses included within net finance costs (22) –

Share of associates’ and joint ventures’ exceptional items: Profits/(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 group’s share of associates’ and joint ventures’ exceptional items 24 2

F-117 SABMiller plc Annual Report 2012 107

4. Exceptional items continued

Exceptional items included in operating profit Net profit on disposal of businesses During 2012 a profit of US$1,195 million arose in Europe on the disposal of the group’s Russian and Ukrainian businesses in exchange for a 24% interest in the enlarged Anadolu Efes group; a profit of US$67 million arose in Africa on the disposal of the group’s Angolan operations in Overview 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.

Profit on disposal of investment in associate During 2012 a profit of US$103 million was realised on the disposal of the group’s investment in its associate, Kenya Breweries Ltd, in Africa.

In 2011 a profit of US$159 million arose on the partial disposal of the group’s shareholding in Tsogo Sun Holdings (Pty) Ltd (Tsogo Sun) as part of the Tsogo Sun/Gold Reef Resorts Ltd (GRR) merger. Business review 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 Pacific Beverages Pty Ltd (Pacific Beverages) from Coca-Cola Amatil Limited. This resulted in a US$66 million gain arising on the remeasurement to fair value of the group’s existing interest.

Litigation During 2012 in Europe a US$42 million anti-trust fine 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 finance, 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 the year (2011: US$296 million).

Transaction-related costs During 2012 costs of US$109 million were incurred in relation to the Foster’s Group Ltd (Foster’s) 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 office, and US$26 million of integration costs were incurred in Asia Pacific following the Foster’s and Pacific Beverages acquisitions. Governance 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 classification of the in-house distribution business in Italy as held for sale and the closure of the Cluj brewery in Romania. Financial statements

Exceptional items included in net finance costs Litigation-related interest income During 2012 US$4 million of interest was received in relation to the refund of the anti-trust fine in Europe.

Transaction-related net costs During 2012 net costs of US$26 million were incurred primarily related to the Foster’s transaction and included fees relating to financing facilities and premiums on derivative instruments which were partially offset by mark to market gains on derivative financial instruments taken out in anticipation of the transaction and where hedge accounting could not be applied.

Share of associates’ and joint ventures’ exceptional items Profits/(losses) on transactions in associates During 2012 Tsogo Sun released deferred consideration relating to a prior acquisition of which the group’s share was US$13 million; US$10 million profit arose on Tsogo Sun’s 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 profit arose in Africa being the group’s share of Castel’s profit on disposal of its subsidiary in Nigeria.

In 2011 the group’s share of the impairment loss on Tsogo Sun’s 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. Shareholder information Impairments During 2012 the group’s share of MillerCoors’ impairment of the Sparks brand amounted to US$35 million.

Integration and restructuring costs In 2011 the group’s share of MillerCoors’ integration and restructuring costs was US$5 million primarily related to severance costs.

Net taxation credits relating to subsidiaries’ and the group’s 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). F-118 108 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

5. Net finance costs

2012 2011 US$m US$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 finance lease payments 1 1 Net exchange losses/(gains) on financing activities 13 (14) Net exchange losses on dividends1 – 9 Fair value losses on financial instruments: – Fair value losses on standalone derivative financial instruments 144 153 – Ineffectiveness of net investment hedges¹ 4 4 Exceptional interest payable and similar charges¹ 96 – Other finance 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 financial instruments: – Fair value gains on standalone derivative financial instruments 170 92 – Fair value gains on dividend-related derivatives¹ 3 6 Net exchange gains on dividends¹ 3 – Exceptional interest receivable and similar income¹ 74 – Total interest receivable and similar income 531 358 Net finance costs 562 525

1 These items have been excluded from the determination of adjusted earnings per share. Adjusted net finance costs are therefore US$542 million (2011: US$518 million).

Refer to note 23 – Financial risk factors for interest rate risk information.

6. Employee and key management compensation costs a. Employee costs

2012 2011 US$m US$m Wages and salaries 2,038 1,837 Share-based payments 161 130 Social security costs 193 172 Pension costs 112 114 Post-retirement benefits 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 2011 Number Number Latin America 26,933 25,691 Europe 14,095 14,239 North America 76 51 Africa 13,596 13,481 Asia Pacific 3,804 3,358 South Africa 11,939 11,897 Corporate 701 495 Group 71,144 69,212

F-119 SABMiller plc Annual Report 2012 109

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 defined as key management. At 31 March 2012 there were 27 (2011: 24) key management. Overview

2012 2011 US$m US$m Salaries and short-term employee benefits 32 26 Post-employment benefits 2 1 Share-based payments 36 31 70 58

The key management figures given above include the directors. Business review d. Directors

2012 2011 US$m US$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 benefits 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 benefits 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. Governance

7. Taxation

2012 2011 US$m US$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 Financial statements 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 financial instruments (30) 14 (101) (22)

Total current tax 1,094 909 Total deferred tax (69) 138 Total taxation 1,025 1,047 Shareholder information Effective tax rate (%) 27.5 28.2

See the financial definitions section for the definition 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 subsidiary’s tax charge includes tax (including deferred tax) on the group’s share of the taxable profits of MillerCoors and includes tax in other comprehensive income on the group’s share of MillerCoors’ taxable items included within other comprehensive income. F-120 110 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

7. Taxation continued

Tax rate reconciliation

2012 2011 US$m US$m Profit before taxation 5,603 3,626 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 2011 US cents 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 2011 Millions of Millions of shares 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 in relation 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 financial statements.

F-121 SABMiller plc Annual Report 2012 111

8. Earnings per share continued

Adjusted and headline earnings The group presents an adjusted earnings per share figure 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 financial statements. Adjusted earnings per share has been based on adjusted earnings for each financial year and on the same Overview 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 2011 US$m US$m Profit for the year attributable to owners of the parent 4,221 2,408 Headline adjustments

Impairment of business held for sale – 53 Business review Impairment of intangible assets – 14 Impairment of property, plant and equipment – 31 Net profit on disposal of businesses (1,242) – Profit on disposal of investment in associate (103) (159) Gain on remeasurement of existing interest in joint venture on acquisition (66) – Profit on disposal of property, plant and equipment (15) (5) 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 items1 (2) 7 Transaction-related net finance costs 26 –

Amortisation of intangible assets (excluding software) 218 158 Governance 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 Financial statements

2012 2011 US$m US$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 final dividend of 69.5 US cents per share in respect of the financial year ended 31 March 2012, which will 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 91.0 US cents (2011: 81.0 US cents).

Treasury shares do not attract dividends and the employee benefit trusts have both waived their right to receive dividends (further information can be found in note 27). Shareholder information

F-122 112 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

10. Goodwill

US$m Cost At 1 April 2010 11,918 Exchange adjustments 348 Acquisitions – through business combinations 43 At 31 March 20111 12,309 Exchange adjustments 187 Acquisitions – through business combinations (provisional) (see note 30) 8,049 Disposals (63) Transfers to disposal group classified as held for sale (see note 19) (29) At 31 March 2012 20,453

Accumulated impairment At 1 April 2010 339 Exchange adjustments 16 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 20111 11,954 At 31 March 2012 20,128

1 As restated (see note 29).

2012 Provisional goodwill arose on the acquisition through business combinations in the year of Foster’s and Pacific 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 Cervecería Argentina SA Isenbeck (CASA Isenbeck) in Argentina and Crown Beverages Ltd (previously Crown Foods Ltd) in Kenya. The fair value exercises in respect of these business combinations are now complete.

Goodwill is monitored principally on an individual country basis and the net book value is allocated by cash generating unit (CGU) as follows.

2012 20111 US$m US$m CGUs: Latin America: – Central America 819 830 – Colombia 4,809 4,590 – 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 Pacific: – Australia 8,215 – – India 350 392 – Other Asia Pacific 12 12 South Africa 618 700 20,128 11,954

1 As restated (see note 29).

F-123 SABMiller plc Annual Report 2012 113

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 flows generated from continuing use of the CGU using a post-tax discount rate, as this closely approximates to applying pre-tax discount rates to pre-tax cash flows. Where a potential impairment is identified using post-tax cash flows and post-tax discount rates, Overview the impairment review is reperformed on a pre-tax basis in order to determine the impairment loss to be recorded. The key assumptions for the value in use calculations are as follows:

Expected volume growth rate – Cash flows are based on financial forecasts approved by management covering five-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 reflects the returns from United States Treasury notes with a maturity of 20 years, and an equity risk premium adjusted for specific industry and country risks. The group

applies local post-tax discount rates to local post-tax cash flows. Business review

Long-term growth rate – Cash flows after the first five-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 group’s operating segments:

Expected volume growth rates Post-tax Long-term 2013-2017 discount rates 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 Pacific 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). Governance Sensitivities to assumptions The group’s impairment reviews are sensitive to changes in the key assumptions described above. Based on the group’s sensitivity analysis, a reasonably possible change in a single assumption will not cause an impairment loss in any of the group’s CGUs. Financial statements Shareholder information

F-124 114 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

11. Intangible assets

Computer Brands software Other Total US$m US$m US$m US$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 classified as held for sale – (1) (28) (29) At 31 March 20111 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 Exchange adjustments 14 13 3 30 Amortisation 151 62 7 220 Disposals – (22) – (22) Impairment – – 14 14 Transfers to disposal group classified as held for sale – (1) (28) (29) 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 20111 4,078 265 21 4,364 At 31 March 2012 8,928 359 614 9,901

1 As restated (see note 29).

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 classified as held for sale).

At 31 March 2012 significant individual brands included within the carrying value of intangible assets are as follows.

Amortisation period 2012 2011 remaining US$m US$m (years) Brand carrying value Carlton (Australia) 2,181 – 40 Águila (Colombia) 1,557 1,529 33 Victoria Bitter (Australia) 1,101 – 40 Cristal (Peru) 646 634 33 Grolsch (Netherlands) 451 492 36

F-125 SABMiller plc Annual Report 2012 115

12. Property, plant and equipment

Assets in Plant, course of Land and vehicles Returnable construction buildings and systems containers Total US$m US$m US$m US$m US$m Overview 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) Transfers to disposal group classified as held for sale – (5) (66) – (71)

Disposals – (46) (276) (97) (419) Business review At 31 March 20111 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 Breakages and shrinkage – – – (73) (73) Transfers (563) 118 383 62 – Transfers to intangible assets (3) – – – (3) Transfers to disposal group classified 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 Exchange adjustments – 33 175 50 258 Provided during the year – 80 585 239 904 Breakages and shrinkage – – – (123) (123) Impairment – 10 21 – 31

Transfers to disposal group classified as held for sale – (5) (66) – (71) Governance 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 Breakages and shrinkage – – – (26) (26) Transfers to disposal group classified 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 Financial statements

Net book amount At 1 April 2010 543 2,834 4,456 1,082 8,915 At 31 March 20111 358 3,076 4,771 1,126 9,331 At 31 March 2012 584 3,088 4,616 1,011 9,299

¹ As restated (see note 29).

Included in land and buildings is freehold land with a cost of US$742 million (2011: US$616 million) which is not depreciated. Shareholder information

F-126 116 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

12. Property, plant and equipment continued

Included in plant, vehicles and systems are the following amounts relating to assets held under finance leases.

2012 2011 US$m US$m Net book amount 34 13

Included in the amounts above are the following amounts in respect of borrowing costs capitalised.

2012 2011 US$m US$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 group’s 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 group’s significant investments in joint ventures, including the name, country of incorporation and proportion of ownership interest is given in note 35 to the consolidated financial statements.

US$m At 1 April 2010 5,822 Exchange adjustments 12 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 results retained 671 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 Pacific Beverages was purchased and from this date the company has been accounted for as a subsidiary.

Summarised financial information for the group’s interest in joint ventures is shown below.

2012 2011 US$m US$m Revenue 5,174 5,157 Expenses (4,502) (4,489) Profit after tax 672 668

Non-current assets 5,613 5,837 Current assets 573 675 Current liabilities (528) (531) Non-current liabilities (801) (783)

F-127 SABMiller plc Annual Report 2012 117

14. Investments in associates

A list of the group’s significant investments in associates, including the name, country of incorporation and proportion of ownership interest is given in note 35 to the consolidated financial statements.

US$m Overview At 1 April 2010 2,213 Exchange adjustments 136 Investments in associates 168 Repayment of investments by associates (68) Share of results retained 357 Share of gains recognised in other comprehensive income 2 Dividends receivable (89) At 31 March 2011 2,719 Exchange adjustments (107) Business review 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) Share of results retained 481 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 N’Gola 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 group’s Russian business, SABMiller RUS LLC, and Ukrainian business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes, in exchange 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 profit of US$103 million. Governance 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 profit of US$159 million on the partial disposal of the group’s shareholding in Tsogo Sun and a loss of US$26 million being the group’s share of its associate’s loss on the merger transaction. The increase in the investments in associates includes US$159 million being the group’s 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 group’s 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. Financial statements The analysis of associated undertakings between listed and unlisted investments is shown below.

2012 2011 US$m US$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 financial information for associates for total assets, total liabilities, revenue and profit or loss on a 100% basis is shown below.

2012 2011 US$m US$m Shareholder information Total assets 18,731 14,046 Total liabilities (6,231) (5,730) Revenue 12,963 10,921 Net profit 1,760 1,276

Some of the group’s 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. F-128 118 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

15. Available for sale investments

US$m At 1 April 2010 32 Exchange adjustments 1 Additions 3 Impairment (1) At 31 March 2011 35 Exchange adjustments (2) Additions 1 Disposals (3) At 31 March 2012 31

2012 2011 US$m US$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 classified as held for sale.

Available for sale investments are denominated in the following currencies.

2012 2011 US$m US$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 2011 US$m US$m Listed 3 3 Unlisted 28 32 31 35

The fair values of unlisted investments are based on cash flows discounted using a rate based on the market interest rate and the risk premium specific 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 classified as available for sale.

16. Inventories

2012 2011 US$m US$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 2011 US$m US$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).

F-129 SABMiller plc Annual Report 2012 119

17. Trade and other receivables

2012 2011 US$m US$m Trade receivables 1,545 1,380 Less: provision for impairment (140) (147) Overview 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 Business review

Analysed as: Current Trade receivables – net 1,389 1,219 Other receivables – net 373 326 Amounts owed by associates 205 12 Amounts owed by joint ventures – trade 6 5 Prepayments and accrued income 183 125 2,156 1,687

Non-current Trade receivables – net 16 14 Other receivables – net 110 123 Prepayments and accrued income 10 3 136 140

The net carrying values of trade and other receivables are considered a close approximation of their fair values. Governance

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 Within Over performing 30 days 30-60 days 60-90 days 90-180 days 180 days US$m US$m US$m US$m US$m US$m At 31 March 2012 Trade receivables 1,140 129 58 15 23 29 Financial statements 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 specifically impaired and provided for. The amount of the provision at 31 March 2012 was US$140 million (2011: US$147 million) and reflects trade receivables from customers which are considered to be experiencing difficult economic situations. It was assessed that a portion of these receivables is expected to be recovered. The group holds collateral as security against specifically 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 specifically impaired and provided for. Shareholder information The amount of the provision at 31 March 2012 was US$12 million (2011: US$14 million) and reflects loans to customers which are considered to be experiencing difficult economic situations. It was assessed that a portion of these receivables is expected to be recovered. The group did not hold collateral as security against specifically impaired other receivables at 31 March 2012 or 31 March 2011.

F-130 120 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

17. Trade and other receivables continued

The carrying amounts of trade and other receivables are denominated in the following currencies.

2012 2011 US$m US$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 2011 2012 2011 US$m US$m US$m US$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 classified 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 2011 US$m US$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 on the 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 in a 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 flow 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’.

F-131 SABMiller plc Annual Report 2012 121

19. Disposal group held for sale

Following the Foster’s acquisition, and the subsequent purchase of the 50% interest in Pacific Beverages from Coca-Cola Amatil Ltd, the group has agreed to dispose of Foster’s interests in its Fijian beverage operations, Foster’s Group Pacific Limited (FGPL), subject to regulatory approvals. Accordingly the assets and liabilities related to FGPL have been presented as held for sale. Overview

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 classified as held for sale

2012 2011 US$m US$m Goodwill 29 –

Property, plant and equipment 27 – Business review 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 classified as held for sale

2012 2011 US$m US$m Borrowings 1 – Trade and other payables 3 55 Provisions 1 10 Deferred tax liabilities 2 – Current tax liabilities – 1 7 66 Governance 20. Trade and other payables

2012 20111 US$m US$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 Financial statements 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 Deferred consideration for acquisitions 3 1 Excise duty payable 383 365 VAT and other taxes payable 248 189 Other payables 622 530 Shareholder information 4,054 3,487

Non-current Deferred income 8 14 Deferred consideration for acquisitions 9 2 Other payables 95 82 112 98

1 As restated (see note 29). F-132 122 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

21. Deferred taxation

The movement on the net deferred tax liability is shown below.

2012 2011 US$m US$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 classified as held for sale (see note 19) (2) – Disposals (26) – Rate change (25) (7) 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.

Pensions and post- retirement Investment in Fixed asset benefit Financial MillerCoors Other timing allowances provisions Intangibles instruments joint venture differences Total US$m US$m US$m US$m US$m US$m 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) Rate change – – – – – (25) (25) Transfers to current tax 1 – – – – (16) (15) Transfers to/(from) deferred tax assets 2 – – – – (23) (21) Transfers to disposal group classified 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

F-133 SABMiller plc Annual Report 2012 123

21. Deferred taxation continued

Pensions and post- retirement Provisions Fixed asset benefit and Other timing

allowances provisions accruals differences Total Overview US$m US$m US$m US$m US$m Deferred tax assets At 1 April 2010 3 7 67 87 164 Exchange adjustments – – 1 – 1 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) Business review 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 Pacific, Latin America and Corporate. Given both recent and forecast trading, the directors are of the opinion that the level of profits in the foreseeable future is more likely than not to be sufficient 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. Governance

2012 2011 US$m US$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 Share-based payments 25 29 Financial statements 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 sufficient profits in future years to recover the assets. A significant part of the tax losses arise in the UK and the value has been calculated at the substantively enacted rate of 24%. It has been announced that the rate will fall annually to 23% and 22% commencing 1 April 2013. The impact of these reductions is not anticipated to have a material impact on the financial 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. A deferred 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 profits 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 profits 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 to control 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 Shareholder information unremitted profits are unlikely to lead to additional corporate taxes. However, remittance to the UK of those earnings may still result in a tax liability, principally as a result of withholding taxes levied by the overseas tax jurisdictions in which those subsidiaries operate.

F-134 124 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

22. Borrowings

2012 2011 US$m US$m Current Secured Overdrafts 10 21 Obligations under finance leases 5 4 Other secured loans 6 10 21 35 Unsecured ZAR1,600 million 9.935% Notes due 20121 209 – COP370 billion IPC + 8.18% Ordinary Bonds due 20122 220 – US$600 million 6.2% Notes due 20113 – 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 significant.

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 of certain 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 2011 US$m US$m Non-current Secured Obligations under finance leases 16 5 Other secured loans 12 152 28 157 Unsecured US$1,000 million 1.85% Notes due 20151,2,3 1,000 – US$2,000 million 2.45% Notes due 20171,2,3 1,993 – US$2,500 million 3.75% Notes due 20221,2,3 2,483 – US$1,500 million 4.95% Notes due 20421,2,3 1,484 – US$1,100 million 5.5% Notes due 20132,3,4,16 1,124 1,138 €1,000 million 4.5% Notes due 20153,5,16 1,367 1,417 US$300 million 6.625% Notes due 20332,3,6,16 416 361 US$850 million 6.5% Notes due 20162,3,7,16 960 943 US$550 million 5.7% Notes due 20142,3,8,16 588 594 US$700 million 6.5% Notes due 20182,3,8,16 811 759 PEN150 million 6.75% Notes due 20153,9,16 56 53 US$300 million 4.875% Notes due 20142,3,10 335 – US$700 million 5.125% Notes due 20152,3,11 730 – US$300 million 7.875% Notes due 20163,12 383 – US$300 million 5.875% Notes due 20352,3,11 358 – COP640 billion IPC + 7.3% Ordinary Bonds due 201413 391 387 COP561.8 billion IPC + 6.52% Ordinary Bonds due 201513 320 335 COP370 billion IPC + 8.18% Ordinary Bonds due 201213 – 213 COP338.5 billion IPC + 7.5% Ordinary Bonds due 201313 205 199 ZAR1,600 million 9.935% Notes due 20123,14 – 236 US$2,169 million unsecured loan due December 201415 2,180 – US$750 million unsecured loan due September 201615 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 Obligations under finance leases 21 9 Overdrafts 138 258 19,226 8,460 F-135 SABMiller plc Annual Report 2012 125

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 flows 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, Overview 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 with accrued 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 the sole 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 Note Programme. Business review

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 in respect 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 Foster’s Finance Corp issued US$300 million, 4.875% Notes due October 2014, guaranteed by Foster’s.

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 Foster’s.

12 On 3 June 1996 FBG Finance Ltd issued US$300 million, 7.875% Notes due June 2016, guaranteed by Foster’s.

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 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.

15 On 9 September 2011 the group entered into US$12,500 million, multicurrency committed syndicated facilities primarily for the purpose of acquiring Foster’s. Governance By 31 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. Financial statements Shareholder information

F-136 126 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

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 2011 US$m US$m Amounts expiring: Within one year 774 967 Between one and two years 12 2,118 Between two and five years 788 79 In five years or more 2,236 – 3,810 3,164

In April 2011 the group entered into a five-year US$2,500 million committed syndicated facility, with the option of two one-year extensions. In March 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 finance leases Obligations under finance leases are as follows.

2012 2011 US$m US$m The minimum lease payments under finance leases fall due as follows. Within one year 6 4 Between one and five years 17 5 23 9 Future finance charges (2) – Present value of finance lease liabilities 21 9

Maturity of non-current financial liabilities The maturity profile of the carrying amount of the group’s non-current financial liabilities at 31 March was as follows.

Net derivative Net derivative Borrowings financial Borrowings financial and Finance assets1 2012 and Finance assets1 2011 overdrafts leases (note 24) Total overdrafts leases (note 24) Total US$m US$m US$m US$m US$m US$m US$m US$m Amounts falling due: Between one and two years 1,964 2 (8) 1,958 593 – (3) 590 Between two and five years 10,605 14 (356) 10,263 4,458 5 (80) 4,383 In five 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 financial instruments only.

F-137 SABMiller plc Annual Report 2012 127

23. Financial risk factors

Financial risk management Overview In the normal course of business, the group is exposed to the following financial risks: Overview

• Market risk • Credit risk • Liquidity risk

This note explains the group’s exposure to each of the above risks, aided by quantitative disclosures included throughout these consolidated financial 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 group’s risk management framework. An essential part of Business review this framework is the role undertaken by the audit committee of the board, supported by the internal audit function, and by the chief financial officer, 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. The board also receives a quarterly report on treasury activities, including confirmation of compliance with treasury risk management policies.

The group treasury function is responsible for the management of cash, borrowings and the financial 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 group’s 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 of derivatives, 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 group’s 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, the group also sells put options to reduce or eliminate the cost of purchased options. It is the policy of the group that no trading in financial instruments be undertaken.

The group’s treasury policies are established to identify and analyse the financial 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 Governance The group is subject to exposure on the translation of the foreign currency denominated net assets of subsidiaries, associates and joint ventures into the group’s 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 financial derivatives, US$2,406 million and €255 million are accounted for as net investment hedges.

The group does not hedge currency exposures from the translation of profits earned in foreign currency subsidiaries, associates and

joint ventures. Financial statements

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 18 months. Committed transactional exposures that are certain are hedged fully without limitation in time. The group principally uses forward exchange contracts to hedge currency risk. Shareholder information

F-138 128 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

23. Financial risk factors continued

The tables below set out the group’s currency exposures from financial 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.

Other Latin Australian European American US dollars SA rand dollars Euro currencies currencies Other Total US$m US$m US$m US$m US$m US$m US$m US$m Financial assets Trade and other receivables 25 130 4 46 155 – 61 421 Derivative financial instruments1 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 financial instruments¹ (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)

Potential impact on other comprehensive income – 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 financial instruments.

F-139 SABMiller plc Annual Report 2012 129

23. Financial risk factors continued

Other Other European African US dollars SA rand Euro currencies currencies Other Total US$m US$m US$m US$m US$m US$m US$m Overview Financial assets Trade and other receivables 34 216 42 2 62 92 448 Derivative financial instruments¹ 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) Business review 20% decrease in functional currency 60 48 346 165 15 41 675

Potential impact on other comprehensive income – (loss)/gain 20% increase in functional currency (77) – (43) (35) – – (155) 20% decrease in functional currency 92 – 51 42 – – 185

Financial liabilities Trade and other payables (293) (111) (182) (13) (27) (175) (801) Derivative financial instruments¹ (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) Governance Potential impact on other comprehensive income – 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 financial instruments.

Foreign currency sensitivity analysis

Currency risks arise on account of financial instruments being denominated in a currency that is not the functional currency and being of Financial statements a monetary nature.

The group holds foreign currency cash flow 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 flow 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 group’s foreign currency net assets. Shareholder information

F-140 130 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

23. Financial risk factors continued

(ii) Interest rate risk As at 31 March 2012 43% (2011: 40%) of consolidated gross borrowings were in fixed rates taking into account interest rate swaps and forward rate agreements.

The group’s policy is to borrow (directly or synthetically) in floating rates, reflecting the fact that floating rates are generally lower than fixed rates in the medium term. However, a minimum of 25% of consolidated net borrowings is required to be in fixed rates for a minimum duration of 12 months and the extent to which group borrowings may be in floating rates is restricted to the lower of 75% of consolidated net borrowings and that amount of net borrowings in floating rates that with a 1% increase in interest rates would increase finance 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 inflation-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 31 March 2012 on a policy adjusted basis, excluding borrowings from recent acquisitions and any inflation-linked debt, 45% (2011: 44%) of consolidated net borrowings were in fixed rates. The impact of a 1% rise in interest rates on borrowings in floating rates would be equivalent to 0.44% (2011: 0.67%) of adjusted EBITDA.

The cash flow interest rate risk sensitivities on variable debt and interest rate swaps were:

Other Australian European Colombian US dollars SA rand dollars Euro currencies peso Other Total US$m US$m US$m US$m US$m US$m US$m US$m At 31 March 2012 Net debt1 13,141 192 2,226 1,359 (34) 1,148 450 18,482 Less: fixed 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 debt1 4,011 263 18 1,416 (23) 1,106 598 7,389 Less: fixed 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 fixed income instruments Changes in the market interest rates of non-derivative financial instruments with fixed interest rates only affect income if these are measured at their fair value. As such, all financial instruments with fixed rates of interest that are accounted for at amortised cost are not subject to interest rate risk as defined 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 fixed 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 flow 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. The analysis was performed on the same basis for 2011.

F-141 SABMiller plc Annual Report 2012 131

23. Financial risk factors continued

Interest rate profiles of financial liabilities The following table sets out the contractual repricing included within the underlying borrowings (excluding net borrowings-related derivatives) exposed to either fixed interest rates or floating interest rates and revises this for the repricing effect of interest rate and cross currency swaps. Overview

2012 2011

Total Effect of Total Total Effect of Total borrowings derivatives exposure borrowings derivatives exposure US$m US$m US$m US$m US$m US$m Financial liabilities 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 five years 6,824 (3,874) 2,950 3,438 (1,459) 1,979 Business review In five 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 finished 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 fixed 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 five 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. Governance Equity securities price risk The group is exposed to equity securities price risk because of investments held by the group and classified 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 financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Financial instruments The group limits its exposure to financial 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 & Poor’s and Baa3 from Moody’s. For banks with a lower credit Financial statements rating, or with no international credit rating, a maximum limit of US$4 million is applied, unless specific approval is obtained from either the chief financial officer 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 financial derivatives, which permit net settlement of assets and liabilities in certain circumstances.

Trade and other receivables There is no significant 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 group’s financial assets. c. Liquidity risk Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.

The group finances 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. Shareholder information

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 in April 2017.

SABMiller Holdings Inc: • US$500 million revolving credit facility, which is due to expire in September 2016. F-142 132 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

23. Financial risk factors continued

Liquidity risk faced by the group is mitigated by having diverse sources of finance 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 group’s financial liabilities which will be settled on a net 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 flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Between Between Less than 1 and 2 2 and 5 Over 1 year years years 5 years US$m US$m US$m US$m At 31 March 2012 Borrowings (1,803) (2,904) (11,763) (8,361) Derivative financial instruments (18) 16 (11) (35) Trade and other payables (3,416) (95) (7) (4) Financial guarantee contracts (6) (2) (6) (4)

At 31 March 20111 Borrowings (1,689) (1,096) (4,380) (2,003) Derivative financial instruments (124) (18) (21) (2) Trade and other payables (2,927) (73) – – Financial guarantee contracts (5) (3) – –

1 As restated (see note 29).

The table below analyses the group’s derivative financial 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 flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Between Between Less than 1 and 2 2 and 5 Over 1 year years years 5 years US$m US$m US$m US$m At 31 March 2012 Forward foreign exchange contracts Outflow (399) (12) – – Inflow 401 12 – –

Cross currency swaps Outflow (278) (346) (1,686) (866) Inflow 216 331 1,637 877

At 31 March 2011 Forward foreign exchange contracts Outflow (423) (30) – – Inflow 384 30 – –

Cross currency swaps Outflow (29) (33) (315) (422) Inflow 19 23 326 446

Capital management The capital structure of the group consists of net debt (see note 28c) and shareholders’ equity.

The group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

Besides the minimum capitalisation rules that may apply to subsidiaries in different countries, the group’s only externally imposed capital requirement relates to the group’s core lines of credit which include a net debt to EBITDA financial covenant which was complied with throughout the year.

The group monitors its financial capacity and credit ratings by reference to a number of key financial ratios and cash flow metrics including net debt to adjusted EBITDA and interest cover. These provide a framework within which the group’s capital base is managed including dividend policy. If the group fails to meet the financial 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 Moody’s Investors Service and BBB+ by Standard & Poor’s Ratings Services, both with a stable outlook.

F-143 SABMiller plc Annual Report 2012 133

23. Financial risk factors continued

Fair value estimation The following table presents the group’s financial assets and liabilities that are measured at fair value.

Level 1 Level 2 Level 3 Total Overview US$m US$m US$m US$m At 31 March 2012 Assets Financial assets at fair value through profit or loss Derivative financial instruments – 756 – 756 Available for sale investments 1 18 12 31 Total assets 1 774 12 787

Liabilities Business review Financial liabilities at fair value through profit or loss Derivative financial instruments – (109) – (109) Total liabilities – (109) – (109)

At 31 March 2011 Assets Financial assets at fair value through profit or loss Derivative financial instruments – 346 – 346 Available for sale investments 1 19 15 35 Total assets 1 365 15 381

Liabilities Financial liabilities at fair value through profit or loss Derivative financial instruments – (135) – (135) Total liabilities – (135) – (135)

The levels of the fair value hierarchy and its application to the group’s financial assets and liabilities are described below. Governance

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities:

The fair value of financial 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, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial 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 Financial statements from prices):

The fair values of financial 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 specific estimates. If all significant 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:

Specific valuation techniques, such as discounted cash flow analysis, are used to determine fair value of the remaining financial instruments.

The following table presents the changes in level 3 instruments for the years ended 31 March.

Available for sale investments

2012 2011 US$m US$m At 1 April 15 15 Exchange adjustments (1) –

Additions – 1 Shareholder information Disposals (2) – Impairments – (1) At 31 March 12 15

F-144 134 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

24. Derivative financial instruments

Current derivative financial instruments

2012 2011

Assets Liabilities Assets Liabilities US$m US$m US$m US$m Embedded derivatives – (1) – – Forward foreign currency contracts – on operating items 7 (13) 3 (12) Forward foreign currency contracts – on borrowings1 14 (12) 1 (1) Forward foreign currency contracts designated as net investment hedges – – – (13) Forward foreign currency contracts designated as cash flow hedges 3 (12) 8 (11) Cross currency swaps – on borrowings¹ – – – (13) Commodity contracts designated as cash flow hedges – (2) 4 – 24 (40) 16 (50)

1 Borrowings-related derivative financial instruments amounting to a net asset of US$2 million (2011: net liability of US$13 million).

Non-current derivative financial instruments

2012 2011

Assets Liabilities Assets Liabilities US$m US$m US$m US$m Interest rate swaps designated as fair value hedges1 394 (18) 269 (4) Interest rate swaps designated as cash flow hedges1 – (4) – (7) Interest rate swaps – on borrowings1 55 (9) – – Forward foreign currency contracts – on borrowings1 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 hedges1 – (10) – – Cross currency swaps – on borrowings1 74 – 50 – Cross currency swaps designated as cash flow hedges1 18 – – – Cross currency swaps designated as fair value hedges1 113 – – – Cross currency swaps designated as net investment hedges 31 (7) 6 (56) Commodity contracts designated as cash flow hedges – – – (1) 732 (69) 330 (85)

1 Borrowings-related derivative financial instruments amounting to a net asset of US$618 million (2011: US$311 million).

Derivatives designated as hedging instruments (i) Fair value hedges The group has entered into several interest rate swaps to pay floating and receive fixed interest which have been designated as fair value hedges to hedge exposure to changes in the fair value of its US dollar and euro fixed 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 fixed interest rates received vary from 1.85% to 6.625% (2011: 5.5% to 6.625%) and the floating 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 fixed interest rates received are 4.5% (2011: 4.5%) and floating 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).

Foster’s has entered into interest rate swaps and cross currency interest rate swaps, the cumulative effect of which is to receive fixed US dollar interest and pay Australian dollar floating interest, and to convert the profile of the US dollar borrowings into Australian dollars. These swaps have been designated as fair value hedges to hedge the exposure of the Australian operations to changes in the fair value of the US dollar borrowings.

As at 31 March 2012 the notional amount of the interest rate swaps was US$600 million (2011: US$nil). The fixed interest rates received vary from 4.875% to 7.875% and the floating rates paid vary from LIBOR plus 47 bps to LIBOR plus 73 bps on the notional amounts.

F-145 SABMiller plc Annual Report 2012 135

24. Derivative financial 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 fixed rate interest varying from 5.125% to 5.875% and paid floating Australian dollar interest with rates varying from Australian bank bills plus 268 bps to Australian bank bills plus 410 bps; and Overview • US$600 million received floating US dollar interest with rates varying from LIBOR plus 47 bps to LIBOR plus 71 bps and paid floating 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 flow hedges The group has entered into interest rate swaps designated as cash flow 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 fixed interest rate paid varies from 4.27% to 4.38% (2011: 4.7%) and the floating rates received Business review 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 flow hedges to manage short-term foreign currency exposures to expected net operating costs including future trade imports and exports. As at 31 March 2012 the notional amounts of these contracts were €317 million, US$557 million, GBP128 million and Czech koruna (CZK) 12 million (2011: €182 million, US$460 million, GBP120 million and CZK299 million).

The group has entered into commodity contracts designated as cash flow 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 of forward 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 flows associated with derivatives that are cash flow hedges are expected to occur and impact the income statement.

Carrying Expected Less than Between 1 Between 2 More than amount cash flows 1 year and 2 years and 5 years 5 years US$m US$m US$m US$m US$m US$m At 31 March 2012

Interest rate swaps: Governance Liabilities (4) (4) (1) (2) (1) – Forward foreign currency contracts: Assets 3 4 4 – – – Liabilities (12) (13) (13) – – – Commodity contracts: Liabilities (2) (2) (2) – – – (15) (15) (12) (2) (1) – Financial statements At 31 March 2011 Interest rate swaps: Liabilities (7) (7) (2) (2) (3) – Forward foreign currency contracts: Assets 8 9 9 – – – Liabilities (11) (12) (12) – – – Commodity contracts: Assets 4 4 4 – – – Liabilities (1) (1) – (1) – – (7) (7) (1) (3) (3) – Shareholder information

F-146 136 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

24. Derivative financial instruments continued

(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 net investments in its foreign subsidiaries in South Africa, Australia, the Czech Republic, Poland, Colombia and Peru to hedge the group’s exposure to foreign exchange risk on these investments. Net losses relating to forward foreign currency contracts and cross currency swaps of US$1 million (2011: US$137 million) have been recognised in other comprehensive income.

Analysis of notional amounts on financial instruments designated as net investment hedges:

2012 2011 m m Forward foreign currency contracts: 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 financial 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 flows 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 flows 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, Swiss franc (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 are fair valued based on discounted future cash flows 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 financial instruments recognised in the income statement

2012 2011 US$m US$m Derivative financial 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 financial instruments: Non-current borrowings designated as the hedged item in a fair value hedge (104) (14) Total fair value gain/(loss) on financial instruments recognised in the income statement 129 (55)

Fair value gains or losses on borrowings, derivative financial instruments held to hedge interest rate risk on borrowings and derivative financial instruments acquired to hedge the risks of the Foster’s acquisition are recognised as part of net finance costs. Fair value gains or losses on all other derivative financial instruments are recognised in operating profit.

F-147 SABMiller plc Annual Report 2012 137

24. Derivative financial instruments continued

Reconciliation of total financial instruments The table below reconciles the group’s accounting categorisation of financial assets and liabilities (based on initial recognition) to the classes of assets and liabilities as shown on the face of the balance sheet. Overview

Financial Fair value liabilities Not through held at categorised income Loans and Available amortised as a financial Non- statement receivables for sale cost instrument Total current Current US$m US$m US$m US$m US$m US$m US$m US$m At 31 March 2012 Assets Available for sale investments – – 31 – – 31 30 1 Derivative financial instruments 756 – – – – 756 732 24 Business review 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 Derivative financial instruments (109) – – – – (109) (69) (40) Borrowings – – – (19,226) – (19,226) (18,164) (1,062) Trade and other payables – – – (3,521) (645) (4,166) (112) (4,054)

At 31 March 20111 Assets Available for sale investments – – 35 – – 35 35 – Derivative financial 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 Derivative financial instruments (135) – – – – (135) (85) (50) Borrowings – – – (8,460) – (8,460) (7,115) (1,345) Trade and other payables – – – (3,011) (574) (3,585) (98) (3,487) Governance

1 As restated (see note 29). Financial statements Shareholder information

F-148 138 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

25. Provisions

Demerged Post- entities and retirement Taxation- Payroll- Onerous litigation benefits related Restructuring related contracts Other Total US$m US$m US$m US$m US$m US$m US$m US$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 classified as held for sale (1) (6) – – – – (3) (10) At 31 March 20111 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 classified 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 Non–current 38 303 43 11 40 128 23 586 103 309 308 206 101 191 85 1,303

1 As restated (see note 29).

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 in relation 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 Ltd’s 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 management’s expectation that the outcomes of these disputes are expected to be resolved within the forthcoming five 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 benefits The provision for post-retirement benefits represents the provision for medical benefits for retired employees and their dependants in South Africa, for post-retirement medical and life insurance benefits for eligible employees and their dependants in North America and Europe, medical and other benefits in Latin America, and pension provisions for employees in North America, Latin America, Europe, Africa and Asia Pacific. The principal assumptions on which these provisions are based are disclosed in note 32.

F-149 SABMiller plc Annual Report 2012 139

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 finalised with the respective tax authorities. Overview

Restructuring This includes the remaining provision for restructuring costs related to Europe which management expects to be utilised within five years, and provisions for costs related to pre-existing demerger costs and demerger warranties in Foster’s 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$22 million) within Latin America, which are expected to be utilised on an ongoing basis when service awards fall due. Payroll-related Business review provisions also include US$46 million (2011: US$nil) within Asia Pacific 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 be utilised within five years.

26. Share capital

2012 2011 US$m US$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) – – Governance 166 166

Ordinary shares of Deferred Nominal 10 US cents shares of value each £1 each 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 Financial statements 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). Shareholder information

F-150 140 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

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 Altria’s 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 be taken by the company in relation to ordinary shares unless the same action is taken in respect of the convertible participating shares. On distribution of the profits (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 for every 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 company’s 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 the creation 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 each convertible 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 of the convertible participating shares shall be required to be convened or passed.

Upon a transfer of convertible participating shares by Altria other than to an affiliate, 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 party’s 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 Altria’s 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 first convert into ordinary shares the lesser of:

(i) such number of convertible participating shares as would result in Altria’s voting shareholding being such percentage as would, in the event of Altria subsequently acquiring one additional ordinary share, require Altria to make a mandatory offer in terms of rule 9 of the City Code; and

(ii) all of its remaining convertible participating shares.

F-151 SABMiller plc Annual Report 2012 141

26. Share capital continued

The company must use its best endeavours to procure that the ordinary shares arising on conversion of the convertible participating shares are admitted to the Official List and to trading on the London Stock Exchange’s market for listed securities, admitted to listing and trading on the 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 Overview 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 of a 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. Business review

2012 2011 Scheme Number 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 outstanding1 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 Governance 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.

Weighted Weighted average average fair exercise value at Number price grant date of options GBP GBP Outstanding at 1 April 2010 13,515,685 11.05 – Financial statements 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 – Outstanding at 31 March 2012 16,622,334 15.91 – Shareholder information

F-152 142 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

26. Share capital continued

ZAR share options Share options designated in ZAR include share options granted under the South African Executive Share Option Plan 2008 and the Mirror Executive Share Purchase Scheme (South Africa). No further grants can be made under the Mirror Executive Share Purchase Scheme (South Africa) although outstanding grants may still be exercised until they reach their expiry date.

Weighted Weighted average average fair exercise value at Number price grant date of options ZAR ZAR Outstanding at 1 April 2010 13,447,779 151.23 – Granted 2,943,850 222.55 88.63 Lapsed (499,850) 176.93 – Exercised (2,205,700) 126.34 – Outstanding at 31 March 2011 13,686,079 169.64 – Granted 2,943,373 283.07 105.43 Lapsed (524,849) 218.17 – Exercised (3,080,100) 138.30 – Outstanding at 31 March 2012 13,024,503 200.73 –

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.

Weighted Weighted average average fair exercise value at Number price grant date of SARs GBP GBP Outstanding at 1 April 2010 4,297,049 9.54 – Granted 49,900 19.51 5.85 Lapsed (24,036) 10.81 – Exercised (747,543) 9.27 – Outstanding at 31 March 2011 3,575,370 9.72 – Granted 64,900 22.50 6.47 Lapsed (26,583) 11.44 – Exercised (793,543) 8.85 – Outstanding at 31 March 2012 2,820,144 10.25 –

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 of their respective performance conditions on their vesting date.

Weighted Weighted average average fair exercise value at Number price grant date of awards GBP 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 – –

F-153 SABMiller plc Annual Report 2012 143

26. Share capital continued

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 in the future, although in practice it is extremely unlikely that this number of awards would be released. Overview

Weighted Number of Weighted average fair value shares Theoretical average value at (per £10 million of maximum exercise price grant date additional value) shares at cap GBP 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 Business review 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.

Weighted Weighted average average fair exercise value at Number price grant date of awards GBP 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.

Weighted Weighted Governance average average remaining remaining contractual contractual Number life in years Number life in years Range of exercise prices 2012 2012 2011 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 Financial statements £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 Shareholder information

F-154 144 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

26. Share capital continued

Weighted Weighted average average remaining remaining contractual contractual Number life in years Number life in years Range of exercise prices 2012 2012 2011 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.

Weighted Weighted average average exercise exercise Number price Number price 2012 2012 2011 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

F-155 SABMiller plc Annual Report 2012 145

26. Share capital continued

Share incentives exercised or vested The weighted average market price of the group’s shares at the date of exercise or vesting for share incentives exercised or vested during the year were: Overview

Weighted Weighted average market average market Number price Number price 2012 2012 2011 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 Business review 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 SAB’s 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 by projecting SABMiller plc’s 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 Governance Share price1 – 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 price1 – South African share option scheme (ZAR) 283.07 222.55 – All other schemes (£) 9.35 8.80 Expected volatility2 – BBBEE scheme – 27.1%

– All other schemes 23.1% 29.2% Financial statements Dividend yield – BBBEE scheme – 4.9% – All other schemes 2.3% 2.5% Annual forfeiture rate – South African share option scheme 5.0% 5.0% – All other schemes 3.0% 3.0% Risk–free interest rate – South African share option scheme 7.9% 8.7% – BBBEE scheme – 8.3% – All other schemes 2.3% 2.9%

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. Shareholder information

F-156 146 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

27. Retained earnings and other reserves a. Retained earnings

Treasury and Retained EBT shares earnings Total US$m US$m US$m At 1 April 2010 (673) 8,198 7,525 Profit for the year – 2,408 2,408 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 Profit for the year – 4,221 4,221 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 Dividends paid – (1,324) (1,324) 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) Utilisation of EBT shares 48 (48) – Credit entry relating to share-based payments – 158 158 At 31 March 2012 (661) 12,524 11,863

The group’s 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 benefit trusts currently in operation, being the SABMiller Employee Benefit Trust (the EBT) and the SABMiller Associated Companies’ Employees’ Benefit 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 a significant 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, a wholly 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 beneficially owned by a participant. There were no beneficially owned shares in either EBT as at 31 March 2012.

F-157 SABMiller plc Annual Report 2012 147

27. Retained earnings and other reserves continued b. Other reserves The analysis of other reserves is as follows.

Foreign Net Overview currency Cash flow investment Available translation hedging hedging for sale reserve reserve reserve reserve Total US$m US$m US$m US$m 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 flow hedges – 39 – – 39 Business review Deferred tax on items taken to other comprehensive income – (14) – – (14) Share of associates’ and joint ventures’ gains recognised in other comprehensive income – 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 flow hedges – 6 – – 6 Deferred tax on items taken to other comprehensive income – 30 – – 30 Share of associates’ and joint ventures’ losses recognised in other comprehensive income – (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. Governance

28a. Reconciliation of profit for the year to net cash generated from operations

2012 2011 US$m US$m Profit for the year 4,477 2,557 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 Financial statements Operating profit 5,013 3,127 Depreciation: – Property, plant and equipment 672 665 – Containers 237 239 Container breakages, shrinkages and write-offs 34 24 Net profit on disposal of businesses (1,258) – Gain on remeasurement of existing interest in joint venture on acquisition (66) – Profit on disposal of investment in associate (103) (159) Profit on disposal of property, plant and equipment (15) (5) Amortisation of intangible assets 273 220 Impairment of intangible assets – 14 Impairment of property, plant and equipment – 31 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) Shareholder information 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 benefit provisions – 8 Net cash generated from operations 5,237 4,568 F-158 148 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

28a. Reconciliation of profit for the year to net cash generated from operations continued

Profit for the year and cash generated from operations before working capital movements includes cash flows relating to exceptional items of US$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 by US$42 million (2011: US$nil) in respect of a litigation-related credit.

The following table provides a reconciliation of EBITDA to adjusted EBITDA.

2012 2011 US$m US$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 flow

2012 2011 US$m US$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 flow 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 flow statement as follows.

2012 2011 US$m US$m Cash and cash equivalents (balance sheet) 745 1,067 Cash and cash equivalents of disposal group classified as held for sale – 4 745 1,071 Overdrafts (138) (258) Overdrafts of disposal group classified as held for sale (1) – Cash and cash equivalents (cash flow statement) 606 813

F-159 SABMiller plc Annual Report 2012 149

28c. Analysis of net debt continued

Net debt is analysed as follows.

Cash and

cash Overview equivalents Derivative Total (excluding financial Finance gross Net overdrafts) Overdrafts Borrowings instruments leases borrowings debt US$m US$m US$m US$m US$m US$m 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 flow 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) Business review Exchange adjustments 10 (49) (38) 9 – (78) (68) Cash flow (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 group’s net debt is denominated in the following currencies.

Australian Colombian Other US dollars SA rand dollars Euro peso currencies Total US$m US$m US$m US$m US$m US$m 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) Governance 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 Financial statements

2012 Major non-cash transactions in the year included the following. The disposal of the group’s Angolan operations, Coca-Cola Bottling Luanda SARL, Coca-Cola Bottling Sul de Angola SARL, Empresa de Cervejas N’Gola Norte SA, and its interest in Empresa de Cervejas N’Gola SARL, in Africa in exchange for a 27.5% interest in BIH Angola.

The contribution of the group’s 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 group’s existing 50% interest in the Pacific 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. Shareholder information

F-160 150 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

29. Restatement of the balance sheet at 31 March 2011

The initial accounting under IFRS 3, ‘Business Combinations’, for the Cervecería 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$2 million to US$412 million and non-current provisions increasing by US$1 million to US$461 million. As a result comparative information for the year ended 31 March 2011 has been presented in the consolidated financial 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 Foster’s 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 Pacific Beverages from Coca-Cola Amatil Limited (CCA) for cash consideration of US$343 million. The acquisition took the group’s investment in Pacific 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$20 million cash consideration and a dilution in the group’s 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. The residual over the net assets acquired is recognised as goodwill in the financial 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 Other Total US$m US$m 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 financial 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.

F-161 SABMiller plc Annual Report 2012 151

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 31 March 2012.

Australia Other Total Overview US$m US$m US$m Consideration satisfied by: Cash consideration 10,931 20 10,951 Cash and cash equivalents acquired 10 2 12 Fair value of existing interest in Pacific 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 group’s effective interests in existing Nigerian businesses – 5 5

11,114 66 11,180 Business review

From the date of acquisition to 31 March 2012 the following amounts have been included in the group’s income and cash flow statements for the year.

Australia Other Total US$m US$m US$m Income statement Revenue 1,058 19 1,077 Operating profit 125 3 128 Profit before tax 105 2 107

Cash flow 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 group’s revenue, operating profit and profit before tax for the year ended 31 March 2012 would have been as follows. Governance

US$m Income statement Revenue 24,430 Operating profit 5,389 Profit 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. Financial statements

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.

Effective % holding after acquisition of non- controlling Form of Company % acquired interest 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 N’Gola Norte SA, and its interest in Empresa de Cervejas N’Gola SARL, in Africa in exchange for a 27.5% interest in BIH Angola, which generated a profit 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 profit on disposal of US$1,195 million, and which included US$284 million arising as a result of measuring to fair value the group’s retained 24% interest in its Russian and Ukrainian businesses. The group also completed the sale of its Italian distribution business in the year, which Shareholder information generated a loss on disposal of US$14 million.

F-162 152 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

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.

Effective % holding after disposal of non- controlling Form of Company % disposed interest consideration Country 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.

Effective % holding after disposal of non- controlling Form of Company % disposed interest consideration Country 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 N’Gola 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 2011 US$m US$m Land and buildings Within one year 65 50 Later than one year and less than five years 171 106 After five years 42 26 278 182

Plant, vehicles and systems Within one year 55 50 Later than one year and less than five years 126 111 After five years 87 63 268 224

F-163 SABMiller plc Annual Report 2012 153

31. Commitments, contingencies and guarantees continued b. Other commitments

2012 2011

US$m US$m Overview Capital commitments not provided in the financial 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 financial information Contracts placed for future expenditure 3,164 1,925 Share of joint ventures’ other commitments 512 449 Business review 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 into contracts for the provision of IT, communications and consultancy services and in relation to which the group had commitments of US$193 million at 31 March 2012 (2011: US$193 million).

The group’s 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 2011 US$m US$m Guarantees to third parties provided in respect of trade loans1 4 8 Guarantees to third parties provided in respect of bank facilities 14 3 Share of joint ventures’ contingent liabilities 4 6 Litigation2 23 24 Other contingent liabilities 9 4 54 45 Governance

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. In the 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 group’s financial position, except insofar as already provided in the consolidated financial statements. These include claims made by certain former employees in Ecuador arising out of events which took place before the group’s investment in Ecuador 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. Financial statements

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 difficult to predict the group’s 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 group’s financial position, except insofar as already provided in the consolidated financial statements. Shareholder information

F-164 154 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

32. Pensions and post-retirement benefits

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 defined contribution and defined benefit schemes. The majority of the schemes are funded and the schemes’ assets are held independently of the group’s finances. The assets of the schemes do not include any of the group’s own financial instruments, nor any property occupied by or other assets used by the group. Pension and post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. Generally, the projected unit method is applied to measure the defined benefit scheme liabilities.

The group also provides medical benefits, which are mainly unfunded, for retired employees and their dependants in South Africa, the Netherlands and Latin America.

The total pension and post-retirement medical benefit costs recognised in the income statement, and related net liabilities on the balance sheet are as follows.

2012 2011 US$m US$m Defined contribution scheme costs 97 97 Defined benefit pension plan costs 15 17 Post-retirement medical and other benefit costs 13 5 Accruals for defined contribution plans (balance sheet) 3 3 Provisions for defined benefit pension plans (balance sheet) 197 196 Provisions for other post-retirement benefits (balance sheet) 112 114

The group operates various defined contribution and defined benefit schemes. Details of the main defined benefit 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 defined benefit 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 financed 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 qualified 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 defined benefit 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 defined benefit pension schemes are provided below.

Foster’s pension scheme The Foster’s pension plan, named AusBev Superannuation Fund, provides accumulation style and defined benefits to employees. The company funds the defined benefits, administration and insurance costs of the fund as a benefit to employees who elect to be members of this fund. The latest valuation of the Foster’s pension scheme was carried out at 30 June 2011 by an independent actuary using the projected unit credit method. The defined benefits 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 defined benefit 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 benefits. Once the surplus liabilities have been settled, the Funds will be deregistered and liquidated. During the year a significant 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 benefits for each of the members. This would allow for each member to be paid their initial benefit, valued as at 1 July 2005, upon their exit.

F-165 SABMiller plc Annual Report 2012 155

32. Pensions and post-retirement benefits continued

Principal actuarial assumptions at 31 March (expressed as weighted averages)

Medical and other

Defined benefit pension plans post-retirement benefits Overview  Latin America Grolsch Other South Africa Other At 31 March 2012 Discount rate (%) 7.5 4.8 6.0 9.3 7.0 Salary inflation (%) 3.5 2.0 3.8 – – Pension inflation (%) 3.5 2.0 3.2 – – Healthcare cost inflation (%) – – – 7.8 3.0 Mortality rate assumptions – Retirement age: Males 55 65 66 63 57 Business review 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 inflation (%) 4.0 2.0 2.4 – – Pension inflation (%) 4.0 2.0 3.0 – – Healthcare cost inflation (%) – – – 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 – Governance Females – 25 – 20 – Financial statements Shareholder information

F-166 156 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

32. Pensions and post-retirement benefits continued

The present value of defined benefit pension plan and post-employment medical benefit liabilities are as follows.

Medical and other Defined benefit pension plans post-retirement benefits  Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m US$m Present value of scheme liabilities at 1 April 2010 148 299 62 509 59 44 103 – Portion of defined benefit obligation that is unfunded 146 – 24 170 59 44 103 – Portion of defined benefit obligation that is partly or wholly funded 2 299 38 339 – – – Benefits 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 classified 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 defined benefit obligation that is unfunded 175 – 13 188 71 43 114 – Portion of defined benefit obligation that is partly or wholly funded – 305 35 340 – – – Benefits 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 defined benefit obligation that is unfunded 172 – 13 185 66 46 112 – Portion of defined benefit 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.

Defined benefit pension plans

Grolsch Other Total US$m US$m US$m Plan assets at 1 April 2010 291 53 344 Expected return on plan assets 15 4 19 Benefits 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 Expected return on plan assets 16 8 24 Benefits 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

F-167 SABMiller plc Annual Report 2012 157

32. Pensions and post-retirement benefits continued

The fair value of assets in pension schemes and the expected rates of return were:

Latin America Grolsch Other Total    Overview Long- Long- Long- term term term rate of rate of rate of US$m return US$m return US$m return US$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 Business review Present value of scheme liabilities (172) (319) (102) (593) (Deficit)/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) (Deficit)/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. Governance

Medical and other Defined benefit pension plans post-retirement benefits  Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m 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 – – – Financial statements (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 defined benefit 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 been completed.

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 Shareholder information with the pension fund.

F-168 158 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

32. Pensions and post-retirement benefits continued

The amounts recognised in net operating expenses in the income statement are as follows.

Medical and other Defined benefit pension plans post-retirement benefits  Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m US$m At 31 March 2012 Current service cost – (4) (2) (6) (2) (1) (3) Interest costs (13) (15) (5) (33) (6) (4) (10) Expected return on plan assets – 16 8 24 – – – (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) Expected return on plan assets – 15 4 19 – – – 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 Defined benefit pension plans post-retirement benefits  Latin South America Grolsch Other Total Africa Other Total US$m US$m US$m US$m US$m US$m 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)

F-169 SABMiller plc Annual Report 2012 159

32. Pensions and post-retirement benefits continued

The cumulative amounts recognised in other comprehensive income are as follows.

2012 2011

US$m US$m Overview 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 2011 2010 2009 2008 US$m US$m US$m US$m US$m

Experience gains/(losses) of plan assets 23 14 33 (77) (90) Business review 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) Deficit 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 group’s major defined benefit schemes during the annual period after 31 March 2012 are US$25 million.

A 1% increase and a 1% decrease in the assumed healthcare cost of inflation will have the following effect on the group’s major post‑employment medical benefits.

2012

Increase Decrease

US$m US$m Governance Current service costs – – Interest costs 1 (1) Accumulated post-employment medical benefit costs 12 (10) Financial statements Shareholder information

F-170 160 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

33. Related party transactions a. Parties with significant influence 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 made a donation of US$33 million to the Fundación Mario Santo Domingo (2011: US$32 million), pursuant to the contractual arrangements entered into at the time of the Bavaria transaction in 2005, under which it was agreed that the proceeds of the sale of surplus non-operating property assets owned by Bavaria SA and its subsidiaries would be donated to various charities, including the Fundación Mario Santo Domingo. At 31 March 2012 US$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 2011 US$m US$m Purchases from associates1 (214) (211) Purchases from joint ventures2 (86) (75) Sales to associates3 39 36 Sales to joint ventures4 28 31 Dividends receivable from associates5 150 89 Dividends received from joint ventures6 896 822 Royalties received from associates7 13 7 Royalties received from joint ventures8 2 2 Management fees and other recoveries received from associates9 24 10 Management and guarantee fees paid to joint ventures10 (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 N’Gola SARL (ECN), Société des Brasseries et Glacières Internationales and Brasseries Internationales Holding Ltd (Castel), Delta Corporation Ltd (Delta) and Distell.

4 The group made sales to MillerCoors and Pacific 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‑Cola Canners 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$3 million), 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 of US$6 million (2011: US$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 Pacific Beverages.

9 The group received management fees from ECN and Delta, and other recoveries from AFP.

10 The group paid management fees to MillerCoors.

2012 2011 At 31 March US$m US$m Amounts owed by associates – trade1 145 12 Amounts owed by associates – loans2 60 – Amounts owed by joint ventures3 6 5 Amounts owed to associates4 (42) (24) Amounts owed to joint ventures5 (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 Pacific 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. F-171 SABMiller plc Annual Report 2012 161

34. Post balance sheet events

There are no material post balance sheet events.

35. Principal subsidiaries, associates and joint ventures Overview

The principal subsidiary undertakings of the group as at 31 March were as follows.

Effective interest Country of Principal Name incorporation activity 2012 2011 Corporate SABMiller Holdings Ltd United Kingdom Holding company 100% 100% SABMiller Africa and Asia BV1 Netherlands Holding company 100% 100% Business review 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 Ltd2 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 SA3 Colombia Brewing/Soft drinks 99% 99% Cervecería Argentina SA Isenbeck Argentina Brewing 100% 100% Cervecería del Valle SA Colombia Brewing 99% 99% Cervecería Hondureña, SA de CV Honduras Brewing/Soft drinks 99% 99% Cervecería Nacional (CN) SA3 Ecuador Brewing 96% 96% Cervecería Nacional SA3 Panama Brewing 97% 97% Cervecería San Juan SA3 Peru Brewing/Soft drinks 92% 92% Cervecería Unión SA Colombia Brewing 98% 98% Industrias La Constancia, SA de CV El Salvador Brewing/Soft drinks 100% 100% Unión de Cervecerías Peruanas Backus y Johnston SAA3 Peru Brewing 94% 94% Governance European operations SABMiller Europe BV1 Netherlands Holding company 100% 100% SABMiller Holdings Europe Ltd United Kingdom Holding company 100% 100% SABMiller Netherlands Cooperative WA Netherlands Holding company 100% 100% Compañia Cervecera de Canarias SA Spain Brewing 51% 51% Dreher Sörgyárak Zrt Hungary Brewing 100% 100% Grolsche Bierbrouwerij Nederland BV Netherlands Brewing 100% 100% Kompania Piwowarska SA4 Poland Brewing 100% 100% Miller Brands (UK) Ltd United Kingdom Sales and distribution 100% 100% Financial statements Pivovary Topvar as Slovakia Brewing 100% 100% PJSC Miller Brands Ukraine5 Ukraine Brewing – 100% Plzeˇnský Prazdroj as Czech Republic Brewing 100% 100% SABMiller RUS LLC5 Russia Brewing – 100% Birra Peroni Srl6 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% Shareholder information Botswana Breweries (Pty) Ltd Botswana Sorghum brewing 31% 31% Cervejas de Moçambique SARL3 Mozambique Brewing 49% 49% Chibuku Products Ltd Malawi Sorghum brewing 31% 31% Coca-Cola Bottling Luanda SARL7 Angola Soft drinks – 28% Coca-Cola Bottling Sul de Angola SARL7 Angola Soft drinks – 37% Crown Beverages Ltd8 Kenya Soft drinks 80% 80%

F-172 162 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

35. Principal subsidiaries, associates and joint ventures continued

Effective interest Country of Principal Name incorporation activity 2012 2011 African operations continued Empresa de Cervejas N’Gola Norte SA7 Angola Brewing – 31% Heinrich’s Syndicate Ltd Zambia Soft drinks 62% 62% Intafact Beverages Ltd Nigeria Brewing 41% 41% International Breweries plc3,9 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 plc3 Zambia Sorghum brewing 43% 43% Nile Breweries Ltd Uganda Brewing 62% 60% Pabod Breweries Ltd9 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 Ltd3 Tanzania Brewing 36% 33% Voltic (GH) Ltd Ghana Soft drinks 80% 80% Voltic Nigeria Ltd8 Nigeria Soft drinks 50% 80% Zambian Breweries plc3 Zambia Brewing/Soft drinks 54% 54%

Asia Pacific 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% Foster’s 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% – Foster’s Australia Ltd Australia Brewing 100% – Foster’s Group Pacific Ltd3 Fiji Brewing 89% – Pacific Beverages Pty Ltd10 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) Ltd11 South Africa Brewing/Soft drinks/ 100% 100% Holding company 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 Biracılık ve Malt Sanayii AS¸ (Anadolu Efes). The group’s 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 group’s effective interests in its existing Nigerian businesses, Pabod Breweries Ltd and Voltic Nigeria Ltd.

10 On 13 January 2012 the remaining 50% interest in Pacific 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.

F-173 SABMiller plc Annual Report 2012 163

35. Principal subsidiaries, associates and joint ventures continued

The group comprises a large number of companies. The list above includes those subsidiary undertakings which materially affect the profit 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. Overview

Where the group’s 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 group’s 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 group’s African beverage interests. Investments in new territories are generally being made with the Castel group’s African beverage operations on an 80:20 basis. The operations continue to be

consolidated due to SABMiller Africa BV’s, SABMiller Botswana BV’s and SABMiller Investment II BV’s majority shareholdings, and ability to Business review 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 Botswana’s shares entitle the holder to twice the voting rights of those shares held by Sechaba Brewery Holdings Ltd. SABMiller Africa BV’s 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 group’s 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. Governance Financial statements Shareholder information

F-174 164 SABMiller plc Annual Report 2012

Notes to the consolidated financial statements continued

35. Principal subsidiaries, associates and joint ventures continued

Associates and joint ventures The principal associates and joint ventures of the group as at 31 March are as set out below. Where the group’s 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.

Effective interest Country of Nature of Name incorporation relationship Principal activity 2012 2011 European operations Anadolu Efes Biracılık ve Malt Turkey Associate Brewing/Soft drinks 24% – Sanayii AS¸ 1,2,3 Grolsch (UK) Ltd United Kingdom Associate Brewing 50% 50% North American operations MillerCoors LLC4 USA Joint venture Brewing 58% 58% African operations BIH Brasseries Internationales Gibraltar Associate Holding company for subsidiaries 20% 20% Holding Ltd3 principally located in Africa Société des Brasseries et Glacières France Associate Holding company for subsidiaries 20% 20% Internationales3 principally located in Africa Algerienne de Bavaroise3,5 Algeria Associate Brewing 40% 40% BIH Brasseries Internationales Holding Gibraltar Associate Brewing/Soft drinks 27% – (Angola) Ltd3,7 Delta Corporation Ltd1,3,6 Zimbabwe Associate Brewing/Soft drinks 25% 23% Empresa de Cervejas N’Gola SARL7 Angola Associate Brewing – 28% Kenya Breweries Ltd6,8,9 Kenya Associate Brewing – 12% Marocaine d’Investissements et de Morocco Associate Brewing 40% 40% Services1,10 Skikda Bottling Company3,5 Algeria Associate Soft drinks 40% 40% Société de Boissons de I’Ouest, Algeria Associate Soft drinks 40% 40% Algerien3,5 Société des Nouvelles Brasseries3,5 Algeria Associate Brewing 40% 40% Asia Pacific operations China Resources Snow Breweries Ltd3 British Virgin Islands Associate Holding company for brewing 49% 49% subsidiaries located in China Pacific Beverages Pty Ltd11 Australia Joint venture Sales and distribution – 50% International Trade and Supply Limited3 British Virgin Islands Associate Sales and distribution 40% – South African operations Coca-Cola Canners of Southern Africa South Africa Associate Canning of beverages 32% 32% (Pty) Ltd3 Distell Group Ltd1,8 South Africa Associate Wines and spirits 29% 29% Hotels and Gaming Tsogo Sun Holdings Ltd1,12 South Africa Associate Holding company for Hotels and 40% 40% Gaming operations

1 Listed in country of incorporation. 2 On 6 March 2012 the group completed its strategic alliance with Anadolu Group and Anadolu Efes Biracılık ve Malt Sanayii AS¸ (Anadolu Efes). The group’s 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 financial 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 group’s holding in these entities. Together with its 20% interest in the Castel group’s 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 financial 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 group’s African beverage interests, gives SABMiller an effective participation of 40% and the other 60% is held by the Castel group’s Africa beverage interests. 11 Pacific 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, Société des Brasseries et Glacières Internationales, BIH Brasseries Internationales Holding Ltd’s (Castel) and BIH Brasseries Internationales Holding (Angola) Ltd’s principal subsidiaries are in Africa, China Resources Snow Breweries Ltd’s principal subsidiaries are in the People’s Republic of China and International Trade and Supply Limited operates in the United Arab Emirates. F-175 166 SABMiller plc Annual Report 2012

Independent auditors’ report to the members of SABMiller plc

We have audited the company financial statements of SABMiller plc Opinion on other matters prescribed by the for the year ended 31 March 2012 which comprise the company Companies Act 2006 balance sheet and the related notes. The financial reporting In our opinion: framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom • the part of the directors’ remuneration report to be audited has Generally Accepted Accounting Practice). been properly prepared in accordance with the Companies Act 2006; and Respective responsibilities of directors and auditors • the information given in the directors’ report for the financial year for As explained more fully in the statement of directors’ responsibilities, which the company financial statements are prepared is consistent the directors are responsible for the preparation of the company with the company financial statements. financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the Matters on which we are required to report by exception company financial statements in accordance with applicable law and We have nothing to report in respect of the following matters where International Standards on Auditing (UK and Ireland). Those standards the Companies Act 2006 requires us to report to you if, in our opinion: require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. • adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from This report, including the opinions, has been prepared for and only for branches not visited by us; or the company’s members as a body in accordance with Chapter 3 of • the company financial statements and the part of the directors’ Part 16 of the Companies Act 2006 and for no other purpose. We do remuneration report to be audited are not in agreement with the not, in giving these opinions, accept or assume responsibility for any accounting records and returns; or other purpose or to any other person to whom this report is shown • certain disclosures of directors’ remuneration specified by law or into whose hands it may come save where expressly agreed by are not made; or our prior consent in writing. • we have not received all the information and explanations we require for our audit. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and Other matter disclosures in the financial statements sufficient to give reasonable We have reported separately on the consolidated financial statements assurance that the financial statements are free from material of SABMiller plc for the year ended 31 March 2012. misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Richard Hughes (Senior Statutory Auditor) company’s circumstances and have been consistently applied and for and on behalf of PricewaterhouseCoopers LLP adequately disclosed; the reasonableness of significant accounting Chartered Accountants and Statutory Auditors estimates made by the directors; and the overall presentation of the London financial statements. In addition, we read all the financial and non-financial information in the SABMiller plc Annual Report to identify 11 June 2012 material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the company financial statements:

• give a true and fair view of the state of the company’s 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.

F-176 SABMiller plc Annual Report 2012 167

Balance sheet of SABMiller plc at 31 March

2012 2011 Notes US$m US$m Fixed assets Tangible fixed assets 2 119 100 Investments in subsidiary undertakings 3 17,083 17,052 Overview Derivative financial instruments 8 499 325 17,701 17,477 Current assets Debtors 4 6,621 7,738 Derivative financial instruments 8 6 3 Short-term deposits 5 293 695 6,920 8,436

Creditors – amounts falling due within one year 6 (1,081) (2,654) Business review

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) Profit and loss account 5,860 4,415 Total shareholders’ funds 9 15,894 14,332

The financial statements on pages 167 to 177 were approved by the board of directors on 11 June 2012 and were signed on its behalf by: Governance Graham Mackay Jamie Wilson Chief Executive Chief Financial Officer

Advantage has been taken of the provisions of section 408(3) of the Companies Act, 2006 which permit the omission of a separate profit and loss account for SABMiller plc. The profit for the parent company for the year was US$2,661 million (2011: US$1,476 million). Financial statements Shareholder information

F-177 168 SABMiller plc Annual Report 2012

Notes to the company financial statements

1. Accounting policies The company regularly reviews its depreciation rates to take account of any changes in circumstances. When setting useful economic lives, a) Basis of preparation the principal factors the company takes into account are the expected SABMiller plc (the company) is a public limited company incorporated rate of technological developments, expected market requirements for in Great Britain and registered in England and Wales. The company the equipment and the intensity at which the assets are expected to financial statements have been prepared in accordance with the be used. The profit or loss on the disposal of an asset is the difference Companies Act 2006 and with accounting standards applicable between the disposal proceeds and the net book value of the asset. in the United Kingdom (UK GAAP). e) Impairment The financial statements are prepared on the going concern basis, In accordance with FRS 11 ‘Impairment of fixed assets and goodwill’, under the historical cost convention, as modified by certain financial long term assets are subject to an impairment review if circumstances assets and financial liabilities (including derivative instruments) at fair or events change to indicate that the carrying value may not be fully value through profit and loss. The principal accounting policies, which recoverable. The review is performed by comparing the carrying value have been applied consistently throughout the year are set out below. 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 b) Investments in subsidiary undertakings considered to be the amount that could be obtained on disposal of These comprise investments in shares and loans that the directors the asset. The value in use of the asset is determined by discounting, intend to hold on a continuing basis in the company’s business. at a market based discount rate, the expected future cash flows The investments are stated at cost less provisions for impairment. resulting from its continued use, including those arising from its final disposal. When the carrying values of long term assets are written c) Foreign currencies down by any impairment amount, the loss is recognised in the profit The financial statements are presented in US dollars which is the and loss account in the period in which it is incurred. Should company’s functional and presentational currency. circumstances or events change and give rise to a reversal of a previous impairment loss, the reversal is recognised in the profit The South African rand (ZAR) and British pound (GBP) exchange rates and loss account in the period in which it occurs and the carrying to the US dollar used in preparing the company financial statements value of the asset is increased. were as follows: The increase in the carrying value of the asset will only be up to Weighted average rate Closing rate the amount that it would have been had the original impairment not occurred. For the purpose of conducting impairment reviews, income ZAR GBP ZAR GBP generating units are considered to be groups of assets and liabilities Year ended 31 March 2012 7.48 0.63 7.67 0.62 that generate income, and are largely independent of other income Year ended 31 March 2011 7.15 0.64 6.77 0.62 streams. They also include those assets and liabilities directly involved in producing the income and a suitable proportion of those used to Monetary assets and liabilities denominated in foreign currencies are produce more than one income stream. retranslated at the rate of exchange ruling at the balance sheet date or at the related forward contract rate with the resultant translation f) Financial assets and financial liabilities differences being included in operating profit, other than those arising Financial assets and financial liabilities are initially recorded at fair on financial liabilities which are recorded within net finance costs. value (plus any directly attributable transaction costs except in the case of those classified at fair value through profit or loss). For those Non-monetary items that are measured in terms of historical cost in financial instruments that are not subsequently held at fair value, the a foreign currency are translated at the rate of exchange ruling at the company assesses whether there is any objective evidence of date of the transaction. All other non-monetary items denominated in impairment at each balance sheet date. a foreign currency are translated at the rate of exchange ruling at the balance sheet date. Financial assets are recognised when the company has rights or other access to economic benefits. Such assets consist of cash, equity d) Tangible fixed assets and depreciation instruments, a contractual right to receive cash or another financial Tangible fixed assets are stated at cost net of accumulated asset, or a contractual right to exchange financial instruments with depreciation and impairment losses. Cost includes the original another entity on potentially favourable terms. Financial assets are purchase price of the assets and the costs attributable to bringing derecognised when the rights to receive cash flows from the asset the asset to its working condition for the intended use. have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership. No depreciation is provided on freehold land or assets in the course of construction. In respect of all other tangible fixed assets, depreciation Financial liabilities are recognised when there is an obligation to is provided on a straight-line basis at rates calculated to write off the transfer benefits and that obligation is a contractual liability to deliver cost, less the estimated residual value of each asset, evenly over its cash or another financial asset or to exchange financial instruments expected useful life as follows: with another entity on potentially unfavourable terms. Financial liabilities are derecognised when they are extinguished, that is Office equipment and software 2-30 years discharged, cancelled or expired. If a legally enforceable right exists Leasehold land and buildings Shorter of the lease term or 50 years to set off recognised amounts of financial assets and liabilities, which are in determinable monetary amounts, and there is the intention to settle net, the relevant financial 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 financial instruments purchased or issued and the amounts receivable or repayable at maturity are included in the effective interest calculation and taken to net interest payable over the life of the instrument.

F-178 SABMiller plc Annual Report 2012 169

1. Accounting policies continued g) Revenue recognition (i) Interest income (i) Loans and receivables Interest income is recognised on an accruals basis using the effective Loans and receivables are non-derivative financial assets with fixed or interest method. determinable payments that are not quoted in an active market. They arise when the company provides money, goods or services directly (ii) Dividend income Overview to a debtor with no intention of trading the receivable. Loans and Dividend income is recognised when the right to receive payment receivables are included in debtors in the balance sheet. is established.

(ii) Cash and short-term deposits h) Deferred taxation Cash and short-term deposits include cash in hand, bank deposits Deferred tax is recognised in respect of all timing differences that repayable on demand, other short-term highly liquid investments with have originated but not reversed at the balance sheet date, where original maturities of three months or less. Bank overdrafts are shown transactions or events that result in an obligation to pay more tax in within creditors – amounts falling due within one year. the future or a right to pay less tax in the future have occurred at the balance sheet date. Business review (iii) Derivative financial assets and financial liabilities Derivative financial assets and financial liabilities are financial A net deferred tax asset is regarded as recoverable and therefore instruments whose value changes in response to an underlying recognised only when, on the basis of all available evidence, it can variable, require little or no initial investment and are settled in be regarded as more likely than not that there will be suitable taxable the future. profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be Derivative financial assets and liabilities are analysed between current deducted. and fixed assets and creditors on the face of the balance sheet, depending on when they are expected to mature. For derivatives Deferred tax is measured at the tax rates that are expected to apply that have not been designated to a hedging relationship, all fair value in the periods in which the timing differences are expected to reverse, movements are recognised immediately in the profit and loss account. based on tax rates and laws that have been enacted or substantively See note k for the company’s accounting policy on hedge accounting. enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis. (iv) Trade creditors Trade creditors are initially recognised at fair value and subsequently i) Dividend distributions measured at amortised cost. In accordance with FRS 21, dividend distributions to equity holders are recognised as a liability in the financial statements of the company Trade creditors are classified as creditors falling due within one year in the period in which the dividends are approved by the company’s unless the company has an unconditional right to defer settlement for shareholders. Interim dividends are recognised when paid. Dividends Governance at least 12 months from the balance sheet date. declared after the balance sheet date are not recognised, as there is no present obligation at the balance sheet date. (v) Borrowings Borrowings are recognised initially at fair value, net of transaction j) Share-based compensation costs and are subsequently stated at amortised cost and include The company operates several equity-settled share-based accrued interest and prepaid interest. Borrowings are classified as compensation schemes. These include share option plans (with and current liabilities unless the company has an unconditional right to without non-market performance conditions attached), performance defer settlement of the liability for at least 12 months from the balance share award plans (with market conditions attached) and awards sheet date. Borrowings classified as hedged items are subject to related to the employee element of the Broad-Based Black Economic Empowerment (BBBEE) scheme in the South Africa. In addition the hedge accounting requirements (see note k). Financial statements company has granted an equity-settled share-based payment to (vi) Financial guarantees retailers in relation to the retailer component of the BBBEE scheme. FRS 26 (Amendment) requires that issued financial guarantees, other than those previously asserted by the entity to be insurance contracts, In accordance with FRS 20, an expense is recognised to spread the are to be initially recognised at their fair value and subsequently fair value at date of grant of each award granted after 7 November measured at the higher of the amount initially recognised less 2002 over the vesting period on a straight-line basis, after allowing cumulative amortisation recognised and the amount determined in for an estimate of the share awards that will eventually vest. A accordance with FRS 12 ‘Provisions, Contingent Liabilities and corresponding adjustment is made to equity over the remaining Contingent Assets’. vesting period. The estimate of the level of vesting is reviewed at least annually, with any impact on the cumulative charge being recognised Financial guarantee contracts are defined in FRS 26 as contracts that immediately. The charge is based on the fair value of the award at the require the issuer to make specified payments to reimburse the holder date of grant, as calculated by binomial model calculations and Monte for a loss it incurs because a specified debtor fails to make payment Carlo simulations. when due in accordance with the original or modified terms of a debt instrument. The charge is not reversed if the options have not been exercised because the market value of the shares is lower than the option Financial guarantees are amortised over the life of the guarantee, price at the date of grant. The proceeds received net of any directly or accelerated if the third party obligation is settled early. The attributable transaction costs are credited to share capital (nominal amortisation is taken to the profit and loss account. value) and share premium when the options are exercised, unless the options are satisfied by treasury or EBT shares. Shareholder information

F-179 170 SABMiller plc Annual Report 2012

Notes to the company financial statements continued

1. Accounting policies continued (i) Fair value hedges Fair value hedges comprise derivative financial instruments designated The issue by the company to employees of its subsidiaries of a grant in a hedging relationship to manage the company’s interest rate risk over the company’s shares represents additional capital contributions to which the fair value of certain assets and liabilities are exposed. by the company to its subsidiaries, except to the extent the company Changes in the fair value of the derivative offset the relevant changes is reimbursed. An additional investment in subsidiaries results in a in the fair value of the underlying hedged item attributable to the corresponding increase in shareholders’ equity. The additional capital hedged risk in the profit and loss account in the period incurred. Gains contribution is based on the fair value of the grant issued allocated or losses on fair value hedges that are regarded as highly effective are over the underlying grant’s vesting period. recorded in the profit and loss account together with the gain or loss on the hedged item attributable to the hedged risk. A new employee benefit trust, the SABMiller Associated Companies’ Employees’ Benefit Trust (the AC-EBT), was established during the (ii) Cash flow hedges year. The AC-EBT holds shares in SABMiller plc for the purposes of Cash flow hedges comprise derivative financial instruments providing share incentives for employees of companies in which designated in a hedging relationship to manage currency and interest SABMiller has a significant economic and strategic interest but over rate risk to which the cash flows of certain liabilities are exposed. The which it does not have management control. These share options are effective portion of changes in the fair value of the derivative that is accounted for as cash-settled share-based payments in accordance designated and qualifies for hedge accounting is recognised as a with FRS 20 ‘Share-Based Payment’. A liability is recognised at separate component of equity. The ineffective portion is recognised fair value in the balance sheet over the vesting period with a immediately in the profit and loss account. Amounts accumulated in corresponding charge to the profit and loss account. The liability is equity are recycled to the profit and loss account in the period in remeasured at each reporting date, on an actuarial basis using the which the hedged item affects profit or loss. However, where a analytic method, to reflect the revised fair value and to adjust for forecasted transaction results in a non-financial asset or liability, the changes in assumptions such as leavers. Changes in fair value of accumulated fair value movements previously deferred in equity are the liability are recognised in the profit and loss account. Actual included in the initial cost of the asset or liability. settlement of the liability will be at its intrinsic value with the difference recognised in the profit and loss account. Details of the group’s financial risk management objectives and policies are provided in note 23 to the consolidated financial k) Hedge accounting statements of the group. The derivative instruments used by the company, which are used solely for hedging purposes (i.e. to offset foreign exchange and l) Operating leases interest rate risks), comprise interest rate swaps, cross currency Rentals paid on operating leases are charged to the profit and loss swaps and forward foreign exchange contracts. Such derivative account on a straight-line basis over the lease term. instruments are used to alter the risk profile of an existing underlying exposure of the company in line with the company’s m) Pension obligations risk management policies. The company operates a defined contribution scheme. Contributions to this scheme are charged to the profit and loss account as incurred. 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 to document 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 firm commitment (fair value hedge) or hedges of highly probable forecast transactions or commitments (cash flow 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 profit 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 company’s 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 profit and loss account. The company does not hold or issue derivative financial instruments for speculative purposes.

F-180 SABMiller plc Annual Report 2012 171

2. Tangible fixed assets

Short Assets in leasehold Office course of land and equipment construction buildings and software Total

US$m US$m US$m US$m Overview 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 – Business review 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 Governance

Shares Loans Total US$m US$m US$m At 1 April 2010 12,797 3,627 16,424 Exchange adjustments – 7 7 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) Financial statements Additions 95 – 95 Capital contribution relating to share-based payments 86 – 86 Impairment provision1 (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. Shareholder information

F-181 172 SABMiller plc Annual Report 2012

Notes to the company financial statements continued

3. Investment in subsidiary undertakings continued

The investment in subsidiary undertakings is shown as follows (all interests are 100% direct investments unless stated otherwise):

2012 2011 Name Country of incorporation Principal activity US$m US$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 SA1 Colombia Finance company – – SABMiller Poland BV Netherlands Holding company 4,976 4,976 SABMiller Horizon Ltd United Kingdom Agent company – – SABSA Holdings (Pty) Ltd2 South Africa Holding company 5 5 SABMiller Capital UK Ltd United Kingdom Holding company – – SABMiller Asia Capital LLP3 United Kingdom Finance company – – 13,239 13,284 Capital contribution relating to share-based payments 382 296 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 2011 US$m US$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 2011 US$m US$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%).

F-182 SABMiller plc Annual Report 2012 173

6. Creditors amounts falling due within one year

2012 2011 US$m US$m Bank overdrafts 2 359 Bank loans – 53 Overview US$600 million 6.2% Notes due 2011 – 609 Amounts owed to subsidiary undertakings 846 1,432 Taxation and social security 29 20 Derivative financial 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 Business review

7. Creditors amounts falling due after more than one year

2012 2011 US$m US$m US$1,100 million 5.5% Notes due 20131 1,099 1,116 €1,000 million 4.5% Notes due 20152 1,367 1,417 US$300 million 6.625% Notes due 20332 416 361 US$850 million 6.5% Notes due 20162 960 943 US$550 million 5.7% Notes due 20142 588 594 US$700 million 6.5% Notes due 20182 811 759 PEN 150 million 6.75% Notes due 20152 56 53 €140 million revolving credit facility2 – 99 Loans from subsidiary undertakings3 1,938 3,560 Derivative financial instruments (see note 8) 38 14 Other creditors 9 4 Deferred income 7 7 Guarantee fee liability 357 – Governance 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 Financial statements 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 floating and receive fixed 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 fixed 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 financial statements of the group).

2 Further information relating to the revolving credit facility and the Notes is detailed in note 22 to the consolidated financial statements of the group.

3 Loans from subsidiary undertakings are unsecured, repayable in 2015 and bear interest at a rate of 1.236%. Shareholder information

F-183 174 SABMiller plc Annual Report 2012

Notes to the company financial statements continued

8. Derivative financial instruments

Assets Liabilities Assets Liabilities 2012 2012 2011 2011 US$m US$m US$m US$m Current derivative financial instruments Forward foreign currency contracts 4 (4) 1 (21) Forward foreign currency contracts as cash flow hedges 2 – 2 – Cross currency swaps – – – (59) 6 (4) 3 (80)

Non-current derivative financial 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 flow hedges The company has entered into forward exchange contracts designed as cash flow 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 floating and receive fixed interest which have been designated as fair value hedges to manage changes in the fair value of its fixed rate borrowings. The borrowings and interest rate swaps have the same critical terms.

As at 31 March 2012, the fixed interest rates received vary from 4.5% to 6.625% (2011: 4.5% to 6.625%) and floating 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 financial instruments (i) Forward foreign currency contracts The company has entered into several forward foreign currency contracts to manage the group’s 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 group’s 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 floating rates and pay fixed rates, held as an economic offset to a number of interest rate swaps that receive fixed rates and pay floating rates that were previously held in a fair value hedge relationship.

Analysis of notional amounts on all outstanding financial instruments held by the company is as follows:

2012 2011 m 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 Cross currency swaps – SA rand 1,404 2,799 – Polish zloty 433 1,092 – Euro 317 317 – Czech koruna – 2,258 – Russian rouble – 1,400

F-184 SABMiller plc Annual Report 2012 175

8. Derivative financial instruments continued

Fair values of financial assets and financial liabilities

Book value Fair value Book value Fair value

2012 2012 2011 2011 Overview US$m US$m US$m US$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 above because their book values are an approximation of their fair values. The fair value of the company’s fixed rate loans are calculated by discounting expected future cash flows using the appropriate yield curve. The book values of floating rate borrowings approximate to their fair value. Business review Fair value loss on financial instruments recognised in the profit and loss account

2012 2011 US$m US$m Derivative financial instruments: Forward foreign currency contracts (108) (53) Interest rate swaps designated as cash flow hedges – 1 Interest rate swaps designated as fair value hedges 100 13 Cross currency swaps 107 (71) Guarantee fees 22 8 121 (102) Other financial instruments: Non-current borrowings designated as the hedged item in a fair value hedge (156) (14) Total fair value loss on financial instruments recognised in the profit and loss account (35) (116)

Other financial liabilities Other financial liabilities include guarantee fee liabilities as disclosed in notes 6 and 7. Governance The company has guaranteed the bank overdrafts and drawn components of bank loans of a number of subsidiaries. Under the terms of the financial 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:

2012 2011 Year of maturity US$m US$m 2014 2,175 – 2015 1,000 – Financial statements 2016 750 – 2017 2,054 – 2022 2,500 – 2042 1,500 – 9,979 – Shareholder information

F-185 176 SABMiller plc Annual Report 2012

Notes to the company financial statements continued

9. Reconciliation of movements in shareholders’ funds

Share Share Merger Hedging Treasury Profit and capital premium relief reserve EBT shares loss account Total US$m US$m US$m US$m US$m US$m US$m US$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 Profit for the year – – – – – – 1,476 1,476 Dividends paid – – – – – – (1,115) (1,115) Cash flow hedges – fair value gains – – – 6 – – – 6 Utilisation of EBT shares – – – – 21 – (21) – Credit entry relating to share-based payments – – – – – – 62 62 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 Profit for the year – – – – – – 2,661 2,661 Dividends paid – – – – – – (1,313) (1,313) Purchases of EBT shares – – – – (52) – – (52) Loan repayment from EBT – – – – 12 – – 12 Utilisation of EBT shares – – – – 61 – (61) – Credit entry relating to share-based payments – – – – – – 72 72 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 profit for the year, except for those arising on financial 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 financial statements of the group. Details of share incentive schemes are provided in note 26 to the consolidated financial statements of the group. Details of dividends paid and proposed for the year are provided in note 9 to the consolidated financial statements of the group.

10. Profit and loss information

Employees Employee costs recognised in the profit and loss during the year were as follows:

2012 2011 US$m US$m Wages and salaries 97 74 Share-based payments 36 29 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 financial statements of the group.

Operating leases Operating lease charges recognised in the profit and loss during the year were as follows:

2012 2011 US$m US$m Plant and machinery 4 5 Other 8 7

F-186 SABMiller plc Annual Report 2012 177

11. Other information

Deferred tax assets have not been recognised in respect of the following:

2012 2011

US$m US$m Overview Tax losses 72 48 Capital allowances in excess of depreciation 11 10 Accruals and provisions 1 1 Share-based payments 25 29 109 88

2012 2011

US$m US$m Business review 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 2011 US$m US$m Land and buildings: Within one year 1 – Between two and five years 1 2 After five years 5 5 Other Within one year 1 – Between two and five years – 2 Governance 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 2011 US$m US$m

Interest received from subsidiaries 2 2 Financial statements Guarantee fee income 1 – Income from recharges to subsidiaries1 134 76 Guarantee fee paid2 (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 2011 US$m US$m Amounts owed by subsidiaries 25 39 Amounts owed to subsidiaries (4) (6) Loans to subsidiaries1 – 60 Loans to associated undertakings1 60 – Loans from subsidiaries – (36)

1 Loans to associated undertakings include balances due from BIH Angola which were previously loans to subsidiaries. Shareholder information

F-187 178 SABMiller plc Annual Report 2012

Five-year financial review for the years ended 31 March

2012 20111 2010 2009 2008 US$m US$m US$m US$m 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 profit 5,013 3,127 2,619 3,148 3,448 Net finance 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) Profit 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 classified as held for sale 79 66 – – – Total assets 55,651 39,114 37,499 31,628 36,082 Derivative financial 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 classified 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 flow 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 inflow 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 (outflow)/inflow before financing and dividends (7,663) 2,526 2,105 174 (415) Net cash inflow/(outflow) from financing 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 share2 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 financial 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 flow (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$000’s) 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.

F-188 SABMiller plc Annual Report 2012 179

2012 2011 2010 2009 2008 US$m US$m US$m US$m US$m Group revenue Segmental analysis Latin America 7,158 6,335 5,905 5,495 5,251 Overview 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 Pacific 3,510 2,026 1,741 1,565 n/a Africa and Asia Pacific 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 Business review

Operating profit (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 Pacific 124 (22) (34) (2) n/a Africa and Asia Pacific 330 South Africa: Beverages 1,091 997 826 704 962 Corporate (190) (147) (139) (97) (94) Group operating profit – 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 Pacific (70) – – – n/a Governance Africa and Asia Pacific – South Africa: Beverages (41) (188) (53) – – Corporate (41) 123 (58) – – 1,026 (436) (472) 2 (112) Group operating profit – 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 Financial statements Europe 836 887 872 944 952 North America 756 741 619 581 477 Africa 743 647 565 562 n/a Asia Pacific 321 92 71 80 n/a Africa and Asia Pacific 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 Shareholder information

F-189 180 SABMiller plc Annual Report 2012

Definitions

Financial definitions Free cash flow This comprises net cash generated from operating activities less cash Adjusted earnings paid for the purchase of property, plant and equipment, and intangible Adjusted earnings are calculated by adjusting headline earnings assets, net investments in existing associates and joint ventures (as defined below) for the amortisation of intangible assets (excluding (in both cases only where there is no change in the group’s effective software), integration and restructuring costs, the fair value ownership percentage) and dividends paid to non-controlling interests movements in relation to capital items for which hedge accounting plus cash received from the sale of property, plant and equipment and cannot be applied and other items which have been treated as intangible assets and dividends received. exceptional but not included above or as headline earnings adjustments together with the group’s share of associates’ and joint Group revenue ventures’ adjustments for similar items. The tax and non-controlling This comprises revenue together with the group’s share of revenue interests in respect of these items are also adjusted. from associates and joint ventures.

Adjusted EBITDA Headline earnings This comprises EBITDA (as defined below) before cash flows Headline earnings are calculated by adjusting profit for the financial from exceptional items and includes dividends received from our period attributable to owners of the parent for items in accordance joint venture, MillerCoors. Dividends received from MillerCoors with the South African Circular 3/2009 entitled ‘Headline Earnings’. approximate to the group’s share of the EBITDA of the MillerCoors Such items include impairments of non-current assets and profits or joint venture. losses on disposals of non-current assets and their related tax and non-controlling interests. This also includes the group’s share of Adjusted EBITDA margin associates’ and joint ventures’ adjustments on the same basis. This is calculated by expressing adjusted EBITDA as a percentage of revenue plus the group’s share of MillerCoors’ revenue. Interest cover This is the ratio of adjusted EBITDA to adjusted net finance costs. Adjusted net finance costs This comprises net finance costs excluding fair value movements in Net debt relation to capital items for which hedge accounting cannot be applied This comprises gross debt (including borrowings, borrowings-related and any exceptional finance charges or income. derivative financial instruments, overdrafts and finance leases) net of cash and cash equivalents (excluding overdrafts). Adjusted profit before tax This comprises EBITA less adjusted net finance costs and less the Organic information group’s share of associates’ and joint ventures’ net finance costs Organic results and volumes exclude the first 12 months’ results and on a similar basis. volumes relating to acquisitions and the last 12 months’ results and volumes relating to disposals. Constant currency Constant currency results have been determined by translating the Total Shareholder Return (TSR) local currency denominated results for the year ended 31 March at TSR is the measure of the returns that a company has provided for the exchange rates for the prior year. its shareholders, reflecting share price movements and assuming reinvestment of dividends. EBITA This comprises operating profit before exceptional items, amortisation Sales volumes of intangible assets (excluding software) and includes the group’s In the determination and disclosure of sales volumes, the group share of associates’ and joint ventures’ operating profit on a aggregates 100% of the volumes of all consolidated subsidiaries and similar basis. its equity accounted percentage of all associates’ and joint ventures’ volumes. Contract brewing volumes are excluded from volumes EBITA margin (%) although revenue from contract brewing is included within group This is calculated by expressing EBITA as a percentage of group revenue. Volumes exclude intra-group sales volumes. This measure revenue. of volumes is used for lager volumes, soft drinks volumes, other alcoholic beverage volumes and beverage volumes and is used in the EBITDA segmental analyses as it more closely aligns with the consolidated This comprises the net cash generated from operations before group revenue and EBITA disclosures. working capital movements. This includes cash flows relating to exceptional items incurred in the year. In the determination and disclosure of aggregated sales volumes, the group aggregates 100% of the volumes of all consolidated EBITDA margin (%) subsidiaries, associated companies and joint ventures. Contract This is calculated by expressing EBITDA as a percentage of revenue. brewing volumes are excluded from aggregated volumes although revenue from contract brewing is included within group revenue. Effective tax rate (%) Aggregated volumes exclude intra-group sales volumes. This The effective tax rate is calculated by expressing tax before tax measure is used for aggregated beverage volumes and for on exceptional items and on amortisation of intangible assets aggregated lager volumes. (excluding software), including the group’s share of associates’ and joint ventures’ tax on the same basis, as a percentage of adjusted profit before tax.

F-190 SABMiller plc Annual Report 2012 181

KPI definitions – How we measure Fossil fuel emissions from energy used at our breweries per hectolitre of lager produced Total Shareholder Return (TSR) in excess of the median Fossil fuel emissions are measured by the total amount of carbon of peer group over three-year periods dioxide (CO2) in kilograms released to the atmosphere by our TSR performance is measured by taking the percentage growth in brewery operations divided by the volume of lager produced. The our TSR over the three-year period to the date aligned with the related total amount of CO2 is the sum of direct emissions produced by Overview measurement date of performance share awards for the excom, and the combustion of fuel (e.g. coal, oil, gas) and indirect emissions from deducting the percentage growth in the TSR of the median of our peer the use of electricity and steam. Emissions are calculated using the group over the same period. internationally recognised WRI/WBCSD Greenhouse Gas Protocol. All consolidated businesses are included on a 100% basis together Growth in adjusted earnings per share (EPS) with the equity accounted percentage share of the MillerCoors Growth in adjusted EPS is measured by comparing the adjusted joint venture. EPS for the current year with that of the prior year. Adjusted EPS is measured using adjusted earnings divided by the basic number of Cumulative financial benefits from our business capability shares in issue. Adjusted earnings are measured using the definition programme Business review on page 180. Incremental cash flows generated as a result of the adoption of new processes and systems including incremental revenues, reduced cost Free cash flow of goods sold and overheads, reduced investment in working capital Free cash flow is measured using the definition on page 180. and lower cost of capital investments.

Proportion of our total lager volume from markets in which we have No. 1 or No. 2 national market share positions Non-financial definitions Lager volumes generated in markets where we have a number one or number two national beer market share position divided by total lager Corporate Governance Code volumes. Lager volumes are measured as defined on page 180. The UK Corporate Governance Code, published by the UK Financial Reporting Council. Proportion of group EBITA from developing and emerging economies Direct economic value generated EBITA generated in developing and emerging economies divided by Revenue plus interest and dividend receipts, royalty income and group EBITA before corporate costs. EBITA is defined on page 180. proceeds of sales of assets (in accordance with guidance by the Developing and emerging economies are as defined by the Global Reporting Initiative GRI EC1). International Monetary Fund (IMF). Economy segment Organic growth in lager volumes Taking the leading brand in the most popular pack type as the Organic growth in lager volumes is measured by comparing lager standard (=100), brands with a weighted average market price which Governance volumes in the year with those in the prior year excluding the effects fall below an index of 90 form the economy segment. Normally, all of acquisitions and disposals (organic information is defined on page brands in this segment will be local brands. 180). Lager volumes are measured as defined on page 180. International brewers index Group revenue growth (organic, constant currency) The index of international brewers charts the share price Growth in group revenue compared with the prior year is measured on progression of the company’s closest peers in the global brewing a constant currency basis (as defined on page 180) and excluding the industry – Anheuser-Busch InBev (Anheuser-Busch and InBev effects of acquisitions and disposals (organic information is defined on included separately, until the acquisition of Anheuser-Busch by InBev page 180). Group revenue is defined on page 180. on 17 November 2008), Carlsberg, Heineken and Molson Coors, Financial statements relative to 1 April 2008. The index is weighted relative to the market Revenue growth in premium brands (constant currency) capitalisation of the brewers as at 1 April 2008. Growth in revenue from sales of premium brands compared with the prior year is measured on a constant currency basis (as defined on Mainstream segment page 180). Premium brands are those in the premium segment as Taking the leading brand in the most popular pack type as the defined on this page. standard (=100), the mainstream segment is formed of brands with a weighted average market price which fall into the 90-109 band. EBITA growth (organic, constant currency) Mainstream brands tend to be local. EBITA growth compared with the prior year is measured on a constant currency basis (as defined on page 180) and excluding the effects of PET acquisitions and disposals (organic information is defined on page PET is short for polyethylene terephthalate, a form of plastic which 180). EBITA is defined on page 180. is used for bottling alcoholic and non-alcoholic drinks.

EBITA margin Premium segment (worthmore segment in the USA) EBITA margin is defined on page 180. Taking the leading brand in the most popular pack type as the standard (=100), brands with a weighted average market price which Hectolitres of water used at our breweries per hectolitre have an index of 110+ form the premium segment. The premium of lager produced segment comprises both local, regional and global brands. Water used at our breweries divided by the volume of lager produced. All consolidated subsidiaries are included on a 100% basis together STRATE Shareholder information with the equity accounted percentage share of the MillerCoors STRATE stands for Share Transactions Totally Electronic and is joint venture. an unlisted company owned by JSE Limited and Central Securities Depository Participants (CSDP) and exists to allow share transactions in South Africa to be settled electronically.

F-191 Registered Office of the Issuer c/o The Corporation Trust Company 1209 Orange Street Wilmington, Delaware 19801 United States

Registered Office of the Guarantor SABMiller House Church Street West Woking Surrey GU21 6HS England

Joint Book-Running Managers Citigroup Global Markets Inc. J.P. Morgan Securities LLC 388 Greenwich Street 383 Madison Avenue New York, NY 10013 New York, NY 10179 United States United States

Mitsubishi UFJ Securities (USA), Inc. Mizuho Securities USA Inc. 1633 Broadway 320 Park Avenue 29th Floor 12th Floor New York, NY 10019 New York, NY 10022 United States United States

Barclays Capital Inc. BBVA Securities Inc. Merrill Lynch, Pierce, Fenner & Smith 745 Seventh Avenue 1345 Avenue of the Americas Incorporated New York, NY 10019 44th Floor One Bryant Park United States New York, NY 10105 New York, NY 10036 United States United States

Morgan Stanley & Co. LLC RBS Securities Inc. Santander Investment 1585 Broadway, 29th Floor 600 Washington Boulevard Securities Inc. New York, NY 10036 Stamford, CT 06901 45 East 53rd Street United States United States New York, NY 10022 United States

Legal Advisers To the Issuer as to United States law and English law Hogan Lovells International LLP Atlantic House Holborn Viaduct London EC1A 2FG England

To the Initial Purchasers as to United States law Davis Polk & Wardwell London LLP 99 Gresham Street London EC2V 7NG England Fiscal Agent and London Paying Agent The Bank of New York Mellon, acting through its London office One Canada Square London E14 5AL England

Principal Paying Agent, Registrar and Transfer Agent The Bank of New York Mellon 101 Barclay Street, 4E New York, New York 10286 United States

Listing Agent Arthur Cox Listing Services Limited Earlsfort Centre Earlsfort Terrace Dublin 2 Ireland

Auditors PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH England imprima — C108736