SABMiller plc Annual Report 2013 - PrecisionIR

Delivering strong revenue and earningsgrowth in 2013Investment in additional production capacity, commercialcapability and distribution reach supported strong growth inour developing markets, while a focus on operating effi ciencieshelped us achieve growth in profi t margins. Total beveragevolumes grew by 7% to 306 million hectolitres, with lager volumesup 6% and soft drinks volumes up 15%.Operationalhighlights• Reported group revenue growthof 10% with organic, constantcurrency group revenue up 7%.• Group revenue per hectolitre (hl)up 3% on an organic, constantcurrency basis.• Lager volumes rose 3% on anorganic basis with growth in alldivisions except North America.• Organic, constant currency EBITAgrowth of 9%, with reported EBITAgrowth of 14%, refl ecting theinclusion of Foster’s and otherbusiness combinations, partiallyoffset by adverse currencymovements.• EBITA margin improvement of 70basis points (bps) to 18.6%, withorganic, constant currency EBITAmargin improvement of 40 bps.• Progress with the Foster’sintegration and synergies remainsahead of schedule, with lagervolume growth in the continuingbrand portfolio in the fourth quarterversus the prior year.• Adjusted earnings up 12%,with adjusted EPS up 11%to 238.7 US cents per share.• Declines in profi t before tax andprofi t attributable to owners of theparent refl ect exceptional non-cashgains reported last year.Creating long-term sustainable valueWe generate value by establishing leading positions instrategically attractive markets that offer long-term growthopportunities, building and sustaining successful local brandsas part of comprehensive portfolios. We maximise the effi ciencyof our businesses and utilise our extensive local supply chainsto ensure that the communities in which we operate participatein our growth and development.UnderstandingconsumertastesBuildingthe rightpartnershipsWe build long-term value by ensuringthat our brands maintain a continuousconnection and relevance to theirtarget consumers, supported byinnovation within the beer categoryto develop new products, brands,packs and price points to meet theevolving expectations of consumers,wholesalers and our retail partners.From strategic alliances that spancontinents, to individual relationshipswith corner-shop retailers, our abilityto build and sustain long-termpartnerships is a core strength of thebusiness. At the local level we areengaged in a shared endeavour withgovernments, distributors, retailers,suppliers and the community at largeto support the social and economicdevelopment of the countries inwhich we operate.Overview Business review Governance Financial statements Shareholder informationFor more information on our financial performance,see pages 36 to 43.For more information on how we create long-termsustainable value, see pages 14 and 44 to 47.SABMiller plc Annual Report 2013 – 3

Group at a glanceA balanced spread of businessesLatin America32% contribution to group EBITA 1Regional offi ce: Miami, USA• Our primary brewing and beverageoperations cover six countries acrossSouth and Central America(Colombia, Ecuador, El Salvador,Honduras, Panama and Peru).• In each of these countries, we are thenumber one brewer by market share.• We are also the third largest brewerin Argentina, and we export to Bolivia,Chile and Paraguay.• We bottle soft drinks for TheCoca-Cola Company in El Salvadorand Honduras, and for PepsicoInternational in Panama.For more information see page 18.Europe12% contribution to group EBITA 1Regional offi ce: Zug, Switzerland• Our primary brewing operations covereight countries – the Czech Republic,Hungary, Italy, Poland, Romania,Slovakia, Spain (Canary Islands) andthe Netherlands.• In the majority of these countries,we are the number one or two brewerby market share.• A further 16 countries includingRussia, Turkey and the Ukraine arecovered in a strategic alliance withAnadolu Efes through brewing, softdrinks or export operations.• We export signifi cant volumes toa further seven European markets,of which the largest are the UKand Germany.For more information see page 21.North America12% contribution to group EBITA 1Regional offi ce: Chicago, USA• MillerCoors is a joint venture withMolson Coors Brewing Company,formed in 2008 by bringing togetherthe US and Puerto Rican operationsof both groups.• Headquartered in Chicago,MillerCoors is the second largestbrewer in the USA, with 29% of thebeer market.• Our wholly owned Miller BrewingInternational business is based inMilwaukee, USA and exports ourbrands to Canada and Mexico andthroughout the Americas.For more information see page 24.Africa12% contribution to group EBITA 1Regional offi ce: Johannesburg,South Africa• Our brewing and beverage operationsin Africa cover 15 countries. A further21 are covered through a strategicalliance with the Castel group and wealso have an associated undertakingin Zimbabwe.• In most of these countries we are thenumber one brewer by market share.• We bottle soft drinks for TheCoca-Cola Company in 20 of ourAfrican markets (in alliance with Castelin 14 of these markets).For more information see page 27.Asia Pacific13% contribution to group EBITA 1Regional offi ce: Hong Kong• CR Snow, our partnership withChina Resources Enterprise, Limited,is the largest brewer in China.• Carlton & United Breweries 2 (CUB)is a leading Australian brewer, whichwe acquired in December 2011.• We are the second largest brewerin India.• We have an operation in Vietnamand we export to various marketsincluding South Korea and Singapore.For more information see page 30.South Africa19% contribution to group EBITA 1Regional offi ce: Johannesburg,South Africa• The South African Breweries (Pty) Ltd(SAB) is South Africa’s leadingproducer and distributor of lagerand soft drinks.• It also exports brands for distributionacross Namibia.• Our soft drinks division is SouthAfrica’s leading bottler of productsfor The Coca-Cola Company.• We have hotel and gaming intereststhrough our associate, Tsogo SunHoldings Ltd, the largest hotel andgaming group in South Africa.For more information see page 33.1 Excluding corporate costs.2 Carlton & United Breweries is the Australian beverage business of Foster’s.4 – SABMiller plc Annual Report 2013

Global beer market trendsDeveloping markets continue to growTrends in 2012/2013Developing markets remain the engine ofvolume growth for the global beer industry.Per capita alcohol consumption continuesto rise as disposable incomes increase andconsumers trade up from informal alcohol(often spirits) to professionally brewed beer.The result is strong volume growth inAfrica, Asia and Latin America. In contrast,consumption in Western Europe continuesto slide.There has been an increasing realisation thatnot all developing markets are equallyattractive. Industry structures vary widely fromcountry to country, with African and LatinAmerican markets being in general muchmore concentrated, putting them in the globalsweet spot of combining strong long-termvolume growth and high EBIT 1 margins.As well as trading up into beer, consumersare trading up within the beer category.Local premium brands increased their sharein developing markets with internationalpremium brands often growing just asstrongly, albeit from a lower base. This trendis also clear in mature markets such as theRegional beer volume growth vs. EBIT 1 margin% Normalised EBIT Margin20%5%WesternEuropeNorthAmericaUSA where premium imports and craft beerscontinued to strongly outperform mainstreambeer. Even in the declining UK beer market,the premium brand segment has done welland gained share.One feature of mature markets is that thepremium segment tends to fragment overtime as consumers seek a broader repertoireof brands – hence the growing popularity oflocal premium, imported and local craft beers.Industry consolidation has continued apace.ABInBev announced the intended acquisitionof the Mexican brewer, Grupo Modelo.Heineken completed the acquisition ofAsia Pacifi c Breweries and Molson Coorsacquired StarBev in Central and EasternEurope. CR Snow (SABMiller’s joint venturewith CRE) announced the intendedacquisition of Kingway Brewery in China.The debate continues about the long-termprofi t prospects for China, the world’sbiggest beer market by far in volume terms.Growth remains strong, as does the potentialfor future growth. That said, unit pricing andmargins are still extremely low. All the bigC&SAmericaC&EEuropeAfricaAsiaPacific0% 3% Regional Volume CAGR (2001-11)Source: Company data, Plato, Bernstein Research.1 Normalised EBIT margin is defi ned as EBIT adjusted for exceptional items.European large cap brewers relative performance vs. MSCI 2 Europe8%17%-21%12%-3%16% 17%-6%65%20%7%24%four brewers have embarked on regionalexpansion, both organic and throughacquisition, increasing their collective share ofthe market at the expense of smaller players.CR Snow remains the clear leader by volume.Industry consolidation has left manycompanies with fragmented IT and backoffice systems, presenting opportunities toimprove global effi ciency without losing localfl exibility. Three of the four major globalbrewers – SABMiller, Heineken and Carlsberg– are currently carrying out programmes torestructure and cut costs.New developments• With unemployment falling among keysections of the population, the US beermarket appeared to turn the corner with1.1% volume growth, making 2012 thefi rst growth year since 2008.• At the same time global commoditypressures started to ease. Although grainmarkets remain volatile with extremeweather affecting the price of wheat andcorn, barley markets improved after betterharvests in Western Europe. In addition,the spot price of aluminium fell sharply.OutlookThe beer category remains a very attractivelong-term investment opportunity.European large cap brewers outperformedthe stock market, as measured by the MSCIEurope index, by 24% in 2012, following anaverage 11% outperformance every year forthe last 10 years.Prospects for future growth remain strongwith volume growth primarily driven bydeveloping markets. In developed marketsthe focus will be on premium brands, newvariants and pricing. Together with increasingeconomies of scale and effi ciency savings,these trends should ensure steady marginexpansion and strong cash fl ow.Leading beverage analystOverview Business review Governance Financial statements Shareholder information2001 2002200420052006 200720082009 2010 2011 20122003Source: Bloomberg. Note: European large cap brewers include AB InBev, Carlsberg,Heineken and SABMiller. Scottish & Newcastle is included for the period 2001-2007.2 The MSCI Europe Index is a free fl oat-adjusted market capitalisation weighted index,designed to measure the equity market performance of 16 developed markets in Europe.SABMiller plc Annual Report 2013 – 5

Acting Chairman’s statement‘I am delighted to report another year of strongfinancial performance, led by our developingmarket operations in Latin America, Africa,Asia Pacific and South Africa.’Including acquisitions and the effects ofcurrency translation, group revenue grew by10% (7% on an organic, constant currencybasis) following selective price increases andthe further expansion of our brand portfoliosto offer a wider choice of products atdifferent prices. Currency movements hadan adverse impact of fi ve percentage pointson group revenue growth, mainly due to theweakening of the South African rand andCentral European currencies against the USdollar. Beverage volumes totalled 306 millionhectolitres, up 7% with lager volumes up 6%and soft drinks volumes up 15%.John ManserActing ChairmanDear ShareholderIt is with sadness that, in my current role asacting Chairman, I am delivering this year’sopening statement on behalf of GrahamMackay, who is currently on leave of absencefor medical reasons. Graham has ledSABMiller with great acuity, dedication andintegrity over the last 16 years, and ourthoughts are with him and his family at thisdiffi cult time.Results and dividendI am delighted to report another yearof strong fi nancial performance, led byour developing market operations inLatin America, Africa, Asia Pacifi c andSouth Africa.Reported earnings before interest, tax,amortisation and exceptional items (EBITA)grew by 14% (9% on an organic, constantcurrency basis), refl ecting the benefi cialimpact of the Foster’s acquisition. ReportedEBITA margin was 70 basis points ahead ofthe prior year at 18.6%. Raw material inputcosts rose in line with expectations by midsingle digits due to higher commodity costs,partially offset by procurement and othersavings. Fixed costs increased due toinfl ation and investments in new productioncapacity in some markets, although againthese were partially offset by effi ciencysavings elsewhere. Profi t before tax declined16% to US$4,712 million, principally refl ectingthe inclusion of signifi cant non-cashexceptional gains on transactions in the prioryear. Adjusted earnings were 12% higherthan the prior year and adjusted earningsper share were up 11% to 238.7 US cents.Capital expenditure for the year wasUS$1,479 million as we continued to investin additional capacity, commissioning newbreweries in Zambia, Nigeria and Ugandawhile extending existing facilities elsewhere.Free cash fl ow was US$3,230 million, anincrease of US$182 million compared withthe prior year. Net debt fell by US$2,161million, ending the year at US$15,701 million.The group’s gearing ratio as at 31 March 2013was 57.2%.The board has recommended a fi nal dividendof 77 US cents per share which will be paidto shareholders on 23 August 2013. Thisbrings the total dividend for the year to 101US cents per share, an increase of 11% overthe prior year.A past that prepares us for the futureIn acknowledging Graham Mackay’s fi nalyear in an executive capacity, I offer my ownperspective on the group’s achievements,strengths and prospects, in the context ofour recent history and the dramatic evolutionof the brewing sector during Graham’smanagement career here.6 – SABMiller plc Annual Report 2013

That SABMiller should emerge from modestbeginnings in South Africa to become aleading global consumer products companyis a remarkable achievement. It is still moreremarkable when one considers theconsiderable obstacles it has overcome aspart of that journey. In its early days, SouthAfrican Breweries posed little challenge tothe established giants of European and USbrewing. The industry was more collaborativethan is the case today and the business wasable to learn from other companies, quietlydeveloping the core skills in brewing andbrand building that form the basis of thestrong operating culture for which SABMilleris rightly known.In 1989, however, the break up of theSoviet bloc provided the catalyst for theconsolidation of the brewing industry and thecreation of a global industry. Brewing assetsthat had long been neglected by indifferentgovernment owners were now suddenlyavailable to buy. South African Breweries,which had already participated in governmentprivatisations in southern Africa, seized theopportunity to break out of the continentand begin expanding into Asia, and Centraland Eastern Europe.Our strategy at the time was to acquirebrewing assets that had typically been poorlyrun and to apply the world-class operationalskills we had learned to improve theperformance, quality and image of theirbeers. Initial forays were also driven by adesire to acquire a portfolio of internationalbrands that could compete on the worldstage. Perversely, it was the process ofevaluating brands for international expansion– and more often than not rejecting them –that reinforced our respect for the localnature of beer.Castle Lagergrowing across AfricaCastle Lager, a brandsynonymous with SABMiller’sheritage in South Africa,posted its second year ofdouble digit growth drivenby strong trade execution,demonstrating that even abrand with over 100 yearsof sales behind it can remainrelevant to a new generationof consumers. The brandis also now establishinga powerful position as aregional brand across therest of Africa.Our local approachThis belief, that beer remains in essencea local product, rooted in the heritage andculture of particular places or communities,now sets us apart from our major competitorsand informs much of our attitude to brandmanagement. Instead of applying a one-sizefits-all approach, we aim to develop full brandportfolios in each of our markets, informed bya deep appreciation for local consumertastes across a spectrum of prices anddrinking occasions. And far from inexorablybecoming more global over time, the rise ofthe craft beer segment in the USA, Europeand Australia would suggest that, if anything,beer is becoming more local than ever.This belief, that beer remainsin essence a local product,rooted in the heritage andculture of particular placesor communities, now setsus apart from our majorcompetitors and informsmuch of our attitude to brandmanagement.In the core mainstream beer segment,we’ve become expert at taking undiscoveredlocal brands and turning them into nationalchampions. In Europe, many of our nowiconic national brands began life in much lessglamorous circumstances. In Latin America,following acquisitions in Central America in2001 and South America in 2005, we havetransformed the image of the beer categoryin our markets, improving quality anddifferentiating our products by package, priceand position. And in China, our joint venturehas established the Snow brand, originallyfrom Manchuria, as both the country’s fi rstnational beer and now the largest beer brandin the world by volume.In the USA, following the merger with MillerBrewing Company in 2002, we refi ned andadapted our skills to succeed in the world’smost competitive and sophisticated consumermarket, gaining brands which are now partof an increasingly successful internationalpremium portfolio.The premiumisation of the beer categoryis a trend we are now leading in many ofour developing markets, establishing localpremium beers that trade on national prideand offer affordable luxury to consumerslooking to trade up. At the lower end of theprice ladder, particularly in Africa, we haveset out to compete with informal alcoholthrough the development of affordable beersmade from locally available ingredients.We started with the sorghum-based EagleLager in Uganda and subsequently launchedtwo new cassava beers in Mozambique andGhana. While these products open up newmarkets for us, they also provide a newincome stream for farmers previously workingat subsistence level and create a new sourceof revenue for governments.Management and organisationThe spirit and attitude formed by thebusiness in those early years was manifestin an energy and restlessness that hassince become the basis for a formidableperformance management culture. Explicitlygoal-oriented with a high degree of personalaccountability, the business developed acadre of exceptional senior managers, manyof whom I am delighted to say remain withus today. This highly mobile workforce hasrepeatedly demonstrated its ability to turnaround underperforming businesses, cuttingcosts and driving top line growth. Thisexperience is now proving invaluable againas we look to grow our operations in Australiafollowing the acquisition of the Foster’sbusiness in late 2011.The business todayThe result, today, is an attractive spread ofbusinesses – well balanced globally in termsof sales volumes, revenues and EBITA,spanning both developed and developingeconomies and advantageously exposedto growth markets. We also enjoy valuablepartnerships with the Castel group in Africa,China Resources Enterprises in China,Anadolu Efes in Turkey and the former SovietUnion and The Coca-Cola Company for whomwe’re the leading bottler in Africa and CentralAmerica. We continue to be a leader in oursector in terms of our brand management, ourapproach to sustainability and our commitmentto market our products responsibly in everycountry in which we operate.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 7

Acting Chairman’s statementcontinuedCorporate governanceThe corporate governance update onpages 57 to 65 of this report providesa detailed description of the directors’approach to corporate governance, theboard’s application of the UK CorporateGovernance Code and the role andeffectiveness of the board.The annual appraisal of the effectiveness ofour board and its committees, as well as theannual evaluation of each individual director’scontribution and performance for the year,assumed particular importance this year inlight of the succession arrangements whichwe implemented last year, summarisedbelow. In my view, the board and itscommittees continue to operate effectivelyand to meet in full their obligations to supportmanagement, to monitor performance andto maintain the board’s strategic oversight.Nevertheless, neither I as acting Chairman,nor the directors collectively, are complacentabout matters of corporate governance.Where we have elected not to apply certainprovisions of the Code, we have done sobecause we believe this to be in the bestinterests of shareholders as a whole, andthe results we have delivered to date do notseem to us to indicate that these decisionshave adversely impacted the performanceof the group.Having decided that a year characterisedby change and transition was not the rightyear to undertake an external evaluation ofour board’s effectiveness, we conducteda rigorous and extensive internal review ofperformance this year, ably orchestrated byour Company Secretary. The results of thisperformance and effectiveness assessmentwere reviewed in full and approved by theboard. Matters identifi ed as requiring furtherconsideration have been addressed,including changing the frequency andlength of board meetings to ensure moreregular meetings with additional time todiscuss group strategy, senior executivesuccession planning and the group’s talentpipeline below the executive committee level.We have also taken steps to hold additionalboard meetings in countries where the grouphas operations. These will enable the boardto conduct more detailed occasional reviewsof country and regional performance and tohold regular pre-board meeting events atwhich non-executive directors have theopportunity to meet more frequently withother members of senior management aswell as executive committee members.SuccessionTurning to succession and change, weannounced in April 2012 that Meyer Kahnwould retire as Chairman after the AnnualGeneral Meeting in July 2012, and thatGraham Mackay would be appointed asExecutive Chairman for an interim periodof one year. At this time we also said thatGraham would hand over executiveresponsibilities to Alan Clark as our newChief Executive after this year’s AGM inJuly 2013, when Graham would becomenon-executive Chairman. Although the UKCorporate Governance Code recommendsthat a chief executive should not go on tobecome chairman of the same company,the board determined that these changeswere in the best interests of SABMiller andits shareholders. The decision had thestrong backing of our shareholders andwas made after discussions with majorinstitutional investors. At the same timewe announced a number of other boardand executive succession changes, withRob Pieterse also retiring from the board.I am glad to say that these changes, andour explanations for them, were welcomedby the overwhelming majority of shareholders.The explanation for our decision was evencited by the Association of British Insurers, ina report in December 2012 on the adequacyof companies’ explanations for not applyingthe UK Corporate Governance Code underthe ‘comply or explain’ principle, as a bestpractice example. The board approveddetailed job specifi cations setting out therespective authorities and responsibilities ofthe Executive Chairman and Chief OperatingOffi cer, and over the last year Graham andAlan have worked together to prepare Alanfor the Chief Executive role and to effect astaged handover of responsibilities to ensureappropriate continuity in the managementof the group.This served us in good stead, when in Aprilthis year Graham was diagnosed with a braintumour. The board accordingly acceleratedAlan’s planned promotion to Chief Executivewith immediate effect while I stepped into thebreach as acting Chairman to allow Grahammedical leave of absence to focus on histreatment. As the transition of managementresponsibilities to Alan was already welladvanced, he has simply had to pick up theremaining executive responsibilities a littlesooner than expected, with the full supportof all of our colleagues on the executivecommittee and the directors.Last year we also reported our intentionto seek and appoint a new independentnon-executive director, with the expectationthat in due course he or she would replaceme as the senior independent director.We were delighted to be able to announceGuy Elliott’s appointment to this role inMarch 2013. Guy is highly experiencedwith a strong reputation as a seasonednon-executive and business leader. He hasbeen part of the leadership team of Rio Tinto,a global business working across bothemerging and developed markets, and hasdeep experience of working through jointventures and partnerships – all very pertinentto our business structure – as well as anunderstanding of consumer-facing businessesacquired during his time on the Cadburyboard. He will be an excellent addition toour board, and his appointment refl ects ourcontinued commitment to the process ofprogressive renewal of the board and theindependent directors in terms of age,gender and balance of skills. With Guy’sappointment effective on 1 July 2013, we willhave appointed six new independent nonexecutivedirectors over the past fi ve years.Share price performancefrom 1 April 2010 to 23 May 2013 (£ sterling)3530252015SABMiller +76.3%InternationalBrewers Index +51.4%FTSE 100 +16.6%Source: Factset and Datastreamas at 23 May 2013Note: Share prices are rebasedto SABMiller; the InternationalBrewers Index charts the shareprice progression of an indexof the company’s closest peersin the global brewing industry –Anheuser-Busch InBev, Carlsberg,Heineken and Molson Coors,relative to 1 April 2010. The indexis weighted relative to the marketcapitalisation of the brewers as at1 April 2010.Apr 2010 Oct 2010 Apr 2011 Oct 2011 Apr 2012 Oct 2012May 20138 – SABMiller plc Annual Report 2013

Sadly, we also announced in April 2013that Cyril Ramaphosa could not continueas a director of SABMiller because of hisincreasing public service commitments.Cyril has served SABMiller with distinctionsince his fi rst appointment as a director andas acting chairman of our predecessorcompany in South Africa in 1997. His wisecounsel, infectious good humour and deepunderstanding will be sorely missed. Thedirectors are grateful to Cyril for his friendshipand dedication over many years of service.On behalf of everyone at SABMiller, we wishhim every success in facing the challengesof his new role.Executive succession also continued apacein the last year with the appointment of SueClark, formerly Corporate Affairs Director,as Alan’s successor in the role of ManagingDirector of SABMiller Europe in June 2012.Sue is making excellent progress, providingstrong leadership to the operation in achallenging time for these economies.In October we appointed Catherine Mayas our new Corporate Affairs Director. Withher extensive international corporate affairsand communications experience, havingpreviously held similar roles at Centrica andReed Elsevier, she is already making a majorcontribution, leading the strong corporateaffairs function built up by Sue andcontinuing to develop the critical capabilitieswhich help to grow our business sustainablyfor the benefi t of all stakeholders.In January 2013 Norman Adami waspromoted to the new role of Chairman,SABMiller Beverages South Africa, toassume overall strategic responsibility forSABMiller’s beverage businesses in SouthAfrica. Norman had, for a number of years,acted both as managing director of TheSouth African Breweries (Pty) Ltd and aschairman of our other beverage interests inSouth Africa. However, with the continuingstrategic importance of our operationsin South Africa, we decided to appointa new managing director to run the beerbusiness to enable Norman to play a morestrategic and infl uential role in the furtherdevelopment of our beverage businessesin South Africa, as well as our developingoperations in Namibia.Further board changesWe had previously announced that, barringunforeseen circumstances, I was expectedto retire at the annual general meeting in2014 and that Guy Elliott would replace meas Deputy Chairman and Senior IndependentDirector. In the light of Graham’s illness, theboard is keeping the situation under reviewpending the progress of his course oftreatment. In the meantime, I will continueas acting Chairman, and an appropriateannouncement about the future will be madeas soon as any defi nitive decisions have beentaken. Taking account of my increased timecommitments and responsibilities as actingChairman, Mark Armour has agreed to theboard’s request that he succeed me aschairman of the audit committee, a yearearlier than planned.Many of you have written to Grahampersonally to send him your best wishesand messages of encouragement, and Iknow he is very grateful to you all for yoursupport. He is inexpressibly proud of thiscompany and its people, of what we haveachieved together and the shape it is nowin. SABMiller has a strong managementteam with considerable depth of talentand a strong board with a number ofdistinguished non-executive directorswho have provided considerable continuity,stability and experience over many yearsof growth. I am confi dent that under AlanClark’s leadership the management teamwill continue to grow our business anddeliver value to shareholders. I hope thatyou will continue to give Alan and all ofmy fellow directors your support.John ManserActing ChairmanTransforming thebeer category inLatin AmericaSince the acquisition of ourinterests in South America in2005, we have transformedthe image of the beer categoryin our markets, driving thedevelopment of new packs,price points and brandpositions. Poker, which in2006 was a regional brand inColombia with a market shareof 18%, is now the country’slargest brand with a 42%share of the beer category.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 9

Chief Executive’s review‘With some 72% of EBITA coming fromdeveloping markets, SABMiller continuesto enjoy the highest exposure of anyglobal brewer to a wide number of growthopportunities in the beer industry.’Business performanceThe group delivered another year of strongfi nancial performance, with investment inour brands, production capacity, productinnovation and trade execution capabilitydriving growth across a number of ourbusinesses. Group revenue rose by 7% on anorganic, constant currency basis, supportedby organic volume growth of 4% for totalbeverages. Revenue per hectolitre rose by3% on an organic, constant currency basis,refl ecting selective price increases and acontinued focus on expanding our portfoliosup and down the price ladder. Operatingcosts have been controlled despite signifi cantcommodity infl ation and currency headwinds,contributing to a 70 basis point expansion ona reported basis of the group EBITA marginwhich was 18.6%.Alan ClarkChief ExecutiveIn my new capacity as Chief Executive,I would like to highlight the sadness sharedby all of us in the group at the news ofGraham Mackay’s illness, diagnosed inApril 2013, and his subsequent decisionto step down early as Executive Chairman.Graham’s contribution to SABMiller’ssuccess is immeasurable, and I am surethat all the group’s shareholders andemployees would join me in expressing ourdeep gratitude for everything he has doneto make SABMiller the resounding successthat it is today. The commitment, skill andforesight with which he has led the businesssince 1997 will remain an inspiration to anew generation of SABMiller management.Speaking personally, his energy, wisecounsel and good humour have greatlyenriched my working experience here.With some 72% of EBITA coming fromdeveloping markets, SABMiller continuesto enjoy the highest exposure of any globalbrewer to a wide number of growthopportunities in the beer industry. Althoughunderlying economic conditions have slowedin some of those markets during the year,most notably Latin America, South Africaand China, we believe the economicfundamentals remain highly attractive overthe long term. SABMiller’s superior positionin these markets refl ects the longstandingcommitment and investment made tosecuring positions which are now deeplyrooted in local markets up and down the valuechain, from farming through to production,distribution, retail and consumption. Thesocial and economic progress of the marketsin which we operate is therefore of directinterest to us as we seek to grow ourbusiness in a way which is sustainable bothlocally and globally. The jobs we create, thetaxes we pay, the skills we impart and theenvironmental footprint we leave affect notjust the communities we serve but our abilityto grow our businesses for the long term.During the last nine months, while managingthe group’s executive committee as ChiefOperating Offi cer, I have had the opportunityto review our operations, partnerships,brands and people. The experience hasbeen a powerful reminder of the strengths,rigorously and consistently applied, thatunderpin SABMiller’s successful operatingmodel. This approach is founded on deeplocal insights, complemented by an increasinglycollaborative approach to codifying andreapplying global best practice around thegroup. As the nature of growth in our industrychanges over time however, our ability tolearn, adapt and deploy new knowledgeat speed and with scale will require thecontinual evolution of our approach andbusiness model.10 – SABMiller plc Annual Report 2013

Growing the core of our business withmainstream beersEarlier in this report, John Manser refersto SABMiller’s core strength in cultivatingand sustaining fl agship mainstream lagerbrands which remain faithful to their heritagewhile also establishing new connectionsand relevance with today’s consumer.This strength was notable in the year asour insight into local retail and consumerenvironments supported progress indeveloped and developing markets alike.In Latin America, for example, we havebeen working hard to secure beer’s placeas the leading alcohol choice, meeting theaspirations of new consumers and enhancingthe affordability and accessibility of ourproducts and packs to suit differentoccasions. As a result, we have seen growingconsumer loyalty to core brands such asCristal in Peru, Pilsener Light in Ecuador,Pilsener in El Salvador and Águila Light inColombia where an enhanced sales servicemodel, driven by centralised telesales anddedicated account developers, helpedimprove trade coverage and distribution.In Australia, I am especially pleased withthe progress we have achieved at Carlton &United Breweries (CUB). This is discussedin the operations review for the Asia Pacifi cregion on page 30. Recent signs ofimprovement in CUB’s market share refl ectbetter relationships with key retail partners,the benefi ts from restructuring our salesforce and early results from repositioningthe brand portfolio. This is exemplifi ed bythe turnaround of Victoria Bitter which hasbeen returned to its original recipe andrelaunched into the market, reversing anear-10 year negative trend.Similarly in South Africa, Castle Lager,a brand synonymous with our own historyand heritage, demonstrated that a beer withmore than 100 years of sales behind it canbe just as vital and relevant to an entirely newgeneration of consumers, posting its secondsuccessive year of double digit growth.We are expanding ourinnovation programmes toaddress a wider range of stylesand price points, enablingconsumers fi rstly to trade moreeasily out of informal alcoholand then to trade up within amore dynamic beer category.Lastly, in diffi cult markets on both sides ofthe Atlantic, our ability to drive top line growthwith established brands has been evident.In the USA, Coors Light has become thesecond largest beer brand in the country,growing its share of the premium lightsegment through the execution of asuccessful sales and marketing strategy,together with the consistent and powerfulrealisation of its ‘Refreshment as cold asthe Rockies’ campaign. In Europe, fl agshipbrands Tyskie in Poland and Timisoreanain Romania increased volume and marketshare, driven by innovations in productsand packs together with strong sales andmarketing delivery.Expanding ouroperations in AfricaWe continue to invest innew capacity across Africawith the commissioningof three new facilities inZambia (left), Uganda andNigeria. In addition, capacityconstraints were alleviatedthrough the expansion ofoperations in Ghana, SouthSudan and Zimbabwe.Driving our premium portfoliosConsumer tastes continually evolve, andnew generations are now looking for premiumand craft beers which are both authenticand clearly differentiated in their markets.SABMiller has created and led this localpremium segment in many markets, a leadwhich is now being secured as we do moreto develop the opportunity around the world.In Latin America we reported encouragingresults from our premium portfolio, driven bythe strong performance of the Miller brandrange. In Panama, Miller Lite and MillerGenuine Draft (MGD) enjoyed strong growth,consolidating their leadership positions inthe premium and super premium segments.Similarly in Ecuador and El Salvador, ourlocal premium brands, Club and Supremarespectively, saw double digit growth fromthe addition of the red beer variants, ClubRoja and Suprema Roja.In response to the popularity of manybeers in the craft segment, MillerCoorsis successfully reorienting its portfolio toincrease its contribution from a more diverserange of premium brands. Tenth and Blake,the MillerCoors craft and imports business,continued its strong performance driven byBlue Moon, Peroni Nastro Azzurro and theLeinenkugel’s brand family, which has hadnotable success this year with Leinenkugel’sSummer Shandy.In Africa, too, we are catering for a new andaspiring middle class with exciting premiumofferings. Castle Lite, featured on the frontof this report, generated exceptional volumegrowth across our Africa division. In SouthAfrica the brand has doubled its sales in theOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 11

Chief Executive’s reviewcontinuedWell-crafted beersOver the course of the year, comment anddebate about craft beer has intensifi ed, drivenby consumers in more developed beer marketsexpressing a preference for a wider range of tastesand fl avours. The interest, passion and excitementthat craft beer brings to the category is somethingwe are enthusiastic supporters of, using theopportunity ourselves to innovate with new stylesand recipes, demonstrating the pride and skillthat goes into our brewing. With the introductionof fl avours such as honey, spices and fruits, weare inspiring new rituals that lend themselves to adifferent range of serving occasions or complementcertain foods.As the majority of SABMiller’s beers are producedand consumed locally, we are well placed to benefi tfrom the growing interest in the quality, provenanceand personality of local craft beer. In the USA,the Tenth and Blake division offers a roster oforiginal brews including Blue Moon BelgianWhite, Leinenkugel’s, and Batch 19. In Australiaour Matilda Bay brewery produces RedbackBeer, Bohemian Pilsner, Beez Neez, Alpha PaleAle and Dogbolter while our Yatala breweryproduces the hugely successful Fat Yak PaleAle and Dirty Granny cider. We also provide aglobal distribution network for St Stefanus, aBelgian Abbey beer with a monastic heritagedating back to 1295.Our local approach to brewing allows us to drawon the heritage and values of the communitieswe serve, informing deep consumer insights.We provide economic benefi ts to the countriesin which we operate by building value chainsthat drive growth and stimulate socialdevelopment by using local resources andraw materials in a sustainable fashion.three years since its relaunch, leveragingits highly successful ‘Extra Cold’ positioningto account for more than 10% of the totalbeer market.Innovation and expandingthe beer categoryFrom craft beers and ciders in the USA,Europe and Australia, to beers brewedwith entirely new raw materials in Africa, weare expanding our innovation programmesto address a wider range of styles andprice points, enabling consumers fi rstlyto trade more easily out of informal alcoholand then to trade up within a more dynamicbeer category.In Europe, we have introduced a numberof product innovations such as the Ksia˛żęcerange of speciality beers in Poland, Fenixwheat beer in the Czech Republic andlower-alcohol ‘Radlers’ or shandies inPoland, the Czech Republic, Hungaryand Slovakia.We launched our second African cassavabasedbeer in Ghana during the year,building on the success of the cassavabasedImpala brand which was launchedtwo years ago in Mozambique. Like Impala,it offers consumers an affordable alternativeto illicit or informal alcohol while directlyfacilitating the development of a localagricultural supply chain. This year,our African division sourced 52% of itsagricultural raw materials from withinAfrica, achieving its 2014 target of 50%a year ahead of schedule.Our traditional African beer, Chibuku, is nowavailable in 10 markets with a new variant,Chibuku Super, expanding the category andgeographic footprint of our more affordableproducts still further. Similarly in LatinAmerica, we have continued the expansionof our bulk pack offerings, making beermore affordable for low-income consumersto share. An example is Pilsen Trujillo inPeru which recorded double digit growthby persuading consumers to switch fromillegal alcohol.MillerCoors now has a full pipeline ofinnovations, illustrated by the launch of Redd’sApple Ale and Third Shift Amber Lager intothe above-premium segment this year.Making good on our responsibilitiesCombating the harmful use of alcohol andrelated issues such as drink-driving orunderage drinking are important priorities forus. In October 2012, in response to the callby the World Health Organisation and itsmember states in the WHO’s Global Strategyto Reduce the Harmful Use of Alcohol, wesigned a fi ve-year global action plan withother leading beer, wine and spiritscompanies to help reduce the harmful useof alcohol. We operate over 100 programmesaround the world to contribute to reducingthe harmful use of alcohol, often workingwith local partners, governments, lawenforcement agencies and communities.We play our part in tacklingthe resource challengeswe jointly share with localcommunities, such as water,food and energy security.Our approach to helping reduce alcoholharm also requires us to regularly reviewour commercial governance practices toensure we are meeting society’s expectations.We believe that our policies on employeebehaviour, commercial communication andproduct innovation are progressive andindustry-leading, as is our company-wideeducation programme that reinforces ourbeliefs in this important area.We also play our part in tackling the resourcechallenges we jointly share with localcommunities, such as water, food and energysecurity. We aim to run our breweries aseffi ciently as possible, and I’m pleased toreport good progress against our water andcarbon reduction targets. In the year, ourwater consumption per hl of lager producedwas 3.7 hl, an 8% reduction on the previousyear. Over the same period, our fossil fuelemissions totalled 11.1 kgCO2e per hl of lagerproduced, a year-on-year drop of 10%.Businesses, governments and civil societyneed to work in partnership to developpractical, local solutions to manage scarceresources. In areas where water securitypresents a potential challenge to ourbusiness, we are taking a leading role increating partnerships such as the StrategicWater Partners Network in South Africa.InvestmentCapital expenditure for the year wasUS$1,479 million as we continued to investselectively in support of future growth.New breweries were commissioned inZambia, Nigeria and Uganda, with furthercapacity expansion completed in Ghanaand South Sudan.Through social investment programmeswhich directly support the communitieswe work in, we have helped entrepreneursestablish thousands of new businesses andgrow to become successful job creators intheir own right. This year alone SABMiller –including our foundations – investedUS$6 million in programmes to fosterentrepreneurial activity worldwide.12 – SABMiller plc Annual Report 2013

Leveraging our global scaleOur business capability programme hascontinued to progress, with the deploymentof the global Information Services solutionin Ecuador completed in the fi rst half, andthe necessary preparations completed inthe second half for deployment in Poland,which went live on 1 April 2013.Benefi t delivery is tracking ahead ofexpectations and SABMiller Procurement hascontinued to drive substantial value from theway we source our raw materials, goods andservices. In Europe, a project to understandour fridge buying requirements in moredetail has led to a dramatic reduction inthe complexity of required specifi cations,allowing the introduction of more competitivetendering and access to greater scaleeconomies. Equally, in Africa a project tosubstitute the traditional ‘steel’ beer can witha more contemporary aluminium can, hasresulted in a lighter, more environmentallysustainable product, which has removedapproximately 10,000 tons of raw materialfrom our supply chain.SABMiller Procurement now managesapproximately a third of SABMiller’s globalprocurement expenditure, primarily onbrewing and packaging materials. Ourintention is to increase this level to 50%in the forthcoming fi nancial year and tosome 80% over the medium term.People as our competitive advantageAs Chief Operating Offi cer through muchof this fi nancial year, I have had the privilegeto meet a wider cross-section of thegroup’s management and employees.The enthusiasm, commitment, energy anddetermination I have encountered at all levelsof the business has certainly reinforced myview that our people represent an enduringadvantage to our business. We now havea more experienced, mobile, mixed-genderand multi-cultural talent pool to draw on thanever before, and, given the globally integratedway in which we expect to compete in thefuture, this is a critical resource.Our talent advantage is ably illustrated bythe fact that the top 10 performing breweriesin the SABMiller group are now all in LatinAmerica, an achievement exemplifi ed byIndustrias La Constancia in El Salvador whichwon our inaugural 2012 SABMiller BestBrewery Award. The progress made by ourbreweries in Latin America on issues suchas effi ciency, quality, water usage, carbonemissions and waste is testament less totechnology than it is to the determination andprofessionalism of our people. Across LatinAmerica, our employees have demonstrateda huge thirst for knowledge and a desire toimprove and accept challenges. The insightsfrom the region are now being reappliedacross the group.Each of our businesses is responsible forensuring a safe working environment inits breweries, bottling plants and offi ces.Our aim is to create a healthy and positiveworkplace for our employees, and moredetail on our health and safety record canbe found on page 48 of this report.Addressing risksWe recognise that running a global businesspresents complex risks. Our aim is tomaximise the opportunities and minimisethe threats that any given risk presents soas to generate the greatest return for ourshareholders. We have a well developedrisk-management process (detailed on pages16 and 17) for identifying, monitoring andmanaging the principal risks we face.The recent directors’ review reveals littlesignifi cant change in the risks we face(see pages 63 and 64). We have, however,stepped up our actions to mitigate riskin some areas. The risk of changingconsumer preferences is addressed inour continuing efforts to build and enhanceour commercial capabilities to respond tochanging consumer tastes and behaviours.The management activities in Australiahave ensured that the integration projectis running ahead of schedule.Looking aheadLooking ahead to the rest of the currentfi nancial year, I am immensely proud to havethe opportunity to lead such an exceptionalsenior management team and to carryforward the inspiring story of SABMiller’sgrowth and development.Trading conditions are expected to bebroadly unchanged, affording opportunitiesto grow our categories further, particularlyin developing markets. We will continue todevelop and differentiate our beer and softdrinks brand portfolios, leveraging localinsights to bring the right products to eachmarket and capture value. We will make priceincreases selectively. Unit input costs areexpected to rise in low to mid single digitsin constant currency terms. Focus will bemaintained on cost effectiveness, includingcontinued synergy delivery in Australia andexpanding the scope of globally-managedprocurement. Cash generation will remain apriority. Targeted investments in productioncapacity, marketing and sales capability willcontinue in order to drive growth.Alan ClarkChief ExecutiveOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 13

How we create long-term sustainable valueStrength through local knowledgeHaving the rightoperating processesUnderstandingconsumer tastesBuilding the rightbrand portfolioBeing in theright marketsBuilding theright partnershipsBuilding the rightbrand portfolioWe constructcomprehensive brandportfolios that cater forthe full range ofconsumers and drinkingoccasions in each localmarket. We build priceladders that matchconsumer aspiration atall income levels througha full spectrum of tasteprofi les and packaging.In selected markets, wherevalue can be created,we operate full beverageportfolios includingcarbonated soft drinks,water and non-alcoholicmalt drinks.Understandingconsumer tastesWe ensure that our brandportfolios remain relevantand the brands withinthem continue to growsustainably. Our innovationprogrammes are drivenby a continuous processof gathering insightinto how and whereconsumers choose tobuy and consume theirfavourite beverages.Being in the rightmarketsWe invest selectively inmarkets where we believethat we can deployour skills to generatesustainable cash returnsthat exceed our capitalcost. We expect to remainin each of our marketsfor the long term and tocontribute to the healthof the beer category.Having the rightoperating processesWe constantly striveto defi ne and sharebest operating practice.We incentivise ourmanagement at everylevel of the businessthrough a rigorousprocess of team andindividual goal settingwhich aligns the need forconsistent improvementin annual profi tabilitywith the longer termambition of achievingsustainable best practice.Our perpetual quest forimprovement relies on acompetitive approach toattracting and retainingthe best available talentfor every job.Building the rightpartnershipsWe see all ourstakeholders – suppliers,employees, distributors,joint ventures, strategicalliances, retailers,governments andsocieties at large –as partners in a sharedendeavour to compete, toimprove and to celebratelife through success.14 – SABMiller plc Annual Report 2013

Key performance indicatorsMeasuring our progressThe key performance indicators (KPIs) outlined below are usedto monitor progress against our overall financial goal and ourfour strategic priorities.Further detail is contained within the Chief Financial Offi cer’s review and the Sustainable Development review.Detailed defi nitions and an explanation of the change since last year are on pages 180 and 181.Financial goal What we measure Why we measure How we have performedTo deliver a higher return to our shareholdersthan our peer group over the longer term.Total Shareholder Return inexcess of the median of ourpeer group over fi ve-yearperiods (2012 and 2011:three-year periods).Growth in adjusted earningsper share.Free cash fl ow.Monitor the value createdfor our shareholders overthe longer term relative toalternative investments inthe drinks industry.Determine the improvementin underlying earnings pershare for our shareholders.Track cash generated topay down debt, return toour shareholders and investin acquisitions.2013 2012 2011140% 89% 73%11% 12% 19%US$3,230mUS$3,048mStrategic priority What we measure Why we measure How we have performedCreating a balanced and attractiveglobal spread of businesses.The wide geographic spread of our operationsallows us to benefi t from growth in volumes andvalue in beer markets around the world. Wecontinue to look for opportunities to strengthenour geographic footprint in both developing anddeveloped markets through greenfi eld entries,alliances, mergers and acquisitions.Developing strong, relevant brandportfolios that win in the local market.We seek to develop attractive brand portfoliosthat meet consumers’ needs in each of ourmarkets. This includes expanding our offeringsto address new consumer segments anddrinking occasions, strengthening ourmainstream brands, building a differentiatedportfolio of global and local premium brandsand channelling the right brands to the rightoutlets at the right time and price.Constantly raising the profitabilityof local businesses, sustainably.Our aim is to keep enhancing our operationalperformance through top-line growth andcontinuous improvement in costs andproductivity. It’s also important that we maintainand advance our reputation, protect our licenceto trade and develop our businesses sustainablyfor the benefi t of our stakeholders.Leveraging our skills and global scale.Our global spread presents increasingopportunities to gain value from the scaleand skills of the group, not least by leveragingour scale and expertise in procurement,standardising our back-offi ce functions andintegrating our front-offi ce systems. We arealso benefi ting from ongoing collaboration andthe sharing of skills between our businesses.The proportion of our totallager volume from markets inwhich we have No.1 or No.2national market share positions.The proportion of groupEBITA from developing andemerging economies.Organic growth in lagervolumes.Group revenue growth(organic, constant currency).Revenue growth in premiumbrands (constant currency).EBITA growth(organic, constant currency).EBITA margin.Hectolitres of water used atour breweries per hl of lagerproduced.Fossil fuel emissions fromenergy use at our breweriesper hl of lager produced.Cumulative fi nancial benefi tsfrom our business capabilityprogramme.Gain an overall picture of therelative strength of our marketpositions.Assess the balance of ourearnings exposure betweenregions of the world economywith highest growth potentialand more mature regions.Track underlying growth ofour core business.Assess the underlying rateof growth in sales value ofour brand portfolios.Monitor progress in buildingour portfolio of global andlocal premium brands.Track our underlyingoperational profi t growth.Monitor our underlyingoperational profi tability.Gauge our progress inreducing the amount ofwater used in our breweries.Assess progress towardsreducing fossil fuel emissionsat our breweries.Track the payback fromour investment in thegroup business capabilityprogramme.US$2,488m2013 2012 201195% 93% 94%72% 76% 79%3% 3% 2%7% 7% 5%10% 14% 7%9% 8% 12%18.6% 17.9% 17.8%3.7 hl/hl 4.0 hl/hl 4.2 hl/hl11.1 kgCO2e/hlUS$1,229m12.4 kgCO2e/hlUS$890m13.8 kgCO2e/hlUS$620mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 15

Principal risksFocused on managing our risksThe principal risks facing the group and consideredby the board are detailed below.The group’s well-developed risk management process is described in the corporategovernance section while fi nancial risks are discussed in the Chief Financial Offi cer’sreview and in note 22 to the consolidated fi nancial statements.Principal risk Context Specific risks we face Possible impactIndustryconsolidationThe global brewing and beverages industryis expected to continue to consolidate.There will continue to be opportunities toenter attractive growth markets, to realisesynergy benefi ts from integration and toleverage our global scale.• Failing to participate invalue-adding transactions.• Paying too much toacquire a business.• Not implementingintegration planssuccessfully.• Failing to identify anddevelop new approachesto market and categoryentry.Lower growth rate,profi tability andfi nancial returns.Change inconsumerpreferencesConsumer tastes and behaviours areconstantly evolving, and at an increasinglyrapid rate. Competition in the beverageindustry is expanding and becoming morefragmented, complex and sophisticated.• Failing to develop andensure the strength andrelevance of our brandswith consumers,shoppers and customers.• Failing to continue toimprove our commercialcapabilities to deliverbrand propositions whichrespond appropriately tochanging consumerpreferences.Market positions comeunder pressure, marketopportunities are missed,lower top line growth ratesand profi tability.ManagementcapabilityWe believe that our people are our enduringadvantage and therefore it is essential thatwe develop and maintain globalmanagement capability.• Failing to identify, developand retain an appropriatepipeline of talentedmanagers for the presentand future needs ofthe group.Lower long-termprofi table growth.RegulatorychangesWith the debate over alcohol consumptionintensifying in many markets, the alcoholindustry is coming under increasingpressure from national and internationalregulators, NGOs and local governments.• Regulation placesincreasing restrictionson the availability andmarketing of beer.• Tax and excise changescause pressure on pricing.Lower growth, profi tabilityand reduced contributionto local communities insome countries.Acquisitionof Foster’sFollowing the Foster’s acquisition, the grouphas committed to delivering a turnaroundplan with specifi c and communicatedfi nancial value creation.• Failing to deliverintegration objectivesand commercial andoperational excellencetargets communicatedas part of theturnaround plan.• Failing to achieve thesynergy and cost savingcommitments of thetransaction.Lower growth rates andprofi tability. Damage to thegroup’s reputation for strongcommercial capability andfor making value-creatingacquisitions.DeliveringbusinesstransformationThe group continues to execute a majorbusiness capability programme that willsimplify processes, reduce costs and allowlocal management teams to focus moreclosely on their markets.• Failing to derive theexpected benefi ts fromthe projects currentlyunder way.• Failing to containprogramme costs orensure execution is in linewith planned timelines.Increased programmecosts, delays in benefi trealisation, businessdisruption, reducedcompetitive advantagein the medium term.16 – SABMiller plc Annual Report 2013

Mitigation• Potential transactions are subject to rigorous analysis. Only opportunities with potentialto create value are pursued.• Proven integration processes, procedures and practices are applied to ensure deliveryof expected returns.• Activities to deliver synergies and leverage scale are in place, monitored closely andcontinuously enhanced.• Developing non-traditional capabilities to enter and grow profi tably in new markets.• Ongoing evaluation of our brand portfolios in every market to ensure that they targetcurrent and future opportunities for profi table growth.• Building our brand equities through innovation and compelling marketing programmes.• Ensuring we have deep understanding of changing consumer and industry dynamicsin key markets, enabling us to respond appropriately to issues which may impact ourbusiness performance.• Continued enhancement of the SABMiller Marketing Way which sets out the bestpractice approach for our commercial processes.• Focus on monitoring and benchmarking commercial performance and developingthe critical commercial capabilities that are required in order to win in local markets.• Further develop the group’s leadership talent pipeline through our Global TalentManagement model and strategic people resourcing.• Sustaining a strong culture of accountability, empowerment and personal development.• Standardisation of key processes and best practices across the group through theroll-out of the SABMiller Ways.• Rigorous adherence to the principle of self-regulation backed by appropriate policiesand management review.• Constructive engagement with government and all external stakeholders on alcoholrelatedissues and working with them to address the harmful use of alcohol.• Investment to improve the economic and social impact of our businesses in localcommunities and working in partnership with local governments and NGOs.• Embedding of the SABMiller Ways (its processes, systems and tools) throughoutthe Foster’s business.• Ongoing monitoring of progress versus the integration plan, including frequent andregular tracking of key performance indicators.• Senior leadership closely involved in monitoring progress and in making key decisions.• Mechanisms in place to track both costs and benefi ts.• Rigorous programme management and governance processes with dedicatedresources and clear accountability.Associated strategic priorities• Creating a balanced and attractiveglobal spread of businesses.• Constantly raising the profi tabilityof local businesses, sustainably.• Developing strong, relevant brandportfolios that win in the local market.• Constantly raising the profi tabilityof local businesses, sustainably.• Leveraging our skills and global scale.• Developing strong, relevant brandportfolios that win in the local market.• Constantly raising the profi tabilityof local businesses, sustainably.• Leveraging our skills and global scale.• Creating a balanced and attractiveglobal spread of businesses.• Developing strong, relevant brandportfolios that win in the local market.• Constantly raising the profi tabilityof local businesses, sustainably.• Creating a balanced and attractiveglobal spread of businesses.• Developing strong, relevant brandportfolios that win in the local market.• Constantly raising the profi tabilityof local businesses, sustainably.• Leveraging our skills and global scale.• Constantly raising the profi tabilityof local businesses, sustainably.• Leveraging our skills and global scale.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 17

Operations reviewEurope continuedIn Romania lager volumes grew by 24%primarily driven by the growth of economybrand Ciucaş in a new PET pack launchedat the end of the prior fi nancial year.Mainstream brand Timisoreana performedahead of prior year benefi ting from growthin PET and marketing activity associatedwith the national football team sponsorship.Our premium brand Ursus also grew assistedby the launch of a new bottle in the secondhalf of the year along with a supportingpromotional campaign. Increased investmentin discounts and marketing resulted in EBITAbelow the prior year.Domestic lager volumes grew 4% in Italydespite a particularly challenging economicenvironment and poor consumer sentiment.Growth was mainly driven by the mainstreamand economy segments with Peronibenefi ting from the expansion of draughtvolumes and economy brand Wuhrerperforming well in the off-premise channel.Premium brand Nastro Azzurro performedahead of the prior year with the subduedmarket impacting performance in theon-premise channel while off-premise growthwas supported by promotional activities.Despite negative sales mix and higher inputcosts, volume growth resulted in EBITA growth.In the United Kingdom the continuedgrowth of Peroni Nastro Azzurro throughon-premise expansion resulted in volumegrowth of 4%. EBITA grew ahead of theprior year with revenue per hl growth andvolume increases.In the Netherlands domestic lagervolumes were up 1% in a highly competitiveenvironment impacted by low consumerconfi dence resulting from economicuncertainty. In this environment the onpremisechannel was negatively impactedbut growth was delivered in the off-premisechannel. Volume growth and revenue per hlimprovements resulted in increased EBITAcompared with the prior year.In Romania lager volumesgrew by 24% primarily drivenby the growth of economybrand Ciucaş in a new PETpack launched at the endof the prior fi nancial year.In the Canaries lager volumes grew 2% againsta backdrop of weak consumer sentiment ina challenging economic environment drivenby strong performance in the off-premisechannel while the on-premise channelcontinued to be subdued. Volumes grew 8%in Slovakia driven by the successful launchof Smadny Mnich Radler along with growthof Kozel and Pilsner Urquell. In Hungaryvolumes were up 5% boosted by strongpromotional support in the on-premisechannel along with the successful launchof Hofbrau Radler.On a pro forma 1 basis, our associate AnadoluEfes grew total volumes by 6% for the year,with an 8% decline in lager more than offsetby soft drinks growth of 14%.1 Pro forma volumes are based on volume informationfor the period from 1 April 2011 to 31 March 2012 usingSABMiller’s defi nition of volumes for the enlarged AnadoluEfes group as if the strategic alliance had commenced on1 April 2011.The innovative Ksia˛żęce collectionKsia˛żęce is a collection of premium specialitybeers. Its three variants lend themselves to differentoccasions and ways of serving and have proveda success with Polish beer consumers looking fornew taste experiences.22 – SABMiller plc Annual Report 2013

A fresh take on Italian stylePlaying on the theme of Italian style, our ‘Opera diPeroni’ and ‘Amici’ programmes for Peroni NastroAzzurro in the UK have brought al fresco opera tocity audiences and aperitivo and dining evenings tourban trend-setters, helping to drive share andreinforce the brand’s premium positioning.Seizing the shandy opportunityBy launching Lech Shandy in April 2012, our Polishbusiness beat its main competitor into the shandysegment, enabling it to establish a favourable pricepoint and position in the market. The productexceeded its annual target within fi ve months.Brewery freshThe delivery of tanked,unpasteurised Pilsner Urquelldirect from the brewery to thepub in the Czech Republic hasraised the image of beer andstrengthened links with the trade.Pilsner Urquell fresh from the tankis now also available in Slovakia.Dutch business winsLean and Green awardAs part of the Dutchgovernment’s Lean and Greeninitiative, our business in theNetherlands undertook to cutits CO2 emissions by 20%between 2007 and 2012. Withactions that included modifyingroad transport operations, weachieved almost 22%.reduction in CO2 emissionsin the NetherlandsInternship scheme attracts the bestIn collaboration with two universities in Pilsen andPrague, our internship programme in the CzechRepublic offers talented young people a highquality,mentored development programme withinthe business. Miloslava Kovac˘ ková and LucieŠvejdová are two of 16 trainees selected from morethan 150 candidates in 2012.SABMiller plc Annual Report 2013 – 23Overview Business review Governance Financial statements Shareholder information

Operations reviewNorth America‘MillerCoors’ EBITA increased by 1% as theimpact of lower volumes, increased costsof goods sold and higher marketing spendwas more than offset by strong revenuemanagement and favourable sales mix.’Tom LongChief Executive Offi cer, MillerCoorsStrategic focus areasWin in premium lights with Coors Light,Miller Lite and Miller 64Expand MillerCoors’ position in abovepremiumwith big new innovationsCreate value through strong revenueand category management in partnershipwith chain and independent customersSupport and develop the three-tierdistribution system to drive effectivenessand valueThe North America segment includesthe group’s 58% share of MillerCoors and100% of Miller Brewing International and thegroup’s North American holding companies.Total North America reported EBITA was 2%higher than the prior year, driven by fi rmpricing and favourable mix.MillerCoorsFor the year ended 31 March 2013,MillerCoors’ US domestic sales to retailers(STRs) declined by 2% on a trading dayadjusted basis amid weaker industryperformance. Domestic sales to wholesalers(STWs) were down by 2% on an organicbasis. EBITA increased by 1% as the impactof lower volumes, increased costs of goodssold and higher marketing spend was morethan offset by strong revenue managementand favourable sales mix.Premium light volumes were down by lowsingle digits, as the continued growth inCoors Light was offset by a mid single digitdecline in Miller Lite. Coors Light hasbenefi ted from the brand’s ‘Refreshment ascold as the Rockies’ campaign and focus onmulticultural outreach, while Miller Lite hascontinued to invest in the ‘It’s Miller Time’campaign. The Tenth and Blake division sawdouble digit volume growth driven by BlueMoon and Leinenkugel’s and their seasonalvariants, with Leinenkugel’s Summer Shandyperforming particularly well. The economysegment declined by mid-single-digits asconsumers continued to trade up to othercategories. The premium regular segmentwas also down by mid single digits, with adouble-digit decline in Miller Genuine Draftpartly offset by mid single digit growth inCoors Banquet. Other brands in theabove-premium segment grew by low singledigits following the national launch of Redd’sApple Ale and Third Shift Amber Lager.MillerCoors’ revenue perhectolitre grew by 3% due tostrong pricing and favourablebrand mix.Financial summaryReported2012NetacquisitionsanddisposalsCurrencytranslationOrganicgrowthReported2013Organic,constantcurrencygrowth%Reportedgrowth%Group revenue (includingshare of associates) (US$m) 5,250 9 – 96 5,355 2 2EBITA 1 (US$m) 756 (4) – 19 771 3 2EBITA margin (%) 14.4 14.4Sales volumes (hl 000)Lager –excluding contract brewing 41,346 32 (793) 40,585 (2) (2)MillerCoors’ volumesLager –excluding contract brewing 39,848 32 (612) 39,268 (2) (1)Sales to retailers (STRs) 39,760 n/a n/a 38,818 n/a (2)Contract brewing 4,549 n/a n/a 4,760 n/a 5Signifi cant business with production operationsSelling operations and major export markets¹ In 2013 before exceptional charges of US$nil (2012: US$35 million being the group’s share of MillerCoors’ impairment ofthe Sparks brand).24 – SABMiller plc Annual Report 2013

MillerCoors’ revenue per hectolitre grewby 3% due to strong pricing and favourablebrand mix, following growth in the Tenthand Blake division and the above-premiumsegment, together with a decline in theeconomy segment. Cost of goods sold perhectolitre increased by low single digits, dueto higher brewing material costs and adversepack mix linked to product innovation, partlyoffset by cost saving initiatives.Increased media investment behind thepremium light portfolio, together with higherspending on new products and packaginginnovation, led to an increase in marketingspend. Our share of impairment chargesrelating to the discontinuation of Home Draftpackaging and of information systems assetsrelated to MillerCoors’ Business Transformationproject was taken during the year.Leinenkugel’s –the shandy that became a cultLaunched in 2007, Leinenkugel’s Summer Shandyhas become the largest seasonal beer in the USAand gained a cult-like following. Despite calls foryear-round sales, it remains available only fromMarch to August – supported in summer 2013by national TV advertising.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 25

Operations reviewNorth America continuedRapid growth for Coors LightBy building on its ‘Rocky mountain cold refreshment’positioning, in 2012 Coors Light recorded thegreatest growth by volume of any established beerbrand in the USA, and became the country’snumber two brand.Encouraging aknowledge andappreciation of fine beerAs consumers have becomemore beer-literate, MillerCoors’crafts and imports division hasstepped up its beer educationprogrammes. Over 500employees, distributors andretailers have completed thecompany’s week-long trainingcourse and all employees mustprove their skills in beer salesand service.Photograph by Don CudneyThe master craftsmanKeith Villa intended to be adoctor until an internship ignitedhis passion for brewing. Aftertraining in Belgium, he returnedto the USA and crafted oneof the country’s most popularbeers, Blue Moon Belgian White.He continues to create awardwinningbeers for MillerCoors.Innovation revitalisesMiller Lite’s can businessThe introduction of Miller Lite’s punch top can(‘No matter how you punch it, it’s Miller Time’)has created intense interest among retailers andconsumers, stimulating social media and reversinga downward trend in Miller Lite’s can sales.Safe rides homeSince 1987, the Miller Lite FreeRides TM programme has providedsafe transport home for overthree million people after publiccelebrations. In 2012 our USjoint venture became the fi rstcorporate sponsor of Chicago’sNew Year’s Eve Penny Ridesprogramme, taking 130,000revellers safely home.26 – SABMiller plc Annual Report 2013

Operations reviewAfricaStrategic focus areasDrive growth in beer and soft drinksthrough full brand portfolios, widerprice ranges and expansion intoadjacent categoriesStep up investment behind ourmainstream brands and differentiatedpremium portfolioIncrease share of alcohol throughaccessible brand and package offeringsFurther develop sales and distributionto enhance our outlet presence andextend our geographic coverageMitigate high imported input coststhrough innovation and local supply chainsFinancial summaryReported2012‘In Africa lager volumes grew 6% despitecycling strong comparative growth of 14%in the prior year.’Mark BowmanManaging Director, SABMiller AfricaNetacquisitionsanddisposalsIn Africa lager volumes grew 6% despitecycling strong comparative growth of 14%in the prior year. Double digit volume growthwas achieved in a number of territories butthis was partially offset by the impact ofa signifi cant excise increase in Tanzaniadampening sales and softer trading inUganda driven by a weaker economy.The Castle brand family continued to deliverrobust growth, with the premium offering,Castle Lite, growing by 43% for the year.We continue to invest in the future growthof the region with the commissioning of twonew facilities at Onitsha in Nigeria and Ndolain Zambia during the year. In addition,capacity constraints were further alleviatedduring the year by expansions in Ghana,South Sudan and Zimbabwe.Soft drinks volumes on an organic basisgrew strongly at 9% supported by continuedgrowth in the non-alcoholic malt beveragescategory, most notably in Nigeria andTanzania, and sparkling soft drinks growthin Ghana, Zambia, Zimbabwe and Castel.Reported soft drinks volumes declinedas a result of the prior year managementownership changes related to the Angolanbusinesses. Other alcoholic beveragesorganic growth of 6% was dampened bya decline in Botswana due to the zoninglegislation enacted during the year whichnegatively impacted Chibuku volumes.CurrencytranslationOrganicgrowthReported2013Organic,constantcurrencygrowth%Reportedgrowth%Group revenue (includingshare of associates) (US$m) 3,686 (210) (221) 598 3,853 18 5EBITA 1 (US$m) 743 (2) (46) 143 838 20 13EBITA margin (%) 20.2 21.7Sales volumes (hl 000)Lager 17,374 35 1,036 18,445 6 6Soft drinks 13,475 (1,570) 1,058 12,963 9 (4)Other alcoholic beverages 5,330 75 321 5,726 6 7As part of our affordability strategy, traditionalbeer is now available in 10 markets as wecontinue to expand our geographic footprintand is taking share from informal alcohol.Chibuku Super, a traditional beer that isbottled in PET and has a longer shelf life,is performing particularly well in Zambiaand was recently launched in Zimbabwe.Reported EBITA growth of 13% (20% onan organic, constant currency basis) wasachieved through a combination of volumegrowth, improving group revenue per hldriven by pricing and positive segment mixin lager. Increased local sourcing of rawmaterials, effi ciencies gained through ourcapacity expansion and synergy benefi tsfrom the combination of our Angolan andNigerian businesses with Castel underpinnedEBITA growth. This was partially offset bycosts associated with our capacity expansionand increasing market-facing investment,including growing our sales force andincreasing marketing spend in markets.Strong EBITA margin expansion of 150 bps,to 21.7%, was principally driven by synergiesin Angola and Nigeria as well as geographicmix benefi ts.In Tanzania, where we were cycling a strongcomparative, lager volumes declined by 8%mainly due to the negative impact of the 25%excise increase and softer consumerSignifi cant business with production operationsAssociatesOverview Business review Governance Financial statements Shareholder information1 In 2013 before net exceptional credits of US$72 million being profi t on disposal of business US$79 million net ofUS$5 million share of associates’ impairments (2012: net exceptional gains of US$185 million being profi t on disposalof business of US$67 million, profi t on disposal of investment in associate of US$103 million and the group’s share ofthe profi ts on transactions in associates of US$23 million, net of US$8 million business capability programme costs).SABMiller plc Annual Report 2013 – 27

Operations reviewAfrica continuedspending. However lager volumes returnedto growth at the end of the year and thefourth quarter was in line with the prior year.Castle Lite outperformed the market withgrowth of 17% despite the tough tradingconditions. The wines and spirits businesscontinued to grow driven by new productand pack innovations.Lager volumes in Mozambique grew by11% underpinned by our full portfolio offering.In the mainstream segment both 2M andManica posted double digit growth whileCastle Lite grew at a signifi cantly higher ratein the premium segment in the fi rst full yearsince its launch. Impala, our cassava-basedaffordable offering, continues to impress aswe begin to expand its reach.Capacity constraints that had previouslylimited growth in Zambia have now beenalleviated with the commissioning of thebrewhouse at Ndola in November 2012.Lager volume growth of 12% was achievedthrough improved availability and animproved economic environment. Thepremium portfolio benefi ted from stronggrowth of Castle Lite, while Castle Lagerand Mosi performed well in the mainstreamsegment. Soft drinks delivered strong volumegrowth. Traditional beer volumes also postedgood growth aided by the launch of ChibukuSuper in the fi rst half of the year which hasbegun to revolutionise the category.In Nigeria lager volumes grewsignifi cantly, both as reportedand organically, due to theadditional capacity providedby the commissioning of ourgreenfi eld brewery in Onitshain August 2012.In Nigeria lager volumes grew signifi cantly,both as reported and organically, due tothe additional capacity provided by thecommissioning of our greenfi eld breweryin Onitsha in August 2012, the successfullaunch of Hero lager and the continuedgrowth of the Trophy lager brand.Botswana continued to feel the impact ofanti-alcohol sentiment with the introductionof zoning legislation and a further increasein the alcohol levy. Total alcoholic beveragevolumes declined during the year withmarket share gains in lager volumes morethan offset by the decline in traditional beervolumes as a result of the impact of thenew zoning regulations.Lager volumes in Uganda ended in line withthe prior year as a result of softer consumerspending following a sustained period of highinfl ation. In Ghana lager volumes grew by15% driven by the continued growth of Clublager. In addition we launched our secondAfrican cassava-based lager in March 2013.Despite challenges in South Sudan,particularly in the second half of the year,double digit growth in lager volumes wasachieved led by the White Bull brand.In Zimbabwe lager volumes at our associateDelta were dampened by excise-relatedpricing in November 2012 and a moresubdued economic landscape. Lager volumegrowth of 4% on an organic basis wasachieved through an increased focus onmarket activations on premium brands, whiletraditional beer volumes declined marginally.Our associate Castel delivered pro forma 1lager volume growth of 6% with good volumeperformances in Cameroon, Ethiopia andBurkina Faso. Pro forma 1 soft drinks volumesgrew by 9%.1 Pro forma volumes are based on volume informationfor the period from 1 April 2011 to 31 March 2012 forthe Castel business as if the management combinationsin Angola and Nigeria and the Castel acquisitionin Madagascar had occurred on 1 April 2011.New brewery, new brandTo mark the opening of its new brewery inOnitsha, our Nigerian business launched anew mainstream brand in September 2012.Rooted in Nigeria’s south east, Hero is nowcontributing to the strong annual growthrate across the business.Ghana’s original lager continuesto growRepositioned to appeal to young professionals,Club Premium Lager grew by 32% this yearand has become Ghana’s largest selling lager.28 – SABMiller plc Annual Report 2013

Impala benefits consumersand farmers alikeLaunched in Mozambique in 2011 and the fi rstcommercial beer to be made from cassava, Impaladelivered a strong performance by providing anaffordable alternative to home brews and creatinga new market for local growers.Safari Lager beats50 entries to becomeAfrica’s Grand ChampionThe Africa Beer Awards in Ghanain March 2013 were the fi rst-everawards from the Institute ofBrewing and Distilling for beersbrewed in Africa. We scooped12 of the 13 awards on offer withSafari Lager from Tanzania takingthe Grand Champion Beer award.Developing talent in AfricaUnder our Africa Nationals programme, 30 managershave been given international experience in Africancountries outside their home market. Our aimis to develop their capabilities through practicalinvolvement as opposed to formal training andto ensure a pipeline of high quality candidatesfor key positions in the future.30Managers onforeign assignmentsin African marketsChibuku Super brings innovationto traditional opaque beerIn the fi rst major change to the Chibuku brand sincethe 1960s, the higher-margin Chibuku Super ispasteurised and lightly carbonated and has a muchlonger shelf-life than the original. It’s now producedin Zimbabwe as well as Zambia.SABMiller plc Annual Report 2013 – 29Overview Business review Governance Financial statements Shareholder information

Operations reviewAsia Pacific‘In Asia Pacific lager volumes for the yeargrew by 6% on an organic basis, with reportedvolume growth of 16% reflecting the Foster’sacquisition and some acquisitions in China.’Ari MervisManaging Director, SABMiller Asia Pacifi cStrategic focus areasReinvigorate our Carlton & UnitedBreweries’ (CUB) brands and commercialfunctions while delivering cost synergiesFurther build market leadership inChina while enhancing profitabilityContinue to drive Snow, the largestbeer brand in China, with additionalpremium variants to increase revenuePursue market liberalisation in Indiaand focus investment on growth andprofitability in selected statesIn Asia Pacifi c lager volumes for the yeargrew by 6% on an organic basis, withreported volume growth of 16% refl ectingthe Foster’s acquisition and some acquisitionsin China, all of which were completed in theprior year. Reported EBITA grew by 166%and group revenue per hl grew by 40%primarily due to the inclusion of Foster’s.EBITA margin increased by 590 bps ona reported basis also due to the benefi tof the Foster’s acquisition.In Australia lager volumes on a pro forma 1continuing basis 2 delivered an improvingtrend, with 3% growth in the fourth quarterversus the prior year. This strong performancehas been underpinned by fl agship brand,Victoria Bitter, returning a second consecutivequarter of sales growth since its relaunchin October 2012; the fi rst such growth in overa decade. The fourth quarter performancewas further supported by strong growth inthe contemporary mainstream and premiumsegments, with brands such as Carlton Dry,Great Northern Brewing Co, Peroni and Millerall performing strongly.Full year volumes were lower by 5% on a proforma 1 continuing basis 2 , while total volumes,including discontinued brands, were down13%. Weak underlying market growth in thefi rst three quarters of the year underpinnedthe majority of the pro forma 1 decline.Our strategy to restore the core has resultedin strong volume resurgence by both VictoriaBitter in the second half of the year andCrown Lager for the full year, while CarltonDry continued with solid growth comparedwith the prior year. Focus on premiumgrowth opportunities has seen volumes forPeroni and Miller Genuine Draft grow on apro forma 1 basis compared with the prioryear, due to increased marketing campaignsand from leveraging CUB’s extensivedistribution network. In addition we haveintroduced a number of innovative cidervariants to continue the strong growthwithin this premium margin market segment,delivering full year pro forma 1 volume growthof 7% compared with the prior year.Promotional optimisation strategiesimplemented post acquisition focusedon delivering greater value both for ourcustomers and ourselves resulting inpro forma 1 group revenue per hl up 4%.This result was underpinned by an increasedfocus on profi table revenue growth, as wellas strong execution behind our premiumportfolio. The integration programme continuesto progress well and ahead of expectations,with half the anticipated annual net operatingprofi t synergies already delivered for thegroup. Initiatives driving this benefi t includethe integration of the Pacifi c Beveragesbusiness, world class manufacturing andFinancial summaryReported2012NetacquisitionsanddisposalsCurrencytranslationOrganicgrowthReported2013Organic,constantcurrencygrowth%Reportedgrowth%Group revenue (includingshare of associates) (US$m) 3,510 2,171 (106) 110 5,685 3 62EBITA 1 (US$m) 321 524 (12) 22 855 7 166EBITA margin (%) 9.1 15.0Sales volumes (hl 000)Lager 58,121 5,960 3,211 67,292 6 16Signifi cant business with production operationsSelling operations and major export marketsAssociates1 In 2013 before exceptional charges of US$104 million being integration and restructuring costs of US$74 million andimpairments of US$30 million (2012: US$70 million being transaction-related costs of US$109 million, integration andrestructuring costs of US$26 million, business capability programme costs of US$1 million and a gain on remeasurementof existing interest in joint venture on acquisition of US$66 million).30 – SABMiller plc Annual Report 2013

procurement programmes and grid andlogistics improvement initiatives. The integrationprogramme has also increased capabilityacross all functions, with deliberate prioritisationof revenue and people management, marketingand manufacturing via the roll out of SABMiller’sCapability Ways. All of these factors combinedenabled solid pro forma 1 domestic EBITAgrowth with pro forma 1 EBITA marginadvancing in excess of 300 bps.The sale of Foster’s interests in its Fijianbeverage operations, Foster’s Group Pacifi cLimited, to Coca-Cola Amatil Ltd (CCA)was completed on 7 September 2012 andFoster’s soft drinks assets were also soldto CCA on 28 September 2012. There wasno gain or loss on either disposal. Witheffect from 1 October 2012, our associatedistribution business in Dubai previouslyreported as part of Australia was transferredto our Europe division.In China lager volumes grew 6% on areported basis (5% on an organic basis).Our associate, CR Snow, continued to expandits national market share although marketgrowth was affected by heavy and prolongedrains and cooler temperatures that affectedcertain key provinces particularly during thefi rst and third quarters of the fi nancial year.Market share increases were delivered inAustralia’s ‘Big Cold Beer’ is backReversing a decade of declining sales with twoconsecutive quarters of growth, CUB’s iconicVictoria Bitter has been restored to its originalstrength and fl avour, regaining its place as thecountry’s best cold beer.Jiangsu, Guizhou, Shanxi, Inner Mongolia,Guangdong and Heilongjiang, althoughmarket share was lost in Sichuan, Anhui andZhejiang provinces.In Australia lager volumes ona pro forma 1 continuing basis 2delivered an improving trend,with 3% growth in the fourthquarter versus the prior year.Group revenue per hl on a reported basis wasbroadly level with the prior year impacted byprovincial mix. The underlying trend continuesto be positive in most provinces driven byCR Snow’s strategy of premiumisation of theportfolio underpinned by the growth of keySnow variants, notably Snow Draft and SnowBrave the World. The rising costs of rawmaterials, higher labour costs and shiftingproduct mix have increased operating costssubstantially but EBITA margin increased drivenby cost-control and effi ciency initiatives witha double digit increase in EBITA as a result.In February 2013 CR Snow entered into anagreement to acquire the brewery businessof Kingway Brewery Holdings Limited. Thetransaction was approved by shareholders ofKingway on 9 May 2013 but remains subjectto regulatory approval.Lager volumes in India grew 20% withstrong performance across the year andthe cycling of trade restrictions in AndhraPradesh to the end of August 2012. Goodgrowth was achieved in most states in whichthe business operates including the keystates of Karnataka, Haryana, MadhyaPradesh, Punjab, Maharashtra and AndhraPradesh underpinned by strong performancefrom the core mainstream brands andinnovation in the premium segment with thecontinued roll-out of Miller High Life. Grouprevenue per hl increased by 7% on aconstant currency basis, refl ecting priceincreases in certain states and a continuedfocus on higher margin brands, packs andstates. The strategy of focusing resources onareas of greater profi tability continues to yieldstrong results and EBITA increased morethan 70% when compared with the prior year.1 Pro forma volumes and fi nancial information are basedon results reported under IFRS and SABMiller accountingpolicies for the period from 1 April 2011 to 31 March 2012,as if the Foster’s and Pacifi c Beverages transactions hadoccurred on 1 April 2011.2 Pro forma continuing basis adjusts for the impact ofdiscontinued licensed brands in all comparative information.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 31

Operations reviewAsia Pacifi c continuedReplenishing groundwater in IndiaAt our Rochees brewery in Rajasthan, we havefunded the construction of six dams to help restoregroundwater levels. The subsequent rise in aquiferlevels has replenished almost as much water as thebrewery extracted last year.New pride amongCUB’s brewersOver recent months, CUB inAustralia has applied our globalbrewing standards to all itsprocesses. The resultingimprovements in taste across theportfolio have been validated byfeedback from consumers andcustomers alike. Our team ofdelighted brewers claim they’vefi nally got their beers back.Snow reinforces itsposition as the world’sbiggest beer brandCR Snow in China has increasedits capacity and widened itscoverage with the addition ofseven new breweries during theyear. The Snow brand continuesto grow ahead of the market witha rising share of the fastergrowingpremium segments.Showcasing the best new hopsCUB’s partnership with Hop Products Australia isdevoted to building hop expertise and developingnew varieties that are showcased in the CascadeFirst Harvest beer each year.Brewed in India, for IndiaDesigned for the Indian palate,Indus Pride is the fi rst Indian beerto be brewed with authentic Indianherbs and spices. Four new variantsbased on cardamom, coriander,cinnamon and fennel are the resultof months of innovation to captureIndia’s essence.32 – SABMiller plc Annual Report 2013

Operations reviewSouth AfricaStrategic focus areasCreate growth by further developingour beer and soft drinks portfolio whileensuring that the core brands continueto resonate with consumersLeverage scale to drive productivity andreinvest savings in market-facing activitiesEngage the competition in allalcohol categoriesShape a culture of partnership andsuperior beer and soft drinks serviceoffering in all classes of tradeShow leadership in shaping our roleand purpose in societyFinancial summaryReported2012‘The continued focus on market-facing activitiesand enhanced retail execution helped drivegood volume growth.’Norman AdamiChairman, SABMiller Beverages South AfricaNetacquisitionsanddisposalsBeveragesThe South Africa: Beverages businessreported a 3% decline in reported EBITA dueto the weakness of the South African randagainst the US dollar but delivered strongconstant currency EBITA growth of 10% andimproved EBITA margins. The continuedfocus on market-facing activities andenhanced retail execution helped drivegood volume growth, in spite of a deteriorationin consumer confi dence towards the latterpart of the year.Group revenue declined by 5% on a reportedbasis, due to the continued depreciationof the rand, but was up 8% on a constantcurrency basis. Group revenue per hl grewby 6% on a constant currency basis whilenet revenue growth, after excise, wascurtailed by the 10% beer excise increaseimplemented in February 2012. Lagerrevenue benefi ted from strong growth inthe premium beer portfolio and a moderateprice increase in February last year. In thesoft drinks portfolio, revenue growth wastempered by well below infl ationary priceincreases across the portfolio.We continued to make signifi cantinvestments in market-facing operations,funded largely by savings in non-marketfacingareas.CurrencytranslationOrganicgrowthReported2013Organic,constantcurrencygrowth%Reportedgrowth%Group revenue (includingshare of associates) (US$m) 5,815 – (762) 487 5,540 8 (5)EBITA 1 (US$m) 1,168 – (155) 116 1,129 10 (3)EBITA margin (%) 20.1 20.4Sales volumes (hl 000)Lager 26,859 – 421 27,280 2 2Soft drinks 17,979 – 389 18,368 2 2Other alcoholic beverages 1,565 – 48 1,613 3 3Lager volumes grew 2% despite theworsening consumer environment, and wecontinued to gain market share as volumesbenefi ted from innovative through-the-linepromotional campaigns. Castle Lite gainedadditional market share in the premiumsegment, increasing its share of the total beerindustry to more than 10%. This wasachieved by continuing to leverage its unique‘Extra Cold’ brand positioning. Castle Lagercontinued its strong growth following thesuccess of the ‘It all comes together witha Castle’ campaign which draws on itscombination of the fi nest home-growningredients. Carling Black Label’s rate ofdecline was reversed, supported by theaward-winning marketing campaign ‘CarlingCup’. In addition, Carling’s ‘Be the Coach’campaign won four Cannes Lions awards,the fi rst ever South African Breweries hasbeen awarded.Lager sales benefi ted from innovation inretail execution as well as continuingimprovements in customer service. Therewas a strong focus on key trade marketingand customer loyalty programmes tailoredto specifi c key classes of trade. There wasa signifi cant increase in the sales force andthe role of the customer interaction centrewas enhanced.Signifi cant business with production operationsSelling operations and major export marketsOverview Business review Governance Financial statements Shareholder information1 In 2013 before exceptional charges of US$22 million being charges incurred in relation to the Broad-Based BlackEconomic Empowerment scheme of US$17 million, integration and restructuring costs of US$17 million, net of businesscapability programme credits of US$12 million (2012: US$41 million being Broad-Based Black Economic Empowermentscheme charges of US$29 million and business capability programme costs of US$12 million).SABMiller plc Annual Report 2013 – 33

Operations reviewSouth Africa continued‘Extra cold’ propositionrevives Castle LiteCastle Lite has regained momentum andbecome South Africa’s largest local premiumbrand after a campaign to highlight its‘Extra Cold’ credentials. The new positioninghas included temperature-sensitive labels,specialised fridges and advertising featuringUS rappers Vanilla Ice and MC Hammer.A number of measures were implementedto drive social responsibility during the year,including the development of a detailedwater risk map for the supply chain whichled to the fi rst-time introduction of sustainableagriculture principles to 500 farmers.In addition, our efforts to promote responsibleconsumption continued through a new publicprivate partnership established with theNational Institute for Crime Prevention andthe Reintegration of Offenders (Nicro) tofurther our work on tackling drink driving.Soft drinks volumes grew 2%, cycling astrong performance in the second half ofthe prior year and despite a more challengingconsumer landscape and a double digit priceincrease on the core returnable glass packin December 2012. The growth in volumeswas driven largely by increased marketpenetration, improved customer servicelevels and focused channel execution, withparticularly strong growth in two litre PETpacks. Improved market penetration wasachieved through the use of market logisticspartnerships and reward structures. Growthin the still drinks portfolio was well above theportfolio average with strong performancesfrom Powerade and Play.Lager sales benefi ted frominnovation in retail execution aswell as continuing improvementsin customer service.On a reported basis our associate Distellposted a decline in group revenue but onan organic, constant currency basis grouprevenue grew in double digits, driven by anincrease in sales volumes in both domesticand international markets, the latter benefi tingfrom a weaker rand. EBITA fell on a reportedand organic, constant currency basis,impacted by a one-off excise charge, causedby the reclassifi cation of wine aperitifs by theSouth African Revenue Service.Both the beer and soft drinks businessesbenefi ted from planned productivityinitiatives, which included vendor contractnegotiations, marketing spend effectivenessand optimising spend on freight, as wesought to limit the cost impact of high singledigit raw material cost increases and variousmarket-facing initiatives. Reported EBITAdeclined by 3%, but was up 10% on aconstant currency basis due to the revenuegrowth and productivity improvements,with reported EBITA margin increasingby 30 bps to 20.4%.Supporting female employeesWe seek to promote diversity in the workplaceand create an environment supportive offemale employees. Recent years have seenrapid growth in the numbers of womenemployed in our South African business at allgrades with a 77% increase in female middleexecutives since 2008.Backing South Africa’ssmaller brewersWe continue to show our support for the growingcraft beer industry in South Africa by sponsoringcraft beer festivals and events. We also help ourfellow South African brewers to access rawmaterials, transfer skills and work on issues suchas maintaining the quality of the country’s hops.34 – SABMiller plc Annual Report 2013

Rewarding innovationOur annual Social Innovation Awards wereset up in South Africa to recognise innovationsthat could benefi t disadvantaged people. Lastyear’s ZAR1 million winner was an affordableand potentially life-saving malaria diagnosiskit developed by two young South Africanentrepreneurs, Ashley Uys and Lyndon Munger.Promoting cansOur 2012 ‘Summer of Cans’ programme inSouth Africa has helped to shift consumers fromtraditional bulk packs to the more convenient andprofi table 440ml cans. The promotion of 12-packsof cans for outdoor occasions has lifted our salesand share of value in the can format.Hotels and GamingSABMiller is a 39.7% shareholder in theTsogo Sun Group, which is listed on theJohannesburg Stock Exchange.Our share of Tsogo Sun’s reported revenuewas US$466 million, a decrease of 4% fromthe prior year with organic, constant currencygrowth of 7%. The operations of Tsogo Sunremain highly geared towards the South Africanconsumer in gaming and the corporate andgovernment markets in hotels; both sectorsFinancial summaryReported2012Netacquisitionsanddisposalsshowing good growth despite the diffi culteconomic climate.Gaming revenues were 8% up on an organic,constant currency basis. The gaming industryin the major provinces of South Africaexperienced varying levels of growth over theprior year with the largest province in termsof gaming win, Gauteng, reporting 7% growthand with KwaZulu-Natal growing by 9%. Threeof Tsogo Sun’s four large casinos in theseprovinces outperformed the market growth.CurrencytranslationOrganicgrowthReported2013Organic,constantcurrencygrowth%Reportedgrowth%Group revenue (share ofassociates) (US$m) 487 8 (63) 34 466 7 (4)EBITA 1 (US$m) 135 2 (19) 16 134 11 (1)EBITA margin (%) 27.7 28.8Revenue per available room(Revpar) – US$ 69.39 n/a n/a n/a 66.20 n/a (5)Every man an expertwith Carling Black LabelFronted by football legend RuudGullit, our highly successful ‘Bethe Coach’ campaign is basedon the insight that every mansecretly believes he’s a sportsexpert. It breaks new ground indigital engagement by allowingconsumers to take on the roleof football coach, select theirplayers and be rewarded witha Carling Black Label.The South African hotel industry continued toshow signs of improvement during the year.South African market occupancies averaged61% in the year compared with 57% in theprior year. Group-wide occupancies endedthe year at 65% against prior yearoccupancies of 62%.Reported EBITA for the year declined by 1%,with growth of 11% on an organic, constantcurrency basis. The underlying growth wasdriven by improved gaming and hotelrevenues together with cost savings.Overview Business review Governance Financial statements Shareholder information1 In 2013 before exceptional charges of US$nil (2012: exceptional gains of US$23 million being the group’s share of profi tson transactions in associates).SABMiller plc Annual Report 2013 – 35

Chief Financial Officer’s review‘We again achieved strong adjustedearnings per share growth in the year, up11%, continuing the trend of double digitgrowth. Free cash flow at US$3,230 millionalso continued to be robust and wasahead of last year by US$182 million.’Shareholder valueThe group’s fi nancial goal is to deliver ahigher return to our shareholders than ourpeer group over the longer term. We aspire tobe the investment of choice in the global beerindustry. We measure our performance againstthis goal by assessing total shareholderreturn (TSR), growth in adjusted EPS andfree cash fl ow.We again achieved strong adjusted EPSgrowth in the year, up 11%, continuing thetrend of double digit growth. Free cash fl owat US$3,230 million also continued to berobust and was ahead of last year byUS$182 million.Over the fi ve years to 31 March 2013 weachieved a TSR of 216%, compared withthe median of the comparator group of 76%,as measured in accordance with the termsof the performance share awards usingthree-month averages. The differentialbetween the two is our TSR key performanceindicator, as shown on page 15. In addition,since SABMiller moved its primary listing tothe London Stock Exchange in March 1999,and over the past fi ve years, we havesignifi cantly outperformed the FTSE 100 insterling terms, as demonstrated in the tablebelow which is based on daily fi gures.Since listing in March1999 to 31 March2013%2012%Last fi ve yearsto 31 March2013%2012%SABMiller plc 1,014 690 254 154FTSE 100 66 44 36 10Jamie WilsonChief Financial Offi cerFinancial highlights• Group revenue up 10% to US$34,487 million; revenue up 7% to US$23,213 million.• EBITA of US$6,421 million, an increase of 14%.• EBITA margin of 18.6%, 70 bps higher than the prior year.• Adjusted profi t before tax of US$5,630 million, an increase of 11%;profi t before tax of US$4,712 million, down 16%.• Adjusted EPS of 238.7 US cents increased by 11%; basic EPS of 205.9 US cents.• Total dividend for the year of 101 US cents per share, up 11%.• Free cash fl ow improved by US$182 million to US$3,230 million.• Net debt of US$15,701 million, a decrease of US$2,161 million from the prior year.Key performance indicators (KPIs)We use a range of KPIs to monitor progressagainst our four strategic priorities and ourfi nancial goal, as noted on page 15. Our KPIsand other performance indicators includenon-GAAP performance measures to assessunderlying performance. These incorporateconstant exchange rates for measuringrevenue and profi t growth; organic measuresto exclude acquisition and divestmenteffects; adjusted profi t measures to excludeexceptional items and amortisation of certainintangible assets; and adjusted EBITDA asa key cash fl ow measure (which includesdividends from the MillerCoors joint ventureand excludes the cash impact of exceptionalitems). Detailed defi nitions of these terms canbe found on pages 180 and 181, and forcertain items reconciliations to the nearestequivalent GAAP measure are providedbelow or in the notes to the consolidatedfi nancial statements.36 – SABMiller plc Annual Report 2013

(a) Group revenue US$mComponents of performance30,0872012*3.3% (4.7)%3.5%VolumePrice/MixCurrency*Adjusted for disposals.30,7552013(Organic)(b) Group revenue growth %Organic, constant currency basis92009457 712.4% 34,487Acquisitions2010 2011 2012 2013(c) Lager: organic volume growth %02009023 32010 2011 2012 20132013(Reported)RevenueGroup revenue was US$34,487 million(including the group’s share of associates’and joint ventures’ revenue of US$11,274million). This represented an increase of 10%(7% on an organic, constant currency basis)driven by selective price increases, increasedvolumes and favourable mix, and for thereported fi gure the impact of acquisitions,in particular Foster’s.As can be seen in chart (a), increasedvolumes and improved price and mix havecontributed similarly to the growth in grouprevenue, with price/mix gains in mostdivisions, most notably Latin America, Africa,and South Africa: Beverages. Currencymovements during the year reduced reportedgroup revenue by almost 5%, mainly due tothe weakening of European currencies andthe South African rand, partly offset by theappreciation of the Colombian peso andPeruvian nuevo sol. The impact ofacquisitions in the prior year, primarilyFoster’s and the Anadolu Efes transaction,added 12% to group revenue in the year onthe prior year base as adjusted for disposals.In the past fi ve years, we have grown grouprevenue, both on an organic basis and byacquisition. The compound annual organicgrowth rate in lager volumes has been 2.0%(2012: 2.4%), and we have leveraged thisgrowth through price and mix benefi tsto generate compound annual organic,constant currency group revenue growthof 6.6% (2012: 7.1%) over the same period.Chart (b) illustrates the organic growthin group revenue for each of the pastfi ve years, with performance shown inconstant currency.VolumesThe combination of innovation, effectivebrand development and good commercialexecution drove strong volume performancein our developing markets in Africa, LatinAmerica, Asia Pacifi c and South Africa, whileNorth America’s volumes declined amidweak industry performance. Total volumes,including lager, soft drinks and otheralcoholic beverages volumes, grew by 4%compared with the prior year on an organicbasis and by 7% on a reported basis. Lagervolumes grew by 3% on the prior year on anorganic basis and by 6% on a reported basis.2013hl mReported2012hl m%changeOrganic%changeTotal volumes 306 286 7 4Lager volumes 242 229 6 3Chart (c) shows organic growth in lagervolumes for each of the last fi ve years.Volumes in the 2009 and 2010 fi nancial yearswere impacted by the global economicrecession following the global fi nancial crisis.Input costsIn the year cost of goods sold increasedapproximately 4% on the prior year, on aconstant currency per hl basis. Raw materialinput costs increased at a slightly lower ratein the second half of the year refl ecting globalgrain prices retreating from a yearly high inthe fi rst half of the year. The impact ofincreases in commodity prices has beenmitigated partially from savings achievedthrough our global procurement programme,particularly in packaging materials throughlower conversion costs as well as valueengineering initiatives. Distribution costs,however, grew at a higher rate in the secondhalf of the year as crude oil prices increased,partly offset by effi ciency initiativesthroughout our distribution network.We expect raw material input costs toincrease by low to mid single digits in theforthcoming fi nancial year. This will principallybe driven by the anticipated increases in theglobal grain and sugar market prices,moderated by our forward cover positions,but could be impacted by the Argentinianand European barley harvests. Packagingcosts are expected to grow at a slightlyslower rate, as the scope of our procurementfunction expands and is expected to continueto deliver savings.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 37

Chief Financial Officer’s reviewcontinued(e) EBITA margin performance %26.1 27.0 15.3 13.6 14.4 14.427.7 28.8 17.9 18.620.2 21.7 9.120.1 20.415.0LatinAmerica20122013EuropeNorthAmericaAfricaAsiaPacificSouth Africa:BeveragesSouth Africa:Hotels &GamingGroup(d) EBITA growth %Organic, constant currency basis520096122010 2011 2012 201389EBITAWe report EBITA (earnings before interest,tax, amortisation and exceptional items) asthis is the key profi t metric by which the groupis managed and operating performance isevaluated internally. Segmental performanceis reported after the apportionment ofattributable head offi ce service costs.We delivered a strong fi nancial performancein 2013 with EBITA growth of 9% on anorganic, constant currency basis, withall divisions contributing to the increase,albeit Europe’s EBITA declined on areported basis. We grew reported EBITA(including the impact of acquisitions) by14% compared with the prior year, toUS$6,421 million. Chart (d) shows theincrease in EBITA for each of the last fi veyears with each year’s growth shownin constant currency after excluding theimpact of acquisitions and disposals.EBITA marginEBITA margin at 18.6% was 70 bps higherthan the prior year. Chart (e) shows EBITAmargin by division. Asia Pacifi c and Africamade particular progress, up 590 bps and150 bps respectively, the former refl ectingthe higher margin Foster’s business.Exceptional itemsItems that are material either by size orincidence are classifi ed as exceptionalitems. Further details on these items canbe found in note 4 to the consolidatedfi nancial statements.Net exceptional charges of US$203 millionbefore fi nance costs and tax were reportedduring the year (2012: credits of US$1,037million) and included net exceptional chargesof US$3 million (2012: credits of US$11 million)related to the group’s share of associates’and joint ventures’ exceptional charges.The net exceptional charges included:• US$79 million additional gain on the prioryear disposal of our Angolan businessesto the Castel group in Africa;• US$141 million charge related to thebusiness capability programme in LatinAmerica, Europe, South Africa: Beverages,and Corporate;• US$91 million charge related to integrationand restructuring costs in Asia Pacifi c andSouth Africa;• US$30 million charge in respect of theimpairment of our business in Vietnam;and• US$17 million charge in respect ofthe Broad-Based Black EconomicEmpowerment scheme in South Africa.Our share of joint ventures’ and associates’exceptional items in the year comprised aUS$5 million charge relating to an impairmentin Castel’s Angolan operations. Afternon-controlling interests our share of thecharge amounted to US$3 million.Finance costsNet fi nance costs were US$735 million,a 31% increase on the prior year’s US$562million mainly as a result of a full year’sinterest charge on the debt related to theFoster’s acquisition. Finance costs in theyear included a net gain of US$12 million(2012: US$2 million) from the mark to marketadjustments of various derivatives on capitalitems for which hedge accounting cannotbe applied. Finance costs in the year didnot include any exceptional fi nance costs(2012: US$22 million).This mark to market gain, and the netexceptional fi nance costs in the prior year,have been excluded from adjusted fi nancecosts and adjusted EPS. Adjusted netfi nance costs are reconciled to net fi nancecosts in the table on page 39. They were38% higher than in 2012. Interest cover hasdecreased to 9.1 times from 11.4 times inthe prior year.38 – SABMiller plc Annual Report 2013

2013US$m2012US$mNet fi nance costs 735 562Mark to market gain on capitalitems 12 2Exceptional fi nance costs – (22)Adjusted fi nance costs 747 542We expect fi nance costs in the 2014 fi nancialyear to be broadly similar to those in 2013.TaxThe effective rate of tax for the year (beforeamortisation of intangible assets other thancomputer software and exceptional items)was 27.0% compared with a rate of 27.5% inthe prior year. This change in the rate resultedfrom a combination of factors including:• a full year’s impact of the Foster’sacquisition;• the resolution of various uncertain taxpositions; and• reductions in corporate income tax ratesin certain territories.In the medium term we continue with ourexpectation that the effective tax rate will bebetween 27% and 29%. This is a level whichwe believe is sustainable based on thecurrent structure of the group.The statutory corporate tax charge for theyear was US$1,201 million, a small increasecompared with US$1,126 million in theprior year.Corporate income taxes paid can bedistorted relative to the annual tax chargeas a result of the payment of a tax liabilityfalling outside the fi nancial year, and becauseof deferred tax accounting treatment.Uncertainty of interpretation and applicationof tax law in some jurisdictions alsocontributes to differences between theamounts paid and those charged to theincome statement. The amount of tax paidin the year decreased to US$683 millionfrom US$893 million in the prior year.The reduction was largely as a result of taxrefunds received in Australia arising fromthe settlement of a longstanding dispute.As a result of specifi c Australian legislationthe tax refunds generated a liability to payan amount back to the Australian Tax Offi ce(ATO) which becomes a prepayment offuture corporate income tax liabilities.Approximately US$440 million was paidback to the ATO in April 2013. The paymentwill be recovered in future years against taxliabilities that arise in Australia.Tax revenues play a key role in funding localpublic services and supporting vibrantcommunities. We pay a signifi cant amount oftax and in many countries we are one of thelargest contributors to government income.In terms of total taxes borne and collectedby the group, including excise and indirecttaxes, these amounted to US$9,900 million(2012: US$9,400 million) in the year. Thecomposition and divisional analysis is shownin charts (f) and (g) respectively.During the year approximately US$2,500million (2012: US$2,500 million) of taxes havebeen paid to African tax authorities (includingSouth Africa).Profit and earningsAdjusted profi t before tax improved by11% over the prior year to US$5,630 millionprimarily as a result of increased volumes,improved revenue per hl refl ecting selectiveprice increases and positive sales mix, andthe inclusion of Foster’s for the whole year.On a statutory basis, profi t before tax ofUS$4,712 million was 16% less than theprior year due to the inclusion of signifi cantexceptional credits arising on transactionsin the prior year, together with a full year’samortisation of Foster’s and Anadolu Efes’intangible assets. The table below reconcilesEBITA to adjusted profi t before tax and tothe statutory profi t before tax.2013US$m2012US$m%changeEBITA 6,421 5,634 14Adjusted fi nance costs (747) (542) (38)Share of associates’and joint ventures’fi nance costs (44) (30) (47)Adjusted profi t beforetax 5,630 5,062 11Exceptional items(excluding fi nancecost exceptionals) (205) 1,037Adjustments to fi nancecosts 12 (20)Amortisation (483) (264) (84)Share of associates’and joint ventures’ taxand non-controllinginterests (242) (212) (14)Profi t before tax 4,712 5,603 (16)Adjusted earnings increased by 12% toUS$3,796 million. With the weighted averagenumber of basic shares in issue for the yearof 1,590 million, up slightly from last year’s1,583 million, we achieved strong adjustedEPS growth in our reporting currency of USdollars and also in the currencies in whichour shares are quoted, as demonstrated inthe table below.2013 2012%changeUS cents 238.7 214.8 11UK pence 151.1 134.4 12South African cents 2,031.3 1,607.0 26(f) Tax borne and collectedby categoryEFBCDAA Excise 64%B Other indirect taxes 22%C Employment taxes 7%D Taxes on profits 5%E Tax withheld at source 2%F Taxes on property 0%(g) Tax borne and collectedby regionEDFCGAEmerging and developing economiesA Latin America 34%B Africa 26%C Europe 9%D Asia Pacific 4%Developed economiesE Asia Pacific 10%F Europe 9%G North America 8%BOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 39

Chief Financial Officer’s reviewcontinued(h) Adjusted earnings per share(EPS) and dividend per shareUS cents2401608002009Adjusted EPSDividend per share2010 2011 2012 2013(i) Free cash flowUS$m9720092,0102,4883,0483,2302010 2011 2012 2013A reconciliation of the statutory measureof profi t attributable to owners of the parentwith adjusted earnings is shown in note 8to the consolidated fi nancial statements.On a statutory basis, basic earnings per sharewere 23% down on the prior year primarilyas a result of the exceptional gains in theprior year.DividendsThe board has proposed a fi nal dividend of77 US cents to make a total of 101 US centsper share for the year – an increase of 11%over the prior year. This represents dividendcover of 2.4 times based on adjusted earningsper share (2012: 2.4 times). Our guideline isto achieve dividend cover of between 2.0 and2.5 times adjusted earnings. The relationshipbetween the growth in dividends per shareand adjusted earnings per share isdemonstrated in chart (h).Details of payment dates and related mattersare disclosed in the directors’ report.Business combinations and similartransactionsOn 14 March 2013 our Tanzanian subsidiary,Tanzania Breweries Ltd, acquired a 60%interest in Darbrew Ltd, a traditional beercompany in Tanzania, for cash considerationof US$6 million. Our effective interest inDarbrew is 22%.With effect from 1 January 2013, followingchanges to the shareholder agreement,our associate, Anadolu Efes, has fullyconsolidated Coca-Cola Icecek AS (CCI),the Turkish soft drinks business in which ithas a 50.26% interest. While Anadolu Efesrecorded a non-cash gain on the change incontrol, we have not recognised our shareof the gain as the uplift in value was refl ectedwithin the fair valuation on acquisition of ourinvestment in Anadolu Efes. The impact ofthe change in control has been adjusted inour organic results.On 7 September 2012 we completed thedisposal of Foster’s interests in its Fijianbeverage operations, Foster’s Group Pacifi cLtd, which was classifi ed as held for saleat 31 March 2012, for cash considerationof US$57 million, net of cash disposed, andon 28 September 2012 we completed thedisposal of Foster’s soft drinks assets, bothto Coca-Cola Amatil Ltd. No gain or losswas recognised on the disposals as thenet assets were fair valued on our acquisitionof Foster’s.On 7 November 2012 Foster’s sold its 49.9%interest in Foster’s USA LLC to MillerCoors forcash consideration of US$21 million. Foster’sUSA is now wholly owned by MillerCoors.Cash flow and investment highlightsNet cash generated from operations beforeworking capital movements (EBITDA) ofUS$5,758 million increased by 16%compared with the prior year. EBITDAexcludes cash contributions from associatesand joint ventures and also includes theeffects of cash fl ows from exceptional items.To consider cash generation on an underlyingbasis, we use an adjusted EBITDA measurewhich excludes the cash fl ow impact ofexceptional items and includes the dividendsreceived from MillerCoors (which are aproxy for our share of MillerCoors’ EBITDA).Adjusted EBITDA of US$6,835 million grewby 11% compared with the prior year.Adjusted EBITDA margin, including our shareof MillerCoors’ revenue, improved 110 bpsin the year to 24.1%.2013US$m2012US$mEBITDA (see note 27a) 5,758 4,979Plus cash outfl ows fromexceptional items 191 308Plus MillerCoors dividend 886 896Adjusted EBITDA 6,835 6,183Revenue 23,213 21,760Plus share of MillerCoors’revenue 5,214 5,11628,427 26,876Adjusted EBITDA margin 24.1% 23.0%Cash fl ow from working capital was anoutfl ow of US$204 million, principally as aresult of the utilisation of restructuring andonerous contract provisions, primarily inAustralia, together with the impact of highersales in the fi nal month of the year on debtcollection, partially offset by the extensionof supplier payment terms. Cash generatedfrom operations increased by 6% over theprior year, to US$5,554 million.Tax paid in the year was down to US$683million from US$893 million in the prior year.As described in the tax section the decreasearose largely as a result of a refund followingthe settlement of a long standing dispute inAustralia, partially offset by additionalwithholding taxes paid as a result of ourgeographic structure and general timingdifferences. Tax payments in the year ending31 March 2014 are expected to increaseas result of the tax prepayment made inAustralia in April 2013.40 – SABMiller plc Annual Report 2013

Net interest paid increased compared withthe prior year to US$770 million from US$407million primarily refl ecting a full year’s interestpayments on the increased borrowingsfollowing the Foster’s transaction.Capital expenditure on property, plant andequipment for the year was US$1,335 million(2012: US$1,473 million), or US$1,479 million(2012: US$1,639 million) including thepurchase of intangible assets. We havecontinued to invest selectively in ouroperations to support future growth,particularly in Africa where new brewerieswere commissioned in Nigeria, Uganda andZambia during the year and there has beenfurther capacity expansion in Ghana andSouth Sudan. Capital expenditure ofapproximately US$1,700 million is expectedin the next fi nancial year.Free cash fl ow improved by US$182 millionto US$3,230 million, refl ecting higher cashgenerated from operating activities anddecreased capital expenditure. Free cash fl owover the last fi ve years is shown in chart (i).Business Capability ProgrammeIn addition to the exceptional costs of thebusiness capability programme noted above,the programme incurred capital expenditurein the year of US$65 million (2012: US$122million). Accumulated improvements inworking capital of US$560 million have beenachieved. Cumulative net operating benefi tsin the year amounted to US$321 million(2012: US$159 million). These includebenefi ts generated from the globalprocurement programme, the regionalmanufacturing operation in Europe and salesand distribution systems in Latin America.Including cost avoidance benefi ts and the netoperating benefi ts of prior years, theaccumulated benefi ts from the programmenow amount to US$1,229 million.We continue to benefi t from the extensionof our globally-managed procurementprogramme and other components.Our estimates of cumulative net operatingbenefi ts are expected to be US$400 millionin the forthcoming year and with an annualrun rate of approximately US$450 millionby March 2014.Balance sheetA signifi cant proportion of the non-currentassets on our balance sheet refl ectacquisitions since our listing on the LondonStock Exchange in March 1999. No goodwillor intangible assets are recognised on thebalance sheet in relation to businesses orbrands that have been developed organicallyor were acquired prior to 1998. The samepolicy applies for our investments inassociates and joint ventures, includingMillerCoors. Acquisitions post 1 April 1998and prior to the IFRS transition in 2005 wereaccounted for in accordance with UK GAAP,with intangible assets, such as brands, notseparately recognised but instead formingpart of the goodwill on the acquisition,which was amortised over 20 years in mostinstances. On transition to IFRS in 2005,we changed our policy and have recognisedacquired intangible assets, primarily brands,separately from goodwill on acquisitions,with intangible assets subject to amortisationand with no amortisation of goodwill. Thegoodwill and intangible assets relating toinvestments in associates and joint venturesincluding MillerCoors are subsumed withinthe investment total and not separatelyidentifi ed on our balance sheet.Total assets increased to US$56,294 millionfrom the prior year’s US$55,928 million(restated to refl ect adjustments to provisionalfair values of business combinations in theprior year), primarily as a result of profi tsearned and cash generated in the year, partlyoffset by the impact of currency translation.Goodwill decreased by US$309 million toUS$19,862 million compared with the restatedprior year amount, predominantly as a resultof the impact of foreign exchange rate changeson goodwill denominated in currencies otherthan the US dollar.Intangible assets decreased by US$323 million,compared with the restated prior year amount,to US$9,635 million primarily refl ectingamortisation and foreign exchange movements,partially offset by additions primarily relatedto the business capability programme.Gross debt at 31 March 2013 decreasedto US$17,872 million from US$18,607 millionat 31 March 2012. Gross debt comprisesborrowings together with the fair value ofderivative assets or liabilities held to manageinterest rate and foreign currency risk ofborrowings. Net debt (comprising gross debtnet of cash and cash equivalents) decreasedto US$15,701 million from US$17,862 millionat 31 March 2012. The reduced level of debtresulted primarily from the partial repaymentof the Foster’s acquisition facilities, togetherwith the repayment on maturity of bonds inColombia and South Africa. As at 31 March2013 we held cash and cash equivalentinvestments of US$2,171 million (2012:US$745 million).An analysis of net debt is provided in note27c to the consolidated fi nancial statements.Our gearing (presented as a ratio of net debtto equity) has decreased to 57.2% from68.6% at 31 March 2012 (restated).Total equity increased from US$26,032million at 31 March 2012 (restated) toUS$27,460 million at 31 March 2013. Theincrease was primarily due to the profi t forthe year, share issues, a credit of US$189million related to share-based paymentcharges, partly offset by currency translationmovements on foreign currency investmentsand dividend payments.Financial structure and liquidityOur strong fi nancial structure gives usadequate resources to facilitate ongoingbusiness along with medium-term fl exibilityto invest in appropriate growth opportunitiesand manage the balance sheet.The group fi nances its operations throughcash generated by the business and amixture of short and medium-term bankcredit facilities, bank loans, corporate bondsand commercial paper. In this way, we avoidover-reliance on any particular liquiditysource. We use cash in hand, cash fromoperations and short-term borrowings tomanage liquidity.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 41

Chief Financial Officer’s reviewcontinued(j) Net debt profileDFECAA US dollar 40%B Australian dollar 17%C Euro 16%D Colombian peso 7%E South African rand 4%F Other currencies 16%BThe following table summarises our fundingstructure at 31 March 2013.2013US$m2012US$mOverdrafts (212) (139)Borrowings (18,301) (19,067)Derivatives 676 620Finance leases (35) (21)Gross debt (17,872) (18,607)Cash and cash equivalents 2,171 745Net debt (15,701) (17,862)Maturity of gross debt:Within one year (2,376) (1,061)Between one to two years (4,135) (1,958)Between two and fi ve years (4,811) (10,263)Over fi ve years (6,550) (5,325)The average maturity of the gross committeddebt portfolio is 6.7 years (2012: 6.9 years).On 19 July 2012 and 9 September 2012respectively, ZAR1,600 million 9.935% Notesdue 2012 and COP370,000 million IPC+8.18%Ordinary Bonds due 2012 matured and wererepaid from existing resources.On 6 December 2012 SABMiller Holdings Incissued €1,000 million 1.875% Notes dueJanuary 2020. The notes were issued underthe SABMiller Holdings Inc US$3,000 millionEuro Medium Term Note Programme,established on 12 October 2012 andguaranteed by SABMiller plc. The proceedsof the bond were used to repay a portion ofthe three and fi ve-year term facilities put inplace to fi nance the acquisition of Foster’s.On 28 March 2013 SABSA Holdings Ltdissued ZAR1,000 million 7.125% Notes dueMarch 2018. The notes were issued underthe ZAR6,000 million Domestic MediumTerm Note Programme, established on13 December 2012 and guaranteed bySABMiller plc. The proceeds of the bondwere used to repay existing indebtedness.On 15 March 2013 SABMiller plc extendedthe maturity date of its US$2,500 millioncommitted syndicated facility to 6 April 2018.Our committed undrawn borrowing facilitieshave decreased from US$3,810 million at 31March 2012 to US$3,352 million at 31 March2013. We have suffi cient headroom to serviceour operating activities and ongoing capitalinvestment. Maturing debt in the next 18months includes COP338,500 million andCOP640,000 million bonds maturing June2013 and May 2014 respectively, US$1,100million and US$550 million bonds maturingin August 2013 and January 2014 and anumber of local bank facilities. Currentcommitted headroom is suffi cient to cover allmaturing facilities over the next 18 months.We have continued to be able to accesssuffi cient and signifi cant funding from anumber of sources and expect to renewmaturing facilities as necessary.Currency, interest rate, commodity andcredit risk managementWe manage the risks from foreign exchange,interest rates, commodities and credit riskwithin a framework of policies approved bythe board which are reviewed on a regularbasis. Exposures are managed within targethedge levels and reported regularly to thetreasury and audit committees.Currency riskMost of our net assets are denominated incurrencies other than the US dollar with theresult that our US dollar balance sheet canbe signifi cantly affected by currencymovements. We seek to mitigate this impact,where cost effective, by borrowing (directlyor synthetically) in the same currencies as thefunctional currencies of our main operatingunits. We borrow principally in US dollars,Australian dollars, euros, Colombian pesosand South African rand. Other than this, wedo not hedge translation exposures.Our debt profi le at 31 March 2013 (after takingaccount of derivatives) is illustrated in chart (j).We are also exposed to transactionalcurrency risk on sales and purchases.Committed transactional exposures arefully hedged and a proportion of othertransactional exposures for a period of up to18 months is also hedged; this is principallyachieved using forward exchange contractsand foreign exchange swaps.Interest rate riskOur policy is to borrow (directly or synthetically)principally in fl oating rates, refl ecting our viewthat fl oating rates are generally lower thanfi xed rates in the medium term. However,in order to mitigate the impact of an upwardchange in interest rates, the extent towhich group debt may be in fl oating ratesis restricted to below 75% of consolidatednet debt and in addition is managed to ameasure based on the potential impact ofadverse moves in interest rates. This policyexcludes infl ation-linked debt. As at 31 March2013 56% of net borrowings were at fi xedrates taking into account fi nancial derivatives,compared with 50% at 31 March 2012.Exposure to movements in interest rateson group borrowings is managed throughinterest rate swaps and forward rateagreements as well as borrowings in fi xedand fl oating rate instruments.42 – SABMiller plc Annual Report 2013

The weighted average interest rate for thetotal gross debt portfolio at 31 March 2013decreased to 4.1% (2012: 4.9%) primarilyrefl ecting the reduction in interest rates incertain currencies and the repayment ofsome high interest rate debt during the year.Commodity riskOur policy is to manage both commoditysupply and price risk. Commodity supplyrisk is managed by the setting of minimumcoverage levels and principally throughsupplier contracts. Commodity price riskis managed within minimum and maximumguardrails principally through multi-year fi xedprice contracts with suppliers and whereappropriate derivative contracts. We hedgea proportion of commodity supply and pricerisk for a period of up to fi ve years. Wherederivative contracts are used, we manageexposures principally through exchangetraded futures, forward contracts and swaps.Credit riskOur counterparty credit risks arise mainlyfrom exposure to customers and fi nancialinstitutions. We limit the exposure to fi nancialinstitutions arising from cash, deposits ofsurplus funds and derivative fi nancialinstruments by setting credit limits based onthe institutions’ credit ratings and generallyonly with counterparties with a minimumcredit rating of BBB- and Baa3 fromStandard & Poors and Moody’s respectively.There is no signifi cant concentration of creditrisk with respect to trade receivables as wehave a large number of internationallydispersed customers.Usage of derivative instrumentsOur policy only allows the use of derivativeinstruments to manage the currency,commodity and interest rate risks arisingfrom our operations and fi nancing activities.It is group policy that no trading in fi nancialinstruments is undertaken.CurrencyThe key exchange rates to the US dollarused in the preparation of the consolidatedfi nancial statements are detailed in thetable below. Most of the major currenciesin which we operate depreciated againstthe US dollar on a weighted average basisover the year with the exception of theColombian peso and the Peruvian nuevo sol.In terms of closing rates, European currenciesas well as the South African rand weakened,while the Australian dollar and Peruviannuevo sol strengthened.Year ended 31 March %2013 2012 changeAverage rateAustralian dollar 0.97 0.95 (2)South African rand 8.51 7.48 (12)Colombian peso 1,796 1,831 2Euro 0.78 0.72 (7)Czech koruna 19.65 17.65 (10)Peruvian nuevo sol 2.61 2.73 5Polish zloty 3.26 2.99 (8)Turkish lira 1.80 1.73 (4)Closing rateAustralian dollar 0.96 0.97 1South African rand 9.24 7.67 (17)Colombian peso 1,832 1,792 (2)Euro 0.78 0.75 (4)Czech koruna 20.07 18.52 (8)Peruvian nuevo sol 2.59 2.67 3Polish zloty 3.26 3.13 (4)Turkish lira 1.81 1.78 (1)Accounting policiesThe principal accounting policies usedby the group are shown in note 1 to theconsolidated fi nancial statements.In addition, note 1 details the areas where ahigh degree of judgement has been appliedin the selection of a policy, an assumptionor estimates used. These relate to:• the assumptions used in impairmenttests of carrying values for goodwill andintangible assets, including forecasts offuture growth, in particular the successof integration initiatives in relation to newlyacquired businesses, the appropriatediscount rates and long-term growth rates;• judgements in relation to provision fortaxes where the tax treatment cannotbe fully determined until a formalresolution has been reached withthe relevant tax authority;• assumptions required for the calculationof post-retirement benefi t obligations;• estimates of useful economic lives andresidual values for intangible assets andproperty, plant and equipment;• judgements in relation to the fair valuesof assets and liabilities on acquisition; and• judgements as to the determination ofexceptional items.Jamie WilsonChief Financial Offi cerOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 43

Sustainable developmentValue through local growthSABMiller has become a global brewer byexcelling locally – nurturing strong, local brandswhich suit the tastes of consumers in eachof our markets. We generate long-term returnsby building value chains that drive economicgrowth and stimulate social development whileusing scarce resources efficiently.Reducing the harmful use of alcoholWe know that most consumers enjoy beerin moderation with friends and families,but there is a minority who drink too much,putting themselves and the people aroundthem at risk of harm. Combating theharmful use of alcohol and the issues linkedwith it, such as drink-driving or underagedrinking, are core priorities for us. Weoperate over 100 programmes around theworld to help reduce the harmful use ofalcohol, working with local partners,governments and communities.Promoting economic growth andinnovation across our value chainOur local operations produce high-qualitydrinks that are enjoyed by millions ofconsumers every day, creating jobs,paying taxes, encouraging enterpriseand developing local skills.In the year, SABMiller generated US$25,042million of economic value 1 . The majority ofthis was distributed through the course ofour business to our employees, shareholdersand investors, suppliers and governments,as well as to local communities through ourcorporate social investment activities.The multiplier effect – the jobs and employmentcreated as a result of our investments andoperations – can be a powerful driver ofdevelopment. Our operations in Africa andSouth Africa employ over 24,000 people,supporting a further million jobs indirectlyand contributing over US$9,000 million ofadded value to the economy 2 .Around the world we have enabledentrepreneurs to establish thousands of newbusinesses. Many have grown from informalbusinesses into self-sustaining, growingcompanies. Last year alone, SABMiller –including our foundations – invested overUS$6 million in programmes to fosterentrepreneurial activity worldwide.In Africa, we are creating completely newbeer brands brewed with locally growncrops. Across the continent, SABMiller workswith a spectrum of farmers from large-scalecommercial growers to near-subsistencesmallholder farmers to boost yields, incomesand economic growth. By pioneering theuse of traditional crops such as sorghumand cassava in brewing, we are opening upnew opportunities, markets and sources ofincome for local farmers and communities.For the year ended 31 March 2013, SABMillerAfrica sourced 52% of agricultural cropsused from within Africa, reaching a year earlyits target to source 50% of agricultural cropsin Africa by 2014.In Ghana, the introduction of cassava beerduring the year gives consumers of illicitand informal alcohol access to an affordable,quality alternative. It also gives farmerspreviously working at subsistence level anew income stream and provides governmentwith a new source of revenue from taxation.In Uganda, our Eagle brands – beersbrewed from locally sourced sorghum crops– have now grown to account for 30% of thelocal market.A fair approach to taxationGiven its important contribution to localpublic services, the level of tax paid bymultinational companies is of major interestto many stakeholders.We work closely with revenue authoritiesaround the world to ensure our tax returnsand related disclosures meet theirrequirements and this is underpinned bya robust governance structure. This year,we were recognised as Best Taxpayer ofthe Year for the third year running byMozambique’s Tax Authority.Total taxes borne and collected by SABMillerplc in the last fi nancial year amounted toUS$9,900 million compared with US$9,400million in 2012. These include excise taxes,corporate taxes, transactional taxes andtaxes borne by employees, as well as ashare of our US joint venture’s taxes. Of thistotal, 73% was paid in developing countries.The corporate tax charge for 2013 wasUS$1,201 million compared with US$1,126million last year, giving us an effective taxrate of 27% (2012: 27.5%).Our approach to helping to reduce alcoholharm also requires regular reviews of ourcommercial governance practices to refl ectsociety’s expectations. We believe that ourpolicies on employee behaviour, commercialcommunication and product innovation areat the leading edge of our industry, as is thecompany-wide education programme thatreinforces our beliefs in this area.The increasing focus by both governmentsand NGOs on alcohol-related harm is leadingto increased regulatory intervention and astronger expectation that industry will playa leading role in tackling these problems.In October, in response to the call by theWorld Health Organization (WHO) and itsmember states in the WHO’s Global Strategyto Reduce the Harmful Use of Alcohol, wesigned a fi ve-year global action plan withother leading beer, wine and spirits companiesto help reduce the harmful use of alcohol.This requires us to strengthen and expandmarketing codes of practice; provide consumerinformation and innovate products responsibly;reduce underage drinking; reduce drinkingand driving; and enlist the support of retailersto reduce harmful drinking. We are confi dentwe can meet these commitments accordingto the stated timetable.The growing resource challenge: nexusthinking across our value chainThe anticipated growth of the middle classfrom two billion to fi ve billion worldwide by2030 3 is expected to raise millions of peopleout of poverty, but will also put pressure onscarce natural resources. According to the2013 World Economic Forum Global RisksReport, water supply is one of the top fi veglobal risks in terms of likelihood and impact.We rely on high-quality water and waterscarcity is already becoming a reality forsome of our breweries.1 For more information on the economic value generated by SABMiller, see Sustainable Development Summary Report 2013, page 10.2 For more information see SABMiller: Our economic impact in Africa animation, and Working for South Africa: the contribution of SABto the South African Economy, at www.sabmiller.com.3 The emerging middle class in developing countries, Homi Kharas, OECD Development Centre Working Paper No. 285, January 2010.Middle class is defi ned as having daily per capita spending of US$10 to US$100.44 – SABMiller plc Annual Report 2013

Addressing the illegal alcohol marketin Latin AmericaAcross Latin America one of the greatestchallenges we face is the presence of a largeillegal alcohol market.Tackling the complex factors that lead tothe harmful use of alcohol requires a targeted,evidence-based approach. This year weasked FLACSO, a well-respected associationof university sociology faculties in LatinAmerica, to look at alcohol consumptionpatterns across the region. Among otherinteresting fi ndings, they found that incountries with lower per capita levels of beerconsumption there is likely to be a higherproportion of the population prone to harmfulconsumption of alcohol, mostly cheap andoften illegal spirits.A second study, with EuromonitorInternational, helped us to determine the sizeand shape of the illegal alcohol market inLatin America. It found illegal alcohol to beroughly a quarter of the total alcohol market– rising to almost a third in countries such asPeru and Ecuador. It also showed that wherebeer is more affordable – as in Panama –the illegal market tends to be small.These studies help us to take more targetedaction. For instance in Peru we are workingwith local authorities to understand thereasons for the existence of the illegal alcoholmarket. In Colombia our media campaign,Licores Adulterados de Colombia (LACRA),a caricature of a fi ctional illegal alcoholcompany, seeks to change consumerattitudes towards illegal alcohol byexposing its dangers.Through this evidence-based approach,and working in partnership with governments,NGOs and other stakeholders to develop atargeted response, we are helping to reducethe harmful use of alcohol across the continent.Expanding the Water FuturespartnershipThe Water Futures partnership was establishedin 2009 to facilitate local action to addresssome of the most pressing shared water risksfacing SABMiller and surrounding communitiesand ecosystems. It set out to prove thebusiness case for private sector action.This has been done through localpartnerships in eight countries with projectsto protect watersheds, upgrade infrastructureand strengthen local water managementinstitutions. For instance, in George, SouthAfrica, SAB (Pty) Ltd is working with theDepartment of Environmental Affairs,WWF and local hop farmers to clear alienvegetation. This will help to improve waterrun-off in the area and relieve stress to theregion. In 2012, a new project in Zambiajoined the partnership: Zambian Breweriesis working with stakeholders to rehabilitatea local spring used by both its Ndola facilityand the local community.To open up the knowledge, experienceand benefi ts of the partnership to moreparticipants, the partnership has agreedto scale-up into a broader Water Futuresinitiative. This will expand its reach, increasethe global network of local partnershipsand encourage new partners to join incollaborative action.For more information, seewww.water-futures.orgOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 45

Sustainable developmentcontinuedWater security cannot be achieved inisolation: it needs to be addressed alongsidefood and energy security with businesses,governments and civil society working inpartnership to develop practical, localsolutions. In areas where water securitypresents a potential challenge to ourbusiness, we are taking a lead in creatingthese partnerships.Our Water Futures partnership, establishedin 2009 to protect watersheds and boostgroundwater levels, covers local projectsin eight countries. In South Africa we area founder member of the Strategic WaterPartners Network – part of the global WaterResources Group (WRG) – which bringstogether businesses and other organisationsto improve water effi ciency and infrastructure.Last year, water effi ciency within our operationsimproved by 8% while fossil fuel emissions perhectolitre of lager produced fell by 10%. Froma 2008 baseline, we are on track to meet ourgoals of reducing water use per hectolitre oflager produced by 25% by 2015 and to halveour on-site fossil fuel emissions per hectolitreof lager produced by 2020.Brewing more effi ciently also reduces waste.The waste we produce is mainly organic and94.4% is reused or recycled. We also workhard to improve the sustainability of ourpackaging. Over half of our beer is packagedin returnable bottles and kegs which havea lower carbon and waste impact thansingle-use types of packaging. We workwith suppliers to reduce the weight andenvironmental impact of both returnable andone-way packaging. For example, this year,Grolsch changed its iconic swing-top bottleWater to lager ratio(hl water/hl lager)4.620084.520094.3 4.24.03.72010 2011 2012 2013*Water to lager ratio down8% to 3.7 hl/hl and on trackto reach 3.5 hl/hl by 2015.CO2e emissions from fossil fuelenergy used on site (kgCO2e/hl lager)14.9200814.3 14.2200913.812.411.12010 2011 2012 2013*Fossil fuel emissions fromenergy use at our breweriesdown 10% to 11.1 kgCO2e/hl.for a lighter version, saving over 100 tonnesof steel a year.Building sustainable development intoour operations and business planningOur 10 sustainable development prioritieshave provided a consistent framework formanaging our most signifi cant social,environmental and economic impacts sincetheir launch in 2006. They support ourstrategic priority to raise constantly theprofi tability of local businesses, sustainably.Our local operations use the 10 prioritiesto guide how they invest their resources,depending on their local issues andchallenges. At a global level we focus onthree priorities material to all our operations:discouraging irresponsible drinking; makingmore beer using less water; and encouragingenterprise development in our value chains.We believe that these three issues have thegreatest potential to impact on businessvalue and create the greatest benefi ts forthe communities in which we work. Ourapproach to water recognises that water,food and energy are connected and wetherefore have an aggressive global carbonreduction target.Progress against our 10 priorities is overseenby the group corporate accountability andrisk assurance committee (CARAC), asub-committee of the SABMiller plc board.Twice a year our Sustainability AssessmentMatrix (SAM) provides a detailed country-* Independent assurance has been obtained fromPricewaterhouseCoopers LLP on the 2013 data: excludingdata relating to MillerCoors LLC the water to lager ratio andCO2e emissions from fossil fuel energy used on site were 3.7hl/hl and 10.4 kgCO2e/hl respectively. For more informationsee our Sustainable Development Summary Report 2013.Nexus animationWater, food and energy are interconnected.Water is used to grow food and to generateenergy; energy is needed to grow food andto treat and move water; and land is neededto produce energy. These three resourcescannot be managed in isolation. Thisinterconnectedness is often called thewater-food-energy nexus. Watch our animationto fi nd out more about the water-food-energynexus at www.sabmiller.com/nexusSustainable Development ReportFor more information on our approachto sustainable development and ourperformance, go to our SustainableDevelopment Report 2013 atwww.sabmiller.com/sd46 – SABMiller plc Annual Report 2013

Stairway level assessment criteria54321Leading edge: performance that representsgenuine global leadership on an issue.Best practice: achieving what is currentlyconsidered to be global best practice in aparticular field.Developing leadership: applying acomprehensive approach including innovativetools and widespread engagement.Progressing: ensuring consistent performanceis achieved in a particular field.Minimum standard: all operations must achievelevel one, or have a plan in place to do so, as itrepresents management of our key sustainabledevelopment risks.level assessment of our sustainabledevelopment performance. Every country isassessed against fi ve levels of performancefrom a minimum standard (level one) toleading edge (level fi ve). SAM data is usedto inform business planning and corporategovernance through our regional and groupCARACs. In many cases, sustainabledevelopment performance forms part of oursenior managers’ performance objectivesand remuneration.During the year, the group’s average SAMscore increased from 3.2 to 3.3 – the sixthyear of continual improvement. Scoresincreased across nine out of 10 priorities(HIV/Aids maintained a high average scoreof 3.8) as our local businesses focusedon tackling the sustainable developmentissues that are most signifi cant in theirparticular market.The average score achievedagainst our SustainabilityAssessment Matrix was 3.3.Improving our sustainable development performanceDiscouragingirresponsible drinkingMaking more beerusing less waterReducing our energyand carbon footprintPackaging, reuseand recyclingWorking towardszero-waste operationsEncouraging enterprisedevelopment in ourvalue chainsTransparency and ethicsThis year we have continued to obtainassurance as to the effective implementationof our ethics and anti-bribery policies.Our anti-bribery programme includesinternationally recognised good practiceincluding training and communication,vetting of relevant suppliers andcommunicating our ethical standards,procedures in areas such as gifts andentertainment, donations and sponsorships,and promoting our independentwhistleblowing hotlines and procedures.Our global procurement business, SABMillerProcurement, has also integrated ethicsand anti-corruption requirements into itsbest practice sourcing policies. During theyear, we have also been working with someof our key joint venture partners to understandtheir approach to transparency and antibriberyissues, and to ensure that this isaligned with our commitment to high ethicalstandards. Our Internal Audit function isengaged in a project to monitor the roll-outof our anti-bribery programme within keyoperating business units.BenefitingcommunitiesContributing to thereduction of HIV/AidsRespectinghuman rightsTransparencyand ethics2013 average2012 average2011 average2007 average201320122011Our work to ensure both that our ethicalprocedures are integrated into ‘businessas usual’ processes, and that transparencyand ethics are a key consideration in allsignifi cant business decisions, will continueon an ongoing basis.We place a high value on reporting andcommunicating in an open and honest waywith our stakeholders. We produced ourfi rst group sustainable development reportin 1998. This year, 16 of our businessesproduced their own local sustainabilityreports and many others provide informationonline. We also contributed to severalindependent reports, including the WaterFunds Business Case Report whichhighlights how investing in water funds inseveral Latin American cities can createcompetitive advantage.Increasingly we use new ways of raisingawareness of sustainable developmentchallenges. For example, in February 2013,SABMiller partnered with The Guardian tohold a day of broadcasts and live onlinedebates on how to achieve inter-connectedaction on water, food and energy security.The debates were viewed online by over3,000 visitors from 101 different countries,reaching an estimated 1.5 million peoplethrough social media.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 47

PeopleSucceeding by valuing and empowering our employeesWe believe that better business decisionscome from groups of competent, high-calibreindividuals with a mix of skills, experienceand backgrounds.Providing a flexible, fair and diverseplace to workSABMiller employs over 70,000 peopleacross six continents. Our success is drivenby each individual’s contribution and werecognise the advantages of a diverseworkforce with the right skills, commitmentand motivation.All our employees are compensated witha fair wage and comprehensive benefi tsand have access to developmentopportunities both within their roleand towards career progression.In many countries we offer our employeesfree medical healthcare if they need it.In countries where HIV/Aids prevalenceis greater than 1% we provide accessto voluntary counselling and testing andmanaged healthcare programmes forour employees and their immediatedependants if they need it.On 31 March 2013 we had 1,733 HIV/Aidspeer educators, equating to one peereducator for every 12 employees in highprevalence countries (defi ned as greaterthan 5% of the population).We treat all employees equally, respectingand promoting diversity in our workforce.We have clear policies and processes inplace to ensure that we recruit and treatpeople fairly and on merit, regardless of age,gender, sexual orientation, religion, disabilityor ethnic origin. We believe that betterbusiness decisions come from groups ofcompetent, high-calibre individuals with amix of skills, experience and backgrounds.In an industry traditionally perceived asmale-dominated, we have various initiativesfor ensuring better representation for women.These include MillerCoors’ BuildingRelationships and Empowering Women(BREW) mentoring programme in the USA,companywide and supported by a femaleexecutive sponsor. As at 31 March 2013,18.8% of our workforce were female (2012:19.0%) and 28.1% of our executives andmanagers were women (2012: 27.8%).Although only two of the 12 membersof the executive committee are female,19% of SABMiller’s plc board are women,which is higher than the FTSE100 average 1and three of our eight independent nonexecutivedirectors are female.Our employees play a crucial role in oursuccess and it is important that we solicittheir views and listen to their ideas andopinions. This is done in almost all of ouroperations through employee engagementsurveys. We respect our employees’ rightto union representation and 38% of ourworkforce are union members (2012: 36%).Many of our businesses have developedproductive partnerships with trade unionson collective bargaining and other issues.We are signatories of the UN GlobalCompact and have recently rolled out arevised approach to managing human rightsrisks, taking account of the UN’s UniversalDeclaration of Human Rights and GuidingPrinciples on Business and Human Rights.This approach helps our local businessesto identify and mitigate any signifi cant riskswithin their operations and value chains.This year, SABMiller Procurement launcheda new Supplier Code of Conduct andSustainable Development Standards coveringthe protection of human rights and labourstandards, transparency and business ethicsand environmental impact. As a member ofSEDEX, the Supplier Ethical Data Exchange,and AIM-PROGRESS, a cross-sector forumthat promotes responsible sourcing, we workcollaboratively to improve supplier standardsand share best practices. Two thirds of ourglobal suppliers’ sites have been assessedagainst our standards using SEDEX.For many years, in South Africa we havesupported Broad-Based Black EconomicEmpowerment (BBBEE) initiatives aimed atgrowing the economy by including andempowering previously disadvantaged SouthAfricans. More than 78% of SAB (Pty) Ltd’sworkers are from previously disadvantagedgroups and 61% of its workers are black. Thisyear in the annual BBBEE verifi cation, SABachieved 73.11 (2012: 72.9) and is therefore aLevel 4 contributor to BBBEE. Through itsBBBEE ownership programme, SAB Zenzele,the business has created almost 40,000shareholders among staff and retailers.Safety, health and wellbeingof our employeesEach of our businesses is responsible forensuring a safe working environment inits breweries, bottling plants and offi ces.We aim to create a healthy and positivework environment and we know that absentor unmotivated employees can reduceproductivity. We support the World EconomicForum’s alliance on workplace wellness,a consortium of companies committed toadvancing wellness in the workplace. Throughthis group, we share information about ourprogrammes with other members – oneexample being our Employee Alcohol Policy.We aim to make sure that our employees,contractors and visitors to our breweries,bottling plants and offi ces are safe. We havesystems to identify and minimise the risk ofaccidents, including regular audits, androbust monitoring and reporting of incidentswhen they do occur.We employ over 70,000 peopleacross six continents.It is with regret that we report 14 employeeand contractor fatalities this year. Two ofthese related to accidents while undertakingmaintenance or repair activities, nine related toaccidents involving vehicles, and three relatedto robberies or assaults on our staff while onsales or trade visits. In each case we haveundertaken an investigation and, whereapplicable, implemented measures to minimisethe likelihood of such an incident recurring.During the year, we recorded 15,695 dayslost through injury – a 12% decrease on2012. However, we recorded 1,788 industrialinjuries, which represents a slight increaseon last year (2012: 1,713).This year we have undertaken a detailedreview of our global health and safetypractices, the results of which have beenshared with the group CARAC. A workinggroup is now looking at strengthening ourhealth and safety management and reportingstructures across all of our operationalfunctions. This review has a high prioritywithin the business and we aim to implementany changes in the coming fi nancial year.Delivering business success throughhigh performanceWe recognise and reward strong performance.Every year, each employee sets stretchingindividual objectives in conjunction with theirmanager. These goals are linked to localcompany objectives, ensuring that eachindividual has clear accountability fordelivering the business strategy.1 The Female FTSE board report 2012, International Centre for Women Leaders, Cranfi eld University.48 – SABMiller plc Annual Report 2013

Bonus payments and salary increasesare linked to performance against theseindividual goals and are calculated againsta combination of individual achievementand overall company performance.Attracting and retaining talentWe aim to offer appropriate careerdevelopment opportunities to all ouremployees and encourage each individualto take ownership of, and manage, theirown development, whether in their currentrole or to prepare them for a new one.Through our global learning strategy we offerover 200 courses from specifi c functionalprogrammes to management developmentPromoting prevention, testingand treatment for life-threateningdiseases in AfricaWe operate in regions where some lifethreateningdiseases such as HIV/Aids andmalaria are prevalent. Following successfulpilots in Botswana, South Africa, Swazilandand Tanzania, we are rolling out our newWellness Development Programme whichfocuses on these diseases as well as onsexually transmitted infections, hepatitis Band C and tuberculosis. Under the programme,we train employees to become peer educatorswho can engage with their colleagues andthe surrounding community to promoteprevention, testing and treatment.As we tackle HIV/Aids in countries ofhigh prevalence, this approach hasproved effective in reducing the associatedstigma and increasing voluntary testingand counselling rates for employees andtheir dependants.and leadership programmes, usingtechniques from e-learning to programmesfacilitated by leading educational institutions.This year we introduced more functionaltraining in technical areas such asengineering and brewing to strengthen andboost our capabilities and so protect us frompotential skills shortages. In the year ended31 March 2013, we provided an average of3.7 training days for every employee.3.7 days of training peremployee on average.We seek to ensure that the talent we needto protect our growth and provide tomorrow’sleaders is identifi ed early and properlynurtured. The roles most critical to deliveringbusiness strategy within SABMiller have beenidentifi ed, as has a global succession pool forthese roles – monitored by the executivecommittee – with candidates from all regions.In the past year, we have made 36 keyappointments from this global talent poolwith experienced executives taking up seniorposts groupwide.Improving employee retention in IndiaIn recent years in India, we have seen highemployee turnover rates of around 20%.In a competitive labour market we havefaced a particular challenge in attractingand retaining employees with the talent andskills to support the growth of the business.To tackle the issue, we have run acomprehensive employee engagementcampaign, Project Sangam (‘BringingTogether’ in Sanskrit), to communicate ourstrategy and ensure consistent executionacross the business. Greater alignment hasresulted in greater engagement and hasreduced turnover to 8% this year. Thebusiness has built also clear frameworks toshow how employees can progress and enjoya fulfi lling career with the company. SABMillerIndia is also doing more to communicate itsaspirations – including holding regular ‘townhall’ meetings with senior leaders – so thatall employees feel part of future success.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 49

Board of directors1. 2.3. 4.5. 6.7. 8.Corporate accountability and risk assurance committee (CARAC)Executive committeeNomination committeeRemuneration committeeAudit committee50 – SABMiller plc Annual Report 20131. Graham Mackay BSc (Eng), BComChairmanGraham Mackay joined the South AfricanBreweries Limited (SAB Ltd) in 1978 andhas held a number of senior positions inthe group, including Executive Chairmanof the beer business in South Africa.He was appointed Group ManagingDirector in 1997 and Chief Executiveof South African Breweries plc upon itslisting on the London Stock Exchangein 1999. In July 2012 he was appointedExecutive Chairman of SABMiller plc.He is a director of Philip MorrisInternational Inc. and a non-executivedirector of Reckitt Benckiser Group plc.Mr Mackay was diagnosed with a braintumour in April 2013, leading the boardto accelerate the planned promotion ofAlan Clark to Chief Executive withMr Mackay becoming non-executiveChairman. At the date of this annualreport Mr Mackay is on medical leaveof absence while continuing treatment.2. John Manser CBE, DL, FCAActing Chairman and SeniorIndependent DirectorJohn Manser joined the board in 2001,was appointed Senior IndependentDirector in July 2010 and became DeputyChairman in 2012. He is a fellow of theInstitute of Chartered Accountants andwas, until his retirement in February 2013,Chairman of Shaftesbury plc. He hasformerly held a number of seniorpositions, both in listed companies andthe fi nancial services industry, includingChairman of Robert Fleming Holdings andChairman of the London InvestmentBanking Association. He is currently theChairman of Trustees for MarlboroughCollege and is Deputy Chairman of theCollege Council.He has assumed the role of actingChairman while Mr Mackay is on medicalleave of absence. In light of his additionalresponsibilities and time commitment asacting Chairman, he will stand down aschairman of the audit committee and asa member of the audit and remunerationcommittees on 5 June 2013.3. Alan Clark MA, DLitt et PhilChief ExecutiveAlan Clark was appointed as ChiefExecutive in April 2013. He joined SAB Ltdin 1990 as Training and DevelopmentManager. He has since held a number ofsenior positions in the group, includingChief Operating Offi cer, SABMiller plc;Managing Director, SABMiller Europe;Marketing Director, SAB Ltd; ManagingDirector, Amalgamated BeverageIndustries Ltd (SAB Ltd’s soft drinksdivision) and Chairman, Appletiser SouthAfrica (Pty) Ltd.Before joining the group, he received hisDoctorate of Psychology degree from theUniversity of South Africa.4. Jamie Wilson LL.B.(hons), CA, ATIIChief Financial Offi cerJamie Wilson was appointed as ChiefFinancial Offi cer in 2011. He joinedSABMiller in 2005 and has held anumber of senior positions in the group,including Senior Vice President, MarketDevelopment and Strategy, Miller BrewingCompany, USA; Managing Director,SABMiller Russia; Managing Director forSABMiller’s Central European businesses,and Finance Director for SABMiller Europe.Before joining SABMiller he held anumber of senior roles in the globalbeverage industry.5. Mark Armour MA, FCAMark Armour joined the board in 2010. Heis a non-executive director of the FinancialReporting Council. He was Chief FinancialOffi cer of Reed Elsevier Group plc and ofits two parent companies, Reed ElsevierPLC and Reed Elsevier NV, from 1996 to2012. Prior to joining Reed Elsevier in1995 he was a partner in the Londonoffi ce of Price Waterhouse. From 2002until 2004, he was the Chairman of TheHundred Group of Finance Directors. Hesucceeds Mr Manser as chairman of theaudit committee on 5 June 2013.6. Geoffrey Bible FCA (Aust), ACMAGeoffrey Bible joined the board in 2002as a nominee of Altria Group, Inc. (Altria)following completion of the Miller BrewingCompany transaction. He served as ChiefExecutive Offi cer of Altria from 1994 untilApril 2002 and as Chairman of the Altriaboard from January 1995 until August2002, when he retired. He also served asChairman of the board of Kraft Foods Inc.from March 2001 until his retirement in 2002.7. Dinyar Devitre BA (hons), MBADinyar Devitre joined the board in 2007as a nominee of Altria. He is a member ofthe board of Altria, a director of WesternUnion Company and a special advisor toGeneral Atlantic LLC. He was senior vicepresident and Chief Financial Offi cer ofAltria between 2002 and 2008 and was adirector of Kraft Foods Inc. between 2002and 2007.He is a director of Pratham USA, servesas a Trustee of the Brooklyn Academy ofMusic and is a Trustee Emeritus of theAsia Society.8. Lesley Knox MALesley Knox joined the board in 2011.She is a non-executive director ofCentrica plc and is a Trustee of theGrosvenor Estates and Chairman ofGrosvenor Group Limited. She originallyqualifi ed as a solicitor, and then spent15 years with Kleinwort Benson beforebecoming Governor of the British LinenBank and a founder director of BritishLinen Advisers. Most recently, she wasChairman of Alliance Trust plc. She isinvolved with a number of arts andcharitable organisations. She willsucceed Mr Morland as chairman ofthe remuneration committee followingthe 2013 AGM.

9. 10.11. 12.13. 14.15. 16.17.9. John Manzoni BEng, MEng, MBAJohn Manzoni joined the board in 2004.Between 2007 and 2012 he was Presidentand Chief Executive Offi cer of TalismanEnergy Inc. Prior to joining Talisman hewas Chief Executive of Refi ning andMarketing of BP plc. He joined BP in 1983and was appointed to the BP plc board in2003. He is a member of the AccentureEnergy Advisory Board.10. Miles MorlandMiles Morland joined the board in 1999.He is founder and Chairman of twocompanies investing in Africa, BlakeneyManagement and Development PartnersInternational. He is also a director ofvarious companies investing in theemerging world. He will stand down aschairman and as a member of theremuneration committee following the2013 AGM.11. Dambisa Moyo BSc, MPA,MBA, Ph.DDambisa Moyo joined the board in 2009.She is an international economist whowrites on the macro economy and globalaffairs, and is a non-executive director ofBarclays PLC and Barrick Gold Corporation.She is a contributing editor to CNBC, thebusiness and fi nance news network. Shehas previously worked at Goldman Sachsand the World Bank in Washington D.C.12. Carlos Alejandro Pérez DávilaBA, MPhilCarlos Pérez joined the board in 2005 asa nominee of the Santo Domingo Groupfollowing completion of the Bavariatransaction. He is a Managing Director atQuadrant Capital Advisors, Inc., Chairmanof the Board of Caracol TV S.A. andserves on the board and executivecommittee of Valorem S.A. He is alsoa Director of Comunican S.A., CineColombia S.A. and the Queen Sofi aSpanish Institute. He was previously aninvestment banker at Goldman Sachs &Co., S.G. Warburg & Co. and Violy,Byorum & Partners.13. Cyril Ramaphosa Bproc LLD (hc)Cyril Ramaphosa joined the board ofSAB Ltd in 1997 and was appointed tothe board of South African Breweries plcupon its listing on the London StockExchange in 1999. He is the founder andChairman of Shanduka Group and holdsdirectorships in MTN Group Ltd, TheBidvest Group, Standard Bank andAlexander Forbes.He was elected deputy president ofthe African National Congress (ANC)in December 2012 and in light of theincreasing amount of time which hewill need to devote to his public servicecommitments, he will retire from theboard following the 2013 AGM.14. Alejandro Santo Domingo DávilaBAAlejandro Santo Domingo joined theboard in 2005, as a nominee of the SantoDomingo Group following completion ofthe Bavaria transaction. He is a ManagingDirector at Quadrant Capital Advisors,Inc., and serves on the boards of ValoremS.A., Comunican S.A. and CaracolTelevision S.A. He is the treasurer of Aidfor AIDS Charity, a member of the boardof trustees of The Metropolitan Museumof Art and is also a member of the boardof the US-based DKMS AmericasFoundation, WNET (Channel Thirteen)and the Wildlife Conservation Society.15. Helen Weir CBE, MA, MBA, FCMAHelen Weir joined the board in 2011.She is Group Finance Director of theJohn Lewis Partnership. Between 2008and 2011 she was Group ExecutiveDirector – Retail at Lloyds Banking Groupplc. She has formerly held a number ofsenior positions in both Lloyds TSB plcand Kingfi sher plc and was a nonexecutivedirector of Royal Mail Holdingsand the City of London Investment Trust.She will replace Cyril Ramaphosa as amember of the nomination committeefollowing the 2013 AGM.She is a member of the Said BusinessSchool Advisory Council and waspreviously a member of the AccountingStandards Board.16. Howard Willard BA (hons), MBAHoward Willard joined the board in 2009as a nominee of Altria. He is ExecutiveVice President and Chief Financial Offi cerof Altria and also oversees the fi nancialservices business of Philip Morris CapitalCorporation and the Strategy andBusiness Development organisation.Prior to this he was Executive VicePresident, Strategy and BusinessDevelopment for Altria and has heldvarious leadership positions at PhilipMorris USA Inc. Before joining the Altriafamily of companies in 1992 he worked atBain & Company and Salomon BrothersInc. He currently serves on the ExecutiveAdvisory Council for the Robins School ofBusiness at the University of Richmond.17. Guy Elliott MA, MBAGuy Elliott will join the board on 1 July 2013and become a member of the audit andremuneration committees. He is a seniorexecutive director of Rio Tinto plc andRio Tinto Limited and served as ChiefFinancial Offi cer from 2002 until April2013. He has been a non-executivedirector of Royal Dutch Shell plc since2010 and the chairman of its auditcommittee since May 2011. He has beenon the UK Takeover Panel since 2012.He was previously a non-executivedirector of Cadbury plc from 2007 until itsacquisition by Kraft in 2010, and duringhis tenure he served as chairman of theaudit committee until April 2009 and assenior independent director from 2008until 2010.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 51

Executive committee1. 2.3. 4.5. 6.7. 8.9. 10.The executive committee (excom) is appointed by the Chief Executive.It comprises the Chief Executive, the Chief Financial Offi cer, regionalmanaging directors and directors of group functions. Its purpose is tosupport the Chief Executive in carrying out the duties delegated to himby the board. In that context, excom executes the strategy and budgetapproved by the board. It also ensures that regular fi nancial reports arepresented to the board, that effective internal controls are in place andfunctioning, and that there is an effective risk management process inoperation throughout the group.1. Norman Adami BBusSc (hons),MBAChairman, SABMiller BeveragesSouth AfricaNorman Adami was appointed to the roleof Chairman, SABMiller Beverages SouthAfrica in January 2013 and has overallstrategic responsibility for SABMiller’sbeverage business in South Africa. Priorto this he was Chairman and ManagingDirector of The South African BreweriesLimited (SAB Ltd). He fi rst joined SAB Ltdin 1979 and has held a number of seniorpositions in the group. These includeRegional Director, Operations Director,Chairman and Managing Director,SAB Ltd, President and Chief ExecutiveOffi cer, Miller Brewing Company andPresident and Chief Executive Offi cer,SABMiller Americas.He is an independent non-executivedirector of Allied Electronics CorporationLimited.2. Mark Bowman BCom, MBAManaging Director, SABMiller AfricaMark Bowman was appointed ManagingDirector of SABMiller Africa in 2007.He joined SABMiller’s beer division in1993 and has held various seniorpositions in the group. These includeManaging Director of SABMiller’s Polishsubsidiary Kompania Piwowarska S.A.,Managing Director of AmalgamatedBeverage Industries Ltd (now the softdrinks division of SAB Ltd) and Chairmanof Appletiser.He is an independent non-executivedirector of Tiger Brands Limited.3. Sue Clark BSc (hons), MBAManaging Director, SABMiller EuropeSue Clark was appointed ManagingDirector, SABMiller Europe in June 2012,previously having held the position ofCorporate Affairs Director, SABMiller plcsince 2003. Prior to this, she held anumber of senior roles in UK companies,including Director of Corporate Affairs,Railtrack Group from 2000 to 2003 andDirector of Corporate Affairs, ScottishPower plc from 1996 to 2000.She is a Trustee of the Clore SocialLeadership Programme.4. John Davidson MA, BCLGeneral Counsel and Group CompanySecretary, SABMiller plcJohn Davidson joined the group asGeneral Counsel and Group CompanySecretary in 2006. Before joiningSABMiller, he spent his entire legal careerat Lovells, a leading international law fi rm,where he had been a partner since 1991,specialising in international corporatefi nance, cross border mergers andacquisitions, and corporate governanceadvisory work. He was the Chairmanfor 2010 and 2011 of the GC100 group(the association of general counsel andcompany secretaries of companies inthe FTSE 100).5. Domenic De Lorenzo BCom (hons),CA (SA)Director, Corporate Finance andDevelopment, SABMiller plcDomenic De Lorenzo joined SABMiller’scorporate fi nance team in 1996 from UALInvestment Bank in South Africa. Hebecame Director, Corporate Finance andDevelopment for Europe and the Americasin 2000 and the Director of the globalteam in 2010.6. Nick Fell BA (hons)Marketing Director, SABMiller plcNick Fell was appointed MarketingDirector, SABMiller plc in 2006. Prior tothis, he worked for Cadbury SchweppesPlc, as President, Global CommercialStrategy and also as Director ofMarketing, Cadbury Trebor Bassett.He previously worked for Diageo plcfor 15 years in a number of senior rolesincluding Global Brands Director, JohnnieWalker, and Group Marketing Director,Guinness Brewing.7. Tony van Kralingen BA (hons)Director: Supply Chain & HumanResources, SABMiller plcTony van Kralingen was appointedDirector: Supply Chain & HumanResources for the SABMiller group inOctober 2008. He joined SAB Ltd in 1982and has held a number of senior positionsin the group. These include OperationsDirector and Marketing Director, SAB Ltd;Chairman & Chief Executive Offi cer,Plzenský Prazdroj a.s. and, most recently,Chairman and Managing Director: SABLtd. In his current role he is accountablefor Group Procurement, Technical andR&D and Human Resources.8. Karl Lippert M.Eng (Mechanical)President, SABMiller Latin AmericaKarl Lippert was appointed President,SABMiller Latin America in 2011. He joinedthe group in 1992 and has extensiveexperience in the global brewing industry.Prior to his appointment as President ofBavaria S.A. in Colombia in 2006,he was Managing Director of KompaniaPiwowarska S.A. in Poland, andpreviously held senior positions asManaging Director of Dreher in Hungary,Sales and Distribution Director forSABMiller Europe, and various positionswithin SAB Ltd in South Africa.9. Catherine May BA (hons)Corporate Affairs Director, SABMiller plcCatherine May was appointed CorporateAffairs Director, SABMiller plc in October2012. She joined SABMiller from Centricaplc, where she served as CorporateAffairs Director from 2006 until December2011, having previously been GroupDirector of Corporate Relations at theglobal information publishing businessReed Elsevier Group plc.She is a non-executive director of theEnglish National Opera and a trustee ofthe UK National Funding Scheme and theFoundation for World Capitals of Culture.10. Ari Mervis BComManaging Director, SABMiller Asia Pacifi cand Chief Executive Offi cer, Carlton &United BreweriesAri Mervis was appointed ManagingDirector Asia Pacifi c and Chief ExecutiveOffi cer of Carlton & United Breweries in2011, having been Managing Director ofSABMiller Asia since 2007. He joined SABLtd’s soft drinks division, AmalgamatedBeverages Industries Ltd, in 1989 andhas held various senior positions in sales,marketing, fi nance and generalmanagement. He has been ManagingDirector of Swaziland Bottling Companyand Appletiser as well as ManagingDirector of SABMiller operations in Russiaand Australia.He is a director of the Melbourne BusinessSchool, and Chairman of ChinaResources Snow Breweries.52 – SABMiller plc Annual Report 2013

Directors’ reportThe directors have pleasure in submittingtheir report to shareholders, together withthe audited annual fi nancial statements forthe year ended 31 March 2013.Principal activities and business reviewSABMiller plc is a holding company whichhas brewing and beverage interests acrosssix continents. Our principal subsidiaries,associates and joint ventures are listedin note 34 to the consolidated fi nancialstatements. Our principal activities arethe manufacture, distribution and saleof beverages.We are required by the Companies Act 2006to produce a fair review of our business,including a description of the principal risksand uncertainties we face, our developmentand performance during the year, and ourposition at the end of the year. These areall covered in the business review on pages2 to 43 of this annual report. Other keyperformance indicators and informationrelating to environmental matters, employeematters and social and community issuesrequired by the business review are set outin our sustainable development review andpeople section on pages 44 to 49 of thisannual report.Significant acquisitions, disposals,financing transactions, investments andmaterial developments during the yearIn September 2012 the group completedthe disposal of Foster’s Group Pty Limited’s(Foster’s) interests in its Fijian beverageoperations, Foster’s Group Pacifi c Limited,and the disposal of Foster’s soft drinksassets. These interests and assets wereoriginally acquired as part of our December2011 acquisition of Foster’s and were soldto Coca-Cola Amatil Limited.In December 2012, SABMiller Holdings Inc,a wholly owned subsidiary of SABMiller plc,issued €1,000 million, 1.875% Notes dueJanuary 2020. These notes were issuedunder its US$3,000 million Guaranteed EuroMedium Term Note Programme establishedin October 2012 and guaranteed bySABMiller plc. The proceeds were used bySABMiller Holdings Inc to repay in part itsbank borrowings incurred to fi nance theacquisition of Foster’s.In January 2013, we announced that oursubsidiary in Panama, Cerveceria Nacional,S.A., had agreed to sell its milk and juicebusiness to La Cooperativa de Productoresde Leche Dos Pinos R.L. for a total cashconsideration of US$86 million. Followingapproval from the Panama competitionauthority (the Authority for ConsumerProtection and the Defence of Competition)the transaction completed in May 2013.In February 2013, we announced that ChinaResources Snow Breweries Limited, our jointventure with China Resources Enterprise,Limited, had entered into an agreementwith Kingway Brewery Holdings Limited toacquire its brewery business, for a totalcash consideration of RMB5.38 billion(c. US$864 million). The transaction wasapproved by Kingway shareholders in May2013, and completion remains subject torequisite regulatory approvals.In March 2013, SABSA Holdings Limited(SABSA), a wholly owned South Africansubsidiary of SABMiller plc, issued ZAR1,000million, 7.125% Notes due March 2018. TheNotes were issued under its ZAR6,000million Domestic Medium Term NoteProgramme established in December 2012and guaranteed by SABMiller plc. Theproceeds were used by SABSA to repayexisting indebtedness.Also in March we exercised an option toextend the maturity date on our US$2,500million committed syndicated revolving creditfacility by one year to April 2018.DirectorsThe names and biographical details ofthe current directors are set out on pages50 and 51. All the current directors servedthroughout the period except for Mr Clark,who was appointed to the board on 26 July2012. Messrs Kahn and Pieterse served asdirectors until their retirement on 26 July2012. As detailed in our corporategovernance report, it is intended that MrElliott will join the board as an independentnon-executive director on 1 July 2013 andthat Mr Ramaphosa will retire from the boardat the conclusion of the 2013 annual generalmeeting. Details of the interests in sharesand options of the directors who held offi ceduring the year and any persons connectedto them are set out in the directors’remuneration report on pages 66 to 85.Corporate governanceThe directors’ approach to corporategovernance, and statements of ourapplication of the UK Corporate GovernanceCode are set out in the corporate governancereport, which forms part of this directors’report, on pages 57 to 65 and in the directors’remuneration report on pages 66 to 85.Share capitalDuring the year, our issued ordinary sharecapital increased from 1,664,323,483 sharesof 10 US cents each to 1,669,731,799 sharesof 10 US cents each, as a result of the issueof 5,408,316 ordinary shares to satisfy theexercise of options granted under ourshare incentive plans, details of which areshown in note 25 to the consolidatedfi nancial statements.During the year we transferred 4,600,000ordinary shares from treasury to theSABMiller pc Employees’ Benefi t Trust (EBT),to be used to satisfy awards outstandingunder our share incentive plans. At 31 March2013 we held a total of 67,468,338 ordinaryshares in treasury.During the year 1,329,857 ordinary shareswere purchased by the trustee on behalf ofthe EBT (at an average price of £25.08 pershare) which amounted to 0.080% of theissued ordinary shares of the company, inorder to ensure that the EBT continued tohold suffi cient ordinary shares to meetpotential future obligations in respect ofperformance shares conditionally awardedunder the Performance Share Award Plans.The total consideration paid amounted toUS$53,291,403.In addition, we have had 50,000 deferredshares of £1 each in issue since ourincorporation in 1998. None were issuedduring the year.Purchase of own sharesAt the last annual general meeting,shareholder authority was obtained for us topurchase our own shares up to a maximumof 10% of the number of ordinary shares inissue as at 8 June 2012. This authority isdue to expire at the earlier of the next annualgeneral meeting or 26 October 2013, andremains exercisable provided that certainconditions relating to the purchase aremet. The notice of annual general meetingproposes that shareholders approve aresolution updating and renewing theauthority allowing us to purchase ourown shares.We did not repurchase any shares during theyear for the purpose of cancellation, holdingin treasury or for any other purpose.Annual general meetingOur 2013 annual general meeting will be heldat the InterContinental London Park Lane,One Hamilton Place, London W1V 7QY, UKat 11.00am on Thursday 25 July 2013.Copies of the Notice of this meeting may beobtained from our website.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 53

Directors’ reportcontinuedDividendsAn interim dividend of 24 US cents per share was paid to shareholders on 14 December 2012,in respect of the year ended 31 March 2013. Details of the fi nal dividend proposed by theboard for the year ended 31 March 2013 are set out below:Amount of fi nal dividend proposedby the board:Total proposed dividend for the yearended 31 March 2013:77 US cents per share.101 US cents per share.If approved, the fi nal dividend will be payable to shareholders on either section of the registeron 16 August 2013 in the following way:Dividend payable on: 23 August 2013.Currency of payment:South African rands – to shareholders on theRSA section of the register.US dollars – to shareholders shown as havingan address in the USA and recorded on theUK section of the register (unless mandatedotherwise).Pounds sterling – to all other shareholders onthe UK section of the register.Ex-dividend dates:12 August 2013 for shares traded on theJSE Limited, South Africa.14 August 2013 for shares traded on theLondon Stock Exchange (LSE).The rate of exchange for conversion from US dollars will be calculated on 24 July 2013and published on the RNS of the LSE and the SENS of the JSE Limited on 25 July 2013.Since the introduction on 1 April 2012 of a dividend withholding tax in South Africadividends paid to shareholders registered on the RSA section of the register will, unlessa shareholder qualifi es for an exemption, be subject to a dividend withholding tax at a rateof 15%. The dividend withholding tax is only of direct application to shareholders registeredon the RSA section of the register, who should direct any questions about the applicationof the dividend withholding tax to Computershare Investor Services (Pty) Limited,Tel: +27 11 373-0004.Note 9 to the consolidated fi nancial statements discloses dividends waived.DonationsDuring the year the group contributedUS$ 37.5 million to corporate socialinvestment programmes, of whichUS$12,746,988 represented charitabledonations. Of this amount charitabledonations amounting to US$219,549were made by SABMiller plc and ourUK subsidiary, Miller Brands (UK) Limited,both in the UK and overseas, comprisingdonations in respect of communitydevelopment, health and education,the environment and other causes.In March 2013 the board announced,following due consideration, that the groupwould provide funding to political parties inthe 2014 South African elections. Donationsof US$1 million (ZAR9 million) in total weremade in May 2013, distributed across the sixlargest parties in proportion to their seats inthe National Assembly. The group madecontributions of ZAR5 million in the run upto the 1999, 2004 and 2009 elections andhas not made any other political donationsin South Africa outside the national electioncycle. This year’s higher donation value inSouth African rand follows a number of yearsof double-digit infl ation in South Africa.In Australia, our Carlton & United Breweries(CUB) business paid membership fees toregistered political parties and incurredexpenditure in attending public policy eventsby registered political parties. The total valueof the fees and expenditure incurred wasUS$38,387. All CUB expenditure related toparticipation and attendance at public policyevents. CUB does not provide stand-alonecash or in kind donations to any politicalparty. Donations of this nature in Australiaare an accepted part of the socio-politicalenvironment.In Honduras the group’s subsidiary,Cervecería Hondureña, donated soft drinksto the value of US$5,954 to participants inthe primary elections for the benefi t ofvolunteers assisting during the elections.It remains our policy not to make donationsto political organisations in the EuropeanUnion. Other political donations are onlymade by exception, and where permittedby local laws, and must be consistent withbuilding multi-party democracy.Ethical business conductThe SABMiller Code of Business Conductand Ethics sets out the high ethical standardswith which all SABMiller employees areexpected to comply, and forms part of ourwider programme of policies and proceduresthroughout the group for combating briberyand corruption. We are committed toconducting business in a way that is fair,ethical and within the framework ofapplicable laws and regulations. We offer54 – SABMiller plc Annual Report 2013

independent confi dential whistleblowerhotlines in the countries in which we operateso that our employees can report any breachof our Code, including bribery, fraud orcorruption.Employment, environmental and socialpoliciesOur aim is to be the employer of choice ineach country in which our group companiesoperate. To achieve this, each operatingcompany designs employment policieswhich attract, retain and motivate the highestquality of staff. We are committed to anactive equal opportunities policy, fromrecruitment and selection, through trainingand development, appraisal and promotionto retirement. Within the constraints of locallaw, it is our policy to ensure that everyone istreated equally, regardless of gender, colour,nationality, ethnic origin, race, disability,marital status, sexual orientation, religion ortrade union affi liation. We value the benefi tsof employing people of different races,genders, creeds and backgrounds. Ifemployees become disabled, efforts aremade to allow them to continue in their role,or a suitable alternative role, through makingreasonable adjustments. Full considerationis given to applications for employment fromdisabled persons, having regard to theirparticular aptitudes and abilities.We are committed to the 10 principles ofthe United Nations Global Compact, whichsets out universally accepted principles inthe areas of human rights, labour, theenvironment and anti-corruption. Ourwebsite sets out these principles and ourprogress towards achieving them.We are committed to regular communicationand consultation with our employees andwe encourage employee involvement in ourperformance. We have global distribution ofreal time news through our global intranet,which is available to all of the group’sbusinesses to help inform employees aboutwhat is happening in our global operations.Further information is provided to employeesat regional and country level by way ofnewsletters and electronic communication.Certain employees throughout the group areeligible to participate in the group’s shareincentive plans.The sustainable development review onpages 44 to 47 gives an overview of theprogress against our 10 sustainabledevelopment priorities and of the impactof our business on the environment. Moredetailed information is provided in oursustainable development report 2013,available on our website.Research and developmentTo ensure improved overall operationaleffectiveness, we place considerableemphasis on research and development inour global technical activities. This enablesus to develop new products, packaging,processes and manufacturing technologies.Continued progress was made in ourresearch in the key areas of raw materials,brewing, fl avour stability, packaging materialsand energy and water saving.Payment of suppliersOur policy is to pay invoices in accordancewith the terms of payment agreed inadvance. At the year end, the amount weowed to trade creditors was equivalent to48.6 days (2012: 49.4 days) of purchasesfrom suppliers.Overseas branchesSABMiller plc does not have any branchesregistered overseas.Going concern and auditPage 86 details the directors’ responsibilitiesfor preparing the consolidated fi nancialstatements. As set out in that statement,the directors are satisfi ed that SABMillerplc is a going concern.PricewaterhouseCoopers LLP haveexpressed their willingness to continue inoffi ce as auditors and resolutions proposingtheir reappointment and authorising theboard to set their remuneration will besubmitted to the forthcoming annualgeneral meeting.Directors’ indemnitiesThe company has granted rolling indemnitiesto the directors, uncapped in amount, inrelation to certain losses and liabilities whichthey may incur in the course of acting asdirectors of the company or of one or more ofits subsidiaries and associates. The companysecretary and deputy company secretaryhave also been granted indemnities, onsimilar terms, covering their roles ascompany secretary and deputy companysecretary respectively of the company andas directors or as company secretary of oneor more of the company’s subsidiaries andassociates. The board believes that it is inthe best interests of the group to attract andretain the services of the most able andexperienced directors and offi cers by offeringcompetitive terms of engagement, includingthe granting of such indemnities.These indemnities are categorised asqualifying third-party indemnity provisionsas defi ned by Section 234 of the CompaniesAct 2006. They will continue in force for thebenefi t of directors and offi cers in respect oftheir periods of offi ce.Substantial shareholdingsDetails of notifi cations received by thecompany in accordance with the Disclosureand Transparency Rules as at 3 June 2013and of persons with signifi cant direct orindirect holdings known to the companyat the year end are set out in the ordinaryshareholding analyses on page 182 of thisannual report.Financial instrumentsInformation on our fi nancial risk managementobjectives and policies and details of ourexposure to price risk, credit risk, liquidity riskand cash fl ow risk are contained in note 22to the consolidated fi nancial statements.Other disclosures required by theCompanies Act and the Disclosureand Transparency RulesWe do not have any contractual or otherarrangements that individually are essentialto the business of the company or the groupas a whole.The structure of our share capital, includingthe rights and obligations attaching to eachclass of share and the percentage of theshare capital that each class of sharecomprises, is set out in note 25 to theconsolidated fi nancial statements. There areno securities of the company that grant theholder special control rights.At 31 March 2013 our employees’ benefi ttrusts held 8,339,106 ordinary shares in thecompany. By agreement with the company,voting rights attached to these shares are notexercised unless shares are benefi ciallyowned by a participant and that participanthas instructed the underlying shareholder tovote. As at 31 March 2013 there were nobenefi cially held shares in our employees’benefi t trusts.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 55

Directors’ reportcontinuedThe directors are responsible for themanagement of the business of the companyand may exercise all the powers of thecompany subject to the articles ofassociation and relevant statutes. Powersof the directors relating to the issuing andbuying back of shares are set out in thearticles of association. These powers aresubject to renewal by our shareholders eachyear at the annual general meeting.Our articles of association give the boardof directors power to appoint directors.The articles of association may be amendedby special resolution of the shareholders.Directors appointed by the board arerequired to submit themselves for election bythe shareholders at the next annual generalmeeting. Additionally, as disclosed in thecorporate governance report on pages 57 to65, Altria Group, Inc. (Altria) and BevCo Ltd(BevCo) have power under their respectiverelationship agreements with the companyto nominate directors for appointment tothe board and certain committees. Theserelationship agreements also regulateprocesses applicable in relation to theacquisition or disposal of shares by Altriaand BevCo.We have a number of facility agreementswith banks which contain provisions givingrights to the banks upon a change of controlof the company. A change of control of thecompany would also give The Coca-ColaCompany certain rights under its bottlingagreements with various subsidiariesof the company, and in certain limitedcircumstances may give China ResourcesEnterprise, Limited the ability to exercisecertain rights under a shareholdersagreement in relation to the company’sassociate CR Snow. A change of controlmay also give the Molson Coors BrewingCompany the ability to exercise certainrights under the MillerCoors operatingagreement, and would result in certainminority protection rights contained in ourrelationship agreement with the AnadoluGroup and Anadolu Efes ceasing to apply.The company does not have any agreementswith any director or offi cer that would providecompensation for loss of offi ce oremployment resulting from a takeover.Our articles of association allow directors, intheir absolute discretion, to refuse to registerthe transfer of a share in certifi cated formwhich is not fully paid or the transfer of ashare in certifi cated form on which thecompany has a lien. If that share has beenadmitted to the Offi cial List, the board maynot refuse to register the transfer if this wouldprevent dealings in our shares from takingplace on an open and proper basis. Theboard may also refuse to register a transferof a share in certifi cated form unless theinstrument of transfer is lodged, dulystamped (if stampable), at the address atwhich our register is held or at such otherplace as the directors may appoint, and(except in the case of a transfer by a fi nancialinstitution where a certifi cate has not beenissued in respect of the share) isaccompanied by the certifi cate for the shareto which it relates and such other evidenceas the directors may reasonably require toshow the right of the transferor to make thetransfer, is in respect of only one class ofshare and is in favour of not more than fourtransferees jointly.Transfers of shares in uncertifi cated formmust be made in accordance with, andsubject to, the Uncertifi cated SecuritiesRegulations (the Regulations), the facilitiesand requirements of the relevant CRESTsystem and such arrangements as theboard may determine in relation to thetransfer of certifi cated shares (subject tothe Regulations).Transfers of shares listed on the JSE inuncertifi cated form must be made inaccordance with, and subject to, theSecurities Services Act 2004, the Rulesand Directives of the JSE and STRATE Ltd.Certifi cated shares may be transferred priorto dematerialisation, but share certifi catesmust be dematerialised prior to trading inthe STRATE environment.Pursuant to our code for securitiestransactions, directors and personsdischarging managerial responsibilities, andemployees may in certain circumstances,require approval to deal in the company’sshares.Unless the directors otherwise determine,no shareholder is entitled in respect of anyshare held by them to vote either personallyor by proxy at a shareholders’ meeting or toexercise any other right conferred bymembership in relation to shareholders’meetings if any call or other sum presentlypayable by them to the company in respectof that share remains unpaid. In addition,no shareholder will be entitled to vote if theyhave been served with a notice after failingto provide the company with informationconcerning interests in those shares requiredto be provided under Section 793 of theCompanies Act 2006. Restrictions on therights of the holders of convertible sharesand deferred shares are set out in note 25to the consolidated fi nancial statements(although there are no convertible sharescurrently in issue).Votes may be exercised in person, by proxy,or in relation to corporate members, by acorporate representative. The deadline fordelivering proxy forms is 48 hours beforethe time for holding the meeting.John DavidsonGeneral Counsel andGroup Company SecretaryFor and on behalf of theboard of SABMiller plc5 June 201356 – SABMiller plc Annual Report 2013

Corporate governanceIntroductionThis report describes our directors’ approachto corporate governance and how the boardapplies the UK Corporate Governance Code.In his statement on pages 6 to 9 of theannual report, our acting Chairman reportson how we apply the principles of the Coderelating to the role and effectiveness of theboard.Application of the UK CorporateGovernance CodeThe board applied all of the principles andprovisions of the Code throughout the yearended 31 March 2013, except in threerespects:1. In July 2012, our Chief Executive,Mr Mackay, was appointed as ExecutiveChairman with the intention that he wouldhold this position for an interim period ofone year. The Code recommends that achief executive should not go on to bechairman of the same company and thatthe chairman should on appointment meetthe independence criteria set out in theCode. As a former Chief Executive,Mr Mackay was not independenton appointment.Mr Mackay’s proposed appointment wasannounced in April 2012, when the boardset out a number of changes to thecomposition of the board to take effect atour 2012 annual general meeting, includingthe retirement of our then Chairman, MrKahn, and of Mr Pieterse, an independentnon-executive director; the appointmentof Mr Mackay as Executive Chairman;and the appointment of Mr Clark as anexecutive director and Chief OperatingOffi cer, with the intention that he wouldsucceed Mr Mackay as Chief Executiveat the end of the interim period, whenMr Mackay would become nonexecutiveChairman.Before announcing these changes, wediscussed them with our major institutionalshareholders, and at the time of theirannouncement our Senior IndependentDirector, Mr Manser, wrote on behalf of theboard to all shareholders to explain theprocess that had been followed and to setout the board’s reasons for these changes.These changes were welcomed by theoverwhelming majority of shareholders,and our explanation of our decision not toapply the Code in this respect under the‘comply or explain’ principle was cited bythe Association of British Insurers, ina report in December 2012, as a bestpractice example.Subsequently, as shareholders will beaware, Mr Mackay was diagnosed in April2013 with a brain tumour, which led theboard to accelerate the planned promotionof Mr Clark to Chief Executive. Thetransition of management responsibilitiesfrom Mr Mackay to Mr Clark was welladvanced when Mr Clark assumed the roleof Chief Executive on 23 April 2013, threemonths earlier than was originally planned.Mr Manser has assumed the role ofacting Chairman while Mr Mackay, whois currently on a medical leave of absence,continues his treatment.2. Our audit committee did not consist solelyof independent directors. Under ourrelationship agreement, as approved byshareholders in 2002 and in 2005, AltriaGroup, Inc. (Altria) has the right tonominate a director to the audit committee,and has nominated Mr Devitre, whom theboard does not consider to be anindependent director for the purposesof the Code. The board neverthelessconsiders that the composition of the auditcommittee remains appropriate, givenAltria’s interest as the company’s largestshareholder, and is satisfi ed that, havingregard to the experience and backgroundin fi nancial matters of Mr Devitre, as aformer chief fi nancial offi cer of Altria, theindependence from management and theeffectiveness of our audit committee indischarging its functions continue to beconsiderably enhanced and not in theleast compromised.3. Two directors, Mr Armour and Ms Weir,were unable to attend our 2012 annualgeneral meeting because of long standingprior commitments.Leadership and effectivenessBoard of directors: composition,independence and renewalCompositionWe have 16 directors: our Chairman(Mr Mackay, who is currently on medicalleave of absence); our acting Chairman(Mr Manser, who is also our DeputyChairman and Senior Independent Director);seven other independent non-executivedirectors; fi ve non-executive directors whowe do not consider to be independent; andtwo executive directors (Mr Clark, the ChiefExecutive, and Mr Wilson, the Chief FinancialOffi cer). Short biographies of each of thedirectors are on pages 50 and 51.The size and certain aspects of thecomposition of our board and our audit,nomination and corporate accountabilityand risk assurance committees continue tobe determined in part by the terms of ourrelationship agreements with Altria and withBevCo Ltd (a holding company of the SantoDomingo Group), both of which have beenapproved by SABMiller’s shareholders.Our agreement with Altria limits the size ofthe board to a maximum of 15 directors, ofwhom no more than two are to be executivedirectors, up to three are to be non-executivedirectors nominated by Altria, up to two areto be non-executive directors nominated byBevCo, and up to eight are to be nonexecutivedirectors nominated by the board.Our agreement with BevCo allows BevCo tonominate up to two non-executive directorsfor appointment to the board.As was the case last year, the number ofdirectors currently exceeds the numberpermitted under our agreement with Altria.Altria has consented to this in order tofacilitate the progressive renewal of theboard and the broadening of the diversityof background, gender and experience atboard level. The board is grateful to Altriafor its agreement to permit the maximumnumber of directors allowed under therelationship agreement to be exceeded forthe time being. The board has announcedfurther changes to the composition of theboard, detailed overleaf, that will, in theabsence of unforeseen circumstances,restore the number of directors to thatenvisaged by the agreement, while stillapplying the provision of the Code thatat least half of the directors (excluding theChairman) should be independent nonexecutivedirectors.Altria and BevCo have each exercised theirright under their respective agreements tonominate one director for appointment to thenomination committee, being Mr Bible andMr Santo Domingo respectively. Both Altriaand BevCo have the right to nominatedirectors for appointment to the corporateaccountability and risk assurance committee(CARAC), which Altria has exercised(nominating Mr Bible) but BevCo has not, andAltria has exercised its right to nominate onedirector (Mr Devitre) for appointment to theaudit committee.IndependenceThe board considers eight directors –Mr Armour, Ms Knox, Mr Manser,Mr Manzoni, Mr Morland, Dr Moyo,Mr Ramaphosa and Ms Weir – to beindependent for the purposes of the Code.The board considers fi ve non-executivedirectors not to be independent for thepurposes of the Code: Mr Bible, Mr Devitreand Mr Willard, as they are nominees ofAltria, the company’s largest shareholder;and Mr Santo Domingo and Mr Pérez,as they are nominees of BevCo Ltd, thecompany’s second largest shareholder.As noted in our statement of our applicationof the Code, Mr Mackay was not consideredindependent on his appointment as Chairman.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 57

Corporate governancecontinuedIf a director has served for a period of nineyears or more, the Code requires the boardto consider whether that director continuesto be independent. In respect of each of thetwo independent directors who have servedthe board for more than nine years and areoffering themselves for re-election(Mr Manser and Mr Morland), the board hasconsidered specifi cally whether their lengthof service has compromised theirindependence. In each case the board hasdetermined that the director concernedremains independent in character andjudgement and that there are no relationshipsor circumstances which are likely to affect,or could appear to affect, his judgement,and that the independence of characterand judgement of each of the directorsconcerned is not in any way affected orimpaired by length of service, noting also thatas a result of executive directors’ successionover the last two years, neither Mr Mansernor Mr Morland has served concurrentlywith any executive director for more thantwo years.The board also conducted a rigorousreview of the performance of Mr Manserand Mr Morland and considers that theyboth continue to bring invaluable integrity,wisdom and experience to the board and tocontribute positively to board and committeedeliberations, especially during the period oftransition of both executive directors and thechairman over the past two years. The boardis therefore entirely satisfi ed as to theperformance and continued independenceof each of these directors.Progressive renewal of the boardThe board continues to believe that its overallcomposition remains appropriate, havingregard in particular to the independence ofcharacter and integrity of all of our directors,and the experience and skills which theybring to their duties.We have been fortunate to retain the servicesof a number of distinguished non-executivedirectors, Mr Bible, Mr Manser, Mr Morlandand Mr Ramaphosa, who have held offi ce forall, or most, of the period since the company’slisting on the London Stock Exchange in1999. Together they have provided stabilityto the board and the board has benefi tedgreatly from their valuable insights into thegroup, its markets and the industry.Nevertheless, our directors have shown theircommitment to the progressive refreshmentof the board in terms of age, experience,gender and balance of skills. We haveappointed six new independent nonexecutivedirectors over the past fi ve years,and in March 2013 we announced changesthat will see the appointment of Mr Elliott asanother independent non-executive directoron 1 July 2013, and, in light of the increasingamount of time which he will need to devoteto public service following his appointmentas deputy president of the African NationalCongress, the retirement of Mr Ramaphosaon 25 July 2013. Barring unforeseencircumstances it is expected that MessrsManser and Morland will retire at the annualgeneral meeting in 2014 and that Mr Elliottwill replace Mr Manser as Deputy Chairmanand Senior Independent Director.With these planned changes, by the timeof the AGM in July 2014 the number ofindependent non-executive directors whohave served more than nine years will fallfrom three to one, while the average length ofservice for non-executive directors will remainat approximately six years (excluding theChairman).The Code recommends that all directorsshould stand for annual re-election and theboard has decided that all directors, savethose who are retiring, should stand forre-election at the next annual generalmeeting.The board considers there is an appropriatebalance of skills, collective experience,independence, knowledge and genderamong our non-executive directors to enablethem to discharge their respective duties andresponsibilities effectively.How the board operatesBoard meetings and attendanceDuring the year we held six board meetings.Individual directors’ attendance at boardand committee meetings and at the annualgeneral meeting is set out in the table below.Directors’ attendance (1 April 2012 to 31 March 2013) and committee membershipsBoard Audit Remuneration Nomination CARAC AGMDirectors Independent Attended Possible Attended Possible Attended Possible Attended Possible Attended Possible AttendedJ M Kahn N/A 3 3 YE A G Mackay N/A 6 6 2 2 YP J Manser Yes 6 6 4 4 3 3 1 1 2 2 YA J Clark N/A 3 3 2 2 YJ S Wilson N/A 6 6 2 2 YM H Armour Yes 5* 6 4 4 3 3 N*G C Bible No 6 6 1 1 2 2 YD S Devitre No 6 6 4 4 YL M S Knox Yes 6 6 3 † 4 2 † 3 YJ A Manzoni Yes 6 6 3 3 1 1 2 2 YM Q Morland Yes 6 6 4 4 3 3 1 1 YD F Moyo Yes 6 6 2 2 YC A Pérez No 6 6 YR Pieterse Yes 3 3 YM C Ramaphosa Yes 6 6 1 1 2 2 YA Santo Domingo No 6 6 1 1 YH A Weir Yes 5* 6 4 4 N*H A Willard No 6 6 Y* Mr Armour and Ms Weir were unable to attend the annualgeneral meeting in July 2012 and the preceding boardmeeting because of longstanding prior commitments.† Our March 2013 board and committee meetings wereheld in Australia. Because of a longstanding priorcommitment and the travelling time required Ms Knoxwas unable to arrive in Australia in time for the auditand remuneration committee meetings, but was ableto attend the board meeting held the following day.58 – SABMiller plc Annual Report 2013

In the few instances where directors have notbeen able to attend a board or committeemeeting, any comments which they havehad on the matters to be considered at thatmeeting have been given in advance to thechairman of the meeting or to the CompanySecretary.Operation of the boardThe board sets the strategic objectives ofthe group, determines investment policies,agrees on performance criteria, anddelegates to management the detailedplanning and implementation of thoseobjectives and policies in accordance withappropriate risk parameters. The boardmonitors compliance with policies andachievement against objectives by holdingmanagement accountable for its activitiesthrough monthly and quarterly performancereporting and budget updates. In addition,members of our executive committee (ourexecutive directors, our regional managingdirectors and the directors of our key groupfunctions: corporate affairs; corporate fi nanceand development; legal; marketing; andsupply chain and human resources) makeregular presentations to the board, enablingdirectors to explore and interrogate specifi cissues and developments in greater detail.Board and committee meetings are held inan atmosphere of intellectual honesty ofpurpose, integrity and mutual respect,requiring reporting of the highest standardby management and direct, robust andconstructive challenge and debate amongboard and committee members.Matters reserved for the boardThere is a schedule of matters which aredealt with exclusively by the board. Theseinclude approval of fi nancial statements; thegroup’s business strategy; the annual capitalexpenditure plan; major capital projects;major changes to the group’s managementand control structure; material investmentsor disposals; risk management strategy;sustainability and environmental policies;and treasury policies.The board governs through clearly mandatedboard committees, accompanied bymonitoring and reporting systems. Eachstanding board committee has specifi cwritten terms of reference issued by theboard and adopted in committee. The termsof reference of the audit, remuneration andnomination committees are available on thecompany’s website. All committee chairmenreport orally on the proceedings of theircommittees at the next meeting of the board,and the minutes of the meetings of all boardcommittees are included in the papersdistributed to all board members beforethe next board meeting.Conflicts of interestOur directors are required to avoid situationswhere they have, or can have, a direct orindirect interest that confl icts, or possiblymay confl ict, with the company’s interests.As permitted by the Companies Act 2006,the articles of association of the companyallow the board to authorise potentialconfl icts of interest that may arise and toimpose such limits or conditions as it thinksfi t. Procedures are in place for the disclosureby directors of any potential confl icts and forthe appropriate authorisation to be sought ifa confl ict arises. These procedures continueto operate effectively. There were no actualor potential confl icts of interest which wererequired to be authorised by the board duringthe year ended 31 March 2013.The roles of executive andnon-executive directorsOur executive directors are responsiblefor proposing strategy and for making andimplementing operational decisions. Ournon-executive directors complement theskills and experience of the executivedirectors, bring independent judgement,and contribute to the formulation of strategy,policy and decision-making through theirknowledge and experience of otherbusinesses and sectors.Information and trainingOur Company Secretary is responsible foradvising the board, through the Chairman, onmatters of corporate governance. The boardand its committees are supplied with full andtimely information, including detailed fi nancialinformation, to enable directors to dischargetheir responsibilities, and the committees areprovided with suffi cient resources toundertake their duties. All directors haveaccess to the advice of the CompanySecretary. Independent professional adviceis also available to directors in appropriatecircumstances, at the company’s expense.During the year ended 31 March 2013, noneof the directors sought independent externaladvice through the company.Following the appointment of new directors tothe board, they are briefed on the duties theyowe to the company as directors, and tailoredinduction programmes are arranged whichinvolve industry specifi c training and includevisits to the group’s businesses and meetingswith senior management, as appropriate. Newdirectors are briefed on internal controls athead offi ce and business unit level and areadvised of the legal and other duties they haveas directors of a listed company as well as onrelevant company policies and governancerelatedmatters.The company is committed to the continuingdevelopment of directors in order that theymay build on their expertise and develop anever more detailed understanding of thebusiness and the markets in which groupcompanies operate. Members of boardcommittees are encouraged to attendinternal and external briefi ngs and courseson aspects of their respective committeespecialisms and regular updates on relevantlegal, regulatory, corporate governance andtechnical developments are presented tocommittee members at each meeting and, asappropriate, to the full board. The Chairmanconsiders the training and developmentneeds of the board and discusses thesewith the respective directors as necessary.Upon appointment to the board Mr Clarkreceived a tailored induction which included,among other things, a briefi ng on hisresponsibilities as a director of a companylisted on the London and Johannesburgstock exchanges.Outside appointmentsNon-executive directors may serve ona number of other boards provided thatthey continue to demonstrate the requisitecommitment to discharge effectively theirduties to SABMiller. The nominationcommittee keeps under review the extent ofdirectors’ other interests to ensure that theeffectiveness of the board is not compromisedby the extent of their external commitments.The board is satisfi ed that all of the nonexecutivedirectors commit suffi cient time totheir duties as directors of the company andthe non-executive directors standing forelection or re-election have confi rmed thatthey have suffi cient time to fulfi l theirrespective obligations to the company.As noted on page 58, Mr Ramaphosa hasdecided not to offer himself for re-election,because of the increasing amount of time thathe expects to devote to his public servicecommitments in South Africa.The board believes, in principle, in the benefi tto the group of our executive directors andmembers of the executive committeeaccepting non-executive directorships ofother companies in order to widen theirexperience and knowledge for the benefi tof the company. Accordingly, subject to theagreement of the board, executive directorsand members of the executive committee arepermitted to accept external non-executiveboard appointments and to retain any feesreceived from those appointments.During the year ended 31 March 2013,Mr Mackay held offi ce as a non-executivedirector of Reckitt Benckiser Group plcand a member of the board of Philip MorrisInternational Inc. Fees earned by Mr Mackayfrom these appointments are set out in thedirectors’ remuneration report, and wereretained by Mr Mackay. Of the executivecommittee members, Mr Adami is anon-executive director of Allied ElectronicsCorporation Limited, and Mr Bowman isa non-executive director of Tiger BrandsLimited, both being companies listed onOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 59

Corporate governancecontinuedthe Johannesburg Stock Exchange, andMr Mervis is a director of the MelbourneBusiness School.Chairman, Chief Executive, DeputyChairman and Senior IndependentDirectorAs noted in the introduction to this report,following the retirement of Mr Kahn as thecompany’s Chairman at the 2012 annualgeneral meeting, Mr Mackay was appointedas Executive Chairman for an interim periodand Mr Clark was appointed as ChiefOperating Offi cer. During that period thedivision of responsibilities between theExecutive Chairman and Chief OperatingOffi cer were clearly defi ned in a writtenstatement of responsibilities which wasconsidered and approved by the board at itsmeeting in May 2012. Following Mr Clark’sappointment as Chief Executive in April 2013,a revised statement of the division ofresponsibilities between the Chairman andthe Chief Executive, which had already beenconsidered by the nomination committee atits meeting in March 2013, was approved bythe board at its meeting in May 2013.Mr Manser has extensive experienceof chairing or serving on all four maincommittees of the board, and is thereforewell placed to infl uence the governance ofthe company and to meet his responsibilitiesas Deputy Chairman and Senior IndependentDirector. He serves as an additional contactpoint for shareholders, and is also availableto fellow non-executive directors, eitherindividually or collectively, to discuss anymatters of concern in a forum that does notinclude executive directors or other membersof the management team. DuringMr Mackay’s medical leave of absenceMr Manser is acting Chairman. In light ofhis additional responsibilities and timecommitments as acting Chairman,Mr Manser will stand down as chairmanof the audit committee and as a member ofthe audit and remuneration committees.Our Chairman and Deputy Chairman areboth available to consult with shareholdersthroughout the year and, in the month priorto the annual general meeting, majorshareholders are invited to meet with theChairman to discuss any issues which theywish to raise (although this year this invitationwill be to meet with the acting Chairman).The board is kept informed of the views ofshareholders through regular updates fromthe Chairman, the Deputy Chairman and theCompany Secretary, as well as through theinclusion in the board papers of reports oncomments from, and exchanges with,shareholders, investor bodies and analysts.In the year under review, the DeputyChairman hosted a meeting of the nonexecutivedirectors without the executivedirectors being present at which, among60 – SABMiller plc Annual Report 2013other things, the performance of theChairman was discussed.Board, committee and directorperformance evaluationA formal and rigorous evaluation of theperformance and effectiveness of the boardand its principal committees is carried outeach year, led by the Chairman and theCompany Secretary, with input from theDeputy Chairman, and in consultation withother directors. The Code recommends thatthe evaluation of board performance shouldbe externally facilitated at least every threeyears. Given that the period under reviewwas a year of transition, the board decidedthat it was not appropriate to carry out anexternally facilitated performance evaluation.The evaluation process included specifi cconsideration by each of the non-executivedirectors on the performance of Mr Mackayin his role as Executive Chairman, Mr Clarkin his role as Chief Operating Offi cer and theeffectiveness of the division of responsibilitiesbetween them.The performance of the Executive Chairmanwas reviewed by the nomination committeein light of responses from each director toquestionnaires covering the elements of hisperformance and this review was shared withand considered by the board. Theperformance of the Chief Executive and theChief Financial Offi cer was reviewed by theChairman and the nomination committee, andreported on to the board by the nominationcommittee. Each non-executive director’sperformance was evaluated by the Chairman,in consultation with the Deputy Chairman,who in turn consulted with the executivedirectors and the Company Secretary.In reviewing the performance of the boardand its committees, again in the light ofdirectors’ responses to questionnaires, theChairman and the Deputy Chairman werealigned in their conclusion that, measuredagainst the principal duties expectedof them, the board and its standing andad hoc sub-committees continued tooperate effectively, including in theirsupport of management, in monitoringof performance, and maintaining theboard’s strategic oversight.The Chairman, the Deputy Chairman, thecommittee chairmen and the CompanySecretary met at the end of the process toreview the results of the performance andeffectiveness evaluations conducted inrespect of the board, of the directorsindividually, of the Chairman and the DeputyChairman and of each of the board’s fourstanding committees. Regarding the boardcommittees, the committee chairmenexpressed their views regarding theoperation of their respective committeesagainst their terms of reference and theperformance and effectiveness of eachcommittee. These views were discussedin an open and constructive manner withrecommendations arising from thediscussions being brought forward to theboard and the respective committees. Theconclusion of this meeting was that the boardwas balanced and operated effectively andthat the board committees dischargedeffectively their duties under their respectiveterms of reference.The results of the performance andeffectiveness assessment process asoutlined above were reviewed in full andapproved by the board. Matters identifi edas requiring further consideration have beenaddressed, including changing the frequencyand length of board meetings to ensure moreregular meetings at which additional time ismade available to discuss group strategy,senior executive succession planning and thegroup’s talent pipeline below the executivecommittee level; organising additional boardmeetings to be held in countries where thegroup has operations, to allow the boardthe opportunity to conduct more detailedoccasional reviews of country and regionalperformance; and the introduction of regularpre-board meeting events at which nonexecutivedirectors have the opportunity toaddress particular themes or issues in moredepth, and to meet more frequently withother members of senior management aswell as executive committee members.All directors, except for Mr Ramaphosa,will be standing for re-election at this year’sannual general meeting. The nominationcommittee has confi rmed to the boardthat each of the existing directors offeringthemselves for election or re-electioncontinues to perform effectively and todemonstrate commitment to their role.In particular, the committee has confi rmedthat, in relation to each of the non-executivedirectors who will have served for over nineyears, the committee is satisfi ed with hisperformance and has determined that thelength of their service does not compromisetheir independence. The test ofindependence does not apply to Mr Bible.Mr Manser, as Deputy Chairman and SeniorIndependent Director, confi rms the Chairmanhas performed effectively and demonstratedcommitment to his role during the year,although he is currently on medical leaveof absence.The board unanimously recommends toshareholders the election of Mr Elliott as anindependent non-executive director. He isa highly experienced business leader, witha strong reputation and, as part of theleadership team of a global business workingacross a mix of emerging and developedmarkets, has gained skills pertinent to ourbusiness structure. Biographical details ofall directors, and of Mr Elliott, are includedon pages 50 and 51.

Retirement of directorsThe company’s articles of association requirethat new directors are subject to election atthe fi rst annual general meeting followingtheir appointment, and directors are subjectto retirement and re-election by shareholdersevery three years. The reappointment ofnon-executive directors is not automatic.However, the board has determined that alldirectors will stand for re-election annually.Independent non-executive directors whohave served for nine years will only be askedto stand for re-election if the board remainssatisfi ed both with the director’s performanceand that nine years’ continuous service doesnot compromise the director’s continuingindependence.The Company SecretaryThe Company Secretary acts as secretaryto the board and its committees and heattended all meetings during the yearunder review.The board’s committees and theexecutive committeeThe executive committeeThe board delegates responsibility forproposing and implementing the group’sstrategy and for managing the group to theChief Executive, Mr Clark, who is supportedby the executive committee (excom), whichhe chairs. Excom members are appointedby Mr Clark, after consultation with theboard. The other members of excom are ourChief Financial Offi cer, our regional managingdirectors and the directors of our key groupfunctions (corporate affairs; corporate fi nanceand development; legal; marketing; andsupply chain and human resources). Excom’spurpose is to support the Chief Executivein carrying out the duties delegated to himby the board and, in that context, excomexecutes the strategy and budget approvedby the board and, through the ChiefExecutive, reports on these matters tothe board.Excom also ensures that effective internalcontrols are in place and functioning, andthat there is an effective risk managementprocess in operation throughout the group.The audit committeeDuring the year under review, the auditcommittee was chaired by Mr Manser,chairman since 2002. Mr Manser qualifi edas a chartered accountant in 1964 and wasmade a Fellow of the Institute of CharteredAccountants in 1976.Mr Morland, Mr Devitre, Mr Armour, Ms Knoxand Ms Weir also served on the committeethroughout the year. Mr Morland has beena member of the committee since 13 April1999, Mr Devitre since 16 May 2007,Mr Armour since 1 May 2010, and Ms Knoxand Ms Weir since 19 May 2011. The boardis satisfi ed that the chairman, Mr Devitre,Mr Armour, Ms Knox and Ms Weir haverecent and relevant fi nancial experience.Biographical information concerningMr Manser and members of the committee isset out on pages 50 to 51. Mr Elliott will jointhe audit committee at the conclusion of the2013 annual general meeting. Mr Elliott hasrecent and relevant fi nancial experience,having been chief fi nancial offi cer of Rio Tintountil his retirement in April 2013, and currentlybeing the chairman of the audit committee ofRoyal Dutch Shell.It had been intended that Mr Armour wouldsucceed Mr Manser as chairman of the auditcommittee following the conclusion of the2014 annual general meeting, but in lightof the additional responsibilities and timecommitments assumed by Mr Manseras acting Chairman, during Mr Mackay’sabsence on medical leave, Mr Armouragreed to the board’s request that hesucceed Mr Manser as chairman of theaudit committee with effect from 5 June2013, when Mr Manser will stand downfrom the audit committee.The committee met four times during theyear. The external auditors, the Chairman(Mr Kahn in May 2012 and Mr Mackaythereafter), the Chief Operating Offi cer, theChief Financial Offi cer and the Chief InternalAuditor attended each meeting by invitation.Other members of the management teamattended as required.The work of the committee during the yearand up to the date of this report includedconsideration of:• the annual fi nancial statements and thepreliminary results announcement for theyears ended 31 March 2012 and 31 March2013 before their submission to the boardfor approval, including consideration of thegroup on a going concern basis, withparticular reference to the balance sheet,the upcoming year’s budgeted profi t andcash fl ows, its medium-term projectionsand committed treasury facilities;• the interim fi nancial statements and interimresults announcement for the six monthsended 30 September 2012;• areas of signifi cance in the preparationof the fi nancial statements, including:exceptional items and compliance withgroup policy; acquisition accounting forFoster’s Group Ltd and the investment inAnadolu Efes; impairment reviews and keyassumptions; evolution of tax exposuresand tax provisions; and the treatment ofcosts and reported benefi ts trackingrelating to the group’s business capabilityprogramme;• governance and controls in relation to thebusiness capability programme and reviewof the regular reports on progress ofdeployment by internal audit and by anindependent external project assuranceteam from KPMG;• reports from the external auditors on theannual and interim fi nancial statements,the approval of the audit plan and itsexpected evolution with the changesenvisaged by the business capabilityprogramme and the auditors’ feeproposal for the 2013 year-end audit;• developments in accounting and reportingstandards and review of the group’sresponses;• a review of the progress of the year’sinternal audit programme and mattersarising and reviewing the plan for theforthcoming year;• the effectiveness of the internal auditfunction and of the Chief Internal Auditor;• the results of the group’s bi-annual lettersof representation;• the internal control environment, principalrisks and risk management systems andthe group’s statement on internal controlsystems, prior to endorsement bythe board;• revisions to and compliance with treasurypolicies including compliance with risklimits and reviewing signifi cant hedgingprogrammes and a continuing focus oncounterparty credit limits;• material legal developments;• whistleblowing systems in place within thegroup and material whistleblowing reports;• independence and the effectiveness of theexternal auditors, particularly taking intoaccount the rotation of both audit partnersat group level and the recommendation tothe board of the reappointment ofPricewaterhouseCoopers LLP as theexternal auditors;• the policy on auditor independence andnon-audit services, and consideration ofthe nature, scope and independencethreats and safeguards of non-auditservices supplied by the external auditorsand pre-approval of proposed projects inline with policy; and• its terms of reference and effectiveness.The audit committee reports its activitiesand makes recommendations to the board.During the year, the audit committeedischarged its responsibilities as they aredefi ned in the committee’s terms ofreference, and has been engaged in ensuringthat appropriate standards of governance,reporting and compliance are being met.The committee has advised the board onissues relating to the application of fi nancialreporting and accounting standards as theyrelate to published fi nancial information.The Chief Internal Auditor has direct accessto the committee, primarily through itschairman. The committee has access tosubsidiary company internal audit leadership.The reports of the divisional fi nance, controlOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 61

Corporate governancecontinuedand assurance committees are also availableto, and any key fi ndings are raised with, theaudit committee. During the year, thechairman of the committee met quarterlywith the external auditors and with the ChiefInternal Auditor without management beingpresent and the committee met with theexternal auditors at least once withoutmanagement being present.The nomination committeeDuring the year, the nomination committeewas chaired by Mr Kahn until his retirementin July when the role of chairman was takenby Mr Manser. Mr Bible, Mr Manser,Mr Manzoni, Mr Morland, Mr Ramaphosaand Mr Santo Domingo were members ofthis committee throughout the year, andMr Mackay joined the committee on hisappointment as Executive Chairman. It hadbeen planned that he would succeedMr Manser as chairman of the committeeat the conclusion of the 2013 annual generalmeeting, although Mr Manser will continueto chair the committee during Mr Mackay’smedical leave of absence if it should benecessary for the committee to meet duringthat period. Ms Weir, who was appointed anon-executive director in May 2011, willbecome a member of the committee at thesame time, in place of Mr Ramaphosa whois retiring as a director. The committeeconsiders the composition of the board andits committees, the retirement, appointmentand replacement of directors, and makesappropriate recommendations to the board.The nomination committee has continued toevaluate the balance of skills, knowledge andexperience of the board and remainscommitted to the progressive renewal of theboard through orderly succession. Wherevacancies arise they prepare a descriptionof the role and capabilities required for theappointment. Appropriate succession plansfor the non-executive directors, for theexecutive directors and for seniormanagement are also kept under closereview. The committee is conscious of theneed for due regard to be given to diversitywhen considering appointments to theboard. Five of the last eight independentnon-executive directors to be appointed bythe board were women, and currently morethan one-third of the company’s independentnon-executive directors are women. Thecommittee therefore believes that thecompany is well positioned in terms ofthe future balance of the board.Where non-executive vacancies arise, thecommittee may use the services of externalconsultants in order to identify suitablecandidates for the board to consider. In relationto the most recent non-executive boardappointment, Mr Elliott, who will join the boardin July, an external search fi rm was retainedand produced a strong list of candidates,who were then shortlisted for considerationby the nomination committee on the basisof their relevant skills and experience.The remuneration committeeDuring the year, the remuneration committeeconsisted entirely of independent directors:Mr Morland (Chairman), Mr Armour, Ms Knox,Mr Manser and Mr Manzoni. Ms Knox, whowas appointed as a non-executive directorin May 2011, will succeed Mr Morland aschairman of the remuneration committee atthe conclusion of the 2013 annual generalmeeting, when Mr Morland will stand downfrom the committee. Mr Elliott will join thecommittee at the same time. Mr Manser willstand down from the committee with effectfrom 5 June 2013.The committee is responsible for theassessment and approval of a broadremuneration strategy for the group, for theoperation of the company’s share-basedincentive plan and for reviewing andapproving short-term and long-termremuneration for the executive directorsand members of the executive committee.The remuneration committee hasimplemented its strategy of ensuring thatemployees and executives are rewarded fortheir contribution to the group’s operatingand fi nancial performance at levels whichtake account of industry, market and countrybenchmarks. To ensure that the executives’goals are aligned to those of the company,share incentives are considered to be criticalelements of executive incentive pay. Duringthe year the committee engaged the servicesof consultants, Kepler Associates. Theseconsultants have no other connection withthe company. At levels below the company’sexecutive committee, the company’smanagement engages other consultants,on a project basis.Specifi cally, during the year the work of theremuneration committee included:• reviewing trends in global executiveremuneration and governance;• reviewing the key elements and design ofthe group’s long-term incentive schemes(including peer comparator groupcomposition);• reviewing global benchmarks;• reviewing and approving performancetargets and conditions for short andlong-term incentive awards;• reviewing and approving long-termincentive awards for executive committeemembers;• reviewing executive director shareholdingguidelines;• review of performance against agreedcriteria;• reviewing and approving total remunerationfor the executive directors and executivecommittee members;• determining the appropriate remunerationfor Mr Clark on his appointment as ChiefOperating Offi cer, for Ms Clark on herappointment as Managing Director ofSABMiller Europe, and for Ms May, ournewly appointed Director of CorporateAffairs and executive committee member;and• reviewing and approving the directors’remuneration report and recommendingit to the board.During the year, the chairman of theremuneration committee undertook adetailed review of executive pay, invitingthe company’s 50 largest shareholders toengage in the process. More than 30shareholders and other representative bodiesagreed to participate, and as a result of thoseinteractions, the committee made a numberof changes to the structure and reporting ofremuneration this year.Details of the company’s remuneration policyand the work of the remuneration committeeduring the year, including the extensiveshareholder consultation, are in the directors’remuneration report on pages 66 to 85.The corporate accountability and riskassurance committee (CARAC)Dr Moyo chaired the committee throughoutthe year. Mr Mackay, Mr Manser, Mr Manzoni,Mr Ramaphosa and Mr Wilson served asmembers for the entire period. Mr Kahnand Mr Pieterse stepped down from thecommittee on their retirement from the boardfollowing the conclusion of the 2012 annualgeneral meeting and Mr Bible and Mr Clarkjoined the committee. Additionally, theDirector of Corporate Affairs, Ms May,met regularly with Dr Moyo to discussimplementation and planning issues, andhas attended all meetings of the committeesince her appointment.The objective of the committee is to assistthe board in the discharge of itsresponsibilities in relation to the group’salcohol policies and corporate accountability,including sustainable development, corporatesocial responsibility, corporate socialinvestment and ethical commercialbehaviour. More details of the committee’sactivities are in the sustainable developmentreview section of this report and in ourseparate Sustainable Development Report,which is available on our website and, uponrequest, in hard copy.During the year the committee continuedto focus on company-specifi c and industryissues which are critical to protecting ourlicence to operate. Particular areas of focusfor the committee during the year included:a review of the management and reporting ofhealth and safety within the group, our policy62 – SABMiller plc Annual Report 2013

on required standards and accountabilities,and more standardised reporting of healthand safety matters; a review of oursustainable development performanceincluding progress towards meeting ourwater and carbon effi ciency targets;consideration of our longer term sustainabledevelopment ambitions; and a review of theapproach to sustainability in our newlyacquired Carlton & United Breweries (CUB)business in Australia, including its alignmentto and performance against our sustainabledevelopment priorities overall.The disclosure committeeThe disclosure committee consists of theChairman, the Chief Executive, the ChiefFinancial Offi cer, the Deputy Chairman, oneother non-executive director, and the GeneralCounsel and Company Secretary or theDeputy Company Secretary. The function ofthe disclosure committee, in accordance withour inside information policy, is to meet asand when required in order to assurecompliance with the UK’s Disclosure andTransparency Rules and the Listing Rules,as guided by the General Counsel, and toensure that the routes of communicationbetween excom members, the disclosurecommittee, the General Counsel’s offi ce,the company secretarial offi ce and investorrelations are clear, and provide for rapidescalation to the disclosure committee andkey advisers, and the board, of any decisionregarding potential inside information, so thatwe are able to comply fully with our continuingobligations under the Disclosure andTransparency Rules and the Listing Rules.AccountabilityThe audit committeeA description of the composition, scope ofresponsibilities and work undertaken by theaudit committee during the year is includedin the section dealing with the board andits committees.Relationship with auditorsPricewaterhouseCoopers were appointedas our auditors on 8 February 1999,subsequently becomingPricewaterhouseCoopers LLP (PwC) in 2003.We have in place a formal policy on auditorindependence and non-audit services, withwhich our external auditors are required tocomply, to ensure that the independence ofthe auditors is not impaired by the nature ofnon-audit work. Our policy stipulates workwhich is permitted or not permitted to beperformed by the auditors, and provides forappropriate approval and oversightprocesses. During the year more detailedguidance was issued to support the policy onthe appointment of the auditors to undertakenon-audit services.Our policy classifi es all non-audit servicesinto audit related services (being thoseservices which are effectively required by lawor regulation), and other non-audit services,and provides that engagements for othernon-audit services are subject to formalpre-approval limits, either by the full auditcommittee or by the chairman of the auditcommittee, depending on the level of thefees involved. All requests for approval havebeen accompanied by a detailed justifi cationas to why the appointment of the externalauditors to provide the services is in the bestinterests of the company, and how it isproposed that auditor independence besafeguarded in connection with the provisionof those services. In the instances whereapproval was sought for the auditors toprovide non-audit services the committeeconcluded that the auditors’ detailedunderstanding of the group and ability todeliver services in a timely fashion provideda cost-effective method of delivery withoutcompromising auditor independence. Inaddition, PwC won a competitive tender toadvise on a health and wellness project inSouth Africa. The committee was satisfi edthat undertaking this project would notcompromise the auditors’ independence.PwC confi rm annually in a formal report tothe audit committee that processes to ensurecompliance with this policy are in place andthat these processes are monitored regularly.This report includes a statement that, in theiropinion, PwC believe that the nature of theirnon-audit services has not impaired theirindependence as auditors. Note 3 to theconsolidated fi nancial statements has abreakdown of non-audit services provided tothe group by the auditors for the year underreview and fees paid to other audit fi rms.The audit committee is satisfi ed that, forthe period under review, the independenceof the auditors has not been affected by theprovision of these non-audit services, whichprimarily related to taxation.The committee has a formal and wellestablished system for the review of theeffectiveness of the external auditors. Thisprocess involves the external auditorspresenting to the committee their proposedaudit strategy followed by the output of theirdiscussions with management. At the auditcommittee meeting in May, the externalauditors present the output of their detailedyear-end work. In making its assessment ofexternal auditor effectiveness, the committeereviews the audit engagement letters beforesignature by management, reviews theexternal auditors’ summary of group andsubsidiary issues and management’sresponse to the summary, and conductsan overall review of the effectiveness of theexternal audit process and the externalauditors. This review is facilitated by theuse of questionnaires completed by fi nanceteams around the world that rate effectivenessacross 17 criteria. In the current year a furtherreview was completed in March 2013 of theoverall relationship with the auditors followingthe rotation of both group audit partners.Following the review, the committee makesa recommendation to the board on thereappointment of the external auditors bythe shareholders.Taking account of the annual assessment ofthe effectiveness of the audit, the committeehas not considered it necessary to requirethe audit to be put out to tender. The leadgroup audit partner is required to rotate aftera maximum of fi ve years (seven years formaterial subsidiary companies) and the mostrecent change of the lead group audit partneroccurred for the 2012 year end. The auditcommittee has reviewed the proposed keyaudit partner rotations during the year.There are no contractual obligationsrestricting the company’s choice ofexternal auditor.Risk managementThe group’s risk management systemis subject to regular review to ensurecompliance with the Code and the FinancialReporting Council’s guidance to directorson internal control (formerly known as theTurnbull Guidance (2005)) covering internalcontrol and risk management.Risk and the board of directorsThe directors are ultimately responsible forthe group’s risk management system and forreviewing its effectiveness. There is a regularschedule for the board to consider thegroup’s signifi cant risks and mitigatingactions. The risk management system isdesigned to manage, rather than eliminate,the risk of failure to achieve businessobjectives and there is a continuous processin place for identifying, assessing, managing,monitoring and reporting on the signifi cantrisks faced by individual group companiesand by the group as a whole. This processhas been in place for the year under reviewup to the approval of the Annual Reportand Accounts. The principal risks anduncertainties facing the group are set outon pages 16 and 17.Executive committeeExcom has specifi c responsibility as the riskmanagement committee for the group’ssystem of risk management. Excom reviewsour signifi cant risks and subsequently reportsto the board on material changes and theassociated mitigating actions. In accordancewith the Turnbull Guidance, reviews on theeffectiveness of the risk management systemwere carried out by excom, as the riskmanagement committee, in April andOctober 2012 and in April 2013.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 63

Corporate governancecontinuedEnterprise-wide risk managementExcom views the careful and appropriatemanagement of risk as a key managementrole. Managing business risk to deliveropportunities is a key element of all ourbusiness activities, and is undertaken usinga practical and fl exible framework whichprovides a consistent and sustainedapproach to risk evaluation. Business risks,which may be strategic, operational, fi nancialor environmental, or concern the group’sreputation, are understood and visible. Thebusiness context determines in each situationthe level of acceptable risk and controls.We continue to seek improvement in themanagement of risk by sharing bestpractice throughout our organisation.Key features of our system of riskmanagement are:• group statements on strategic direction,ethics and values;• clear business objectives and businessprinciples;• an established risk policy;• a continuous process for identifi cationand evaluation of signifi cant risks to theachievement of business objectives;• management processes in place tomitigate signifi cant risks to an acceptablelevel;• continuing monitoring of signifi cant risksand internal and external environmentalfactors that may change our risk profi le;and• a regular review of both the type andamount of external insurance purchased,bearing in mind the availability of cover, itscost and the likelihood and magnitude ofthe risks involved.In addition to excom’s bi-annual reports tothe board on key risks, there is a process ofregular reporting to the board through theaudit committee on the status of the riskmanagement process. Since 2010 strategicplanning, internal audit and other risk controlspecialist processes have been integratedinto line management’s risk processes andsimplifi ed risk reporting. A process of gradualrefi nement and strengthening has continuedduring this year.Key reports include those that identify,assess and monitor strategic and operationalrisks in each division and on a group basis.Internal controlThe Turnbull Guidance recommends internalcontrol practices for UK listed companies toassist them in assessing the application ofthe Code’s principles and compliance withthe Code’s provisions with regard to internalcontrol.Our systems of internal control are designedand operated to support the identifi cation,evaluation and management of risks affectingthe group. These include controls in relationto the fi nancial reporting process andthe preparation of consolidated accounts,but extend across all areas of operations.They are subject to continuous reviewas circumstances change and newrisks emerge.Key features of the systems of internalcontrol are:• the risk management system describedabove;• written policies and procedures within ourbusinesses, which are detailed in policymanuals;• clearly defi ned lines of accountability anddelegations of authority;• management of operating risk by usingappropriate infrastructure, controls,systems and people throughout thebusinesses;• business continuity planning, includingpreventative and contingency measures,back-up capabilities and the purchase ofinsurance;• maintenance of a state of preparedness forcompliance with s404 of the US Sarbanes-Oxley Act through the identifi cation andtesting of key fi nancial controls under itsInternal Financial Control (IFC) programme.This is a voluntary initiative, whichcontinues to further strengthen internalcontrol systems and processes withinthe group;• key policies employed in managingfi nancial and operating risk involvesegregation of duties, transactionauthorisation, monitoring, fi nancial andmanagerial review and comprehensivereporting and analysis against approvedstandards and budgets;• a treasury operating framework whichestablishes policies and manages liquidityand fi nancial risks, including foreignexchange, interest rate and counterpartyexposures, and incorporates group andregional treasury committees that monitorthese activities and compliance with thepolicies. Treasury policies, risk limits andmonitoring procedures are reviewedregularly by the audit committee on behalfof the board; and• a group tax policy and tax operatingframework which forms the basis of taxgovernance across the group and ismanaged by our group tax functionwhich monitors tax risk and implementsstrategies and procedures to control it.Assurance on compliance with systems ofinternal control and on their effectivenessis obtained through regular managementreviews, reviews of key fi nancial controls,internal audit reviews and quality assurance,testing of certain aspects of the internalfi nancial control systems by the externalauditors during the course of their statutoryexaminations and regular reports to the auditcommittee by the internal and externalauditors. Our divisional fi nance, control andassurance committees consider the resultsof these reviews to confi rm that controls arefunctioning and to ensure that any materialbreakdowns and remedial actions have beenreported to the appropriate boards ofdirectors. In relation to our associatedundertakings or joint ventures, these mattersare reviewed at the level of the associates’or joint ventures’ boards or other governingcommittees.At the half year and at the year end themembers of regional and country businessexecutive committees, each of our functionaldirectors (corporate affairs; corporate fi nanceand development; legal; marketing, andsupply chain and human resources), eachof the direct reports to the Chief FinancialOffi cer (fi nance and control; global templatedesign authority; information technology;internal audit; tax; and treasury), and thegroup head of strategy and planning arerequired to submit to the Company Secretaryon behalf of the board formal letters ofrepresentation on compliance with internalcontrols and key policies, includingnotifi cation of continuing or potentialsignifi cant legal, regulatory, environmentaland other exposures.These letters form the subject of reports tothe audit committee, and cover all subsidiarycompanies, as well as MillerCoors LLC andTsogo Sun Holdings Limited which submittailored letters of representation. Executivedirectors and executive committee memberssit on the boards of major associatedcompanies. Directors and members of theexecutive committee also make annualwritten declarations of interests and areobliged to report without delay any potentialor actual confl icts of interest which may arise.The directors are responsible for the group’ssystems of internal control and for reviewingtheir effectiveness annually. The board hasconducted a review of the effectiveness ofthe group’s internal controls covering materialfi nancial, operational and compliancecontrols and risk management systems forthe year under review. Necessary actions aretaken to remedy any signifi cant weaknessesidentifi ed from the board’s review of theinternal control system. The systems ofinternal control are designed to manage,rather than eliminate, the risk of failure toachieve business objectives and can providereasonable, but not absolute, assuranceagainst material misstatement or loss. Inreviewing these, the board has taken intoaccount the results of all the work carriedout by internal and external auditors.64 – SABMiller plc Annual Report 2013

CUB in Australia became part of the groupduring the second half of last year. As part ofthe integration of CUB into the group, goodprogress has been made to embed systems,controls and procedures.The board, with advice from the auditcommittee, has completed its annual reviewof the effectiveness of the system of internalcontrol and risk management for the periodsince 1 April 2012 in accordance with theTurnbull Guidance.Internal auditOur global internal audit function consists ofthe group internal audit team, led by the ChiefInternal Auditor, plus regional and countryaudit functions that operate in each of thegroup’s principal areas of business. Theregional and country functions are centrallydirected by the group internal audit team.The country internal audit functions are jointlyaccountable to local senior fi nancemanagement and regional heads of internalaudit. They also have direct access andaccountability to local audit committees andthe Chief Internal Auditor.Internal audit activities, all of which arerisk-based, are performed by teams ofappropriately qualifi ed and experiencedemployees. Third parties may be engaged tosupport audit work as appropriate. The ChiefInternal Auditor, who reports functionally tothe Chief Financial Offi cer, has regularmeetings with the chairman of the auditcommittee and prepares formal reports foreach audit committee meeting as to theconsolidated activities and key fi ndings ofthe global internal audit function.Our global internal audit function uses astandardised group-wide internal auditmethodology which is in compliance with the‘International Standards for the ProfessionalPractice of Internal Auditing’ of the Instituteof Internal Auditors. The function operates aformal global quality assurance andeffectiveness programme. Accordingly,detailed quality review assessments areperformed with regard to the regional andcountry internal audit teams, to ensurecompliance with defi ned quality andperformance measures. This processprovides a basis for the annual review ofthe effectiveness of the global internal auditfunction and results in a formal report(prepared by the Chief Internal Auditor) to theaudit committee to support the committee’sformal annual assessment of theeffectiveness of internal audit. In addition, aperiodic review of internal audit is undertakenby an independent external consultant inaccordance with the guidelines of theInstitute of Internal Auditors. The auditcommittee has satisfi ed itself that adequate,objective internal audit assurance standardsand procedures exist within the group.Continuous improvement in the quality andobjectivity of the global internal audit functionremains a key objective of the department.Whistleblowing measuresAll our employees have the opportunityto make confi dential disclosures aboutsuspected impropriety or wrongdoing. TheCompany Secretary or the Deputy CompanySecretary, in consultation with the ChiefInternal Auditor if appropriate, decides on theappropriate method and level of investigation.The audit committee is notifi ed of all materialdisclosures made and receives reports onthe results of investigations and actionstaken. The audit committee has the powerto request further information, conduct itsown inquiries or order additional action asit sees fi t.Relations with shareholdersAll shareholders were again encouraged toattend the annual general meeting held inJuly 2012, which provided shareholders withthe opportunity to ask questions of the boardand chairmen of all the board committees. Atthe meeting, all resolutions were put to a voteon a poll, with the results being published onthe company’s website, and on the Londonand Johannesburg stock exchange newsservices. As the geographic spread ofshareholders inevitably means that not everyshareholder can attend a meeting in the UK,a video fi lm and a full transcript of theproceedings of the meeting were publishedon the company’s website. Similararrangements are planned for theforthcoming annual general meeting. In orderto further ease access to information, allshareholders were this year given theopportunity to receive statutory informationfrom the company electronically.We maintain a dedicated investor relationsfunction which reports to the Director ofCorporate Affairs. The investor relations teambuilds and maintains long-term relationshipswith institutional investors and analysts and,in partnership with our corporate anddivisional management teams and withinthe scope of regulatory constraints, givespresentations on group performance andregional businesses and strives to ensurethat these are understood across the globalequity markets, including in one-to-onemeetings with investors. Dialogue onsustainable developments and sociallyresponsible investment matters is handled bythe Group Head of Sustainable Development,who undertakes focused meetings withinterested investors and stakeholders.In addition to scheduled management-ledprogrammes in which executives interactwith investors and analysts, the Chairmanannually contacts all shareholders (or theirrepresentatives) holding more than 1% of theissued share capital of the company, toenable him to address any queries whichshareholders may have about thegovernance of the company or nonoperationalaspects of company strategy.It is also, more broadly, designed to give theboard a greater awareness of shareholderconcerns. During the year the Chairman andMr Manser, as Deputy Chairman and SeniorIndependent Director, accompanied by theCompany Secretary, met with a number ofinstitutional shareholders. The DeputyChairman and the Company Secretary arealso available to discuss issues withshareholders, and views expressed byshareholders are communicated to theboard. As part of this initiative the Chairmanoffers to meet with signifi cant shareholders inthe month before the annual general meetingspecifi cally to deal with issues arising fromthe annual report and notice of the annualgeneral meeting. Institutional and shareholdercomment on the annual report is conveyedby the Company Secretary to the full boardand to the audit and remunerationcommittees in relation to matters withintheir respective terms of reference.During April 2012 we also consulted withmajor shareholders before announcing theproposed appointment of Mr Mackay asExecutive Chairman and Mr Clark as ChiefOperating Offi cer. The then Chairman,Mr Kahn, the Senior Independent Director,Mr Manser, and the Company Secretary,Mr Davidson, conducted a number of callsand personal meetings with majorshareholders and institutional investors todiscuss the proposals with them. Followingthe announcement of the appointments, theSenior Independent Director then wrotepersonally to all shareholders setting out therationale for the proposed appointments, andexplaining why the directors thought it in thebest interests of SABMiller to make theseappointments.As described in our remuneration report,during 2013 our 50 largest shareholderswere invited to meet with the chairman ofthe remuneration committee to discussour remuneration philosophy.John DavidsonGeneral Counsel andGroup Company SecretaryFor and on behalf of theboard of SABMiller plc5 June 2013Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 65

Directors’ remuneration reportChairman’s letter‘The remuneration committee’s mainresponsibility is to ensure that paymentsto executives are appropriate and alignedwith shareholder interests, producingsustainable value creation through thedelivery of our long-term business strategy.’Dear ShareholderThe year ended 31 March 2013 has beenanother year of strong fi nancial performance,with group revenue up 10% and reportedEBITA up 14%, contributing to adjusted EPSgrowth of 11% and an 11% increase in thetotal dividend for the year. We achieved aTotal Shareholder Return of 254% over thefi ve years to 31 March 2013, with £100invested in SABMiller fi ve years ago beingworth £354, compared with just £175 ifinvested in the median of our peer group,or £136 if invested in the FTSE 100 index.Furthermore, £100 invested in SABMillerupon our listing in London in 1999 wouldnow be worth £1,114.In such circumstances, it might be expectedthat executive variable pay would havepaid-out at maximum for the year. However,while three-year adjusted EPS and fi ve-yearTSR performance conditions for long-termincentives have resulted in full vesting for2013, the annual bonus payments toexecutives are well below the maximum, ashas been the case in recent years, refl ectingthe very challenging performance targets setevery year by the remuneration committee.Details of the performance measures andpayouts for 2013 are included later in theremuneration report. A number of you hadasked for greater disclosure concerningbonus assessment and the level of payouts;we are happy to provide that this year andintend to continue to do so in future years.Miles MorlandChairman of the remuneration committeeThe remuneration report has beenredesigned this year, and split into twosections, consistent with the draftremuneration reporting regulationsproposed by the UK Department forBusiness Innovation & Skills. The policyreport describes our remunerationphilosophy, and its alignment with ourbusiness strategy, and includes asummary of the key elements of pay.The implementation report details andexplains the amounts paid in respect of theyear and periods ended 31 March 2013, andincludes information on our achievement asmeasured against the various performanceconditions which determine payments toexecutive directors.During the year the remuneration committeeundertook a consultation, inviting our 50largest shareholders to contribute to thatprocess. I was delighted that more than 30shareholders and other representative bodiesagreed to participate, and their input wasextremely useful. A wide variety of views wereexpressed, not all of which were mutuallycompatible, but as a result of thoseinteractions, we have made a numberof changes to remuneration this year.66 – SABMiller plc Annual Report 2013

Value of £100 invested in SABMiller in London five years ago (1 April 2008) £400350354300250200150100175136500200820092010201120122013SABMiller Peer group FTSE 100 Note: Spot pricesThe committee would have normallyundertaken a full review of remuneration thisyear, but with the transition to a new chiefexecutive (which was accelerated to 23 April2013, following the sudden illness of GrahamMackay), the committee considered that itwould not be appropriate to make anymaterial changes before the new ChiefExecutive Alan Clark had the properopportunity to engage with the board on thestrategic direction of the group. In this way,any changes would be fully aligned with, andreinforce, the group’s strategy. However,rather than defer all changes beingconsidered, the committee has made anumber of changes in response to ourshareholder consultation pending a fullreview during 2013, including:• more detailed disclosure of performancemeasures and outcomes relating to annualbonus payments;• fi xed the vesting schedule for ValueShares, to address an issue consideredby some shareholders as providing anopportunity for retesting; and• reduced the quantum of long-termincentive awards granted to executivedirectors and executive committeemembers by around 43%, directlyproportional to the increase in share pricesince 2010 when the long-term incentiveswere last calibrated.Before next year, the committee, led byLesley Knox (who will take over as chairmanof the remuneration committee in July 2013),will continue to review our remunerationstructure and strategy, with particular focuson long-term incentives, to ensure that itcontinues to support the company’s strategicaims under the leadership of Alan Clark. Wewill welcome further input from shareholdersinto this process, and any material changeswill be discussed with shareholders andrefl ected in the binding vote on remunerationpolicy at the AGM in 2014.I hope that the changes made to remunerationthis year, the process of further review thatwe have committed to undertake before nextyear, and the demonstration of the closealignment between pay and performance willmeet with your support at the AGM this year.I will be stepping down from the committeefollowing the AGM in July after chairing it fornine years. During this period SABMiller hasbeen, by any measure but most importantlyin terms of Total Shareholder Return, oneof the most successful large consumercompanies in the world, with shareholdersmaking over ten times their money sinceour London listing in 1999.This performance has not been achievedby fl uke or by the company being carriedalong by a strong industry tide. It has beenachieved by extraordinary managementproducing extraordinary returns under theleadership of Graham Mackay. We changedour compensation system three years agoto ‘tilt the bar’ so that middle-of-the-packperformance would not be rewarded butexceptional performance relative to our peerswould receive exceptional rewards. It wasclear from the recent consultations that thismove has been welcomed by a large majorityof our shareholders. I thank them for theirsupport and wish Lesley Knox the verybest in taking over chairing the committee.I know she will do a fi ne job. Please give heryour input.Yours sincerelyMiles MorlandDirectorChairman of the remuneration committee5 June 2013(The directors’ remuneration report continueson pages 68 to 85.)Remuneration glossary of termsSTI Short-term IncentivesLTI Long-term IncentivesTSR Total shareholder returnEPS Adjusted earnings per shareOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 67

Directors’ remuneration reportPolicy reportThis report covers the period from 1 April2012 to 31 March 2013 and complies withthe requirements of the Large and MediumsizedCompanies and Groups (Accounts andReports) Regulations 2008 and theprovisions of the UK Corporate GovernanceCode relating to remuneration. It has alsobeen prepared with reference to the March2013 draft of the new remuneration reportingregulations proposed by the UK GovernmentDepartment of Business Innovation and Skills(draft BIS regulations). These regulations areproposed to apply to all UK companies listedon a major stock exchange for fi nancial yearsending on or after 31 October 2013. Althoughnot a requirement for the current reportingyear, the proposed new format has beenadopted, where possible and appropriate,to facilitate more consistent reporting ofremuneration in the future.Remuneration philosophyThe company’s remuneration philosophy is toensure that all employees are rewarded fairlyand appropriately for their contribution. Insetting remuneration levels, the committeetakes into account appropriate marketbenchmarks, ensuring an emphasis on payfor performance. This approach helps toattract, retain and motivate individuals of thenecessary calibre, while ensuring employeebehaviours remain consistent withSABMiller’s values.Base pay is a fi xed cost for the company,and is set at around median for the relevantmarket, with a signifi cant proportion ofvariable performance-related pay toincentivise and reward performancemeasured over the short-term (one year) andlong-term (three to fi ve years), reinforced byshareholding guidelines to ensure long-termalignment with shareholders.Short-term incentives are structured toreward the delivery of annual fi nancialperformance balanced with the achievementof strategic priorities, ensuring that theachievement of short-term fi nancialperformance is not at the expense offuture opportunities.Long-term incentives are an integral part ofthe company’s approach to competitiveperformance-based pay, and are aligned toshareholder returns to ensure a clear line ofsight between executive pay and long-termvalue creation for shareholders. For thisreason, long-term incentives are thecomponent of pay which represent thelargest opportunity for executive directorsand members of the executive committee.The combination of these componentsensures that high pay is achievedonly for high performance and highshareholder returns.When determining pay, the committeeconsiders the total remuneration (beingfi xed pay plus short-term and long-termincentives) that may be earned for eachlevel of performance. Furthermore, whendetermining the specifi c performancemeasures for each incentive plan, theEnsure employees are rewardedfairly and appropriatelyFixed payMedian for the relevantmarketShort-term incentives(One year) alignedto financial performanceand strategic prioritiescommittee pays particular regard toenvironmental, social and governance issues,to ensure that the incentive arrangementsdo not inadvertently motivate or rewardinappropriate outcomes or excessive risk.Before the quantum of awards is determined,extensive modelling of the potentialoutcomes is undertaken, and adjustmentsmade, so that remuneration remainsappropriate in all the circumstances.The targeted positions are:• upper decile pay for upper decileperformance;• upper quartile pay for upper quartileperformance;• median pay (or lower) for medianperformance; and• fi xed pay only for below medianperformance.At the end of each performance period,before any variable payments are confi rmed,remuneration receivable is compared to theexpected level of pay for actual performanceachieved, to ensure that any payouts remainappropriate to overall business performanceand shareholder returns.Attract, retain and motivate individualswith the necessary calibre and behavioursLong-term incentives(Three to five years) alignedto shareholder returnsHigh pay is achieved only for high performance and high shareholder returnsRemuneration structureTotal remuneration comprises fi xed pay and variable performance-related pay, which is further divided into short-term incentives (with aone-year performance period) and long-term incentives (with three- to fi ve-year performance periods).In addition, executive directors are required to own outright shares in the company having a value proportional to their base pay (300% of basepay for the Chief Executive, and 200% for other executive directors). This provides further alignment with shareholder returns, by ensuring areduction in their own wealth if there is a reduction in SABMiller’s share price.Fixed payBase payRetirement benefitsOther benefitsVariable performance-related payShort-term incentivesAnnual bonus plan (one year)Long-term incentivesShare option plan (three to five years)Share award plan (three to five years)68 – SABMiller plc Annual Report 2013

Alignment of strategy, pay and performanceThe company’s key strategic priorities aim to deliver a higher return to shareholders than other companies or investment opportunities.Accordingly, those same strategic priorities determine the performance measures for both the short-term and long-term incentive plans.For the year ended 31 March 2013 the key strategic priorities and performance measures across the group were:Key strategic prioritiesCreating a balanced and attractive globalspread of businessesDeveloping strong, relevant brand portfoliosthat win in the local marketConstantly raising the profi tability of localbusiness, sustainablyLeveraging our skills and global scaleRemuneration scenario chartsPerformance measuresShort-term incentives• Volume and mix• EBITA growth• Revenue• Market share• EBITA margin• Water usage• Fossil fuel emissions• Return on investment• Working capitalLong-term incentives• Share price increase (absolute)• EPS compound growth over three tofi ve years• TSR out-performance of a peer groupover fi ve yearsThe charts below provide an indication of the remuneration outcomes for each director in the circumstances prescribed by the draft BISregulations, showing potential total remuneration at (i) maximum, (ii) on-target, and (iii) minimum performance levels:Chief Executive Value of package £mMaximumOn-targetMinimum£0 £5 £10 £15Chief Financial Officer Value of package £mMaximumOn-targetMinimum£0 £5 £10 £15Fixed pay Short-term incentives Long-term incentivesThe scenario charts assume:• Fixed pay = base pay plus retirementbenefi ts for the year ending 31 March 2014,plus the anticipated value of other benefi ts(assumed to be the same amount as for theyear ended 31 March 2013 for this purpose).• Short-term incentives = maximum bonuspaid at maximum performance, halfmaximumbonus paid for on-targetperformance, with nil bonus for belowon-target performance.MaximumOn-targetMinimumComposition of package %0% 20% 40%60%80% 100%MaximumOn-targetMinimum• Long-term incentives = for share options,the maximum value is based on one-thirdof the face value with full vesting, whileon-target assumes 20% of face valueand two-thirds vesting. For performanceshares, the maximum scenario assumesfull vesting, with on-target at 25% vesting.For value shares, the maximum scenarioassumes TSR exceeds the median of thecomparator group by 30% across allperformance periods. No value sharesvest for median TSR performance andno long-term incentives vest for belowon-target performance.Composition of package %0% 20% 40%60%80% 100%The charts on page 75 are prepared on thesame basis as above, but for the periodending 31 March 2013, excluding andincluding share price growth.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 69

Directors’ remuneration reportPolicy report continuedKey elements of payFixed payPurpose and linkto strategyBase payProvides a fi xed level ofearnings, appropriate to therequirements of the role.Non-executive directors’feesRemunerates non-executivedirectors for their responsibilitiesand time commitment.Retirement benefitsProvides the basis for retirementsavings.Other benefitsProvides benefi ts appropriate tothe market and the role.OpportunityAround median for the relevantmarket, while recognisingexperience in the role.The amounts paid to executivedirectors for the year ended31 March 2013 are shown inthe table on page 75.Median for companies of asimilar size and presence.Currently the median of theFTSE-30 is used as a referenceposition.Amounts paid to non-executivedirectors for the year ended31 March 2013 are shown inthe table on page 76.Pension contributions paid bythe company in respect of eachexecutive director are fi xed at30% of base pay.The total amounts for executivedirectors for the year ended 31March 2013 are shown in thetable on page 75.The total values of benefi tsreceived by executive directorsand non-executive directors inrespect of the year ended31 March 2013 are shown inthe tables on pages 75 and 76respectively.Operation andperformancemeasuresBase pay is reviewed annuallywith effect from the start ofeach fi nancial year, havingreference to the competitivelevel of pay in other comparableorganisations, the level ofincrease awarded to otheremployees, and overallbusiness performance.Non-executive directors’remuneration policy and feesare reviewed annually by theboard, and the Chairman’s feeis determined by the committee.Amounts up to the annual andlifetime allowances arecontributed to the SABMiller plcUK Staff Pension Scheme, aregistered defi ned contributionpension scheme, in which allUK employees are eligible toparticipate.Any amount in excess of theselimits is notionally credited tothe company’s unfundedretirement benefi ts scheme, orpaid in lieu as a taxable cashallowance.Executive directors are providedwith a company car allowance,medical insurance, long-termdisability insurance, lifeinsurance, accompanied travel,legal and professional feesrelevant to their duties, clubsubscriptions, occasionalovernight accommodation in thegroup’s London apartment, anda beer allowance.Non-executive directors do notgenerally receive any benefi ts,other than a beer allowance.Proposed policychangesChanges to base pay for theyear ending 31 March 2014 areshown in the table on page 72.Changes to non-executivedirectors’ fees for the yearending 31 March 2014 areshown in the table on page 72.None.None.70 – SABMiller plc Annual Report 2013

Short-term incentives Long-term incentivesAdditional(Grants are made annually at the discretion of the remuneration committee)Annual bonus plan Share option plan Share award plan Shareholding requirementsIncentivises and rewards theachievement of annual fi nancialand other specifi ed strategicpriorities.With base pay set at median,the annual bonus ensures thatabove-market pay cannot beachieved unless challengingperformance targets are met,thereby controlling the company’sfi xed costs and aligning pay withperformance.Chief Executive: up to 175% ofbase pay. 1Other executive directors: up to120% of base pay.The total bonus opportunity issplit:• 60% for the delivery of annualfi nancial performance targets;and• 40% for the achievement ofindividual strategic objectives.This balance ensures that theachievement of short-term fi nancialperformance is not at the expenseof future opportunities.If overall business performance isnot satisfactory, or there has beena material breach of safety oradverse impact on theenvironment, the bonus amountmay be further reduced or forfeitedat the discretion of theremuneration committee.The performance measures,achievement against targets, andthe amounts paid to eachexecutive director for the yearended 31 March 2013 are shownon page 77.None.Share options provide a direct andtransparent link between executive payand value creation for shareholders, as nogains are possible unless there has beenan increase in share price.Furthermore, to ensure that any shareprice increase is supported by continuingsustainable growth in the group’sunderlying fi nancial performance,additional performance conditions apply,which must be achieved or else the shareoptions will lapse.All share options expire on the tenthanniversary of their grant date.Since 2010, the maximum awards havebeen:Chief Executive: options over 250,000shares at maximum vesting, subject toEPS performance conditions 2 (reducedto 140,000 shares at maximum vestingfor 2013).Other executive directors: options over150,000 shares at maximum vesting,subject to EPS performance conditions(reduced to 85,000 shares at maximumvesting for 2013).Share options reward executives onlyif there is an absolute increase inshare price.Performance measures are applied to:• two-thirds of the share options afterthree years; and• one-third of the share options afterfi ve years.If these performance conditions are notmet, the appropriate proportion of shareoptions will lapse. There is no opportunityfor retesting.Achievement against the performanceconditions for the periods ended31 March 2013, and the resulting numberof share options vesting are shown onpage 78.The combination of a share option planand share award plan enables executivesto be incentivised and rewarded forachieving a broader range of performancemetrics, in addition to share priceincrease.The share award plan rewards executiveswith shares for:• core fi nancial performance (currentlyEPS) – denoted as ‘PerformanceShares’, and• external-relative performance (currentlyTSR out-performance of a comparatorgroup) – denoted since 2010 as “ValueShares”.Chief Executive: up to 125,000 sharessubject to EPS performance conditions,plus an additional 220 shares for every£10 million increase in shareholder valuein excess of a comparator group 3(reduced to 70,000 shares plus125 shares respectively for 2013).Other executive directors: up to 75,000shares subject to EPS performanceconditions, plus an additional 130 sharesfor every £10m increase in shareholdervalue in excess of a comparator group(reduced to 42,500 shares plus 75 sharesrespectively for 2013).Performance shares vest in a singletranche on the third anniversary of thegrant date, subject to performance. 25% ofthe shares vest at threshold performance,with 100% vesting only if more stretchingperformance conditions are met.There is no opportunity for retesting if theperformance conditions are not met.Value shares vest only if SABMiller’s TSRoutperforms the median of a comparatorgroup. No shares vest for medianperformance, but for every £10 millionof additional shareholder value createdin excess of the median (being the %out-performance multiplied by thecompany’s market capitalisation at thecommencement of the performanceperiod), a fi xed number of shares will vest.The comparator group and performancefor the periods to 31 March 2013 areshown on page 79.The level of share awards granted in 2013 has been reduced by around 43%. The grantsmade to executive directors in 2013 are shown in the tables on pages 82, 83 and 84.The vesting schedule for Value Shares granted in 2013 has been amended to:• 1/3rd after three years;• 1/3rd after four years; and• 1/3rd after fi ve years.Previously, an executive could request the release of shares at fi xed intervals betweenthree and fi ve years, based on performance to that date. This was considered by someshareholders as providing an opportunity for retesting.During 2013, a further review will be undertaken to ensure that the long-term incentiveplans continue to support the company’s key strategic priorities under the leadershipof the new Chief Executive.Provides alignment withshareholder returns by ensuring areduction in an executive director’sown wealth if there is a reductionin SABMiller’s share price.Shares owned outright equivalentto:Chief Executive: 300% ofbase pay.Other executive directors: 200%of base pay.Directors’ shareholdings as at31 March 2013 are shown onpage 81.Any shares arising from theexercise or vesting of shareoptions or share awards grantedto executive directors must beretained (except those shares soldto pay the exercise price and anytax upon exercise or vesting ofany such award) until the relevantthreshold is met.None.Overview Business review Governance Financial statements Shareholder information1 During the year ended 31 March 2013, theChief Operating Offi cer (as Chief Executive-elect) waseligible for an annual bonus of up to 150% of base pay.2 During the year ended 31 March 2013, the ChiefOperating Offi cer (as Chief Executive-elect) was grantedoptions over 200,000 shares at maximum vesting, subjectto EPS performance conditions.3 During the year ended 31 March 2013, the ChiefOperating Offi cer (as Chief Executive-elect) was granted aconditional award of up to 100,000 shares subject to EPSperformance conditions, plus an additional 175 shares forevery £10 million increase in shareholder value in excess ofa comparator group.SABMiller plc Annual Report 2013 – 71

Directors’ remuneration reportPolicy report continuedBase pay and non-executive directors’ feesExecutive directors’ base pay, and non-executive directors’ fees, for the years ending 31 March 2013 and 31 March 2014(annualised for ease of comparison) are as follows:AnnualisedYear ended 31 March 2013£Year ending 31 March 2014£ % changeExecutive directorsChief Executive/Executive Chairman 1,295,000 1,100,000 15% decrease 1Chief Operating Offi cer 850,000 n/a n/aChief Financial Offi cer 720,000 740,000 2.8%Non-executive directorsNon-executive chairman’s fee 315,000 650,000 106%Base fee 80,000 80,000 nilSenior independent director (additional fee) 30,000 30,000 nilCommittee chairman fee• Audit 30,000 30,000 nil• Remuneration 24,000 28,000 16.7%• Nomination 15,000 25,000 67%• CARAC 20,000 22,000 10%Committee member fee• Audit 15,000 20,000 33.3%• Remuneration 12,000 15,000 25%• Nomination – – nil• CARAC 8,000 12,000 50%1 During the year ended 31 March 2013, Mr Mackayreceived base pay at the rate of £1,295,000 per annumin his role as Chief Executive (from 1 April 2012 to 25 July2012) and as Executive Chairman (from 26 July 2012).Upon assuming the role of Chief Executive (with effectfrom 23 April 2013) Mr Clark’s base pay was set at therate of £1,100,000 per annum for the period ending31 March 2014, representing a 15% decrease in basepay for the Chief Executive role.It had been intended that, at the AGM inJuly 2013, Mr Mackay (Executive Chairman)would become non-executive Chairman,and Mr Clark (Chief Operating Offi cer) wouldbecome Chief Executive. However, for healthreasons, Mr Mackay was forced to stepdownon 23 April 2013, resulting in Mr Clarkbeing promoted with immediate effect toChief Executive. Mr Manser (DeputyChairman and Senior Independent Director)has assumed the responsibilities of actingChairman while Mr Mackay is absent onmedical leave.Mr Clark will receive pay as Chief Executive,and Mr Manser will receive a total fee asacting non-executive Chairman, both witheffect from 23 April 2013. Mr Mackay willcontinue to receive his current base pay onlywhile on medical leave, at least until the2013 AGM. A decision will then be madedepending upon Mr Mackay’s health andthe circumstances at that time.The non-executive Chairman’s fee has beenpositioned at the median for the FTSE-30for a UK-based role. This appears as asignifi cant percentage increase because theprevious non-executive Chairman was basedin South Africa and received a lower feebased on the market rate for that location.The base fee for non-executive directors hasnot increased this year, but the committeefees (which have not increased since 2011)have been increased to the median of theFTSE-30 or just below. The FTSE-30 is thecompany’s reference position for nonexecutivedirectors’ fees.Consideration of conditions elsewherein the groupWhen determining the remuneration forexecutive directors, the committee considersthe pay and conditions of other employeesthroughout the group. The average increasein base pay for other UK-based employeesis 3.2% for 2013/14. Short-term incentivesfor other employees are applied andcalculated in a manner consistent withthose for executive directors and otherexecutive committee members. Longtermincentives are cascaded to ten otherexecutive committee members, and alsoto around 1,700 senior executives belowthe executive committee.72 – SABMiller plc Annual Report 2013

Service contracts and termination arrangementsExecutive directors have service contracts with the company which may be terminated with not less than 12 months’ notice as set out below.Non-executive directors do not have service contracts, but serve the company under letters of appointment which may be terminated withoutliability for compensation.Date fi rst appointedto the boardDate of service contract/letter of appointmentDate next due for electionor re-electionExecutive directorsA J Clark 26 July 2012 23 May 2013 2013 AGMJ S Wilson 21 July 2011 17 August 2011 2013 AGMNon-executive directorsM H Armour 1 May 2010 14 April 2010 2013 AGMG C Bible 1 August 2002 27 September 2002 2013 AGMD S Devitre 16 May 2007 16 May 2007 2013 AGMJ M Kahn 8 February 1999 23 February 1999 n/aL M S Knox 19 May 2011 17 May 2011 2013 AGME A G Mackay 8 February 1999 27 February 1999 2013 AGMP J Manser 1 June 2001 23 May 2013 2013 AGMJ A Manzoni 1 August 2004 12 May 2004 2013 AGMM Q Morland 8 February 1999 23 February 1999 2013 AGMD F Moyo 1 June 2009 26 May 2009 2013 AGMC A Perez Davila 9 November 2005 12 October 2005 2013 AGMR Pieterse 15 May 2008 9 June 2008 n/aM C Ramaphosa 8 February 1999 23 February 1999 n/a 1A Santo Domingo Davila 9 November 2005 12 October 2005 2013 AGMH A Weir 19 May 2011 17 May 2011 2013 AGMH A Willard 1 August 2009 1 August 2009 2013 AGM1 Mr Ramaphosa has confi rmed his intention not to standfor re-election at the 2013 AGM.The company’s policy on service contractsand termination arrangements is set outbelow. The company’s overriding principleis that there should be no reward for failure.The committee’s approach, whenconsidering payments in the event oftermination, is to take account of theindividual circumstances including the reasonfor termination, any contractual obligations,and the relevant share plan and pensionscheme rules.Service contract key itemsNotice periodTermination payment• For executive directors, 12 months’ written notice by either party. Executive committeemembers and other employees have notice periods of up to 12 months.• Base pay and benefi ts: paid in lieu for the remainder of the notice period, less any deductionconsidered appropriate and reasonable taking into account any accelerated receipt ofpayment and the employee’s duty to mitigate any loss.• Short-term incentives: not contractual, but normal practice is to pro-rate the annual bonus forthe year in which an employee departs, subject to individual and business performance.• Long-term incentives: not contractual, but if an employee leaves by reason of retirement,injury, disability, ill-health or redundancy, any unvested share awards are pro-rated for timeserved during the relevant period, with vesting subject to the applicable performanceconditions. In the event of death, or if the company or business in which the employee worksis sold or transferred, any unvested share awards may vest in full, subject to the absolutediscretion of the remuneration committee.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 73

Directors’ remuneration reportImplementation reportRole of the remuneration committeeIn accordance with its terms of reference(which are available on the company’swebsite), the committee determines the basison which the executive directors andmembers of the executive committee are tobe paid and the amount of their remuneration.In addition, the committee has oversight ofthe remuneration strategy for the group asa whole, monitoring the level and structureof remuneration for senior management, andapproving all awards under the company’sshare incentive arrangements. Whendetermining executive pay, the committeeconsiders the specifi c performancemeasures for each incentive plan, aswell as overall business performance andshareholder returns, paying particular regardto environmental, social and governanceissues, to ensure that the incentivearrangements do not inadvertently motivateor reward inappropriate outcomes orexcessive risk.During the year ended 31 March 2013remuneration committee members’attendance at meetings and details of the coreagenda items discussed are shown below:MeetingsMembersM Q Morland (Chairman)M H ArmourL M S KnoxP J ManserJ A ManzoniEligibleto attendAttendedMeeting Core agenda items AttendeesMay 2012• Consider and approve short-term incentivepayments for the year ended 31 March2012.• Consider and approve long-term incentiveawards vesting in respect of theperformance periods ended 31 March 2012.• Determine base pay for the year ending31 March 2013.• Determine short-term incentive andlong-term incentive performance measuresand targets, and consider total remunerationfor various performance outcomes forawards to be made during the year ending31 March 2013.• Approve long-term incentive awards foremployees below executive committee.• Consider and implement shareholdingguidelines for executive directors.M Q Morland (Chairman)M H ArmourL M S KnoxP J ManserJ A ManzoniNovember 2012March 2013• Review remuneration policy, practice, payand conditions for employees across thegroup.• Approve (off-cycle) long-term incentiveawards for employees below executivecommittee.• Additional agenda item:Approve remuneration package for newexecutive committee member.• Report on shareholder consultations, andconsider structural changes to remunerationfor the year commencing 1 April 2013.M Q Morland (Chairman)M H ArmourL M S KnoxP J ManserJ A ManzoniM Q Morland (Chairman)M H ArmourP J ManserJ A ManzoniThe following non-executive directorsattended some committee meetings duringthe year as observers: Mr Kahn, Mr SantoDomingo and Mr Willard. Also present, onoccasions at the invitation of the committeewere Mr Clark (then Chief Operating Offi cer),Mr Davidson (General Counsel andGroup Company Secretary), Mr Fairhead(Group Head of Compensation & Benefi ts),Mr Mackay (Executive Chairman) andMr Shapiro (Deputy Company Secretary),although none was present when his ownremuneration was discussed.Advisors to the remuneration committeeExternal advisorsKepler Associates is retained by thecommittee to provide independent advice onremuneration matters including current marketpractices, incentive design, performancemetrics, and independent monitoring of totalshareholder return. Kepler Associates doesnot provide any other advice or services to thegroup, and fees are charged on a time-basis.Total fees in respect of the year ended31 March 2013 were £81,500. No other feeswere paid to Kepler Associates.Internal advisorsThe committee considers the views ofthe Chairman, and the Chief Executive,on the remuneration and performance ofother members of the executive committee.The General Counsel and Group CompanySecretary, and the Group Head ofCompensation & Benefi ts also provideinformation to the committee on legal,regulatory and governance issues, andon the pay and conditions for employeesthroughout the group.74 – SABMiller plc Annual Report 2013

Executive directors’ emoluments for the year ended 31 March 2013 (audited table)The table below shows the payments madeto executive directors in respect of the yearended 31 March 2013. Directors’ emolumentshave been disclosed as required by thecurrent regulations, but also shown is theExecutivedirectorsAll fi gures in £EmolumentsBase payCash andnon-cashbenefi ts 4“single fi gure” of remuneration for eachexecutive director during the year, calculatedin the manner proposed by the draft BISregulations. Also included for Mr Clark andMr Wilson are the values of long-termAnnualbonus: cash(see page 77) 2013 total 2012 totalincentives vesting by reference to theperformance period ended 31 March 2013which were granted to them in 2008 and2010 in respect of their services asemployees rather than as executive directors.Additional “single figure” disclosureRetirementbenefi tsLong termincentivesexcludingshare pricegrowth(see page 79)Totalexcludingshare pricegrowthEffect of shareprice growth(see pages 78and 79)Total(includingshare pricegrowth)E A G Mackay 1 1,295,000 122,841 1,400,000 2,817,841 3,042,642 388,500 3,005,146 6,211,487 7,698,910 13,910,397A J Clark 2 579,545 96,858 530,000 1,206,403 – 173,864 1,560,943 2,941,210 3,754,906 6,696,116J S Wilson 3 720,000 41,150 535,680 1,296,830 909,994 216,000 175,590 1,688,420 332,860 2,021,280Total 2,594,545 260,849 2,465,680 5,321,074 3,952,636 778,364 4,741,679 10,841,117 11,786,676 22,627,7931 Mr Mackay received annual fees for his service as anon-executive director of Reckitt Benckiser Group plc of£92,000 for the year ended 31 December 2012, of which£13,500 was applied to the purchase of Reckitt BenckiserGroup plc ordinary shares. In addition, Mr Mackayreceived annual fees as a non-employee director of PhilipMorris International Inc of US$130,000 plus an annualaward of shares of common stock in Philip MorrisThe charts have been prepared on the samebasis as the remuneration scenario charts onpage 69. For comparison purposes, the chartprovides an indication of minimum, on-targetand maximum total remuneration for theperiod, shown with and without the effectof share price growth over the performanceperiods. In the fi ve years ended 31 March2013 SABMiller’s share price increasedby 214%.International Inc for the year ended 31 December 2012which had a fair market value of US$160,000 on theirgrant date of 9 May 2012.2 Mr Clark was appointed as a director on 26 July 2012, andtherefore received only pro-rated emoluments from thecompany as an executive director during the year ended31 March 2013.3 Mr Wilson was appointed as a director on 21 July 2011,and therefore received only pro-rated emoluments fromthe company as an executive director during the yearended 31 March 2012.4 The benefi ts received during the year ended 31 March2013 all relate to non-cash benefi ts as detailed onpage 70, with the exception of car allowances of £23,400,£11,693 and £17,150 paid to Mr Mackay, Mr Clark andMr Wilson respectively.E A G Mackay £mOpportunity excluding share price growthMinimum On-target Maximum2013 excluding share price growth2013 including share price growth£0 £5 £10 £15A J Clark £mOpportunity excluding share price growthMinimum On-targetMaximum2013 excluding share price growth2013 including share price growth£0 £2 £4 £6£8 £10J S Wilson £mOpportunity excluding share price growthMinimum On-target Maximum2013 excluding share price growthOverview Business review Governance Financial statements Shareholder information2013 including share price growth£0 £1 £2 £3£4 £5Fixed pay Short-term incentives Long-term incentives Share price growthSABMiller plc Annual Report 2013 – 75

Directors’ remuneration reportImplementation report continuedNon-executive directors’ emoluments for the year ended 31 March 2013 (audited table)Non-executive directorsAll fi gures in £ Base fees Benefi tsEmoluments and “single figure” of remunerationCommittee feesAudit Remuneration CARAC Nomination2013 total 2012 totalM H Armour 80,000 206 15,000 12,000 – – 107,206 104,203G C Bible 1 80,000 – – – 5,424 – 85,424 77,000D S Devitre 80,000 364 15,000 – – – 95,364 92,148J M Kahn 101,420 1,074 – – 2,576 4,830 109,900 314,074L M S Knox 80,000 265 15,000 12,000 – – 107,265 90,312P J Manser 110,000 407 30,000 12,000 8,000 10,170 170,577 147,398J A Manzoni 80,000 373 – 12,000 8,000 – 100,373 97,462M Q Morland 80,000 409 15,000 24,000 – – 119,409 116,400D F Moyo 80,000 279 – – 20,000 – 100,279 97,357C A Perez Davila 80,000 243 – – – – 80,243 77,181R Pieterse 2 25,757 – – – 2,576 – 28,333 85,000M C Ramaphosa 80,000 208 – – 8,000 – 88,208 85,199A Santo Domingo Davila 80,000 298 – – – – 80,298 77,246H A Weir 80,000 302 15,000 – – – 95,302 80,197H A Willard 3 – 307 – – – – 307 382Total 1,117,177 4,735 105,000 72,000 54,576 15,000 1,368,488 1,541,559Non-executive directors do not participatein any of the company’s incentive plans,nor do they receive retirement benefi ts.As non-executive Chairman until hisretirement from the board on 26 July 2012,Mr Kahn was provided with an offi ce,secretarial assistance, a company car,medical insurance, assistance with fi linga UK tax return, and a beer allowance.1 Mr Bible joined the CARAC with effect from 26 July 2012,and his committee membership fees for the year arepro-rated.2 Mr Pieterse retired from the board on 26 July 2012.3 Mr Willard is an executive offi cer of Altria Group Inc (Altria),and in line with the company’s agreement with Altria, hedoes not receive a director’s fee from the company, butis entitled to receive a beer allowance in line with othernon-executive directors.Other non-executive directors receive a beerallowance only.76 – SABMiller plc Annual Report 2013

Variable pay outcome for the year ended 31 March 2013Annual bonus planAs explained on page 71 the total bonusopportunity for executive directors is split:• 60% for the delivery of annual fi nancialperformance targets; and• 40% for the achievement of individualstrategic objectives.In response to feedback from someshareholders, more detailed informationregarding the annual bonus performancemeasures has been provided this year, withthe weightings and determinations for theyear ended 31 March 2013 shown in thetable below, split between fi nancial andindividual strategic targets:Achievement against the group’s fi nancialperformance targets, upon which bonusesare based for each executive director,resulted in achievement just above target(32% out of a maximum of 60%). This isdespite adjusted EPS growth of 11% andreported EBITA up 14%, refl ecting the verychallenging performance targets set for thefi nancial year. Individual strategic objectivesare usually different for each executivedirector, although some key strategicobjectives have joint responsibility.Outcome (% of maximum bonusopportunity)Performance measure Weighting EAG Mackay A J Clark J S WilsonFinancial performance targets:• Earnings per share growth.• EBITA achievement.• Working capital improvement.Individual strategic objectives, including quantifi able measurement forachievements with regard to:• Cost optimisation project.• Market share growth in designated territories.• Talent management development.• Others, not disclosed for reasons of commercial confi dentiality.Selection only,so separateweightings notdisclosed25%25%10%60% 32% 32% 32%40% 30% 29% 30%Total (% of maximum bonus opportunity) 100% 62% 61% 62%Maximum bonus (% of base pay) 175% 150% 120%Base pay £1,295,000 £579,545 £720,000Annual bonus £1,400,000 £530,000 £535,680At its meeting on 21 May 2013 the committeereviewed performance against each target,and also considered overall businessperformance and shareholder returnsachieved. After consideration, the committeeawarded bonuses to the executive directorsin the amounts shown above for the yearended 31 March 2013.Annual bonus, as a percentage of themaximum bonus opportunity, for the highestpaid director (E A G Mackay) for each of thelast three years, split between annualfi nancial performance and individual strategicobjectives was:Performance measureBonus (% of maximum)100%0%Years ended31 MarchWeighting 201062% 61% 62%31 March201131 March2012Financial performance targets 60% 45% 53% 47%Individual strategic objectives 40% 34% 32% 30%Total (% of maximum bonus opportunity) 100% 79% 85% 77%Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 77

Directors’ remuneration reportImplementation report continuedShare option planAs explained on page 71, share optionsprovide a direct and transparent linkbetween executive pay and value creationfor shareholders, as no gains are possibleunless there has been an absolute increasein the share price. Furthermore, to ensurethat any share price increase is supported bycontinuing sustainable growth in the group’sunderlying fi nancial performance, annualawards vest dependent upon theachievement of additional performanceconditions with:• two-thirds of the share options tested afterthree years; and• one-third of the share options tested afterfi ve years.If the performance conditions are notachieved at the relevant time, the appropriateproportion of share options will lapse andthere is no opportunity for retesting.For share options vesting in respect of theperformance periods ended 31 March 2013the performance conditions, achievementand vesting outcomes are shown in thetable below:OutcomePerformance period and achievement Vesting EAG Mackay A J Clark J S WilsonFive years ended 31 March 2013• Threshold vesting:EPS > UK RPI + 3% pa compound• Maximum vesting:EPS > UK RPI + 5% pa compound• Performance achieved:EPS = UK RPI + 14.2% pa compoundThree years ended 31 March 2013• Threshold vesting:EPS > UK RPI + 3% pa compound• Maximum vesting:EPS > UK RPI + 5% pa compound• Performance achieved:EPS = UK RPI + 11.1% pa compoundThresholdThresholdMaximumMaximum100%100%75,900 sharesat £12.5019,800 sharesat £9.295167,500sharesat £19.5116,500 sharesat £12.508,250 sharesat £10.49108,550 1sharesat £19.5113,000 2sharesat £19.51Value at vesting (excluding share price growth) £nil £nil £nilValue at vesting (including share price growth)* £4,716,532 £2,206,909 £196,690* Exercise price shown in the table; and share price at31 March 2013 = £34.64.1 Under the terms of the share option grant to Mr Clarkin 2010, before he became an executive director, optionsover 65,000 of the 108,550 shares vesting for the threeyears ended 31 March 2013 were not subject toperformance conditions.2 Under the terms of the share option grant to Mr Wilsonin 2010, before he became an executive director,options over the 13,000 shares vesting for the threeyears ended 31 March 2013 were not subject toperformance conditions.In the fi ve years ended 31 March 2013SABMiller’s share price as listed on theLondon Stock Exchange increased by 214%.The opening share price on 1 April 2008was £11.03; and the closing share price on28 March 2013 (being the prior trading dayclosest to 31 March 2013) was £34.64.Details of share options conditionallyawarded to executive directors andoutstanding at 31 March 2013 areshown on page 82.78 – SABMiller plc Annual Report 2013

Share award planThe share award plan rewards executivesfor core fi nancial performance, currentlymeasured as adjusted EPS growth and TSRout-performance of a comparator group.For annual awards granted before 2010,EPS growth is measured over three years,and TSR-based awards vest:• two-thirds after three years; and• one-third after fi ve years.Since 2010 annual awards have compriseda reduced number of performance sharesvesting after three years dependent uponEPS growth, plus value shares vesting overa period of three to fi ve years dependentupon TSR exceeding the median ofa comparator group, with no sharesvesting at median.The value shares conditionally awardedbefore 2013 vest on the fi fth anniversaryof the grant date, subject to TSR outperformance,but participants may requestthe remuneration committee to releaseshares from the third anniversary of the grantdate. In such circumstances, the numberof shares is determined based on TSRout-performance to that date, with theshares partially deferred and released inequal instalments over the period until thefi fth anniversary of the grant date. There isno opportunity for retesting against futureTSR performance, and the deferred sharesare subject to forfeiture under certaincircumstances should the participant’semployment terminate beforethe fi fth anniversary. The earliest opportunityfor any value shares to be released will be inthe period ending 31 March 2014. Valueshares conditionally awarded from 2013vest one-third on the third, fourth and fi fthanniversaries of the grant date respectively.The number of shares to be released, if any,will be based on TSR out-performance tothose dates.If the performance conditions for any awardare not achieved at the relevant date, theappropriate proportion of shares will lapseand there is no opportunity for retesting.For share awards vesting in respect of theperformance period ended 31 March 2013,the performance conditions, achievementand vesting outcomes are shown in thetable below:OutcomePerformance conditions and achievement Vesting EAG Mackay A J Clark J S WilsonFive years ended 31 March 2013• Threshold vesting:TSR > median• Maximum vesting:TSR > median by 33%• Performance achieved:TSR > median by 79.5%Three years ended 31 March 2013• Threshold vesting:EPS > 5% pa compound• Maximum vesting:EPS > 9% pa compound• Performance achieved:EPS = 14.0% pa compound100%100%37,950 sharesat £12.509,900 sharesat £9.295125,000sharesat £19.5116,500 sharesat £12.508,250 sharesat £10.4965,000sharesat £19.519,000sharesat £19.51Value at vesting (excluding share price growth) £3,005,146 £1,560,943 £175,590Value at vesting (including share price growth)* £5,987,524 £3,108,940 £311,760* Share price at date of grant shown in the table; and shareprice at 31 March 2013 = £34.64Details of performance shares and value shares conditionally awarded to executive directors and outstanding at 31 March 2013 are shownon pages 83 and 84. The constituents of the TSR comparator group for share awards vested or outstanding as at 31 March 2013 are:Weighting of comparator group constituents for awards grantedbefore 2010 from 20101 Anheuser-Busch InBev 10%21%2 Heineken 10% 21%1103 Molson Coors Brewing Co 10% 211%89 104 Carlsberg 10% 911%75 Diageo 10% 3 11%66 Pernod-Ricard 10% 85%7 Kirin Holdings 10% 4 5%58 Asahi Breweries 10% 755%69 Constellation Brands 10% 5%410 Sapporo Holdings 10% 5%The weighting of the comparator groupconstituents was rebalanced in 2010 toweight more heavily those companiesconsidered to be the most signifi cantcompetitors of SABMiller, and thereforebetter comparators for benchmarkingcompany performance.ThresholdThresholdMaximumMaximumFor the purpose of calculating TSR, the shareprices and dividends of the comparatorcompanies are converted, as necessary, intosterling at the exchange rates prevailing atthe relevant times, to remove distortionsarising from differing rates of infl ation in thecountries where the comparator companiesare listed. TSR is averaged over three monthsfor awards granted before 2010, and over sixmonths for awards granted from 2010, withthe longer averaging period adopted in 2010to reduce the sensitivity of vesting due toshort-term stock market volatility.132Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 79

Directors’ remuneration reportImplementation report continuedPerformance reviewIn accordance with the Large and MediumsizedCompanies and Groups (Accounts andReports) Regulations 2008, which remain inforce, the company is also required to includea line graph showing the company’s TSRperformance compared to an appropriatebroad equity market index for the precedingfi ve years. The chart opposite compares thecompany’s TSR with the FTSE 100 TotalReturn Index over the period from 1 April2008 to 31 March 2013 assuming an initialinvestment of £100. The company is aconstituent of the FTSE 100 Total ReturnIndex and, accordingly, this is consideredto be an appropriate comparison todemonstrate the company’s relativeperformance.Five-year cumulative TSR performanceValue of £100 invested 31 March 2008 £400350354300250200150100136500200820092010201120122013SABMiller FTSE 100 Note: Spot pricesOver this period, £100 invested in SABMillerwould have returned £354, while the sameamount notionally invested in this indexwould have returned just £136.80 – SABMiller plc Annual Report 2013

Total shareholdings of directorsIn 2012 the committee established shareholding requirements, which provide alignment with shareholder returns, by ensuring a reduction inan executive director’s own wealth if there is a reduction in SABMiller’s share price. Any shares arising from the exercise or vesting of shareoptions or share awards granted to executive directors must be retained (except those shares sold to pay the exercise price and any tax uponexercise or vesting of any such award) until the relevant threshold is met. The total shareholdings and requirement at 31 March 2013 are shownin the table below:Executive directorShares heldOwned outright(see table below)Subject toperformanceconditions(see table onpage 83)Subject todeferralOptions held(see table on page 82)Owned outrightSubject toperformanceconditionsShares ownedoutright at31 March 2013@ £34.64(% of base pay)ShareholdingrequirementE A G Mackay 1,671,823 470,700 – 849,404 940,596 4,472% 300%A J Clark 173,747 279,500 – 520,246 509,500 708% 200%J S Wilson 12,275 159,000 – 3,623 313,000 59% 200%Mr Wilson does not yet meet the shareholding requirement, but as a result of shares retained from awards vesting in respect of the year ended31 March 2013 but not received until after the year end, Mr Wilson’s shares owned outright at 5 June 2013 were equivalent to 83% of base pay.Directors’ interests in shares of the company (audited)DirectorOrdinary sharesheld at 31 March 2012(or date of appointment if later)Ordinary sharesacquired during the periodOrdinary sharesdisposed of during the periodOrdinary sharesheld as at 31 March 2013(or date of retirement if earlier)E A G Mackay 1,12 1,537,375 280,100 145,652 1,671,823A J Clark 2,12 173,747 – – 173,747J S Wilson 3,12 6,850 35,000 29,575 12,275M H Armour 4 – 3,000 – 3,000G C Bible 5 75,775 – – 75,775D S Devitre 6 – – – –J M Kahn 7 1,670,578 – – 1,670,578L M S Knox 3,000 – – 3,000P J Manser 5,000 – – 5,000J A Manzoni 8 3,579 1,987 – 5,566M Q Morland 40,000 – – 40,000D F Moyo 386 – – 386C A Perez Davila – – – –R Pieterse 9 – – – –M C Ramaphosa 10 4,000 – – 4,000A Santo Domingo Davila – – – –H A Weir 11 – 100 – 100H A Willard – – – –1 Mr Mackay had awards vested in respect of 280,100shares during the year ended 31 March 2013 (seepage 83), with 145,652 shares sold to settle the resultingtax liability, and the balance of the shares was retained byMr Mackay benefi cially.2 Mr Clark was appointed as an executive director at theannual general meeting held on 26 July 2012, and thetable refl ects his shareholding on that date. The vestingof 141,750 shares (see page 83) in May 2012 occurredbefore Mr Clark’s appointment as an executive director,and accordingly the resulting balance of shares retainedby Mr Clark is included in the fi gure for ordinary sharesheld at the date of his appointment in the table above.3 Mr Wilson had awards vested in respect of 9,000 sharesduring the year ended 31 March 2013 (see page 83), with3,575 shares sold to settle the resulting tax liability, andthe balance of shares were retained by Mr Wilsonbenefi cially. Mr Wilson also exercised options over 26,000shares (see page 82) that were granted to him in 2008and 2009 before he became an executive director, whichwere sold upon exercise.4 Mr Armour acquired 3,000 shares on 12 March 2013 ata price of £34.705 per share.5 After the year end, Mr Bible acquired a further 1,225shares on 30 May 2013 at a price of £33.7832 per share.6 After the year end, Mr Devitre acquired a total of 30,000shares, being 10,000 shares on 28 May 2013 at a priceof £34.9599 per share; 10,000 shares on 28 May 2013at a price of £35.2046 per share; and 10,000 shares on29 May 2013 at a price of £34.3618 per share.7 Mr Kahn retired from the board on 26 July 2012, and thetable refl ects his shareholding on that date.8 Mr Manzoni has elected to apply his quarterlynon-executive director’s fees to the regular purchase ofordinary shares after the deduction of taxes by way of atrading plan, and accordingly acquired 520 shares on25 June 2012 at a price of £24.558 per share, 461 shareson 25 September 2012 at a price of £27.30 per share,505 shares on 21 December 2012 at a price of £28.404per share, and 501 shares on 25 March 2013 at a price of£34.393 per share. The trading plan will remain in placeuntil revoked by Mr Manzoni, although it cannot berevoked or altered except in open dealing periods withthe clearance of the chairman in accordance with theModel Code.9 Mr Pieterse retired from the board on 26 July 2012, andthe table refl ects his shareholding on that date.10 Mr Ramaphosa’s interest in 4,000 shares is nonbeneficial.11 Ms Weir acquired 100 shares on 26 March 2013 at a priceof £34.63 per share.12 In May and June 2013 Messrs Mackay, Clark andWilson’s benefi cial holdings increased by 86,363, 47,830and 5,046 shares, respectively, following the vesting ofawards over 162,950, 81,500 and 9,000 shares,respectively, and the subsequent sales of shares to settletax liabilities on the gross awards vested, with thebalance of the shares being retained. There have beenno other changes in the directors’ benefi cial interests asat 5 June 2013.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 81

Directors’ remuneration reportImplementation report continuedShare incentive plans (audited)Executive directors’ interests in shares ofthe company provided in the form of shareoptions and share awards are shown in thetables below. Mr Clark was appointed to theboard on 26 July 2012, and Mr Wilson wasappointed to the board on 21 July 2011, butShare optionsthe share awards detailed below representtheir total outstanding share awards,including those granted to them in respectof their services as employees, ratherthan just those granted in respect of, orin contemplation of, their qualifying servicesas executive directors.During the year ended 31 March 2013 thehighest and lowest market prices for thecompany’s shares were £35.095 (on 14March 2013) and £23.485 (on 1 June 2012)respectively, and the closing market price on28 March 2013 (being the prior trading dayclosest to 31 March 2013) was £34.64.DirectorExercisable for3-10 years fromPerformanceperiod(year ending31 March)Subscriptionprice£Outstandingas at31 March 2012Grantedduringthe yearExercisedduringthe yearLapsedduringthe yearOutstandingas at31 March 2013Vested andexercisableas at31 March 2013Sale price/market price(if applicable)£E A G Mackay 19 May 2006 Vested 10.61 230,000 – – – 230,000 230,00018 May 2007 Vested 11.67 230,000 – – – 230,000 230,00016 May 2008 Vested 12.50 154,100 – – – 154,100 154,10016 May 2008 5 years (2013) 12.50 75,900 – – – 75,900 –14 Nov 2008 Vested 9.295 40,200 – – – 40,200 40,20014 Nov 2008 5 years (2013) 9.295 19,800 – – – 19,800 –15 May 2009 Vested 12.31 195,104 – – – 195,104 195,10415 May 2009 5 years (2014) 12.31 94,896 – – – 94,896 –1 Jun 2010 3 years (2013) 19.51 167,500 – – – 167,500 –1 Jun 2010 5 years (2015) 19.51 82,500 – – – 82,500 –1 Jun 2011 3 years (2014) 22.495 167,500 – – – 167,500 –1 Jun 2011 5 years (2016) 22.495 82,500 – – – 82,500 –1 Jun 2012 3 years (2015) 23.95 – 167,500 – – 167,500 –1 Jun 2012 5 years (2017) 23.95 – 82,500 – – 82,500 –1,540,000 250,000 – – 1,790,000 849,404A J Clark 20 May 2005 Vested 8.28 69,746 – – – 69,746 69,74619 May 2006 Vested 10.61 100,000 – – – 100,000 100,00018 May 2007 Vested 11.67 100,000 – – – 100,000 100,00016 May 2008 Vested 12.50 83,500 – – – 83,500 83,50016 May 2008 5 years (2013) 12.50 16,500 – – – 16,500 –1 Aug 2008 Vested 10.49 41,750 – – – 41,750 41,7501 Aug 2008 5 years (2013) 10.49 8,250 – – – 8,250 –15 May 2009 Vested 12.31 125,250 – – – 125,250 125,25015 May 2009 5 years (2014) 12.31 24,750 – – – 24,750 –1 Jun 2010 3 years (2013) 19.51 108,550 – – – 108,550 –1 Jun 2010 5 years (2015) 19.51 21,450 – – – 21,450 –1 Jun 2011 3 years (2014) 22.495 108,550 – – – 108,550 –1 Jun 2011 5 years (2016) 22.495 21,450 – – – 21,450 –1 Jun 2012 3 years (2015) 23.95 – 134,000 – – 134,000 –1 Jun 2012 5 years (2017) 23.95 – 66,000 – – 66,000 –829,746 200,000 – – 1,029,746 520,246J S Wilson 20 May 2005 Vested 8.28 3,623 – – – 3,623 3,62316 May 2008 Vested 12.50 13,000 – 13,000 – – – 27.8915 May 2009 Vested 12.31 13,000 – 13,000 – – – 27.891 Jun 2010 3 years (2013) 19.51 13,000 – – – 13,000 –1 Jun 2011 3 years (2014) 22.495 67,000 – – – 67,000 –1 Jun 2011 5 years (2016) 22.495 33,000 – – – 33,000 –1 Dec 2011 3 years (2014) 22.40 33,500 – – – 33,500 –1 Dec 2011 5 years (2016) 22.40 16,500 – – – 16,500 –1 Jun 2012 3 years (2015) 23.95 – 100,500 – – 100,500 –1 Jun 2012 5 years (2017) 23.95 – 49,500 – – 49,500 –192,623 150,000 26,000 – 316,623 3,623Share options granted to executive directorsfrom 2008 have a performance condition thatrequires compound annualised adjusted EPSgrowth, expressed in sterling, of:• UK RPI + 3% per annum compound forany of the share options to vest; and• UK RPI + 5% per annum compound forfull vesting.Share options with performance periodsended 31 March 2013 have been testedagainst their respective performanceconditions and the outcome is shown onpage 78. As a result, these share optionshave vested in full and become exercisable.On 3 June 2013. Mr Clark and Mr Wilsonwere granted options over 140,000 and85,000 shares respectively at an exerciseprice of £33.30 per share, subject to theperformance conditions listed here.82 – SABMiller plc Annual Report 2013

Performance sharesDirectorAward datePerformanceperiod(year ending31 March)Share price ateffective dateof award£Outstandingas at31 March 2012Awardedduringthe yearVestedduringthe yearLapsedduringthe yearOutstandingas at31 March 2013E A G Mackay 18 May 2007 Vested 11.67 37,950 – 37,950 – –16 May 2008 5 years (2013) 12.50 37,950 – – – 37,95014 Nov 2008 5 years (2013) 9.295 9,900 – – – 9,90015 May 2009 Vested 12.31 242,150 – 242,150 – –15 May 2009 5 years (2014) 12.31 47,850 – – – 47,8501 Jun 2010 3 years (2013) 19.51 125,000 – – – 125,0001 Jun 2011 3 years (2014) 22.495 125,000 – – – 125,0001 Jun 2012 3 years (2015) 23.95 – 125,000 – – 125,000625,800 125,000 280,100 – 470,700A J Clark 18 May 2007 Vested 11.67 16,500 – 16,500 – –16 May 2008 5 years (2013) 12.50 16,500 – – – 16,5001 Aug 2008 5 years (2013) 10.49 8,250 – – – 8,25015 May 2009 Vested 12.31 125,250 – 125,250 – –15 May 2009 5 years (2014) 12.31 24,750 – – – 24,7501 Jun 2010 3 years (2013) 19.51 65,000 – – – 65,0001 Jun 2011 3 years (2014) 22.495 65,000 – – – 65,0001 Jun 2012 3 years (2015) 23.95 – 100,000 – – 100,000321,250 100,000 141,750 – 279,500J S Wilson 15 May 2009 Vested 12.31 9,000 – 9,000 – –1 Jun 2010 3 years (2013) 19.51 9,000 – – – 9,0001 Jun 2011 3 years (2014) 22.495 50,000 – – – 50,0001 Dec 2011 3 years (2014) 22.40 25,000 – – – 25,0001 Jun 2012 3 years (2015) 23.95 – 75,000 – – 75,00093,000 75,000 9,000 – 159,000Before 2010 50% of the performance sharesgranted to executive directors and toexecutive committee members (and all of theperformance shares awarded to Mr Wilson in2009 and 2010) had a performance conditionthat requires compound annualised adjustedEPS growth over a three-year period. Allperformance shares awarded since 2010have this performance condition. For sharesawarded in 2009 and 2010, the requiredcompound growth in adjusted EPS was:• 5% per annum for any performance sharesto vest; and• 9% per annum for full vesting.For shares awarded from 2011 onwards,the required compound growth in adjustedEPS is:• 6% per annum for any performance sharesto vest; and• 11% per annum for full vesting.The other 50% of the performance sharesgranted to executive directors and toexecutive committee members before 2010have a performance condition that requiresthe company’s TSR to exceed the medianTSR of a comparator group (identifi ed onpage 79). Two-thirds of these shares had athree-year performance period and areincluded in the total shares vested during theyear in the table above, and the remainingone-third of these shares have a fi ve-yearperformance period and are outstandingas at 31 March 2013. For these shares:• for below median TSR performance, noperformance shares will vest;• at median TSR performance, one-quarterof the performance shares will vest; and• if TSR exceeds the median by 33% ormore, full vesting.Performance shares with performanceperiods ended on 31 March 2013 have beentested against their respective performanceconditions and the outcome is shown onpage 79. As a result, these performanceshares will vest in full three or fi ve years aftertheir respective award dates, as appropriate.On 3 June 2013 Mr Clark and Mr Wilson wereconditionally awarded 70,000 and 42,500shares respectively, subject to achieving theEPS-related performance conditionlisted here.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 83

Directors’ remuneration reportImplementation report continuedValue sharesDirectorEffective dateof awardShare priceon effectivedate ofaward£Outstandingas at31 March 2012(shares per£10m ofadditionalshareholdervalue)Awardedduringthe year(shares per£10m ofadditionalvalue)Releasedduring theyear(ordinarysharesreleased)Lapsedduringthe year(shares per£10m ofadditionalvalue)Outstandingas at31 March 2013(shares per£10m ofadditionalvalue)EarliestpossiblereleasedateE A G Mackay 1 Jun 2010 19.51 220 – – – 220 1 Jun 2013 1 Jun 20151 Jun 2011 22.495 220 – – – 220 1 Jun 2014 1 Jun 20161 Jun 2012 23.95 – 220 – – 220 1 Jun 2015 1 Jun 2017440 220 – – 660A J Clark 1 Jun 2010 19.51 115 – – – 115 1 Jun 2013 1 Jun 20151 Jun 2011 22.495 115 – – – 115 1 Jun 2014 1 Jun 20161 Jun 2012 23.95 – 175 – – 175 1 Jun 2015 1 Jun 2017230 175 – – 405J S Wilson 1 Jun 2011 22.495 100 – – – 100 1 Jun 2014 1 Jun 20161 Dec 2011 22.40 30 – – – 30 1 Jun 2014 1 Jun 20161 Jun 2012 23.95 – 130 – – 130 1 Jun 2015 1 Jun 2017130 130 – – 260FinalvestingdateThe number of shares which can be releasedunder a value share award is dependentupon TSR out-performance compared witha comparator group (identifi ed on page 79)over a three- to fi ve-year performance period:• for below median TSR performance, noshares will vest;• at median TSR performance, no shares willvest; but• for every £10 million of additionalshareholder value created, a fi xed numberof shares (as set out in the table above) willvest.Additional shareholder value represents theamount of additional return to shareholdersas a result of the company’s TSRperformance exceeding that of thecomparator group. It is calculated as thepercentage change in TSR of the company,less the percentage change in TSR of themedian of the comparator group, multipliedby the company’s market capitalisation at thecommencement of the performance period.The maximum number of shares thatcan vest is capped at the level at whichadditional shareholder value at the endof each performance period equals themarket capitalisation of the company atthe commencement of the performanceperiod. The maximum value for allparticipants (including executive directors),in the aggregate is therefore capped at0.6% of additional shareholder value createdfor any fi ve-year performance period. This isthe maximum theoretical percentage that canbe earned in aggregate by all participants,with 99.4% of the additional value createdaccruing to shareholders.The value shares conditionally awardedbefore 2013 vest on the fi fth anniversaryof the grant date, subject to TSR outperformance,but participants may requestthe release of all or part of the award fromthe third anniversary of the grant date.If the remuneration committee exercisesits discretion to release shares in suchcircumstances, the number of shares isdetermined based on TSR out-performanceto that date, with the shares partially deferredand released in equal instalments over theperiod until the fi fth anniversary of the grantdate. There is no opportunity for retestingagainst future TSR performance, and thedeferred shares are subject to forfeitureunder certain circumstances should theparticipant’s employment terminate beforethe fi fth anniversary. Value sharesconditionally awarded from 2013 vestone-third on the third, fourth and fi fthanniversaries of the grant date respectively.Any shares are then released, based onTSR out-performance to those dates. If theperformance conditions for any award arenot achieved at the relevant date, theappropriate proportion of shares will lapseand there is no opportunity for retesting.The earliest opportunity for any value sharesto be released will be in the period ending31 March 2014. No awards had beenreleased to any participant as at 5 June 2013.At 31 March 2013 TSR out-performance,additional shareholder value created, andthe indicative number of shares vesting forthe highest paid executive during the year(E A G Mackay) was:Performance period commencing1 April 2010 1 April 2011 1 April 2012SABMiller’s TSR to 31 March 2013 80.875% 47.163% 28.365%Comparator group TSR to 31 March 2013 51.225% 41.564% 36.620%Out-performance 29.650% 5.599% -8.255%SABMiller market capitalisation (at commencement of the performance period) £27,746m £33,485m £37,639mAdditional shareholder value created £8,227m £1,875m £nilValue of 220 shares per £10m (at £34.64 per share) £6.3m £1.4m £nilValue of shares as % of additional shareholder value created 0.07% 0.07% nilOn 3 June 2013 Mr Clark and Mr Wilsonwere conditionally awarded 125 and 75 valueshares respectively for every £10 million ofadditional shareholder value created overa three- to fi ve-year performance periodcommencing on 1 April 2013.84 – SABMiller plc Annual Report 2013

Employees’ Benefit Trust (EBT)The Share Award Plan and olderperformance share schemes are operatedin conjunction with the EBT. At 31 March2013 the number of shares held in the EBTwas 8.3 million (2012: 5.6 million),representing 0.50% (2012: 0.35%) of theissued ordinary shares of the company.The Associated Companies Employees’Benefi t Trust (Associated Companies EBT)was established in 2011 to facilitate theprovision of share-based long-termincentives to employees of companiesassociated with the SABMiller group but notsubsidiaries of the company, and hence noteligible to participate in the company’sexisting share option and share award plans.At 31 March 2013 the number of shares heldin the Associated Companies EBT was nil(2012: 0.3 million) representing 0% (2012: lessthan 0.01%) of the issued ordinary shares ofthe company. All of the shares held by theAssociated Companies EBT were sold duringthe year ended 31 March 2013 and theproceeds of sale were subsequentlydistributed after the year end to holdersof share awards which vested during thatperiod (not including any executive directors).In aggregate there were 8.3 million sharesheld in trust as at 31 March 2013 (2012: 5.9million). These shares are held by the trusteeon behalf of the EBT to ensure that they holdsuffi cient ordinary shares to meet potentialfuture obligations in respect of share awardsand share-settled stock appreciation rights.The trustees of the EBT and the AssociatedCompanies EBT have waived their right toreceive dividends on any shares held by them,and will only vote shares or claim dividendson shares which are benefi cially owned by aparticipant, and only then in accordance withthe instructions of the underlying shareholder.As at 31 March 2013 there were nobenefi cially held shares in either the EBT orin the Associated Companies EBT (2012: nil).ApprovalThis report complies with the requirements ofthe Large and Medium-sized Companies andGroups (Accounts and Reports) Regulations2008. Throughout the year ended 31 March2013 the company applied the provisions ofthe UK Corporate Governance Code relatingto remuneration. Those parts of the reportthat are subject to audit are identifi edseparately.This report and the recommendations of theremuneration committee were approved bythe board on 5 June 2013 as recommendedby the remuneration committee on 21 May2013 and will be submitted to shareholdersfor approval at the 2013 annual generalmeeting.Signed on behalf of the board of directors byJohn DavidsonGeneral Counsel andGroup Company Secretary5 June 2013Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 85

Statement of directors’ responsibilitiesin respect of the consolidated fi nancial statementsThe directors are responsible for preparing the consolidated fi nancialstatements in accordance with applicable law and regulations.Company law requires the directors to prepare consolidated fi nancialstatements for each fi nancial year. The directors have prepared theconsolidated fi nancial statements in accordance with InternationalFinancial Reporting Standards (IFRSs) as adopted by the EuropeanUnion. The consolidated fi nancial statements are required by law togive a true and fair view of the state of affairs of the group and of theprofi t or loss of the group for that year.In preparing those fi nancial statements, the directors are required to:• select suitable accounting policies and then apply themconsistently;• make judgements and estimates that are reasonable and prudent;• state that the fi nancial statements comply with IFRSs as adoptedby the European Union; and• prepare the consolidated fi nancial statements on the going concernbasis, unless it is inappropriate to presume that the group willcontinue in business, in which case there should be supportingassumptions or qualifi cations as necessary.The directors confi rm that they have complied with the aboverequirements in preparing the fi nancial statements.The directors are responsible for keeping adequate accountingrecords that disclose with reasonable accuracy at any time thefi nancial position of the group and to enable them to ensure thatthe consolidated fi nancial statements comply with the CompaniesAct 2006 and Article 4 of the IAS Regulation. They are alsoresponsible for safeguarding the assets of the group and hencefor taking reasonable steps for the prevention and detection offraud and other irregularities.In addition, the Companies Act 2006 requires directors to providethe group’s auditors with every opportunity to take whatever stepsand undertake whatever inspections the auditors consider to beappropriate for the purpose of enabling them to give their audit report.Each of the directors, having made appropriate enquiries,confi rms that:• so far as the director is aware, there is no relevant audit informationof which the group’s auditors are unaware; and• each director has taken all the steps that they ought to have takenas a director in order to make themselves aware of any relevantaudit information and to establish that the group’s auditors areaware of that information.The directors have reviewed the group’s performance for the year andthe principal risks it faces, together with the budget and cash fl owforecasts, in particular with reference to the period to the end ofSeptember 2014, and the application of reasonably possiblesensitivities associated with these forecasts. On the basis of thisreview, and in the light of the current fi nancial position and existingcommitted borrowing facilities, the directors are satisfi ed that thegroup has adequate resources to continue in operational existenceand therefore have continued to adopt the going concern basis inpreparing the consolidated fi nancial statements.A copy of the fi nancial statements of the group is placed on thecompany’s website. The directors are responsible for the maintenanceand integrity of statutory and audited information on the company’swebsite. Information published on the internet is accessible in manycountries with different legal requirements. Legislation in the UnitedKingdom governing the preparation and dissemination of fi nancialstatements may differ from legislation in other jurisdictions.Each of the directors, whose names and functions are listed in theGovernance section of the Annual Report, confi rms that, to the bestof their knowledge:• the consolidated fi nancial statements, which have been preparedin accordance with IFRSs as adopted by the EU, give a true andfair view of the assets, liabilities, fi nancial position and profi t of thegroup; and• the management report incorporated into the directors’ reportcontained in the Governance section of the Annual Report includesa fair review of the development and performance of the businessand the position of the group, together with a description of theprincipal risks and uncertainties that it faces.86 – SABMiller plc Annual Report 2013

Independent auditors’ reportto the members of SABMiller plcWe have audited the consolidated fi nancial statements of SABMillerplc for the year ended 31 March 2013 which comprise theconsolidated income statement, the consolidated statement ofcomprehensive income, the consolidated balance sheet, theconsolidated cash fl ow statement, the consolidated statement ofchanges in equity and the related notes. The fi nancial reportingframework that has been applied in their preparation is applicable lawand International Financial Reporting Standards (IFRSs) as adoptedby the European Union.Respective responsibilities of directors and auditorsAs explained more fully in the statement of directors’ responsibilities,the directors are responsible for the preparation of the consolidatedfi nancial statements and for being satisfi ed that they give a true andfair view. Our responsibility is to audit and express an opinion on thefi nancial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland). Those standardsrequire us to comply with the Auditing Practices Board’s EthicalStandards for Auditors.This report, including the opinions, has been prepared for and only forthe company’s members as a body in accordance with Chapter 3 ofPart 16 of the Companies Act 2006 and for no other purpose. We donot, in giving these opinions, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown orinto whose hands it may come save where expressly agreed by ourprior consent in writing.Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts anddisclosures in the fi nancial statements suffi cient to give reasonableassurance that the fi nancial statements are free from materialmisstatement, whether caused by fraud or error. This includes anassessment of: whether the accounting policies are appropriate tothe group’s circumstances and have been consistently applied andadequately disclosed; the reasonableness of signifi cant accountingestimates made by the directors; and the overall presentation of thefi nancial statements. In addition, we read all the fi nancial andnon-fi nancial information in the SABMiller plc Annual Report toidentify material inconsistencies with the audited fi nancial statements.If we become aware of any apparent material misstatements orinconsistencies we consider the implications for our report.Opinion on financial statementsIn our opinion the consolidated fi nancial statements:• give a true and fair view of the state of the group’s affairs as at31 March 2013 and of its profi t and cash fl ows for the yearthen ended;• have been properly prepared in accordance with IFRSs as adoptedby the European Union; and• have been prepared in accordance with the requirements of theCompanies Act 2006 and Article 4 of the IAS Regulation.Opinion on other matter prescribed by theCompanies Act 2006In our opinion, the information given in the directors’ report for thefi nancial year for which the consolidated fi nancial statements areprepared is consistent with the consolidated fi nancial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following:Under the Companies Act 2006 we are required to report to you if, inour opinion:• certain disclosures of directors’ remuneration specifi ed by law arenot made; or• we have not received all the information and explanations werequire for our audit.Under the Listing Rules we are required to review:• the directors’ statement in relation to going concern on page 86;and• the part of the corporate governance report relating to thecompany’s compliance with the nine provisions of the UKCorporate Governance Code specifi ed for our review; and• certain elements of the directors’ remuneration report.Other matterWe have reported separately on the company fi nancial statementsof SABMiller plc for the year ended 31 March 2013 and on theinformation in the directors’ remuneration report that is describedas having been audited.Richard Hughes (Senior Statutory Auditor)for and on behalf of PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsLondon5 June 2013Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 87

Consolidated income statementfor the year ended 31 MarchRevenue 2 23,213 21,760Net operating expenses 3 (19,010) (16,747)Notes2013US$m2012US$mOperating profit 2 4,203 5,013Operating profi t before exceptional items 2 4,403 3,987Exceptional items 4 (200) 1,026Net finance costs 5 (735) (562)Finance costs 5a (1,417) (1,093)Finance income 5b 682 531Share of post-tax results of associates and joint ventures 2 1,244 1,152Profit before taxation 4,712 5,603Taxation 7 (1,201) (1,126)Profit for the year 27a 3,511 4,477Profi t attributable to non-controlling interests 237 256Profi t attributable to owners of the parent 26a 3,274 4,2213,511 4,477Basic earnings per share (US cents) 8 205.9 266.6Diluted earnings per share (US cents) 8 203.5 263.8The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.88 – SABMiller plc Annual Report 2013

Consolidated statement of comprehensive incomefor the year ended 31 MarchProfit for the year 3,511 4,477Other comprehensive loss:Currency translation differences on foreign currency net investments (700) 136– (Decrease)/increase in foreign currency translation reserve during the year (700) 153– Recycling of foreign currency translation reserve on disposals – (17)Net actuarial losses on defi ned benefi t plans 31 (21) (9)Available for sale investments:– Fair value losses arising during the year 26b (1) –Net investment hedges:– Fair value gains/(losses) arising during the year 26b 63 (1)Cash fl ow hedges: 26b (5) 6– Fair value losses arising during the year (8) –– Fair value losses transferred to inventory 8 2– Fair value (gains)/losses transferred to profi t or loss (5) 4Tax on items included in other comprehensive loss 7 34 101Share of associates’ and joint ventures’ other comprehensive loss 13,14 (70) (256)Other comprehensive loss for the year, net of tax (700) (23)Total comprehensive income for the year 2,811 4,454Attributable to:Non-controlling interests 233 255Owners of the parent 2,578 4,199Total comprehensive income for the year 2,811 4,454The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.Notes2013US$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 89

Consolidated balance sheetat 31 MarchAssetsNon-current assetsGoodwill 10 19,862 20,171Intangible assets 11 9,635 9,958Property, plant and equipment 12 9,059 9,162Investments in joint ventures 13 5,547 5,520Investments in associates 14 5,416 5,072Available for sale investments 22 30Derivative fi nancial instruments 23 732 732Trade and other receivables 16 144 136Deferred tax assets 20 71 117Loan participation deposit 17 100 10050,588 50,998Notes2013US$m2012 1US$mCurrent assetsInventories 15 1,175 1,248Trade and other receivables 16 2,067 2,204Current tax assets 159 629Derivative fi nancial instruments 23 111 24Available for sale investments – 1Cash and cash equivalents 17 2,171 7455,683 4,851Assets of disposal group classifi ed as held for sale 18a 23 795,706 4,930Total assets 56,294 55,928LiabilitiesCurrent liabilitiesDerivative fi nancial instruments 23 (34) (40)Borrowings 21 (2,469) (1,062)Trade and other payables 19 (4,004) (4,127)Current tax liabilities (1,460) (1,323)Provisions 24 (558) (704)(8,525) (7,256)Liabilities of disposal group classifi ed as held for sale 18b (1) (7)(8,526) (7,263)Non-current liabilitiesDerivative fi nancial instruments 23 (52) (69)Borrowings 21 (16,079) (18,164)Trade and other payables 19 (132) (112)Deferred tax liabilities 20 (3,507) (3,719)Provisions 24 (538) (569)(20,308) (22,633)Total liabilities (28,834) (29,896)Net assets 27,460 26,032EquityShare capital 25 167 166Share premium 6,581 6,480Merger relief reserve 4,586 4,586Other reserves 26b 1,328 1,978Retained earnings 26a 13,710 11,863Total shareholders’ equity 26,372 25,073Non-controlling interests 1,088 959Total equity 27,460 26,0321 As restated (see note 28).The balance sheet of SABMiller plc is shown on page 167.The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.The fi nancial statements were authorised for issue by the board of directors on 5 June 2013 and were signed on its behalf by:Alan ClarkChief ExecutiveJamie WilsonChief Financial Offi cer90 – SABMiller plc Annual Report 2013

Consolidated cash flow statementfor the year ended 31 MarchCash flows from operating activitiesCash generated from operations 27a 5,554 5,237Interest received 468 516Interest paid (1,238) (923)Tax paid (683) (893)Net cash generated from operating activities 27b 4,101 3,937Cash flows from investing activitiesPurchase of property, plant and equipment (1,335) (1,473)Proceeds from sale of property, plant and equipment 30 116Purchase of intangible assets (144) (166)Proceeds from sale of intangible assets 4 –Purchase of available for sale investments – (1)Proceeds from disposal of available for sale investments 5 2Proceeds from disposal of associates 21 205Proceeds from disposal of businesses (net of cash disposed) 57 (23)Acquisition of businesses (net of cash acquired) (6) (10,951)Investments in joint ventures (272) (288)Investments in associates (23) (52)Repayment of investments by associates – 14Dividends received from joint ventures 13 886 896Dividends received from associates 113 120Dividends received from other investments 1 1Net cash used in investing activities (663) (11,600)Cash flows from financing activitiesProceeds from the issue of shares 25 102 96Proceeds from the issue of shares in subsidiaries to non-controlling interests 36 107Purchase of own shares for share trusts 26a (53) (52)Purchase of shares from non-controlling interests – (27)Proceeds from borrowings 2,318 19,000Repayment of borrowings (2,878) (10,139)Proceeds from associate in relation to loan participation deposit 17 100 –Capital element of fi nance lease payments (6) (5)Net cash payments on derivative fi nancial instruments (5) (52)Dividends paid to shareholders of the parent 9 (1,517) (1,324)Dividends paid to non-controlling interests (131) (109)Net cash (used in)/generated from financing activities (2,034) 7,495Net cash infl ow/(outfl ow) from operating, investing and fi nancing activities 1,404 (168)Effects of exchange rate changes (51) (39)Net increase/(decrease) in cash and cash equivalents 1,353 (207)Cash and cash equivalents at 1 April 606 813Cash and cash equivalents at 31 March 27c 1,959 606The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.Notes2013US$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 91

Consolidated statement of changes in equityfor the year ended 31 MarchNotesCalled upsharecapitalUS$mSharepremiumaccountUS$mMergerreliefreserveUS$mOtherreservesUS$mTotalRetained shareholders’earnings equityUS$m US$mNoncontrollinginterestsUS$mAt 1 April 2011 166 6,384 4,586 1,881 8,991 22,008 751 22,759Total comprehensive income – – – 97 4,102 4,199 255 4,454Profi t for the year – – – – 4,221 4,221 256 4,477Other comprehensive income/(loss) – – – 97 (119) (22) (1) (23)Dividends paid 9 – – – – (1,324) (1,324) (159) (1,483)Issue of SABMiller plc ordinary shares 25 – 96 – – – 96 – 96Proceeds from the issue of shares insubsidiaries to non-controlling interests – – – – – – 107 107Non-controlling interests disposed of viabusiness disposal – – – – – – (64) (64)Arising on business combinations – – – – – – 84 84Dilution of non-controlling interestsas a result of business combinations 26a – – – – (5) (5) 5 –Payment for purchase of own sharesfor share trusts 26a – – – – (52) (52) – (52)Buyout of non-controlling interests 26a – – – – (7) (7) (20) (27)Credit entry relating to share-basedpayments 26a – – – – 158 158 – 158At 31 March 2012 1 166 6,480 4,586 1,978 11,863 25,073 959 26,032Total comprehensive income – – – (650) 3,228 2,578 233 2,811Profi t for the year – – – – 3,274 3,274 237 3,511Other comprehensive loss – – – (650) (46) (696) (4) (700)Dividends paid 9 – – – – (1,517) (1,517) (128) (1,645)Issue of SABMiller plc ordinary shares 25 1 101 – – – 102 – 102Proceeds from the issue of shares insubsidiaries to non-controlling interests – – – – – – 36 36Non-controlling interests disposed of viabusiness disposal – – – – – – (13) (13)Arising on business combinations – – – – – – 1 1Payment for purchase of own sharesfor share trusts 26a – – – – (53) (53) – (53)Credit entry relating to share-basedpayments 26a – – – – 189 189 – 189At 31 March 2013 167 6,581 4,586 1,328 13,710 26,372 1,088 27,460TotalequityUS$m1 As restated (see note 28).The notes on pages 93 to 164 are an integral part of these consolidated fi nancial statements.Merger relief reserveMerger relief reserve comprises US$3,395 million in respect of the excess of value attributed to the shares issued as consideration for MillerBrewing Company over the nominal value of those shares and US$1,191 million relating to the merger relief arising on the issue of SABMiller plcordinary shares for the buyout of non-controlling interests in the group’s Polish business.92 – SABMiller plc Annual Report 2013

Notes to the consolidated financial statements1. Accounting policiesThe principal accounting policies adopted in the preparation ofthe group’s fi nancial statements are set out below. These policieshave been consistently applied to all the years presented, unlessotherwise stated.a) Basis of preparationThe consolidated fi nancial statements of SABMiller plc have beenprepared in accordance with International Financial ReportingStandards as adopted by the European Union (IFRSs as adoptedby the EU), and the Companies Act 2006 applicable to companiesreporting under IFRS.The fi nancial statements are prepared under the historical costconvention, except for the revaluation to fair value of certain fi nancialassets and liabilities, and post-retirement assets and liabilities asdescribed in the accounting policies below. The accounts havebeen prepared on a going concern basis.The preparation of fi nancial statements in conformity with IFRSrequires the use of certain critical accounting estimates. It alsorequires management to exercise its judgement in the process ofapplying the group’s accounting policies. Actual results could differfrom those estimates.b) Recent accounting developments(i) New standards, amendments and interpretations ofexisting standards adopted by the groupThere were no standards, interpretations and amendments adoptedby the group since 1 April 2012 which had a signifi cant impact on thegroup’s consolidated results or fi nancial position.(ii) New standards, amendments and interpretations ofexisting standards that are not yet effective and have notbeen early adopted by the groupThe following standards, interpretations and amendments to existingstandards have been published and are mandatory for the group’saccounting periods beginning on or after 1 April 2013 or later periods,but which have not been early adopted by the group.The amendment to IAS 19 will be adopted by the groupretrospectively from 1 April 2013. Under the amended standard, theinterest charge on retirement benefi t liabilities and the expected returnon plan assets will be replaced by a net interest income or expenseon net defi ned benefi t assets or liabilities based on high qualitycorporate bond rates. The group estimates the adoption of theamended IAS 19 would have resulted in a reduction in profi t for theyear ended 31 March 2013 of approximately US$20 million (after tax).The change is not expected to have a material impact on the group’snet assets.The following standards, interpretations and amendments to existingstandards mandatory for the group’s accounting periods beginningon or after 1 April 2013 are not expected to have a material impacton the consolidated results of operations or fi nancial position ofthe group.• Amendment to IAS 1, ‘Financial statement presentation’, is effectivefrom 1 July 2012.• Amendment to IFRS 7, ‘Financial instruments: Disclosures’, iseffective from 1 January 2013.• IFRS 13, ‘Fair Value Measurement’, is effective from 1 January 2013.• Annual improvements to IFRS 2009-2011, are effective from1 January 2013.The group has yet to assess the full impact of the following standardsand amendments to existing standards mandatory for the group’saccounting periods beginning on or after 1 April 2014 or later periods.• Amendment to IAS 32, ‘Offsetting fi nancial instruments asset andliability’, is effective from 1 January 2014.• IAS 27 (revised), ‘Separate Financial Statements’, is effective from1 January 2014.• IAS 28 (revised), ‘Associates and Joint Ventures’, is effective from1 January 2014.• IFRS 9, ‘Financial Instruments’, is effective from 1 January 2015 1 .• IFRS 10, ‘Consolidated Financial Statements’, is effective from1 January 2014.• IFRS 11, ‘Joint Arrangements’, is effective from 1 January 2014.• IFRS 12, ‘Disclosures of Interests in Other Entities’ is effective from1 January 2014.1 Not yet endorsed by the EU.c) Significant judgements and estimatesIn determining and applying accounting policies, judgement isoften required where the choice of specifi c policy, assumption oraccounting estimate to be followed could materially affect thereported results or net position of the group, should it later bedetermined that a different choice be more appropriate.Management considers the following to be areas of signifi cantjudgement and estimation for the group due to greater complexityand/or particularly subject to the exercise of judgement:(i) Impairment reviewsGoodwill arising on business combinations is allocated to the relevantcash generating unit (CGU). Impairment reviews in respect of therelevant CGUs are performed at least annually or more regularly ifevents indicate that this is necessary. Impairment reviews are basedon future cash fl ows discounted using the weighted average cost ofcapital for the relevant country with terminal values calculatedapplying a long-term growth rate. The future cash fl ows which arebased on business forecasts, the long-term growth rates and thediscount rates used are dependent on management estimates andjudgements. Future events could cause the assumptions used inthese impairment reviews to change with a consequent adverseimpact on the results and net position of the group. Details of theestimates used in the impairment reviews for the year are set outin note 10.(ii) TaxationThe group operates in many countries and is subject to taxesin numerous jurisdictions. Signifi cant judgement is required indetermining the provision for taxes as the tax treatment is often byits nature complex, and cannot be fi nally determined until a formalresolution has been reached with the relevant tax authority which maytake several years to conclude. Amounts provided are accrued basedon management’s interpretation of country specifi c tax laws and thelikelihood of settlement. Actual liabilities could differ from the amountprovided which could have a consequent adverse impact on theresults and net position of the group.(iii) Pension and post-retirement benefitsPension accounting requires certain assumptions to be made in orderto value the group’s pension and post-retirement obligations in thebalance sheet and to determine the amounts to be recognised in theincome statement and in other comprehensive income in accordancewith IAS 19. The calculations of these obligations and charges arebased on assumptions determined by management which includediscount rates, salary and pension infl ation, healthcare cost infl ation,mortality rates and expected long-term rates of return on assets.Details of the assumptions used are set out in note 31. The selectionof different assumptions could affect the net position of the group andfuture results.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 93

Notes to the consolidated financial statementscontinued1. Accounting policies continued(iv) Property, plant and equipmentThe determination of the useful economic life and residual values ofproperty, plant and equipment is subject to management estimation.The group regularly reviews all of its depreciation rates and residualvalues to take account of any changes in circumstances, and anychanges that could affect prospective depreciation charges andasset carrying values.(v) Business combinationsOn the acquisition of a company or business, a determination ofthe fair value of the assets acquired and liabilities assumed, and theuseful life of intangible assets and property, plant and equipmentacquired is performed, which requires the application of managementjudgement. Future events could cause the assumptions used by thegroup to change which could have a signifi cant impact on the resultsand net position of the group.(vi) Exceptional itemsExceptional items are expense or income items recorded in a periodwhich have been determined by management as being material bytheir size or incidence and are presented separately within the resultsof the group. The determination of which items are disclosed asexceptional items will affect the presentation of profi t measuresincluding EBITA and adjusted earnings per share, and requires adegree of judgement. Details relating to exceptional items reportedduring the year are set out in note 4.d) Segmental reportingOperating segments refl ect the management structure of the groupand the way performance is evaluated and resources allocated basedon group revenue and EBITA by the group’s chief operating decisionmaker, defi ned as the executive directors. The group is focusedgeographically, and while not meeting the defi nition of reportablesegments, the group reports separately as segments South Africa:Hotels and Gaming and Corporate as this provides useful additionalinformation.e) Basis of consolidationSABMiller plc (the company) is a public limited company incorporatedin Great Britain and registered in England and Wales. Theconsolidated fi nancial statements include the fi nancial informationof the subsidiary, associate and joint venture entities owned bythe company.(i) SubsidiariesSubsidiaries are entities controlled by the company, where control isthe power directly or indirectly to govern the fi nancial and operatingpolicies of the entity so as to obtain benefi t from its activities,regardless of whether this power is actually exercised. Where thecompany’s interest in subsidiaries is less than 100%, the shareattributable to outside shareholders is refl ected in non-controllinginterests. Subsidiaries are included in the fi nancial statements fromthe date control commences until the date control ceases.Control is presumed to exist when the group owns, directly orindirectly through subsidiaries, more than half of the voting powerof an entity unless, in exceptional circumstances, it can be clearlydemonstrated that such ownership does not constitute control.Control also exists where the group has the ability to direct ordominate decision-making in an entity, regardless of whetherthis power is actually exercised.On the subsequent disposal or termination of a business, the resultsof the business are included in the group’s results up to the effectivedate of disposal. The profi t or loss on disposal or termination iscalculated after charging the amount of any related goodwill to theextent that it has not previously been taken to the income statement.Intra-group balances, and any unrealised gains and losses or incomeand expenses arising from intra-group transactions, are eliminated inpreparing the consolidated fi nancial statements. Unrealised losses areeliminated unless the transaction provides evidence of an impairmentof the asset transferred.Some of the company’s subsidiaries have a local statutory balancesheet date of 31 December. These are consolidated usingmanagement prepared information on a basis coterminous withthe company’s balance sheet date.(ii) AssociatesAssociates are entities in which the group has a long-term interestand over which the group has directly or indirectly signifi cantinfl uence, where signifi cant infl uence is the ability to infl uencethe fi nancial and operating policies of the entity.The associate, Distell Group Ltd, has a statutory balance sheet dateof 30 June. In respect of each year ending 31 March, this companyis included based on fi nancial statements drawn up to the previous31 December, but taking into account any changes in the subsequentperiod from 1 January to 31 March that would materially affect theresults. All other associates are included on a coterminous basis.(iii) Joint venturesJoint ventures are contractual arrangements which the group hasentered into with one or more parties to undertake an economicactivity that is subject to joint control. Joint control is the contractuallyagreed sharing of control over an economic activity, and exists onlywhen the strategic, fi nancial and operating decisions relating to theactivity require the unanimous consent of the parties sharing thecontrol.The group’s share of the recognised income and expenses ofassociates and joint ventures are accounted for using the equitymethod from the date signifi cant infl uence or joint control commencesto the date it ceases based on present ownership interests.The group recognises its share of associates’ and joint ventures’post-tax results as a one line entry before profi t before taxation inthe income statement and its share of associates’ and joint ventures’equity movements as a one line entry under other comprehensiveincome in the statement of comprehensive income.When the group’s interest in an associate or joint venture has beenreduced to nil because the group’s share of losses exceeds itsinterest in the associate or joint venture, the group only provides foradditional losses to the extent that it has incurred legal or constructiveobligations to fund such losses, or make payments on behalf of theassociate or joint venture. Where the investment in an associate orjoint venture is disposed, the investment ceases to be equity accounted.(iv) Transactions with non-controlling interestsTransactions with non-controlling interests are treated as transactionswith equity owners of the group. For purchases from non-controllinginterests, the difference between any consideration paid and therelevant share acquired of the carrying value of net assets of thesubsidiary is recorded in equity. Gains or losses on disposals tonon-controlling interests are also recorded in equity where there isno loss of control.94 – SABMiller plc Annual Report 2013

1. Accounting policies continued(v) Reduction in interestsWhen the group ceases to have control, joint control or signifi cantinfl uence, any retained interest in the entity is remeasured to its fairvalue, with the change in carrying amount recognised in profi t or loss.The fair value is the initial carrying amount for the purposes ofsubsequently accounting for the retained interest as an associate,joint venture or fi nancial asset. In addition, certain amounts previouslyrecognised in other comprehensive income in respect of that entityare accounted for as if the group had directly disposed of the relatedassets or liabilities. This may mean that certain amounts previouslyrecognised in other comprehensive income are reclassifi ed to profi tor loss.If the ownership interest in an associate is reduced but signifi cantinfl uence is retained, or if the ownership interest in a joint venture isreduced but joint control is retained, only the proportionate share ofthe carrying amount of the investment and of the amounts previouslyrecognised in other comprehensive income are reclassifi ed to profi tor loss where appropriate.f) Foreign exchange(i) Foreign exchange translationItems included in the fi nancial statements of each of the group’sentities are measured using the currency of the primary economicenvironment in which the entity operates (the functional currency).The consolidated fi nancial statements are presented in US dollarswhich is the group’s presentational currency. The key exchangerates to the US dollar used in preparing the consolidated fi nancialstatements were as follows:Year ended31 March 2013Year ended31 March 2012Average rateAustralian dollar (AUD) 0.97 0.95South African rand (ZAR) 8.51 7.48Colombian peso (COP) 1,796 1,831Euro (€) 0.78 0.72Czech koruna (CZK) 19.65 17.65Peruvian nuevo sol (PEN) 2.61 2.73Polish zloty (PLN) 3.26 2.99Turkish lira (TRY) 1.80 1.73Closing rateAustralian dollar (AUD) 0.96 0.97South African rand (ZAR) 9.24 7.67Colombian peso (COP) 1,832 1,792Euro (€) 0.78 0.75Czech koruna (CZK) 20.07 18.52Peruvian nuevo sol (PEN) 2.59 2.67Polish zloty (PLN) 3.26 3.13Turkish lira (TRY) 1.81 1.78The average exchange rates have been calculated based on theaverage of the exchange rates during the relevant year which havebeen weighted according to the phasing of revenue of the group’sbusinesses.(ii) Transactions and balancesThe fi nancial statements for each group company have beenprepared on the basis that transactions in foreign currencies arerecorded in their functional currency at the rate of exchange ruling atthe date of the transaction. Monetary items denominated in foreigncurrencies are retranslated at the rate of exchange ruling at thebalance sheet date with the resultant translation differences beingincluded in operating profi t in the income statement other than thosearising on fi nancial assets and liabilities which are recorded within netfi nance costs and those which are deferred in equity as qualifyingcash fl ow hedges and qualifying net investment hedges. Translationdifferences on non-monetary assets such as equity investmentsclassifi ed as available for sale assets are included in othercomprehensive income.(iii) Overseas subsidiaries, associates and joint venturesOne-off items in the income and cash fl ow statements of overseassubsidiaries, associates and joint ventures expressed in currenciesother than the US dollar are translated to US dollars at the rates ofexchange prevailing on the day of the transaction. All other items aretranslated at weighted average rates of exchange for the relevantreporting period. Assets and liabilities of these undertakings aretranslated at closing rates of exchange at each balance sheet date.All translation exchange differences arising on the retranslation ofopening net assets together with differences between incomestatements translated at average and closing rates are recognisedas a separate component of equity. For these purposes net assetsinclude loans between group companies that form part of the netinvestment, for which settlement is neither planned nor likely to occurin the foreseeable future. When a foreign operation is disposed of, anyrelated exchange differences in equity are reclassifi ed to the incomestatement as part of the gain or loss on disposal.Goodwill and fair value adjustments arising on the acquisition of aforeign entity are treated as assets and liabilities of the foreign entityand translated at the closing rate.(iv) Hyperinflationary economiesIn hyperinfl ationary economies, when translating the results ofoperations into US dollars, adjustments are made to local currencydenominated non-monetary assets, liabilities, income statement andequity accounts to refl ect the changes in purchasing power. SouthSudan is considered to be a hyperinfl ationary economy in the yearended 31 March 2013. The effect of infl ation accounting in SouthSudan for the year ended 31 March 2013 was not material.g) Business combinations(i) SubsidiariesThe acquisition method is used to account for businesscombinations. The identifi able net assets (including intangibles) areincorporated into the fi nancial statements on the basis of their fairvalue from the effective date of control, and the results of subsidiaryundertakings acquired during the fi nancial year are included in thegroup’s results from that date.On the acquisition of a company or business, fair values refl ectingconditions at the date of acquisition are attributed to the identifi ableassets (including intangibles), liabilities and contingent liabilitiesacquired. Fair values of these assets and liabilities are determinedby reference to market values, where available, or by reference to thecurrent price at which similar assets could be acquired or similarobligations entered into, or by discounting expected future cash fl owsto present value, using either market rates or the risk-free rates andrisk-adjusted expected future cash fl ows.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 95

Notes to the consolidated financial statementscontinued1. Accounting policies continuedThe consideration transferred is measured as the fair value of theassets given, equity instruments issued and liabilities incurred orassumed at the date of the acquisition, and also includes the group’sestimate of the fair value of any deferred consideration payable.Acquisition-related costs are expensed as incurred. Where thebusiness combination is achieved in stages and results in a change incontrol, the acquisition date fair value of the acquirer’s previously heldequity interest in the acquiree is remeasured to fair value at theacquisition date through profi t or loss. Where the businesscombination agreement provides for an adjustment to the cost thatis contingent on future events, the consideration transferred includesthe fair value of any asset or liability resulting from a contingentconsideration arrangement. On an acquisition by acquisition basis,the group recognises any non-controlling interest in the acquireeeither at fair value or at the non-controlling interest’s proportionateshare of the acquiree’s net assets.(ii) Associates and joint venturesOn acquisition the investment in associates and joint ventures isrecorded initially at cost. Subsequently the carrying amount isincreased or decreased to recognise the group’s share of theassociates’ and joint ventures’ income and expenses after thedate of acquisition.Fair values refl ecting conditions at the date of acquisition areattributed to the group’s share of identifi able assets (includingintangibles), liabilities and contingent liabilities acquired. Theconsideration transferred is measured as the fair value of the assetsgiven, equity instruments issued and liabilities incurred or assumedat the date of the acquisition, and also includes the group’s estimateof the fair value of any deferred consideration payable.The date signifi cant infl uence or joint control commences is notnecessarily the same as the closing date or any other date namedin the contract.(iii) GoodwillGoodwill arising on consolidation represents the excess of theconsideration transferred, the amount of any non-controlling interestin the acquiree and the acquisition-date fair value of any previousequity interest in the acquiree over the fair value of the identifi ableassets (including intangibles), liabilities and contingent liabilities of theacquired entity at the date of acquisition. Where the fair value of thegroup’s share of identifi able net assets acquired exceeds the fair valueof the consideration, the difference is recognised immediately in theincome statement.Goodwill is stated at cost less impairment losses and is reviewedfor impairment on an annual basis. Any impairment identifi ed isrecognised immediately in the income statement and is not reversed.The carrying amount of goodwill in respect of associates and jointventures is included in the carrying value of the investment in theassociate or joint venture.h) Intangible assetsIntangible assets are stated at cost less accumulated amortisationon a straight-line basis (if applicable) and impairment losses. Cost isusually determined as the amount paid by the group, unless the assethas been acquired as part of a business combination. Intangibleassets acquired as part of a business combination are recognisedat their fair value at the date of acquisition. Amortisation is includedwithin net operating expenses in the income statement. Internallygenerated intangibles are not recognised except for computersoftware and applied development costs referred to under computersoftware and research and development below.Intangible assets with fi nite lives are amortised over their estimateduseful economic lives, and only tested for impairment where thereis a triggering event. The group regularly reviews all of its amortisationrates and residual values to take account of any changes incircumstances. The directors’ assessment of the useful life ofintangible assets is based on the nature of the asset acquired, thedurability of the products to which the asset attaches and theexpected future impact of competition on the business.(i) BrandsBrands are recognised as an intangible asset where the brand hasa long-term value. Acquired brands are only recognised where titleis clear or the brand could be sold separately from the rest of thebusiness and the earnings attributable to it are separately identifi able.Acquired brands are amortised. In respect of brands currently heldthe amortisation period is 10 to 40 years, being the period for whichthe group has exclusive rights to those brands, up to a maximum of40 years.(ii) Contract brewing and other licences recognised as partof a business combinationContractual arrangements for contract brewing and competitorlicensing arrangements are recognised as an intangible asset ata fair value representing the remaining contractual period with anassumption about the expectation that such a contract will berenewed, together with a valuation of this extension.Acquired licences or contracts are amortised. In respect of licencesor contracts currently held, the amortisation period is the period forwhich the group has exclusive rights to these assets or incomestreams.(iii) Customer lists and distributor relationships recognisedas part of a business combinationThe fair value of businesses acquired may include customer lists anddistributor relationships. These are recognised as intangible assetsand are calculated by discounting the future revenue streamattributable to these lists or relationships.Acquired customer lists or distributor relationships are amortised.In respect of contracts currently held, the amortisation period is theperiod for which the group has the benefi t of these assets.(iv) Computer softwareWhere computer software is not an integral part of a related itemof property, plant and equipment, the software is capitalised as anintangible asset.Acquired computer software licences are capitalised on the basisof the costs incurred to acquire and bring them to use. Direct costsassociated with the production of identifi able and unique internallygenerated software products controlled by the group that willprobably generate economic benefi ts exceeding costs beyond oneyear are capitalised. Direct costs include software developmentemployment costs (including those of contractors used), capitalisedinterest and an appropriate portion of overheads. Capitalisedcomputer software, licence and development costs are amortisedover their useful economic lives of between three and eight years.Internally generated costs associated with maintaining computersoftware programmes are expensed as incurred.96 – SABMiller plc Annual Report 2013

1. Accounting policies continued(v) Research and developmentResearch and general development expenditure is written off in theperiod in which it is incurred.Certain applied development costs are only capitalised as internallygenerated intangible assets where there is a clearly defi ned project,separately identifi able expenditure, an outcome assessed withreasonable certainty (in terms of feasibility and commerciality),expected revenues exceed expected costs and the group has theresources to complete the task. Such assets are amortised on astraight-line basis over their useful lives once the project is complete.i) Property, plant and equipmentProperty, plant and equipment are stated at cost net of accumulateddepreciation and any impairment losses.Cost includes expenditure that is directly attributable to theacquisition of the assets. Subsequent costs are included in theasset’s carrying value or recognised as a separate asset asappropriate, only when it is probable that future economic benefi tsassociated with the specifi c asset will fl ow to the group and the costcan be measured reliably. Repairs and maintenance costs arecharged to the income statement during the fi nancial period inwhich they are incurred.(i) Assets in the course of constructionAssets in the course of construction are carried at cost less anyimpairment loss. Cost includes professional fees and for qualifyingassets certain borrowing costs as determined below. When theseassets are ready for their intended use, they are transferred into theappropriate category. At this point, depreciation commences on thesame basis as on other property, plant and equipment.(ii) Assets held under finance leasesAssets held under fi nance leases which result in the group bearingsubstantially all the risks and rewards incidental to ownership arecapitalised as property, plant and equipment. Finance lease assetsare initially recognised at an amount equal to the lower of their fairvalue and the present value of the minimum lease payments atinception of the lease, then depreciated over the lower of the leaseterm or their useful lives. The capital element of future obligationsunder the leases is included as a liability in the balance sheetclassifi ed, as appropriate, as a current or non-current liability. Theinterest element of the lease obligations is charged to the incomestatement over the period of the lease term to refl ect a constantrate of interest on the remaining balance of the obligation for eachfi nancial period.(iii) Returnable containersReturnable containers in circulation are recorded within property,plant and equipment at cost net of accumulated depreciation lessany impairment loss.Depreciation of returnable bottles and containers is recorded to writethe containers off over the course of their economic life. This istypically undertaken in a two stage process:• The excess over deposit value is written down over a period of1 to 10 years.• Provisions are made against the deposit values for breakages andlosses in trade together with a design obsolescence provision heldto write off the deposit value over the expected container designperiod – which is a period of no more than 14 years from theinception of a container design. This period is shortened whereappropriate by reference to market dynamics and the ability of theentity to use containers for different brands.(iv) DepreciationNo depreciation is provided on freehold land or assets in the courseof construction. In respect of all other property, plant and equipment,depreciation is provided on a straight-line basis at rates calculated towrite off the cost, less the estimated residual value, of each asset overits expected useful life as follows:Freehold buildingsLeasehold buildingsPlant, vehicles and systemsReturnable containers(non-returnable containersare recorded as inventory)Assets held under fi nance leases20 – 50 yearsShorter of the lease termor 50 years2 – 30 years1 – 14 yearsLower of the lease term orlife of the assetThe group regularly reviews all of its depreciation rates and residualvalues to take account of any changes in circumstances. Whensetting useful economic lives, the principal factors the group takesinto account are the expected rate of technological developments,expected market requirements for the equipment and the intensityat which the assets are expected to be used.The profi t or loss on the disposal of an asset is the differencebetween the disposal proceeds and the net book amount.(v) Capitalisation of borrowing costsFinancing costs incurred, before tax, on major capital projects duringthe period of development or construction that necessarily take asubstantial period of time to be developed for their intended use,are capitalised up to the time of completion of the project.j) Advance payments made to customers (principally hotels,restaurants, bars and clubs)Advance payments made to customers are conditional on theachievement of contracted sales targets or marketing commitments.The group records such payments as prepayments initially at fairvalue and amortises them in the income statement over the relevantperiod to which the customer commitment is made (typically three tofi ve years). These prepayments are recorded net of any impairmentlosses.Where there is a volume target the amortisation of the advance isincluded in sales discounts as a reduction to revenue and where thereare specifi c marketing activities/commitments the amortisation isincluded as an operating expense. The amounts capitalised arereassessed annually for achievement of targets and are impairedwhere there is objective evidence that the targets will not be achieved.Assets held at customer premises are included within property, plantand equipment and are depreciated in line with group policies onsimilar assets.k) InventoriesInventories are stated at the lower of cost incurred in bringing eachproduct to its present location and condition, and net realisable value,as follows:• Raw materials, consumables and goods for resale: Purchase costnet of discounts and rebates on a fi rst-in fi rst-out basis (FIFO).• Finished goods and work in progress: Raw material cost plus directcosts and a proportion of manufacturing overhead expenses on aFIFO basis.Net realisable value is based on estimated selling price less furthercosts expected to be incurred to completion and disposal. Costs ofinventories include the transfer from equity of any gains or losses onmatured qualifying cash fl ow hedges of purchases of raw materials.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 97

Notes to the consolidated financial statementscontinued1. Accounting policies continuedl) Financial assets and financial liabilitiesFinancial assets and fi nancial liabilities are initially recorded at fairvalue (plus any directly attributable transaction costs, except in thecase of those classifi ed at fair value through profi t or loss). For thosefi nancial instruments that are not subsequently held at fair value, thegroup assesses whether there is any objective evidence ofimpairment at each balance sheet date.Financial assets are recognised when the group has rights or otheraccess to economic benefi ts. Such assets consist of cash, equityinstruments, a contractual right to receive cash or another fi nancialasset, or a contractual right to exchange fi nancial instruments withanother entity on potentially favourable terms. Financial assets arederecognised when the right to receive cash fl ows from the assethave expired or have been transferred and the group has transferredsubstantially all risks and rewards of ownership.Financial liabilities are recognised when there is an obligation totransfer benefi ts and that obligation is a contractual liability to delivercash or another fi nancial asset or to exchange fi nancial instrumentswith another entity on potentially unfavourable terms. Financialliabilities are derecognised when they are extinguished, that isdischarged, cancelled or expired.If a legally enforceable right exists to set off recognised amounts offi nancial assets and liabilities, which are in determinable monetaryamounts, and there is the intention to settle net, the relevant fi nancialassets and liabilities are offset.Interest costs are charged to the income statement in the year inwhich they accrue. Premiums or discounts arising from the differencebetween the net proceeds of fi nancial instruments purchased orissued and the amounts receivable or repayable at maturity areincluded in the effective interest calculation and taken to net fi nancecosts over the life of the instrument.There are four categories of fi nancial assets and fi nancial liabilities.These are described as follows:(i) Financial assets and financial liabilities at fair valuethrough profit or lossFinancial assets and fi nancial liabilities at fair value through profi t orloss include derivative assets and derivative liabilities not designatedas effective hedging instruments.All gains or losses arising from changes in the fair value of fi nancialassets or fi nancial liabilities within this category are recognised inthe income statement.a. Derivative fi nancial assets and fi nancial liabilitiesDerivative fi nancial assets and fi nancial liabilities are fi nancialinstruments whose value changes in response to an underlyingvariable, require little or no initial investment and are settled inthe future.These include derivatives embedded in host contracts. Suchembedded derivatives need not be accounted for separately ifthe host contract is already fair valued; if it is not considered as aderivative if it was freestanding; or if it can be demonstrated thatit is closely related to the host contract. There are certain currencyexemptions which the group has applied to these rules which limit theneed to account for certain potential embedded foreign exchangederivatives. These are: if a contract is denominated in the functionalcurrency of either party; where that currency is commonly used ininternational trade of the good traded; or if it is commonly used forlocal transactions in an economic environment.Derivative fi nancial assets and liabilities are analysed between currentand non-current assets and liabilities on the face of the balancesheet, depending on when they are expected to mature.For derivatives that have not been designated to a hedgingrelationship, all fair value movements are recognised immediately inthe income statement. (See note x for the group’s accounting policyon hedge accounting).(ii) Loans and receivablesLoans and receivables are non-derivative fi nancial assets with fi xed ordeterminable payments that are not quoted on an active market. Theyarise when the group provides money, goods or services directly to adebtor with no intention of trading the receivable. They are included incurrent assets, except for maturities of greater than 12 months afterthe balance sheet date which are classifi ed as non-current assets.Loans and receivables are initially recognised at fair value includingoriginating fees and transaction costs, and subsequently measuredat amortised cost using the effective interest method less provisionfor impairment. Loans and receivables include trade receivables,amounts owed by associates, amounts owed by joint ventures –trade, accrued income and cash and cash equivalents.a. Trade receivablesTrade receivables are initially recognised at fair value andsubsequently measured at amortised cost less provisionfor impairment.A provision for impairment of trade receivables is established whenthere is objective evidence that the group will not be able to collect allamounts due according to the terms of the receivables. The amountof the provision is the difference between the asset’s carrying valueand the present value of the estimated future cash fl ows discountedat the original effective interest rate. This provision is recognised in theincome statement.b. Cash and cash equivalentsIn the consolidated balance sheet, cash and cash equivalentsincludes cash in hand, bank deposits repayable on demand and othershort-term highly liquid investments with original maturities of threemonths or less. In the consolidated cash fl ow statement, cash andcash equivalents also includes bank overdrafts which are shownwithin borrowings in current liabilities on the balance sheet.(iii) Available for sale investmentsAvailable for sale investments are non-derivative fi nancial assets thatare either designated in this category or not classifi ed as fi nancialassets at fair value through profi t or loss, or loans and receivables.Investments in this category are included in non-current assets unlessmanagement intends to dispose of the investment within 12 monthsof the balance sheet date. They are initially recognised at fair valueplus transaction costs and are subsequently remeasured at fair valueand tested for impairment. Gains and losses arising from changes infair value including any related foreign exchange movements arerecognised in other comprehensive income. On disposal orimpairment of available for sale investments, any gains or losses inother comprehensive income are reclassifi ed to the income statement.Purchases and sales of investments are recognised on the date onwhich the group commits to purchase or sell the asset. Investmentsare derecognised when the rights to receive cash fl ows from theinvestments have expired or have been transferred and the group hastransferred substantially all risks and rewards of ownership.98 – SABMiller plc Annual Report 2013

1. Accounting policies continued(iv) Financial liabilities held at amortised costFinancial liabilities held at amortised cost include trade payables,accruals, amounts owed to associates, amounts owed to jointventures – trade, other payables and borrowings.a. Trade payablesTrade payables are initially recognised at fair value and subsequentlymeasured at amortised cost using the effective interest method.Trade payables are analysed between current and non-currentliabilities on the face of the balance sheet, depending on when theobligation to settle will be realised.b. BorrowingsBorrowings are recognised initially at fair value, net of transactioncosts and are subsequently stated at amortised cost and includeaccrued interest and prepaid interest. Borrowings are classifi ed ascurrent liabilities unless the group has an unconditional right to defersettlement of the liability for at least 12 months from the balance sheetdate. Borrowings classifi ed as hedged items are subject to hedgeaccounting requirements (see note x). Bank overdrafts are shownwithin borrowings in current liabilities and are included within cashand cash equivalents on the face of the cash fl ow statement as theyform an integral part of the group’s cash management.m) ImpairmentThis policy covers all assets except inventories (see note k), fi nancialassets (see note l), non-current assets classifi ed as held for sale (seenote n), and deferred tax assets (see note u).Impairment reviews are performed by comparing the carrying valueof the non-current asset to its recoverable amount, being the higherof the fair value less costs to sell and value in use. The fair value lesscosts to sell is considered to be the amount that could be obtainedon disposal of the asset. Value in use is determined by discountingthe future post-tax cash fl ows generated from continuing use of thecash generating unit (CGU) using a post-tax discount rate, as thisclosely approximates to applying pre-tax discount rates to pre-taxcash fl ows. Where a potential impairment is identifi ed using post-taxcash fl ows and post-tax discount rates, the impairment review isreperformed on a pre-tax basis in order to determine the impairmentloss to be recorded.Where the asset does not generate cash fl ows that are independentfrom the cash fl ows of other assets, the group estimates therecoverable amount of the CGU to which the asset belongs. For thepurpose of conducting impairment reviews, CGUs are considered tobe groups of assets that have separately identifi able cash fl ows. Theyalso include those assets and liabilities directly involved in producingthe income and a suitable proportion of those used to produce morethan one income stream.An impairment loss is held fi rstly against any specifi cally impairedassets. Where an impairment is recognised against a CGU, theimpairment is fi rst taken against goodwill balances and if there is aremaining loss it is set against the remaining intangible and tangibleassets on a pro-rata basis.Should circumstances or events change and give rise to a reversal ofa previous impairment loss, the reversal is recognised in the incomestatement in the period in which it occurs and the carrying value ofthe asset is increased. The increase in the carrying value of the assetis restricted to the amount that it would have been had the originalimpairment not occurred. Impairment losses in respect of goodwillare irreversible.Goodwill is tested annually for impairment. Assets subject toamortisation are reviewed for impairment if circumstances orevents change to indicate that the carrying value may not befully recoverable.n) Non-current assets (or disposal groups) held for saleNon-current assets and all assets and liabilities classifi ed as held forsale are measured at the lower of carrying value and fair value lesscosts to sell.Such assets are classifi ed as held for resale if their carrying amountwill be recovered through a sale transaction rather than throughcontinued use. This condition is regarded as met only when a sale ishighly probable, the asset or disposal group is available for immediatesale in its present condition and when management is committed tothe sale which is expected to qualify for recognition as a completedsale within one year from date of classifi cation.o) ProvisionsProvisions are recognised when there is a present obligation, whetherlegal or constructive, as a result of a past event for which it isprobable that a transfer of economic benefi ts will be required to settlethe obligation and a reliable estimate can be made of the amount ofthe obligation. Such provisions are calculated on a discounted basiswhere the effect is material to the original undiscounted provision. Thecarrying amount of the provision increases in each period to refl ectthe passage of time and the unwinding of the discount and themovement is recognised in the income statement within netfi nance costs.Restructuring provisions comprise lease termination penalties andemployee termination payments. Provisions are not recognised forfuture operating losses. Provisions are recognised for onerouscontracts where the unavoidable cost exceeds the expected benefi t.p) Share capitalOrdinary shares are classifi ed as equity. Incremental costs directlyattributable to the issue of new shares or options are shown in equityas a deduction, net of tax, from the proceeds.q) Investments in own shares (treasury and shares held byemployee benefit trusts)Shares held by employee share ownership plans, employee benefi ttrusts and in treasury are treated as a deduction from equity until theshares are cancelled, reissued, or disposed.Purchases of such shares are classifi ed in the cash fl ow statement asa purchase of own shares for share trusts or purchase of own sharesfor treasury within net cash from fi nancing activities.Where such shares are subsequently sold or reissued, anyconsideration received, net of any directly attributable incrementalcosts and related tax effects, is included in equity attributable to thecompany’s equity shareholders.r) Revenue recognition(i) Sale of goods and servicesRevenue represents the fair value of consideration received orreceivable for goods and services provided to third parties and isrecognised when the risks and rewards of ownership are substantiallytransferred.The group presents revenue gross of excise duties because unlikevalue added tax, excise is not directly related to the value of sales. It isnot generally recognised as a separate item on invoices, increases inexcise are not always directly passed on to customers, and the groupcannot reclaim the excise where customers do not pay for productreceived. The group therefore considers excise as a cost to the groupand refl ects it as a production cost. Consequently, any excise that isrecovered in the sale price is included in revenue.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 99

Notes to the consolidated financial statementscontinued1. Accounting policies continuedRevenue excludes value added tax. It is stated net of price discounts,promotional discounts, settlement discounts and after an appropriateamount has been provided to cover the sales value of credit notes yetto be issued that relate to the current and prior periods.The same recognition criteria also apply to the sale of by-productsand waste (such as spent grain, malt dust and yeast) with theexception that these are included within other income.(ii) Interest incomeInterest income is recognised on an accruals basis using the effectiveinterest method.When a receivable is impaired the group reduces the carrying amountto its recoverable amount by discounting the estimated future cashfl ows at the original effective interest rate, and continuing to unwindthe discount as interest income.(iii) Royalty incomeRoyalty income is recognised on an accruals basis in accordancewith the relevant agreements and is included in other income.(iv) Dividend incomeDividend income is recognised when the right to receive payment isestablished.s) Operating leasesRentals paid and incentives received on operating leases are chargedor credited to the income statement on a straight-line basis over thelease term.t) Exceptional itemsWhere certain expense or income items recorded in a period arematerial by their size or incidence, the group refl ects such items asexceptional items within a separate line on the income statementexcept for those exceptional items that relate to associates, jointventures, net fi nance costs and tax. (Associates’ and joint ventures’net fi nance costs and tax exceptional items are only referred to inthe notes to the consolidated fi nancial statements).Exceptional items are also summarised in the segmental analyses,excluding those that relate to net fi nance costs and tax.The group presents alternative earnings per share calculations on aheadline and adjusted basis. The adjusted earnings per share fi gureexcludes the impact of amortisation of intangible assets (excludingcomputer software), certain non-recurring items and post-taxexceptional items in order to present an additional measure ofperformance for the years shown in the consolidated fi nancialstatements. Headline earnings per share is calculated in accordancewith the South African Circular 3/2012 entitled ‘Headline Earnings’which forms part of the listing requirements for the JSE Ltd (JSE).u) TaxationThe tax expense for the period comprises current and deferred tax.Tax is recognised in the income statement, except to the extent that itrelates to items recognised in other comprehensive income or directlyin equity, in which case it is recognised in other comprehensiveincome or directly in equity, respectively.Current tax expense is based on the results for the period as adjustedfor items that are not taxable or not deductible. The group’s liability forcurrent taxation is calculated using tax rates and laws that have beenenacted or substantively enacted by the balance sheet date.Deferred tax is provided in full using the liability method, in respect ofall temporary differences arising between the tax bases of assets andliabilities and their carrying values in the consolidated fi nancialstatements, except where the temporary difference arises fromgoodwill (in the case of deferred tax liabilities) or from the initialrecognition (other than a business combination) of other assets andliabilities in a transaction that affects neither accounting nor taxableprofi t.Deferred tax liabilities are recognised where the carrying value ofan asset is greater than its tax base, or where the carrying value ofa liability is less than its tax base. Deferred tax is recognised in fullon temporary differences arising from investment in subsidiaries,associates and joint ventures, except where the timing of the reversalof the temporary difference is controlled by the group and it isprobable that the temporary difference will not reverse in theforeseeable future. This includes taxation in respect of the retainedearnings of overseas subsidiaries only to the extent that, at thebalance sheet date, dividends have been accrued as receivable ora binding agreement to distribute past earnings in future periods hasbeen entered into by the subsidiary. Deferred income tax is alsorecognised in respect of the unremitted retained earnings of overseasassociates and joint ventures as the group is not able to determinewhen such earnings will be remitted and when such additional taxsuch as withholding taxes might be payable.A net deferred tax asset is regarded as recoverable and thereforerecognised only when, on the basis of all available evidence, it isprobable that future taxable profi t will be available against which thetemporary differences (including carried forward tax losses) can beutilised.Deferred tax is measured at the tax rates expected to apply in theperiods in which the timing differences are expected to reverse basedon tax rates and laws that have been enacted or substantivelyenacted at balance sheet date. Deferred tax is measured on anon-discounted basis.v) Dividend distributionsDividend distributions to equity holders of the parent are recognisedas a liability in the group’s fi nancial statements in the period in whichthe dividends are approved by the company’s shareholders. Interimdividends are recognised when paid. Dividends declared after thebalance sheet date are not recognised, as there is no presentobligation at the balance sheet date.w) Employee benefits(i) Wages and salariesWages and salaries for current employees are recognised in theincome statement as the employees’ services are rendered.(ii) Vacation and long-term service awards costsThe group recognises a liability and an expense for accrued vacationpay when such benefi ts are earned and not when these benefi tsare paid.The group also recognises a liability and an expense for long-termservice awards where cash is paid to the employee at certainmilestone dates in a career with the group. Such accruals areappropriately discounted to refl ect the future payment dates atdiscount rates determined by reference to local high-qualitycorporate bonds.100 – SABMiller plc Annual Report 2013

1. Accounting policies continued(iii) Profit-sharing and bonus plansThe group recognises a liability and an expense for bonuses andprofi t-sharing, based on a formula that takes into considerationthe profi t attributable to the company’s shareholders aftercertain adjustments.The group recognises a provision where contractually obligedor where there is a past practice that has created a constructiveobligation. At a mid-year point an accrual is maintained for theappropriate proportion of the expected bonuses which wouldbecome payable at the year end.(iv) Share-based compensationThe group operates a variety of equity-settled share-basedcompensation plans and a cash-settled share-basedcompensation plan.The equity-settled plans comprise share option plans (with and withoutmarket performance conditions attached), performance share awardplans (with market conditions attached) and awards related to theemployee element of the Broad-Based Black Economic Empowerment(BBBEE) scheme in South Africa. An expense is recognised to spreadthe fair value of each award granted after 7 November 2002 over thevesting period on a straight-line basis, after allowing for an estimateof the share awards that will eventually vest. A correspondingadjustment is made to equity over the remaining vesting period.The estimate of the level of vesting is reviewed at least annually, withany impact on the cumulative charge being recognised immediately.In addition the group has granted an equity-settled share-basedpayment to retailers in relation to the retailer element of the BBBEEscheme. A one-off charge has been recognised based on the fairvalue at the grant date with a corresponding adjustment to equity.The charge will not be adjusted in the future.The charges are based on the fair value of the awards as at the dateof grant, as calculated by various binomial model calculations andMonte Carlo simulations.The charges are not reversed if the options and awards are notexercised because the market value of the shares is lower thanthe option price at the date of grant.The proceeds received net of any directly attributable transactioncosts are credited to share capital (nominal value) and share premiumwhen the options are exercised.For the cash-settled plan a liability is recognised at fair value in thebalance sheet over the vesting period with a corresponding chargeto the income statement. The liability is remeasured at each reportingdate, on an actuarial basis using the analytic method, to refl ect therevised fair value and to adjust for changes in assumptions such asleavers. Changes in the fair value of the liability are recognised in theincome statement. Actual settlement of the liability will be at itsintrinsic value with the difference recognised in the income statement.(v) Pension obligationsThe group has both defi ned benefi t and defi ned contribution plans.The liability recognised in the balance sheet in respect of defi nedbenefi t pension plans is the present value of the defi ned benefi tobligation at the balance sheet date less the fair value of plan assets,together with adjustments for unrecognised past service costs.The defi ned benefi t obligation is calculated annually by independentactuaries using the projected unit credit method. The present valueof the defi ned benefi t obligation is determined by discounting theestimated future cash outfl ows using interest rates of high-qualitycorporate bonds that are denominated in the currency in which thebenefi ts will be paid, and that have terms to maturity approximating tothe terms of the related pension liability.Actuarial gains and losses arising from experience adjustments andchanges in actuarial assumptions are recognised in full as they ariseoutside of the income statement and are charged or credited toequity in other comprehensive income in the period in which theyarise, with the exception of gains or losses arising from changes inthe benefi ts regarding past services, which are recognised in theincome statement.Past service costs are recognised immediately in the incomestatement, unless the changes to the pension plan are conditional onthe employees remaining in service for a specifi ed period of time (thevesting period). In this case, the past service costs are amortised ona straight-line basis over the vesting period.The contributions to defi ned contribution plans are recognised asan expense as the costs become payable. The contributions arerecognised as employee benefi t expense when they are due. Prepaidcontributions are recognised as an asset to the extent that a cashrefund or a reduction in the future payments is available.(vi) Other post-employment obligationsSome group companies provide post-retirement healthcare benefi tsto qualifying employees. The expected costs of these benefi ts areassessed in accordance with the advice of qualifi ed actuaries andcontributions are made to the relevant funds over the expectedservice lives of the employees entitled to those funds. Actuarial gainsand losses arising from experience adjustments, and changes inactuarial assumptions are recognised in full as they arise outside theincome statement and are charged or credited to equity in othercomprehensive income in the period in which they arise. Theseobligations are valued annually by independent qualifi ed actuaries.(vii) Termination benefitsTermination benefi ts are payable when employment is terminatedbefore the normal retirement date, or whenever an employee acceptsvoluntary redundancy in exchange for these benefi ts. The grouprecognises termination benefi ts when it is demonstrably committedto terminating the employment of current employees according to adetailed formal plan without possibility of withdrawal, or providingtermination benefi ts as a result of an offer made to encouragevoluntary redundancy. Benefi ts falling due more than 12 monthsafter balance sheet date are discounted to present value in a similarmanner to all long-term employee benefi ts.x) Derivative financial instruments – hedge accountingFinancial assets and fi nancial liabilities at fair value through profi tor loss include all derivative fi nancial instruments. The derivativeinstruments used by the group, which are used solely for hedgingpurposes (i.e. to offset foreign exchange, commodity price andinterest rate risks), comprise interest rate swaps, cross currencyswaps, forward foreign exchange contracts, commodity contractsand other specifi c instruments as necessary under the approval of theboard. Such derivative instruments are used to alter the risk profi le ofan existing underlying exposure of the group in line with the group’srisk management policies. The group also has derivatives embeddedin other contracts primarily cross border foreign currency supplycontracts for raw materials.Derivatives are initially recorded at fair value on the date a derivativecontract is entered into and are subsequently remeasured at their fairvalue. The method of recognising the resulting gain or loss dependson whether the derivative is designated as a hedging instrument, andif so, the nature of the hedging relationship.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 101

Notes to the consolidated financial statementscontinued1. Accounting policies continuedIn order to qualify for hedge accounting, the group is required todocument at inception, the relationship between the hedged item andthe hedging instrument as well as its risk management objectives andstrategy for undertaking hedging transactions. The group is alsorequired to document and demonstrate that the relationship betweenthe hedged item and the hedging instrument will be highly effective.This effectiveness test is reperformed at each period end to ensurethat the hedge has remained and will continue to remain highlyeffective.The group designates certain derivatives as either: hedges of the fairvalue of recognised assets or liabilities or a fi rm commitment (fairvalue hedge); hedges of highly probable forecast transactions orcommitments (cash fl ow hedge); or hedges of net investments inforeign operations (net investment hedge).(i) Fair value hedgesFair value hedges comprise derivative fi nancial instrumentsdesignated in a hedging relationship to manage the group’s interestrate risk and foreign exchange risk to which the fair value of certainassets and liabilities are exposed. Changes in the fair value of thederivative offset the relevant changes in the fair value of the underlyinghedged item attributable to the hedged risk in the income statementin the period incurred.Gains or losses on fair value hedges that are regarded as highlyeffective are recorded in the income statement together with thegain or loss on the hedged item attributable to the hedged risk.(ii) Cash flow hedgesCash fl ow hedges comprise derivative fi nancial instrumentsdesignated in a hedging relationship to manage currency and interestrate risk to which the cash fl ows of certain liabilities are exposed.The effective portion of changes in the fair value of the derivative thatis designated and qualifi es for hedge accounting is recognised inother comprehensive income. The ineffective portion is recognisedimmediately in the income statement. Amounts accumulated in equityare reclassifi ed to the income statement in the period in which thehedged item affects profi t or loss. However, where a forecastedtransaction results in a non-fi nancial asset or liability, the accumulatedfair value movements previously deferred in equity are included in theinitial cost of the asset or liability.(iii) Hedges of net investments in foreign operationsHedges of net investments in foreign operations comprise eitherforeign currency borrowings or derivatives (typically forwardexchange contracts and cross currency swaps) designated in ahedging relationship.Gains or losses on hedging instruments that are regarded as highlyeffective are recognised in other comprehensive income. Theselargely offset foreign currency gains or losses arising on thetranslation of net investments that are recorded in equity, in theforeign currency translation reserve. The ineffective portion of gainsor losses on hedging instruments is recognised immediately in theincome statement. Amounts accumulated in equity are onlyreclassifi ed to the income statement upon disposal of the netinvestment.Where a derivative ceases to meet the criteria of being a hedginginstrument or the underlying exposure which it is hedging is sold,matures or is extinguished, hedge accounting is discontinued andamounts previously recorded in equity are reclassifi ed to the incomestatement. A similar treatment is applied where the hedge is of afuture transaction and that transaction is no longer likely to occur.When the hedge is discontinued due to ineffectiveness, hedgeaccounting is discontinued prospectively.Certain derivative instruments, while providing effective economichedges under the group’s policies, are not designated as hedges.Changes in the fair value of any derivative instruments that do notqualify or have not been designated as hedges are recognisedimmediately in the income statement. The group does not holdor issue derivative fi nancial instruments for speculative purposes.y) Deposits by customersReturnable containers in circulation are recorded within property,plant and equipment and a corresponding liability is recorded inrespect of the obligation to repay the customers’ deposits. Depositspaid by customers for branded returnable containers are refl ected inthe balance sheet within current liabilities. Any estimated liability thatmay arise in respect of deposits for unbranded containers is shownin provisions.z) Earnings per shareBasic earnings per share represents the profi t on ordinary activitiesafter taxation attributable to the equity shareholders of the parententity, divided by the weighted average number of ordinary shares inissue during the year, less the weighted average number of ordinaryshares held in the group’s employee benefi t trusts and in treasuryduring the year.Diluted earnings per share represents the profi t on ordinary activitiesafter taxation attributable to the equity shareholders of the parent,divided by the weighted average number of ordinary shares in issueduring the year, less the weighted average number of ordinary sharesheld in the group’s employee benefi t trusts and in treasury during theyear, plus the weighted average number of dilutive shares resultingfrom share options and other potential ordinary shares outstandingduring the year.102 – SABMiller plc Annual Report 2013

2. Segmental analysisOperating segments refl ect the management structure of the group and the way performance is evaluated and resources allocated basedon group revenue and EBITA by the group’s chief operating decision maker, defi ned as the executive directors. The group is focusedgeographically and, while not meeting the defi nition of reportable segments, the group reports separately as segments South Africa:Hotels and Gaming and Corporate as this provides useful additional information.The segmental information presented below includes the reconciliation of GAAP measures presented on the face of the income statementto non-GAAP measures which are used by management to analyse the group’s performance.Income statementGrouprevenue2013US$mLatin America 7,821 2,112 7,158 1,865Europe 5,767 784 5,482 836North America 5,355 771 5,250 756Africa 3,853 838 3,686 743Asia Pacifi c 5,685 855 3,510 321South Africa: 6,006 1,263 6,302 1,303– Beverages 5,540 1,129 5,815 1,168– Hotels and Gaming 466 134 487 135Corporate – (202) – (190)34,487 6,421 31,388 5,634Amortisation of intangible assets (excluding computer software) – group and share of associates’and joint ventures’ (483) (264)Exceptional items in operating profi t – group and share of associates’ and joint ventures’ (205) 1,015Net fi nance costs – group and share of associates’ and joint ventures’(excluding exceptional items) (779) (570)Share of associates’ and joint ventures’ taxation (164) (170)Share of associates’ and joint ventures’ non-controlling interests (78) (42)Profit before taxation 4,712 5,603Group revenue (including associates and joint ventures)With the exception of South Africa: Hotels and Gaming, all reportable segments derive their revenues from the sale of beverages. Revenues arederived from a large number of customers which are internationally dispersed, with no customers being individually material.Revenue2013US$mShare ofassociates’and jointventures’revenue2013US$mGrouprevenue2013US$mEBITA2013US$mRevenue2012US$mGrouprevenue2012US$mShare ofassociates’and jointventures’revenue2012US$mLatin America 7,821 – 7,821 7,148 10 7,158Europe 4,292 1,475 5,767 5,347 135 5,482North America 141 5,214 5,355 134 5,116 5,250Africa 2,267 1,586 3,853 2,299 1,387 3,686Asia Pacifi c 3,797 1,888 5,685 1,682 1,828 3,510South Africa: 4,895 1,111 6,006 5,150 1,152 6,302– Beverages 4,895 645 5,540 5,150 665 5,815– Hotels and Gaming – 466 466 – 487 487EBITA2012US$mGrouprevenue2012US$m23,213 11,274 34,487 21,760 9,628 31,388Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 103

Notes to the consolidated financial statementscontinued2. Segmental analysis continuedOperating profitThe following table provides a reconciliation of operating profi t to operating profi t before exceptional items.Operatingprofit2013US$mExceptionalitems2013US$mOperatingprofit beforeexceptionalitems2013US$mOperatingprofi t2012US$mExceptionalitems2012US$mOperatingprofi t beforeexceptionalitems2012US$mLatin America 1,920 63 1,983 1,617 119 1,736Europe 588 64 652 1,939 (1,135) 804North America 7 – 7 – – –Africa 518 (79) 439 584 (162) 422Asia Pacifi c 358 104 462 54 70 124South Africa: Beverages 1,040 22 1,062 1,050 41 1,091Corporate (228) 26 (202) (231) 41 (190)4,203 200 4,403 5,013 (1,026) 3,987EBITA (segment result)This comprises operating profi t before exceptional items, amortisation of intangible assets (excluding computer software) and includes thegroup’s share of associates’ and joint ventures’ operating profi t on a similar basis. The following table provides a reconciliation of operatingprofi t before exceptional items to EBITA.Operatingprofitbeforeexceptionalitems2013US$mShare ofassociates’and jointventures’operatingprofit beforeexceptionalitems2013US$mAmortisationof intangibleassets(excludingcomputersoftware)– group andshare ofassociates’and jointventures’2013US$mEBITA2013US$mOperatingprofi tbeforeexceptionalitems2012US$mShare ofassociates’and jointventures’operatingprofi t beforeexceptionalitems2012US$mAmortisationof intangibleassets(excludingcomputersoftware)– group andshare ofassociates’and jointventures’2012US$mLatin America 1,983 – 129 2,112 1,736 – 129 1,865Europe 652 76 56 784 804 11 21 836North America 7 721 43 771 – 711 45 756Africa 439 392 7 838 422 318 3 743Asia Pacifi c 462 156 237 855 124 132 65 321South Africa: 1,062 190 11 1,263 1,091 211 1 1,303– Beverages 1,062 67 – 1,129 1,091 77 – 1,168– Hotels and Gaming – 123 11 134 – 134 1 135Corporate (202) – – (202) (190) – – (190)EBITA2012US$m4,403 1,535 483 6,421 3,987 1,383 264 5,634The group’s share of associates’ and joint ventures’ operating profi t is reconciled to the share of post-tax results of associates and jointventures in the income statement as follows.2013US$mShare of associates’ and joint ventures’ operating profi t (before exceptional items) 1,535 1,383Share of associates’ and joint ventures’ exceptional items in operating profi t (5) 11Share of associates’ and joint ventures’ net fi nance costs (44) (30)Share of associates’ and joint ventures’ taxation (164) (170)Share of associates’ and joint ventures’ non-controlling interests (78) (42)Share of post-tax results of associates and joint ventures 1,244 1,1522012US$m104 – SABMiller plc Annual Report 2013

2. Segmental analysis continuedEBITDAThe following table provides a reconciliation of EBITDA (the net cash generated from operations before working capital movements) to adjustedEBITDA. A reconciliation of profi t for the year for the group to EBITDA after cash exceptional items for the group can be found in note 27a.EBITDA2013US$mCashexceptionalitems2013US$mDividendsreceivedfromMillerCoors2013US$mAdjustedEBITDA2013US$mEBITDA2012US$mCashexceptionalitems2012US$mDividendsreceivedfromMillerCoors2012US$mAdjustedEBITDA2012US$mLatin America 2,382 61 – 2,443 2,068 112 – 2,180Europe 884 61 – 945 1,067 58 – 1,125North America 29 – 886 915 22 – 896 918Africa 583 – – 583 564 13 – 577Asia Pacifi c 754 34 – 788 159 88 – 247South Africa: Beverages 1,257 10 – 1,267 1,267 13 – 1,280Corporate (131) 25 – (106) (168) 24 – (144)Other segmental information5,758 191 886 6,835 4,979 308 896 6,183Capitalexpenditureexcludinginvestmentactivity¹2013US$mInvestmentactivity 22013US$mTotal2013US$mCapitalexpenditureexcludinginvestmentactivity 12012US$mInvestmentactivity 22012US$mLatin America 528 – 528 522 (34) 488Europe 216 – 216 324 17 341North America – 272 272 – 288 288Africa 391 29 420 398 (82) 316Asia Pacifi c 88 (78) 10 69 10,931 11,000South Africa: 228 – 228 284 – 284– Beverages 228 – 228 284 – 284– Hotels and Gaming – – – – – –Corporate 28 (5) 23 42 1 431 Capital expenditure includes additions of intangible assets (excluding goodwill) and property, plant and equipment.Total2012US$m1,479 218 1,697 1,639 11,121 12,7602 Investment activity includes acquisitions and disposals of businesses, net investments in associates and joint ventures, purchases of shares in non-controlling interests and purchasesand disposals of available for sale investments.Depreciation andamortisationLatin America 467 445Europe 226 298Africa 104 128Asia Pacifi c 316 117South Africa: Beverages 172 168Corporate 32 26Depreciation and amortisation exclude amounts relating to impairment charges.2013US$m2012US$m1,317 1,182Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 105

Notes to the consolidated financial statementscontinued2. Segmental analysis continuedGeographical informationThe UK is the parent company’s country of domicile. Those countries which account for more than 10% of the group’s total revenue and/ornon-current assets are considered individually material and are reported separately below.RevenueUK 378 359Australia 3,064 1,025Colombia 3,742 3,481South Africa 4,896 5,150USA 129 124Rest of world 11,004 11,62123,213 21,7602013US$m2012US$mNon-current assetsUK 388 354Australia 14,351 14,511Colombia 8,465 8,727South Africa 2,368 2,760USA 5,804 5,777Rest of world 18,409 18,02049,785 50,1492013US$m2012 1US$m1 As restated (see note 28).Non-current assets by location exclude amounts relating to derivative fi nancial instruments and deferred tax assets.106 – SABMiller plc Annual Report 2013

3. Net operating expensesCost of inventories recognised as an expense 5,043 5,049– Changes in inventories of fi nished goods and work in progress 93 18– Raw materials and consumables used 4,950 5,031Excise duties¹ 5,755 5,047Employee costs (see note 6a) 2,693 2,502Depreciation of property, plant and equipment 867 909– Containers 226 237– Other 641 672Net profi t on disposal of businesses (79) (1,242)Profi t on disposal of investment in associate – (103)Gain on dilution of investment in associate (4) –Gain on remeasurement of existing interest in joint venture on acquisition – (66)Loss/(profi t) on disposal of property, plant and equipment 13 (15)Amortisation of intangible assets 450 273– Intangible assets (excluding computer software) 394 218– Computer software 56 55Other expenses 4,634 4,906– Selling, marketing and distribution costs 2,582 2,562– Repairs and maintenance expenditure on property, plant and equipment 333 325– Impairment of goodwill 11 –– Impairment of property, plant and equipment 39 –– Impairment of trade and other receivables 23 25– Operating lease rentals – land and buildings 64 60– Operating lease rentals – plant, vehicles and systems 95 84– Research and development expenditure 4 7– Acquisition-related costs – 109– Other operating expenses 1,483 1,734Total net operating expenses by nature 19,372 17,260Other income (362) (513)– Revenue received from royalties (55) (43)– Dividends received from investments (1) (1)– Other operating income (306) (469)Net operating expenses 19,010 16,7471 Excise duties of US$5,755 million (2012: US$5,047 million) have been incurred during the year as follows: Latin America US$2,019 million (2012: US$1,843 million); Europe US$995 million(2012: US$1,204 million); North America US$4 million (2012: US$3 million); Africa US$418 million (2012: US$408 million); Asia Pacifi c US$1,369 million (2012: US$626 million) and SouthAfrica US$950 million (2012: US$963 million). The group’s share of MillerCoors’ excise duties incurred during the year was US$695 million (2012: US$703 million).Foreign exchange differences recognised in the profi t for the year, except for those arising on fi nancial instruments measured at fair value underIAS 39, were a loss of US$14 million (2012: US$27 million).2013US$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 107

Notes to the consolidated financial statementscontinued3. Net operating expenses continuedThe following fees were paid to a number of different accounting fi rms as auditors of various parts of the group.Group auditorsFees payable to the company’s auditor and its associates for the audit of parent companyand consolidated fi nancial statements 2 3Fees payable to company’s auditor and its associates for other services:The audit of the company’s subsidiaries 9 8Total audit fees payable to the company’s auditor 11 11Audit-related assurance services 1 2Taxation compliance services 1 1Taxation advisory services 1 6Services relating to corporate fi nance transactions – 3Other non-audit servicesServices relating to information technology 1 1 4Other 1 2Total fees payable to the company’s auditor 16 292013US$m2012US$mOther audit firmsFees payable to other auditor fi rms for:The audit of the company’s subsidiaries 1 1Taxation advisory services 3 2Services relating to corporate fi nance transactions – 1Internal audit services 1 1Other non-audit servicesServices relating to information technology 1 12 8Other 12 7Total fees payable to other audit firms 29 201 Principally relating to the business capability programme.4. Exceptional itemsExceptional items included in operating profit:Net profi t on disposal of businesses 79 1,248Business capability programme costs (141) (235)Integration and restructuring costs (91) (60)Impairments (30) –Broad-Based Black Economic Empowerment scheme charges (17) (29)Profi t on disposal of investment in associate – 103Gain on remeasurement of existing interest in joint venture on acquisition – 66Litigation – 42Transaction-related costs – (109)Net exceptional (losses)/gains included within operating profit (200) 1,0262013US$m2012US$mExceptional items included in net finance costs:Litigation-related fi nance income – 4Transaction-related net fi nance costs – (26)Net exceptional losses included within net finance costs – (22)Share of associates’ and joint ventures’ exceptional items:Impairments (5) (35)Profi ts on transactions in associates – 46Share of associates’ and joint ventures’ exceptional (losses)/gains (5) 11Non-controlling interests’ share of associates’ and joint ventures’ exceptional (losses)/gains 2 –Group’s share of associates’ and joint ventures’ exceptional (losses)/gains (3) 11Net taxation credits relating to subsidiaries’ and the group’s share of associates’ and joint ventures’exceptional items 20 24108 – SABMiller plc Annual Report 2013

4. Exceptional items continuedExceptional items included in operating profitNet profit on disposal of businessesDuring 2013 an additional profi t of US$79 million was realised in Africa in relation to the disposal in the prior year of the group’s Angolan operationsin exchange for a 27.5% interest in BIH Angola, following the successful resolution of certain matters leading to the release of provisions.In 2012 a profi t of US$1,195 million arose in Europe on the disposal of the group’s Russian and Ukrainian businesses in exchange for a 24%interest in the enlarged Anadolu Efes group; a profi t of US$67 million arose in Africa on the disposal of the group’s Angolan operations inexchange for a 27.5% interest in BIH Angola; partially offset by a loss of US$14 million incurred in Europe primarily in relation to the recyclingof the foreign currency translation reserve on the disposal of the distribution business in Italy.Business capability programme costsThe business capability programme will streamline fi nance, human resources and procurement activities through the deployment of globalsystems and introduce common sales, distribution and supply chain management systems. Costs of US$141 million have been incurred inthe year (2012: US$235 million).Integration and restructuring costsDuring 2013 US$74 million of integration and restructuring costs were incurred in Asia Pacifi c following the Foster’s and the Pacifi c Beveragesacquisitions, including the closure of certain beverage lines, and US$17 million of restructuring costs were incurred in South Africa: Beverages.In 2012 US$34 million of restructuring costs were incurred in Latin America, principally in Ecuador, Peru and the regional offi ce, andUS$26 million of integration costs were incurred in Asia Pacifi c following the Foster’s and Pacifi c Beverages acquisitions.ImpairmentsDuring 2013 a US$30 million (2012: US$nil) impairment charge was incurred in respect of the Vietnam business in Asia Pacifi c. The impairmentcharge comprised US$11 million against goodwill and US$19 million against property, plant and equipment.Broad-Based Black Economic Empowerment scheme chargesUS$17 million (2012: US$29 million) of charges have been incurred in relation to the Broad-Based Black Economic Empowerment (BBBEE)scheme in South Africa. This represents the continuing IFRS 2 share-based payment charge in respect of the employee element ofthe scheme.Profit on disposal of investment in associateIn 2012 a profi t of US$103 million was realised on the disposal of the group’s investment in its associate, Kenya Breweries Ltd, in Africa.Gain on remeasurement of existing interest in joint venture on acquisitionIn 2012 the group acquired the remaining 50% interest which it did not already own in Pacifi c Beverages from Coca-Cola Amatil Limited.This resulted in a US$66 million gain arising on the remeasurement to fair value of the group’s existing interest.LitigationIn 2012 in Europe a US$42 million anti-trust fi ne paid by Grolsch prior to its acquisition by SABMiller plc was annulled by the EU General Courtand the payment refunded.Transaction-related costsIn 2012 costs of US$109 million were incurred in relation to the Foster’s transaction.Exceptional items included in net finance costsLitigation-related interest incomeIn 2012 US$4 million of interest was received in relation to the refund of the anti-trust fi ne in Europe.Transaction-related net finance costsIn 2012 net costs of US$26 million were incurred primarily related to the Foster’s transaction and included fees relating to fi nancing facilitiesand premiums on derivative instruments which were partially offset by mark to market gains on derivative fi nancial instruments taken out inanticipation of the transaction and where hedge accounting could not be applied.Share of associates’ and joint ventures’ exceptional itemsImpairmentsDuring 2013 an impairment of a soft drinks plant in BIH Angola amounted to US$5 million. After taking account of non-controlling interests,the group’s share was US$3 million.In 2012 the group’s share of MillerCoors’ impairment of the Sparks brand amounted to US$35 million.Profits on transactions in associatesIn 2012 Tsogo Sun released deferred consideration relating to a prior acquisition of which the group’s share was US$13 million; US$10 millionprofi t arose on Tsogo Sun’s fair value accounting on the change in control on the acquisition of the outstanding stake in the Formula 1 chain;and a US$23 million profi t arose in Africa being the group’s share of Castel’s profi t on disposal of its subsidiary in Nigeria.Overview Business review Governance Financial statements Shareholder informationNet taxation credits relating to subsidiaries’ and the group’s share of associates’ and joint ventures’ exceptional itemsNet taxation credits of US$20 million (2012: US$24 million) arose in relation to exceptional items during the year and include US$nil(2012: US$13 million) in relation to MillerCoors although the tax credit is recognised in Miller Brewing Company (see note 7).SABMiller plc Annual Report 2013 – 109

Notes to the consolidated financial statementscontinued5. Net finance costsa. Finance costsInterest payable on bank loans and overdrafts 183 170Interest payable on derivatives 255 156Interest payable on corporate bonds 677 463Interest element of fi nance lease payments 1 1Net exchange losses on fi nancing activities 25 13Fair value losses on fi nancial instruments:– Fair value losses on standalone derivative fi nancial instruments 220 144– Ineffectiveness of net investment hedges¹ – 4Exceptional interest payable and similar charges¹ – 96Other fi nance charges 56 46Total finance costs 1,417 1,0932013US$m2012US$mb. Finance incomeInterest receivable 39 55Interest receivable on derivatives 355 226Fair value gains on fi nancial instruments:– Fair value gains on standalone derivative fi nancial instruments 272 170– Fair value gains on dividend-related derivatives¹ 10 3Net exchange gains on dividends¹ 2 3Exceptional interest receivable and similar income¹ – 74Other fi nance income 4 –Total finance income 682 531Net finance costs 735 5621 These items have been excluded from the determination of adjusted earnings per share. Adjusted net fi nance costs are therefore US$747 million (2012: US$542 million).Refer to note 22 – Financial risk factors for interest rate risk information.6. Employee and key management compensation costsa. Employee costsWages and salaries 2,154 2,038Share-based payments 201 161Social security costs 215 193Pension costs 128 112Post-retirement benefi ts other than pensions 11 132013US$m2012US$m2,709 2,517Of the US$2,709 million employee costs shown above, US$16 million (2012: US$15 million) has been capitalised within intangible assets andproperty, plant and equipment.110 – SABMiller plc Annual Report 2013

6. Employee and key management compensation costs continuedb. Employee numbersThe average monthly number of employees are shown on a full-time equivalent basis, excluding employees of associated and joint ventureundertakings and including executive directors.2013Number2012NumberLatin America 29,882 26,933Europe 10,489 14,095North America 82 76Africa 12,652 13,596Asia Pacifi c 5,128 3,804South Africa 11,438 11,939Corporate 815 70170,486 71,144c. Key management compensationThe directors of the group and members of the executive committee (excom) are defi ned as key management. At 31 March 2013 there were26 (2012: 27) key management.Salaries and short-term employee benefi ts 34 32Post-employment benefi ts 2 2Share-based payments 61 36d. Directors2013US$m2013US$m2012US$m97 70Aggregate emoluments £6,689,562 (2012: £6,087,153) 11 10Aggregate gains made on the exercise of share options or vesting of share awards 12 15Notional contributions to unfunded retirement benefi ts scheme £767,000 (2012: £562,679) 1 12012US$m24 26At 31 March 2013 two directors (2012: one) had retirement benefi ts accruing under money purchase pension schemes. Company contributionsto money purchase pension schemes during the year amounted to £11,364 (2012: £nil).Full details of individual directors’ remuneration are given in the directors’ remuneration report on pages 66 to 85.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 111

Notes to the consolidated financial statementscontinued7. TaxationCurrent taxation 1,118 957– Charge for the year 1,131 986– Adjustments in respect of prior years (13) (29)Withholding taxes and other remittance taxes 170 137Total current taxation 1,288 1,094Deferred taxation (87) 32– (Credit)/charge for the year (28) 60– Adjustments in respect of prior years 5 (3)– Rate change (64) (25)Taxation expense 1,201 1,1262013US$m2012US$mTax credit relating to components of other comprehensive loss is as follows:Deferred tax credit on actuarial gains and losses (28) (71)Deferred tax credit on fi nancial instruments (6) (30)(34) (101)Total current tax 1,288 1,094Total deferred tax (121) (69)Total taxation 1,167 1,025Effective tax rate (%) 27.0 27.5UK taxation included in the aboveCurrent taxation – –Withholding taxes and other remittance taxes 133 39Total current taxation 133 39Deferred taxation 24 (24)UK taxation expense 157 15See the fi nancial defi nitions section for the defi nition of the effective tax rate. The calculation is on a basis consistent with that used in prioryears and is also consistent with other group operating metrics. Tax on amortisation of intangible assets (excluding computer software) wasUS$135 million (2012: US$72 million).MillerCoors is not a taxable entity. The tax balances and obligations therefore remain with Miller Brewing Company as a 100% subsidiary of thegroup. This subsidiary’s tax charge includes tax (including deferred tax) on the group’s share of the taxable profi ts of MillerCoors and includestax in other comprehensive income on the group’s share of MillerCoors’ taxable items included within other comprehensive income.Tax rate reconciliationProfi t before taxation 4,712 5,603Less: Share of post-tax results of associates and joint ventures (1,244) (1,152)2013US$m2012US$m3,468 4,451Tax charge at standard UK rate of 24% (2012: 26%) 832 1,157Exempt income (242) (413)Other incentive allowances (20) (63)Expenses not deductible for tax purposes 157 47Deferred tax asset not recognised 51 30Initial recognition of deferred taxation (28) (10)Tax impact of MillerCoors joint venture 180 179Withholding taxes and other remittance taxes 170 137Other taxes 35 28Adjustments in respect of foreign tax rates 124 90Adjustments in respect of prior periods (8) (32)Deferred taxation rate change (64) (25)Deferred taxation on unremitted earnings 14 1Total taxation expense 1,201 1,126112 – SABMiller plc Annual Report 2013

8. Earnings per share2013US cents2012US centsBasic earnings per share 205.9 266.6Diluted earnings per share 203.5 263.8Headline earnings per share 204.5 179.8Adjusted basic earnings per share 238.7 214.8Adjusted diluted earnings per share 236.0 212.5The weighted average number of shares was:2013Millions ofshares2012Millions ofsharesOrdinary shares 1,667 1,661Treasury shares (72) (72)EBT ordinary shares (5) (6)Basic shares 1,590 1,583Dilutive ordinary shares 19 17Diluted shares 1,609 1,600The calculation of diluted earnings per share excludes 6,332,436 (2012: 8,362,920) share options that were non-dilutive for the year becausethe exercise price of the option exceeded the fair value of the shares during the year, 21,226,441 (2012: 14,799,716) share awards that werenon-dilutive for the year because the performance conditions attached to the share awards have not been met and nil (2012: nil) shares inrelation to the employee component of the BBBEE scheme that were non-dilutive for the year. These share incentives could potentially diluteearnings per share in the future.Incentives involving 10,601,120 shares were granted after 31 March 2013 and before the date of signing of these fi nancial statements.Adjusted and headline earningsThe group presents an adjusted earnings per share fi gure which excludes the impact of amortisation of intangible assets (excluding computersoftware), certain non-recurring items and post-tax exceptional items in order to present an additional measure of performance for the yearsshown in the consolidated fi nancial statements. Adjusted earnings per share has been based on adjusted earnings for each fi nancial year andon the same number of weighted average shares in issue as the basic earnings per share calculation. Headline earnings per share has beencalculated in accordance with the South African Circular 3/2012 entitled ‘Headline Earnings’ which forms part of the listing requirements forthe JSE Ltd (JSE). The adjustments made to arrive at headline earnings and adjusted earnings are as follows.Profi t for the year attributable to owners of the parent 3,274 4,221Headline adjustmentsImpairment of goodwill 11 –Impairment of property, plant and equipment 39 –Loss/(profi t) on disposal of property, plant and equipment 13 (15)Net profi t on disposal of businesses (79) (1,242)Profi t on disposal of investments in associates – (103)Gain on dilution of investments in associates (4) –Gain on remeasurement of existing interest in joint venture on acquisition – (66)Tax effects of these items (14) 12Non-controlling interests’ share of the above items (3) 40Share of associates’ and joint ventures’ headline adjustments, net of tax and non-controlling interests 15 –Headline earnings 3,252 2,847Business capability programme costs 141 235Broad-Based Black Economic Empowerment scheme charges 17 29Integration and restructuring costs 71 60Net gain on fair value movements on capital items¹ (12) (2)Amortisation of intangible assets (excluding computer software) 394 218Transaction-related costs – 109Litigation – (42)Litigation-related fi nance income – (4)Transaction-related net fi nance costs – 26Tax effects of the above items (137) (101)Non-controlling interests’ share of the above items (8) (7)Share of associates’ and joint ventures’ headline adjustments, net of tax and non-controlling interests 78 32Adjusted earnings 3,796 3,4002013US$m2012US$mOverview Business review Governance Financial statements Shareholder information1 This does not include all fair value movements but includes those in relation to capital items for which hedge accounting cannot be applied.SABMiller plc Annual Report 2013 – 113

Notes to the consolidated financial statementscontinued9. DividendsEquity2012 Final dividend paid: 69.5 US cents (2011: 61.5 US cents) per ordinary share 1,125 9732013 Interim dividend paid: 24.0 US cents (2012: 21.5 US cents) per ordinary share 392 3512013US$m2012US$m1,517 1,324In addition, the directors are proposing a fi nal dividend of 77 US cents per share in respect of the fi nancial year ended 31 March 2013 whichwill absorb an estimated US$1,227 million of shareholders’ funds. If approved by shareholders, the dividend will be paid on 23 August 2013to shareholders registered on the London and Johannesburg registers as at 16 August 2013. The total dividend per share for the year is101 US cents (2012: 91 US cents).Treasury shares do not attract dividends and the employee benefi t trusts have both waived their right to receive dividends (further informationcan be found in note 26).10. GoodwillUS$mCostAt 1 April 2011 12,309Exchange adjustments 188Acquisitions – through business combinations 8,091Disposals (63)Transfers to disposal group classifi ed as held for sale (29)At 31 March 2012 1 20,496Exchange adjustments (301)Acquisitions – through business combinations (provisional) (see note 29) 3Transfers to disposal group classifi ed as held for sale (see note 18) (13)At 31 March 2013 20,185Accumulated impairmentAt 1 April 2011 355Exchange adjustments (20)Disposals (10)At 31 March 2012 325Exchange adjustments (13)Impairment 11At 31 March 2013 323Net book amountAt 1 April 2011 11,954At 31 March 2012 1 20,171At 31 March 2013 19,8621 As restated (see note 28).2013Provisional goodwill arose on the acquisition through business combination in the year of Darbrew Limited in Tanzania. The fair value exercisein respect of this business combination has yet to be completed.2012Goodwill arose on the acquisition through business combinations of Foster’s and Pacifi c Beverages in Australia and International Breweries plcin Nigeria. The fair value exercises in respect of these business combinations are now complete.114 – SABMiller plc Annual Report 2013

10. Goodwill continuedGoodwill is monitored principally on an individual country basis and the net book value is allocated by cash generating unit (CGU) as follows.CGUs:Latin America:– Central America 803 819– Colombia 4,706 4,809– Peru 1,796 1,744– Other Latin America 224 243Europe:– Czech Republic 901 976– Netherlands 100 104– Italy 414 431– Poland 1,168 1,218– Other Europe 75 77North America 256 256Africa 250 252Asia Pacifi c:– Australia 8,319 8,262– India 335 350– Other Asia Pacifi c 1 12South Africa 514 6181 As restated (see note 28).2013US$m2012 1US$m19,862 20,171AssumptionsThe recoverable amount for a CGU is determined based on value in use calculations. Value in use is determined by discounting the futurepost-tax cash fl ows generated from continuing use of the CGU using a post-tax discount rate, as this closely approximates to applying pre-taxdiscount rates to pre-tax cash fl ows. Where a potential impairment is identifi ed using post-tax cash fl ows and post-tax discount rates, theimpairment review is reperformed on a pre-tax basis and the fair value less cost to sell calculated, in order to determine the impairment lossto be recorded. The key assumptions for the value in use calculations are as follows.Expected volume compound annual growth rate (CAGR) – Cash fl ows are based on fi nancial forecasts approved by management foreach CGU covering fi ve-year periods and are dependent on management’s expected volume CAGRs which have been determined based onpast experience and planned initiatives, and with reference to external sources in respect of macroeconomic assumptions. Expected growthrates over the fi ve-year forecast period are generally higher than the long-term average growth rates for the economies in which the CGUsoperate as a steady state is not necessarily expected to be reached in this period.Discount rate – The discount rate (weighted average cost of capital) is calculated using a methodology which refl ects the returns fromUnited States Treasury notes with a maturity of 20 years, an equity risk premium adjusted for specifi c industry and country risks, and infl ationdifferentials. The group applies local post-tax discount rates to local post-tax cash fl ows.Long-term growth rate – Cash fl ows after the fi rst fi ve-year period are extrapolated using a long-term growth rate, in order to calculatethe terminal recoverable amount. The long-term growth rate is estimated using historical trends and expected future trends in infl ation rates,based on external data.The following table presents the key assumptions used in the value in use calculations in each of the group’s operating segments:Expected volumeCAGRs2014–2018%Post-taxdiscount rates%Long-termgrowth rates%Latin America 4.3–6.4 7.6–13.2 2.0–5.1Europe 1.3–6.0 6.6–10.8 2.0–3.0North America 8.5 6.7 2.5Africa 7.6–8.8 13.5–16.8 6.0–9.5Asia Pacifi c 2.1–6.3 7.4–12.7 3.0–6.5South Africa 3.3 10.6 4.5The most material balance is in Australia. For the goodwill in Australia to be at risk of impairment the following situations would need to occur:future compound revenue growth to reduce to a level where operating profi t growth is limited to the long-term growth rate; or long-term growthin nominal terms to fall below 1.5%; or the discount rate to rise to 8.7% or higher.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 115

Notes to the consolidated financial statementscontinued10. Goodwill continuedImpairment reviews resultsA US$30 million impairment loss has been recognised in respect of SABMiller Vietnam Company Limited in Asia Pacifi c, which was principallydue to a deterioration in trading. The impairment loss has been allocated to goodwill (US$11 million) and property, plant and equipment(US$19 million).Sensitivities to assumptionsThe group’s impairment reviews are sensitive to changes in the key assumptions described above. Based on the group’s sensitivity analysis,a reasonably possible change in a single assumption will not cause an impairment loss in any of the group’s CGUs.11. Intangible assetsBrandsUS$mComputersoftwareUS$mCostAt 1 April 2011 4,860 540 48 5,448Exchange adjustments 304 (32) 12 284Additions – separately acquired 6 165 – 171Acquisitions – through business combinations 4,832 – 595 5,427Transfers from property, plant and equipment – 3 – 3Disposals (28) (30) – (58)At 31 March 2012¹ 9,974 646 655 11,275Exchange adjustments (11) (36) 2 (45)Additions – separately acquired – 149 – 149Acquisitions – through business combinations (see note 29) 2 – – 2Transfers to disposal group classifi ed as held for sale (see note 18) (9) – – (9)Disposals (4) (7) – (11)At 31 March 2013 9,952 752 657 11,361OtherUS$mTotalUS$mAccumulated amortisation and impairmentAt 1 April 2011 782 275 27 1,084Exchange adjustments 23 (17) (2) 4Amortisation 201 55 17 273Disposals (18) (26) – (44)At 31 March 2012 988 287 42 1,317Exchange adjustments (9) (18) (1) (28)Amortisation 335 56 59 450Transfers to disposal group classifi ed as held for sale (see note 18) (7) – – (7)Disposals – (6) – (6)At 31 March 2013 1,307 319 100 1,726Net book amountAt 1 April 2011 4,078 265 21 4,364At 31 March 2012¹ 8,986 359 613 9,958At 31 March 2013 8,645 433 557 9,6351 As restated (see note 28).At 31 March 2013 signifi cant individual brands included within the carrying value of intangible assets are as follows.2013US$m2012US$mAmortisationperiodremaining(years)Brand carrying valueCarlton (Australia) 2,139 2,181 39Águila (Colombia) 1,478 1,557 32Victoria Bitter (Australia) 1,080 1,101 39Cristal (Peru) 646 646 32Grolsch (Netherlands) 421 451 35116 – SABMiller plc Annual Report 2013

12. Property, plant and equipmentAssets incourse ofconstructionUS$mLand andbuildingsUS$mPlant,vehiclesand systemsUS$mReturnablecontainersUS$mCostAt 1 April 2011 358 3,743 8,787 2,245 15,133Exchange adjustments (15) (99) (350) (106) (570)Additions 801 20 369 306 1,496Acquisitions – through business combinations 54 347 373 12 786Breakages and shrinkage – – – (73) (73)Transfers (563) 118 383 62 –Transfers to intangible assets (3) – – – (3)Transfers to disposal group classifi ed as held for sale – (10) (44) – (54)Disposals (48) (354) (1,268) (379) (2,049)At 31 March 2012¹ 584 3,765 8,250 2,067 14,666Exchange adjustments (18) (163) (505) (147) (833)Additions 720 25 324 296 1,365Acquisitions – through business combinations (see note 29) – 1 1 – 2Breakages and shrinkage – – – (71) (71)Transfers (733) 115 532 86 –Transfers from other assets – – 3 – 3Transfers to disposal group classifi ed as held for sale (see note 18) – (2) (10) – (12)Disposals (11) (18) (313) (138) (480)At 31 March 2013 542 3,723 8,282 2,093 14,640Accumulated depreciation and impairmentAt 1 April 2011 – 667 4,016 1,119 5,802Exchange adjustments – (29) (174) (57) (260)Provided during the year – 78 594 237 909Breakages and shrinkage – – – (26) (26)Transfers to disposal group classifi ed as held for sale – (2) (25) – (27)Disposals – (42) (635) (217) (894)At 31 March 2012 – 672 3,776 1,056 5,504Exchange adjustments – (43) (273) (82) (398)Provided during the year – 78 563 226 867Breakages and shrinkage – – – (24) (24)Impairment – 4 35 – 39Transfers to disposal group classifi ed as held for sale (see note 18) – (1) (6) – (7)Disposals – (8) (293) (99) (400)At 31 March 2013 – 702 3,802 1,077 5,581Net book amountAt 1 April 2011 358 3,076 4,771 1,126 9,331At 31 March 2012¹ 584 3,093 4,474 1,011 9,162At 31 March 2013 542 3,021 4,480 1,016 9,0591 As restated (see note 28).As a result of the annual impairment reviews, US$19 million of impairment losses have been recognised in the year (2012: US$nil) (see note 10).Included in land and buildings is freehold land with a cost of US$725 million (2012: US$742 million) which is not depreciated.TotalUS$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 117

Notes to the consolidated financial statementscontinued12. Property, plant and equipment continuedIncluded in plant, vehicles and systems are the following amounts relating to assets held under fi nance leases.Net book amount 40 342013US$m2012US$mIncluded in the amounts above are the following amounts in respect of borrowing costs capitalised.At 1 April 53 56Exchange adjustments (4) (2)Amortised during the year – (1)At 31 March 49 532013US$m2012US$mBorrowing costs of US$nil (2012: US$nil) were capitalised during the year.Borrowings are secured by various of the group’s property, plant and equipment with an aggregate net book value of US$21 million(2012: US$20 million).13. Investments in joint venturesA list of the group’s signifi cant investments in joint ventures, including the name, country of incorporation and proportion of ownership interestis given in note 34 to the consolidated fi nancial statements.At 1 April 2011 5,813Investments in joint ventures 288Transfer to subsidiary undertaking (100)Share of results retained 671Share of other comprehensive loss (256)Dividends received (896)At 31 March 2012 5,520Investments in joint ventures 272Share of results retained 717Share of other comprehensive loss (76)Dividends received (886)At 31 March 2013 5,547US$mOn 13 January 2012 the remaining 50% interest in Pacifi c Beverages was purchased and from this date the company has been accountedfor as a subsidiary.Summarised fi nancial information for the group’s interest in joint ventures is shown below.Revenue 5,214 5,174Expenses (4,497) (4,502)Profi t after tax 717 6722013US$m2012US$mNon-current assets 5,626 5,613Current assets 593 573Current liabilities (521) (528)Non-current liabilities (829) (801)118 – SABMiller plc Annual Report 2013

14. Investments in associatesA list of the group’s signifi cant investments in associates, including the name, country of incorporation and proportion of ownership interest isgiven in note 34 to the consolidated fi nancial statements.At 1 April 2011 2,719Exchange adjustments (102)Investments in associates 2,056Repayment of investments by associates (14)Acquisitions – through business combinations 186Disposal of investments in associates (104)Share of results retained 481Dividends receivable (150)At 31 March 2012 1 5,072Exchange adjustments (161)Investments in associates 106Disposal of investments in associates (21)Share of results retained 527Share of gains recognised in other comprehensive loss 6Dividends receivable (113)At 31 March 2013 5,4161 As restated (see note 28).2013On 7 November 2012 Foster’s sold its 49.9% interest in Foster’s USA LLC to MillerCoors LLC at no gain or loss to the group. Foster’s LLC isnow wholly owned by MillerCoors LLC.2012On 1 January 2012 the group acquired a 27.5% interest in BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola) in exchangefor contributing its Angolan businesses, including its associate, Empresa de Cervejas N’Gola SARL, into BIH Angola. Castel acquired theremaining 72.5% in BIH Angola, having contributed its Angolan businesses into BIH Angola.On 6 March 2012 the group completed its strategic alliance with Anadolu Efes. The group’s Russian business, SABMiller RUS LLC, andUkrainian business, PJSC Miller Brands Ukraine, were contributed to Anadolu Efes, in exchange for a 24% equity stake in the enlargedAnadolu Efes group.On 25 November 2011 the group disposed of its effective 12% investment in Kenya Breweries Ltd, generating a profi t of US$103 million.The analysis of associate undertakings between listed and unlisted investments is shown below.Listed 2,580 2,536Unlisted 2,836 2,5365,416 5,072As at 31 March the market value of listed investments included above is:– Anadolu Efes 2,318 1,985– Distell Group Ltd 704 574– Delta Corporation Ltd 351 204– Tsogo Sun Holdings Ltd 1,166 1,0321 As restated (see note 28).Summarised fi nancial information for associates for total assets, total liabilities, revenue and profi t or loss on a 100% basis is shown below.Total assets 23,249 18,731Total liabilities (8,890) (6,231)Revenue 19,046 12,963Net profi t 2,155 1,7602013US$m2013US$mUS$m2012 1US$m2012 1US$mOverview Business review Governance Financial statements Shareholder informationSome of the group’s investments in associated undertakings which operate in African countries are also subject to local exchange controlregulations. These local exchange control regulations provide for restrictions on exporting capital from those countries, other than throughnormal dividends.SABMiller plc Annual Report 2013 – 119

Notes to the consolidated financial statementscontinued15. InventoriesRaw materials and consumables 691 670Work in progress 123 122Finished goods and goods for resale 361 4562013US$m2012 1US$m1,175 1,2481 As restated (see note 28).The following amount of inventories are expected to be utilised after 12 months.Raw materials and consumables 48 432013US$m2012US$mThere were no borrowings secured on the inventories of the group (2012: US$nil).An impairment charge of US$15 million was recognised in respect of inventories during the year (2012: US$12 million).16. Trade and other receivablesTrade receivables 1,740 1,545Less: provision for impairment (140) (140)Trade receivables – net 1,600 1,405Other receivables 392 492Less: provision for impairment (12) (12)Other receivables – net 380 480Amounts owed by associates 68 205Amounts owed by joint ventures – trade 5 6Prepayments and accrued income 158 244Total trade and other receivables 2,211 2,3402013US$m2012 1US$mAnalysed as:CurrentTrade receivables – net 1,584 1,389Other receivables – net 274 370Amounts owed by associates 59 205Amounts owed by joint ventures – trade 5 6Prepayments and accrued income 145 2342,067 2,204Non-currentTrade receivables – net 16 16Other receivables – net 106 110Amounts owed by associates 9 –Prepayments and accrued income 13 10144 1361 As restated (see note 28).The net carrying values of trade and other receivables are considered a close approximation of their fair values.120 – SABMiller plc Annual Report 2013

16. Trade and other receivables continuedAt 31 March 2013 trade and other receivables of US$466 million (2012: US$441 million) were past due but not impaired. These relate tocustomers of whom there is no recent history of default. The ageing of these trade and other receivables is shown below.FullyperformingUS$mWithin30 daysUS$m30-60 daysUS$m60-90 daysUS$m90-180 daysUS$mPast dueOver180 daysUS$mAt 31 March 2013Trade receivables 1,255 181 62 15 18 42Other receivables 290 44 18 5 4 15Amounts owed by associates 6 2 – 3 4 53Amounts owed by joint ventures – trade 5 – – – – –At 31 March 2012 1Trade receivables 1,140 129 58 15 23 29Other receivables 353 16 13 4 18 3Amounts owed by associates 72 8 6 – 12 107Amounts owed by joint ventures – trade 6 – – – – –1 As restated (see note 28).The group holds collateral as security for past due trade receivables to the value of US$17 million (2012: US$28 million). Collateral held primarilyincludes bank guarantees and charges over assets.At 31 March 2013 trade receivables of US$167 million (2012: US$151 million) were determined to be specifi cally impaired and provided for. Theamount of the provision at 31 March 2013 was US$140 million (2012: US$140 million) and refl ects trade receivables from customers which areconsidered to be experiencing diffi cult economic situations. It was assessed that a portion of these receivables is expected to be recovered.The group holds collateral as security against specifi cally impaired trade receivables with a fair value of US$1 million (2012: US$1 million).At 31 March 2013 other receivables of US$16 million (2012: US$13 million) were determined to be specifi cally impaired and provided for. Theamount of the provision at 31 March 2013 was US$12 million (2012: US$12 million) and refl ects loans to customers which are considered tobe experiencing diffi cult economic situations. It was assessed that a portion of these receivables is expected to be recovered. The group heldcollateral as security against specifi cally impaired other receivables at 31 March 2013 of US$1 million (2012: US$nil).The carrying amounts of trade and other receivables are denominated in the following currencies.SA rand 340 413US dollars 238 355Australian dollars 260 385Euro 246 241Colombian peso 167 162Czech koruna 91 89British pound 81 79Polish zloty 211 142Indian rupee 136 110Other currencies 441 3642,211 2,3401 As restated (see note 28).Movements on the provisions for impairment of trade receivables and other receivables are as follows.Trade receivables2013US$m2012US$m2013US$m2012 1US$mOther receivablesAt 1 April (140) (147) (12) (14)Provision for receivables impairment (23) (25) – –Receivables written off during the year as uncollectible 12 7 – 1Acquisitions – through business combinations – (5) – –Disposals 4 20 – –Transfers to disposal group classifi ed as held for sale – 1 – –Exchange adjustments 7 9 – 1At 31 March (140) (140) (12) (12)2013US$m2012US$mOverview Business review Governance Financial statements Shareholder informationThe creation of provisions for impaired receivables is included in net operating expenses in the income statement (see note 3).SABMiller plc Annual Report 2013 – 121

Notes to the consolidated financial statementscontinued17. Cash and cash equivalentsShort-term deposits 1,684 103Cash at bank and in hand 487 6422013US$m2012US$m2,171 745Cash and short-term deposits of US$146 million (2012: US$144 million) are held in African countries (including South Africa) and are subject tolocal exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from those countries,other than through normal dividends.The group operates notional cash pools. The structures facilitate interest and balance compensation of cash and bank overdrafts. Thesenotional pooling arrangements meet the set-off rules under IFRS and, as a result, the cash and overdraft balances have been reported neton the balance sheet.Effective 1 January 2012 the group combined the operational management of its Angolan businesses in Africa with the Angolan businessesof its associate, Castel. All of the Angolan businesses, in which the group retains an associate interest, have been managed from that dateby Castel. As a result, a participation in a bank loan of US$100 million previously owed by an Angolan subsidiary of the group was no longerentitled to be offset within borrowings.During the year ended 31 March 2013 Castel has paid US$100 million to the group to cover the group’s exposure in respect of the loanparticipation deposit. This has resulted in a payable to associate being recorded in the consolidated balance sheet, as the loan participationdeposit and the payable to associate are held with different counterparties and therefore are unable to be offset. In accordance with IAS 7‘Statement of Cash Flows’, the loan participation has been separately disclosed on the balance sheet as a loan participation deposit, andin the cash fl ow statement has not been treated as a cash and cash equivalent as it is not readily convertible into cash.18. Disposal group held for saleDuring 2013 the group agreed to sell its milk and juice business in Panama, subject to regulatory approvals. Accordingly the assets andliabilities related to the milk and juice business in Panama have been presented as held for sale, and the disposal group presented within theLatin America segment in accordance with IFRS 8 ‘Operating segments’.In 2012 the assets and liabilities related to Foster’s interests in its Fijian beverage operations, Foster’s Group Pacifi c Limited, were presentedas held for sale, and the disposal group presented within Asia Pacifi c. The Fijian beverage operations were disposed of on 7 September 2012.a. Assets of disposal group classified as held for saleGoodwill 13 29Intangible assets 2 –Property, plant and equipment 5 27Inventories 3 18Trade and other receivables – 523 792013US$m2012US$mb. Liabilities of disposal group classified as held for saleBorrowings – 1Trade and other payables – 3Provisions – 1Deferred tax liabilities 1 21 72013US$m2012US$m122 – SABMiller plc Annual Report 2013

19. Trade and other payablesTrade payables 1,236 1,262Accruals 873 1,076Deferred income 9 14Containers in the hands of customers 504 449Amounts owed to associates 150 42Amounts owed to joint ventures – trade 14 17Deferred consideration for acquisitions 10 12Excise duty payable 363 383VAT and other taxes payable 239 248Other payables 738 736Total trade and other payables 4,136 4,239Analysed as:CurrentTrade payables 1,236 1,262Accruals 873 1,076Deferred income 5 6Containers in the hands of customers 504 449Amounts owed to associates – trade 50 42Amounts owed to joint ventures – trade 14 17Deferred consideration for acquisitions 4 3Excise duty payable 363 383VAT and other taxes payable 239 248Other payables 716 6412013US$m2012 1US$m4,004 4,127Non-currentDeferred income 4 8Amounts owed to associates 100 –Deferred consideration for acquisitions 6 9Other payables 22 951 As restated (see note 28).20. Deferred taxationThe movement on the net deferred tax liability is shown below.132 112At 1 April 3,602 2,394Exchange adjustments (45) 52Acquisitions – through business combinations (see note 29) 1 1,270Transfers to disposal group classifi ed as held for sale (see note 18) (1) (2)Disposals – (26)Rate change (64) (25)Transfers to current tax – (17)Charged to the income statement (23) 57Deferred tax on items charged to other comprehensive loss:– Financial instruments (6) (30)– Actuarial gains and losses (28) (71)At 31 March 3,436 3,6021 As restated (see note 28).2013US$m2012 1US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 123

Notes to the consolidated financial statementscontinued20. Deferred taxation continuedThe movements in deferred tax assets and liabilities (after offsetting of balances as permitted by IAS 12) during the year are shown below.Fixed assetallowancesUS$mPensionsand postretirementbenefitprovisionsUS$mIntangiblesUS$mFinancialinstrumentsUS$mInvestment inMillerCoors Other timingjoint venture differencesUS$m US$mDeferred tax liabilitiesAt 1 April 2011 711 (16) 1,187 (48) 748 (4) 2,578Exchange adjustments (34) (1) 95 – – (13) 47Acquisitions – through business combinations (36) – 1,600 5 – (297) 1,272Disposals (49) – (2) – – (4) (55)Rate change – – – – – (25) (25)Transfers to current tax 1 – – – – (16) (15)Transfers to/(from) deferred tax assets 2 – – – – (23) (21)Transfers to disposal group classifi ed as held for sale – – – (2) – – (2)Charged/(credited) to the income statement 112 5 (62) – 37 (51) 41Deferred tax on items charged to othercomprehensive loss:– Financial instruments – – – (1) (29) – (30)– Actuarial gains and losses – (2) – – (69) – (71)At 31 March 2012 1 707 (14) 2,818 (46) 687 (433) 3,719Exchange adjustments (51) – 2 – – 2 (47)Acquisitions – through business combinations – – 1 – – – 1Rate change (64) – – – – – (64)Transfers from deferred tax assets (11) – – – – (14) (25)Transfers to disposal group classifi ed as held for sale – – (1) – – – (1)Charged/(credited) to the income statement 104 22 (125) (2) 44 (85) (42)Deferred tax on items charged/(credited) to othercomprehensive loss:– Financial instruments – – – 1 (7) – (6)– Actuarial gains and losses – (6) – – (22) – (28)At 31 March 2013 685 2 2,695 (47) 702 (530) 3,507TotalUS$m1 As restated (see note 28).Fixed assetallowancesUS$mProvisionsand Other timingaccruals differencesUS$m US$mDeferred tax assetsAt 1 April 2011 – 60 124 184Exchange adjustments 1 (1) (5) (5)Acquisitions – through business combinations 2 – – 2Disposals (4) (7) (18) (29)Transfers to current tax – – 2 2Rate change – 1 (1) –Transfers from/(to) deferred tax liabilities 2 (1) (22) (21)(Charged)/credited to the income statement (1) 5 (20) (16)At 31 March 2012 – 57 60 117Exchange adjustments – (1) (1) (2)Transfers (to)/from deferred tax liabilities (11) (20) 6 (25)Charged to the income statement (4) (2) (13) (19)At 31 March 2013 (15) 34 52 71TotalUS$m124 – SABMiller plc Annual Report 2013

20. Deferred taxation continuedDeferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and the deferred tax assets and liabilitiesrelate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is anintention to settle the balances on a net basis.The deferred tax asset arises due to timing differences in Europe, Africa, Asia Pacifi c, and Latin America and, in the prior year, also Corporate.Given both recent and forecast trading, the directors are of the opinion that the level of profi ts in the foreseeable future is more likely than notto be suffi cient to recover these assets.Deferred tax liabilities of US$3,449 million (2012: US$3,662 million, restated) are expected to fall due after more than one year.Deferred tax assets of US$52 million (2012: US$71 million) are expected to be recovered after more than one year.Unrecognised deferred tax assetsDeferred tax assets have not been recognised in respect of the following items:Tax losses 345 161Tax credits 1,318 242Depreciation in excess of capital allowances 16 13Share-based payments 29 25Other deductible temporary differences 60 1072013US$m2012US$m1,768 548Deferred tax assets in respect of tax losses are not recognised unless there is convincing evidence that there will be suffi cient profi ts in futureyears to recover the assets. A signifi cant part of the tax losses arises in the UK and the value has been calculated at the substantively enactedrate of 23%. It has been announced that the rate will fall to 20% commencing 1 April 2015. The impact of this reduction is not anticipated tohave a material impact on the fi nancial statements. The tax losses do not expire.Deferred tax assets in respect of tax credits arising which are carried forward for offset against future profi ts are not recognised unless thereis absolute certainty that future profi ts will arise. US$968 million (2012: US$242 million) of such tax credits expire within 10 years.Deferred tax is recognised on the unremitted earnings of overseas subsidiaries where there is an intention to distribute those reserves.A deferred tax liability of US$16 million (2012: US$37 million) has been recognised. A deferred tax liability of US$80 million (2012: US$51 million)has also been recognised in respect of unremitted profi ts of associates where a dividend policy is not in place. No deferred tax has beenrecognised on unremitted earnings of overseas subsidiaries where the group is able to control the timing of the reversal of these differencesand it is not probable that they will not reverse in the foreseeable future. Similarly no tax is provided where there are plans to remit overseasearnings of subsidiaries but it is not expected that such distributions will give rise to a tax liability.As a result of UK legislation which largely exempts overseas dividends from tax, the temporary differences arising on unremitted profi ts areunlikely to lead to additional corporate taxes. However, remittance to the UK of those earnings may still result in a tax liability, principally asa result of withholding taxes levied by the overseas tax jurisdictions in which those subsidiaries operate.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 125

Notes to the consolidated financial statementscontinued21. BorrowingsCurrentSecuredOverdrafts 9 10Obligations under fi nance leases 8 5Other secured loans 5 62013US$m2012US$m22 21UnsecuredUS$1,100 million 5.5% Notes due 2013 1,2,3,4 1,111 –COP338,520 million IPC + 7.5% Ordinary Bonds due 2013 5 200 –US$550 million 5.7% Notes due 2014 1,2,4,6 570 –ZAR1,600 million 9.935% Notes due 2012 2,7 – 209COP370,000 million IPC + 8.18% Ordinary Bonds due 2012 5 – 220Other unsecured loans 363 484Overdrafts 203 1282,447 1,041Total current borrowings 2,469 1,062The fair value of current borrowings equals the carrying amount, as the impact of discounting is not signifi cant.1 The notes are redeemable in whole or in part at any time at the option of the issuer at a redemption price equal to the make-whole amount.2 The notes are redeemable in whole but not in part at the option of the issuer upon the occurrence of certain changes in taxation at their principal amount with accrued and unpaid interestto the date of redemption.3 On 13 August 2003 Miller Brewing Company issued US$1,100 million, 5.5% Guaranteed Notes due August 2013. Since 1 July 2008 SABMiller plc has been the sole obligor of the notes.4 On 11 June 2012 SABMiller Holdings Inc entered into a contingent guarantee of the obligations of SABMiller plc in respect of these Notes and certain of its other present and futureexternal borrowings. The guarantee takes effect upon the occurrence of certain insolvency events in relation to SABMiller plc.5 With effect from 31 March 2011 98.7% of the 2012 bonds and 97.4% of the 2013 bonds issued by Bavaria SA have been guaranteed by SABMiller plc.6 On 17 July 2008 SABMiller plc issued US$550 million, 5.7% Notes due January 2014.7 On 19 July 2007 SABSA Holdings (Pty) Ltd issued ZAR1,600 million, 9.935% Notes due July 2012. The notes were issued under the ZAR4,000 million (increased to ZAR6,000 millionon 24 December 2008) Domestic Medium Term Note Programme established on 17 July 2007 and guaranteed by SABMiller plc.126 – SABMiller plc Annual Report 2013

21. Borrowings continuedNon-currentSecuredObligations under fi nance leases 27 16Other secured loans 4 122013US$m2012US$m31 28UnsecuredZAR1,000 million 7.125% Notes due 2018 1,2 108 –€1,000 million 1.875% Notes due 2020 2,3,4 1,275 –US$1,000 million 1.85% Notes due 2015 2,4,5 1,004 1,000US$2,000 million 2.45% Notes due 2017 2,4,5 2,020 1,993US$2,500 million 3.75% Notes due 2022 2,4,5 2,506 2,483US$1,500 million 4.95% Notes due 2042 2,4,5 1,485 1,484US$1,100 million 5.5% Notes due 2013 2,4,6,7 – 1,124€1,000 million 4.5% Notes due 2015 2,7,8 1,317 1,367US$300 million 6.625% Notes due 2033 2,4,7,9 440 416US$850 million 6.5% Notes due 2016 2,4,7,10 937 960US$550 million 5.7% Notes due 2014 2,4,7,11 – 588US$700 million 6.5% Notes due 2018 2,4,7,11 792 811PEN150 million 6.75% Notes due 2015 2,7,12 59 56US$300 million 4.875% Notes due 2014 2,4,13 312 335US$700 million 5.125% Notes due 2015 2,4,14 762 730US$300 million 7.875% Notes due 2016 2,15 364 383US$300 million 5.875% Notes due 2035 2,4,14 344 358COP640,000 million IPC + 7.3% Ordinary Bonds due 2014 16 396 391COP561,800 million IPC + 6.52% Ordinary Bonds due 2015 16 330 320COP338,520 million IPC + 7.5% Ordinary Bonds due 2013 16 – 205US$521 million (2012: US$2,169 million) unsecured loan due December 2014 17 523 2,180US$624 million (2012: US$750 million) unsecured loan due September 2016 17 621 744Other unsecured loans 453 20816,048 18,136Total non-current borrowings 16,079 18,164Total current and non-current borrowings 18,548 19,226Analysed as:Borrowings 18,301 19,067Obligations under fi nance leases 35 21Overdrafts 212 13818,548 19,226The fair value of non-current borrowings is US$16,679 million (2012: US$18,821 million). The fair values are based on a combination of marketquoted prices and cash fl ows discounted using prevailing interest rates.1 On 28 March 2013 SABSA Holdings Ltd issued ZAR1,000 million, 7.125% Notes due March 2018. The notes were issued under the ZAR6,000 million Domestic Medium Term NoteProgramme established on 13 December 2012 and guaranteed by SABMiller plc.2 The notes are redeemable in whole but not in part at the option of the issuer upon the occurrence of certain changes in taxation at their principal amount with accrued and unpaid interestto the date of redemption.3 On 6 December 2012 SABMiller Holdings Inc issued €1,000 million, 1.875% Notes due January 2020. The notes were issued under the SABMiller Holdings Inc US$3,000 millionEuro Medium Term Note Programme guaranteed by SABMiller plc.4 The notes are redeemable in whole or in part at any time at the option of the issuer at a redemption price equal to the make-whole amount.5 On 17 January 2012 SABMiller Holdings Inc issued US$1,000 million, 1.85% Notes due January 2015, US$2,000 million, 2.45% Notes due January 2017, US$2,500 million, 3.75% Notesdue January 2022 and US$1,500 million, 4.95% Notes due January 2042, guaranteed by SABMiller plc.6 On 13 August 2003 Miller Brewing Company issued US$1,100 million, 5.5% Guaranteed Notes due August 2013. Since 1 July 2008 SABMiller plc has been the sole obligor of the notes.7 On 11 June 2012 SABMiller Holdings Inc entered into a contingent guarantee of the obligations of SABMiller plc in respect of these Notes and certain of its other present and futureexternal borrowings. The guarantee takes effect upon the occurrence of certain insolvency events in relation to SABMiller plc.8 On 17 July 2009 SABMiller plc issued €1,000 million, 4.5% Notes due January 2015. The notes were issued under the SABMiller plc US$5,000 million Euro Medium Term NoteProgramme.9 On 13 August 2003 SABMiller plc issued US$300 million, 6.625% Guaranteed Notes due August 2033. Since 10 September 2010 the principal and interest in respect of the notes has notbeen guaranteed.Overview Business review Governance Financial statements Shareholder information10 On 5 July 2006 SABMiller plc issued US$850 million, 6.5% Notes due July 2016.11 On 17 July 2008 SABMiller plc issued US$550 million, 5.7% Notes due January 2014 and US$700 million, 6.5% Notes due July 2018.SABMiller plc Annual Report 2013 – 127

Notes to the consolidated financial statementscontinued21. Borrowings continued12 On 19 March 2010 SABMiller plc issued PEN150 million, 6.75% Notes due March 2015.13 On 5 October 2004 Foster’s Finance Corp issued US$300 million, 4.875% Notes due October 2014, guaranteed by Foster’s Group Pty Ltd.14 On 28 June 2005 FBG Finance Ltd issued US$700 million, 5.125% Notes due June 2015 and US$300 million, 5.875% Notes due June 2035, guaranteed by Foster’s Group Pty Ltd.15 On 3 June 1996 FBG Finance Ltd issued US$300 million, 7.875% Notes due June 2016, guaranteed by Foster’s Group Pty Ltd.16 With effect from 31 March 2011 85.5% of the 2014 bonds, 94.0% of the 2015 bonds and 97.4% of the 2013 bonds, all issued by Bavaria SA, have been guaranteed by SABMiller plc.17 On 9 September 2011 the group entered into US$12,500 million, multicurrency committed syndicated facilities primarily for the purpose of acquiring Foster’s. By 31 March 2013US$10,855 million (2012: US$9,081 million) of this facility had been voluntarily cancelled. Of the remaining US$1,645 million (2012: US$3,419 million) facility, US$500 million(2012: US$500 million) is a revolving credit facility and undrawn.Undrawn borrowing facilitiesThe group had the following undrawn committed borrowing facilities available at 31 March in respect of which all conditions precedent hadbeen met at that date.Amounts expiring:Within one year 281 774Between one and two years 17 12Between two and fi ve years 554 788In fi ve years or more 2,500 2,2362013US$m2012US$m3,352 3,810In April 2011 the group entered into a fi ve-year US$2,500 million committed syndicated revolving credit facility, with the option of two one-yearextensions. In March 2013 the maturity of this facility was extended to April 2018. The contingent guarantee referred to in footnote 7 onpage 127 extends to the obligations of SABMiller plc in respect of this facility.Maturity of obligations under finance leasesObligations under fi nance leases are as follows.The minimum lease payments under fi nance leases fall due as follows.Within one year 9 6Between one and fi ve years 24 17In fi ve years or more 10 –43 23Future fi nance charges (8) (2)Present value of fi nance lease liabilities 35 212013US$m2012US$mMaturity of non-current financial liabilitiesThe maturity profi le of the carrying amount of the group’s non-current fi nancial liabilities at 31 March was as follows.BorrowingsandoverdraftsUS$mFinanceleasesUS$mNet derivativefinancialassets 1(note 23)US$m2013TotalUS$mBorrowingsandoverdraftsUS$mFinanceleasesUS$mNet derivativefi nancialassets 1(note 23)US$mAmounts falling due:Between one and two years 4,173 7 (45) 4,135 1,964 2 (8) 1,958Between two and fi ve years 5,031 15 (235) 4,811 10,605 14 (356) 10,263In fi ve years or more 6,848 5 (303) 6,550 5,579 – (254) 5,3252012TotalUS$m16,052 27 (583) 15,496 18,148 16 (618) 17,5461 Net borrowings-related derivative fi nancial instruments only.128 – SABMiller plc Annual Report 2013

22. Financial risk factorsFinancial risk managementOverviewIn the normal course of business, the group is exposed to the following fi nancial risks:• Market risk• Credit risk• Liquidity riskThis note explains the group’s exposure to each of the above risks, aided by quantitative disclosures included throughout these consolidatedfi nancial statements, and it summarises the policies and processes that are in place to measure and manage the risks arising, including thoserelated to the management of capital.The directors are ultimately responsible for the establishment and oversight of the group’s risk management framework. An essential part ofthis framework is the role undertaken by the audit committee of the board, supported by the internal audit function, and by the chief fi nancialoffi cer, who in this regard is supported by the treasury committee and the group treasury function. Among other responsibilities, the auditcommittee reviews the internal control environment and risk management systems within the group and it reports its activities to the board.The board also receives a quarterly report on treasury activities, including confi rmation of compliance with treasury risk management policies.The group treasury function is responsible for the management of cash, borrowings and the fi nancial risks arising in relation to interest ratesand foreign exchange rates. The responsibility for the management of commodities exposures lies with the procurement functions within thegroup, including SABMiller Procurement GmbH (SABMiller Procurement, formerly Trinity Procurement GmbH), the group’s centralisedprocurement function. Risk management of key brewing and packaging materials has now been substantially transferred to SABMillerProcurement. Some of the risk management strategies include the use of derivatives, principally in the form of forward foreign currencycontracts, cross currency swaps, interest rate swaps and exchange-traded futures contracts, in order to manage the currency, interest rateand commodities exposures arising from the group’s operations. The group also purchases call options where these provide a cost-effectivehedging alternative and, where they form part of an option collar strategy, the group also sells put options to reduce or eliminate the cost ofpurchased options. It is the policy of the group that no trading in fi nancial instruments be undertaken.The group’s treasury policies are established to identify and analyse the fi nancial risks faced by the group, to set appropriate risk limits andcontrols and to monitor exposures and adherence to limits.a. Market risk(i) Foreign exchange riskThe group is subject to exposure on the translation of the foreign currency denominated net assets of subsidiaries, associates and jointventures into the group’s US dollar reporting currency. The group seeks to mitigate this exposure, where cost effective, by borrowing in thesame currencies as the functional currencies of its main operating units or by achieving the same effect through the use of forward foreignexchange contracts and currency swaps. An approximate nominal value of US$4,589 million of US dollar borrowings and €351 million ofeuro borrowings (2012: US$4,429 million of US dollar borrowings and €255 million of euro borrowings) have been swapped into currenciesthat match the currency of the underlying operations of the group, including South African rand, Peruvian nuevo sol, Czech koruna, Polishzloty, Australian dollar and Colombian peso. Of these fi nancial derivatives US$2,882 million and €351 million (2012: US$2,406 million and€255 million) are accounted for as net investment hedges and US$1,300 million (2012: US$1,600 million) are accounted for as fair value hedges.The group does not hedge currency exposures from the translation of profi ts earned in foreign currency subsidiaries, associates andjoint ventures.The group is also exposed to transactional currency risk on sales and purchases that are denominated in a currency other than the respectivefunctional currencies of group entities. These exposures are presently managed locally by group entities which, subject to regulatoryconstraints or currency market limitations, hedge a proportion of their foreign currency exposure estimated to arise over a period of up to18 months. Committed transactional exposures that are certain are hedged fully without limitation in time. The group principally uses forwardexchange contracts to hedge currency risk.The tables below set out the group’s currency exposures from fi nancial assets and liabilities held by group companies in currencies other thantheir functional currencies and resulting in exchange movements in the income statement and balance sheet.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 129

Notes to the consolidated financial statementscontinued22. Financial risk factors continuedUS dollarsUS$mSArandUS$mAustraliandollarsUS$mEuroUS$mOtherEuropeancurrenciesUS$mLatinAmericancurrenciesUS$mFinancial assetsTrade and other receivables 21 135 3 36 134 165 21 515Derivative fi nancial instruments¹ 2,023 61 – 1,034 352 – – 3,470Cash and cash equivalents 25 2 – 8 16 9 2 62Intra-group assets 190 8 115 1,062 802 – 2 2,179At 31 March 2013 2,259 206 118 2,140 1,304 174 25 6,226OtherUS$mTotalUS$mPotential impact on earnings – (loss)/gain20% increase in functional currency (305) (26) (20) (200) (160) (29) (4) (744)20% decrease in functional currency 365 31 24 240 192 35 5 892Potential impact on other comprehensive income– (loss)/gain20% increase in functional currency (72) (8) – (157) (57) – – (294)20% decrease in functional currency 86 10 – 188 69 – – 353Financial liabilitiesTrade and other payables (260) (47) (19) (143) (415) (215) (5) (1,104)Derivative fi nancial instruments 1 (58) (565) (1,331) (431) (1,023) (428) – (3,836)Borrowings (1,533) – (521) (2,557) (9) (58) (113) (4,791)Intra-group liabilities (45) (41) (400) (103) (114) – (1) (704)At 31 March 2013 (1,896) (653) (2,271) (3,234) (1,561) (701) (119) (10,435)Potential impact on earnings – gain/(loss)20% increase in functional currency 316 17 70 200 90 36 20 74920% decrease in functional currency (379) (20) (84) (240) (108) (43) (24) (898)Potential impact on other comprehensive income– gain/(loss)20% increase in functional currency – 92 309 339 171 81 – 99220% decrease in functional currency – (110) (370) (407) (205) (97) – (1,189)1 These represent the notional amounts of derivative fi nancial instruments.130 – SABMiller plc Annual Report 2013

22. Financial risk factors continuedUS dollarsUS$mSArandUS$mAustraliandollarsUS$mEuroUS$mOtherEuropeancurrenciesUS$mLatinAmericancurrenciesUS$mFinancial assetsTrade and other receivables 25 130 4 46 155 – 61 421Derivative fi nancial instruments¹ 2,273 40 – 543 231 – 21 3,108Cash and cash equivalents 50 7 1 22 5 2 21 108Intra-group assets 278 63 17 1,080 323 – 3 1,764At 31 March 2012 2,626 240 22 1,691 714 2 106 5,401Potential impact on earnings – (loss)/gain20% increase in functional currency (345) (40) (4) (211) (81) – (15) (696)20% decrease in functional currency 414 47 4 254 97 – 19 835Potential impact on other comprehensive income– (loss)/gain20% increase in functional currency (93) (1) – (71) (39) – (2) (206)20% decrease in functional currency 111 1 – 85 46 – 2 245Financial liabilitiesTrade and other payables (160) (54) (18) (159) (384) (19) (21) (815)Derivative fi nancial instruments 1 (236) (492) (1,035) (121) (709) (510) – (3,103)Borrowings (1,692) – (2,069) (1,381) – (56) (62) (5,260)Intra-group liabilities (8) (79) (278) (159) (189) – (2) (715)At 31 March 2012 (2,096) (625) (3,400) (1,820) (1,282) (585) (85) (9,893)Potential impact on earnings – gain/(loss)20% increase in functional currency 349 22 49 287 95 3 15 82020% decrease in functional currency (419) (27) (59) (344) (115) (4) (16) (984)Potential impact on other comprehensive income– gain/(loss)20% increase in functional currency – 82 517 17 118 95 – 82920% decrease in functional currency – (98) (621) (20) (142) (113) – (994)1 These represent the notional amounts of derivative fi nancial instruments.Foreign currency sensitivity analysisCurrency risks arise on account of fi nancial instruments being denominated in a currency that is not the functional currency and being of amonetary nature.The group holds foreign currency cash fl ow hedges totalling US$1,317 million at 31 March 2013 (2012: US$1,224 million). The foreign exchangegains or losses on these contracts are recorded in the cash fl ow hedging reserve until the hedged transactions occur, at which time therespective gains and losses are transferred to inventory, property, plant and equipment, goodwill or to the income statement as appropriate.The group holds net investment hedges totalling US$5,937 million at 31 March 2013 (2012: US$5,312 million). The foreign exchange gains orlosses on these contracts are recorded in the net investment hedging reserve and partially offset the foreign currency translation risk on thegroup’s foreign currency net assets.OtherUS$mTotalUS$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 131

Notes to the consolidated financial statementscontinued22. Financial risk factors continued(ii) Interest rate riskAs at 31 March 2013 46% (2012: 43%) of consolidated gross borrowings were in fi xed rates taking into account interest rate swaps and forwardrate agreements.The group’s policy is to borrow (directly or synthetically) in fl oating rates, refl ecting the fact that fl oating rates are generally lower than fi xed ratesin the medium term. However, a minimum of 25% of consolidated net borrowings is required to be in fi xed rates for a minimum duration of12 months and the extent to which group borrowings may be in fl oating rates is restricted to the lower of 75% of consolidated net borrowingsand that amount of net borrowings in fl oating rates that with a 1% increase in interest rates would increase fi nance costs by an amount equalto (but not more than) 1.20% of adjusted EBITDA. The policy excludes any infl ation-linked debt, where there will be a natural hedge withinbusiness operations, and also excludes borrowings arising from acquisitions in the previous six months.Exposure to movements in interest rates in group borrowings is managed through interest rate swaps and forward rate agreements. As at31 March 2013 on a policy adjusted basis, 56% (2012: 50%) of consolidated net borrowings were in fi xed rates. The impact of a 1% rise ininterest rates on borrowings in fl oating rates would be equivalent to 1.01% (2012: 0.44%) of adjusted EBITDA.The cash fl ow interest rate risk sensitivities on variable debt and interest rate swaps were.US dollarsUS$mSArandUS$mAustraliandollarsUS$mEuroUS$mOtherEuropeancurrenciesUS$mColombianpesoUS$mAt 31 March 2013Net debt 1 11,745 148 523 2,539 (19) 884 557 16,377Less: fi xed rate debt (11,085) (108) – (2,592) – – (265) (14,050)Variable rate debt 660 40 523 (53) (19) 884 292 2,327Adjust for:Financial derivatives 2,662 152 1,017 934 558 – – 5,323Net variable rate debt exposure 3,322 192 1,540 881 539 884 292 7,650+/- 100 bps changePotential impact on earnings 34 2 16 9 5 9 3 78+/- 100 bps changePotential impact on othercomprehensive income – – 8 – – – – 8OtherUS$mTotalUS$mAt 31 March 2012Net debt 1 13,141 192 2,226 1,359 (34) 1,148 450 18,482Less: fi xed rate debt (12,665) – – (1,367) – – (282) (14,314)Variable rate debt 476 192 2,226 (8) (34) 1,148 168 4,168Adjust for:Financial derivatives 3,692 183 1,083 885 139 – – 5,982Net variable rate debt exposure 4,168 375 3,309 877 105 1,148 168 10,150+/- 100 bps changePotential impact on earnings 42 4 34 9 1 12 2 104+/- 100 bps changePotential impact on othercomprehensive income – – 12 – – – – 121 Excluding net borrowings-related derivative instruments.Fair value sensitivity analysis for fixed income instrumentsChanges in the market interest rates of non-derivative fi nancial instruments with fi xed interest rates only affect income if these are measured attheir fair value. As such, all fi nancial instruments with fi xed rates of interest that are accounted for at amortised cost are not subject to interestrate risk as defi ned in IFRS 7.The group holds derivative contracts with a nominal value of US$6,704 million as at 31 March 2013 (2012: US$6,217 million) which aredesignated as fair value hedges. In the case of these instruments and the underlying fi xed rate bonds, changes in the fair values of the hedgeditem and the hedging instrument attributable to interest rate movements net off almost completely in the income statement in the same period.Cash flow sensitivity analysis for variable rate instrumentsA change of 100 bps in interest rates at the reporting date would have increased/(decreased) other comprehensive income and the incomestatement by the amounts shown above. This analysis assumes all other variables, in particular foreign currency rates, remain constant.The analysis was performed on the same basis for 2012.132 – SABMiller plc Annual Report 2013

22. Financial risk factors continuedInterest rate profiles of financial liabilitiesThe following table sets out the contractual repricing included within the underlying borrowings (excluding net borrowings-related derivatives)exposed to either fi xed interest rates or fl oating interest rates and revises this for the repricing effect of interest rate and cross currency swaps.TotalborrowingsUS$mEffect ofderivativesUS$mTotalexposureUS$m2013 2012TotalborrowingsUS$mEffect ofderivativesUS$mTotalexposureUS$mFinancial liabilitiesRepricing due:Within one year 4,823 5,515 10,338 5,138 5,981 11,119Between one and two years 1,375 (946) 429 1,712 (900) 812Between two and fi ve years 5,508 (2,816) 2,692 6,824 (3,874) 2,950In fi ve years or more 6,842 (1,753) 5,089 5,552 (1,207) 4,345Total interest bearing 18,548 – 18,548 19,226 – 19,226Analysed as:Fixed rate interest 14,050 (5,515) 8,535 14,314 (5,981) 8,333Floating rate interest 4,498 5,515 10,013 4,912 5,981 10,893Total interest bearing 18,548 – 18,548 19,226 – 19,226(iii) Price riskCommodity price riskThe group is exposed to variability in the price of commodities used in the production or in the packaging of fi nished products, such as theprice of malt, barley, sugar and aluminium. Commodity price risk is managed within minimum and maximum guard rails principally throughmulti-year fi xed price contracts with suppliers and, where appropriate, derivative contracts. The group hedges a proportion of commoditysupply and price risk for a period of up to fi ve years. Where derivative contracts are used the group manages exposures principally throughexchange-traded futures, forwards and swaps.At 31 March 2013 the notional value of commodity derivatives amounted to US$89 million (2012: US$36 million). No sensitivity analysis hasbeen provided on these outstanding contracts as the impact is considered to be immaterial.Equity securities price riskThe group is exposed to equity securities price risk because of investments held by the group and classifi ed on the balance sheet as availablefor sale investments. No sensitivity analysis has been provided on these outstanding contracts as the impact is considered to be immaterial.b. Credit riskCredit risk is the risk of fi nancial loss to the group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations.Financial instrumentsThe group limits its exposure to fi nancial institutions by setting credit limits on a sliding scale based on their credit ratings and generally dealingonly with counterparties with a minimum credit rating of BBB- by Standard & Poor’s and Baa3 from Moody’s. For banks with a lower creditrating, or with no international credit rating, a maximum limit of US$5 million is applied, unless specifi c approval is obtained from either the chieffi nancial offi cer or the audit committee of the board. The utilisation of credit limits is regularly monitored. To reduce credit exposures, the grouphas ISDA Master Agreements with most of its counterparties for fi nancial derivatives, which permit net settlement of assets and liabilities incertain circumstances.Trade and other receivablesThere is no signifi cant concentration of credit risk with respect to trade receivables as the group has a large number of customers which areinternationally dispersed. The type of customers range from wholesalers and distributors to smaller retailers. The group has implementedpolicies that require appropriate credit checks on potential customers before sales commence. Credit risk is managed by limiting theaggregate amount of exposure to any one counterparty.The group considers its maximum credit risk to be US$5,052 million (2012: US$3,705 million, as restated) which is the total of the group’sfi nancial assets.c. Liquidity riskLiquidity risk is the risk that the group will not be able to meet its fi nancial obligations as they fall due.The group fi nances its operations through cash generated by the business and a mixture of short-term and medium-term bank credit facilities,bank loans, corporate bonds and commercial paper with a range of maturity dates. In this way, the group ensures that it is not overly reliant onany particular liquidity source or that maturities of borrowings sourced in this way are not overly concentrated.Overview Business review Governance Financial statements Shareholder informationSubsidiaries have access to local bank credit facilities, but are principally funded by the group.At 31 March 2013 the group had the following core lines of credit that were available for general corporate purposes.SABMiller plc Annual Report 2013 – 133

Notes to the consolidated financial statementscontinued22. Financial risk factors continuedSABMiller plc:• US$2,500 million committed syndicated revolving credit facility, which is due to expire in April 2018.SABMiller Holdings Inc:• US$500 million revolving credit facility, which is due to expire in September 2016.Liquidity risk faced by the group is mitigated by having diverse sources of fi nance available to it and by maintaining substantial unutilisedbanking facilities and reserve borrowing capacity, as indicated by the level of undrawn facilities.As at 31 March 2013 the borrowing capacity under committed bank facilities amounted to US$3,352 million (2012: US$3,810 million).The table below analyses the group’s fi nancial liabilities which will be settled on a net basis into relevant maturity groupings based on theremaining period at the balance sheet date to the contractual settlement date. The amounts disclosed in the table are the contractualundiscounted cash fl ows. The amounts disclosed for fi nancial guarantee contracts represent the maximum possible cash outfl ows forguarantees provided in respect of associates’ bank facilities, which would only be payable upon the occurrence of certain default events.Should such events occur, certain remedies are available that could mitigate the impact. Balances due within 12 months equal their carryingbalances as the impact of discounting is not signifi cant.Less than1 yearUS$mBetween1 and 2yearsUS$mBetween2 and 5yearsUS$mOver5 yearsUS$mAt 31 March 2013Borrowings (3,466) (4,468) (5,881) (9,407)Derivative fi nancial instruments (11) (13) (13) –Trade and other payables (3,391) (119) – –Financial guarantee contracts (234) – – –At 31 March 2012Borrowings (1,803) (2,904) (11,763) (8,361)Derivative fi nancial instruments (18) 16 (11) (35)Trade and other payables 1 (3,489) (95) (7) (4)Financial guarantee contracts (174) – – –1 As restated (see note 28).The table below analyses the group’s derivative fi nancial instruments which will be settled on a gross basis into relevant maturity groupingsbased on the remaining period at the balance sheet date to the contractual settlement date. The amounts disclosed in the table are thecontractual undiscounted cash fl ows. Balances due within 12 months equal their carrying balances as the impact of discounting is notsignifi cant. Forward foreign currency swaps have been included for the fi rst time in the table below for the year ended 31 March 2013,along with the comparative for the prior year.Less than1 yearUS$mBetween1 and 2yearsUS$mBetween2 and 5yearsUS$mOver5 yearsUS$mAt 31 March 2013Forward foreign currency swapsOutfl ow (2,944) (43) – –Infl ow 2,982 43 – –Forward foreign exchange contractsOutfl ow (1,308) (63) – –Infl ow 1,306 63 – –Cross currency swapsOutfl ow (325) (466) (1,730) (874)Infl ow 332 451 1,816 864At 31 March 2012Forward foreign currency swapsOutfl ow (2,492) (87) – –Infl ow 2,527 82 – –Forward foreign exchange contractsOutfl ow (399) (12) – –Infl ow 401 12 – –Cross currency swapsOutfl ow (278) (346) (1,686) (866)Infl ow 216 331 1,637 877134 – SABMiller plc Annual Report 2013

22. Financial risk factors continuedCapital managementThe capital structure of the group consists of net debt (see note 27c) and shareholders’ equity.The group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confi dence and to sustain futuredevelopment of the business.Besides the minimum capitalisation rules that may apply to subsidiaries in different countries, the group’s only externally imposed capitalrequirement relates to the group’s core lines of credit which include a net debt to EBITDA fi nancial covenant which was complied withthroughout the year.The group monitors its fi nancial capacity and credit ratings by reference to a number of key fi nancial ratios and cash fl ow metrics including net debtto adjusted EBITDA and interest cover. These provide a framework within which the group’s capital base is managed including dividend policy.If the group fails to meet the fi nancial targets required by the ratings agencies, a credit rating downgrade could impact the average interest rateof borrowings of the group and the future availability of credit to the group.The group is currently rated Baa1/stable outlook by Moody’s Investors Service and BBB+/positive outlook by Standard & Poor’s Ratings Services.Fair value estimationThe following table presents the group’s fi nancial assets and liabilities that are measured at fair value.Level 1US$mAt 31 March 2013AssetsDerivative fi nancial instruments – 843 – 843Available for sale investments – 10 12 22Total assets – 853 12 865LiabilitiesDerivative fi nancial instruments – (86) – (86)Total liabilities – (86) – (86)At 31 March 2012AssetsDerivative fi nancial instruments – 756 – 756Available for sale investments 1 18 12 31Total assets 1 774 12 787LiabilitiesDerivative fi nancial instruments – (109) – (109)Total liabilities – (109) – (109)Level 2US$mThe levels of the fair value hierarchy and its application to the group’s fi nancial assets and liabilities are described below.Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities:The fair value of fi nancial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market isregarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, orregulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quotedmarket price used for fi nancial assets held by the group is the current bid price.Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derivedfrom prices):The fair values of fi nancial instruments that are not traded in an active market (for example, over the counter derivatives or infrequently tradedlisted investments) are determined by using valuation techniques. These valuation techniques maximise the use of observable market datawhere it is available and rely as little as possible on entity specifi c estimates. If all signifi cant inputs required to fair value an instrument areobservable, the instrument is included in level 2.Level 3: Inputs for the asset or liability that are not based on observable market data:Level 3US$mTotalUS$mOverview Business review Governance Financial statements Shareholder informationSpecifi c valuation techniques, such as discounted cash fl ow analysis, are used to determine fair value of the remaining fi nancial instruments.SABMiller plc Annual Report 2013 – 135

Notes to the consolidated financial statementscontinued22. Financial risk factors continuedThe following table presents the changes in level 3 instruments for the years ended 31 March.Available for saleinvestmentsAt 1 April 12 15Exchange adjustments – (1)Disposals – (2)At 31 March 12 122013US$m2012US$m23. Derivative financial instrumentsCurrent derivative financial instruments2013 2012AssetsUS$mLiabilitiesUS$mAssetsUS$mLiabilitiesUS$mEmbedded derivatives 1 – – (1)Interest rate swaps – on borrowings 1 25 (4) – –Forward foreign currency contracts – on operating items 11 (13) 7 (13)Forward foreign currency contracts – on borrowings 1 26 (1) 14 (12)Forward foreign currency contracts designated as cash fl ow hedges 1 (12) 3 (12)Cross currency swaps – on borrowings 1 47 – – –Commodity contracts designated as cash fl ow hedges – (4) – (2)111 (34) 24 (40)1 Borrowings-related derivative fi nancial instruments amounting to a net asset of US$93 million (2012: US$2 million).Non-current derivative financial instruments2013 2012AssetsUS$mLiabilitiesUS$mAssetsUS$mLiabilitiesUS$mInterest rate swaps designated as fair value hedges 1 428 (13) 394 (18)Interest rate swaps designated as cash fl ow hedges 1 – (10) – (4)Interest rate swaps – on borrowings 1 – (11) 55 (9)Forward foreign currency contracts – on borrowings 1 5 – 5 –Forward foreign currency contracts – on operating items designated as net investment hedges 32 (14) 42 (21)Forward foreign currency contracts – on borrowings designated as net investment hedges 1 4 (2) – (10)Cross currency swaps – on borrowings 1 45 – 74 –Cross currency swaps designated as cash fl ow hedges 1 59 – 18 –Cross currency swaps designated as fair value hedges 1 78 – 113 –Cross currency swaps designated as net investment hedges 81 – 31 (7)Commodity contracts designated as cash fl ow hedges – (2) – –732 (52) 732 (69)1 Borrowings-related derivative fi nancial instruments amounting to a net asset of US$583 million (2012: US$618 million).Derivatives designated as hedging instruments(i) Fair value hedgesThe group has entered into several interest rate swaps to pay fl oating and receive fi xed interest which have been designated as fair valuehedges to hedge exposure to changes in the fair value of its US dollar and euro fi xed rate borrowings. Borrowings are designated as thehedged item as part of the fair value hedge. The borrowings and the interest rate swaps have the same critical terms.As at 31 March 2013 the notional amount of the US dollar interest rate swaps was US$4,250 million (2012: US$3,950 million). The fi xed interestrates received vary from 1.85% to 6.625% (2012: 1.85% to 6.625%) and the fl oating interest rates paid vary from LIBOR plus 47.2 bps to LIBORplus 177.8 bps (2012: LIBOR plus 71.6 bps to LIBOR plus 177.8 bps) on the notional amount.As at 31 March 2013 the notional amount of the euro interest rate swaps was €900 million (2012: €500 million). The fi xed interest rates receivedare 1.875% to 4.5% (2012: 4.5%) and fl oating interest rates paid vary from EURIBOR plus 71 bps to EURIBOR plus 178 bps (2012: EURIBORplus 177 bps to EURIBOR plus 178 bps) on the notional amount.136 – SABMiller plc Annual Report 2013

23. Derivative financial instruments continuedThe group has entered into interest rate swaps and cross currency interest rate swaps, the cumulative effect of which is to receive fi xed USdollar interest and pay Australian dollar fl oating interest, and to convert the profi le of the US dollar borrowings into Australian dollars. Theseswaps have been designated as a combination of fair value and cash fl ow hedges to hedge the exposure of the Australian operations tochanges in the fair value of the US dollar borrowings.As at 31 March 2013 the notional amount of the interest rate swaps was US$300 million (2012: US$600 million). The fi xed interest ratesreceived are 7.875% (2012: 4.875% to 7.875%) and the fl oating interest rates paid vary from LIBOR plus 69.2 bps to LIBOR plus 72.8 bps(2012: LIBOR plus 47 bps to LIBOR plus 73 bps) on the notional amount.The notional amount of the cross currency interest rate swaps was US$1,300 million (2012: US$1,600 million). These were:• US$1,000 million (2012: US$1,000 million) received US dollar fi xed rate interest varying from 5.125% to 5.875% (2012: 5.125% to 5.875%)and paid fl oating Australian dollar interest with rates varying from Australian bank bills plus 268 bps to Australian bank bills plus 410 bps(2012: Australian bank bills plus 268 bps to Australian bank bills plus 410 bps); and• US$300 million (2012: US$600 million) received fl oating US dollar interest with rates of LIBOR plus 71 bps (2012: LIBOR plus 47 bps toLIBOR plus 71 bps) and paid fl oating Australian dollar interest with rates of Australian bank bills plus 117 bps (2012: Australian bank billsplus 87 bps to Australian bank bills plus 117 bps).As at 31 March 2013 the carrying value of the hedged borrowings was US$7,202 million (2012: US$6,827 million).(ii) Cash flow hedgesThe group has entered into Australian dollar interest rate swaps designated as cash fl ow hedges to manage the interest rate on borrowings.The notional amount of these interest rate swaps was US$521 million equivalent (2012: US$515 million). The fair value of these interest rateswaps was a liability of US$10 million (2012: US$4 million). The fi xed interest rate paid varies from 4.27% to 4.38% (2012: 4.27% to 4.38%) andthe fl oating rates received are Australian bank bills plus zero bps (2012: Australian bank bills plus zero bps). As at 31 March 2013 the carryingvalue of the hedged borrowings was US$523 million (2012: US$535 million).The group has entered into forward exchange contracts designated as cash fl ow hedges to manage short-term foreign currency exposuresto expected net operating costs including future trade imports and exports. As at 31 March 2013 the notional amounts of these contractswere €383 million, US$432 million, GBP144 million, Swiss franc (CHF) 70 million, ZAR464 million and CZK674 million (2012: €317 million,US$557 million, GBP128 million, CHF15 million, ZAR405 million and CZK12 million).The group has entered into commodity contracts designated as cash fl ow hedges to manage the future price of commodities. As at 31 March2013 the notional amount of forward contracts for the purchase price of corn was US$13 million (2012: US$3 million), the notional amount offorward contracts for the purchase price of aluminium was US$75 million (2012: US$33 million) and the notional amount of forward contractsfor the purchase price of sugar was US$1 million (2012: US$nil).The following table indicates the period in which the cash fl ows associated with derivatives that are cash fl ow hedges are expected to occurand impact the income statement.CarryingamountUS$mExpectedcash flowsUS$mLess than1 yearUS$mBetween 1and 2 yearsUS$mBetween 2and 5 yearsUS$mAt 31 March 2013Interest rate swaps:Liabilities (10) (10) (4) (6) –Forward foreign currency contracts:Assets 1 1 1 – –Liabilities (12) (12) (12) – –Commodity contracts:Liabilities (6) (8) (4) (3) (1)(27) (29) (19) (9) (1)At 31 March 2012Interest rate swaps:Liabilities (4) (4) (1) (2) (1)Forward foreign currency contracts:Assets 3 4 4 – –Liabilities (12) (13) (13) – –Commodity contracts:Liabilities (2) (2) (2) – –(15) (15) (12) (2) (1)Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 137

Notes to the consolidated financial statementscontinued23. Derivative financial instruments continued(iii) Hedges of net investments in foreign operationsThe group has entered into several forward foreign currency contracts and cross currency swaps which it has designated as hedges of netinvestments in its foreign subsidiaries in South Africa, Australia, the Czech Republic, Poland, Colombia and Peru to hedge the group’sexposure to foreign exchange risk on these investments. Net gains relating to forward foreign currency contracts and cross currency swapsof US$63 million (2012: losses of US$1 million) have been recognised in other comprehensive income.Analysis of notional amounts on fi nancial instruments designated as net investment hedges:Forward foreign currency contracts:SA rand 3,681 2,374Czech koruna 5,575 6,825Peruvian nuevo sol 480 631Australian dollar 1,000 1,000Polish zloty 611 630Colombian peso 445,500 490,476Cross currency swaps:SA rand 1,404 1,404Australian dollar 277 –Polish zloty 585 433Czech koruna 7,600 –2013m2012mStandalone derivative financial instruments(i) Forward foreign currency contractsThe group has entered into forward foreign currency contracts to manage short-term foreign currency exposures to expected future tradeimports and exports. These derivatives are fair valued based on discounted future cash fl ows with gains and losses taken to the incomestatement. As at 31 March 2013 the notional amounts of these contracts were €32 million, US$61 million and ZAR28 million (2012: €91 million,US$150 million and ZAR37 million).The group has entered into forward foreign currency contracts to manage foreign currency exposures on intercompany loan balances. Thesederivatives are fair valued based on discounted future cash fl ows with gains and losses taken to the income statement. As at 31 March 2013the notional amounts of these contracts were US$108 million, €3 million, GBP31 million, Romanian lei (RON) 454 million, PLN863 million,CHF34 million, ZAR251 million, CZK6,340 million, AUD415 million and Hungarian forints (HUF)14,500 million (2012: US$110 million, €60 million,GBP34 million, RON196 million, PLN189 million, CHF15 million, ZAR632 million, CZK1,425 million and AUD209 million).(ii) Cross currency swapsThe group has entered into cross currency swaps to manage foreign currency exposures on intercompany loan balances. These derivatives arefair valued based on discounted future cash fl ows with gains and losses taken to the income statement. As at 31 March 2013 the notionalamounts of these contracts were €317 million (2012: €317 million).Fair value gain on financial instruments recognised in the income statementDerivative fi nancial instruments:Interest rate swaps 8 (8)Interest rate swaps designated as fair value hedges (7) 104Forward foreign currency contracts 12 76Forward foreign currency contracts designated as fair value hedges 3 8Cross currency swaps 19 27Cross currency swaps designated as net investment hedges – (4)Other fair value gains 18 3053 233Other fi nancial instruments:Non-current borrowings designated as the hedged item in a fair value hedge 7 (104)Total fair value gain on financial instruments recognised in the income statement 60 1292013US$m2012US$mFair value gains or losses on borrowings, derivative fi nancial instruments held to hedge interest rate risk on borrowings and derivative fi nancialinstruments acquired to hedge the risks of the Foster’s acquisition were recognised as part of net fi nance costs. Fair value gains or losses onall other derivative fi nancial instruments are recognised in operating profi t.138 – SABMiller plc Annual Report 2013

23. Derivative financial instruments continuedReconciliation of total financial instrumentsThe table below reconciles the group’s accounting categorisation of fi nancial assets and liabilities (based on initial recognition) to the classes ofassets and liabilities as shown on the face of the balance sheet.Fair valuethroughincomestatementUS$mLoans andreceivablesUS$mAvailablefor saleUS$mFinancialliabilitiesNotheld at categorisedamortised as a financialcost instrumentUS$m US$mTotalUS$mNoncurrentUS$mAt 31 March 2013AssetsAvailable for sale investments – – 22 – – 22 22 –Derivative fi nancial instruments 843 – – – – 843 732 111Trade and other receivables – 1,916 – – 295 2,211 144 2,067Loan participation deposit – 100 – – – 100 100 –Cash and cash equivalents – 2,171 – – – 2,171 – 2,171LiabilitiesDerivative fi nancial instruments (86) – – – – (86) (52) (34)Borrowings – – – (18,548) – (18,548) (16,079) (2,469)Trade and other payables – – – (3,524) (612) (4,136) (132) (4,004)At 31 March 2012 1AssetsAvailable for sale investments – – 31 – – 31 30 1Derivative fi nancial instruments 756 – – – – 756 732 24Trade and other receivables – 2,073 – – 267 2,340 136 2,204Loan participation deposit – 100 – – – 100 100 –Cash and cash equivalents – 745 – – – 745 – 745LiabilitiesDerivative fi nancial instruments (109) – – – – (109) (69) (40)Borrowings – – – (19,226) – (19,226) (18,164) (1,062)Trade and other payables – – – (3,594) (645) (4,239) (112) (4,127)1 As restated (see note 28).CurrentUS$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 139

Notes to the consolidated financial statementscontinued24. ProvisionsDemergedentities andlitigationUS$mPostretirementbenefitsUS$mTaxationrelatedUS$mRestructuringUS$mPayrollrelatedUS$mOnerouscontractsUS$mAt 1 April 2011 94 310 302 70 46 7 44 873Exchange adjustments (2) (1) (2) 2 – 7 2 6Acquisitions – through businesscombinations 34 1 37 160 29 211 26 498Disposals (1) – – (10) (1) – (9) (21)Charged/(credited) to the income statement– Additional provision in year 4 28 3 23 17 2 37 114– Unused amounts reversed – (10) (54) (1) (1) – – (66)Utilised in the year (7) (28) (26) (31) (14) (13) (20) (139)Actuarial losses recorded in othercomprehensive loss – 9 – – – – – 9Transfers to disposal group classifi ed asheld for sale – – – – (1) – – (1)Transfer between categories 3 – 5 4 (4) – (8) –At 31 March 2012 1 125 309 265 217 71 214 72 1,273Exchange adjustments (4) (16) (3) (1) (3) 1 (1) (27)Charged/(credited) to the income statement– Additional provision in year 1 30 21 19 14 2 18 105– Unused amounts reversed – – (25) (5) – – (1) (31)Utilised in the year (4) (43) (7) (110) (13) (56) (19) (252)Actuarial losses recorded in othercomprehensive loss – 21 – – – – – 21Transfer from current tax liabilities – – 7 – – – – 7Transfer between categories 7 – (10) (6) 9 (1) 1 –At 31 March 2013 125 301 248 114 78 160 70 1,096Analysed as:Current 558 704Non-current 538 569OtherUS$m2013US$mTotalUS$m2012US$m1,096 1,2731 As restated (see note 28).Demerged entities and litigationDuring the year ended 31 March 1998 the group recognised a provision of US$73 million for the disposal of certain demerged entitiesin relation to equity injections which were not regarded as recoverable, as well as potential liabilities arising on warranties and the saleagreements. During the year ended 31 March 2013 US$1 million (2012: US$2 million) of this provision was utilised in regard to costs associatedwith SAB Ltd’s previously disposed of remaining retail interests. The residual balance of US$10 million relates mainly to the disposal of OKBazaars (1929) Ltd to Shoprite Holdings Ltd (Shoprite). As disclosed in previous annual reports, a number of claims were made by Shoprite inrelation to the valuation of the net assets of OK Bazaars at the time of the sale and for alleged breaches by SAB Ltd of warranties contained inthe sale agreements. These claims are being contested by SAB Ltd.There are US$115 million (2012: US$90 million) of provisions in respect of outstanding litigation within various operations, based onmanagement’s expectation that the outcomes of these disputes are expected to be resolved within the forthcoming fi ve years.While provision for all claims has already been made, the actual outcome of the disputes and the timing of the resolution cannot be estimatedby the directors at this time. The further information ordinarily required by IAS 37, ‘Provisions, contingent liabilities and contingent assets’ hasnot been disclosed on the grounds that it can be expected to seriously prejudice the outcome of the disputes.Post-retirement benefitsThe provision for post-retirement benefi ts represents the provision for medical benefi ts for retired employees and their dependants in SouthAfrica, for post-retirement medical and life insurance benefi ts for eligible employees and their dependants in North America and Europe,medical and other benefi ts in Latin America, and pension provisions for employees in North America, Latin America, Europe, Africa andAsia Pacifi c. The principal assumptions on which these provisions are based are disclosed in note 31.140 – SABMiller plc Annual Report 2013

24. Provisions continuedTaxation-relatedThe group has recognised various provisions in relation to taxation exposures it believes may arise. The provisions principally relate tonon-corporate taxation and interest and penalties on corporate taxation in respect of a number of group companies. Any settlement inrespect of these amounts will occur as and when the assessments are fi nalised with the respective tax authorities.RestructuringThis includes the remaining provision for restructuring costs related to Europe which management expects to be utilised within four years, andprovisions for costs related to pre-existing demerger costs and demerger warranties in Foster’s in Australia which are expected to be utilisedwithin one year.Payroll-relatedThis principally relates to employee long service awards of US$17 million (2012: US$19 million) within South Africa and US$3 million(2012: US$15 million) within Latin America, which are expected to be utilised over time when service awards fall due. Payroll-related provisionsalso include US$37 million (2012: US$32 million, restated) within Asia Pacifi c relating to employee entitlement provisions, and US$18 million(2012: US$4 million) of cash-settled share-based payment provisions within Corporate which are expected to be utilised within one year.Onerous contractsThis includes provisions for unfavourable supply contracts for malt, glass, aluminium cans and concentrated fruit juice for non-alcoholicbeverages, as well as provisions for surplus property leases in Australia which management expects to be utilised within seven years.Other provisionsIncluded within other provisions are environmental provisions and other provisions. These are primarily expected to be utilised within four years.25. Share capitalGroup and companyCalled up, allotted and fully paid share capital1,669,731,799 ordinary shares of 10 US cents each (2012: 1,664,323,483) 167 16650,000 deferred shares of £1.00 each (2012: 50,000) – –Ordinaryshares of10 US centseachDeferredshares of£1 each2013US$m2012US$m167 166NominalvalueUS$mAt 1 April 2011 1,659,040,014 50,000 166Issue of shares – share incentive plans 5,283,469 – –At 31 March 2012 1,664,323,483 50,000 166Issue of shares – share incentive plans 5,408,316 – 1At 31 March 2013 1,669,731,799 50,000 167Changes to authorised share capitalWith effect from 1 October 2009 the company adopted new articles of association which removed any previous limit on the authorised sharecapital. Directors are still limited as to the number of shares they can at any time allot because allotment authority continues to be requiredunder the Companies Act 2006, save in respect of employee share plans.Changes to issued share capitalDuring the year the company issued 5,408,316 (2012: 5,283,469) new ordinary shares of 10 US cents to satisfy the exercise of options grantedunder the various share incentive plans, for consideration of US$102 million (2012: US$96 million).Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 141

Notes to the consolidated financial statementscontinued25. Share capital continuedRights and restrictions relating to share capitalConvertible participating sharesAltria is entitled to require the company to convert its ordinary shares into convertible participating shares so as to ensure that Altria’s votingshareholding does not exceed 24.99% of the total voting shareholding.If such an event occurs, the convertible participating shares will rank pari passu with the ordinary shares in all respects and no action shallbe taken by the company in relation to ordinary shares unless the same action is taken in respect of the convertible participating shares. Ondistribution of the profi ts (whether by cash dividend, dividend in specie, scrip dividend, capitalisation issue or otherwise), the convertibleparticipating shares will rank pari passu with the ordinary shares. On a return of capital (whether winding-up or otherwise), the convertibleparticipating shares will rank pari passu with the ordinary shares.Altria is entitled to vote its convertible participating shares at general meetings of the company on a poll on the basis of one-tenth of a vote forevery convertible participating share on all resolutions other than a resolution:(i) proposed by any person other than Altria, to wind-up the company;(ii) proposed by any person other than Altria, to appoint an administrator or to approve any arrangement with the company’s creditors;(iii) proposed by the board, to sell all or substantially all of the undertaking of the company; or(iv) proposed by any person other than Altria, to alter any of the class rights attaching to the convertible participating shares or to approve thecreation of any new class of shares,in which case Altria shall be entitled on a poll to vote on the resolution on the basis of one vote for each convertible participating share, but,for the purposes of any resolution other than a resolution mentioned in (iv) above, the convertible participating shares shall be treated asbeing of the same class as the ordinary shares and no separate meeting or resolution of the holders of the convertible participating sharesshall be required to be convened or passed.Upon a transfer of convertible participating shares by Altria other than to an affi liate, such convertible participating shares shall convert intoordinary shares.Altria is entitled to require the company to convert its convertible participating shares into ordinary shares if:(i) a third party has made a takeover offer for the company and (if such offer becomes or is declared unconditional in all respects) it wouldresult in the voting shareholding of the third party being more than 30% of the total voting shareholding; and(ii) Altria has communicated to the company in writing its intention not itself to make an offer competing with such third party offer, providedthat the conversion date shall be no earlier than the date on which the third party’s offer becomes or is declared unconditional in allrespects.Altria is entitled to require the company to convert its convertible participating shares into ordinary shares if the voting shareholding of a thirdparty should be more than 24.99%, provided that:(i) the number of ordinary shares held by Altria following such conversion shall be limited to one ordinary share more than the number ofordinary shares held by the third party; and(ii) such conversion shall at no time result in Altria’s voting shareholding being equal to or greater than the voting shareholding which wouldrequire Altria to make a mandatory offer in terms of rule 9 of the City Code.If Altria wishes to acquire additional ordinary shares (other than pursuant to a pre-emptive issue of new ordinary shares or with the priorapproval of the board), Altria shall fi rst convert into ordinary shares the lesser of:(i) such number of convertible participating shares as would result in Altria’s voting shareholding being such percentage as would, in the eventof Altria subsequently acquiring one additional ordinary share, require Altria to make a mandatory offer in terms of rule 9 of the City Code;and(ii) all of its remaining convertible participating shares.142 – SABMiller plc Annual Report 2013

25. Share capital continuedThe company must use its best endeavours to procure that the ordinary shares arising on conversion of the convertible participating sharesare admitted to the Offi cial List and to trading on the London Stock Exchange’s market for listed securities, admitted to listing and trading onthe JSE Ltd, and admitted to listing and trading on any other stock exchange upon which the ordinary shares are from time to time listedand traded, but no admission to listing or trading need be sought for the convertible participating shares whilst they remain convertibleparticipating shares.Deferred sharesThe deferred shares do not carry any voting rights and do not entitle their holders to receive any dividends or other distributions. In the event ofa winding-up deferred shareholders would receive no more than the nominal value. Deferred shares represent the only non-equity share capitalof the group.Share-based paymentsThe group operates various share incentive plans. The share incentives outstanding are summarised as follows.Scheme2013Number2012NumberGBP share options 17,809,920 16,622,334ZAR share options 12,939,245 13,024,503GBP stock appreciation rights (SARs) 1,955,529 2,820,144GBP performance share awards 7,505,723 6,880,114GBP value share awards 11,721,564 6,877,784GBP cash settled awards – 335,940Total share incentives outstanding 1 51,931,981 46,560,8191 Total share incentives outstanding exclude shares relating to the BBBEE scheme.Further details relating to all of the share incentive schemes can be found in the directors’ remuneration report on pages 66 to 85.The exercise prices of incentives outstanding at 31 March 2013 ranged from £0 to £28.28 and ZAR53.30 to ZAR401.06 (2012: £0 to £25.48and ZAR53.30 to ZAR290.23). The movement in share awards outstanding is summarised in the following tables.GBP share optionsGBP share options include share options granted under the Executive Share Option Plan 2008, the Approved Executive Share Option Plan2008, the Executive Share Option (No.2) Scheme, the Approved Executive Share Option Scheme and the International Employee ShareScheme. No further grants can be made under the now closed Executive Share Option (No.2) Scheme, the Approved Executive Share OptionScheme, or the International Employee Share Scheme; although outstanding grants may still be exercised until they reach their expiry date.Numberof optionsWeightedaverageexercisepriceGBPWeightedaverage fairvalue atgrant dateGBPOutstanding at 1 April 2011 15,088,057 13.46 –Granted 4,417,346 22.51 6.47Lapsed (679,700) 18.88 –Exercised (2,203,369) 11.44 –Outstanding at 31 March 2012 16,622,334 15.91 –Granted 4,637,730 24.01 5.85Lapsed (583,250) 20.28 –Exercised (2,866,894) 12.52 –Outstanding at 31 March 2013 17,809,920 18.42 –Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 143

Notes to the consolidated financial statementscontinued25. Share capital continuedZAR share optionsShare options designated in ZAR include share options granted under the South African Executive Share Option Plan 2008 and the MirrorExecutive Share Purchase Scheme (South Africa). No further grants can be made under the Mirror Executive Share Purchase Scheme(South Africa) although outstanding grants may still be exercised until they reach their expiry date.Numberof optionsWeightedaverageexercisepriceZARWeightedaverage fairvalue atgrant dateZAROutstanding at 1 April 2011 13,686,079 169.64 –Granted 2,943,373 283.07 105.43Lapsed (524,849) 218.17 –Exercised (3,080,100) 138.30 –Outstanding at 31 March 2012 13,024,503 200.73 –Granted 2,912,565 381.88 134.46Lapsed (456,401) 263.02 –Exercised (2,541,422) 154.55 –Outstanding at 31 March 2013 12,939,245 248.38 –GBP SARsGBP SARs include stock appreciation rights granted under the Stock Appreciation Rights Plan 2008 and the International Employee StockAppreciation Rights Scheme. No further grants can be made under the now closed International Employee Stock Appreciation Rights Scheme,although outstanding grants may still be exercised until they reach their expiry date.Numberof SARsWeightedaverageexercisepriceGBPWeightedaverage fairvalue atgrant dateGBPOutstanding at 1 April 2011 3,575,370 9.72 –Granted 64,900 22.50 6.47Lapsed (26,583) 11.44 –Exercised (793,543) 8.85 –Outstanding at 31 March 2012 2,820,144 10.25 –Granted 60,600 23.95 5.81Lapsed (9,600) 15.94 –Exercised (915,615) 8.66 –Outstanding at 31 March 2013 1,955,529 11.39 –GBP performance share awardsGBP performance share awards include awards made under the Executive Share Award Plan 2008, the Performance Share Award Schemeand the International Performance Share Award Sub-Scheme. No further awards can be made under the Performance Share Award Schemeand the International Performance Share Award Sub-Scheme, although outstanding awards remain and will vest, subject to the achievementof their respective performance conditions on their vesting date.Numberof awardsWeightedaverageexercisepriceGBPWeightedaverage fairvalue atgrant dateGBPOutstanding at 1 April 2011 7,364,124 – –Granted 2,208,640 – 20.46Lapsed (278,760) – –Released to participants (2,413,890) – –Outstanding at 31 March 2012 6,880,114 – –Granted 3,471,222 – 22.32Lapsed (254,284) – –Released to participants (2,591,329) – –Outstanding at 31 March 2013 7,505,723 – –144 – SABMiller plc Annual Report 2013

25. Share capital continuedGBP value share awardsThe 4,843,780 (2012: 4,034,340) value share awards granted during the year ended 31 March 2013 represent the theoretical maximum numberof awards that could possibly vest in the future, although in practice it is extremely unlikely that this number of awards would be released.Number ofvalue shares(per £10 million ofadditional value)Theoreticalmaximumshares at capWeightedaverageexercise priceGBPWeightedaverage fairvalue atgrant dateGBPOutstanding at 1 April 2011 1,022 3,168,200 – –Granted 1,205 4,034,340 – 7.27Lapsed (97) (324,756) – –Outstanding at 31 March 2012 2,130 6,877,784 – –Granted 1,270 4,843,780 – 7.02Outstanding at 31 March 2013 3,400 11,721,564 – –GBP cash-settled awardsGBP share incentives included under the Associated Companies’ Cash Award Plan 2011.Numberof awardsWeightedaverageexercisepriceGBPWeightedaverage fairvalue atgrant dateGBPOutstanding at 1 April 2011 – – –Granted 335,940 – 20.35Outstanding at 31 March 2012 335,940 – –Released to participants (335,940) – –Outstanding at 31 March 2013 – – –Outstanding share incentivesThe following table summarises information about share incentives outstanding at 31 March.Range of exercise pricesNumber2013Weightedaverageremainingcontractuallife in years2013Number2012Weightedaverageremainingcontractuallife in years2012GBP share options£4 – £5 – – 204,850 1.0£5 – £6 9,000 0.6 73,418 1.6£6 – £7 356,310 1.1 401,993 2.1£8 – £9 452,944 2.1 622,494 3.1£9 – £10 78,275 5.6 78,275 6.6£10 – £11 942,994 3.4 1,097,744 4.4£11 – £12 1,117,686 4.1 1,456,403 5.1£12 – £13 3,311,385 5.7 4,781,927 6.8£17 – £18 17,200 6.6 28,700 7.6£19 – £20 3,072,050 7.2 3,603,984 8.2£20 – £21 46,950 7.7 66,950 8.7£22 – £23 3,872,096 8.2 4,185,596 9.2£23 – £24 4,443,930 9.2 – –£25 – £26 20,000 8.7 20,000 9.7£28 – £29 69,100 9.7 – –17,809,920 7.0 16,622,334 7.1Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 145

Notes to the consolidated financial statementscontinued25. Share capital continuedRange of exercise pricesNumber2013Weightedaverageremainingcontractuallife in years2013Number2012Weightedaverageremainingcontractuallife in years2012ZAR share optionsR50 – R60 7,500 0.1 172,932 1.1R60 – R70 49,900 0.6 229,400 1.2R70 – R80 40,500 1.1 68,500 2.1R80 – R90 – – 10,000 0.2R90 – R100 363,507 2.0 519,607 3.0R110 – R120 – – 40,000 3.4R120 – R130 527,300 2.9 757,940 3.9R140 – R150 931,600 5.3 1,292,300 6.3R150 – R160 426,100 6.0 629,600 7.0R160 – R170 362,150 4.1 461,100 5.1R180 – R190 1,041,100 4.9 1,377,700 5.9R210 – R220 1,665,750 6.8 2,455,350 7.8R220 – R230 1,985,700 7.7 2,140,000 8.7R250 – R260 519,600 8.2 542,400 9.2R290 – R300 2,155,793 8.7 2,327,674 9.7R310 – R320 625,850 9.2 – –R400 – R410 2,236,895 9.7 – –12,939,245 7.2 13,024,503 7.2GBP SARs£4 – £5 – – 219,168 1.1£6 – £7 243,734 1.1 344,018 2.1£8 – £9 299,010 2.1 460,085 3.1£9 – £10 2,275 5.6 9,100 6.6£10 – £11 384,784 3.1 522,934 4.1£11 – £12 485,283 4.1 651,500 5.1£12 – £13 355,943 5.3 481,839 6.3£13 – £14 12,400 4.6 16,700 5.6£19 – £20 49,900 7.2 49,900 8.2£22 – £23 61,600 8.2 64,900 9.2£23 – £24 60,600 8.2 – –1,955,529 3.8 2,820,144 4.3GBP performance share awards£0 7,505,723 1.5 6,880,114 1.1GBP value share awards£0 11,721,564 2.6 6,877,784 3.0GBP cash-settled awards£0 – – 335,940 1.0Total share incentives outstanding 51,931,981 5.1 46,560,819 5.4Exercisable share incentivesThe following table summarises information about exercisable share incentives outstanding at 31 March.Number2013Weightedaverageexerciseprice2013Number2012Weightedaverageexerciseprice2012GBP share options 5,792,390 11.27 5,103,986 10.46ZAR share options 4,915,057 164.84 5,004,479 140.97GBP SARs 1,783,429 10.35 2,705,344 9.80146 – SABMiller plc Annual Report 2013

25. Share capital continuedShare incentives exercised or vestedThe weighted average market price of the group’s shares at the date of exercise or vesting for share incentives exercised or vested during theyear were:Number2013Weightedaverage marketprice2013Number2012Weightedaverage marketprice2012Share incentives designated in GBP 6,709,778 26.81 5,410,802 23.01Share incentives designated in ZAR 2,541,422 385.70 3,080,100 278.19Total share incentives exercised or vested during the year 9,251,200 8,490,902Broad-Based Black Economic Empowerment (BBBEE) schemeOn 9 June 2010 the initial allocation of participation rights was made in relation to the BBBEE scheme in South Africa. A total of 46.2 millionnew shares in The South African Breweries (Pty) Limited (SAB), representing 8.45% of SAB’s enlarged issued share capital, were issued. Theshares in SAB will be exchanged at the end of the estimated ten-year scheme term for shares in SABMiller plc based on a repurchase formulalinked, inter alia, to the operating performance of SAB. No performance conditions and exercise prices are attached to these shares, althoughthe employee component has a four-year vesting period. The weighted average fair value of each SAB share at the grant date was ZAR40.Weighted average fair value assumptionsThe fair value of services received in return for share awards granted is measured by reference to the fair value of share awards granted. Theestimate of the fair value of the services received is measured based on a binomial model approach except for the awards under PerformanceShare Award schemes, the Executive Share Award Plan 2008 (including value share awards) and the BBBEE scheme which have been valuedusing Monte Carlo simulations, and awards under the cash settled scheme which have been valued based on an analytic approach.The Monte Carlo simulation methodology is necessary for valuing share-based payments with TSR performance hurdles. This is achieved byprojecting SABMiller plc’s share price forwards, together with those of companies in the same comparator group, over the vesting period and/or life of the awards after considering their respective volatilities.The following weighted average assumptions were used in these option pricing models during the year.2013 2012Share price 1– South African share option scheme (ZAR) 379.21 280.49– All other schemes (£) 23.76 22.33Exercise price 1– South African share option scheme (ZAR) 381.88 283.07– All other schemes (£) 8.71 9.35Expected volatility (all schemes) 2 (%) 26.1 23.1Dividend yield (all schemes) (%) 2.4 2.3Annual forfeiture rate– South African share option scheme (%) 5.0 5.0– All other schemes (%) 3.0 3.0Risk-free interest rate– South African share option scheme (%) 7.3 7.9– All other schemes (%) 1.0 2.31 The calculation is based on the weighted fair value of issues made during the year.2 Expected volatility is calculated by assessing the historical share price data in the United Kingdom and South Africa since May 2002.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 147

Notes to the consolidated financial statementscontinued26. Retained earnings and other reservesa. Retained earningsTreasury andEBT sharesUS$mRetainedearningsUS$mAt 1 April 2011 (657) 9,648 8,991Profi t for the year – 4,221 4,221Other comprehensive loss – (119) (119)Actuarial losses taken to other comprehensive loss – (9) (9)Share of associates’ and joint ventures’ other comprehensive loss – (181) (181)Deferred tax credit on items taken to other comprehensive loss – 71 71Dividends paid – (1,324) (1,324)Dilution of non-controlling interests as a result of business combinations – (5) (5)Payment for purchase of own shares for share trusts (52) – (52)Buyout of non-controlling interests – (7) (7)Utilisation of EBT shares 48 (48) –Credit entry relating to share-based payments – 158 158At 31 March 2012 (661) 12,524 11,863Profi t for the year – 3,274 3,274Other comprehensive loss – (46) (46)Actuarial losses taken to other comprehensive loss – (21) (21)Share of associates’ and joint ventures’ other comprehensive loss – (53) (53)Deferred tax credit on items taken to other comprehensive loss – 28 28Dividends paid – (1,517) (1,517)Payment for purchase of own shares for share trusts (53) – (53)Utilisation of EBT shares 71 (71) –Credit entry relating to share-based payments – 189 189At 31 March 2013 (643) 14,353 13,710TotalUS$mThe group’s retained earnings includes amounts of US$734 million (2012: US$709 million), the distribution of which is limited by statutory orother restrictions.Treasury and EBT shares reserveOn 26 February 2009 77,368,338 SABMiller plc non-voting convertible shares were converted into ordinary shares and then acquired by thecompany to be held as treasury shares. While the purchase price for each share was £10.54, the whole amount of the consideration was paidbetween group companies. On 15 February 2010, 5,300,000 of these treasury shares were transferred to the EBT for nil consideration. On 26March 2013 an additional 4,600,000 treasury shares were transferred to the EBT at no gain or loss to the group. These shares will be used tosatisfy awards outstanding under the various share incentive plans. As at 31 March 2013 a total of 67,468,338 shares (2012: 72,068,338) wereheld in treasury.There are two employee benefi t trusts currently in operation, being the SABMiller Employees’ Benefi t Trust (the EBT) and the SABMillerAssociated Companies’ Employees’ Benefi t Trust (the AC-EBT). The EBT holds shares in SABMiller plc for the purposes of the various shareincentive plans, further details of which are disclosed in the directors’ remuneration report. At 31 March 2013 the EBT held 8,339,106 shares(2012: 5,605,746 shares) which cost US$126 million (2012: US$98 million) and had a market value of US$438 million (2012: US$225 million).These shares have been treated as a deduction in arriving at shareholders’ funds. The EBT used funds provided by SABMiller plc to purchasesuch of the shares as were purchased in the market. The costs of funding and administering the scheme are charged to the income statementin the period to which they relate.The AC-EBT holds shares in SABMiller plc for the purposes of providing share incentives for employees of companies in which SABMiller has asignifi cant economic and strategic interest but over which it does not have management control. Further details on the AC-EBT are disclosed inthe directors’ remuneration report. At 31 March 2013 the AC-EBT held no (2012: 335,940) shares which cost US$nil (2012: US$11 million) andhad a market value of US$nil (2012: US$13 million). These shares have been treated as a deduction in arriving at shareholders’ funds. TheAC-EBT used funds provided by Gardwell Ltd, a wholly owned indirect subsidiary of SABMiller plc, to purchase the shares. The costs offunding and administering the scheme are charged to the income statement in the period to which they relate.Shares currently held in each EBT rank pari passu with all other ordinary shares, but in both cases the trustees have elected to waive dividendsand to decline from voting shares, except in circumstances where they may be holding shares benefi cially owned by a participant. There wereno benefi cially owned shares in either EBT as at 31 March 2013 (2012: nil).148 – SABMiller plc Annual Report 2013

26. Retained earnings and other reserves continuedb. Other reservesThe analysis of other reserves is as follows.ForeigncurrencytranslationreserveUS$mCash flowhedgingreserveUS$mNetinvestmenthedgingreserveUS$mAvailablefor salereserveUS$mAt 1 April 2011 2,183 35 (340) 3 1,881Currency translation differences 137 – – – 137Net investment hedges – – (1) – (1)Cash fl ow hedges – 6 – – 6Deferred tax on items taken to other comprehensive loss – 30 – – 30Share of associates’ and joint ventures’ other comprehensive loss – (75) – – (75)At 31 March 2012 2,320 (4) (341) 3 1,978Currency translation differences (696) – – – (696)Net investment hedges – – 63 – 63Cash fl ow hedges – (5) – – (5)Available for sale investments – – – (1) (1)Deferred tax on items taken to other comprehensive loss – 6 – – 6Share of associates’ and joint ventures’ other comprehensive (loss)/income – (23) – 6 (17)At 31 March 2013 1,624 (26) (278) 8 1,328Foreign currency translation reserveThe foreign currency translation reserve comprises all translation exchange differences arising on the retranslation of opening net assetstogether with differences between income statements translated at average and closing rates.27a. Reconciliation of profit for the year to net cash generated from operationsProfi t for the year 3,511 4,477Taxation 1,201 1,126Share of post-tax results of associates and joint ventures (1,244) (1,152)Finance income (682) (531)Finance costs 1,417 1,093Operating profi t 4,203 5,013Depreciation:– Property, plant and equipment 641 672– Containers 226 237Container breakages, shrinkages and write-offs 38 34Profi t on disposal of businesses (79) (1,258)Gain on remeasurement of existing interest in joint venture on acquisition – (66)Profi t on disposal of investment in associate – (103)Gain on dilution of investment in associate (4) –Loss/(profi t) on disposal of property, plant and equipment 13 (15)Amortisation of intangible assets 450 273Impairment of goodwill 11 –Impairment of property, plant and equipment 39 –Impairment of working capital balances 31 16Amortisation of advances to customers 45 24Unrealised net gain from fair value hedges – (20)Dividends received from other investments (1) (1)Charge with respect to share options 184 132Charge with respect to Broad-Based Black Economic Empowerment scheme 17 29Other non-cash movements (56) 12Net cash generated from operations before working capital movements (EBITDA) 5,758 4,979Increase in inventories (14) (45)Increase in trade and other receivables (107) (25)Increase in trade and other payables 82 374Decrease in provisions (177) (46)Increase in post-retirement benefi t provisions 12 –Net cash generated from operations 5,554 5,2372013US$mTotalUS$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 149

Notes to the consolidated financial statementscontinued27a. Reconciliation of profit for the year to net cash generated from operationscontinuedProfi t for the year and cash generated from operations before working capital movements includes cash fl ows relating to exceptional items ofUS$191 million (2012: US$308 million), comprising US$140 million (2012: US$228 million) in respect of business capability programme costs,US$51 million (2012: US$50 million) in respect of integration and restructuring costs, US$nil (2012: US$72 million) in respect of transactionrelatedcosts, partially offset by US$nil (2012: US$42 million) in respect of a litigation-related credit.The following table provides a reconciliation of EBITDA to adjusted EBITDA.EBITDA 5,758 4,979Cash exceptional items 191 308Dividends received from MillerCoors 886 896Adjusted EBITDA 6,835 6,1832013US$m2012US$m27b. Reconciliation of net cash generated from operating activities to free cash flowNet cash generated from operating activities 4,101 3,937Purchase of property, plant and equipment (1,335) (1,473)Proceeds from sale of property, plant and equipment 30 116Purchase of intangible assets (144) (166)Proceeds from sale of intangible assets 4 –Investments in joint ventures (272) (288)Investments in associates (23) –Repayment of investments by associates – 14Dividends received from joint ventures 886 896Dividends received from associates 113 120Dividends received from other investments 1 1Dividends paid to non-controlling interests (131) (109)Free cash flow 3,230 3,0482013US$m2012US$m27c. Analysis of net debtCash and cash equivalents on the balance sheet are reconciled to cash and cash equivalents on the cash fl ow statement as follows.2013US$mCash and cash equivalents (balance sheet) 2,171 745Overdrafts (212) (138)Overdrafts of disposal group classifi ed as held for sale – (1)Cash and cash equivalents (cash flow statement) 1,959 6062012US$m150 – SABMiller plc Annual Report 2013

27c. Analysis of net debt continuedNet debt is analysed as follows.Cash andcashequivalents(excludingoverdrafts)US$mOverdraftsUS$mBorrowingsUS$mDerivativefinancialinstrumentsUS$mFinanceleasesUS$mTotalgrossborrowingsUS$mAt 1 April 2011 1,071 (258) (8,193) 298 (9) (8,162) (7,091)Exchange adjustments 10 (49) (38) 9 – (78) (68)Cash fl ow (246) 157 (8,861) (43) 5 (8,742) (8,988)Acquisitions – through business combinations 12 – (1,844) 259 (2) (1,587) (1,575)Disposals (102) 11 98 – – 109 7Other movements – – (229) 97 (15) (147) (147)At 31 March 2012 745 (139) (19,067) 620 (21) (18,607) (17,862)Exchange adjustments (83) 32 131 – 1 164 81Cash fl ow 1,512 (105) 560 4 6 465 1,977Disposals (3) – – – – – (3)Other movements – – 75 52 (21) 106 106At 31 March 2013 2,171 (212) (18,301) 676 (35) (17,872) (15,701)27d. Major non-cash transactions2013Major non-cash transactions in the year included the following.The additional profi t realised on the disposal in the prior year of the group’s Angolan operations in Africa.2012Major non-cash transactions in the year included the following.The disposal of the group’s Angolan operations, Coca-Cola Bottling Luanda SARL, Coca-Cola Bottling Sul de Angola SARL, Empresa DeCervejas N’Gola Norte SA, and its interest in Empresa de Cervejas N’Gola SARL, in Africa in exchange for a 27.5% interest in BIH Angola.The contribution of the group’s Russian beer business, SABMiller RUS LLC, and Ukrainian beer business, PJSC Miller Brands Ukraine, toAnadolu Efes in exchange for a 24% economic interest in the enlarged Anadolu Efes group.The remeasurement of the group’s existing 50% interest in the Pacifi c Beverages joint venture to fair value on the acquisition of theremaining 50% interest.NetdebtUS$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 151

Notes to the consolidated financial statementscontinued28. Restatement of the balance sheet at 31 March 2012The initial accounting under IFRS 3, ‘Business Combinations’, for the Foster’s, the Pacifi c Beverages and the International Breweriesacquisitions had not been completed as at 31 March 2012. During the year ended 31 March 2013 adjustments to provisional fair valuesin respect of these acquisitions were made. As a result comparative information for the year ended 31 March 2012 has been presented inthe consolidated fi nancial statements as if the adjustments to provisional fair values had been made from the respective transaction dates.The fair value exercises in respect of these acquisitions are now complete.The following table reconciles the impact on the balance sheet reported as at 31 March 2012 to the comparative balance sheet presented inthe consolidated fi nancial statements. No material adjustments to the income statement for the year ended 31 March 2012 have been requiredas a result of the adjustments to provisional fair values.At 31 March2012US$mAdjustmentsto provisionalfair valuesUS$mAt 31 March2012As restatedUS$mAssetsNon-current assetsGoodwill 20,128 43 20,171Intangible assets 9,901 57 9,958Property, plant and equipment 9,299 (137) 9,162Investments in joint ventures 5,520 – 5,520Investments in associates 4,946 126 5,072Available for sale investments 30 – 30Derivative fi nancial instruments 732 – 732Trade and other receivables 136 – 136Deferred tax assets 117 – 117Loan participation deposit 100 – 10050,909 89 50,998Current assetsInventories 1,255 (7) 1,248Trade and other receivables 2,156 48 2,204Current tax assets 482 147 629Derivative fi nancial instruments 24 – 24Available for sale investments 1 – 1Cash and cash equivalents 745 – 7454,663 188 4,851Assets of disposal group classifi ed as held for sale 79 – 794,742 188 4,930Total assets 55,651 277 55,928LiabilitiesCurrent liabilitiesDerivative fi nancial instruments (40) – (40)Borrowings (1,062) – (1,062)Trade and other payables (4,054) (73) (4,127)Current tax liabilities (910) (413) (1,323)Provisions (717) 13 (704)(6,783) (473) (7,256)Liabilities of disposal group classifi ed as held for sale (7) – (7)(6,790) (473) (7,263)Non-current liabilitiesDerivative fi nancial instruments (69) – (69)Borrowings (18,164) – (18,164)Trade and other payables (112) – (112)Deferred tax liabilities (3,917) 198 (3,719)Provisions (586) 17 (569)(22,848) 215 (22,633)Total liabilities (29,638) (258) (29,896)Net assets 26,013 19 26,032Total equity 26,013 19 26,032152 – SABMiller plc Annual Report 2013

29. Acquisitions and disposalsThe group completed the acquisition of a 60% interest in Darbrew Limited in Tanzania in March 2013 for total cash consideration ofUS$6 million. The business combination has been accounted for using the acquisition method. The residual value over the net assetsacquired is recognised as goodwill of US$3 million in the fi nancial statements.DisposalsOn 7 September 2012 the group completed the disposal of Foster’s interests in its Fijian beverage operations, Foster’s Group Pacifi c Limited,and on 28 September 2012 the group completed the disposal of Foster’s soft drink assets, both to Coca-Cola Amatil Limited (CCA). There wasno gain or loss on disposal.30. Commitments, contingencies and guaranteesa. Operating lease commitmentsThe minimum lease rentals to be paid under non-cancellable leases at 31 March are as follows.Land and buildingsWithin one year 65 65Later than one year and less than fi ve years 152 171After fi ve years 33 422013US$m2012US$m250 278Plant, vehicles and systemsWithin one year 54 55Later than one year and less than fi ve years 129 126After fi ve years 91 87b. Other commitments274 268Capital commitments not provided in the financial informationContracts placed for future expenditure for property, plant and equipment 239 277Contracts placed for future expenditure for intangible assets 3 1Share of capital commitments of joint ventures 48 44Other commitments not provided in the financial informationContracts placed for future expenditure 2,632 3,164Share of joint ventures’ other commitments 379 512Contracts placed for future expenditure in 2013 primarily relate to minimum purchase commitments for raw materials and packaging materials,which are principally due between 2013 and 2019. Additionally, as part of the business capability programme the group has entered intocontracts for the provision of IT, communications and consultancy services and in relation to which the group had commitments ofUS$120 million at 31 March 2013 (2012: US$193 million).The group’s share of joint ventures’ other commitments primarily relate to MillerCoors’ various long-term non-cancellable advertising andpromotion commitments.2013US$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 153

Notes to the consolidated financial statementscontinued30. Commitments, contingencies and guarantees continuedc. Contingent liabilities and guaranteesGuarantees to third parties provided in respect of trade loans 1 2 4Share of joint ventures’ contingent liabilities – 4Litigation 2 15 23Other contingent liabilities 2 92013US$m2012US$m19 401 Guarantees to third parties provided in respect of trade loansThese primarily relate to guarantees given by Grolsch to banks in relation to loans taken out by trade customers.2 LitigationThe group has a number of activities in a wide variety of geographic areas and is subject to certain legal claims incidental to its operations. In the opinion of the directors, after takingappropriate legal advice, these claims are not expected to have, either individually or in aggregate, a material adverse effect upon the group’s fi nancial position, except insofar as alreadyprovided in the consolidated fi nancial statements. These include claims made by certain former employees in Ecuador arising out of events which took place before the group’s investmentin Ecuador in 2005, in respect of which, based on legal advice that they have no valid legal basis, the directors have determined that no provision is required and that they should continueto be contested.OtherSABMiller and Altria entered into a tax matters agreement (the Agreement) on 30 May 2002, to regulate the conduct of tax matters betweenthem with regard to the acquisition of Miller and to allocate responsibility for contingent tax costs. SABMiller has agreed to indemnify Altriaagainst any taxes, losses, liabilities and costs that Altria incurs arising out of or in connection with a breach by SABMiller of any representation,agreement or covenant in the Agreement, subject to certain exceptions.The group has exposures to various environmental risks. Although it is diffi cult to predict the group’s liability with respect to these risks, futurepayments, if any, would be made over a period of time in amounts that would not be material to the group’s fi nancial position, except insofar asalready provided in the consolidated fi nancial statements.31. Pensions and post-retirement benefitsThe group operates a number of pension schemes throughout the world. These schemes have been designed and are administered inaccordance with local conditions and practices in the countries concerned and include both defi ned contribution and defi ned benefi t schemes.The majority of the schemes are funded and the schemes’ assets are held independently of the group’s fi nances. The assets of the schemesdo not include any of the group’s own fi nancial instruments, nor any property occupied by or other assets used by the group. Pension andpost-retirement benefi t costs are assessed in accordance with the advice of independent professionally qualifi ed actuaries. Generally, theprojected unit method is applied to measure the defi ned benefi t scheme liabilities.The group also provides medical benefi ts, which are mainly unfunded, for retired employees and their dependants in South Africa, theNetherlands and Latin America.The total pension and post-retirement medical benefi t costs recognised in the income statement, and related net liabilities on the balance sheetare as follows.Defi ned contribution scheme costs 110 97Defi ned benefi t pension plan costs 18 15Post-retirement medical and other benefi t costs 11 13Accruals for defi ned contribution plans (balance sheet) 7 3Provisions for defi ned benefi t pension plans (balance sheet) 206 197Provisions for other post-retirement benefi ts (balance sheet) 95 1122013US$m2012US$m154 – SABMiller plc Annual Report 2013

31. Pensions and post-retirement benefits continuedThe group operates various defi ned contribution and defi ned benefi t schemes. Details of the main defi ned benefi t schemes are provided below.Latin America pension schemesThe group operates a number of pension schemes throughout Latin America. Details of the major scheme are provided below.The Colombian Labour Code Pension Plan is an unfunded scheme of the defi ned benefi t type and covers all salaried and hourly employees inColombia who are not covered by social security or who have at least 10 years of service prior to 1 January 1967. The plan is fi nanced entirelythrough company reserves and there are no external assets. The most recent actuarial valuation of the Colombian Labour Code Pension Planwas carried out by independent professionally qualifi ed actuaries at 28 February 2013 using the projected unit credit method. All salariedemployees are now covered by social security or private pension fund provisions. The principal economic assumptions used in thepreparation of the pension valuations are shown below and take into consideration changes in the Colombian economy.Grolsch pension schemeThe Grolsch pension plan, named Stichting Pensioenfonds van de Grolsche Bierbrouwerij, is a funded scheme of the defi ned benefi t type,based on average salary with assets held in separately administered funds. The latest valuation of the Grolsch pension fund was carriedout at 31 March 2013 by an independent actuary using the projected unit credit method.OtherDetails of other defi ned benefi t pension schemes are provided below.Carlton & United Breweries pension schemeThe Carlton & United Breweries pension fund, named AusBev Superannuation Fund, provides accumulation style and defi ned benefi ts to theemployees. The company funds the defi ned benefi ts, administration and insurance costs of the fund as a benefi t to employees who elect to bemembers of this fund. The latest valuation of the Carlton & United Breweries pension fund was carried out at 30 June 2011 by an independentactuary using the projected unit credit method. The valuation update for the fund was carried out at 31 March 2013 by an independent actuary.The defi ned benefi ts section is now closed to new members.South Africa pension schemesThe group operates a number of pension schemes throughout South Africa. Details of the major schemes are provided below.The ABI Pension Fund, Suncrush Pension Fund and Suncrush Retirement Fund are funded schemes of the defi ned benefi t type based onaverage salary with assets held in separately administered funds. The surplus apportionment schemes for the ABI Pension Fund, the SuncrushPension Fund and Suncrush Retirement Fund have been approved by the Financial Services Board.The active and pensioner liabilities in respect of the ABI Pension Fund and the Suncrush Retirement Fund have been settled. The only liabilitiesare in respect of former members, the surplus apportionment scheme and unclaimed benefi ts. Once the surplus liabilities have been settled,the Funds will be deregistered and liquidated. The latest valuation of the South African pension schemes was carried out at 31 March 2013 byan independent actuary.The Section 14 transfer of the Suncrush Pension Fund members to the SAB Staff Provident Fund was annulled by the Financial Services Boardon 24 August 2011. The Rules of the Fund have been amended to allow for paid-up benefi ts for each of the members. This would allow for eachmember to be paid their benefi t, valued as at 1 July 2005, upon their exit.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 155

Notes to the consolidated financial statementscontinued31. Pensions and post-retirement benefits continuedPrincipal actuarial assumptions at 31 March (expressed as weighted averages)Defined benefit pension plansMedical and otherpost-retirement benefitsLatinAmerica Grolsch Other South Africa OtherAt 31 March 2013Discount rate (%) 5.0 3.8 4.6 8.8 4.9Salary infl ation (%) 2.5 2.0 3.9 – –Pension infl ation (%) 2.5 0.7 3.2 – –Healthcare cost infl ation (%) – – – 7.5 2.3Mortality rate assumptions– Retirement age: Males 55 65 62 63 57Females 50 65 61 63 53– Life expectations on retirement age:Retiring today: Males 27 21 22 16 25Females 36 24 23 20 32Retiring in 20 years: Males 27 23 22 16 25Females 36 25 23 20 32At 31 March 2012Discount rate (%) 7.5 4.8 6.0 9.3 7.0Salary infl ation (%) 3.5 2.0 3.8 – –Pension infl ation (%) 3.5 2.0 3.2 – –Healthcare cost infl ation (%) – – – 7.8 3.0Mortality rate assumptions– Retirement age: Males 55 65 66 63 57Females 50 65 61 63 53– Life expectations on retirement age:Retiring today: Males 27 21 22 16 24Females 36 24 23 20 31Retiring in 20 years: Males 27 23 22 16 24Females 36 25 23 20 32The present value of defi ned benefi t pension plan and post-employment medical benefi t liabilities are as follows.Defined benefit pension plansMedical and otherpost-retirement benefitsLatinAmericaUS$mGrolschUS$mPresent value of scheme liabilities at 1 April 2011 175 305 48 528 71 43 114– Portion of defi ned benefi t obligation that is unfunded 175 – 13 188 71 43 114– Portion of defi ned benefi t obligation that is partly or wholly funded – 305 35 340 – – –Benefi ts paid (18) (11) (15) (44) – (4) (4)Contributions paid by plan participants – 3 – 3 (2) – (2)Current service cost – 4 2 6 2 1 3Interest costs 13 15 5 33 6 4 10Actuarial losses/(gains) 6 21 13 40 (1) 1 –Reversal of unused provision (10) – – (10) – – –Acquisitions – – 52 52 – – –Exchange adjustments 6 (18) (3) (15) (10) 1 (9)Present value of scheme liabilities at 31 March 2012 172 319 102 593 66 46 112– Portion of defi ned benefi t obligation that is unfunded 172 – 13 185 66 46 112– Portion of defi ned benefi t obligation that is partly or wholly funded – 319 89 408 – – –Benefi ts paid (17) (11) (9) (37) – (5) (5)Contributions paid by plan participants – 3 – 3 (2) – (2)Current service cost 1 4 3 8 1 1 2Interest costs 12 14 4 30 6 3 9Actuarial losses/(gains) 17 (19) 2 – (14) 5 (9)Settlements and curtailments – – (3) (3) – – –Exchange adjustments (4) (12) (6) (22) (10) (2) (12)Present value of scheme liabilities at 31 March 2013 181 298 93 572 47 48 95– Portion of defi ned benefi t obligation that is unfunded 181 – 12 193 47 48 95– Portion of defi ned benefi t obligation that is partly or wholly funded – 298 81 379 – – –OtherUS$mTotalUS$mSouthAfricaUS$mOtherUS$mTotalUS$m156 – SABMiller plc Annual Report 2013

31. Pensions and post-retirement benefits continuedThe fair value reconciliations of opening plan assets to closing plan assets, on an aggregated basis, are as follows.GrolschUS$mDefined benefit pension plansPlan assets at 1 April 2011 333 52 385Expected return on plan assets 16 8 24Benefi ts paid (11) (14) (25)Employer contributions/(employer assets recognised) 9 (5) 4Actuarial gains/(losses) 26 (3) 23Acquisitions – 51 51Exchange adjustments (21) (5) (26)Plan assets at 31 March 2012 352 84 436Expected return on plan assets 15 5 20Benefi ts paid (11) (8) (19)Employer contributions 17 2 19Actuarial gains 18 – 18Settlements – (3) (3)Exchange adjustments (14) (4) (18)Plan assets at 31 March 2013 377 76 453The fair value of assets in pension schemes and the expected rates of return were.OtherUS$mTotalUS$mLatin America Grolsch Other TotalUS$mLongtermrate ofreturn% US$mLongtermrate ofreturn% US$mLongtermrate ofreturn% US$mAt 31 March 2013Equities – – 126 7.0 20 8.0 146Bonds – – 235 3.0 21 8.0 256Cash – – – – 31 7.0 31Property and other – – 16 7.0 4 9.0 20Total fair value of assets – 377 76 453Present value of scheme liabilities (181) (298) (93) (572)(Defi cit)/surplus in the scheme (181) 79 (17) (119)Unrecognised pension asset due to limit – (79) (8) (87)Pension liability recognised (181) – (25) (206)At 31 March 2012Equities – – 102 7.0 31 1.0 133Bonds – – 229 4.0 14 9.0 243Cash – – – – 34 6.0 34Property and other – – 21 7.0 5 9.0 26Total fair value of assets – 352 84 436Present value of scheme liabilities (172) (319) (102) (593)(Defi cit)/surplus in the scheme (172) 33 (18) (157)Unrecognised pension asset due to limit – (33) (7) (40)Pension liability recognised (172) – (25) (197)The expected returns on plan assets is determined by considering the expected returns available on each major asset class and the asset mixunderlying the current investment policy.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 157

Notes to the consolidated financial statementscontinued31. Pensions and post-retirement benefits continuedThe amounts recognised in the balance sheet are as follows.Defined benefit pension plansMedical and otherpost-retirement benefitsLatinAmericaUS$mGrolschUS$mAt 31 March 2013Present value of scheme liabilities (181) (298) (93) (572) (47) (48) (95)Fair value of plan assets – 377 76 453 – – –(181) 79 (17) (119) (47) (48) (95)Unrecognised assets due to limit – (79) (8) (87) – – –Net liability recognised on balance sheet (181) – (25) (206) (47) (48) (95)OtherUS$mTotalUS$mSouthAfricaUS$mOtherUS$mTotalUS$mAt 31 March 2012Present value of scheme liabilities (172) (319) (102) (593) (66) (46) (112)Fair value of plan assets – 352 84 436 – – –(172) 33 (18) (157) (66) (46) (112)Unrecognised assets due to limit – (33) (7) (40) – – –Net liability recognised on balance sheet (172) – (25) (197) (66) (46) (112)In respect of defi ned benefi t pensions plans in South Africa, which are included in ‘Other’, the pension asset recognised is limited to the extentthat the employer is able to recover a surplus either through reduced contributions in the future or through refunds from the scheme. Pensionfund assets have been set equal to nil as the surplus apportionment exercise required in terms of the South African legislation has not yetbeen completed.The pension asset recognised in respect of Grolsch is limited to the extent that the employer is able to recover a surplus either through reducedcontributions in the future or through refunds from the scheme. The limit has been set equal to nil due to the terms of the pension agreementwith the pension fund.The amounts recognised in net operating expenses in the income statement are as follows.Defined benefit pension plansMedical and otherpost-retirement benefitsLatinAmericaUS$mGrolschUS$mAt 31 March 2013Current service cost (1) (4) (3) (8) (1) (1) (2)Interest costs (12) (14) (4) (30) (6) (3) (9)Expected return on plan assets – 15 5 20 – – –OtherUS$mTotalUS$mSouthAfricaUS$mOtherUS$mTotalUS$m(13) (3) (2) (18) (7) (4) (11)At 31 March 2012Current service cost – (4) (2) (6) (2) (1) (3)Interest costs (13) (15) (5) (33) (6) (4) (10)Expected return on plan assets – 16 8 24 – – –(13) (3) 1 (15) (8) (5) (13)158 – SABMiller plc Annual Report 2013

31. Pensions and post-retirement benefits continuedThe amounts recognised in the statement of comprehensive income are as follows.LatinAmericaUS$mDefined benefit pension plansGrolschUS$mOtherUS$mTotalUS$mMedical and otherpost-retirement benefitsAt 31 March 2013Actual return on plan assets – 33 5 38 – – –Less: expected return on plan assets – (15) (5) (20) – – –Experience gains arising on– scheme assets – 18 – 18 – – –– scheme liabilities – 19 1 20 – – –Changes in actuarial assumptions (17) – (1) (18) 14 (5) 9Unrecognised gains due to limit – (49) (1) (50) – – –SouthAfricaUS$mOtherUS$mTotalUS$m(17) (12) (1) (30) 14 (5) 9At 31 March 2012Actual return on plan assets – 42 5 47 – – –Less: expected return on plan assets – (16) (8) (24) – – –Experience gains/(losses) arising on– scheme assets – 26 (3) 23 – – –– scheme liabilities – (21) (10) (31) 1 – 1Changes in actuarial assumptions (6) – (3) (9) – (1) (1)Unrecognised (gains)/losses due to limit – (6) 14 8 – – –The cumulative amounts recognised in other comprehensive income are as follows.(6) (1) (2) (9) 1 (1) –Cumulative actuarial losses recognised at beginning of year (212) (203)Net actuarial losses recognised in the year (21) (9)Cumulative actuarial losses recognised at end of year (233) (212)History of actuarial gains and lossesExperience gains/(losses) of plan assets 18 23 14 33 (77)Percentage of plan assets 4% 5% 4% 10% 26%Experience gains/(losses) of scheme liabilities 20 (30) 16 (44) 28Percentage of scheme liabilities 3% 4% 2% 7% 6%Fair value of plan assets 453 436 385 344 299Present value of scheme liabilities (667) (705) (642) (612) (499)Defi cit in the schemes (214) (269) (257) (268) (200)Unrecognised assets due to limit (87) (40) (53) (22) (17)Net liability recognised in balance sheet (301) (309) (310) (290) (217)Contributions expected to be paid into the group’s major defi ned benefi t schemes during the annual period after 31 March 2013 areUS$25 million.A 1% increase and a 1% decrease in the assumed healthcare cost of infl ation will have the following effect on the group’s major postemploymentmedical benefi ts.20132013US$m2012US$m2011US$m2013US$m2010US$mIncreaseUS$m2012US$m2009US$mDecreaseUS$mCurrent service costs – –Interest costs 1 (1)Accumulated post-employment medical benefi t costs 9 (7)Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 159

Notes to the consolidated financial statementscontinued32. Related party transactionsa. Parties with significant influence over the group: Altria Group, Inc. (Altria) and the Santo Domingo Group (SDG)Altria is considered to be a related party of the group by virtue of its 26.8% equity shareholding. There were no transactions with Altria duringthe year.SDG is considered to be a related party of the group by virtue of its 14.0% equity shareholding in SABMiller plc. There were no transactionswith SDG during the year. During the year ended 31 March 2012 the group made donations of US$33 million to the Fundación Mario SantoDomingo, pursuant to the contractual arrangements entered into at the time of the Bavaria transaction in 2005, under which it was agreedthat the proceeds of the sale of surplus non-operating property assets owned by Bavaria SA and its subsidiaries would be donated to variouscharities, including the Fundación Mario Santo Domingo. No donations were made to the Fundación Mario Santo Domingo during the yearended 31 March 2013. At 31 March 2013 US$nil (2012: US$nil) was owing to the SDG.b. Associates and joint venturesDetails relating to transactions with associates and joint ventures are analysed below.Purchases from associates 1 (227) (214)Purchases from joint ventures 2 (97) (86)Sales to associates 3 46 39Sales to joint ventures 4 25 28Dividends receivable from associates 5 113 150Dividends received from joint ventures 6 886 896Royalties received from associates 7 27 13Royalties received from joint ventures 8 2 2Management fees, guarantee fees and other recoveries received from associates 9 17 24Management fees paid to joint ventures 10 (2) (1)Sale of associate to joint venture 11 21 –2013US$m2012US$m1 The group purchased canned Coca-Cola products for resale from Coca-Cola Canners of Southern Africa (Pty) Limited (Coca-Cola Canners); inventory from Distell Group Ltd (Distell) andAssociated Fruit Processors (Pty) Ltd (AFP); and accommodation from Tsogo Sun Holdings Ltd (Tsogo Sun), all in South Africa.2 The group purchased lager from MillerCoors LLC (MillerCoors).3 The group made sales of lager to Tsogo Sun, Delta Corporation Ltd (Delta), Anadolu Efes Biracılık ve Malt Sanayii A¸S (Anadolu Efes), and Distell, and in the prior year also to EmpresaCervejas De N’Gola SARL (ECN), and Société des Brasseries et Glacières Internationales and Brasseries Internationales Holding Ltd (Castel).4 The group made sales to MillerCoors, and in the prior year also to Pacifi c Beverages Pty Ltd.5 The group had dividends receivable from Castel of US$21 million (2012: US$60 million), Coca-Cola Canners US$11 million (2012: US$6 million), Distell US$21 million (2012: US$22 million),Tsogo Sun US$33 million (2012: US$41 million), Delta US$12 million (2012: US$3 million), International Trade and Supply Limited $14 million (2012: US$6 million), Grolsch (UK) LtdUS$1 million (2012: US$2 million) and Kenya Breweries Ltd US$nil (2012: US$9 million).6 The group received dividends from MillerCoors.7 The group received royalties from Delta and Anadolu Efes and in the prior year also Kenya Breweries Ltd.8 The group received royalties from MillerCoors.9 The group received management fees from Delta, guarantee fees from Delta and BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola), and other recoveries from AFP.In the prior year management fees were also received from ECN.10 The group paid management fees to MillerCoors.11 The group sold its interest in Foster’s USA LLC to MillerCoors for cash consideration.At 31 MarchAmounts owed by associates – trade 1 68 145Amounts owed by associates – loans 2 – 60Amounts owed by joint ventures 3 5 6Amounts owed to associates 4 (150) (42)Amounts owed to joint ventures 5 (14) (17)2013US$m2012US$m1 Amounts owed by AFP, Delta, BIH Angola and Anadolu Efes.2 Amounts owed by BIH Angola in the prior year.3 Amounts owed by MillerCoors.4 Amounts owed to Coca-Cola Canners, Castel and Tsogo Sun. At 31 March 2013 this balance included US$100 million received in compensation for the loan participation deposit relatingto the Angolan businesses managed by Castel (see note 17).5 Amounts owed to MillerCoors.Guarantees provided in respect of associates’ bank facilities are detailed in note 22.c. Transactions with key managementThe group has a related party relationship with the directors of the group and members of the excom as key management. At 31 March 2013there were 26 (2012: 27) members of key management. Key management compensation is provided in note 6c.160 – SABMiller plc Annual Report 2013

33. Post balance sheet eventsIn January 2013 the group agreed to sell its non-core milk and juice business in Panama, subject to regulatory approval. The regulatoryapproval for the sale was received and the sale completed in May 2013.34. Principal subsidiaries, associates and joint venturesThe principal subsidiary undertakings of the group as at 31 March were as follows.Effective interestNameCountry ofincorporationPrincipalactivity2013 2012CorporateSABMiller Holdings Ltd United Kingdom Holding company 100% 100%SABMiller Africa and Asia BV 1 Netherlands Holding company 100% 100%SABMiller Holdings SA Ltd United Kingdom Holding company 100% 100%SABMiller Holdings SH Ltd United Kingdom Holding company 100% 100%SABMiller International BV Netherlands Trademark owner 100% 100%SABMiller SAF Limited United Kingdom Holding company/Financing 100% 100%SABMiller Southern Investments Ltd United Kingdom Holding company 100% 100%SABMiller Procurement GmbH 2 Switzerland Procurement 100% 100%SABSA Holdings Ltd South Africa Holding company 100% 100%Latin American operationsBavaria SA 3 Colombia Brewing/Soft drinks 99% 99%Cervecería Argentina SA Isenbeck Argentina Brewing 100% 100%Cervecería del Valle SA Colombia Brewing 99% 99%Cervecería Hondureña, SA de CV Honduras Brewing/Soft drinks 99% 99%Cervecería Nacional (CN) SA 3 Ecuador Brewing 96% 96%Cervecería Nacional SA 3 Panama Brewing 98% 97%Cervecería San Juan SA 3 Peru Brewing/Soft drinks 92% 92%Cervecería Unión SA Colombia Brewing 98% 98%Industrias La Constancia, SA de CV El Salvador Brewing/Soft drinks 100% 100%Unión de Cervecerías Peruanas Backus y Johnston SAA 3 Peru Brewing 94% 94%European operationsSABMiller Europe BV 1 Netherlands Holding company 100% 100%SABMiller Holdings Europe Ltd United Kingdom Holding company 100% 100%SABMiller Netherlands Cooperatieve WA Netherlands Holding company 100% 100%Birra Peroni Srl Italy Brewing 100% 100%Compañia Cervecera de Canarias SA Spain Brewing 51% 51%Dreher Sörgyárak Zrt Hungary Brewing 100% 100%Grolsche Bierbrouwerij Nederland BV Netherlands Brewing 100% 100%Kompania Piwowarska SA 4 Poland Brewing 100% 100%Miller Brands (UK) Ltd United Kingdom Sales and distribution 100% 100%Pivovary Topvar as Slovakia Brewing 100% 100%Plzeňský Prazdroj as Czech Republic Brewing 100% 100%Ursus Breweries SA Romania Brewing 99% 99%North American operationsSABMiller Holdings Inc USA Holding company/Financing 100% 100%Miller Brewing Company USA Holding company 100% 100%African operationsSABMiller Africa BV Netherlands Holding company 62% 62%SABMiller Botswana BV Netherlands Holding company 62% 62%SABMiller (A&A) Ltd United Kingdom Holding company 100% 100%SABMiller Investments Ltd Mauritius Holding company 80% 80%SABMiller Investments II BV Netherlands Holding company 80% 80%Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 161

Notes to the consolidated financial statementscontinued34. Principal subsidiaries, associates and joint ventures continuedEffective interestNameCountry ofincorporationPrincipalactivity2013 2012African operations continuedSABMiller Nigeria Holdings BV Netherlands Holding company 50% 50%SABMiller Zimbabwe BV Netherlands Holding company 62% 62%Accra Brewery Ltd Ghana Brewing 60% 60%Ambo Mineral Water Share Company Ethiopia Soft drinks 40% 40%Botswana Breweries (Pty) Ltd Botswana Sorghum brewing 31% 31%Cervejas de Moçambique SARL 3 Mozambique Brewing 49% 49%Chibuku Products Ltd Malawi Sorghum brewing 31% 31%Crown Beverages Ltd Kenya Soft drinks 80% 80%Heinrich’s Syndicate Ltd Zambia Soft drinks 62% 62%Intafact Beverages Ltd Nigeria Brewing 38% 41%International Breweries plc 3 Nigeria Brewing 36% 33%Kgalagadi Breweries (Pty) Ltd Botswana Brewing/Soft drinks 31% 31%Maluti Mountain Brewery (Pty) Ltd Lesotho Brewing/Soft drinks 24% 24%MUBEX Mauritius Procurement 100% 100%National Breweries plc 3 Zambia Sorghum brewing 43% 43%Nile Breweries Ltd Uganda Brewing 62% 62%Pabod Breweries Ltd Nigeria Brewing 38% 38%Rwenzori Bottling Company Ltd Uganda Soft drinks 80% 80%Southern Sudan Beverages Ltd South Sudan Brewing 80% 80%Swaziland Beverages Ltd Swaziland Brewing 37% 37%Tanzania Breweries Ltd 3 Tanzania Brewing 36% 36%Voltic (GH) Ltd Ghana Soft drinks 80% 80%Voltic Nigeria Ltd Nigeria Soft drinks 50% 50%Zambian Breweries plc 3 Zambia Brewing/Soft drinks 54% 54%Asia Pacific operationsSABMiller Asia BV Netherlands Holding company 100% 100%SABMiller Asia Ltd Hong Kong Holding company 100% 100%SABMiller (A&A 2) Ltd United Kingdom Holding company 100% 100%SABMiller Beverage Investments Pty Ltd Australia Holding company 100% 100%SKOL Beer Manufacturing Company Ltd 5 India Holding company 100% 100%Foster’s Group Pty Ltd Australia Holding company 100% 100%Bulmer Australia Pty Ltd Australia Brewing 100% 100%Cascade Brewery Company Pty Ltd Australia Brewing 100% 100%CUB Pty Ltd 6 Australia Brewing 100% 100%FBG Treasury (Aust.) Pty Ltd Australia Financing 100% 100%Foster’s Group Pacifi c Ltd 3,7 Fiji Brewing - 89%Pacifi c Beverages Pty Ltd Australia Brewing 100% 100%Queensland Breweries Pty Ltd Australia Brewing 100% 100%SABMiller Breweries Private Ltd India Brewing 100% 100%SABMiller Vietnam Company Ltd Vietnam Brewing 100% 100%SABMiller India Ltd 8 India Brewing 99% 99%South African operationsThe South African Breweries (Pty) Ltd South Africa Brewing/Soft drinks/Holding 100% 100%companyThe South African Breweries Hop Farms (Pty) Ltd South Africa Hop farming 100% 100%The South African Breweries Maltings (Pty) Ltd South Africa Maltsters 100% 100%Appletiser South Africa (Pty) Ltd South Africa Fruit juices 100% 100%1 Operates and resident for tax purposes in the United Kingdom.2 Previously Trinity Procurement GmbH.3 Listed in country of incorporation.4 SABMiller Poland BV, a wholly owned subsidiary of the group, holds 100% of Kompania Piwowarska SA.5 Previously SABMiller India Ltd.6 Previously Foster’s Australia Ltd.7 On 7 September 2012 the group completed the disposal of Foster’s Group Pacifi c Ltd.8 Previously Skol Breweries Ltd.162 – SABMiller plc Annual Report 2013

34. Principal subsidiaries, associates and joint ventures continuedThe group comprises a large number of companies. The list above includes those subsidiary undertakings which most signifi cantly affect theprofi t or net assets of the group, or a business segment, together with the principal intermediate holding companies of the group. With theexception of those noted above, the principal country in which each of the above subsidiary undertakings operates is the same as the countryin which each is incorporated.Where the group’s nominal interest in the equity share capital of an undertaking is less than 50%, the basis on which the undertaking is asubsidiary undertaking of the group is as follows.African operationsThe group’s effective interest in the majority of its African operations was diluted as a result of the disposal of a 38% interest in SABMiller AfricaBV and SABMiller Botswana BV on 1 April 2001, in exchange for a 20% interest in the Castel group’s African beverage interests. Investments innew territories are generally being made with the Castel group’s African beverage operations on an 80:20 basis. The operations continue to beconsolidated due to SABMiller Africa BV’s, SABMiller Investment Ltd’s, SABMiller Botswana BV’s, SABMiller Nigeria Holdings BV’s andSABMiller Investment II BV’s majority shareholdings, and ability to control the operations.Botswana Breweries (Pty) Ltd (BBL) and Kgalagadi Breweries (Pty) Ltd (KBL)SABMiller Botswana held a 40% interest in each of Botswana Breweries (Pty) Ltd and Kgalagadi Breweries (Pty) Ltd with the remaining 60%interest in each held by Sechaba Brewery Holdings Ltd. SABMiller Botswana’s shares entitle the holder to twice the voting rights of thoseshares held by Sechaba Brewery Holdings Ltd. SABMiller Africa BV’s 10.1% indirect interest (2012: 10.1%) is held via a 16.8% interest(2012: 16.8%) in Sechaba Brewery Holdings Ltd. In April 2013 BBL and KBL merged into a single entity, with KBL the surviving legal entity.The shareholding interests in KBL remain unchanged.Maluti Mountain Brewery (Pty) Ltd (Maluti)SABMiller Africa BV holds a 39% interest in Maluti with the remaining interest held by a government authority, the Lesotho NationalDevelopment Corporation (51%), the Privatisation Unit (5.25%), and the Lesotho Unit Trust (4.75%). Maluti is treated as a subsidiary undertakingbased on the group’s ability to control its operations through its board representation. The day to day business operations are managed inaccordance with a management agreement with Bevman Services AG, a group company.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 163

Notes to the consolidated financial statementscontinued34. Principal subsidiaries, associates and joint ventures continuedAssociates and joint venturesThe principal associates and joint ventures of the group as at 31 March are as set out below. Where the group’s interest in an associate or a jointventure is held by a subsidiary undertaking which is not wholly owned by the group, the subsidiary undertaking is indicated in a note below.NameCountry ofincorporationNature ofrelationshipPrincipalactivityEffective interest2013 2012European operationsAnadolu Efes Biracılık ve MaltSanayii AŞ 1,2 Turkey Associate Brewing/Soft drinks 24% 24%Grolsch (UK) Ltd United Kingdom Associate Brewing 50% 50%International Trade and Supply Limited 2 British Virgin Islands Associate Sales and distribution 40% 40%North American operationsMillerCoors LLC 2,3 USA Joint venture Brewing 58% 58%African operationsBIH Brasseries Internationales20% 20%Holding Ltd 2 principally located in AfricaSociété des Brasseries et Glacières20% 20%Internationales SA 2 principally located in AfricaAlgerienne de Bavaroise Spa 2,4 Algeria Associate Brewing 40% 40%BIH Brasseries Internationales Holding Gibraltar Associate Brewing/Soft drinks 27% 27%(Angola) Ltd 2Delta Corporation Ltd 1,5 Zimbabwe Associate Brewing/Soft drinks 25% 25%Marocaine d’Investissements et de Morocco Associate Brewing 40% 40%Services SA 1,6Skikda Bottling Company SARL 2,4 Algeria Associate Soft drinks 40% 40%Société de Boissons de I’OuestAlgeria Associate Soft drinks 40% 40%Algerien SARL 2,4Société des Nouvelles Brasseries 2,4 Algeria Associate Brewing 40% 40%Asia Pacific operationsChina Resources Snow Breweries Ltd 2 British Virgin Islands Associate Holding company for brewingsubsidiaries located in China49% 49%South African operationsCoca-Cola Canners of Southern Africa South Africa Associate Canning of beverages 32% 32%(Pty) Ltd 2Distell Group Ltd 1,7 South Africa Associate Wines and spirits 29% 29%Hotels and GamingTsogo Sun Holdings Ltd 1 South Africa Associate Holding company for Hotels andGaming operations40% 40%1 Listed in country of incorporation.2 These entities report their fi nancial results for each 12 month period ending 31 December.3 SABMiller shares joint control of MillerCoors with Molson Coors Brewing Company under a shareholders’ agreement. Voting interests are shared equally between SABMiller and MolsonCoors, and each of SABMiller and Molson Coors has equal board representation. Under the agreement SABMiller has a 58% economic interest in MillerCoors and Molson Coors has a42% economic interest.4 Effective 18 March 2004 SABMiller acquired 25% of the Castel group’s holding in these entities. Together with its 20% interest in the Castel group’s African beverage interests, this givesSABMiller participation on a 40:60 basis with the Castel group.5 Interests in this company is held by SABMiller Africa BV which is held 62% by SABMiller Holdings Ltd.6 SABMiller acquired a 25% direct interest in this holding company on 18 March 2004 which has controlling interests in three breweries, a malting plant and a wet depot in Morocco.This 25% interest together with its 20% interest in the Castel group’s African beverage interests, gives SABMiller an effective participation of 40% and the other 60% is held by theCastel group’s Africa beverage interests.7 This entity reports its fi nancial results for each 12 month period ending 30 June.The principal country in which each of the above associated undertakings operates is the same as the country in which each is incorporated.However, Société des Brasseries et Glacières Internationales, BIH Brasseries Internationales Holding Ltd’s (Castel) and BIH BrasseriesInternationales Holding (Angola) Ltd’s principal subsidiaries are in Africa, China Resources Snow Breweries Ltd’s principal subsidiaries arein the People’s Republic of China and International Trade and Supply Limited operates in the United Arab Emirates.164 – SABMiller plc Annual Report 2013

Statement of directors’ responsibilitiesin respect of the company fi nancial statementsThe directors are responsible for preparing the Annual Report, thedirectors’ remuneration report and the company fi nancial statementsin accordance with applicable law and regulations.Company law requires the directors to prepare fi nancial statementsfor each fi nancial year. The directors have prepared the companyfi nancial statements in accordance with applicable law and UnitedKingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice). The fi nancial statements are required by law togive a true and fair view of the state of affairs of the company forthat year.In preparing those fi nancial statements, the directors are required to:• select suitable accounting policies and then apply themconsistently;• make judgements and estimates that are reasonable and prudent;• state whether applicable UK Accounting Standards have beenfollowed, subject to any material departures disclosed andexplained in the fi nancial statements; and• prepare the fi nancial statements on the going concern basis unlessit is inappropriate to presume that the company will continue inbusiness, in which case there should be supporting assumptionsor qualifi cations as necessary.The directors confi rm that they have complied with the aboverequirements in preparing the fi nancial statements.The directors are responsible for keeping adequate accountingrecords that disclose with reasonable accuracy at any time thefi nancial position of the company and enable them to ensure that thefi nancial statements comply with the Companies Act 2006. They arealso responsible for safeguarding the assets of the company andhence for taking reasonable steps for the prevention and detectionof fraud and other irregularities.In addition, the Companies Act 2006 requires directors to provide thecompany’s auditors with every opportunity to take whatever stepsand undertake whatever inspections the auditors consider to beappropriate for the purpose of enabling them to give their auditreport. Each of the directors, having made appropriate enquiries,confi rms that:• so far as the director is aware, there is no relevant audit informationof which the company’s auditors are unaware; and• each director has taken all the steps that they ought to have takenas a director in order to make themselves aware of any relevantaudit information and to establish that the company’s auditors areaware of that information.A copy of the fi nancial statements of the company is placed onthe company’s website. The directors are responsible for themaintenance and integrity of statutory and audited information onthe company’s website. Information published on the internet isaccessible in many countries with different legal requirements.Legislation in the United Kingdom governing the preparation anddissemination of fi nancial statements may differ from legislation inother jurisdictions.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 165

Independent auditors’ reportto the members of SABMiller plcWe have audited the company fi nancial statements of SABMiller plcfor the year ended 31 March 2013 which comprise the companybalance sheet and the related notes. The fi nancial reportingframework that has been applied in their preparation is applicablelaw and United Kingdom Accounting Standards (United KingdomGenerally Accepted Accounting Practice).Respective responsibilities of directors and auditorsAs explained more fully in the statement of directors’ responsibilities,the directors are responsible for the preparation of the companyfi nancial statements and for being satisfi ed that they give a true andfair view. Our responsibility is to audit and express an opinion on thecompany fi nancial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland). Those standardsrequire us to comply with the Auditing Practices Board’s EthicalStandards for Auditors.This report, including the opinions, has been prepared for and only forthe company’s members as a body in accordance with Chapter 3 ofPart 16 of the Companies Act 2006 and for no other purpose. We donot, in giving these opinions, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown orinto whose hands it may come save where expressly agreed by ourprior consent in writing.Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts anddisclosures in the fi nancial statements suffi cient to give reasonableassurance that the fi nancial statements are free from materialmisstatement, whether caused by fraud or error. This includes anassessment of: whether the accounting policies are appropriate to thecompany’s circumstances and have been consistently applied andadequately disclosed; the reasonableness of signifi cant accountingestimates made by the directors; and the overall presentation of thefi nancial statements. In addition, we read all the fi nancial andnon-fi nancial information in the SABMiller plc Annual Report toidentify material inconsistencies with the audited fi nancial statements.If we become aware of any apparent material misstatements orinconsistencies we consider the implications for our report.Opinion on other matters prescribed by theCompanies Act 2006In our opinion:• the part of the directors’ remuneration report to be audited hasbeen properly prepared in accordance with the Companies Act2006; and• the information given in the directors’ report for the fi nancial year forwhich the company fi nancial statements are prepared is consistentwith the company fi nancial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters wherethe Companies Act 2006 requires us to report to you if, in our opinion:• adequate accounting records have not been kept by the company,or returns adequate for our audit have not been received frombranches not visited by us; or• the company fi nancial statements and the part of the directors’remuneration report to be audited are not in agreement with theaccounting records and returns; or• certain disclosures of directors’ remuneration specifi ed by law arenot made; or• we have not received all the information and explanations werequire for our audit.Other matterWe have reported separately on the consolidated fi nancial statementsof SABMiller plc for the year ended 31 March 2013.Richard Hughes (Senior Statutory Auditor)for and on behalf of PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsLondon5 June 2013Opinion on financial statementsIn our opinion the company fi nancial statements:• give a true and fair view of the state of the company’s affairs as at31 March 2013;• have been properly prepared in accordance with United KingdomGenerally Accepted Accounting Practice; and• have been prepared in accordance with the requirements of theCompanies Act 2006.166 – SABMiller plc Annual Report 2013

Balance sheet of SABMiller plcat 31 MarchFixed assetsTangible fi xed assets 2 126 119Investments in subsidiary undertakings 3 13,840 17,083Derivative fi nancial instruments 9 445 49914,411 17,701Current assetsDebtors: amounts falling due after more than one year 4 1,954 2Debtors: amounts falling due within one year 5 4,566 6,619Derivative fi nancial instruments 9 75 6Cash at bank and in hand 6 1,647 293Notes2013US$m2012US$m8,242 6,920Creditors: amounts falling due within one year 7 (2,325) (1,081)Net current assets 5,917 5,839Total assets less current liabilities 20,328 23,540Creditors: amounts falling due after more than one year 8 (3,998) (7,646)Net assets 16,330 15,894Capital and reservesShare capital 167 166Share premium 6,581 6,480Merger relief reserve 4,586 4,586Other reserves (1,190) (1,198)Profi t and loss account 6,186 5,860Total shareholders’ funds 10 16,330 15,894The fi nancial statements on pages 167 to 177 were approved by the board of directors on 5 June 2013 and were signed on its behalf by:Alan ClarkChief ExecutiveJamie WilsonChief Financial Offi cerAdvantage has been taken of the provisions of section 408(3) of the Companies Act, 2006 which permit the omission of a separate profi t andloss account for SABMiller plc. The profi t for the parent company for the year was US$1,710 million (2012: US$2,661 million).The consolidated fi nancial statements of the group include a consolidated cash fl ow statement which includes the cash fl ows of the company.The company has therefore taken advantage of the exemption granted by FRS 1 (Revised 1996) not to present a cash fl ow statement.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 167

Notes to the company financial statements1. Accounting policiesa) Basis of preparationSABMiller plc (the company) is a public limited company incorporatedin Great Britain and registered in England and Wales. The companyfi nancial statements have been prepared in accordance with theCompanies Act 2006 and with accounting standards applicable inthe United Kingdom (UK GAAP).The fi nancial statements are prepared on the going concern basis,under the historical cost convention, as modifi ed by certain fi nancialassets and fi nancial liabilities (including derivative instruments) at fairvalue through profi t and loss. The principal accounting policies, whichhave been applied consistently throughout the year are set out below.b) Foreign currenciesThe fi nancial statements are presented in US dollars which is thecompany’s functional and presentational currency.The South African rand (ZAR) and British pound (GBP) exchangerates to the US dollar used in preparing the company fi nancialstatements were as follows:Weighted average rateClosing rateZAR GBP ZAR GBPYear ended 31 March 2013 8.51 0.63 9.24 0.66Year ended 31 March 2012 7.48 0.63 7.67 0.62Monetary assets and liabilities denominated in foreign currencies areretranslated at the rate of exchange ruling at the balance sheet dateor at the related forward contractual rate with the resultant translationdifferences being included in operating profi t, other than those arisingon fi nancial liabilities which are recorded within net fi nance costs.Non-monetary items that are measured in terms of historical cost ina foreign currency are translated at the rate of exchange ruling at thedate of the transaction. All other non-monetary items denominated ina foreign currency are translated at the rate of exchange ruling at thebalance sheet date.c) Tangible fixed assets and depreciationTangible fi xed assets are stated at cost net of accumulateddepreciation and impairment losses. Cost includes the originalpurchase price of the assets and the costs attributable to bringingthe asset to its working condition for its intended use.No depreciation is provided on assets in the course of construction.In respect of all other tangible fi xed assets, depreciation is providedon a straight-line basis at rates calculated to write off the cost, lessthe estimated residual value of each asset, evenly over its expecteduseful life as follows:Offi ce equipment and software 2-30 yearsLeasehold land and buildings Shorter of the lease term or 50 yearsThe company regularly reviews its depreciation rates to take accountof any changes in circumstances. When setting useful economic lives,the principal factors the company takes into account are the expectedrate of technological developments, expected market requirementsfor the equipment and the intensity at which the assets are expectedto be used. The profi t or loss on the disposal of an asset is thedifference between the disposal proceeds and the net book valueof the asset.d) Investments in subsidiary undertakingsThese comprise investments in shares and loans that the directorsintend to hold on a continuing basis in the company’s business.The investments are stated at cost, together with subsequentcapital contributions, less provisions for impairment.e) ImpairmentIn accordance with FRS 11 ‘Impairment of fi xed assets and goodwill’,long-term assets are subject to an impairment review if circumstancesor events change to indicate that the carrying value may not be fullyrecoverable. The review is performed by comparing the carrying valueof the long-term asset to its recoverable amount, being the higher ofthe net realisable value and value in use. The net realisable value isconsidered to be the amount that could be obtained on disposal ofthe asset. The value in use of the asset is determined by discounting,at a market based discount rate, the expected future cash fl owsresulting from its continued use, including those arising from its fi naldisposal. When the carrying values of long-term assets are writtendown by any impairment amount, the loss is recognised in the profi tand loss account in the period in which it is incurred.Should circumstances or events change and give rise to a reversal ofa previous impairment loss, the reversal is recognised in the profi t andloss account in the period in which it occurs and the carrying value ofthe asset is increased. The increase in the carrying value of the assetwill only be up to the amount that it would have been had the originalimpairment not occurred.For the purpose of conducting impairment reviews, incomegenerating units are considered to be groups of assets and liabilitiesthat generate income, and are largely independent of other incomestreams. They also include those assets and liabilities directly involvedin producing the income and a suitable proportion of those used toproduce more than one income stream.f) Financial assets and financial liabilitiesFinancial assets and fi nancial liabilities are initially recorded at fairvalue (plus any directly attributable transaction costs except in thecase of those classifi ed at fair value through profi t or loss). For thosefi nancial instruments that are not subsequently held at fair value, thecompany assesses whether there is any objective evidence ofimpairment at each balance sheet date.Financial assets are recognised when the company has rights orother access to economic benefi ts. Such assets consist of cash,equity instruments, a contractual right to receive cash or anotherfi nancial asset, or a contractual right to exchange fi nancialinstruments with another entity on potentially favourable terms.Financial assets are derecognised when the rights to receive cashfl ows from the asset have expired or have been transferred andthe company has transferred substantially all risks and rewardsof ownership.Financial liabilities are recognised when there is an obligation totransfer benefi ts and that obligation is a contractual liability to delivercash or another fi nancial asset or to exchange fi nancial instrumentswith another entity on potentially unfavourable terms. Financialliabilities are derecognised when they are extinguished, that isdischarged, cancelled or expired. If a legally enforceable right existsto set off recognised amounts of fi nancial assets and liabilities, whichare in determinable monetary amounts, and there is the intention tosettle net, the relevant fi nancial assets and liabilities are offset. Interestcosts are charged to the profi t and loss account in the year in whichthey accrue. Premiums or discounts arising from the differencebetween the net proceeds of fi nancial instruments purchased orissued and the amounts receivable or repayable at maturity areincluded in the effective interest calculation and taken to netinterest payable over the life of the instrument.168 – SABMiller plc Annual Report 2013

1. Accounting policies continued(i) Loans and receivablesLoans and receivables are non-derivative fi nancial assets with fi xed ordeterminable payments that are not quoted in an active market. Theyarise when the company provides money, goods or services directlyto a debtor with no intention of trading the receivable. Loans andreceivables are included in debtors in the balance sheet.(ii) Cash at bank and in handCash at bank and in hand includes cash in hand, bank depositsrepayable on demand, other short-term highly liquid investments withoriginal maturities of three months or less. Bank overdrafts are shownwithin creditors – amounts falling due within one year.(iii) Derivative financial assets and financial liabilitiesDerivative fi nancial assets and fi nancial liabilities are fi nancialinstruments whose value changes in response to an underlyingvariable, require little or no initial investment and are settled inthe future.Derivative fi nancial assets and liabilities are analysed between currentand fi xed assets and creditors on the face of the balance sheet,depending on when they are expected to mature. For derivatives thathave not been designated to a hedging relationship, all fair valuemovements are recognised immediately in the profi t and lossaccount. See note k for the company’s accounting policy onhedge accounting.(iv) Trade creditorsTrade creditors are initially recognised at fair value and subsequentlymeasured at amortised cost.Trade creditors are classifi ed as creditors falling due within one yearunless the company has an unconditional right to defer settlementfor at least 12 months from the balance sheet date.(v) BorrowingsBorrowings are recognised initially at fair value, net of transactioncosts and are subsequently stated at amortised cost and includeaccrued interest and prepaid interest. Borrowings are classifi ed ascurrent liabilities unless the company has an unconditional right todefer settlement of the liability for at least 12 months from thebalance sheet date. Borrowings classifi ed as hedged items aresubject to hedge accounting requirements (see note k).(vi) Financial guaranteesFRS 26 (Amendment) ‘Financial Instruments-Measurement’ requiresthat issued fi nancial guarantees, other than those previously assertedby the entity to be insurance contracts, are to be initially recognisedat their fair value and subsequently measured at the higher of theamount initially recognised less cumulative amortisation recognisedand the amount determined in accordance with FRS 12 ‘Provisions,Contingent Liabilities and Contingent Assets’.Financial guarantee contracts are defi ned in FRS 26 as contracts thatrequire the issuer to make specifi ed payments to reimburse the holderfor a loss it incurs because a specifi ed debtor fails to make paymentwhen due in accordance with the original or modifi ed terms of a debtinstrument.Financial guarantees are amortised over the life of the guarantee,or accelerated if the third party obligation is settled early. Theamortisation is taken to the profi t and loss account.g) Revenue recognition(i) Interest incomeInterest income is recognised on an accruals basis using the effectiveinterest method.(ii) Dividend incomeDividend income is recognised when the right to receive paymentis established.h) Deferred taxationDeferred tax is recognised in respect of all timing differences thathave originated but not reversed at the balance sheet date, wheretransactions or events that result in an obligation to pay more tax inthe future or a right to pay less tax in the future have occurred at thebalance sheet date.A net deferred tax asset is regarded as recoverable and thereforerecognised only when, on the basis of all available evidence, it can beregarded as more likely than not that there will be suitable taxableprofi ts against which to recover carried forward tax losses andfrom which the future reversal of underlying timing differences canbe deducted.Deferred tax is measured at the tax rates that are expected to applyin the periods in which the timing differences are expected to reverse,based on tax rates and laws that have been enacted or substantivelyenacted by the balance sheet date. Deferred tax is measured on anon-discounted basis.i) Dividend distributionsIn accordance with FRS 21 ‘Events after the balance sheet date’,dividend distributions to equity holders are recognised as a liability inthe fi nancial statements of the company in the period in which thedividends are approved by the company’s shareholders. Interimdividends are recognised when paid. Dividends declared after thebalance sheet date are not recognised, as there is no presentobligation at the balance sheet date.j) Share-based compensationThe company operates several equity-settled share-basedcompensation schemes. These include share option plans (with andwithout non-market performance conditions attached), performanceshare award plans (with market conditions attached) and awardsrelated to the employee element of the Broad-Based Black EconomicEmpowerment (BBBEE) scheme in the South Africa. In addition thecompany has granted an equity-settled share-based payment toretailers in relation to the retailer component of the BBBEE scheme.In accordance with FRS 20 ‘Share-based Payments’, an expenseis recognised to spread the fair value at date of grant of eachaward granted after 7 November 2002 over the vesting period on astraight-line basis, after allowing for an estimate of the share awardsthat will eventually vest. A corresponding adjustment is made toequity over the remaining vesting period. The estimate of the levelof vesting is reviewed at least annually, with any impact on thecumulative charge being recognised immediately. The charge isbased on the fair value of the award at the date of grant, as calculatedby binomial model calculations and Monte Carlo simulations.The charge is not reversed if the options have not been exercisedbecause the market value of the shares is lower than the optionprice at the date of grant. The proceeds received net of any directlyattributable transaction costs are credited to share capital (nominalvalue) and share premium when the options are exercised, unlessthe options are satisfi ed by treasury or EBT shares.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 169

Notes to the company financial statementscontinued1. Accounting policies continuedThe issue by the company to employees of its subsidiaries of a grantover the company’s shares represents additional capital contributionsby the company to its subsidiaries, except to the extent the companyis reimbursed. An additional investment in subsidiaries results in acorresponding increase in shareholders’ equity. The additional capitalcontribution is based on the fair value of the grant issued allocatedover the underlying grant’s vesting period.The company has an employee benefi t trust, the SABMillerAssociated Companies’ Employees’ Benefi t Trust (the AC-EBT). TheAC-EBT holds shares in SABMiller plc for the purposes of providingshare incentives for employees of companies in which SABMiller hasa signifi cant economic and strategic interest but over which it doesnot have management control. These share options are accounted foras cash-settled share-based payments in accordance with FRS 20.For the cash-settled plan a liability is recognised at fair value in thebalance sheet over the vesting period with a corresponding chargeto the profi t and loss account. The liability is remeasured at eachreporting date, on an actuarial basis using the analytic method,to refl ect the revised fair value and to adjust for the changes inassumptions such as leavers. Changes in fair value of the liability arerecognised in the profi t and loss account. Actual settlement of theliability will be at its intrinsic value with the difference recognised inthe profi t and loss account.Shares held by employee benefi t trusts and in treasury are treated asa deduction from equity until the shares are utilised.k) Hedge accountingThe derivative instruments used by the company, which are usedsolely for hedging purposes (i.e. to offset foreign exchange andinterest rate risks), comprise interest rate swaps, cross currencyswaps and forward foreign exchange contracts. Such derivativeinstruments are used to alter the risk profi le of an existing underlyingexposure of the company in line with the company’s risk managementpolicies.Derivatives are initially recorded at fair value on the date a derivativecontract is entered into and are subsequently remeasured at their fairvalue. The method of recognising the resulting gain or loss dependson whether the derivative is designated as a hedging instrument, andif so, the nature of the hedging relationship.Certain derivative instruments, while providing effective economichedges under the company’s policies, are not designated as hedges.Changes in the fair value of any derivative instruments that do notqualify or have not been designated as hedges are recognisedimmediately in the profi t and loss account. The company does nothold or issue derivative fi nancial instruments for speculative purposes.(i) Fair value hedgesFair value hedges comprise derivative fi nancial instrumentsdesignated in a hedging relationship to manage the company’sinterest rate risk to which the fair value of certain assets and liabilitiesare exposed. Changes in the fair value of the derivative offset therelevant changes in the fair value of the underlying hedged itemattributable to the hedged risk in the profi t and loss account in theperiod incurred. Gains or losses on fair value hedges that areregarded as highly effective are recorded in the profi t and lossaccount together with the gain or loss on the hedged itemattributable to the hedged risk.(ii) Cash flow hedgesCash fl ow hedges comprise derivative fi nancial instrumentsdesignated in a hedging relationship to manage currency and interestrate risk to which the cash fl ows of certain assets and liabilities areexposed. The effective portion of changes in the fair value of thederivative that is designated and qualifi es for hedge accounting isrecognised as a separate component of equity. The ineffective portionis recognised immediately in the profi t and loss account. Amountsaccumulated in equity are recycled to the profi t and loss account inthe period in which the hedged item affects profi t or loss. However,where a forecasted transaction results in a non-fi nancial asset orliability, the accumulated fair value movements previously deferredin equity are included in the initial cost of the asset or liability.Details of the group’s fi nancial risk management objectives andpolicies are provided in note 22 to the consolidated fi nancialstatements of the group.l) Operating leasesRentals paid on operating leases are charged to the profi t and lossaccount on a straight-line basis over the lease term.m) Pension obligationsThe company operates a defi ned contribution scheme. Contributionsto this scheme are charged to the profi t and loss account as incurred.In order to qualify for hedge accounting, the company is requiredto document the relationship between the hedged item and thehedging instrument. The company is also required to document anddemonstrate that the relationship between the hedged item and thehedging instrument will be highly effective. This effectiveness test isreperformed at each period end to ensure that the hedge hasremained and will continue to remain highly effective.The company designates certain derivatives as hedges of the fairvalue of recognised assets or liabilities or a fi rm commitment (fairvalue hedge) or hedges of highly probable forecast transactionsor commitments (cash fl ow hedge).Where a derivative ceases to meet the criteria of being a hedginginstrument or the underlying exposure which it is hedging is sold,matures or is extinguished, hedge accounting is discontinued andamounts previously recorded in equity are recycled to the profi t andloss account. A similar treatment is applied where the hedge is of afuture transaction and that transaction is no longer likely to occur.When the hedge is discontinued due to ineffectiveness, hedgeaccounting is discontinued prospectively.170 – SABMiller plc Annual Report 2013

2. Tangible fixed assetsAssets incourse ofconstructionUS$mShortleasehold Officeland and equipmentbuildings and softwareUS$m US$mCostAt 1 April 2012 54 32 119 205Additions 18 5 10 33Disposals – (3) (3) (6)Transfers (16) 2 14 –At 31 March 2013 56 36 140 232Accumulated depreciationAt 1 April 2012 – 17 69 86Disposals – (3) (3) (6)Charge for the year – 4 22 26At 31 March 2013 – 18 88 106Net book amountAt 1 April 2012 54 15 50 119At 31 March 2013 56 18 52 1263. Investment in subsidiary undertakingsCostAt 1 April 2012 13,761 3,462 17,223Additions 1 5,100 – 5,100Capital contribution relating to share-based payments 95 – 95Repayments 1 – (3,462) (3,462)Disposals 2 (4,976) – (4,976)At 31 March 2013 13,980 – 13,980Accumulated impairmentAt 1 April 2012 and at 31 March 2013 140 – 140Net book valueAt 31 March 2012 13,621 3,462 17,083At 31 March 2013 13,840 – 13,8401 During the year the company increased its investment in SABMiller Holdings Ltd by US$5,000 million. As part of this transaction the loan from the company to SABMiller Holdings Ltd ofUS$3,462 million was repaid. The investment in SABMiller Africa & Asia BV was increased by US$100 million.2 During the year the company sold its investment in SABMiller Poland BV to another group company at net book value. The investment in Safari Ltd was liquidated with no gain or loss onthe disposal.SharesUS$mLoansUS$mTotalUS$mTotalUS$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 171

Notes to the company financial statementscontinued3. Investment in subsidiary undertakings continuedNameCountry ofincorporationPrincipalactivitySABMiller Holdings Ltd United Kingdom Holding company 10,437 5,437Miller Brands (UK) Ltd United Kingdom Sales and distribution 39 39SAB Finance (Cayman Islands) Ltd Cayman Islands Finance company – –Safari Ltd Jersey Finance company – –SABMiller Management BV Netherlands Group management services – –SABMiller Africa & Asia BV Netherlands Holding company 278 178Appletiser International BV Netherlands Holding company – –SABMiller (Safari) United Kingdom Finance company 506 506Pilsner Urquell International BV Netherlands Holding company – –SABMiller Holdings Europe Ltd United Kingdom Holding company 2,098 2,098Racetrack Colombia Finance SA 1 Colombia Finance company – –SABMiller Poland BV Netherlands Holding company – 4,976SABMiller Horizon Ltd United Kingdom Agent company – –SABSA Holdings Ltd 2 South Africa Holding company 5 5SABMiller Capital UK Ltd United Kingdom Holding company – –SABMiller Asia Capital LLP 3 United Kingdom Finance company – –13,363 13,239Capital contribution relating to share-based payments 477 3822013US$m2012US$m13,840 13,6211 94.9% direct interest and 100% effective interest.2 SABMiller plc contributed ZAR36 million towards the cost of a guarantee fee to SABSA Holdings Ltd, a fellow group undertaking. It has no direct interest in the share capital of thatcompany.3 1% direct interest and 100% effective interest.4. Debtors: amounts falling due after more than one yearLoan owed by subsidiary undertakings 1,743 –Amounts owed by subsidiary undertakings 109 2Loan participation deposit 100 –Financial guarantee asset 2 –2013US$m2012US$m1,954 2The interest on the loan owed by subsidiary undertakings is fl oating one month LIBOR plus 180 bps. The loan is repayable in 2017.The presentation of the loan participation deposit at 31 March 2013 within Debtors: amounts falling due after one year is consistent with thetreatment in the current year and prior year consolidated balance sheets as described in note 17 to the consolidated fi nancial statements ofthe group. At 31 March 2012 this loan participation deposit was presented on the company balance sheet as a short-term deposit.The comparative has not been restated on the grounds of materiality.5. Debtors: amounts falling due within one yearAmounts owed by subsidiary undertakings 4,499 6,474Amounts owed by associated undertakings – 60Other debtors 32 61Deferred tax – 24Financial guarantee asset 3 –Loan participation deposit 32 –2013US$m2012US$m4,566 6,619Interest on loans owed by subsidiary undertakings are at either fi xed interest rates up to maximum 5.5% or fl oating rates of one or six monthLIBOR plus up to 175 bps, depending upon the country where the company receiving the loan is located.172 – SABMiller plc Annual Report 2013

6. Cash at bank and in handShort-term deposits 1,647 293The company has short-term deposits in US dollars (USD). The effective interest rates were 0.15% (2012: USD 0.23%).7. Creditors: amounts falling due within one yearBank loans and overdrafts – 2Trade and other creditors 27 55Amounts owed to subsidiary undertakings 425 846Taxation and social security 76 29Derivative fi nancial instruments (see note 9) 7 4Accruals and deferred income 84 80Dividends payable to shareholders 1 2US$1,100 million 5.5% Notes due 2013 1 (note 8) 1,078 –US$550 million 5.7% Notes due 2014 2 (note 8) 570 –Guarantee fee liability 57 632013US$m2013US$m2012US$m2012US$m2,325 1,081Amounts owed to subsidiary undertakings are at either fi xed rates or fl oating rates of one or six month LIBOR minus 13 bps to plus 175 bps.All amounts owed are unsecured and repayable on demand.8. Creditors: amounts falling due after more than one yearUS$1,100 million 5.5% Notes due 2013 1 – 1,099€1,000 million 4.5% Notes due 2015 2 1,317 1,367US$300 million 6.625% Notes due 2033 2 440 416US$850 million 6.5% Notes due 2016 2 937 960US$550 million 5.7% Notes due 2014 2 – 588US$700 million 6.5% Notes due 2018 2 792 811PEN 150 million 6.75% Notes due 2015 2 59 56Loans from subsidiary undertakings – 1,938Amounts owed to associated undertakings 100 –Derivative fi nancial instruments (see note 9) 25 38Other creditors 6 9Deferred income 6 7Guarantee fee liability 316 3572013US$m2012US$m3,998 7,646The maturity of creditors falling due after more than one year is as follows:Between one and two years 234 1,153Between two and fi ve years 2,364 5,007After fi ve years 1,400 1,4863,998 7,6461 On 30 June 2008 notes previously held by Miller Brewing Company and guaranteed by SABMiller plc and SABMiller Finance BV were novated to SABMiller plc and the guaranteeterminated. The notes mature on 15 August 2013. The notes are redeemable in whole or in part at any time at the option of the issuer at a redemption price equal to the make wholeamount. The notes are redeemable in whole but not in part at the option of the issuer upon occurrence of certain changes in taxation at their principal amount with accrued and unpaidinterest to the date of redemption.In addition, interest rate swaps to pay fl oating and receive fi xed interest previously held by Miller Brewing Company have been novated to SABMiller plc which have been designated asfair value hedges to hedge exposure to changes in the fair value of the fi xed rate borrowings. As a result, fair value gains or losses on the hedged borrowings have been recognised inSABMiller plc from the date the interest rate swaps were novated (this differs from the date of inception in the consolidated fi nancial statements of the group).2 Further information relating to the Notes is detailed in note 21 to the consolidated fi nancial statements of the group.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 173

Notes to the company financial statementscontinued9. Derivative financial instrumentsAssets2013US$mLiabilities2013US$mAssets2012US$mLiabilities2012US$mCurrent derivative financial instrumentsForward foreign currency contracts 26 – 4 (4)Forward foreign currency contracts as cash fl ow hedges 47 – 2 –Interest rate swaps designated as fair value hedges 2 (7) – –75 (7) 6 (4)Non-current derivative financial instrumentsForward foreign currency contracts 34 (15) 43 (31)Interest rate swaps designated as fair value hedges 304 (10) 351 –Cross currency swaps 107 – 105 (7)445 (25) 499 (38)Derivatives designated as hedging instruments(i) Cash flow hedgesThe company has entered into forward exchange contracts designed as cash fl ow hedges to manage short-term foreign currency exchangeexposures to future creditor payments. As at 31 March 2013 the notional amounts of these contracts was GBP72 million and CHF43 million(2012: GBP119 million and AUD1 million).(ii) Fair value hedgesThe company has entered into interest rate swaps to pay fl oating and receive fi xed interest which have been designated as fair value hedges tomanage changes in the fair value of its fi xed rate borrowings. The borrowings and interest rate swaps have the same critical terms.As at 31 March 2013 the fi xed interest rates received vary from 1.6675% to 6.625% (2012: 4.5% to 6.625%) and fl oating interest rates paid varyfrom LIBOR/EURIBOR plus 47.2 bps to LIBOR/EURIBOR plus 197.8 bps (2012: LIBOR/EURIBOR plus 71.6 bps to LIBOR/EURIBOR plus 198.8bps) on the notional amount. As at 31 March 2013 the carrying value of the hedged borrowings was US$3,272 million (2012: US$3,191 million).Standalone derivative financial instruments(i) Forward foreign currency contractsThe company has entered into several forward foreign currency contracts to manage the group’s exposure to foreign exchange risk on theinvestments in subsidiaries in South Africa, the Czech Republic, Peru, Australia, Poland and Colombia.(ii) Cross currency swapsThe company has entered into several cross currency swaps to manage the group’s exposure to foreign exchange risk relating to subsidiariesin South Africa, Australia, Poland, and the Netherlands.(iii) Interest rate swapsThe company holds a number of interest rate swaps to receive fl oating rates and pay fi xed rates, held as an economic offset to a number ofinterest rate swaps that receive fi xed rates and pay fl oating rates that were previously held in a fair value hedge relationship.Analysis of notional amounts on all outstanding fi nancial instruments held by the company is as follows:Forward foreign currency contracts– SA rand 2,136 245– Czech koruna 1,095 6,825– Peruvian nuevo sol 310 631– Australian dollar 500 500– Pounds sterling 72 119– Swiss franc 43 –– Polish zloty 11 –– Colombian peso 445,500 490,476Cross currency swaps– SA rand 1,404 1,404– Australian dollar 46 –– Polish zloty 235 433– Euro 317 317Interest rate swaps– Fair value hedges– US dollar 2,500 1,750– Euro 500 5002013m2012m174 – SABMiller plc Annual Report 2013

9. Derivative financial instruments continuedBook value2013US$mFair value2013US$mBook value2012US$mFair value2012US$mCurrent borrowings 1,648 1,659 2 2Non-current borrowings 3,545 3,675 7,218 7,592Current borrowings in the table above exclude amounts owed to subsidiary undertakings. Non-current borrowings in the table above includeamounts owed to subsidiary undertakings.Derivatives, cash and cash equivalents, short-term deposits, loan participation deposit, debtors and creditors (excluding borrowings) are notincluded in the table above because their book values are an approximation of their fair values. The fair value of the company’s fi xed rate loansare calculated by discounting expected future cash fl ows using the appropriate yield curve. The book values of fl oating rate borrowingsapproximate to their fair value.Fair value gain/(loss) on financial instruments recognised in the profit and loss accountDerivative fi nancial instruments:Forward foreign currency contracts 35 (108)Interest rate swaps designated as fair value hedges (51) 100Cross currency swaps 48 107Guarantee fees 62 222013US$m2012US$m94 121Other fi nancial instruments:Non-current borrowings designated as the hedged item in a fair value hedge 42 (156)Total fair value gain/(loss) on financial instruments recognised in the profit and loss account 136 (35)Other financial liabilitiesOther fi nancial liabilities include guarantee fee liabilities as disclosed in notes 7 and 8.The company has guaranteed the bank overdrafts and drawn components of bank loans of a number of subsidiaries. Under the terms of thefi nancial guarantee contracts, the company will make payments to reimburse the lenders upon failure of the guaranteed entity to makepayments when due.Terms and notional values of the liabilities guaranteed were as follows:Year of maturity2014 581 2,1752015 1,060 1,0002016 684 7502017 2,054 2,0542020 1,282 –2022 2,500 2,5002042 1,500 1,5009,661 9,9792013US$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 175

Notes to the company financial statementscontinued10. Reconciliation of movements in shareholders’ fundsSharecapitalUS$mSharepremiumUS$mMergerreliefUS$mHedgingreserveUS$mEBTUS$mTreasurysharesUS$mProfit andloss accountUS$mAt 1 April 2012 166 6,480 4,586 2 (103) (1,097) 5,860 15,894Issue of share capital 1 101 – – – – – 102Profi t for the year – – – – – – 1,710 1,710Dividends paid – – – – – – (1,504) (1,504)Cash fl ow hedges – fair value losses – – – (8) – – – (8)Transfer into EBT – – – – (70) 70 – –Purchases of EBT shares – – – – (53) – (53)Utilisation of EBT shares – – – – 69 – (69) –Credit entry relating to share-based payments – – – – – – 94 94Capital contribution relating to share-basedpayments – – – – – – 95 95At 31 March 2013 167 6,581 4,586 (6) (157) (1,027) 6,186 16,330TotalUS$mForeign exchange differences recognised in the profi t for the year, except for those arising on fi nancial instruments measured at fair value underFRS 26, were gains US$1 million (2012: US$111 million).In March 2013 4.6 million treasury shares with an original cost to the company of US$70 million were transferred into the EBT reserve at no gainor loss to the company.Further information relating to the share capital, share premium, the treasury shares and the EBT reserve of the company is detailed in notes 25and 26 to the consolidated fi nancial statements of the group. Details of share incentive schemes are provided in note 25 to the consolidatedfi nancial statements of the group. Details of dividends paid and proposed for the year are provided in note 9 to the consolidated fi nancialstatements of the group.11. Profit and loss informationInformation relating to directors’ remuneration is included in the directors’ remuneration report on pages 66 to 85.Details of auditors’ remuneration are provided in note 3 to the consolidated fi nancial statements of the group.Operating leasesOperating lease charges recognised in the profi t and loss during the year were as follows:Plant and machinery 4 4Other 8 82013US$m2012US$m176 – SABMiller plc Annual Report 2013

12. Other informationa. Deferred tax assets have not been recognised in respect of the following:Tax losses 92 72Depreciation in excess of capital allowances 12 11Accruals and provisions 1 1Share-based payments 30 25b. Contingent liabilities and guarantees2013US$m2012US$m135 109Capital expenditure contracted but not provided – 2The company has guaranteed borrowings in respect of certain subsidiary undertakings. Guarantee fees received from 100% ownedsubsidiaries were US$63 million (2012: US$22 million). Guarantees to third parties provided in respect of bank facilities were US$174 million.Note 13 details guarantee fees paid to related parties.At 31 March 2013 the company had annual commitments under non-cancellable operating leases as follows:Land and buildingsWithin one year – 1Between two and fi ve years 1 1After fi ve years 5 5OtherWithin one year 1 113. Related party transactionsTransactions with undertakings which are not wholly ownedThe company has taken advantage of the exemption provided under FRS 8 not to disclose transactions with subsidiaries which are whollyowned. During the year the company had transactions with undertakings in which it does not hold a 100% interest.Interest received from subsidiary undertakings – 2Guarantee fee income from subsidiary undertakings 1 1Loan participation deposit compensation from an associated undertaking 100 –Income from recharges to subsidiary undertakings 1 119 134Guarantee fees paid to subsidiary undertakings (1) (1)1 The company received income from recharges related to business capability programme costs.At 31 MarchAmounts owed by subsidiary undertakings 23 25Amounts owed to subsidiary undertakings (12) (4)Amounts owed to associated undertakings 1 (100) –Loans to associated undertakings – 601 Amounts owed to associated undertakings relates to compensation received from Castel in recognition of a loan participation deposit advanced to the Angolan businesses bySABMiller plc. The Angolan businesses are managed by Castel.2013US$m2013US$m2013US$m2013US$m2012US$m2012US$m2012US$m2012US$mOverview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 177

Five-year financial reviewfor the years ended 31 MarchIncome statementsGroup revenue 34,487 31,388 28,311 26,350 25,302Revenue 23,213 21,760 19,408 18,020 18,703Operating profi t 4,203 5,013 3,127 2,619 3,148Net fi nance costs (735) (562) (525) (563) (706)Share of post tax results of associates and joint ventures 1,244 1,152 1,024 873 516Taxation (1,201) (1,126) (1,069) (848) (801)Non-controlling interests (237) (256) (149) (171) (276)Profit for the year attributable to owners of the parent 3,274 4,221 2,408 1,910 1,881Adjusted earnings 3,796 3,400 3,018 2,509 2,065Balance sheetsNon-current assets 50,588 50,998 34,870 33,604 28,156Current assets 5,683 4,851 4,178 3,895 3,472Assets of disposal group classifi ed as held for sale 23 79 66 – –Total assets 56,294 55,928 39,114 37,499 31,628Derivative fi nancial instruments (86) (109) (135) (321) (142)Borrowings (18,548) (19,226) (8,460) (9,414) (9,618)Other liabilities and provisions (10,199) (10,554) (7,694) (7,171) (5,751)Liabilities of disposal group classifi ed as held for sale (1) (7) (66) – –Total liabilities (28,834) (29,896) (16,355) (16,906) (15,511)Net assets 27,460 26,032 22,759 20,593 16,117Total shareholders’ equity 26,372 25,073 22,008 19,910 15,376Non-controlling interests in equity 1,088 959 751 683 741Total equity 27,460 26,032 22,759 20,593 16,1172013US$m2012 1US$m2011US$m2010US$m2009US$mCash flow statementsAdjusted EBITDA 6,835 6,183 5,617 5,020 4,667EBITDA 5,758 4,979 4,502 3,974 4,164Net working capital movements (204) 258 66 563 (493)Net cash generated from operations 5,554 5,237 4,568 4,537 3,671Net interest paid (770) (407) (640) (640) (722)Tax paid (683) (893) (885) (620) (766)Net cash inflow from operating activities 4,101 3,937 3,043 3,277 2,183Net capital expenditure and other investments (1,440) (1,522) (1,245) (1,483) (2,082)Net investments in subsidiaries, joint ventures and associates (223) (11,095) (183) (504) (533)Dividends received from joint ventures, associates and other investments 1,000 1,017 911 815 606Net cash inflow/(outflow) before financing and dividends 3,438 (7,663) 2,526 2,105 174Net cash (outfl ow)/infl ow from fi nancing (517) 8,819 (1,214) (804) 615Dividends paid to shareholders of the parent (1,517) (1,324) (1,113) (924) (877)Effect of exchange rates (51) (39) 25 90 22Increase/(decrease) in cash and cash equivalents 1,353 (207) 224 467 (66)Per share information (US cents per share)Basic earnings per share 205.9 266.6 152.8 122.6 125.2Diluted earnings per share 203.5 263.8 151.8 122.1 124.6Adjusted basic earnings per share 238.7 214.8 191.5 161.1 137.5Net asset value per share 2 1,579.4 1,506.5 1,326.6 1,203.2 969.9Total number of shares in issue (millions) 1,669.7 1,664.3 1,659.0 1,654.7 1,585.4Other operating and financial statisticsReturn on equity (%) 3 14.4 13.6 13.7 12.6 13.4EBITA margin (%) 18.6 17.9 17.8 16.6 16.3Adjusted EBITDA margin (%) 24.1 23.0 22.9 21.7 20.9Interest cover (times) 9.1 11.4 10.8 9.3 6.7Free cash fl ow (US$m) 3,230 3,048 2,488 2,028 106Total borrowings to total assets (%) 32.9 34.4 21.6 25.1 30.4Net cash generated from operations to total borrowings (%) 29.9 27.2 54.0 48.2 38.2Revenue per employee (US$000) 329.3 305.9 280.4 256.9 272.5Average monthly number of employees 70,486 71,144 69,212 70,131 68,635¹ Restated for the adjustments made to the provisional fair values relating to the Foster’s, the Pacifi c Beverages and the International Breweries acquisitions.² Net asset value per share is calculated by dividing shareholders’ equity by the closing number of shares in issue.³ This is calculated by expressing adjusted earnings as a percentage of total shareholders’ equity.178 – SABMiller plc Annual Report 2013

Group revenueSegmental analysisLatin America 7,821 7,158 6,335 5,905 5,495Europe 5,767 5,482 5,394 5,577 6,145North America 5,355 5,250 5,223 5,228 5,227Africa 3,853 3,686 3,254 2,716 2,567Asia Pacifi c 5,685 3,510 2,026 1,741 1,565South Africa:– Beverages 5,540 5,815 5,598 4,777 3,955– Hotels and Gaming 466 487 481 406 3482013US$m2012US$m2011US$m2010US$m2009US$m34,487 31,388 28,311 26,350 25,302Operating profit (excluding share of associates and joint ventures)Segmental analysisLatin America 1,983 1,736 1,497 1,270 1,057Europe 652 804 857 840 900North America 7 – 16 12 230Africa 439 422 365 316 354Asia Pacifi c 462 124 (22) (34) (2)South Africa: Beverages 1,062 1,091 997 826 704Corporate (202) (190) (147) (139) (97)Operating profit – before exceptional items 4,403 3,987 3,563 3,091 3,146Exceptional (charge)/creditLatin America (63) (119) (106) (156) 45Europe (64) 1,135 (261) (202) (452)North America – – – – 409Africa 79 162 (4) (3) –Asia Pacifi c (104) (70) – – –South Africa: Beverages (22) (41) (188) (53) –Corporate (26) (41) 123 (58) –(200) 1,026 (436) (472) 2Operating profit – after exceptional items 4,203 5,013 3,127 2,619 3,148EBITASegmental analysisLatin America 2,112 1,865 1,620 1,386 1,173Europe 784 836 887 872 944North America 771 756 741 619 581Africa 838 743 647 565 562Asia Pacifi c 855 321 92 71 80South Africa:– Beverages 1,129 1,168 1,067 885 764– Hotels and Gaming 134 135 137 122 122Corporate (202) (190) (147) (139) (97)6,421 5,634 5,044 4,381 4,129Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 179

DefinitionsFinancial definitionsAdjusted earningsAdjusted earnings are calculated by adjusting headline earnings (asdefi ned below) for the amortisation of intangible assets (excludingcomputer software), integration and restructuring costs, the fair valuemovements in relation to capital items for which hedge accountingcannot be applied and other items which have been treated asexceptional but not included above or as headline earningsadjustments together with the group’s share of associates’ and jointventures’ adjustments for similar items. The tax and non-controllinginterests in respect of these items are also adjusted.Adjusted EBITDAThis comprises EBITDA (as defi ned below) before cash fl ows fromexceptional items and includes dividends received from our jointventure, MillerCoors. Dividends received from MillerCoorsapproximate to the group’s share of the EBITDA of the MillerCoorsjoint venture.Adjusted EBITDA marginThis is calculated by expressing adjusted EBITDA as a percentage ofrevenue plus the group’s share of MillerCoors’ revenue.Adjusted net finance costsThis comprises net fi nance costs excluding fair value movements inrelation to capital items for which hedge accounting cannot beapplied and any exceptional fi nance charges or income.Adjusted profit before taxThis comprises EBITA less adjusted net fi nance costs and less thegroup’s share of associates’ and joint ventures’ net fi nance costs ona similar basis.Constant currencyConstant currency results have been determined by translating thelocal currency denominated results for the year ended 31 March atthe exchange rates for the prior year.EBITAThis comprises operating profi t before exceptional items, amortisationof intangible assets (excluding computer software) and includes thegroup’s share of associates’ and joint ventures’ operating profi t on asimilar basis.EBITA margin (%)This is calculated by expressing EBITA as a percentage of grouprevenue.EBITDAThis comprises the net cash generated from operations beforeworking capital movements. This includes cash fl ows relating toexceptional items incurred in the year.EBITDA margin (%)This is calculated by expressing EBITDA as a percentage of revenue.Effective tax rate (%)The effective tax rate is calculated by expressing tax before tax onexceptional items and on amortisation of intangible assets (excludingcomputer software), including the group’s share of associates’ andjoint ventures’ tax on the same basis, as a percentage of adjustedprofi t before tax.Free cash flowThis comprises net cash generated from operating activities lesscash paid for the purchase of property, plant and equipment, andintangible assets, net investments in existing associates and jointventures (in both cases only where there is no change in the group’seffective ownership percentage) and dividends paid to non-controllinginterests plus cash received from the sale of property, plant andequipment and intangible assets and dividends received.Group revenueThis comprises revenue together with the group’s share of revenuefrom associates and joint ventures.Headline earningsHeadline earnings are calculated by adjusting profi t for the fi nancialperiod attributable to owners of the parent for items in accordancewith the South African Circular 3/2012 entitled ‘Headline Earnings’.Such items include impairments of non-current assets and profi ts orlosses on disposals of non-current assets and their related tax andnon-controlling interests. This also includes the group’s share ofassociates’ and joint ventures’ adjustments on the same basis.Interest coverThis is the ratio of adjusted EBITDA to adjusted net fi nance costs.Net debtThis comprises gross debt (including borrowings, borrowings-relatedderivative fi nancial instruments, overdrafts and fi nance leases) net ofcash and cash equivalents (excluding overdrafts).Organic informationOrganic results and volumes exclude the fi rst 12 months’ results andvolumes relating to acquisitions and the last 12 months’ results andvolumes relating to disposals.Total Shareholder Return (TSR)TSR is the measure of the returns that a company has provided forits shareholders, refl ecting share price movements and assumingreinvestment of dividends.Sales volumesIn the determination and disclosure of sales volumes, the groupaggregates 100% of the volumes of all consolidated subsidiaries andits equity accounted percentage of all associates’ and joint ventures’volumes. Contract brewing volumes are excluded from volumesalthough revenue from contract brewing is included within grouprevenue. Volumes exclude intra-group sales volumes. This measureof volumes is used for lager volumes, soft drinks volumes, otheralcoholic beverage volumes and beverage volumes and is used in thesegmental analyses as it more closely aligns with the consolidatedgroup revenue and EBITA disclosures.KPI definitions – How we measureTotal Shareholder Return (TSR) in excess ofthe median of peer group over five-year periods(2012 and 2011: three-year periods)TSR performance is measured by taking the percentage growth inour TSR over the fi ve-year period (2012 and 2011: three-year period)to the date aligned with the related measurement date of performanceshare awards for the excom, and deducting the percentage growth inthe TSR of the median of our peer group over the same period.180 – SABMiller plc Annual Report 2013

Growth in adjusted earnings per share (EPS)Growth in adjusted EPS is measured by comparing the adjustedEPS for the current year with that of the prior year. Adjusted EPS ismeasured using adjusted earnings divided by the basic number ofshares in issue. Adjusted earnings are measured using the defi nitionon page 180.Free cash flowFree cash fl ow is measured using the defi nition on page 180.Proportion of our total lager volume from markets in whichwe have No. 1 or No. 2 national market share positionsLager volumes generated in markets where we have a number one ornumber two national beer market share position divided by total lagervolumes. Lager volumes are measured as defi ned on page 180.Proportion of group EBITA from developing andemerging economiesEBITA generated in developing and emerging economies divided bygroup EBITA before corporate costs. EBITA is defi ned on page 180.Developing and emerging economies are as defi ned by theInternational Monetary Fund (IMF).Organic growth in lager volumesOrganic growth in lager volumes is measured by comparing lagervolumes in the year with those in the prior year excluding the effectsof acquisitions and disposals (organic information is defi ned onpage 180). Lager volumes are measured as defi ned on page 180.Group revenue growth (organic, constant currency)Growth in group revenue compared with the prior year is measuredon a constant currency basis (as defi ned on page 180) and excludingthe effects of acquisitions and disposals (organic information isdefi ned on page 180). Group revenue is defi ned on page 180.Revenue growth in premium brands (constant currency)Growth in revenue from sales of premium brands compared with theprior year is measured on a constant currency basis (as defi ned onpage 180). Premium brands are those in the premium segment asdefi ned on this page.EBITA growth (organic, constant currency)EBITA growth compared with the prior year is measured on aconstant currency basis (as defi ned on page 180) and excludingthe effects of acquisitions and disposals (organic information isdefi ned on page 180). EBITA is defi ned on page 180.EBITA marginEBITA margin is defi ned on page 180.Hectolitres of water used at our breweries per hectolitreof lager producedWater used at our breweries divided by the volume of lager produced.This includes 100% of all consolidated subsidiaries together with theequity accounted percentage share of the MillerCoors joint venture.Fossil fuel emissions from energy used at our breweriesper hectolitre of lager producedFossil fuel emissions are measured by the total amount of carbondioxide (CO2) in kilograms released to the atmosphere by our breweryoperations divided by the volume of lager produced. The total amountof CO2 is the sum of direct emissions produced by the combustionof fuel (e.g. coal, oil, gas) and indirect emissions from the use ofelectricity and steam. Emissions are calculated using theinternationally recognised WRI/WBCSD Greenhouse Gas Protocol.This includes 100% of all consolidated businesses together with theequity accounted percentage share of the MillerCoors joint venture.Cumulative financial benefits from our businesscapability programmeIncremental cash fl ows generated as a result of the adoption of newprocesses and systems including incremental revenues, reduced costof goods sold and overheads, reduced investment in working capitaland lower cost of capital investments.KPI explanation of changeWe have moved to a fi ve-year TSR measurement period for thepurpose of the TSR KPI as the performance share awards withthree-year TSR measurement periods for the excom have allnow vested and only awards with fi ve-year TSR measurementsperiods remain. The change has had no signifi cant impact onthe TSR trend.Non-financial definitionsCorporate Governance CodeThe UK Corporate Governance Code, as adopted by the FinancialReporting Council.Direct economic value generatedRevenue plus interest and dividend receipts, royalty income andproceeds of sales of assets (in accordance with guidance by theGlobal Reporting Initiative GRI EC1).Economy segmentTaking the leading brand in the most popular pack type as thestandard (=100), brands with a weighted average market price whichfall below an index of 90 form the economy segment. Normally, allbrands in this segment will be local brands.International brewers indexThe index of international brewers charts the share price progressionof the company’s closest peers in the global brewing industry –Anheuser-Busch InBev, Carlsberg, Heineken and Molson Coors,relative to 1 April 2010. The index is weighted relative to the marketcapitalisation of the brewers as at 1 April 2010.Mainstream segmentTaking the leading brand in the most popular pack type as thestandard (=100), the mainstream segment is formed of brands witha weighted average market price which fall into the 90-109 band.Mainstream brands tend to be local.PETPET is short for polyethylene terephthalate, a form of plastic which isused for bottling alcoholic and non-alcoholic drinks.Premium segment (worthmore segment in the USA)Taking the leading brand in the most popular pack type as thestandard (=100), brands with a weighted average market price whichhave an index of 110+ form the premium segment. The premiumsegment comprises local, regional and global brands.STRATESTRATE stands for Share Transactions Totally Electronic, an unlistedcompany owned by JSE Limited and Central Securities DepositoryParticipants (CSDP), which exists to allow share transactions in SouthAfrica to be settled electronically.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 181

Ordinary shareholding analysesListed below are analyses of holdings extracted from the register of ordinary shareholders at the year end:Number ofshareholdersPercentage ofshare capitalPortfolio size1 – 1,000 44,219 0.761,001– 10,000 8,563 1.5710,001 – 100,000 683 1.05100,001 – 1,000,000 732 15.391,000,001 and over 159 81.2354,356 100.00CategoryBanks 5 0.12Individuals, Nominees & Trusts 52,512 10.65Insurance Companies 153 5.75Investment Companies 26 0.97Medical Aid Schemes 26 0.14Mutual Funds 712 18.46Other Corporate Entities 16 42.55Pension Funds 774 14.83Other 132 6.5354,356 100.00Substantial shareholdingsAs at 3 June 2013, we had received the following notifi cations of interests in voting rights of the issued share capital of the company pursuantto Rule 5.1.2 of the Disclosure and Transparency Rules:Date ofnotificationNumberof sharesPercentageof issuedshare capitalAltria Group, Inc. 29 June 2012 430,000,000 26.99BevCo Ltd 20 March 2007 225,000,000 14.98Public Investment Corporation 13 January 2009 67,663,248 4.49Kulczyk Holding S.A. 28 March 2013 48,000,000 2.99The Companies Act requires disclosure of persons with signifi cant direct or indirect holdings of securities as at year end. At the year end wewere aware of the following shareholdings:Percentageof issuedshare capitalAltria Group, Inc. 26.84BevCo Ltd 14.04Public Investment Corporation 3.22Kulczyk Holding S.A. 2.99182 – SABMiller plc Annual Report 2013

Shareholders’ diaryFinancial reporting calendar and annual general meetingInterim management statement and annual general meeting July 2013Announcement of interim results, for half-year to September November 2013Interim management statement January 2014Preliminary announcement of annual results May 2014Annual fi nancial statements published June 2014Dividends Declared PaidOrdinary:Interim November DecemberFinal May AugustUnsolicited investment advice – warning to shareholdersMany companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investmentmatters. These are typically from overseas-based ‘brokers’ who target UK shareholders offering to sell them what often turn out to beworthless or high-risk shares in US or UK investments. They can be very persistent and extremely persuasive. A 2006 survey by the FinancialServices Authority, now the Financial Conduct Authority (FCA), reported that the average amount lost by investors was around £20,000. It is notjust the novice investor that has been duped in this way; many of the victims had been successfully investing for several years. Shareholdersare advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free reports into the company.If you receive any unsolicited investment advice:• Make sure you get the correct name of the person and organisation.• Check that they are properly authorised by the FCA before getting involved. You can check at http://www.fca.org.uk/firms/systemsreporting/register/search• The FCA also maintains on its website a list of unauthorised overseas fi rms who are targeting, or have targeted, UK investors and anyapproach from such organisations should be reported to the FCA so that this list can be kept up to date and any other appropriate actioncan be considered.• Report the matter to the FCA either by calling 0800 111 6768 or by completing an online form at: http://www.fca.org.uk/consumers/scams/investment-scams/share-fraud-and-boiler-room-scams/reporting-form. If you deal with an unauthorised fi rm, you wouldnot be eligible to receive payment under the Financial Services Compensation Scheme.South African shareholders may report such approaches to the Financial Services Board (FSB) on:Toll Free: 0800 110443 or 0800 202087Email: info@fsb.co.zaComplete the FSB online complaint form which can be found on their website www.fsb.co.za.Overview Business review Governance Financial statements Shareholder informationSABMiller plc Annual Report 2013 – 183

AdministrationSABMiller plcIncorporated in England and Wales (Registration No. 3528416)General Counsel and Group Company SecretaryJohn DavidsonRegistered officeSABMiller HouseChurch Street WestWokingSurrey, EnglandGU21 6HSTelephone +44 1483 264000Head officeOne Stanhope GateLondon, EnglandW1K 1AFTelephone +44 20 7659 0100Internet addresswww.sabmiller.comInvestor relationsTelephone +44 20 7659 0100Email: investor.relations@sabmiller.comSustainable developmentTelephone +44 1483 264134Email: sustainable.development@sabmiller.comIndependent auditorsPricewaterhouseCoopers LLPChartered Accountants and Statutory Auditors1 Embankment PlaceLondon, EnglandWC2N 6RHTelephone +44 20 7583 5000Registrar (United Kingdom)Capita RegistrarsThe Registry34 Beckenham RoadBeckenhamKent, EnglandBR3 4TUTelephone +44 20 8639 3399(outside UK)Telephone 0871 664 0300(from UK calls cost 10p per minuteplus network extras, lines are open8.30am-5.30pm Mon-Fri)Email: ssd@capitaregistrars.comwww.capitaregistrars.comRegistrar (South Africa)Computershare Investor Services (Pty) Limited70 Marshall Street, JohannesburgPO Box 61051Marshalltown 2107South AfricaTelephone +27 11 370 5000United States ADR DepositaryJP Morgan Depositary Bank1 Chase Manhattan Plaza, Floor 58New York, NY 10005Telephone U.S: 866 JPM-ADRSOutside the U.S: +1 866 576-2377Email: adr@jpmorgan.com184 – SABMiller plc Annual Report 2013

Cautionary statementThis document does not constitute an offer to sell or issueor the solicitation of an offer to buy or acquire ordinary sharesin the capital of SABMiller plc (the “company”) or any othersecurities of the company in any jurisdiction or an inducementto enter into investment activity.This document is intended to provide information to shareholders.It should not be relied upon by any other party or for any other purpose.This document includes ‘forward-looking statements’ with respectto certain of SABMiller plc’s plans, current goals and expectationsrelating to its future fi nancial condition, performance and results.These statements contain the words “anticipate”, “believe”, “intend”,“estimate”, “expect” and words of similar meaning. All statements otherthan statements of historical facts included in this document, including,without limitation, those regarding the company’s fi nancial position,business strategy, plans and objectives of management for futureoperations (including development plans and objectives relating tothe company’s products and services) are forward-looking statements.Such forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause the actualresults, performance or achievements of the company to be materiallydifferent from future results, performance or achievements expressedor implied by such forward-looking statements. Such forward-lookingstatements are based on numerous assumptions regarding thecompany’s present and future business strategies and the environmentin which the company will operate in the future. These forward-lookingstatements speak only as at the date of this document. Factors whichmay cause differences between actual results and those expected orimplied by the forward-looking statements include, but are not limitedto: material adverse changes in the economic and business conditionsin the markets in which SABMiller operates; increased competition andconsolidation in the global brewing and beverages industry; changes inconsumer preferences; changes to the regulatory environment; failureto deliver the integration and cost-saving objectives in relation to theFoster’s acquisition; failure to derive the expected benefi ts from thebusiness capability programme; and fl uctuations in foreign currencyexchange rates and interest rates. The company expressly disclaimsany obligation or undertaking to disseminate any updates or revisionsto any forward-looking statements contained herein to refl ect anychange in the company’s expectations with regard thereto or anychange in events, conditions or circumstances on which any suchstatement is based. The past business and fi nancial performanceof SABMiller plc is not to be relied on as an indication of itsfuture performance.The paper used in the report contains 75% recycled content, allof which is sourced from de-inked post-consumer waste. All of thepulp is bleached using an elemental chlorine free process (ECF).Printed in the UK by CPI Colour, a CarbonNeutral ® company. Bothmanufacturing mill and the printer are registered to the EnvironmentalManagement System ISO14001 and are Forest Stewardship Council ®(FSC) chain-of-custody certifi ed.Designed by Furtherfurthercreative.co.ukSABMiller plc Annual Report 2013

Registered officeSABMiller HouseChurch Street WestWokingSurreyEnglandGU21 6HSTelephone +44 1483 264000www.sabmiller.com