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132 SABMiller plc Annual Report 2012Notes to the consolidated financial statements continued23. Financial risk factors continuedLiquidity risk faced by the group is mitigated by having diverse sources of finance 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 2012 borrowing capacity under committed bank facilities amounted to US$3,810 million (2011: US$3,164 million).The table below analyses the group’s financial liabilities which will be settled on a net basis into relevant maturity groupings based onthe remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractualundiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.Less than1 yearUS$mBetween1 and 2yearsUS$mBetween2 and 5yearsUS$mOver5 yearsUS$mAt 31 March 2012Borrowings (1,803) (2,904) (11,763) (8,361)Derivative financial instruments (18) 16 (11) (35)Trade and other payables (3,416) (95) (7) (4)Financial guarantee contracts (6) (2) (6) (4)At 31 March 2011 1Borrowings (1,689) (1,096) (4,380) (2,003)Derivative financial instruments (124) (18) (21) (2)Trade and other payables (2,927) (73) – –Financial guarantee contracts (5) (3) – –1 As restated (see note 29).The table below analyses the group’s derivative financial instruments which will be settled on a gross basis into relevant maturity groupingsbased on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractualundiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.Less than1 yearUS$mBetween1 and 2yearsUS$mBetween2 and 5yearsUS$mOver5 yearsUS$mAt 31 March 2012Forward foreign exchange contractsOutflow (399) (12) – –Inflow 401 12 – –Cross currency swapsOutflow (278) (346) (1,686) (866)Inflow 216 331 1,637 877At 31 March 2011Forward foreign exchange contractsOutflow (423) (30) – –Inflow 384 30 – –Cross currency swapsOutflow (29) (33) (315) (422)Inflow 19 23 326 446Capital managementThe capital structure of the group consists of net debt (see note 28c) and shareholders’ equity.The group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain 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 financial covenant which was complied withthroughout the year.The group monitors its financial capacity and credit ratings by reference to a number of key financial ratios and cash flow metrics includingnet debt to adjusted EBITDA and interest cover. These provide a framework within which the group’s capital base is managed includingdividend policy. If the group fails to meet the financial targets required by the ratings agencies, a credit rating downgrade could impact theaverage interest rate of borrowings of the group and the future availability of credit to the group.The group is currently rated Baa1 by Moody’s Investors Service and BBB+ by Standard & Poor’s Ratings Services, both with a stable outlook.
SABMiller plc Annual Report 2012 13323. Financial risk factors continuedFair value estimationThe following table presents the group’s financial assets and liabilities that are measured at fair value.At 31 March 2012AssetsFinancial assets at fair value through profit or lossDerivative financial instruments – 756 – 756Available for sale investments 1 18 12 31Total assets 1 774 12 787LiabilitiesFinancial liabilities at fair value through profit or lossDerivative financial instruments – (109) – (109)Total liabilities – (109) – (109)At 31 March 2011AssetsFinancial assets at fair value through profit or lossDerivative financial instruments – 346 – 346Available for sale investments 1 19 15 35Total assets 1 365 15 381LiabilitiesFinancial liabilities at fair value through profit or lossDerivative financial instruments – (135) – (135)Total liabilities – (135) – (135)Level 1US$mLevel 2US$mThe levels of the fair value hierarchy and its application to the group’s financial assets and liabilities are described below.Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities:The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market isregarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service,or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quotedmarket price used for financial assets held by the group is the current bid price.Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derivedfrom prices):The fair values of financial instruments that are not traded in an active market (for example, over the counter derivatives or infrequently tradedlisted investments) are determined by using valuation techniques. These valuation techniques maximise the use of observable market datawhere it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument areobservable, the instrument is included in level 2.Level 3: Inputs for the asset or liability that are not based on observable market data:Specific valuation techniques, such as discounted cash flow analysis, are used to determine fair value of the remaining financial instruments.The following table presents the changes in level 3 instruments for the years ended 31 March.Level 3US$m2012US$mTotalUS$mAvailable for saleinvestmentsAt 1 April 15 15Exchange adjustments (1) –Additions – 1Disposals (2) –Impairments – (1)At 31 March 12 152011US$mOverview Business review Governance Financial statements Shareholder information
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Registered officeSABMiller HouseChu
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