he South African Breweries Limited is a holding Tcompany invested in and taking management responsibility for a portfolio of businesses, principally engaged in meeting mass market consumer needs mainly in the Southern African region. Beer is the major profit contributor, but an important balance is provided by signifisant interests in other beverages, retailing, hotels and the manufacture of selected consumer goods, together with strategic investments in businesses which complement the mainstream interests.

T A Then Charles Glass sold his Castle Lager from V V a wagon to thirsty diggers during the late 19th Century Witwatersrand golds trike, he paved the way for the birth of SAB. Early Randlords persuaded Glass to part with his brewery and with venture capital raised through a London quotation, The South African Breweries Limited was registered in 1895. With the added impetus of a ISE listing in 1897, the new brewing company showed steady growth, buying hotels and other licensed outlets to expand the distribution network. The second stage of SAWs development started in the 1960's with a move into wines and spirits and the moulding of its hotel investments into a regenerated industry. By the 1970's, however, legal constraints made it imperative for SAB to broaden its investment base away from liquor. Due to SAWs affinity with a broad spectrum of consumers, the third stage of SAWs evolution involved the acquisition of significant mass market manufacturing and retailing investments and the inclusion of soft drinks and fruit juices in the Group's range of beverages.

The contents arc listed on the inside back cover. verkrygbaar in Afrikaans by die oordragsekretarisse. Financial highlights

(j;fJ 1992 1991 increase

Group summary (Rand million) Turnover 17699 16122 ]0 Added cash value generated 4454 4 146 7 Profit after taxation 1046 973 7 Attributable earnings 779 711 10 Total assets 11 837 10310 ]5 Market capitalisation 16538 13 094 26

Ordinary share performance (cents) Earnings per share - attributable earnings basis 290 265 ]0 - fully inflation adjusted 269 247 9 - cash equivalent basis 473 422 12 Cash flow per share 350 383 (9) Dividends per share 130 118 10 Net equity per share 1 371 1 168 17

Financial statistics Percent return on revalued equity 21,2 22,7 Financial gearing ratio 0,53 0,48

Seven year COin pound growth per annum (,Yo) 1986/92 1985/91 Shareholders' combined rate of return 41 33 Rate of inflation (Consumer Price Index) IS 15

o EARNINGS PER SHARE IIl1 ADDED CASH VALUE GENEltATlD • DIVIDENDS PER SHARE • DISBURSED AI-.10NG EMPLOVEES

cents Ihn 4500 -~ ~ 3 750 " ~ 3000 - 2250 - l- t_ 1500 - 1;-

750 - -

o - 86 87 88 89 90 91 92 86 87 88 89 90 91 92

] Performance highlights

SAB Objective: BUSINESS To improve both the shareholders' Seek to achieve a compound PHILOSOPHY income flow and the value of their growth rate in dividends and share investment in a sustainable and price, which over time betters that socially acceptable way. achieved by comparable industrial equity investments.

INVESTMENT Objective: POLICY To invest in a focused and balanced To develop four main pillars of portfolio of businesses engaged in activity - beverages, retail, hotels meeting mass market consumer and the manufacture of selected needs. consumer goods.

RETURN ON Objective: INVESTMENT To achieve and sustain a return on The average annual rate of return revalued equity capital, on revalued equity should over which exceeds the current cost of time exceed 20%. acquiring that capital, by the maximum margin consistent with defined and acceptable risk parameters.

FINANCING Constraint: POLICY To manage the business rigidly The ratio of interest bearing debt to within predetermined financial total shareholders' funds will not ratios, be permitted to exceed 0,6: 1. which are deemed to provide adequate financial buffers, Objective: to meet all obligations under the Seek to cover taxed net financing most adverse foreseeable costs not less than six times by circumstances. taxed operating profits.

DIVIDEND Practice: POLICY To retain sufficient earnings Dividend distribution: generated in terms of the stated approximately 4S{J1J of earnings. return objective, to sustain planned net asset growth, within the stated gearing constraint, while seeking to maintain regular and improving dividend payments.

2 Accounting philosophy

Achievement: The compound growth rate over The Group is dedicated to achieving the last seven years is 41 o per meaningful and responsible reporting through annum, compared with 320/0 per annum achieved by the ten largest the comprehensive disclosure and explana• com parable industrial equity tion of its financial results. This is done investments on theJSE. to assist objective corporate performance

rneasuremen t, to enable returns on Achievement: Growth was achieved in the investment to be assessed against the risks earnings of the diversified interests of the Group, despite continuing inherent in their achievement and to facilitate economic recession. Total profits appraisal of the full potential of the Group. have been generated equally between Beer and other interests. The core determinant of meaningful Achievement: presentation and disclosure of information is The return for the year ended 31 March 1992 is 210/0 and the its validity in supporting management's average annual return over the last decision making processes. While tile seven years is also 21 %. accounting philosophy encourages the pioneering of new techniques, it fully

endorses the fundamental concepts underlying both the financial and Achievement: The gearing ratio at 31 March 1992 management accounting disciplines, as is 0,53:1 and the average over the enunciated by The International Federation of last seven years is 0,45: 1. Accountants, The International Accounting Achievement: Standards Committee and The South African Taxed net financing costs were covered 5,8 times in the year ended Institute of Chartered Accountants. 3 J March'] 992 and, on average, 6,4 times over the last seven years. The Group is committed to active Achievement: participation in the setting and regular review Dividends increased by 'JO'Jtb in the year ended 31 March 1992 and of accounting standards and to the have increased by a compound rate development of new and improved of 200/0 per annum over the last seven years, while the average accounting practices. This is done to ensure distribution rate over that period that the information reported to the was 44,80/0. management and stakeholders of the Group

continues to be relevant and reliable.

3 CORPORATE CODE OF CONDUCT

To act in a fashion that will eam the Group the reputation of being: • open and frank in all dealings and disclosures; • non-sectional and non-political; • socially and environmentally responsible; • beyond reproach in the quality of its products and services; • [ealous of its standing as regards integrity and credibility; • consistent in honouring its legal and moral obligations; • aware of the need to foster loyalty and long enduring rela• tionships.

With regard to its human resources, to reinforce the principles of enlightened and humane employment practices and, in parti• cular, to: • eliminate discrimination; • recognise the employees' inalienable right to organise them• selves and to negotiate their conditions of employment; • promote training and development of skills.

OPERATING MANAGEMENT APPROACH

To endeavour to take the lead in its various fields of activities by: • seeking to be farsighted, innovative, entrepreneurial and competitive; • striving for a consistently high level of productivity with performance matching risk and return; • maintaining a soundly based group of prudently financed businesses; • decentralising to the maximum and, in the process, devel• oping the separate, independent and individual identities of Group companies and their managements. Portfolio of businesses

INTERESTS AND HOLDINGS ACTIVITIES

BEVERAGES

SAD Beer Division Brewing and marketing of clear beer 70°;1) of United Breweries (Pty) Ltd Barley malting 700/0 of Ohlsson's Brewery Transkei (Pty) Ltd Hop fanning 550/0 of Southern Associated Maltsters (Pty) ltd

Amalgamated Beverage Industries Ltd 68% Carbonated soft drinks 24°,f) of Amalgamated Beverage Canners (Pty) Ltd

South African Fruit Juices l()()!Yo Sparkling and still fruit juices, lOO<}b of Appletiser Pure Fruit Juices (Pty) Ltd fruit concentrate and spring water 100% of Cape Display (Pty) Ltd 100Wo of Western Province Preserving Company (Pty) Ltd 49% of Ceres Fruit Juices (Pty) Ltd

Traditional Beer Investments 100% Traditional sorghum beer 50% of Bophuthatswana Breweries (Pty) Ltd Distillers Corporation (SA) Ltd Wines and spirits Stell en bosch Fanners' Winery Group Ltd Wines and spirits

RETAIL

OK Bazaars (1929) Ltd 69% Mass merchandising

Amalgamated Retail Ltd 69% Specialist furniture stores 760/0 of Boymans Ltd Specialist footwear and apparel Controlling interest effectively acquired in April 1992 chain stores Selected consumer services Edgars Stores Ltd Speciality clothing, accessories and horne textiles chain stores Apparelmanufacture

HOTELS

Southern Sun Hotel Holdings Ltd 100% Hotels, inns and resorts ZooAl of Sun International Inc 500/0 of Southern Sun Timesharing (Pry) Ltd

MANUFACTURING

Associated Furniture Companies Ltd 66% Furniture and upholstery 50% of Kallenbach-Hendler (Pty) Ltd Hedding 50% of Resinkem (Pry) Ltd Spring units 21 % of Romarex Ltd Textiles

The Lion Match Company Ltd 71% Matches and disposable lighters 50(}D of Amalgamated Appliances (Pty) Ltd Packaging and printing Small domestic electrical appliances Shaving products, knives, scissors and garden tools

Da Gama Textile Company Ltd 61% Vertically integrated cotton textile manufacturing

The Plate Glass Group 67% Automotive glass and glass, board and Controlling interest effectively acquired in April 1992 timber products for the building and furniture industries

Conshu Holdings Ltd 33% Footwear

5 Directorate and management

BOARD OF DIRECTORS

Executive directors Executive directors (continued) Non-executive directors

J M Kahil (52) BA(Law) MHA E A G Mackay (42) BSc(Eng) BCom P F Rencr (59)*t DCOlll(hc)·t Managing Director: Beer Division Chairman of johannesburg Executive Chairman: joined Beer Division in 1978; appointed Consolidated Investment Co Limited The South African Breweries Limited Managing Director in 1987: and to SAB Appointed to SAB Board in 1987 and Joined OK in 1966; after holding Board in 1990 Cbainnan of the General Purposes and executive positions in Afcol and Amrel, At~dit Committees in 1990 rejoined OK as Chief Executive in 1977; L van der wan (55) BAdmin appointed 10 SAB Board in 1981; Chairman: IN F de la ) I Beck (69) BCom C1\(5A) Group Managing Director in 1983; Selected Manufacturing Interests Director of Companies and Executive Chairman in 1990 Joined SAB in 1962; appointed to SAB Appointed \0 SAB Board in 191'17 Board in 1980; Chief Executive of Afcol N G Cox (44) CA(SA) FBIM in 1981; and Chairman: Selected V G Bray (56) BCom CA(SA)*1 Managing Director: N0I1-R5A Interests Manufacturing Interests in 1988 Executive Director of Johannesburg Joined SAB Group in Zimbabwe in Consolidated Investment Co Limited 1973; appointed Commercial Director: Kit wllltarns (55) J.'CA:~ Appointed to SAil Board in 1985 Non-ItSA Interests in 1986 and Chairman: Non-HSA Interests Managing Director in 1990; and to Joined SAil Group in Zimbabwe in 1962; H P de Villiers (67) IICom(Rhodes) 5AI\ Board in 1990 appointed to 5/\11 Board in 1973; CA(SA) FCA Executive Chairman of the Beverage Former Chairman of Standard Bank V B I !arnmond (66) Division in 1981; Chief Executive: Investment Corporation Limited Merchandising Consultant Non-RSA Interests in 1986; and Appointed to SAB Board in 1985 joined Edgars in 1959; appointed Chairman in 1990 Managing Director in 1983; and to D Gordon (61) CA(SA) DEcon(hcrt SAB Board in 1987; retired from Edgers M I Wyman (45) CA(5A)t Chairman of Liberty Life Group as Deputy Chairman and Chief Group Planning and Development Appointed to SAil Board in 1982 Executive Officer in 1990 Director joined SAB in 1986; appointed to SAB DC Kovarsky (45) CA(SA) G \1\' Hood (62) BArch Board in 1990 Executive Director of Johannesburg Managing Director: Consolidated Investment Co Limited OK Bazaars (1929) Limited Appointed to SA(\ BOard in 1990 joined SAS in 1954; after holding executive posttlons in Southern Sun, M J Levett (52) BCom FFA FlA ASA joined OK in 197(j and appointed Chairman and Managing Director of Managing Director in 198,\ and to South Afrtcnn Mutual Life Assurance SAB Board in 1987 Society Appointed to SAB Board in 1984 R L Lloyd (.J.8) MA Mech Eng MBA Chairman: Beverage Interests A ?vi Rosholt (71) CA(SA) Dtconthc}'f joined SAB in 1971; appointed Chief Former Chairman of Barlow Rand Executive: Beer Division in 1981; to Limited SAil Board in 1984; and Chairman' Appointed to SAil Board ill 1966 Beverage Interests in 19S7 C L Sunter (47) BA(Oxon)* \·v S Macl'arlane (56) CA(S!\) FCAt Chairman and Chief Executive of Group Financial Director Gold and Uranium Division of Anglo joined SAl) in 1975; appointed to SAn American Corporation of South Board in 1980 Africa Limited Appointed to SAB Board in 1987

• Members of General Purposes Committee of the Board t Members of Audit Committee 6 tBritish CENTRAL EXECUTIVE BEER OTHER COMMITTEE DIVISION EXECUTIVES

Members Executive directors Group

All SAB Executive directors and the E A G Mackay (42) BSc(Eng) BCom F D D Estment (59) ARM following: Managing Director Group Corporate Risk Manager joined Beer Division in 1978; appointed Joined SAB in 1983 G H Beeton (60) BCam ACIS Managing Director in 1987 Group Managing Director: R L Hogben (46) BCom Edgars Stores Limited N J Adami (37) BBusSc MBA Managing Director' joined Idgars in 1963; appointed to Regional Director: Southern Transvaal Edgars Board in 1982; and Group SA Fruit Juices Managing Director in 1990 joined Beer Division in 1979; appointed joined Shoe Corporation in 1970; a General Manager in 1984; and transferred to Beer Division in 1979; 5J Rerger(S4) Regional Director in 1989 appointed Managing Director: SA Fruit Managing Director: Juices in 1990 Amalgamated Retail Limited T A Bates (55) Joined Afccl's retail interests in 1964; Technical Director P R L Schreuder (55) AIAC appointed Managing Director of Anne! Joined Beer Division in 1958; appointed Managing Director: in 1986 General Manager: Southem'Franvaal in Traditional Beer investments 1981 and Regional Director in 1984; joined Beer Division in 1964; TO Bucknall (48) BA Group Public Affairs Manager and Technical Director in 1989 appointed Managing Director of TBI Joined SAB in 1982 in 1984 R \11/ Childs (39) BA BCom MBA(Wits) G H L Coedhals (55) Regional Director: I J Somerville (38) BCom Managing Director: Northern Transvaal and ors BCornpt(J-[ons) CA(SA) Indol lnternatlonaal BY joined Beer Divtson in 1986; Group Financial Manager Joined Beer Division in 1964; appointed appointed Human Resources Director Joined in 1983; transferred Managing Director of Indol in 1982 in 1988 and Regional Director in 1992 to SAB in 1985 T H Pearce (51) BCom RJ Davies (42) Chief Executive: Da Gama Textile Co Limited Human Resources Director Joined Da Gama as Chief Executive Joined Beer Division in 1979; in 1983 appointed Human Resources Director in 1992 H A Reid (61) MSAI MechE FI Prodf Managing Director: H F G McCallum (62) Amalgamated Beverage Industries Administration Director Limited Joined SALl in 1953; transferred to joined the Coca-Cola Export Beer Division in 1980; appointed Corporation in 1967; appointed Managing Director of All! in 1976 Administration Director in 1984

M H Simms (43) BSc MBA A D Richards (44) BA Chief Executive: Regional Director: Coast International Beverage Interests Joined SAB in 1982; appointed Joined Beer Division in 1978; appointed General Manager Eastern Province and Managing Director of Applettser in Border in 1989; and Regional Director: 1985; and Chief Executive of Coast 1992 tntemattonalBeverage Interests in 1990

RJ Stringfellow (41) BCom CA{Z) C G Robertson (59) BCom ACMA Managing Director: Financial Director Southern Sun Hotel Holdings Limited joined Beer Division in 1985 as Joined SAil Group in Zimbabwe in 1981; Financial Director joined and appointed Managing Director of Southern Sun in 1990 BJ K Smith (42) BScHon ~lBA(Harvard) Marketing Director A 0 C Tonkinson (47) BA Blurts Joined Beer Division in 19St; appointed Group Secretary Joined Lion Match in 1975; joined and Regional Director in 1987 and appointed Group Secretary of SAil Marketing Director in 1992 in 1992

7 Executive chairman's review

GROUP

" .. a quarter century or unbroken annuat growtt: ill earntngs per share. "

Macro environment

Estimates of selected South African ('colIGulie indicators for (he year elided 3 J March 1992:

- gross domestic product: between O,5(YO atu! J ,0% real deciiue;

- private consumption expenditure: ;1/ excess of l,OfYo real decline;

- ;llflatiol1: average of J 5,7911;

- prune commercia! overdraft rates: 20,250/0 unttt late Marcil 1992.

Operating performance pressures of the inordinately high SAB scrip can only strengthen the rate of inflation on (II] input costs. market capitalisation of the ordinary The accomplishments of the past Both earnings per share - at and convertible shares in issue. At year have been extremely gratifying, 290 cents - and dividends per share the date of this review, this stood especially when viewed against the - at 130 cents - were 10% up, at over R 17 billion on The background of the worst recesstonary making possible the attainment of a Johannesburg Stock EXChange. conditions experienced in South remarkable record in the history of The core of the Group, the Africa for more than fifty years, South African listed securities: a SAB Beer Division, contributed MARKET CAPITALISATION Consumer spending - a key factor in AT FINANCIAl. YEAR END the performance of SAB - plummeted quarter century of unbroken annual R46S million to attributable growth in earnings per share. earnings - an improvement of Rill into negative real growth. but Group 16% 17500 ------turnover for the year to 31 March This was a propitious on the previous year. The other 1992 still posted an increase of 10%) opportunity to afford ordinary interests, in aggregate, accounted for in monetary terms to R17,7 billion, shareholders the option of taking R314 million or 4(}){) of the total• On this level of activity, the up all or part of their final dividend still 2% up, but indicating the profit after taxation surpassed entitlement in SAB ordinary shares, greater volatility experienced in the Rl billion for the first time in SAB's (It a price of 5180 cents per share- sectors of consumer spending served 97-year history, and earnings 5% below the price at which the by them. More details follow later in attributable to ordinary shareholders shares closed on The Johannesburg this review. Improved to R779 million - 10% Stock Exchange on the day Recognising the importance ahead of the previous year. This was preceding the dividend declaration, of the cash characteristics of achieved despite a sharp increase in after adjusting for the dividend performance, the SAB Group also financing costs and the unrelenting itself. lmproved marketability of measures earnings per share on a

86 87 88 89 90 91 92

8 cash equivalent basis - which The sooner all this can become provide meaningful incentives to eliminates the effect of all non-cash a reality the better. Every month of employees and form a basis for items and identifies the actual cash delay sees the further spread of constructive interaction with the potential per share. For the year violence, unrest and intimidation, labour unions. under review, the cash equivalent while confidence among the vast In tandem with the activity of earnings per share were 473 cents- majority of South Africans has sunk the established business sector must "The creation of a 630/0 higher than the conventional to an alarmingly low level. The run the development and expansion flourishing economic measure, and 12IMl up on the expectation gap, between what can of informal sector activities. The two system must be the previous year. Complementing this be done practically to improve the sectors, by a constant process of prime objective of is the determination of the cash quality of life of deprived cross-fertilisation, can ensure that every developing flow per share. This focuses on the communities and the unrealistic entrepreneurial initiative is fostered cash stream actually achieved in the aspirations that are being recklessly and sustained. In its own right, the country" period under review. At 350 cents, fanned, is a matter of particular Informal sector has a vitalmultipller . this indicates a creditable cash concern. effect on job creation, drawing more realisation rate of 74%. South Africa, with its immense and more people into the economic The impact of inflation on natural, mineral and human mainstream. reported results is another vital resources, has the capacity to It must be recognised that perspective to obtain. In this regard, generate growth and prosperity for South Africa has a very open supplementary information is the entire sub-continent and even economy, requiring and depending provided as an integral part of the further into Africa. But time is of the on significant participation in the annual financial statements. Fully essence. The rich mosaic of its global market. If this relationship inflation adjusted earnings per share peoples must now prove beyond any is to be optimised, the substantial of 269 cents are within 7°A) of those doubt that peace, stability and expertise and strength of big reflected on an attributable earnings harmony can really be attained. business must be harnessed in order basis in the Group Income Statement. to maintain the well developed first world infrastructure, to attract They are also up 9% on the previous Economic factors year and cover dividends an meaningful capital inflows, to extremely sound 2,1 times. [t has, however, to be recognised provide truly competitive exports, that economic freedom is a and to demonstrate the necessary Socio-political situation necessary precondition for political financial stability in riding out the freedom - not the other way round. inevitable ebbs and flows of South Africa is now well into its The creation of a flourishing economic fortune. third year of profound and economic system OlUSt be the External attitudes towards this irreversible change. The initiatives prime objective of every developing country have changed dramatically of the State President have made country. Polities can and should and positively over the past year. possible the continuation of serious never be more than a facilitator, The opportunity to translate these debate and negotiation on the encouraging and protecting private into active involvement must now future shape and course of the ownership and property rights. In be seized. There is no reason to country. The vehicle for the South Africa, a tremendous believe that real growth rates of necessary negotiations between the responsibility rests on the shoulders 6% or more cannot be achieved and established political parties and the of the business community and sustained in Gross Domestic Product extra-parliamentary movements on especially on the large corporate through the remainder of the a new constitutional dispensation enterprises. What is desperately nineties, provided such involvement has been Codesa (the Convention needed, on the one hand, is massive is secured. for a Democratic South Africa). ongoing investment, generating What is abundantly clear is Progress to date indicates that the strong and sustainable economic that the benefits of a political introduction of interim government growth. On the other hand, just as settlement, without accompanying structures and the prospect of essential, is the fostering of a basic strong growth, will never be genuine power sharing are now work ethic, which will support the sustainable. It is also essential to tantalisingly close. extension of new job opportwlities, ensure that first world commercial

9 Executive chairman's review (continued)

standards are not compromised and year to 31 March 1992, R4,5 billion organisation dominates the glass that sound ethical principles are of added cash value was generated and board industries in Southern consistently demonstrated. inside the Group, for disbursement Africa, and has made important alllong the stakeholders. This is an inroads into the automotive glass Achievement appraisal increase of 7(XI over the previous replacement industry in the United ", , , 410/0 per al1l1[/111 year and a significant demonstration Kingdom. Europe, North America It is appropriate, now, to examine effective conipoutut of the crucial role that is being and Australia. During April 1992, where the SAB Group stands in rate of growth ill played by large corporate enterprises, the acquisition of an effective these respects. This is best discussed shareholders' wealth, even in times of severe economic 67o/r) of Plate Glass and Shatterprufe with reference to the major downturn. Once again, more than Industries Ltd was finalised. This has achieved over the performance objectives, which half of this - an increase in value of been financed entirely by the issue past sevell years" remain in place and are enunciated 15% - has been disbursed Jll10ng of some 25,8 million automatically in some detail in an earlier section the 90 000 employees of the Group. c~nvertible cumulative preference of the Annual Report. Shareholders have received 10lYo of shares in SAG which, at the date of Success in pursuing the basic the added value by way of dividends, this report, were trading on the jSE philosophy of satisfying the return while the balance has been taken up at around R56 per share, placing a requirements of the shareholders is by taxation, financing costs and perceived value of over R I ,4 billion overwhelmingly evident in the 4]1)'() retentions to fund asset replacement on the transaction. per annum effective compound rate and growth. The total of taxes Al 31 March 1992, the PG of growth in shareholders' wealth, channelled to the State is now transaction was only partly achieved over the past seven years. R3,6 billion - an increase of 7q·iJ completed. The balance sheet, This bears comparison with the over the previous year. therefore, includes an investment composite rate of 32%) applicable of R247 million in respect of the to the ten largest locally listed Investment underlying net asset value acquired industrial equity investments. by that date, together with the Internally, the seven year Capital expenditure for the year was related preference shares issued. average return on closing revalued a substantial IU,3 billion- in line Full consolidation of this group equity is 2]%. as against the with that forecast a year ago. will be reflected from 1 April 1992, objective of exceeding 20(Yo per R918nlillion WIlS laid out in the extending the selected consumer annum. Even on a fully inflation beverage interests, R152 million in goods manufacturing interests of adjusted basis for the same period, retail and hotels, Rt5 million went the SAB Group. an average return of 18% on equity into the selected consumer goods ('OMBINED RATE OF The formation of a financial RETURN TO SHAIU]-IOLDERS has been achieved. manufacturing interests, while the services activity, focused on the OVER 7 YEAn I'EIUOI) As regards tile desired balance balance of some RI84 million was mass market consumer, has -SAL! in the portfolio of businesses, it is expended in the remaining interests, progressed over the past year in - TOP 10 COMI'ARAULE especially noteworthy that the which include the nOIl-RSA partnership with the Nedccr group. EQUITY INVESTMENTS Seven Year Financial Review confirms operations. Further productive Initial response to the specialised % a compound per annum growth rate capacity, somewhat constrained products offered through the in attributable earnings over that retail store development. essentially separately established, joint-ly period of 20,8()1) for the Beer Division comprising refurbishment and controlled Advantage group has and an almost identical 20,31)f) for upgrading of facilities, and ongoing been encouraging, and range and the other interests. advances in systems technology, other service extensions will now be Viewing the Group from an constituted the thrust of the massive strenuously advanced. It seems, outside perspective, tile Cash Value programme. however, unlikely that this group Added Statement articulates the The investment focus of the will also be used to finance the overall contribution made to the Group has remained unchanged. extensive instalment credit country as a whole, as well as Consistent with this, steps were transactions of tile retail companies identifying the participation of commenced during the past year to in the SAB Group. Developments the various key stakeholders in the take control of a fully reconstructed internationally in the accounting 20------distributable value created. ln the Plate Glass group. This widespread treatment of off-balance sheet,

IS ------86 87 88 89 90 91 92

10 managed associate finance funds and term borrowings Non-RSA interests companies are pointing towards the comfortably covering the total The Group strategy is to concentrate incorporation of such companies investment in long term assets. particularly on beverage investment into the Group accounts by way of Banking facilities available to opportunities beyond the borders full consolidation. This aspect will the Group now amount to of the Republic in appropriate mass the Group's be more closely examined in the R5,7 billion - almost double the consumer markets, drawing on the coming year. level of R2,9 billion utilised at previously equity base of expertise already well In similar vein, the Group's 31 March 1992. accounted non-RSA established in South Africa. previously equity accounted non• The authorised share capital of interests have been RSA interests have been reflected on Unfortunately, divulging more the Company remained unchanged reflected on a fully a fully consolidated basis in the information about these activities, during the year under review. consolidated basis. Annual Financial Statements with However, the following automatically beyond the consolidated financial effect from 1 April 1991. Although convertible cumulative preference figures, is still not believed to be in this change in accounting practice shares of 20 cents each (Series B) the best interests of SAB or its has no effect on reported were issued: 6053 500 on shareholders. attributable earnings, the 1991 2 March 1992 and 9 722 222 on Earnings brought to account figures have been restated to be 30 March 1992. These were in for the period under review, totalled directly comparable in the respect of the initial tranches of an impressive R67 million and were constituent parts. the PG Group acquisition and have 170/0 up on the previous year. been recorded provisionally at Further improvement, though Funding R1S,OO per share - being the somewhat constrained by the current state of the world economy, Cash flow from operations, aided by estimated underlying net asset value acquired. is expected in the corning year. stringent working capital Virtually all of the remaining management, again exceeded unissued shares in the capital of R1,l billion for the year and made it Footwear manufacturing the Company are denominated as possible for the substantial capital interests ordinary shares. It is, therefore, expenditure programme to be The Group's 33% interest in Consbu proposed that the approval of funded with the use of only Holdings Limited contributed nearly shareholders, by way of special R574 million of additional net RIO million in attributable earnings, business at the forthcoming annual borrowings. based on their results for calendar general meeting, will be sought for Closing gearing at 530/0 of total 1991. This compares with just over the conversion of approximately shareholders' funds, together with a R9 million brought to account in half of this remaining ordinary six times interest cover, reflects an the previous year - a very share capacity into automatically extremely sound financial position satisfactory performance under the convertible preference share and a well controlled degree of circumstances. capacity, creating greater flexibility financial risk. The internally applied in the use to which the different gearing constraint of 60lYo is classes of shares can be put. Miscellaneous regularly assessed against the liability capacity provided by the This category includes the expenses changing mix of the underlying Divisional review of overall management and assets of the Group and remains In the pages which follow, the administration, general corporate conservative. Its strict application various divisions and subsidiaries activities, the results of minor ensures that a strong financial base are reported on in more detail. It ls, subsidiaries and such financing costs is always in place to meet future however, appropriate to deal firstly as are not allocated directly to the growth and development with those elements of the Group various segments of the Group. In opportunities. which are not supplemented by aggregate, the impact of such The actual funding profile is detailed finandaJ and operanng expenditure on attributable earnings well balanced, with shareholder commentaries. for the past year was R48 million.

11 Executive chairman's review (continued)

BEVERAGE SALES VOLUMES BEVERAGES -BEER - SOFT DRINKS Industry environment - WINE AND SPIRITS

Index Estirnates of national votume changes ill the year ended 31 March 1992: 180 ------alcoholic beverages down by 3o/i);

- malt beer was clown by 0,50/0, spirits by 8% and wine by 30A);

- carbonated soft drinks grew by 3(Yo;

- fr/lit juices grew by 2%; wet sorghum was virtl/ally unchanged.

Operational details 1992 1991 Shareholding (%) Divisions and subsidiaries Beer Division 100,0 100,0 80 ------SA Maltsters 55,0 55,0 86 87 88 89 90 91 92 Amalgamated Beverage Industries 67,6 67,6 SA Fruit juices 100,0 100,0 Appletiser Pure Fruit Juices 100,0 100,0 Western Province Preserving Company 100,0 100,0 Cape Display 100,0 AITRIBUTABLE EARNINGS Traditional Beer Investments 100,0 100,0 • !lEVERAGES Bophuthatswana Breweries 50,0 50,0 Equity investments Amalgamated Beverage Canners 24,0 24,0 Ceres Fruit juices 49,0 50,0 Distillers Corporation 30,0 30,0 Stellenbosch Fanners' Winery 30,0 30,0 Number of facilities Breweries Beer Division 11 11 Traditional Beer Investments 6 6 Malting plants SA Maltsters 2 2 Bottling plants Amalgamated Beverage Industries 7 7 Factories SA Fruit juices 3 2 BEVERAGE EARNINGS Farms Beer Division Hop Farms 6 6 • BEER DIVISION SA Fruit juices 5 5 .A81 o OTHER UEVERAGES Products Rm Beer Division Lion Lager, Castle Lager, Hansa Pilsener, Castle Milk Stout, Carling Black Label, Ohlsson's Lager, Amstel I Marketer of imported Heineken ASI Coca-Cola products: Coca-Cola, , , , , I II products: Lemon Twist, Pine Nut, Ginger Beer, Sparberry, Creme Soda, Iron Brew Sc}/weppes products: Sparkling Lemon and Granadilla, and the • III mixers SA Fruit juices Applenser, Crapetrser, Just juice II .111 Ceres, Liqui-Fruit, Fruitree, (spring water) Apple and other fruit concentrates "--11111 Fresh and canned pineapples and juice concentrate : IIIIII Traditional Beer Investments Chibuku, Mamkhulu 86 87 88 89 90 91 92

12 BEER DIVISIO

"Tile Beer Division ranks among the top brewers in the world"

increase in the excise tax rate including these products in excise SALIENT FEATURF}. 1992 1991 ., lncr. imposed in April 1991 and the revenue was retained. This small further setback in September, when first step by Government towards Turnover (lim) 48:111.4 4 189,9 1; the liquor industry was singled out levelling the playing field is Excise tax (lim) 1 294,3 1 068,1:\ 21 for special treatment in the gratifying, but the comparable rax~ti0nIRIll) .31:11,7 352,7 conversion from CST to VAT. excise levied is still significantly Whereas other consumer products out of line by international Net financing costs (lim) 42,3 31.11 33 benefited from a reduction in the standards. Beer in this country Attributable earnings (lim) 46:;,6 402,2 16 tax rate from 13% to 10%, an ad inexplicably carries ten times the Total assets (Rm) 3 822,7 3 157,4 21 valorem tax was imposed on liquor excise of natural wine and cider, in order to nullify any benefit from the latter being marketed directly The 16% growth in attributable the lowered rate. against beer. However, this initial earnings is an endorsement of the After five consecutive years of move by the authorities will resilience and strength of the Beer volume growth ranging between hopefully lead to a fairer spread of Division. This achievement was 10% and 14% per annurn - with the tax burden over time. recorded under the most adverse beer's share of the liquor market ln terms of research and devel• circumstances and included the growing by some 2% yearly - sales opruent, the Division continued to absorption of a sharp increase in flattened out virtually frorn the date fix its focus on quality improvements, finance costs, as well as continuation of the excise increase. Dornestic beer cost saving opportunities and brand/ of the provision of additional sales ended the year marginally pack development. The conversion replacement depreciation on the lower than the previous year, fro III the cardboard outer packaging estimated repiacernent costs of plant although beer still increased its share for the 750[nl returnable bottle to a • TURNOVER low-weight plastic crate has been the and equipment. of the liquor market by a further 1 %. • TOTAL ASSETS ma!n event in this area. The total The collapse in consumer An Impressive 80% increase in programme is expected to cost in the Rm spending, reflecting the disastrous export volumes to 47 countries region of R700 million, of which 5 0\l0 ------effects of the recessionary conditions, enabled total sales to grow by R24 million was spent in the year high levels of unemployment and nearly 1 (Yo. A priority nov.. ' is to under review. Commercial produc• the particular impact of VAT in the develop brands in strategically tion of these crates has progressed informal sector, resulted in a decline important foreign markets. well and the introduction into the in the overall beverage market, with The introduction of an ad Natal market is far advanced. A I sales of alcohol beverages down valorem excise tax in September last further three years will be required for sharply. Early closing of outlets in year heralded the inclusion of the full conversion across the II areas affected by township unrest natural wine, sorghum beer and country. Indications of quality and further hampered beer consumption. cider in the excise net. Although efficiency improvements are already Beer sales growth was also this form of tax was dropped from marerialistng and customer response IIII severely irnpeded by the 19% March 1992, the principle of is positive. IIIIII 86 87 88 89 90 91 92

13 Executive chairman's review Icontlnuedl

Beer Division (continued) inadequate rainfall during planting packaging hall, corn puler centre, and unseasonably heavy rainfall at sophisticated laboratory and In line with the low level of the reaping stage - had a disastrous spacious accommodation, the volume growth, the Division effect on the barley crop. The total institute will playa key role in deferred certain of its expenditure crop scarcely reached 60% of the providing the skills training required earmarked for capacity expansion. annual norm, forcing SA~1to in a rapidly expanding business. The Despite such rescheduling, costs import some 90 000 tonnes of malt Division also continues 10 invest in "Rosslyn, Alrode and and completion times have bettered to maintain its mailing plants at the training of non-technical staff. Prospecton are nOlV expectations. Newlands brewery full production. Fortunately, Ihis The industrial relations scene ill the world league of has moved into the final phase of importation is not expected to has remained peaceful, with the the doubling of its capacity with entail additional cost, but the loss major breweries" Division working hard to establish the successful commissioning of a to the barley farmers has been positive relationships with its maj

14 "Export sales col/til/lie to offer important opportunities for growth"

development and significant and driving has again been created Towards the end of the past amounts of time, Inoney and effort by way of the Company's "Think year, two Beer Division directors have been expended towards this before you Drink, before you Drive" retired after Illany years of end, through both the Company's advertising campaign. Through its distinguished service. Peter Savory, corporate social investment activity founder membership of the Social Marketing Director, retired in and the "Customer Development Aspects of Alcohol Committee, an December after 32 years' service Programme." which is targeted at important role was played in the and John Seton, Regional Director: enhancing the performance of small launch of a nationwide campaign to Coast, after 38 years' service. In liquor traders. reduce under-age consumption of consequence, Barry Smith. formerly As South Africa emerges from alcoholic beverages. In conjunction Regional Director: Northern years of isolation, the opportunities with the Federated Hospitality Transvaal & Of'S, has been for the commerctat sponsorshtp of ASSOCiation (Fedhasa), posters re• appointed Marketing Director; international sport, particularly enforcing the legal age limit on Alan Richards moves from General through the electronic media, are drinking were designed and Manager: Eastern Cape to Regional growing significantly. Beer Division, distributed to both on-premise and Director: Coast; Rob Childs, Human which has enjoyed a long and off-premise outlets for display. This Resources Director, is the new mutually beneficial relationship effort is beginning to show signs of Regional Director: Northern with soccer in this country, has success and will be extended during Transvaal & OFS, and Richard secured sponsorship of the South the years ahead. Davies, General Manager: Natal. African National Soccer Squad. Not Beer Division'S commitment to becomes Human Resources only will this sponsorship enable promoting a healthy, stable and Director. the players - who will take South peaceful society has not diminished. Prospects for the current year Africa back into the world of soccer During the past year, considerable are more dependent than usual on - to develop and hone their skills, attention has been focused by the trends in the national economy. but provision has also been made in cOlnpany on investing in the areas With no sign as yet of improvement the agreement with the South identified by the community as in consumer demand, growth in African Football Association for the those where the greatest and most sales volumes could continue to establishment of a special trust to urgent needs exist. A multitude of remain fairly moderate for sorne fund the grass roots development of educational, health care and youth time. The Division should, however, the gallle. development projects has received be able to show further real earnings Beer Division's efforts to funding and guidance from Beer growth without breaking its long promote the responsible use of its Division's corporate social term commitment to reducing the products have continued unabated. investment team and, despite the real price of beer. Export sales Significant public awareness of the pernicious civil disturbances, these continue to offer important problems associated with drinking projects have made progress... opportunities for growth.

15 Executive chairman's review (continued)

AMALGAMATED BEVERAGE INDUSTRIES LIMITED

II ABI is tile dominant Coca-Cola bottler and distributor ill Sal/them Africa"

However, a reduction in unrest, project in Durban started last year, SALIENT FEATUHES 1992 1991 % Inn. particularly in the Durban area, and lnvestruent in containers and easier overall access to the requirements to maintain operati Turnover (Rm] 1051,5 890,9 18 townships, enabled ABI to provide a were at normallevels and amoun Excise lax (Rm) 25,4 24,0 6 fuller distribution service. In all, to RS7 million. Through focused

Net financing costs mill) 7,0 5,2 3S 1 200 new customers were gained, management attention during the primarily in the Informal sector and year, working capital was reduced Taxation (Rm) .'15,7 S2.2 focusing on larger spaza shops. by R34 million. ABI has also Attrib\ltable earnings (I~m) 68,4 56,9 20 As a result, ABI was able to maintained its prudent policy of Earnings per S]\;lfl' ICl'IILIi 64,5 5],7 20 boost turnover beyond R I billion revaluing properties, plant and

Total assets (Rm] 652,9 SS9) 17 for the first time - an impressive equipment to reflect depreciated 18% improvement - and to current replacement values. As a achieve attributable earnings of result, additional revaluation SAB's interests in franchises in the R68,4 milllon. This is 209·6 up on the depreciation of R2 million was carbonated soft drink (CSO) previous year. brought to account. industry are vested in AIlI, the major ABI has identified the informal Alll is the (SO industry leader, bottler and distributor of the Coca• sector as a priority for market and takes care to retain its Cola, Schweppes and Sparletta development. Over the next four operational edge by developing brands in the key Reef, Pretoria and years, the company will commit and refining its technical and Durban markets. It operates seven some RSO million to develop this personnel skills. Accordingly, the plants - three in jonannesburg. one sector, with IUS million being company operates eight in-house • TURNOVER each in Pretoria and Midrand and earmarked for the current year for training centres where some • TOTAL ASSETS two in Durban. investment in people development, 7 000 mandays were devoted to

Rm The performance of AB! is delivery vehicles, coolers and improving the competence of 1050 ------significantly affected by the storage facilities. As part of this 2400 employees. all at a cost of environmental dynamics prevailing progra[nn1e, it has pioneered the use sornc RS million. 875 ------_ in its specific operating areas. The of redundant freight containers as Until the next economic abnormally hot and dry summer secure store r00l11S in informal upswing gathers n10111entU[n and 700 ----- provided a welcome bonus to sales settlements. This initiative has generates increased personal which, in COl1l1110n with all other proved successful in aiding aspirant disposable income, consumer

525 ---- beverages, were adversely affected traders to operate their own spending will remain at the current by depressed consumer spending. businesses, and to extend ABI restrained levels. However, a gradUill 350 - Heavy excise duty increases, and the products in remote areas. improvement in conditions is effect of VAT, which impacted Expansion capital tnvestrnent expected as the year progresses and severely on the informal sector, were amounted to R48 million, mainly real growth in earnings should be 175 further negative factors. for the completion of the Phoenix achievable. o 86 87 88 89 90 91 92

16 OTHER BEVERAGE INTERESTS

", ' . all important extension of SAWs beverage interests. "

Fruitree brands. This joint venture until 1995, grew steadily and SALIENT FEATURES 1992 1991 % with the Ceres Fruit Growers Co• ina. systematically. Its turnover operative was started in 1986 and increased by 191)h, with nominal Turnover 1 Rill) 299.4 209,4 43 has proved to be an increasingly attributable profits of approximately Attrthutahle camtngs IlI.m) 64,4 56,4 thriving partnership between Rl million. This activity was " business and organised agriculture. Total assets 111m) 526,6 409,7 29 achieved despite the imposition of In the volatile world markets. excise duty for the first time on both fruit juice prices escalated wet and powdered sorghum. An S A Fruit Juices dramatically during the year with additional national brand, apple and pineapple juices in the ThiS group spans SAB's natural "Mamkhulu," was launched, vanguard. Although gains were beverage interests. and includes complementing TBI's flagship achieved through juice concentrate farming, fruit processing, and the "Chibuku". manufacture and distribution of sales, branded products suffered. The conlpany will continue to The fruit drinks. Its main investments net effect was adverse. work at improving the quality of its comprise Appletiser Pure Fruit Juices Local trading has remained products, their availability and the (APV)), Western Province Preserving extremely sluggish. However, APFJ supporting customer service. This Company (\A/PPC), and a 49% improved its export performance to will establish a sound base for the interest in Ceres Fruit Juices (CF]). achieve an overall 5% sales volume future. During the las I year, 1000/u of Cape growth. despite persistent drought conditions in the Eastern Cape, Display - a national food and Wine and spirit interests beverage sales and distribution which reduced South African Company - was acquired; as well as production of pineapples to half the The SAB Group holds 30°,i) in each 7S

17 Executive chairman's review (continued)

HETAIL SALES RETAIL (Calendar years)

• FOOD AND IJEV[RAGES • CLOTHING AND ALUI~D Industry environment

• DURABLES El OTHER National retail sales estimates for the year ended 31 March] 992:

Rh - total sales: iI,5uAJ nomtnat growth and 4,5(7h real decline; .4 ------durables: zero growth;

- clothing, [outwear, textiles and accessories: }% real growtn:

- food: 9,50/u real decline.

Operational details 1992 1991

Shareholding (%)

Subsidiaries OK Bazaars 69,0 69,0 Arnrel 68,7 68,7 Edgars 65,0 65,0 85 1}6 1}7 81} 1}9 90 91

Equity investments Boymans 36,0 36,0

ATI'RIUUTABLE EARNINGS Number of facilities .RHAIL Stores OK Bazaars chain 176 187 Hyperama chain 24 22 Arnrel furniture 223 224 Arnrel footwear and apparel 594 735 Edgars group 384 384

Service depots and kiosks Arnrel 321 338

Factories Celrose 2 2

Trading space (OOO's m') OK Bazaars 755 760 !tETAI!. EARNINGS Arnrel 358 377 Edga rs grou p 555 555 OOK .AMRlL • [DGARS Outlets RIll 210 ------OK Bazaars OK Bazaars chain, Hvpcramas and House &: HOIlH."

Amrel Specialist [umlture stores: Blaikies, Crown, Fairdeal, Furniture City, Geen & Richards, Lubners, Mcfvamees, Melodys, Tip Top, Triangle Specialist footwear and apparel drain stores: ABC Shoes, Cuthberts, MandelJes, Scotts, Select-a-Shoe Services: Early Bird TV, King Cobbler, Multiserv, Prontaprint

Edgar> Speciality clothillg, accessories and hotne textile cnatn stores: Edgars, Jet, Sales House, Express Apparel Manufactllre: Celrose

86 87 88 89 90 91 92

18 OK BAZAARS (1929) LIMITED

spans tile entire mass merchandising spectrum ... [ood, clothing, housewares, [umiture and appliances

and a lower level of fixed overhead training in various disciplines, all at SALIENT FEATURES 1992 1991 % incr. recovery - although offset somewhat a cost of R6,6 million. The overall by more efficient shrinkage control industrial relations mood was one of Turnover (Rm) 4924,5 4616,9 and the reversal of certain deferred mutual flexibility and co-operation, N~t financing costs (Rm) 46,8 38.4 22 tax -led to a 37,4(M) decline in as exemplified by the uneventful Taxation (Rm) (13,5) 4,4 attributable earnings. A lower level and speedy conclusion of the

Attributable earnings [Rm] 9,4 14,9 (37) of creditor funding and a higher annual wage negotiations. level of average borrowings gave rise Personal disposable Income, Eamtngs per share recurs) 75,J 120,3 137) to the 21,90/0 increase in net the key determinant of consumer Total aSSN, (Rm) 1460,7 I 385,0 financing costs. Total assets were, spending, will remain under severe however, tightly controlled and pressure well into 1992, not least The OK group spans the entire mass grew by only S,Sq;o. Growth in stock from growing unemployment and merchandising spectrum - food, levels at 7,2% was certainly not the likely continuance of restrictive clothing, housewares, furniture excessive and significant further fiscal and monetary policies. and appliances. The OK Stores focus improvements will be generated in Overshadowing all this are the future as the implementation rnainly on middle and lower income persistent violence, socio-political and operation of the centralised shoppers with a value-for-money unrest and the full impact of the grocery warehousing system range of merchandise comprising devastating drought. proceeds. some SO 000 items, over 970/0 of Following the restructuring A Hyperama was opened in which are locally made. This of the group with effect from Kempton Park, and the Germiston • TURNOVER customer base remains the most 1 May 1992 into two principal Hyperama was extensively • TOTAL ASSETS sensitive to changes in the economic operating divisions - OK Stores refurbished. Three OK stores were fortunes of the country and the and Hyperamas - backed by Rm also opened, including a new store essential central support services, severity of the present downturn in Francistown, Botswana, and management will be better its trading performance particularly a new centralised distribution positioned to Improve its focus hard. The Hyperamas - catering warehouse was launched in Cape on the marketing strategies and mainly to middle and upper income Town. A further 14 smaller stores to secure a greater share of the earners - were less affected. were closed in pursuance of the II Group turnover suffered more "anchor" store strategy commenced pressurised consumer Rand. in the second half of the year as the in 1991. Achievement in these areas II 1111 rate of unemployment accelerated, Staff training and development will, over time, facilitate an economic activity slowed down, and was directed at 1 780 management irnprovement in earnings and VAT was introduced. This, coupled and supervisory employees, while establish a stronger base for the 1.11 11111111 with excessively high interest rates 18000 staff received shopfloor future. 1111 86 87 8H 89 90 91 92 ]9 Executive chairman's review {

AMALGAMATED RETAIL LIMITED

. specialist retail group, tradillg ill furniture, footwear, apparel alief selected COl15111ner services ... "

65% of the group's turnover and Select-a-Shoe, for closure or SALIENT FEATURES 1992 1991 %

inn. almost all of its earnings. conversion, while 12 stores trading

Turnover (Rm) 1003,1 \ O:lO,7 (3) Management resisted temptations as Barnes were closed from January- to lower its credit standards merely all to stem losses. Only 8 new stores Net financing (OSIS (11m) 24,1 16,9 43 to boost hire purchase sales, and have been opened to bolster the raxauon (Urn) (6,1) 18.2 some loss of market share was ongoing operations. Divisional Attributable earnings (Rill) \5,7 24,0 (3.'i) unavoidable. ln consequence, turnover, as a result, declined by Earnings per shan' (cents) 170,3 260.5 (35) divisional turnover fell by 2% to 6% to R298 million, and with a Total assets (Rrn) 492,2 476,3 R651 million. but successful expense poor performance from 36%- controls, tight cash management owned Boymans, the attributable Arnrel, a highly decentralised and the deferred tax adjustment earnings of the Footwear and specialist retail group, trades in four referred to above, helped the Apparel Division decreased main product areas - furniture, Division attain an increase of substantially. 2()IM) in attributable earnings. footwear. apparel and selected In April 1992 Amrel acquired consumer services. Amretfin, the group's a further 40% of Boyrnans for The group faced harsh trading associated finance company, approximately RIS million as a conditions in the extremely volatile continued to finance hire purchase result of underwriting a much• durable goods sector of consumer debtors, with the group managing needed rights issue. It is believed spending. The decline of 2,70.,6 in the credit exposure on its behalf. that the increased participation and TURNOVER turnover was exacerbated by the • TOTAL ASSETS The quality of the debtors' book closer involvement in managing closure of some I SO stores in the continues to improve and the this group will bring about a Rm Footwear Division. Pressure on extent of arrears has remained fairly speedier Improvement in its margins and increasing financing constant. Consideration will now be earnings. costs on higher borrowings, despite given to greater standardisation of The Service Division stringent overhead controls and the credit policies and the treatment of predictably experienced headwinds reversal of excess deferred tax arrear debtors. and divisional turnover increased relating to Instalment sale debtors, Trading conditions in the by only 6% to R55 million and reduced attributable earnings by Footwear and Apparel Division divisional attributable earnings 34,6% from the record levels of the worsened Significantly, especially declined by Z(¥X). previous year. in the cash businesses. As of April Another difficult year is The Furniture Division - the core 1991, management identified expected and any increase in of Amrel's business - contributed 137 stores in the hardest hit chain, earnings is likely to be moderate.

86 87 88 89 90 91 92

20 EDGARS STORES LIMITED

" ... the premier fashion retailer of clothing, footwear, household textiles and accessories, supported by selective clothing design and manufacturing. "

of 168 stores and currently operates mass of middle income cash SALIENT FEATURES 1992 199\ % incr. 1,8 million active accounts. Edgars customers, with emphasis on core responded to the difficult trading fashion items. With the consumer's Turnover (Rm) 2748,5 2476,4 II environment with an aggressive, resources drained, the cash clothing Net financing costs (Rm) 72,6 58,6 24 focused marketing campaign. As a market continued its decline, and Taxation (Rm) 143,1 144,0 (I) result, sales increased by 12,4% to sales at R300 million reflected no Attributable earnings (Rm) 157,5 \50,4 Rl 925 million, compared with improvement. The chain thus Earnings per share (cenu) 310,0 296,0 estimated CFTA sales growth of only reported an after tax loss of

Total assets (Rm) I 564,8 I 356,5 15 7,6%. With margins weakening, R8 million compared with its however, earnings rose by only previous small profit of Rl million. 6% to R134 million - off the base The group's manufacturing The Edgars group - the largest of the superlative 38% increase last arm, Celrose, has expanded further speciality clothing retail group in year. Trading space was augmented its design and production facilities Southern Africa - sells fashion by 3%: one new store was opened in with the acquisition of the H.O. Lee merchandise across the entire the East Rand Mall and three major brand for South Africa - thus clothing, footwear, textile and stores were extended. gaining access to the important accessories (eFTA) market. It Sales House sells quality denim market and its potential for operates three major chains - merchandise, largely on credit, growth in both the local and export Edgers, Sales House and Jet - and a through 110 stores to a loyal and arenas. In the face of the rapid manufacturing company, Celrose, stable customer base. The chain deterioration of the local clothing TURNOVER Although the worsening maintained its strategy of market over the last nine months • TOTAL ASSETS recession cut deeply into consumer repositioning stores from of the review period, sales Rm spending across a broad front of the transportation nodes to CBO's and at Celrose increased by a modest 2800 ------;;;;;- semi-durable market, the group shopping centres. After extensive 10%, while profit after tax ended once more gained market share, refurbishment expenditure over the at break-even. increasing sales by 11% to past three years, the portfolio is now Private consumption R2 749 million and attributable modern and well located. In spite of expenditure is likely to remain earnings by 5°,.f) to R158 million. regular and aggressive markdowns• constrained in the year ahead. The Edgars chain - the required to maintain momentum - Although little improvement is 1200 speciality fashion leader in the CFT A the chain grew sales by 14% and expected in the first half, further market - sells predominantly for generated a most impressive 31 % growth in sales and earnings 800 credit to the middle and upper increase in attributable earnings. should be achieved for the year as 400 income groups through a network Jet's target market is the broad a whole. o 86 87 88 89 90 91 92

21 Executive chairman's review (continued)

HOTEL INDUSTRY ROOM OCCUI)ANCY HOTELS (Calendar years)

% Industry environment 56------~ National statistics for calendar 199]: 54 ~ - national hotel occupancies averaged 49%;

52 ~f-- - only 8,50/0 growth ill total income; - decline in hotel occupancies: ~ ~ 50 - ~ 6,60/0 in the 5 star sector ~ 5,20/0 ill the 2, 3, and 4 star sector 48 ~ 8,50/u in the 1 star sector.

46 r Operational details 1992 1991 Shareholding (Cltil) 44 r 85 86 87 88 89 90 91 Subsidiaries Southern Sun 100,0 100,0 Equity investments Southern Sun Timeshare 50,0 50,0 Sun International 20,0 20,0 Number of hotel units Southern Sun Hotels 15 23 Southern Sun Resorts 9 8 Holiday Inn 18 20 Holiday Inn Garden Court 2 ATTRII1UTAIlLE EARNINGS Fonnule 1 1 • HOTELS Other 8 5

Tota! 53 56 Number of rooms/chalets Southern Sun Hotels 3295 4913 Southern Sun Resorts 1611 1212 Holiday Inn 2786 3805 Holiday Inn Garden Court 1213 Formule I 77 Other 1286 805

Total 10 191 10725

Hotels, inns and resorts

Southern Sun Hotels Airport Sun, Beverley Hills, Cape Sun, De Waal Sun, Elangeni, Elizabeth Sun, Johannesburg Sun & Towers, Kimberley Sun, HOTEL EARNINGS Maharani, Newlands Sun, Sandton Sun, Sunnyside Park Hotel, Rm The Burgerspark, The President, The St George's 28 ------Southern Sun Resorts Beacon Island, Breakers Resort, Cabana Beach, Drakensberg Sun, Malelane Lodge, Pine Lake Inn, Sabi River Hotel & Country Club, Umhlanga Sands, Zululand Safari Lodge Holiday Inn Bloemfontein, Cape Town, East London, Ermelo, Harnsmtth. II Jan Smuts, Marine Parade, Milpark, Newcastle, Oudtshoorn, Pietersburg, Port Elizabeth, Pretoria, Riverside, Sandton, Ulundi, II Umtata, Wilderness In Holiday inn Garden Court Bloemfontein, Durban Beachfront Formule 1 Jan Smuts Other Hotels Belville, Inn on the Square, Rand International, Downtown Inn, Durban Inn, Umhlanga Beach Mews, Umhlanga Rocks Hotel, I III Welkom J_LLL 86 87 88 89 90 91 92

22 HOTEL INTERESTS

" ... SAB is the dominant owner and operator of hotels in the SOli them Hemisphere. "

offering a complete holiday Tirnesharing and the 25!Ml SAUENT f'I:ATURES 1992 1991 % iner. experience to all leisure travellers. shareholding in Nedtravel. Holiday Inn offers quality The depressed economy has Turnover (Rm) 564) 525.0 accommodation for the local severely stifled local travel. but this Net financing costs (Rill) 2,2 45,2 (95) business cornmunity at 3 star Inns adverse effect on occupancies was Taxation (Rm) 0,6 1,2 (SU) in the Ina jar and secondary cities, partly offset by a long-awaited influx Attrfbutable earnings (Rm) 27.1 14,6 " while the newly created Holiday Inn of foreign visitors. The group's high Total J5S<'ts (RIll) 1 298.7 1239,8 Garden Court operates selected market share has enabled it to service hotels in such centres, outperform the rest of the hotel

providing quality accommodation industry, despite an overall 570Al The operation of the hotel interests, at low room rates, primarily for room occupancy - slightly lower apart from the property ownership local business and leisure travellers. than the 58°A:. of the previous year. aspects, is the responsibility of Pormule 1 - another new brand - Hotel operating overheads - Southern Sun. Extensive research on has been developed in partnership almost all being fixed in nature• the subject of responding optimally with the French-based Accor Group, increased at a faster rate than to the changing needs of guests has using cost-effective building turnover and contributed to a been undertaken. The differing techniques and state-of-the-art decline in operating income. needs of local and international technology, and charging very low Good performance by the clientele and escalating capital and room rates, justifying its claim of associated companies. coupled labour costs have triggered a total the world's most affordable hotel with reduced financing costs, reshaping of the hotel portfolio and chain. enabled a near doubling in TOTAL ASSETS significant changes in the branding Eight hotels in the group await attributable earnings to R2r million • TURNOVER strategy. refurbishing prior to branding. for the year. Rm Five distinct brands have been During the year, four properties The protracted recession in 1400 ------created, each offering guests clearly which could not conform to the South Africa will continue to defined products with varying levels new branding standards were hamper hotel occupancies. 1200 -----~~: of service, star ratings and room relinquished. However, political reforms thusfar 1000 ------+ rates. Southern Sun Hotels operates Through the new five brand have already promoted increased 4 and 5 star hotels in the major strategy, the group will seek foreign tourism and, if the level of 800 -----c=+'" centres, of the highest quality and dominance in all sectors of the violence can be contained, service, primarily for local and industry within the next three to additional growth will occur in this 600 ---101-11 international business and five years and retain its equity area. wtrh the benefits of the international leisure rnarkets. accounted 20% interest in the Sun focused branding structure, further Southern Sun Resorts operates 3 and International casino resort group, improvements in attributable 200 4 star coastal and inland resorts 50% interest in Southern Sun earnings can be expected. o 86 87 88 89 90 91 92

23 Executive chairman's review (continued)

PHYSICAL VOLUME OF MANUFACTURING OUTPUT SELECTED MANUFACTURING

Index 110 ------Industry environment

Estimates for the total manufuctunng sector in the year ended 31 March 1992:

- total sales: SO/(J nominal growth and 20/0 real decline; II - unfilled orders: real decline of 15%; I I I - declines in volume of production: total by 3°/(), durable goods by 5,50/0 I I I I and non-durable by 0,5u/o. I I I I IIIIII Operational details 1992 1991 86 87 88 89 90 91 92 Shareholding (O;h)

Subsidiaries Afcol 65,6 65,6 Lion Match 70,6 70,6 Oa Gama 60,7 60,7

AITRIBUTABLE EARNINGS • MANUFACTURING Equity investments Amalgamated Appliances 50,0 Con shu 33,2 33,2 Kallenbach-Hendler 50,0 50,0 Resinkem 50,0 50,0 Romatex 21,0 21,0 Spankor 50,0 50,0

Number of factories Afeal 37 38 Lion Match 6 8 Oa Gama 3 3

MANUFACTURING EARNINGS Branded products

• ArCOl Aleal Furniture and upholstery: Alpine, Frystark, Grafton Everest, • LION Greaves & Thomas, Heritage, Highpoint, Impulse, Parker Knoll, IlIII DAGAMA Peach & Hatton, Powercraft. Sarma, Star, Steelfurn, Unita Bedding: Edblo, Sealy, Slumberland, Softex, Ther-a-peele D OTHER Spring units: Premier springs Rm Appliances: Ekeo Hostess food warmers, Fujica/Tivoli heaters, ISO ------Steelcraft gas freezers Poem: Vita foam Textiles: jatex, Mattex

Lion Match Matches and disposable ligl1ters: Advertising bookmatches, Laser and Cricket lighters, Lion, Surelight and Zebra matches Packagillg and prillting: Interpak Snwlf domestic appliances: , Berda, Haz, Pinewarc, Rowenta, Salton Silaving products, knives, scissors and garden tools: Lion, London Bridge, Loving Touch, Wilkinson Sword

Da Gama Vertically integrated textile manutacturing: Cottage Look, Daydawn, Edenrose, Fasco

86 87 88 89 90 91 92

24 ASSOCIATED FURNITURE COMPANIES LIMITED

If ••• the 1110St extensive [urniture manufacturer in the Southern Hemisphere . also producer of furnishings and allied raw materials

in the past decade ~ necessitating The sound balance sheet reflects a SALIENT FEATURES 1992 1991 % iner. factory closures, lay-offs and gearing ratio of only 41 %. widespread short-time. Contrary A post-balance sheet event was Turnover (Rm) 791,5 780,1 to industry trends, Afcol marginally the sale of the 500/0 investment in Net financing costs (Rm] 22,6 25,.~ un improved its turnover on that of Spankor for R95 million in April, Taxation (llm) 5,5 16.8 (67) the previous year and, consequently, 1992. Although Spankor contributed Attributable earnings (Rill) 26,0 40.0 (35) gained market share. usefully to earnings, the transaction

Earnings per share (cents) 106, I 163,0 (35) In this environment, the allows Afcol to reduce its debt consolidated companies succeeded significantly, to sharpen the focus Total assets (Rlll) 530,7 495,0 in containing their earnings decline on its managed core businesses, and in the second half year to only to facilitate future growth. It has Afeol produces furniture across the 10% - in contrast to the 420/0 drop long been a strategy of Afcol to entire range - bedding, case goods, of the first six months. Also, they reduce its reliance on non-managed kitchen furniture, upholstery and almost doubled their export investments. small appliances. These activities are earnings to R16 million from There is a close correlation complemented by group companies virtually nothing three years ago. between private consumption producing strategic raw materials for Extremely competitive and expenditure and the demand for Afcol and, largely, for the furniture, depressed trading conditions furniture. Current forecasts are that motor and building industries. forced certain associated companies the past year's real decline in Together, they represent over 57°~ into a predictable contraction in consumer spending may reverse of the group's attributable earnings, earnings. In the event, Afcol's into an upward trend towards the DTURNOVER • TOTAt ASSFTS the balance being equity accounted overall earnings showed a decline end of the second half of the new earnings from major investments in of 35%. financial year. However, the present Rm Romatex, Spankor/P G Bison, Sales increases in the last drought will clearly be a retarding 840 ------Resinkem and in the leading office quarter of the year required factor. furniture manufacturer, Kallenbach• R21 million debtor funding, while Under these circumstances, it Hendler. VAT demanded a further R7 million, is difficult to predict earnings The prime generator of furniture introducing a potential new performance. Nevertheless, given demand, private consumption funding requirement of R28 million. no deterioration in socio-political expenditure, was in a negative mode Tight capital expenditure and conditions and the beginning of an throughout the past year. Industry working capital control, however, economic upturn in the latter half statistics on local furniture stemmed the rise in borrowings to of the year, attributable earnings production signalled a 17,49kl real only R14 million, despite capital should show improvement on those decline in calendar 1991 - the worst expenditure of some R7 mtllion. of the prior year.

86 87 88 89 90 9l 92

25 Executive chairman's review (continued)

THE LION MATCH COMPANY LIMITED

". . . the household name in matches for over 80 years"

and in the early 1980's invested in This transaction and the sale SALIENT FEATURES 1992 1991 tncr'". the manufacture and distribution of in February 1992 of Lion Match's small domestic electrical appliances. 29,596 Investment in Chet Industries Turnover (Rill) 329,6 331,3 II) Depressed consumer spending, resulted in a cash realisation of Net flnancing costs (Ilm) 12,6 12,0 5 together with the destocking in R19,4 million and contributed Taxation (Rm) 12,:~ 12,7 (3) the retail trade, resulted in group substantially to the reduction in Attributable earnings (Rm] 12,6 I.S,4 (ItI) turnover declining by lOA-! in the group's borrowings. Earnings p¬ rshar e (cents) 27,7 B,9 (HI) nominal terms. Group trading profit Although capital expenditure

Total assets (Rm) 227,7 240,7 (S) of R39,2 million was 2% lower than of RIO,8 million was incurred, net the previous year, reflecting reduced financing of sorne R27 million was contributions from all operations repaid over the course of the year. Lion Match maintains its position other than the Lights Division. The current borrowings of as the leading manufacturer of Financing costs and a marginally R3S,9 million represent a very safety matches in Africa, while higher effective rate of taxation satisfactory gearing level of SOIne

embracing a portfolio of businesses. resulted in a 6°16 reduction in 311}6 of shareholders' funds. The mainly involved in the manufacture, consolidated profit after taxation. budgeted capital expenditure sale and distribution of specific fast- However, extensive rationalisation programme for the new year moving consumer goods and and re-organisation costs in amounts to In 7,2 million, mainly packaging. It is some 30 years since Amalgamated Appliances for plant upgrading in the Lights o TURNOVER the company branched out from its contributed to an equity accounted Division . • TOlAL ASSETS traditional match operations with loss of Rl,9 million, thereby The restrictive monetary and

Rill the addition of packaging and reducing group attributable earnings fiscal measures, as well as the 350 ------printing interests. Today, us lnterpak to R12,6 million. effects of the national drought, Division enjoys growing market A joint venture was concluded will continue to inhibit consumer shares in the fonning and printing in January 1992 between Lion Match demand in the forthcoming year. of folding cartons, labels, books, and Tedelex, whereby the fixed assets Nevertheless, Lion Match is in a plastic thermoforming and related and stock of Lion Appliances and sound financial position and, activities. those of Haz and Tedelex Housewares with the anticipated benefits Subsequently, Lion Match were rationalised to form a new from the rationalisation of the successfully diversified into the company, Amalgamated Appliances. Appliances Division, a reasonable manufacture and supply of shaving lt manufactures and distributes the irnprovement in earnings could be and horne and garden products brands previously controlled by the achievable. under the Wilkinson Sword banner, separate entities.

8S 86 88 89 90 91 92 26 DA GAMA TEXTILE COMPANY LIMITED

" ... South Africa'S premier textile group ... tile leader in the "value added" activities of the market"

In a climate of recession, was focused on essential SALIENT FEATURES 1992 1991 % mer. already difficult trading conditions refurbishment and the upgrading of were compounded by intensified plant. New capital expenditure of Turnover (Rm) 260,8 263,4 (1) local competition and escalating some RIO million - earmarked for Net financing costs (Rm) 0,9 (1,9) imports. Volumes of imports for refurbishment - will be comfortably

Taxation (Rm] 6,5 9,9 (34) January/September 1991 increased funded from net operating cash over the same period in 1990 by flow. AttrIbutable earnings (Rm) 30,0 42,4 (Z9) 17% for cotton fabric, 46% for fabric During April 1992 the Earnings per share (cents) 58,9 83,2 (29) from man-made fibres and 35% for Government announced its decision

Total assets (Rm) 275,2 256,3 filament fabric. Imported fabrics to implement certain short term now represent over 40% of the measures concerning the importation South African market, demonstrating of a wide range of textiles and Da Gama continues to advance its clearly the inadequacy of import clothing. These new measures will prime position in the market duties during the past year as apply for a transitional period of segments in which it competes. The protection against cheap imports eighteen months, during which the group produces a comprehensive from subsidised foreign relevant business sectors and trade range of cotton and synthetic fibre manufacturers. unions will, together with the textile goods, which includes the The Household Textile Division Government, investigate a long- blending and spinning of the fibres, and the Workwear component of term strategy for the textile and weaving, bleaching, dyeing, printing the Apparel Division showed sales clothing industries to replace the and finishing of fabrics, and the growth from increased market share. short-term measures. Meanwhile, sewing of made-up articles for The Fashion Fabrics of the Apparel the new tariff rates, gazetted in IDTURNOVER household textiles. The Home Division and the Home Sewing May 1992, are unlikely to benefit • TOTAL ASSETS Fashion Division sells made-up Division, however, saw sales trading until the second half of the household textile products, such as declines, mainly because of imports. financial year as a result of existing Rm bed linen, duvets and curtains. The Sales in the Industrial Division stockholdings. 280 ------"...----==_ Industrial Division is focused on shrank as State spending was curbed Depending upon the beneficial State and Provincial contract and reduced the contract business. effect of the new duty levels, business and supplies interlinings, All these factors led to Da Gama and provided there is no further yarn sales and industrial substrates. posting a 29% earnings decline• deterioration in the socio-political The Home Sewing Division still very creditable, considering environment, it should be possible 160 furnishes fabric to retailers, who prevailing conditions in the industry. for group earnings to approximate act as a supply conduit to the The balance sheet remains those of the past year. However, 120 informal sector. The Apparel extremely strong with a dosing the present drought will clearly Division supplies fabric to positive net cash position of be a negative factor retarding 80 manufacturers of ladies', men's R2,7 million. capital expenditwe of the recovery in consumer and children's clothing. R14,8 million dwing!be past J12I spending. 40 o 85 86 87 88 90 91 92

27 Executive chairman's review (continued)

Community field in a low-profile fashion and, for a collective effort, not only in keeping with its mass consumer among corporate donors as in the Now that I have dealt extensively ethos, endeavours to maintain close past, but hugely as a [oint effort with the Group's operating community contact by financing among all the forces which can environment and performance in and managing projects under its contribute to the common good. commercial terms, it is appropriate own banner, where practical. An excellent example of the to comment on our relationship The largest allocation of funds pooling of resources came about with the broad South African is still in the area of education with under the auspices of the Private 1/ Big business and smatl community. As a mass marketing particular emphasis on those aspects giant, SAB's fortunes are inextricably Sector Initiative (PSI), when a entrepreneurs need which determine the quality of interlinked with those of consumers number of leading corporations, each other to create teaching - from pre-primary to at large. This reality has always including SAB, decided to address and enrich jobs" tertiary level, including the made for close contact with the the education crisis in a concerted upgrading of teaching facilities and community, which has granted manner. This developed, after the improvement of teacher skills SAB its licence to trade for almost a lengthy negotiations with in the classroom. At the same time, century now. In turn, SAB has over community leaders, into the SAB is becoming increasingly time upheld its commitment to add establishment of the Joint Education concerned about the deterioration - to the quality of community life by Trust (JET): a unique partnership if not collapse - of health and making worthwhile social between Ina jar interests in the black welfare services. lt endeavours to investments towards a stable, community - including trade respond to growing demands, peaceful and prosperous country. unions and political, community especially with the provision of South Africa is hard pressed to and education organisations - and primary health care services, where provide the resources necessary to leading companies. It aims to they are scant or non-existent. alleviate the vast community improve the quality of education Particularly disconcerting, however, hardship. In such a scenario, the and its relationship to the world of is the shift from expanding health vital need for active involvement work. SAB is proud to be a founder and welfare services to attempts and assistance of the corporate member of JET and to contribute to merely to maintain existing sector must be assumed automatically, its mission over and above its own operations in the face of growing and is accepted as such. However, ever-expanding social investment it is sometimes forgotten that shortfalls. spending. community organisations and lt is now common cause that Now turning to events closer to business should conceive and apply a major generator of further job home, and given the poor economic pragmatic and sensible methods to creation will be small business environment. Group headcount has improve the living standards of the development and self-employment. fallen marginally below the level of D NUMBER OF EMPLOYEES needy. It follows, therefore, that SAil constantly identifies the previous period. It is significant • EMPLOYEES WITH S OR projects employing existing opportunities for the small that some 40 000 employees have MORE YEARS SERVICE infrastructure should, at all times, businessman - also among its own completed service of five years or 000, enjoy pre-eminence to ensure the workforce - by encouraging others more. In the area of training 100 ------most productive use of available to share in its commercial success. funds. Big business and small entrepreneurs and development, more than SAB continues to direct need each other to create and enrich 34000 employees underwent growing amounts to community jobs. various forms of formal training development, principally within the As the process of social in the past year, at a cost of chosen priority areas of education, upliftment and reconstruction R37 million. Much of the emphasis health and welfare. We believe in receives greater prominence - an is still on equipping supervisory supporting proposals and projects inescapable factor in the quest for a personnel with skills in human which have community negotiated constitutional settlement relations and inter-cultural endorsement and participation, and - the magnitude of the challenge communication. to facilitate which offer lasting value. SAB has becomes more apparent. playing a more purposeful role in always preferred to operate in this Increasingly, the task at hand calls a rapidly changing South Africa.

86 87 88 89 90 91 92

28 The year ahead With this as background, the Concentration on strict asset SAB Group has committed itself to management and ongoing cost Private consumption expenditure in a substantial capital expenditure control, coupled with continued the twelve months to 31 March 1993 programme of over R3 billion, of attention to quality and value in the is unlikely to show any real growth. which at least half will be spent in Group's products and services, In monetary terms, therefore, an the coming year. The beverage should ensure a further increase in " ... the SAB Croup increase in line with the anticipated activities, obviously, will account for earnings in the coming year, in line 11(15 committed itself average inflation rate of around with that just achieved. the bulk of this spending, absorbing to a substantia! 14% is all that can be expected. This around RI billion. The continued capital expenditure means that personal disposable expansion of the Alrode and Appreciation programme of over income - the main determinant of Prospecton breweries, together with If I have to single out the main 113 consumer spending - will continue over R300 million in container reason why the past year will not billion" to be severely pressurised well into spending, are major recipients of be easily forgotten, it must surely 1993. The dogged application of this allocation. The retail and hotel be the tremendous test it proved strict monetary and fiscal policies interests require R200 million for for the greater SAB family of offers little prospect of relief from refurbishment and the resumption management and staff - they were this quarter. of focused development, while confronted with enormous pressures Accordingly, the vexing the selected consumer goods and challenges. Under the question facing the country manufacturing activities, including circumstances, it is indeed a great tribute to their loyalty and resilience concerns the identification of the the PG group, have identified that such a pleasing set of results triggers that can start the a similar amount of around has been achieved. My very special desperately needed economic R200 million for facility upgrading thanks go to my senior executive and extension. Non-RSA interests upswing. Certainly, positive colleagues for their constant support and miscellaneous projects will movement in the major world and unflagging friendship. My deep absorb about R 100 million. economies will be critical and, in appreciation also goes to the nOI1- On the working capital side, consequence, more resolute executive directors of our Board for endeavour is called for in the area of provision has been made for an their total commitment and increase of the order of South African exports. Also, valuable contribution. RSOO million, which is expected to appreciable investment activity in lt is with considerable sadness [eave the total cash retained from the private sector is vital to support that we record the death of Craig operating activities at close on and sustain any resumption of Waigel, our Group Secretary and a R800 million. The remaining net loyalmember of SAB for 39 years. growth. However, little impact will funding requirement of some While the year ahead will be made without the urgent R700 million should be met, more undoubtedly present its own brand restoration of consumer confidence. or less equally, by the increase in of difficulties and problems, and This requires the resolute correction the automatically convertible while consumer demand will remain of the prevailing climate of violence shares, concluding the PG group severely muted, I nevertheless and despair, through concrete acquisition, and by further continue to view the future with advances in the socio-political arena utilisation of borrowing facilities. confidence and enthusiasm. There and the re-establishment of proper Group gearing should not, as a can be no doubt that SAB has in respect for law and order. result, increase beyond the place quality people throughout the Group - people who are determined As the recovery is likely to be appropriate established internal and dedicated to reach new record only gradual, attention will have to constraints. levels of achievement. continue to be paid, in both the As regards exports, the public and private sectors, to greater advances made in the past }"t"M by efficiencies, to the elimination of many of the Group companies, p~~ unproductive and unnecessary especially the IIeeJ Division. will be J M Kahn spending, and to the redoubling intensified and sales, dinctIy and Eucutive Chairman of efforts in training and skills indirectly, are targeted to em.'ed enhancement. R2S0 million. 21 May 1992

29 Segmental analysis

Turnover Taxed Taxed net Attributable operating profit financing costs earnings 1992 1991t 1992 1991t 1992 1991t 1992 1991t Rm Rm Rm Rm Rm Rm Rm Rm

Beverages 6189 5290 648 556 28 18 598 516

Beer 4838 4190 506 439 22 16 466 402 ABI 1 051 891 72 60 4 3 68 57 Other beverages 300 209 70 57 2 (1) 64 57

Retail 8676 8124 258 249 75 57 183 189

OK Bazaars 4925 4617 34 36 24 19 9 15 Amrel 1003 1 031 29 33 12 9 16 24 Edgars 2748 2476 195 180 39 29 158 150

Manufacturing 1382 1374 98 127 19 18 78 108

Aleal 791 780 39 54 12 13 26 40 Lion Match 330 331 19 21 7 6 12 15 Da Gama 261 263 30 42 (1) 30 43 Conshu 10 10 10 10

Hotel interests 565 525 42 42 15 27 27 15

Non-RSA interests 831 737 111 94 (4) (9) 67 57

Miscellaneous * 56 72 21 10 69 54 (48) (44)

External minorities (110) (113)

Preference dividends (16) (17)

Group 17699 16 122 1 178 1 078 202 165 779 711

t The previously equity accounted non-RSA interests of the Group have been fully consolidated from 1 April 1991. The 1991 figures have been restated to be fully comparable . • Includes management and administration expenses and unallocated financing costs.

TURNOVER AlTRIBUTABLE EARNINGS

Rm Rm 9000 ------600

480

5400 360

3600 240

1800 120

o o Beverages Retail Manufacturing Hotels Beverages Retail Manufacturing Hotels [J 1991 .1992 1111991 .1992

30 Total assets Net assets Taxed Cash flow operating return from operations 1992 1991t 1992 199]\ 1992 199]\ 1992 1991t Rm Rm Rm Rm % % Rm Rm

Beverages 5002 4127 3660 2939 18 19 925 810

Beer 3823 3 157 2915 2312 17 19 749 709 ASI 653 560 361 313 20 19 151 91 Other beverages 526 410 384 314 18 18 25 10

Retail 3518 3218 2027 1642 13 IS (13) 261

OK Bazaars 1 461 1 385 777 623 4 6 (34) 113 AmreJ 492 476 281 265 10 12 16 56 Edgars 1565 I 357 969 754 20 24 5 92

Manufacturing 1080 1033 799 756 12 17 47 116

Afcal 531 495 374 351 10 15 10 44 Lion Match 227 241 152 165 13 13 24 24 Oa Gama 275 256 226 199 13 21 13 48 Conshu 47 41 47 41 21 22

Hotel interests 1299 1240 967 902 4 5 14 14

Non-RSA interests 856 675 564 416 20 23 191 157

Miscellaneous 82 17 141 27 (46) (68)

Group 11 837 10310 8158 6682 14 16 1 118 1290

t The previously equity accounted non-RSA interests of the Group have been fully consolidated from I April 1991. The 1991 figures have been restated to be fully comparable.

NET ASSETS TAXED OPERATING RETURN Rm ,~ 4~ ------20 ------

3200 16

2400 12

1 600 B

BOO •

o o Beverages Retail Manufacturing Hotels geverages Retall Manufacturing Hotels 01991 .1992 1991 .1992

31 Seven year financial review

7 year compound growth GROUP STATISTICS Diu p.a. 1992 1991 t 1990 1989 1988 1987 1986

Ordinary share performance (cents per share) Earnings 20,1 290,4 265,0 225,2 187,2 146,5 112,3 82,5 Dividends 20,1 130,0 118,0 101,0 84,0 66,0 50,0 37,0 Net equity 17,2 1 371 1 168 1009 850 727 612 511

Returns and productivity Return on revalued equity (0/0) (objective 20,00;0) Av.20,9 21,2 22,7 22,3 22,0 20,0 18,4 16,1 Pre-tax return on total assets (0/0) Av.15,7 15,7 17,3 17, I 16,0 15,0 13,4 10,4 Effective tax rate (o/u) 36,6 40,4 39,7 39,S 35,8 27,9 8,5 Taxed operating return (o/u) Av.14,9 14,4 16,1 16,2 14,9 14,8 13,1 11,9 Net asset turn (times] 2,1 2,3 2,3 2,2 2,3 2,1 2,0 Taxed operating profit to sales income (0/0) 7,0 6,9 7,1 6,7 6,3 6,1 5,9 Turnover per employee (ROOO) 197,9 171,9 145,6 124,7 106,4 89,S 77,6

Solvency and liquidity Taxed net financing costs cover (target 6,0 times) Av.6,4 5,8 6,5 6,4 7,6 9,8 6,8 4,5 Dividend cover (times) 2,2 2,2 2,2 2,2 2,2 2,2 2,2 Financial gearing ratio Av.O,45 0,53 0,48 0,45 0,46 0,38 0,46 0,50 Total liabilities to total shareholders' funds 1,23 1,32 1,19 1,14 1,01 0,97 0,98 Interest free liabilities to total assets 0,31 0,35 0,33 0,31 0,31 0,26 0,24

Other statistics (thousand) Number of employees 89,S 93,8 91,0 85,0 81,6 79,1 73,5 Number of ordinary shareholders 15,5 14,3 14,6 15,4 IS,S 14,7 15,0

- SAB SHARE PRICE INDEX Johannesburg stock exchange performance - jsr INDUSTRIAL INDEX Market prices (cents per share) Closing (last sale) 5650 4725 3400 2300 1 775 1780 1020 Index High 6 075 4950 4125 2400 2625 180O 1 075 900 Low 4600 3165 1925 1 575 150O 875 580 Weighted average 35,4 5459 3958 2799 1928 1952 1358 789 Market capitalisation (Rm) 750 Ordinary shares 36,7 15 ISO 12669 9445 6164 4757 4666 2670 Automatically convertible 600 preference shares 1388 425 329 SAB share price index" 36,2 869 727 523 354 273 274 156 ]SE actuaries' industrial Index' 23,5 438 418 367 304 186 215 144 450 Closing price earnings ratio 19,5 17,8 15, I 12,3 12,1 15,9 12,4 Closing dividend yield (0/0) 2,3 2,5 3,0 3,7 3,7 2,8 3,6 Number of ordinary shares in 300 issue (million] 268,1 268,1 268,1 268,0 268,0 262,2 261,7 Volume of shares traded (million) 7,2 8,6 6,6 6,4 8,7 7,3 8,8 150 Number of transactions (thousand) 6,9 6,1 6,4 5,5 6,4 5,7 5,3 Volume traded to number in issue (0/0) 2,7 3,2 2,5 2,4 3,3 2,8 3,4 Value of shares traded (Rm) 392,6 341,6 184,4 122,5 170,7 99,2 69,3 0 86 87 88 89 90 91 92 Definitions are given in note 2 on the financial statements. t The previously equity accounted non·RSA interests of the Group have been fully consolidated f~om 1 April 1991. I'he 1991 figures have been restated to be fully comparable. * Base for both indices: 1985 = 100,0.

32 7 year compound growth 1992 1991t 1990 1989 1988 1987 1986 GROUP 0/0 p.a. Rm Rm Rm Rm Rm Rill Rm

Cash flow statements

Cash generated from trading 27,2 2394 2227 I 701 1252 960 707 457

(Increase)/decrease in working capital (403) (211) (301) (82) 19 (131) (96) Dividend income 72 66 66 51 37 28 24

Cash generated from operating activities 26,0 2063 2082 1466 I 221 1016 604 385

Net financing costs (324) (258) (221) (144) (110) (121) (121) Taxation paid (621) (534) (295) (209) (91) (43) (40)

Cash flow from operations 24,0 I 118 1290 950 868 815 440 224 Dividends paid (430) (394) (311) (226) (187) (137) (122) Extraordinary items (8) (24)

Net cash retained from operating activities 680 872 639 642 628 303 102 Investment to maintain operations (614) (592) (400) (348) (294) (195) (120)

Cash retained to invest in real growth 66 280 239 294 334 108 (18) Investment to expand operations (655) (687) (475) (580) (271) (149) (198) CASH INVESTEIJ IN: Net acquisition of subsidiaries • J-:XPANDING OPERATIONS and associates (216) (127) (21) (175) (102) (76) (77) • MAINTAINING OPERATIONS _ NET CASH RETAINED Net financing required (805) (534) (257) (461) (39) (117) (293) Rill Drawings under long and 1500 mediurn term facilities 703 683 451 626 336 70 172 Loan redemptions (329) (536) (203) (161) (401) (93) (69) 1250 Net increase/(decrease) in the use of short term facilities 80 242 71 17 (32) 88 6 1000 Decrease/(increase) in cash 120 155 (90) (178) (19) 28 (IS) 750 Increase/(decrease) in net borrowings 574 544 229 304 ( 116) 93 94 500 lncrease/(decrease) in shareholder funding 231 (10) 28 157 ISS 24 199 250

Net financing raised 805 534 257 461 39 117 293 0 86 87 88 89 90 91 92 t The previously equity accounted non-l(SA interests of the Group have been fully consolidated from I April 1991. lhe 1991 figures have been restated to be fully comparable.

33 Seven year financial review (continued)

34 7 year compound growth 1992 1991 t 1990 1989 1988 1987 1986 DIVISIONAL 0/0 p.a. Rm Rm Rm Rm Rm Rm Rm

Turnover

Beverages 6189 5290 4276 3521 2779 2253 1670 Retail 8676 8124 7050 5829 4843 4010 3353 Hotels 565 525 492 409 330 272 233 Manufacturing 1382 1374 1 329 798 692 522 409 Non-RSA interests 831 737 Miscellaneous 56 72 103 40 39 26 36

Group 18,6 17699 16 122 13 250 10597 8683 7083 5701

Total profits!

Beverages 620 538 422 349 274 211 154 Retail 183 192 168 142 104 71 30 Hotels 27 15 27 25 11 4 Manufacturing 79 109 146 61 47 28 12 Non-RSA interests 115 103 48 37 26 23 12 Miscellaneous" (48) (44) (41) (12) 14 26 41

Group 22,0 976 913 770 602 476 360 253

Total assets TOTAL PROFITS Beverages 5002 4 127 3398 2695 1 955 1602 1285 • BEVERAGES Retail 3518 3218 2768 2300 1963 1699 1426 • RETAIL Hotels 1299 1240 856 776 608 525 459 C1 MANUFACTURING Manufacturing 1080 1033 993 620 523 370 368 D REMAINING INfERESTS

Non-RSA interests 856 675 153 158 138 102 71 Rm Miscellaneous 82 17 208 214 39 30 23 1000

Group 21,2 11837 10310 8376 6763 5226 4328 3632 800 Capital expenditure

Beverages 918 766 545 666 348 191 185 600 Retail 129 189 168 124 142 126 79 Hotels 23 89 49 101 53 49 161 400 Manufacturing 15 67 90 70 35 14 21 Non-RSA interests 165 156 Miscellaneous 19 12 23 6 47 3 2 200

Group 21,S 1269 1279 875 967 625 383 448 0 86 87 88 89 90 91 92 t The previously equity accounted non-RSA interests of the Group IYw-bem fully consolidated from 1 April 1991. The 1991 figures have been restated to be fully comparable. :j: Profit after taxation less additional replacement cost depreciaIion.-lli bd1:R minority interests . • Includes management and administration expenses and uryJloc;mod 1iIYncio&mst5..

35 TO THE MEMBERS OF THE SOUTH AFRICAN BREWERIES LIMITED

Approval Report of the auditors The management of the Company is responsible 'Ne have audited the annual financial statements for the preparation of the annual financial set out on pages 30 to 40 and 44 to 67. statements and related financial information Vve conducted our audit in accordance with included in this report. generally accepted auditing standards. These The financial statements are prepared in standards require that we plan and perform the accordance with generally accepted accounting audit to obtain reasonable assurance that, in all practices, local and international, and incorporate material respects, fair presentation is achieved in full and responsible disclosure in line with the the financial statements. The audit included an accounting philosophy of the Group. evaluation of the appropriateness of the The Audit Committee, consisting mainly of accounting policies, an examination, on a test non-executive directors, meets periodically with basis, of evidence that supports the amounts the Company's external auditors and executive included in the financial statements, an management to discuss accounting, auditing and assessment of the reasonableness of significant financial reporting matters. The external auditors estimates made by management and a have unrestricted access to the Audit Committee. consideration of the appropriateness of the These financial statements have been overall financial statement presentation and approved by the Board of Directors and are disclosures. We consider that our auditing signed on its behalf by: procedures were appropriate in the circumstances to express our opinion presented below. In our opinion, these financial statements fairly present the financial position of the Group and the Company at 31 March 1992 and the results of their operations for the }'ear then J M Kahn ended, in conformity with generally accepted Executive Chairman accounting practices and in the manner required by the Companies Act. We have also examined the Group inflation adjusted income statement, current value balance sheet and supplementary Information set out on pages 41 to 43. In our opinion, these statements W S Macfarlane have been properly prepared on the bases set out Group Financial Director in the notes thereto.

Johannesburg 21 May 1992 ~~w...r~~

Currency of financial statements Price Waterhouse lIfeyemel 8 The financial statements are expressed in South Chartered Accountants (SA) African Rand (R). The approximate value of Rl/OO at 31 March was: Johannesburg 1992 1991 21 May 1992 US Dollar 0,35 0,37 Sterling 0,20 0,21 Deutsche Mark 0,57 0,63 Swiss Franc 0,52 0,54 Dutch Guilder 0,64 0,71 Australian Dollar 0,45 0.47 Income statements for the years ended 3 J March

COMPANY GROUP 1991 1992 1992 1991 Restated Rm Rm Notes Rm Rm

3911,0 4484,6 Turnover 4 17698,6 16121,9

697,0 828,1 Trading profit 5 1822,3 1 732,4 159,1 157,7 Dividend income 6.1 7l,9 66,3 88,1 147,1 Net financing costs 7 324,5 258,3

768,0 838,7 1 569,7 1 540,4 252,7 265,7 Taxation 8.1 559,8 607,9

515,3 573,0 1 009,9 932,5 Equity accounted retained earnings 6.2 36,4 40,9

515,3 573,0 Profit after taxation 1046,3 973,4 51,1 50,2 Additional replacement cost depreciation 70,1 60,6 Attributable to outside shareholders - of indirect subsidiaries 71,2 72,3 - of direct subsidiaries 109,7 112,8 17,1 16,5 Preference dividends 9.2 16,5 17,1

Earnings attributable to 447,1 506,3 ordinary shareholders 778,8 7]0,6 4,1 (0,5) Extraordinary items 10 (10,7) (9,9)

451,2 505,8 768,1 700,7 316,4 348,6 Ordinary dividends 9.1 348,6 316,4

134,8 157,2 Retained earnings for the year 15 419,5 384,3

Earnings per ordinary share (cents) - attributable earnings basis 3.1.1 290,4 265,0 - cash equivalent basis 3.1.2 473,0 421,8 Dividends per ordinary share (cents) 9.1 130,0 118,0

37 Cash flow statements for the years ended 31 March

COMPANY GROUP 1991 1992 1992 1991 Restated Rm Rm Notes Rm Rm

Cash retained from operating activities 697,0 828,1 Trading profit I 822,3 I 732,4 209,6 248,8 Non-cash items 11.1 572,3 495,1

906,6 1076,9 Cash generated from trading 2394,6 2227,5 (57,4) (85,2) Increase in working capital 11.2 (403,2) (211,3) 159, I 157,7 Dividend income 6.1 71,9 66,3

1008,3 1 149,4 Cash generated from operating activities 2063,3 2082,5 (88, I) (147,1) Net financing costs 7 (324,5) (258,3) (269,7) (263,9) Taxation paid 11.3 (621,1) (534,2)

650,5 738,4 Cash flow from operations 1117,7 I 290,0 (301,3) (340,9) Dividends paid 11.4 (430,4) (394,4) (0,5) Extraordinary items (7,6) (24,0)

349,2 397,0 Net cash retained 679,7 871,6

Cash utilised in investment activities (312,4) (266,1) Investment to maintain operations 11.5 (613,7) (592,5) (317,6) (468,0) Investment to expand operations 11.6 (655,0) (687,3) Net acquisition of subsidiaries (121,5) (256,7) and associates 11.7 (215,9) (126,6)

(751,5) (990,8) Net cash invested (1484,6) (I 406,4)

Cash injected from financing activities 245,5 182,5 Increase in borrowings 11.8 453,7 389,0 1,6 (0,6) Decrease in cash 120,5 155,6 Increase in shareholder (8,5) 228,1 funding 11.9 230,7 (9,8) Increase in inter-group 163,7 183,8 indebtedness

402,3 593,8 Net financing raised 804,9 534,8

Cash flow per share (cents) 3.1.3 349,8 383,2

38 Cash value added statement for the years ended 31 March

Cash value added is GROUP 1992 1991 Change the distributable Restated value generated inside Rm % Rm % % the Group through its ma nufacturi ng, Cash generated: trading and invest- Cash derived from sales 15545,6 14208,9 ment operations, Income from investments 71,9 66,3 This cash is disbursed Cash value generated 15617,5 14275,2 9 among the Group's Cash payments outside the Group to stakeholders leaving suppliers of materials, facilities sufficient funds to and services (11 164,0) (10129,4) continue operations,

Cash value added 4453,5 100 4145,8 100 7

Cash utilised to: Remunerate employees for their services 2397,8 54 2087,3 50 15 Pay direct taxes to the State 621,1 14 534,2 13 16

Provide lenders with a return on PERCENTAGE monies borrowed 324,5 7 258,3 6 26 DISTRIBUTIONS Provide shareholders with a reward for the use of their risk capital 430,4 10 394,4 10 9

Cash disbursed among stakeholders 3 773,8 85 3274,2 79 15

Cash retained in the business to fund the replacement of assets and facilitate further growth 679,7 15 871,6 21 (22) 1992

State taxes: Direct taxes (as above) 621,1 534,2 16 Excise duty 1374,9 1164,9 18 1991 Value added tax/general sales tax 1 229,2 1 372,5 (10) • EMPLOYEES Employee tax 287,6 227,7 26 o RETENTIONS RSC levies 49,6 28,6 73 II STATE iii LENDERS Channelled through the Group 3562,4 3327,9 7 ~ SHAREHOLDERS

39 Balance sheets at 31 March

COMPANY GROUP 1991 1992 1992 1991 Restated Rm Rm Notes Rm Rm

Shareholders' funds 378,6 378,6 Ordinary share capital 13.3 378,6 378,6 1 773,8 2086,7 Non-distributable reserves 14.1 1 558,0 1 404,2 822,5 1 032,1 Retained surplus 15 1 740,5 1 348,1

2974,9 3497,4 Ordinary shareholders' equity 3677,1 3130,9 225,8 453,9 Preference share capital 16.3 453,9 225,8 Outside shareholders' interests in subsidiaries 17 1 092,1 964,9

3200,7 3951,3 Total shareholders' funds 5223,1 4321,6

Interest bearing debt I 395,4 I 548,3 Long and medium term financing 18.1 I 769,9 1 640,3 263,6 346,4 Short term borrowings 19 1165,5 719,9

I 659,0 1 894,7 2935,4 2360,2

4859,7 5846,0 Total capital employed 8158,5 6681,8

Fixed assets Properties, plant, vehicles 2153,9 2 577,6 and equipment 20.1 5576,2 4789,8 289,1 570,6 Investments and loans 21.5 1491,4 1 141,0 2787,0 2941,3 Interests in subsidiaries 22.3 53,0 55,8

5230,0 6089,5 7 120,6 5986,6

Current assets 262,4 316,8 Stocks 23 2231,0 1 973,6 413,7 462,0 Debtors 24 2296,0 2041,7 1,8 2,4 Deposits and cash 25 189,7 308,3

677,9 781,2 4716,7 4323,6

5907,9 6870,7 Total assets 11 837,3 10310,2

Interest free liabilities 85,6 84,3 Deferred taxation 26 312,5 325,7 535,1 485,7 Creditors and provisions 27 2716,5 2629,0 191,5 194,6 Current taxation 11.3 389,7 437,7 236,0 260,1 Shareholders for dividends 9.3 260,1 236,0

1 048,2 1 024,7 3678,8 3628,4

4859,7 5846,0 Net assets 2.1.6 8158,5 6681,8

40 Supplementary inflation adjusted information

EARNINGS PER SHARE: Inflation impacts in numerous ways on financial reporting and there is, as yet, no silnplistic or standard solution to C STATED IN 1992 RANDS reflecting this in the accounting infonnation. Nevertheless, the persistently high level of inflation necessitates the !\iI UNADJUSTED presentation of supplementary intonnanon to assist with a better evaluation of operating per{onnance and the overall financial position. Cenh 300 ~ ~ Real growth and trends ,,_ ",;; 1'-< ." r!" - 7 year 250 " " compound . ~; '" growth 1992 1991 200 Iii ~ l; :', 0/0 p.a. 0/0 % ,,' ,': ISO be . r ~ Rate of inflation, as measured by ~ " 100 , ~ changes in the consumer price index " over the financial year 15,5 15,7 14,2 " " SO ".' r " Real growth achieved in: , . " 0 86 87 88 89 90 91 92

Turnover 3,J (5,1) 1,7

Added cash value generated 7,6 (7,1) 5,2 1992 .EARNINGS PER SHARE Total assets 5,7 (0,8) 2,6 • INrLATION ADJUSTED Earnings per share 4,6 (5,3) 3,0 EARNINGS PER SHARE

E1INfLATION ADJUSTMENT Inflation adjusted performance Historic earnings do not take account of the amounts which would be charged against income were businesses to reflect the current costs of goods sold or the current values of fixed asset utilisation. Furthermore, returns on historic values of assets are inevitably grossly overstated and may well be misleading in assessing the sustainability of the business.

SAB has, in the internal management accounts of the Group as well as in the primary annual financial statements, adjusted for the most significant of these effects by revaluing the majority of its fixed assets and charging related additional depreciation. To the extent that further adjustment is necessary, especially as regards working capital, SAB presents a supplementary income statment and balance sheet, with appropiate key ratios STATED IN 1992 RAl\'l)S: and statistics. • TURNOVER • TOTAL ASSETS The following summary shows the fully adjusted performance and financial position over time: Rm

7 year compound real growth 0/0 p.a. 1992 1991t 1990 1989 1988 1987 1986 III

Inflation adjusted earnings ,IIIIII per share (cents) 5,3 269,3 246,7 202,3 178,1 131,2 95,2 72,2 Dividends per share (cents) 4,6 130,0 118,0 101,0 84,0 66,0 50,0 37,0 IIIIII Effective dividend cover (times) 2,1 2,1 2,0 2,1 2,0 1,9 2,0 Inflation adjusted return on equity (Ok) 18,5 18,9 18,9 18,9 17,6 15,3 13,9 Current value gearing ratio 0,49 0,40 0,40 0,36 0,37 0,46 0,49 IIIIII t The previously equity accounted non-RSA interests of the Group have been fully consolidated from 1 April 1991. The 1991 figures have 86 87 88 89 90 91 92 been restated to be fully comparable. 41 Group inflation adjusted income statement for the years ended 31 March

1991 1992 Restated Historical Primary Inflation Inflation Primary Historical cost adjusted adjusted cost Rm Rm Rm Notes Rm Rm Rm

16121,9 16121,9 16 121,9 Turnover 17698,6 17698,6 17698,6

Trading profit per historical 1 732,4 1 732,4 1 732,4 cost convention 1822,3 1 822,3 1 822,3 Inflation adjustments: (60,6) (100,8) Additional depreciation ii (85,3) (70,1) (134,9) Cost of sales adjustment iii (160,0)

1 732,4 1 671,8 1496,7 Adjusted trading profit 1 577,0 1 752,2 I 822,3 Dividend income and equity 107,2 107,2 107,2 accounted earnings 108,3 108,3 108,3 (258,3) (258,3) (258,3) Net financing costs (324,5) (324,5) (324,5) 81,5 Credit for financial gearing iv 87,0 (607,9) (607,9) (607,9) Taxation (559,8) (559,8) (559,8)

973,4 912,8 819,2 Adjusted profit after taxation 888,0 976,2 1046,3 Attributable to outside (188,8) (185, I) (140,6) shareholders (149,4) (180,9) (185,1) (17, I) (17,1) (17,1) Preference dividends (16,5) (16,5) (16,5)

Earnings attributable to 767,5 710,6 661,5 ordinary shareholders 722,1 778,8 844,7

286,2 265,0 246,7 Earnings per share (cents) 269,3 290,4 315,0 118,0 118,0 118,0 Dividends per share (cents) 130,0 130,0 130,0 2,4 2,2 2,1 Dividend cover (times) 2,1 2,2 2,4

Notes on the inflation adjusted income statement and current value balance sheet

i. The inflation adjusted income statement and current value balance sheet have been prepared in accordance with guideline AC 201 (Disclosure of effects of changing prices on financial results), and certain of the concepts embodied in ED77 (Disclosure of current value information in financial statements), both issued by The South African Institute of Chartered Accountants.

ii. It is the Group's policy to reflect fixed assets at current values where appropriate. All properties within the Group have been revalued while the plant and machinery of the Southern African beverage interests have been stated at depreciated replacement cost - this being the only area, for the time being, in the Group where a definite replacement responsibility is recognised. As a result, the related additional replacement cost depreciation is charged in the primary financial statements. The current value financial statements recognise, in addition to the above, the revaluation of the remaining fixed assets, together with a related charge for additional depreciation. The historical cost income statement excludes all additional depredation and the historical cost balance sheet excludes the net revaluation of properties, plant, vehicles and equipment.

iii. The cost of sales adjustment, which is computed to reflect the cost of stock consumed at current prices, has been determined by using a last-in-first-out (LIFO) method of stock valuation. In deriving the current value balance sheet, stocks have been valued at the lower of current replacement cost or net realisable value.

42 Group current value balance sheet at 3J March

1991 1992 Restated Historical Primary Current Current Primary Historical cost value value Cost Rm Rm Rm Notes Rm Rm Rm

Shareholders' funds 2390,3 3130,9 3506,1 Ordinary shareholders' equity 3898,8 3677,1 2882,3 225,8 225,8 225,8 Preference capital 453,9 453,9 453,9 863,0 964,9 1 175,2 Outside shareholders' interests 1175,8 I 092,1 964,3

3479,1 4321,6 4907,1 5 528,5 5223,1 4300,5 2360,2 2360,2 2250,7 Borrowings v 2893,2 2935,4 2935,4

5839,3 6681,8 7157,8 Total capital employed 8421,7 8 158,5 7235,9

5 144,1 5986,6 6388,9 Fixed assets ii 7302,7 7120,6 6198,0 4323,6 4323,6 4397,3 Current assets jij 4 797,8 4716,7 4716,7

9467,7 10310,2 10786,2 Total assets 12 100,5 II 837,3 10914,7 3628,4 3628,4 3628,4 Interest free liabilities 3678,8 3678,8 3678,8

5839,3 6681,8 7157,8 Net assets 8421,7 8 158,5 7235,9

Returns and ratios vi 34,6 Financial gearing benefit (%) 35,5 32,1 22,7 18,9 Return on equity (%) 18,5 21,2 29,3 Interest bearing debt to 0,60 0,48 0,40 total shareholders' funds 0,49 0,53 0,64 Total liabilities to 1,64 1,32 1,14 total shareholders' funds 1,16 1,23 1,50 892 1 168 1308 Net equity per share (cents) 1454 1371 1075

Notes on the inflation adjusted income statement and current value balance sheet (continued) iv. The credit for financial gearing represents the extent to which the impact of the inflation adjustments has been borne by external sources by virtue of their providing funding to the Group. These amounts are calculated based on the respective financial gearing proportions of monetary liabilities to non-cash assets for each entity, using the averages of the opening and closing balances for the year. Net monetary liabilities consist of borrowings (including short dated redeemable preference shares) and interest free liabilities (excluding deferred liabilities) reduced by the total of debtors and cash. This amount represents the extent to which external sources have been used to fund non-cash assets, thus ensuring that owners do not have to bear the full impact of funding the current value of those assets. This gives rise to the credit for financial gearing in the Group inflation adjusted income statement. Non-cash assets comprise total assets excluding debtors and cash. v. Long and medium term financing has been restated to net present values in the Group current value balance sheet, to recognise any benefit of lower costs of financing achieved against the prevailing long term borrowing rates. vi. The returns and ratios have been calculated by reference to the closing balance sheets, which include short dated redeemable preference shares in borrowings. Cash on deposit is netted off borrowings for purposes of' the gearing ratios. The Group financial gearing benefit is the proportion which the credit for financial gearing bears to the total inflation adjustments.

43 Notes on the financial statements

1. Accounting policies and basis of recognised professional valuers on the following preparation bases: The principal accounting policies of the Group, - Hotel properties are valued at the lower of which are set out below, are in all material respects depreciated replacement cost or market value, consistent with those applied in the previous year such value having been determined by and in conformity with the standards issued by the reference to the earnings potential of each International Accounting Standards Committee. property. The primary annual financial statements have been - Special purpose manufacturing buildings are prepared in accordance with the historical cost valued at depreciated replacement cost. convention, as modified by the revaluation of - Other general purpose buildings are valued at certain fixed assets. net realisable open market value. 1.1 Basis of consolidation and goodwill Properties in the Group were revalued as at 1 April The Group annual financial statements incorporate 1989. the financial statements of the Company and its 1.3.2 Plant subsidiaries. Where a strategic res-ponsibility to replace plant is The results of any subsidiaries acquired or disposed recognised, such plant is reflected at current of during the year are included from the dates values. In terms of this, plant in the Southern effective control was acquired and up to the dates African beverage interests of the Group is revalued effective control ceased. annually by technical management at depreciated Goodwill, being the excess of tile purchase replacement cost. Changes arising on revaluation consideration over the attributable fair value of net are taken to non-distributable reserves, net of assets at date of acquisition is either written off or, minority interests; these reserves are subsequently if appropriate, capitalised and amortised over its transferred to retained surplus when realised. effective economic life. Plant in the other operations, is recorded at cost The results of certain minor foreign subsidiaries are and amortised over its estimated useful life. accounted for using the equity method unless, in Financing costs and certain direct costs incurred on the opinion of the Directors, circumstances major projects during the period of development indicate that it is prudent to account for income or construction are capitalised. The cost of brewing from such investments only as and when received. facilities acquired under suspensive sale The aggregate assets and liabilities of these non• arrangements prior to 31 March 1984 includes consolidated subsidiaries are disclosed in note 22.2. capitalised future finance charges. These facilities are reflected in fixed assets at that cost, net of both 1.2 Associates depreciation and the set-off of the remaining An associate is one in which the Group owns provision for future finance charges. between 20% and 50% of the equity capital and which it intends to hold as a long term investment. Used returnable containers which satisfy quality The post-acquisition results of associates are standards are valued at the lower of cost or deposit incorporated in the ftnanclal statements, using the value, with any write down to deposit value being equity method, from the effective dates of amortised over the estimated useful life of the acquisition and up to the effective dates of disposal. containers. Unused returnable containers are carried at cost. The equity accounted retained earnings of non• managed associates are transferred to non• 1.3.3 Finance leases distributable reserves. Assets acquired under finance lease agreements are The attributable net earnings before taxation of capitalised at their cash cost equivalent. Lease associates involved in the financing of instalment payments are allocated between the lease finance sales (associate finance companies) are included in cost and the capital repayment using the effective interest rate method. trading profit with related taxation shown in the Group taxation charge. The aggregate assets and 1.3.4 Vehicles and equipment liabilities of these managed associate finance Expenditure on fixtures in new or expanded companies are disclosed in note 21.1. premises in the OK Bazaars group is capitalised and Surplus funds, arising from fixed long term fixtures are not depreciated. Their replacement and borrowings in the Group that are lent to these renewal, as well as the modernisation and associate finance companies in reduction of their maintenance of shop premises and equipment, is external borrowing needs are netted off Group provided for by an annual charge to trading profit long term borrowings. of one percent of sales. Expenditure is charged against the provision as incurred. 1.3 Fixed assets Hotel equipment is valued substantially at actual 1.3.1 Properties cost on a first-in-first-out basis. Property revaluations are undertaken every three Vehicles and the balance of the equipment are years either by technical management or reflected at depreciated historical cost.

44 I.3.S Disposals contracts have been entered into, Translation Surpluses and deficits realised on the disposal of surpluses and deficits are dealt with in the income fixed assets are calculated by reference to the statement. The costs of forward cover are charged revalued book amounts of such assets and are to financing costs over the term of the forward included in trading profit where they arise from contract. occurrences typical of the ordinary trading 1.4.3 Foreign trading transactions activities of the Group. Translation surpluses and deficits arising on 1.3.6 Depreciation foreign trading transactions are accounted for in Special purpose manufacturing buildings, leasehold trading profit. hotel properties, plant, vehicles and equipment, I.S Stocks other than those dealt with as above, are Stocks are valued at the lower of cost or net depreciated or amortised over their estimated realisable value. Cost is arrived at on the following useful lives. Depreciation is not provided on bases: freehold hotel properties, certain industrial and - Raw materials, hotel stocks and consumable commercial buildings and freehold land, nor on stores are valued at invoice cost on a first-in- assets in the course of construction. first-out (FIFO) basis. Additional depreciation is brought to account in - Merchandise is generally valued at invoice cost the income statement on any enhanced on a FIFO basis and in the case of certain retail replacement values of depreciable assets other than merchandise the values are reduced where leasehold properties. necessary to those on which normal gross profit 1.3.7 Investments margins can be realised. Investments in consolidated subsidiaries, associates - Manufactured products and work in progress and other share investments are revalued annually are valued at raw material cost plus labour cost at either underlying attributable net asset value or and a proportion of manufacturing overhead fair value. Fair value is determined by reference to expenses. quoted market values, the capitalised value of a suitable earnings multiple and other appropriate 1.6 Recommended dividends indicators. Declines in value are not adjusted if it is Account is taken of dividends recommended by anticipated that these are temporary in nature. subsidiaries and associates, unless circumstances indicate that it is prudent to account for dividends 1.3.8 Trade marks and brands from such investments only as and when received. Where payment is made for the acquisition of a trade mark, the amount is raised as an investment 1.7 Deferred taxation within fixed assets and amortised over its Deferred taxation is provided using the liability anticipated useful life. method. Full provision is made for all timing differences which are expected to give rise to a tax No valuation is made of internally developed trade liability within the foreseeable future. marks or brands. Expenditure incurred to maintain brands is charged in full against the revenue Assessments of likely future taxes payable are based derived therefrom. on the tax regulations applicable to the various categories of fixed and current assets, a 1.4 Foreign currency translations conservative appraisal of anticipated levels of 1.4.1 Foreign operations activity and long range capital expenditure Financial statements of foreign subsidiaries are programmes. translated into South African currency as follows: No provision is made for deferred taxation on any changes to timing differences resulting from the - Assets and liabilities at rates of exchange ruling at the financial year end. revaluation of fixed assets except where disposal is intended. Deferred taxation is also not provided on - Income and expenditure items at the weighted the recoupable value of allowances claimed for tax average rate of exchange during the financial purposes on hotel buildings and related fixed year. plant, since any disposal of an hotel property Differences arising on translation are reflected in would normally be made by sale of the shares in non-distributable reserves. the hotel-owning company and such allowances would therefore not be recouped and taxed. 1.4.2 Foreign currency balances Assets and liabilities in foreign currencies are 1.8 Instalment sale transactions translated to South African currency at rates of Finance charges earned are accounted for over the exchange ruling at the financial year end, or at period of the transaction or are deferred in forward rates where related forward exchange proportion to outstanding balances.

4S Notes on the financial statements (continued)

2. Definitions 3. Accounting issues 2.1 Financial terms 3.1 Earnings per ordinary share 2.1.1 Cash equivalent earnings 3.1.1 Attributable earnings basis This comprises the earnings attributable to The calculations are based on the earnings ordinary shareholders after adjusting for the effects attributable to ordinary shareholders before of non-cash charges and credits, including equity extraordinary items, Account is taken of tile accounted retained earnings. number of ordinary shares in issue for the period 2.1.2 Cash flow per share during which they have participated in the income This focuses on the cash stream actually achieved of the Group. in the period under review. It is calculated by 1991 dividing the cash now from operations after 1992 excluding any minority interest therein, by the Earnings attributable 10 weighted average number of ordinary shares in ordinary shareholders issue. (ROOO) 778764 710626 Weighted average 2.1.3 Taxed net financing costs number of shares in This is calculated by adding the allowable net issue (thousand) 268135 268 130 financing costs taxed at the standard rate of Earnings per share (cents) 290,4 265.0 taxation to the disallowable financing costs. 2.1.4 Total profits 3.1.2 Cash equivalent earnings basis This represents profit after taxation less additional The basis recognises the potential of the earnings replacement cost depreciation, before any stream to generate cash and is consequently an allocation of minority interests. indicator of the underlying quality of the earnings attributable to ordinary shareholders. The same 2.1.5 Taxed operating profit divisor is used as in the attributable earnings basis This comprises total profits plus taxed net and the cash equivalent earnings is derived as financing costs. follows: 2.1.6 Net assets This is regarded as being the sum of fixed and 1992 1991 current assets less all interest free liabilities. Restated ROOO ROOO 2.2 Returns and ratios Earnings attributable 2.2.1 Shareholders' combined rate of return to ordinary shareholders 778764 710 626 This is computed by recognising the market price of Adjusted for: an SAB share seven years ago as a cash outflow, Non-cash items (note II I) 572324 495098 recognising the annual per share dividend streams Deferred taxation (17433) (6139) and closing share price at the end of seven years as Additional replacement inflows and determining the internal rate of return depreciation 70086 60589 implicit in these cash flow streams. Equity accounted 2.2.2 Pre-tax return on total assets retained earnings (36441) (40967) This is calculated by relating to closing total assets Less: Minority share of the trading profit, plus dividend income and adjustments (99094) ISS 235) equity accounted earnings, minus additional Cash equivalent earnings t 268206 I 130972 replacement cost depreciation. Cash equivalent earnings 2.2.3 Taxed operating return per share (cents) 473,0 421,8 This is calculated by relating the taxed operating profit to closing net assets. The preliminary report stated a provisional figure 2.2.4 Net asset turn of 450,3 cents per share, which bas subsequently This is calculated by dividing sales income by been amended to 473,0 cents per share. closing net assets. 3.1.3 Cash now per share 2.2.5 Taxed net financing costs cover The cash now per share is derived as follows: This is the ratio of taxed operating profit to taxed net financing costs. t992 1991 Restated 2.2.6 Financial gearing ratio This represents the ratio of interest bearing debt to ROOO RooO total shareholders' funds, including short dated Cash flow from operations 1117665 I 290023 redeemable preference shares in borrowings, netting Less: Minority participation (179724) (262582) cash on deposit off interest bearing debt and regarding convertible debentures as permanent Cash flow attributable to capital. The liabilities of the associate finance ordinary shareholders 937941 1027441 companies are excluded from the consolidated financial statements. Cash flow per share (cents) 349,8 383.2

46 3.1.4 Dilution Group Future earnings per share calculations will be ROOO affected by two factors: Fixed assets 28953 Current assets 21211 - the conversion of the series A and B Interest free liabilities (25481) automatically convertible cumulative Interest bearing debt (13459) preference shares (note 31.3). Net asset value 11 224 - the exercising of options to acquire ordinary Significant progress with the disposals is expected shares by the holders thereof (note 31.2). to be achieved in the coming financial year. The Series A shares are likely to convert within the :{.3 Changes in the bases of accounting next three years and the effect of such dilution on 3.3.1 Consolidation of foreign subsidiaries earnings per share will be approximately 1,40;0. With effect from 1 April 1991 the Group's non-RSA The Series B shares, relating to the Plate Glass interests, which were previously equity accounted, transaction, are unlikely to convert within the next were consolidated in accordance with international accounting developments. three years. Moreover, at 31 March 1992 only the This change had no effect on reported attributable initial trenches of the transaction had taken place, earnings. The effect, on the balance sheet at making the determination of any transitional 31 March 1991, which has been fully restated, can dilution quite meaningless. be summarised as follows: Were all of the options to acquire ordinary shares Group granted in terms of the Executive Share Purchase ROOD Scheme exercised, the effect of dilution would be Increase in fixed assets 198465 totally insignificant. Increase in current assets 242570 Increase in interest free liabilities (259 103) 3.2 Discontinued operations Increase in net assets 181932 During the year, certain minor retail and Increase in net interest bearing debt (65999) manufacturing operations of the Group were Attributable to outside shareholders 115933 discontinued. The results of these operations, arising prior to formal discontinuance, which are 3.3.2 Accounting for associate companies included in the Income statement, consist of: With effect from 1 April 1991, the Group's share of the post acquisition retained earnings of non• Group managed associates have been transferred to a ROOO non-distributable reserve in compliance with local Turnover 5168 accounting statement AC110. The cumulative effect of this change on the opening retained Loss before taxation (1 178) surplus at the beginning of the prior year is Tax relief 164 reflected in note 15 as a prior year adjustment of R188 098 000. Loss after taxation (1014) Attributable to outside shareholders (323) 3.3.3 Goodwill The basis of accounting for goodwill has been Attributable to ordinary shareholders (691) modified to bring it into line with internationally accepted practice. Subsequent to the decision to discontinue, steps were put in place to either wind down or dispose Consequently, amounts which were previously shown as 'set-offs' against share premium have of these operations. The results of such actions been transferred to retained surplus as follows: (net of tax and minorities) have been included in extraordinary items and consist of provisions for Group Company IWOO ROOO estimated losses and closure costs of R25 898 000 Previously set-off in non- and profit on disposal of net assets of RS 16 000. distributable reserves 10088 10088 The turnover relating to these items, which has been Previously set-off in excluded from Group turnover, is R141 824 000. ordinary share premium 222855 222855 Previously set-off in However, not all the net assets and interest bearing preference share premium 130411 130411 debt of discontinued operations had been disposed Cumulative effect on of by the year end. Amounts carried in the balance prior year opening sheet at 31 March 1992 in respect of discontinued retained suplus (note IS) 363354 363354 operations are:

47 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO ROoo ROOO

4. Turnover

Sales (excluding VAT/CST) IS 767467 14431907 3039963 2637065 Excise duty 1403866 1 163204 1 147407 939191

Sales income 17171333 15595 III 4 187370 3576256 Fees and finance charges 302410 287599 20270 17325 Rentals 28293 26030 18289 7596 Investment income 196549 213113 258716 309857

17698585 16 Iii 853 4484 645 3911034

The Group eliminates inter-company and inter- divisional sales, unless they arise on an ann's length basis between totally independent corporate entities in the normal course of their business.

s. Trading profit This is stated before net financing costs, additional replacement cost depreciation and taxation and after taking account of the following items:

5.1 Income from subsidiaries Dividends 1592 1461 133394 137332 Interest 78008 146900 Fees and royalties 38379 17325

1592 1461 249781 301 557 Disclosed in dividend income (note 6.1) 1592 1461 133394 137332

116387 164225

5.2 Depreciation of fixed assets On historical book values Owned 362668 332460 110124 97433 Leased 32581 25278 9192 1 653 Container amorttsatlon and write downs 171 679 146640 128939 108571

566928 504378 248255 207657

5.3 Surplus on disposal of assets Properties, plant, vehicles and equipment Owned 7518 5816 1903 1274 Leased 385 152 270 (6)

7903 5968 2173 1268

5.4 Auditors' remuneration Audit fees 8933 8163 1304 1 103 Other service fees 1229 809 259 234 Expenses 321 351 36 62

10483 9323 1599 1399

5.5 Rental and operating lease charges Properties 512985 453270 6128 4461 Plant, vehicles and equipment 58149 54640 1036 869

In 134 507910 7164 5330

48 GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO ROOO ROOO

5.6 Fees payable Managerial, technical, administrative and secretarial fees paid outside the Group 29737 14887 17924 6962

5.7 Directors' emoluments For services as Directors 70 63 Other emoluments 5749 5307 Pensions and retirement allowances for past managerial services 61 69

5880 5439 Paid by subsidiaries 1892 2175

3988 3264

5.8 Changes in provisions Provisions for losses in subsidiaries 12109 2563 3380

6. Dividend income and equity accounted retained earnings

6.1 Dividend income Subsidiaries (note 5.1) 1592 1461 133394 137332 Listed investments 29027 32481 24258 21 773 Unlisted investments 41262 32384

71 881 66326 157652 159 105

6.2 Equity accounted retained earnings Subsidiaries not consolidated (20049) (20375) Associates (note 14.3) 56490 61342

36441 40967

6.3 Attributable tncomc Consolidated subsidiaries 133394 137332 Subsidiaries not consolidated (18457) (18896) Associates 126007 125474 24258 21 773 Other investments 772 715

108322 107293 157652 159105

7. Net financing costs

Gross financing costs 462294 369939 283934 256753 Capitalised on projects (note 1.3.2) (43247) (28025) (35800) (17938) Short dated redeemable preference dividends 30215 31450

Total financing costs 449262 373364 248134 238815 Interest received (124 715) (115087) (101062) (150 752)

Net financing costs 324547 258277 147072 88063

49 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO nooo ROOO

8. Taxation

8.1 Taxation charge Current taxation This year 576806 604753 272 000 268000 Prior years (7135) 2132 (9638)

569671 606885 262362 268000 Deferred taxation (note 1.7) (17433) (6139) (1303) (19222) Withholding tax on dividends received 7534 7199 4590 3965

Total taxation 559772 607945 265649 252743

Comprising: South African normal taxation 462348 507410 261 059 248778 Foreign taxes 97424 100 535 4590 3965

559772 607945 265649 252743

8.2 Tax relief included in extraordinary items (note 10) (12638) (11658)

8.3 Reconciliation of rate of taxation °/b % % (Yo Standard rate 48,0 50,0 48,0 50,0

Adjusted for: Continuing timing differences (4,4) (3,3) (6,2) (7,2) Foreign tax rate differential (3,4) (3,6) Special allowances (2,7) (2,6) (1,8) (1,9) Adjustments to the rate of deferred tax on instalment sale transactions (1,7) Tax losses offset against timing differences (1,1) (1,5) Other adjustments 1,9 1,4 (1,0) 0,6

Net reduction (11,4) (9,6) (9,0) (8,5)

Effective rate 36,6 40,4 39,0 41,S

8.4 Tax losses The estimated tax losses available for set-off against future taxable Income are as follows; Total available tax losses 372 000 316000 Applied to reduce deferred taxation 231000 197000

141000 119000

The major portion of these tax losses derives from capital allowances and trading losses, mainly in the hotel interests of the Group. so GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO ROOO 11000

9. Dividends

9.1 Ordinary dividends 33,0 cents paid 31 December 1991 88485 80446 88485 80446 97,0 cents payable 1 July \992 260091 235959 260091 235959

130,0 cents (1991: 118,0 cents) 348576 316405 348576 316405

9.2 Preference dividends 6,2% Cumulative 6,2 cents paid 30 September 1991 62 62 62 62 6,2 cents paid 31 March 1992 62 62 62 62

12,4 cents (1991: 12,4 cents) 124 124 124 124

7,0% Redeemable cumulative 2,1 cents paid 27 September 1991 895 1 194 895 I 194 1,4 cents paid 31 March 1992 595 895 595 895

3,5 cents (1991: 4,9 cents) 1490 2089 1490 2089

7,0% Cumulative 3,5 cents paid 30 September 1991 86 86 86 86 3,5 cents paid 31 March 1992 87 87 87 87

7,0 cents (1991: 7,0 cents) 173 173 173 173

Automatically convertible cumulative (Series A) 82,5 cents paid 30 September 1991 7341 7341 7341 7341 82,S cents paid 31 March 1992 7340 7340 7340 7340

165,0 cents (1991: 165,0 cents) 14681 14681 14681 14681

Total preference dividends 16468 17067 16468 17067

9.3 Total dividends 365044 333472 365044 333472

Comprising: Dividends paid 104 953 97513 104 953 97513 Dividends payable 260091 235959 260091 235959

365044 333472 365044 333472

10. Extraordinary items (note 8.2)

Share of extraordinary (losses)/profits in associates (2952) 8592 Reversal of provision for loss in a subsidiary 4000 Disposal of interests and discontinuance of operations in subsidiaries and associates (7 268) (16237) Other (508) (2235) (508) 110

(10 728) (9880) (508) 4 110

51 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO RooO ROOO

11. Cash flow information

11.1 Non-cash items Depreciation and container charges (note 5,2) 566928 504378 248255 207657 Surplus on disposal of fixed assets (note 5.3) (7903) (5968) (2173) (1268) Provisions for losses in subsidiaries (note 5.8) 12109 2563 3380 Other 1190 (3312) 201 (133)

572 324 495098 248846 209636

11.2 Movement in working capital Increase in stocks (278921) (248343) (54 356) (46080) Increase in debtors (251962) (295004) (48289) (83 745) Increase in creditors and provisions 127687 332036 17428 72398

(403196) (211 311) (85217) (57427)

11.3 Taxation paid Taxation liability at the beginning of the year (437657) (357756) (191490) (189272) Current taxation provided (note 8.1) (569671) (606885) (262362) (268000) Withholding tax on dividends received (note 8.1) (7534) (7199) (4590) (3965) Movement related to acquisition and disposal of subsidiaries 4075 10 Taxation liability at the end of the year 389697 437657 194583 191490

(621090) (534 173) (263859) (269747)

11.4 Dividends paid By the Company Shareholders for dividends at the beginning of the year (235959) (203760) (235959) (203760) Ordinary dividends declared (note 9.1) (348576) (316405) (348576) (316405) Preference dividends declared (note 9.2) (16468) (17067) (16468) (17067) Shareholders for dividends at the end of the year (note 9.3) 260091 235959 260091 235959

(340912) (301 273) (340912) (301 273)

By subsidiaries Outside shareholders for dividends at the beginning of the year (56 783) (60055) Outside shareholders' share of dividends declared (90584) (89817) Outside shareholders for dividends at the end of the year (note 17) 57895 56783

(89472) (93089)

Total dividends paid (430384) (394362) (340912) (301 273)

11.5 Investment to maintain operations Replacement of fixed assets (678820) (724369) (284069) (337394) Disposal of fixed assets 65168 131888 18019 24943

(613 652) (592 481) (2660S0) (312451)

11.6 Investment to expand operations Fixed asset additions (655016) (687314) (468012) (317587)

52 GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOa ROOO ROOO

11.7 Net acquisition of subsidiaries and associates Payment to acquire minority interests in Southern Sun Hotel Holdings Limited (121460) (121460) Part acquisition of Plate Glass & Shatterprufe Industries Ltd (247027) (247 027) Acquisition of Cape Display (Pty) Ltd (18042) (18 042) Disposal of Transkei Sun International Ltd and Sun International (Bophuthatswana) Ltd 52843 Other minor interests (3674) (5 183) 8338

(215900) (126643) (256731) (121460)

11.8 Increase in borrowings Long and medium term Raised 702593 682817 365453 584 638 Repaid (329 077) (536299) (190 263) (391 906) Net increase in short term 80 180 242533 7292 52766

453696 389051 182482 245498

11.9 Increase in shareholder funding Proceeds of shares issued: By the Company Preference shares 236636 236636 By subsidiaries to outsiders Ordinary shares 403 4640 Preference shares redeemed By the Company (8526) (8526) (8526) (8526) By subsidiaries (2221) Outside shareholder funding 2159 Shares in subsidiaries purchased from outside shareholders (3650)

230 672 (9757) 228110 (8526)

12. Share capital

12.1 Authorised 330000000 Ordinary shares of 20 cents 66 000 66000 66000 66000 1 000000 6,20/0 Cumulative preference shares of R2 2 000 2000 2 000 2 000 44000 000 7,0% Redeemable cumulative preference shares of Rl 44000 44 000 44 000 44000 2475000 7,0% Cumulative preference shares of 1t1 2475 2475 2475 2475 36000 000 Automatically convertible cumulative preference shares of 20 cents 7200 7200 7200 7200

Total authorised share capital 121 675 121675 121675 121675

12.2 Automatically convertible cumulative preference shares The Directors may, in respect of each allotment of automatically convertible preference shares, determine the amounts and dates of payment of dividends and the basis of conversion into ordinary shares. On a winding up, these shareholders are entitled to repayment of the nominal amount and any premium paid up thereon.

53 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO ROOO ROOO

13. Ordinary share capital

13.1 Issued ordinary shares 268135210 Ordinary shares of 20 cents (1991: 268135 210) 53627 53627 53627 53627

13.2 Ordinary share premium At the beginning of the year 324932 323733 324932 323 733 Premium on shares issued during the year 1 199 I 199

At the end of the year 324932 324932 324932 324932

13.3 Total ordinary share capital 378559 378559 378559 378559

14. Non-distributable reserves

14.1 Analysis of closing balance Transferred from share premium (R38 810 000 is subject to the same restrictions as share premium) 89346 89346 89346 89346 Unrealised net surplus on revaluation of fixed assets and investments 1 006903 962437 1 947479 1 636 5S5 Capital redemption reserve fund 55008 46482 49853 41327 Equity accounted reserves of associates 333217 276727 Notional tax on LIFO conversion 1646 1327 Other 71873 27854 6540

Total non-distributable reserves 1 557 993 1404173 2086678 1 773798

Comprising: Company 2086678 1 773 798 Less: Surplus on revaluation of subsidiaries and associates (1 587744) (1205769)

498934 568029 Consolidated subsidiaries 691 579 538788 Equity accounted subsidiaries and associates 367480 297356

1 557993 1404173

14.2 Movement for the year Unrealised net surplus arising on revaluation of certain fixed assets Properties, plant, vehicles and equipment 121 982 149 156 (16691) 114148 Investments, including revaluation of and adjust- ments to interests in subsidiaries and associates - Hotel interests (note 15) 20000 244047 - Other 7903 (16285) 381 974 92 442

Net revaluation surplus 149885 376918 365283 206590 Transfers (to)/frOln retained surplus (note 15) (17904) 47557 (52403) 44461 Other 21839 28924 Total movement for the year 153820 453399 312880 251051

54 GROUP COMPANY 1992 1991 1992 1991 Restated ROOD ROOO ROoo ROOO

14.3 Transfers (tot/from retained surplus Net surplus realised on disposal of revalued fixed assets or amortised in line with depreciation charge (105419) (47870) (54389) 35935 Transfer to capital redemption reserve fund 8526 11 049 8526 8526 Transfer of retained earnings of associate companies (note 6.2) 56490 61342 Other 22499 23036 (6540)

(17904) 47557 (52403) 44461

15. Retained surplus At the beginning of the year 1348177 1851858 822533 955837 Prior year adjustments Transfer of retained earnings of associate companies to non-distributable reserves (note 3.3.2) (188098) Goodwill reallocated (note 3.3.3) (363354) (363354) Retained earnings for the year 419460 384 341 157220 134784 Transfers from/(to) non-distributable reserves (note 14.3) 17904 (47557) 52403 (44461) Dividends receivable on reorganisation and deregistration of minor subsidiaries 132 514 Adjustment on reconstruction of hotel interests (effectively offsetting revaluation increase - note 14.2) (19059) (242899) Adjustments on consolidation, including variation of interests in subsidiaries and associates (25959) (46114) 7213 At the end of the year 1 740523 1348177 1032156 822533 Comprising: Company 1 032 156 822533 Consolidated subsidiaries 612630 443321 Non consolidated subsidiaries and managed associate finance companies 95737 82323

1 740523 1 348 177

16. Preference share capital

16.1 Issued preference shares (note 31.3) 1000000 6,29'6 Cumulative preference shares of R2 2000 2000 2000 2000 42630618 7,0% Redeemable cumulative preference shares of Rl 17052 25579 17052 25579 2475000 7,0% Cumulative preference shares of Rl 2475 2475 2475 2475 8897477 Series A automatically convertible cumulative preference shares of 20 cents 1779 1 779 1779 1 779 15775722 Series B automatically convertible cumulative preference shares of 20 cents 3155 3155 Total issued preference shares 26461 31833 26461 31833

55 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO Rooo ROOO

16. Preference share capital (continued) 16.1 Total issued preference shares 26461 31 833 26461 31833 16.2 Preference share premium Share premium on automatically convertible cumulative preference shares Series A 193965 193965 193965 193965 Series B 233481 233481 Total preference share premium 427446 193965 427446 193965

16.3 Total preference share capital 453907 225798 453907 225 798

17. Outside shareholders' interests in subsidiaries Share capital and reserves 906453 806218 Attributable revaluations 127791 101861 Dividends receivable 57895 56783

I 092 139 964862

18. Long and medium term financing

18.1 Analysis of closing balance Secured financing Suspensive sale liabilities 1 105440 904839 1 036599 856824 Finance [case liabilities 130801 200398 12915 103226 Other term loans 96736 62053 24146

Total secured 1 332977 1167290 1 073660 960050 Unsecured financing Debentures and loan stock 123861 137026 94319 100 688 Other term loans 886896 607946 603037 481 895 1 010 757 744972 697356 582583 Short dated redeemable preference shares 230000 230000

Total unsecured 1 240757 974972 697356 582583

Total amounts outstanding (Annexure 1) 2573 734 2142262 1 771016 1 542633 Redeployed in associate finance companies (note 1.2) (288 194) (283029) Portion redeemable within one year transferrred to short term borrowings (note 19) (515635) (218874) (222754) (147279)

Long and medium term financing 1 769905 1 640359 1 548262 I 395354

18.2 Analysis of repayments Repayable during tile 12 months to: 31 March 1992 218874 147279 31 March 1993 515635 450162 222 754 143101 31 March 1994 690 078 351 729 431018 312816 31 March 1995 615653 279033 514445 184228 31 March 1996 320628 182168 291 176 164735 31 March 1997 208 542 140979 Repayable thereafter 223198 660 296 170644 590474 2573 734 2142262 1 771016 1 542633

56 GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO ROOO ROOO

18.3 Analysis by currency SA Rands 1915088 1578292 1 167979 1063016 US Dollars (Group 184,9m; Company 178,4m) 584076 501 545 566349 443893 Deutsche Mark (20,6m) 36688 35724 36688 35724 Botswana Pula (17,lm) 22809 26701 Other currencies 15073 2573734 2142262 1 771016 1 542633 18.4 Other borrowing details Borrowings totalling 1 332 977 I 167290 1073660 960050 are secured over properties, plant, vehicles and equipment having a book value of I 5!3 259 1 100025 I 156490 814050

Secured liabilities in both Company and Group have been reduced by the off-set of certain sinking-fund deposits of R770,Z million created for the purpose of repaying such liabilities.

19. Short term borrowings

Bank overdrafts 100659 190 192 59376 60663 Short term loans and acceptances 549178 310 806 64 229 55650 Current portion of long term borrowings (note 18.1) 515 635 218874 222754 147279 1165472 719872 346359 263592

20. Properties, plant, vehicles and equipment 20.1 Revalued amounts Freehold properties 1848245 1587172 957 198 786563 Leasehold properties 348931 326213 20145 16 115 Plant, vehicles and equipment Owned 6626727 5696938 3748486 3271 032 Leased 454057 390347 146342 147548 Future finance charges (note' 3.2) (5571841 (557184) (557184) (557184) 8720776 7443486 4314987 3664074

Depreciation and amounts written off Freehold properties 305883 265634 216593 198826 Leasehold properties 32712 26140 340 296 Plant, vehicles and equipment Owned 2964716 2515561 1851991 I 609 835 Leased 200 426 164 822 27664 19771

3503 737 2972 157 2096588 1 828728 future finance charges amortised (note 1.3.2) (359189) (318518) (359189) (318518)

3144548 2653639 I 737399 1510210

Net book value 5576228 4789847 2577 588 2153864

Comprising: Owned assets 5284089 4541591 2443029 2026057 Leased assets 292139 248256 134559 127807

5576228 4789847 2577 588 2153864

57 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROoo ROOO RooO ROOO

20. Properties, plant, vehicles and equipment (continued)

20.2 Revaluation increases To historical book values Freehold properties 703805 633259 353529 342347 Leasehold properties 51858 48411 Plant, vehicles and equipment 1598466 1 382188 1237323 1193143

2354129 2063858 1 590852 1 535490

To depreciation Freehold properties 220272 188954 172 813 160235 Leasehold properties 2307 I 70S Plant, vehicles and equipment 1208989 1030731 1031915 922205

1431 568 I 221 390 1 204 728 1 082440

Net revaluation increase 922561 842468 386 124 453050 20.3 Net historical book values Freehold properties 1058829 877233 559889 405625 Leasehold properties 266668 253367 19805 15819 Plant, vehicles and equipment Owned 3301 627 2829920 1691 087 1 390259 Leased 224538 225525 118678 127777 Future finance charges (note 1.3.2) (197995) (238666) (197 995) (238666)

4653667 3947379 2191464 1 700 814

20.4 Movement for the year Capital expenditure I 267854 1177918 749459 548223 Disposals (45557) (60544) (10554) (13992) Revaluations 80093 123747 (66926) 146491 Depreciation (note S.2) (566928) (504378) (248255) (207657) Consolidation of new interests (1991: Non-RSA) 3534 293654 Transfer of properties resulting from reorganisation under moratorium on duties 94664 Other 47385 44770

Total movement for the year 786381 I 075 167 423724 567729

Capital expenditure comprised: Properties 218898 212313 165 017 70616 Plant, vehicles and equlprnent 1 048 956 965 605 584442 477 607

1267854 I 177918 749459 548223

Disposals comprised: Properties 4775 29423 681 2548 Plant, vehicles and equipment 40782 31 121 9873 11444

45557 60544 10 554 13992

20.5 Other fixed asset details Depreciation and amounts written off Group plant, vehicles and equipment include R4 796000 (1991: RS 322 000), being provision for replacement and renewals of fixtures and modernisation and maintenance of shop premises and equipment in the OK Bazaars group. The fixtures and equipment have a book value of R 112423 000 (1991: RI04 370000) after making the provision (note 1.3.4).

Details of freehold and leasehold properties are available at the registered offices.

58 GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOa ROOD ROOD

21. Investments and loans

21.1 Associates Shares at: Cost or valuation (note 1.3.7) 306497 268243 Group book value 571084 554273 Post acquisition Non-distributable reserves 46626 22436 Retained surplus 495269 446425

Carrying amount (Annexure 3) I 112979 1023 134 306497 268243

Compnsmg: Managed associate finance companies 139553 118877 Other associate companies 973426 904257 306497 268243

I 112979 1023134 306497 268243

The aggregate balance sheets of the managed associate finance companies are summarised as follows (note 1.2): Fixed assets 987 I 987 Current assets 857562 788086

Total assets 858549 790073 Deferred taxation (93095) (J 09 798) Other interest free liabilities (5896) (12866)

Net assets 759558 667409 Interest bearing debt (619863) (548411)

Shareholders' funds and loans 139695 118998 Outside shareholders' interests (142) (121)

Group interests 139553 118877

21.2 Other investments Plate Glass & Shatterprufe Industries Ltd 247027 247027 Other shares at cost or valuation 4245 2240 2394 1644

251 272 2240 249421 1644

21.3 Loans Trade and miscellaneous 107813 98521 13 091 18211 Associates 10255 6657 1275 525

118068 105 178 14366 18736

21.4 Liquor licences and trade marks At cost or valuation less amortisation (note 1.3.8) 9033 10 484 283 484

21.5 Total investments and loans 1 491 352 1141036 570567 289 107

59 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated sooo I(QOO RooO ROOD

22. Interests in subsidiaries

22.1 Consolidated subsidiaries (Annexure 2) Indebtedness to the Company 708329 922290 Indebtedness by the Company 105730 120697

Net indebtedness 602599 801 593 Shares at valuation (note 1.3.7) 2338552 1 985388

Net interests 2941 151 2786981

22.2 Minor foreign subsidiaries not consolidated Shares at cost or valuation (note 1.3.7) 68842 76094 Post acquisition Non-distributable reserves 272 272 Retained surplus (57607) (45055)

11 507 31 311 Net indebtedness 41467 24454

Net interests 52974 55765 The aggregate balance sheets of these foreign subsidiaries as per their latest financial statements are summarised as follows (note I I): Fixed assets 75266 77 985 Current assets 67492 67957

Total assets 142758 145942 Interest free liabilities (53290) (61518)

Net assets 89468 84424 Interest bearing debt (30385) (22757)

Shareholders' funds and loans 59083 61667 Outside shareholders' interests (6109) (5902)

Group interests 52974 55765

22.3 Total interests in subsidiaries 52974 55765 2941151 2786981

22.4 Aggregate profits/losses of consolidated subsidiaries Profits 414928 405997 Losses 56952 51 750

23. Stocks

Raw materials 363031 284293 134743 87 157 \'\Tork in progress 145618 126438 42688 38242 Manufactured products 252719 245475 75633 80179 Merchandise 1353266 1209 431 Consumable stores and hotel stocks 116347 107941 63718 56848

2230981 1973578 316782 262426

60 GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO ROOO ROOO

24. Debtors Trade debtors I 849989 I 628098 309415 284805 Prepaid expenses 112977 105 151 25039 23656 Deferred expenditure 15411 29733 Non-consolidated subsidiaries and associates 9277 14502 6500 Unamortiscd forward cover costs 48743 46537 48743 46537 Other 259598 217711 78834 52244

2295995 2041 732 462031 413742

25. Deposits and cash Cash on deposit 167045 278997 1855 1239 Other cash balances 22717 29282 539 559 189762 308279 2394 I 798

26. Deferred taxation Provision for taxation on timing differences resulting from Fixed asset allowances 203852 197859 58827 58827 Debtors allowances 6088 IS 429 UFO reserves 67417 70801 Consumable stores 37260 35278 25467 26770 Other (2 124) 6330 312493 325697 84294 85597

27. Creditors and provisions Trade creditors I 537 362 1367249 109228 96921 Excise duty payable 132361 103428 100 435 80115 VAT/GST payable 39269 129 835 7846 51 734 Capital expenditure creditors 69663 70329 54526 5S 864 Containers in tile hands of customers 128335 112613 36273 31238 Special foreign exchange provision (note 28) 12500 12 SOO 12500 12500 Financing costs accrued 46854 112792 37923 98706 Other, including sundry accruals and provisions 750169 720206 126921 108160 2716513 2628952 485652 535238

28. Foreign currency information The Company, and certain of its subsidiaries with its specific approval, manage with active input from certain banks, limited short term foreign currency exposures relating to future imports, exports and financing costs. At 31 March 1992, net covered positions had been taken in respect of: Covered Percentage currency cover US Dollars 168,5 million 79% Deutsche Mark 46,6 million 45% The Company continues to adopt a prudent but flexible attitude to forward cover, and the foreign exchange provision of RI2,S million previously set aside Irom attributable earnings has been retained (note 27). In addition, total foreign borrowings of USS 184,9 million and DM20,6 million in the Group remain fully covered. All other significant foreign trade positions in the Group were also fully covered at Sl March 1992.

61 Notes on the financial statements (continued)

29. Ordinary shareholding analyses

Listed below are analyses of holdings extracted from the register of ordinary shareholders at 31 March 1992: Number of Percentage of shareholders share capital Portfolio size: 1- 1000 11439 2 1001- 10000 3500 4 10 001 - 100000 425 5 100 001 - and over 117 89

IS 481 100 Category: Companies 390 Individuals 14088 7 Pension and provident funds 216 7 Bank, nominees and finance companies 409 26 Insurance companies 56 23 Trust funds and investment companies 322 36

15481 100

The percentage shareholding of non-II.SA residents was l,lOft) (1991: 1,1 !JfJ).

To the best of the Directors' knowledge and belief, no company or individual had a controlling interest in the Company at 3] March 1992.

According to information received by the Directors, the following are the only shareholders beneficially holding, directly or indirectly, at 31 March 1992, in excess of 5% of the share capital having normal voting rights (the ordinary and automatically convertible cumulative preference capital):

Beverage and Consumer Holdings Limited (Bevcon} 32,0% South African Mutual Llfe Assurance Society (Old Mutual) 13,6% Suid-Afnkaanse Nasionale Lewensassuransie Maatskappy (San lam) 8,5% Liberty Life Group 7,20/0

30. Interests of Directors and Managers in share capital

The interests, direct and indirect. of the Directors and Managers in office at the date of this report, and their families, aggregated as to beneficial interest, with which is included family interest, and non-beneficial interest are as follows: Ordinary shares Preference snares- Non- Beneficial beneficial Options Beneficial At 31 March 1991 I 843 376 6000 570000 1J8508

At 31 March 1992and 21 May 1992 I 624424 7000 590000 138508

Comprising: Non-Executive Directors 19500 7 ])()() 138508 Executive Directors I 269 121 300000 Managers 335803 290000

1624424 7 ])()() 590000 138508

*7% redeemable cumulative other than 6 280 automatically convertible cumulative.

Disclosures by the Directors indicate that at 31 March 1992 and at the date of this report, their interests and those of their families did not. in aggregate, exceed 5% in respect of either the share capital or voting control of any subsidiaries. Details of the interests of individual Directors and Managers in the share capital of the Company are available at the registered office.

62 31. Other share capital information

31.1 Unissued shares under the control of the Directors Automatically convertible cumulative Ordinary preference Specifically reserved for purposes of the SAB Executive Share Purchase Scheme 5408000 Under the general control of the Directors 56456790 11326801

Unissued shares at 31 March 1992 61864790 11 326801

31.2 Ordinary shares under option The following share options have been granted in terms of the SAB E.xecutive Share Purchase Scheme: Number of ordinary Subscription Exercisable between shares price 18 October 1995 and 18 October 2000 710000 R34,2S 23 May 1996 and 23 May 200 1 120000 R50,12 16 December 1996 and 16 December 2001 20000 R55,2S

31.3 Terms of preference share issues The 6,20/\1 cumulative preference shares are entitled to a premium of 50 cents per R2 share in the event of repayment as the result of a winding up or a capital reduction.

The 7,00/0 redeemable cumulative preference shares are redeemable at par in five equal annual instalments which commenced on 30 September 1989.

The specific terrns attaching to the Series A automatically convertible cumulative preference shares, include a fixed dividend of 165 cents per share per annum and automatic conversion into ordinary shares on a one-for-one basis in the financial year following that in which the aggregate dividend declared on an ordinary share is equal to or exceeds 165 cents per share.

The specific terms attaching to the Series B automatically convertible cumulative preference shares, include a fixed dividend of 255 cents per share per annum and automatic conversion into ordinary shares on a one-for-one basis in the financial year following that in which the aggregate dividend declared on an ordinary share is equal to or exceeds 255 cents per share.

32. Retirement benefit information

It is the policy of the Group to provide for pension liabilities by payments to separate trust funds, independent from the Group, and contributions are charged against profits. A total of twenty four funds cover the large rnajonty of employees, other than those employees required by legislation to be members of various industry funds.

All, except three funds are defined benefit funds and are subject to the Pension Funds Act, 1956, which requires actuarial valuations every three years. Tile funds are valued on the projected benefit valuation basis and any deficits identified are funded by the companies concerned usually by way of increased future contributions.

Five funds were valued during the year and all were found to be financially sound by independent consulting actuaries.

63 Notes on the financial statements (continued)

GROUP COMPANY 1992 1991 1992 1991 Restated ROOO ROOO nooo ROOO

33. Contingent liabilities Guarantees in respect of Secured debentures, loans, promissory notes, overdrafts and other banking facilities of certain subsidiaries and associates 8770 20537 14054 Instalment debts financed by the manufacturer of merchandise sold 16913 18546 Staff loans and pensions 10 764 5 715 5759 277 Other 12920 15497 518 SI8

49367 60295 6277 14849

The comprehensive basis of providing for deferred taxation does not apply where the non-reversal of long term timing differences is probable. The tax effect of continuing long term timing differences, which would have had to be raised under the comprehensive basis, amounts to: Fixed assets 427200 385500 427200 385500 Instalment sale debtors 26500 The increase in these amounts of R68,2 million would have had to be provided by way of an additional tax charge for the period.

34. Future capital expenditure Contracted 947500 760900 878900 609900 Authorised by the Directors but not yet contracted 2132000 2270300 1 227200 1 728200

3079500 3031200 2 106100 2338 100 To be expended Within one year I 389 100 I 470600 840400 974300 Within the following three years 1 690400 I 560600 I 265 700 I 363800

3079500 3031200 2 106 100 2338100 This capital expenditure will be financed by net cash flow from operations and the utilisation of borrowings within the accepted gearing profile of the Group.

35 Borrowing capacity

35.1 Unutiliscd borrowing facilities Bank overdrafts and general banking facilities 2 191 000 I 453 700 Flexible term, including foreign facilities 409 600 698600 Long term, including suspensive sale arrangements 210 SOO 301 500

2811 100 2453800

35.2 Reserve capacity In terms of the most restrictive covenants imposed by significant loan agreements, the Group had unutilised borrowing capacity, after the offset of funds redeployed in associate finance companies, amounting to 'Hl200 668 300

64 Annexure 1

GROUP COMPANY Years Closing 1992 1991 1992 1991 Long and medium of interest Restated term financing redemption rate (!I(J nooo ROOO ROOO ROOO

Suspensive sale liabilities Single instalment 1996 14,4 224440 224440 Single instalment 1995 14,7 212009 210216 212009 210216 Three annual instalments 1993/1995 17,8 204 584 173501 204584 173501 Half-yearly Instalments 1993/1999 19,3 190724 190724 190724 190724 Single instalment 1995 15,1 100 307 125411 100 307 125411 Single instalment 1995 14,6 55089 80224 55089 80224 Single instalment 1996 15,6 37721 44737 37721 44737 Half-yearly instalments 1992/1995 17,6 29751 18189 Single instalment 1993 15,1 11 725 32011 11 725 32011 Under R20 million each 17,1 39090 29826

16,2 1 105440 904839 1 036599 856824

Finance lease liabilities Hotel property 1993/2001 13,1 25207 25842 Plant and equipment 1992/1996 17,5 12915 103226 12915 103226 Under R20 million each 18,8 92 679 71 330

17,6 130801 200 398 12915 103226

Secured term loans Single instalment 1993 16,9 24146 24146 Under R20 million each -local 13,9 44609 35352 - foreign '12,0 27981 26701

14, I 96736 62053 24146

Debentures and loan stock Unsecured debentures 1995/1999 11,2 50000 50000 50000 SO 000 Under R20 million each 11,4 73861 87026 44319 50688

11,3 123861 137026 94319 100688

Unsecured term loans Equal half-yearly instalments 1993/1998 *16,4 253466 214558 253466 214558 3 month loans with extension options 1994/1997 16,4 140000 25000 Single instalment 1994 *17,2 122427 104600 122427 104600 Equal half-yearly instalments 1994/1999 *13,S 67053 52848 67053 52848 Equal half-yearly instalments 1994/1998 '13,8 63473 50895 63473 50895 Equal half-yearly instalments 1995/1999 *15,2 35559 35559 Single instalment 1994 *14,S 33484 30678 33484 30678 Under R20 million each - local 16,1 116231 45677 - foreign *14,2 55203 83690 27575 28316

15,8 886896 607946 603037 481 895

Short dated preference shares Redeemable 1993 13,2 200 000 200 000 Redeemable 1995 13,2 30000 30000

13,2 230000 230000

Total amounts outstanding (note IS.1) 15,6 2573734 2 142262 1 771 016 1 542 633 Further details of all loans are available at the registered office of the Company .

• Foreign loans: interest rates include the cost of forward cover and the effects of interest swaps.

65 Annexure 2

Issued Effective Interests of capital holding holding company Shares- Net indebtedness 1992 1991 1992 1991 1992 1991 Restated Restated Restated Consolidated subsidiaries sooo % % sooo scoo sooo soeo

Beverages Alrode Brewing Company (Ply) Ltd 9500 100 9 500 (9 5(0) Amalgamated Beverage Industries Lid 1060 68 68 209075 180174 17543 14321 Appletiser Pure Fruit Juices (Pty) Lid 2000 100 100 49217 36483 5232 1610. Bier en Mout Bclcggings (Edms) Bpk 100 I 137 51-1 Canterbury Overseas Inc -II 1-15 100 100 2865941 170010 34579 II 1.1 Cape Display (Ply) Ltd 100 2531 Ohlsson's Brewery Transkei (Pry] Lid <257 70 70 43882 36.52 9620 285.5 Ohlsson's Cape Breweries Ltd 3520 100 100 3520 3520 (3520) (3520) SAB Hop Farms (Pry) Ltd 16 100 100 21419 15024 16052 11272 Southern Associated Maltsters (Pty) I.td 36369 55 55 1161761 22913 14393 905. United Breweries (Pry) Ltd 1000 70 70 97321 77 897 (44 838) (25039) western Province Preserving Company (Pry) Ltd 1200 100 100 100 100 21982 19901

Retail Amalgamated Retail Ltd 2303 69 69 522-12 85.87 2406 31666 Edgars Stores ltd (indirect) 5082 65 65 370716 307150 55327 26.2. OK Bazaars (1929) Ltd 6211 69 69 83567 11999. 2229

Manufacturing Associated Furniture Companies Lid 12270 66 66 169295 163920 4426 5.73 Da Gama Textile Company Lid (indirect) 1020 61 61 130002 119662 4802 6197 The Lion Match Company Ltd 9076 71 71 82059 77 399 2242 H02

Hotels Southern Sun Hotel Holdings Ltel 4808 100 100 446984 402638 98619 69040 Property companies (various) 100 100 137013 119 348 3647

Other investments Sabfin (Ply) Ltd 100 100 264 236 326 179 5H 575 Sabre Finance Ltd 1625 100 100 23010 21872 Miscellaneous 13 565 14472 33908 1079.

Interests in consolidated subsidiaries (note 22.1) 2338 552 I 985388 602599 801 593

General information in respect of subsidiaries as required in terms of paragraph 62 of the 4th Schedule of the Companies Act, 1973 (as amended) is set out in respect of only those subsidia.ries,. the financial position or results of which arc material for a proper appreciation of the affairs of the Group. It is considered that disdosure in these statements of such information in respect of the remaining subsidiaries would entail expense out of proportion to the value to Members. However, detailed information in respect of all subsidiaries is 3\"3ilabIt.u tbt registered office .

• At valuation tnote 1.3.7). t Incorporates an update of accumulated revaluations. 66 Annexure 3

Number of Percentage shares held holding GROUP COMPANY Carrying amount Cost or valuation 1992 1991 1992 1991 1992 1991 Restated Restated Associates % % ROOO ROOO ROOO ROoo

Listed Beverages Delta Corporation Ltd' 5883990 17 17 3678 3519 Distillers Corporation (SA) Ltd'" 42000000 30 30 179786 159 564 179786 159564 Seychelles Breweries Ltd'" 1 433014 20 20 8262 7898 Stellenbosch Farmers' Winery Group Ltd'" 42000 000 30 30 79800 67200 79800 67200

Retail Boymans Ltd=" 3 873 301 36 36 10 690 10407

Manufacturing Conshu Holdings Ltd'" 15385775 33 33 46911 41479 46911 41479 Romatex Ltd" 5172 236 21 21 63983 63684

Hotels Sun International (Bophuthatswana) Ltd 2 45700 Transket Sun International Ltd 2 6300 393 110 405751 306497 268243 Market value of listed associates 571 583 708 713 437427 373595

Unlisted Beverages Amalgamated Beverage Canners (Pty) Ltd" 591 120 24 24 29156 23380 Ceres Fruit Juices (Pty) Ltd" 485 49 50 9188 4133

Manufacturing Amalgamated Appliances (Pty) uct 50 21 140 Chet Industries (Pty) Ltd 30 6329 Kallenbach-Hendler (Pty) ua- 7820000 50 50 24614 29593 Resinkem (Pty) uu- 1000000 50 50 9454 8296 Spankor Ltd' 9586 50 50 50370 43462

Hotels Southern Sun Timesharing (Pty) Ltd" I 50 50 1663 4325 Sun International Inc' 260218 20 20 428336 371 500

Managed associate finance companies Amretfin (Pry) Ltd' looA 50 50 103 617 89864 Okfin (Pty) Ltd' 2500A 50 50 35936 29013

Miscellaneous 6395 7488 719869 617383

Directors' valuation of unlisted associates 779935 632 795 Interests in associates (note 21.1) 1 112979 1023 134 306497 268243

* Period taken to account: Twelve months to 31 March 1992. ** Period taken to account: Twelve months to 31 December 1991 . ... Period taken to account: Twelve months to 29 February 1992. t Period taken to account: Three months to 31 March 1992.

67 Notice of meeting

Notice is hereby given that the annual general meeting of Members of the Company in respect of the year ended 31 March 1992 will be held at 2 Jan Smuts Avenue, Johannesburg on 17 July 1992 at 10:00 for the following purposes: To receive and adopt the Group annual financial statements for the year ended 31 March 1992. 2 To re-elect the following Directors who retire by rotation in accordance with the Articles of Association: Messrs W F de la H Beck, V G Bray, N G Cox, G W Hood, M J Levett, E A G Mackay, and M I Wyman. 3 To place all of the unissued shares in the capital of the Company from time to tlme at the disposal of the Directors for the purposes stated: 3.1 as to S 408 000 ordinary shares of twenty cents; for the specific allotment and issue, on the exercise of options .already granted and in the future, as the Directors nlay from time to time determine, to the present Executive Directors of the Company and to other employees of the Company and its subsidiaries in terms of the SAB Executive Share Purchase Scheme as presently constituted. 3.2 as to all of the remainder of the unissued shares; for allotment and issue to such persons, at such times and generally on such terms and conditions, and for such consideration, whether payable in cash or otherwise, as the Directors may front time to time determine, subject to the approval of The Johannesburg Stock Exchange. 4 To consider as special business the following resolution which will be proposed as a special resolution• "RESOLVED that 28 000 000 ordinary shares of twenty cents each in the authorised share capital of the Company be and they are hereby converted into automatically convertible cumulative preference shares of twenty cents each ranking pari passu in all respects with the existing unissued automatically convertible cumulative preference shares in the share capital of the Company thereby resulting in the authorised share capital after such conversion being 302000 000 ordinary shares of twenty cents each, 64000 000 automatically convertible cumulative preference shares of twenty cents each, 1 000000 6,20/0 cumulative preference shares of R2,00 each, 44000 000 7(Vo redeemable cumulative preference shares of HI,OO each and 2 475 000 7(Yu cumulative preference shares of HI,OO each." The terms of the special resolution appear above. The effect thereof will be to convert 28 000 000 ordinary shares of twenty cents each into automatically convertible cumulative preference shares in the share capital of the Company. The reason therefor is to utilise the unissued ordinary share capital of the Company for the purpose of creating additional automatically convertible preference shares in the capital of the Company rather than to increase the Company's share capital. All members are entitled to attend and speak at the meeting, but only the holders of the Company's ordinary and automatically convertible cumulative preference shares are entitled to vote. Any Member entitled to attend and vote is entitled to appoint a proxy or proxies to attend, speak and vote in his stead, and the person so appointed need not be a Member. Proxy forms should be forwarded to reach the registered office of the Company or the office of the Transfer Secretaries or the London Secretaries at least 48 hours before the time fixed for the holding of the meeting. Notice is also given that the registers of Members of the Company will be closed from 15 to 17 July 1992, both "dat"es~ inclusive. ~C:> A 0 C Tonkinson Grollp Secretary

Johannesburg 21 May 1992

Proxy forms for use at the meeting Inay be obtained from the Group Secretary. the Transfer Secretaries or the London Secretaries at their respective addresses set out on the inside bad: cover of this report.

68 Administration

The South African Breweries limited (Registration no 69/16025/06)

Group Secretary Auditors A 0 C Tonkinson Price Waterhouse Meyernel

Postal address London Secretaries PO Box 1099 Johannesburg 2000 Bamato Brothers Limited 99 lIishopsgate Business address and registered office London EC2M 3XE England 2 Jan Smuts Avenue Johannesburg Telefax (071) 588-7014 Telefax (011) 339·1830 Telex 886951 (Barbre) Telex 4-22482 SA Telephone (071) 588-7011 Telephone (011) 339-4711

Transfer Secretaries United Kingdom Transfer Consolidated Share Registrars Limited Secretaries 40 Commissioner Street Barclays Registrars Limited Johannesburg 2001 Bourne House 34 Beckenham Road PO Box 61051 Marshalltown 2107 Beckenbam Kent BR34TU Telefax (011) 836-0792 England Telex 4-84276 SA Telefax (081) 658-3430 Telephone (Ol [) 492-1620 Telephone (081) 650-4866

Diary

Annual general meeting July Reports Published: Interim, for half-year to September November Preliminary announcement of annual results May Annual financial statements June Dividends Ordinary Declared: Paid: Interim November Last business day of December Final May First business day of July Preference Paid: Interim 70/0.) Redeemable curuulnuve Last Friday of September Other 30 September Final All classes other than Series B Automatically Convertible Cumulative Preference Shares 31 March Series B Automatically Convertible Cumulative Preference November Last business day of December Interest payments (half-yearly) "A" and "B" unsecured debentures, 1988/1997 30 May/30 November 9,375% Unsecured loan stock, 1989/1998 30 September/Sf March 11,2% Unsecured debentures, 1994/1998 31 August/Last day of February 11,25% Unsecured debentures. 1991/2000 30 September/31 March 12,375% Unsecured debentures, 1991/1998 30 Septernber/S! March Redemptions Paid: 7o/[) Redeemable cumulative preference shares Last Friday of September "A" and "B" unsecured debentures, 1988/1997 30 November 9,3750/0 Unsecured loan stock, 1989/1998 14 May 11,2YY[) Unsecured debentures, 1991/2000 30 September 12.3750/0.) Unsecured debentures, 1991/1998 Last Friday of September

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