Accounting policies and definitions
As stated previously, the reported turnover for the year ended 31 March 2003 has been restated following the adoption of FRS 5 Reporting the substance of transactions, application note G – revenue recognition. There was no impact on EBITA in either 2003 or 2004, however the adjustment does increase the group’s reported EBITA margin by approximately 20 basis points.
The group has also adopted UITF 38 Accounting for ESOP trusts, which has resulted in a reclassification of shares held in both employee share trusts and the Safari Ltd investment, from other fixed asset investments, reducing net assets by US$629 million at 31 March 2003. This amount has been deducted in arriving at shareholders’ funds. The revised UITF 17 Employee share schemes, has also been adopted. There were no material changes to reported profits for the year ended 31 March 2003.
During 2002 the Accounting Standards Board (ASB) delayed the mandatory implementation of a new accounting standard for Retirement Benefits (FRS 17) in order to allow UK and international standards boards an opportunity to agree how to converge their different approaches. The group continues to provide additional information as required by FRS 17 by way of a note to the accounts. The group has exposures associated with defined benefit pension schemes and post-retirement benefits: the Miller defined benefit pension plans and post-retirement benefit plans, the ABI Pension Fund which is in surplus, and the South African post-retirement medical aid schemes which are almost fully provided for under SSAP 24, being the most significant. The updated valuations as at the year end, required for FRS 17 disclosure purposes only, indicate a deficit on the schemes in aggregate, in excess of amounts provided in the balance sheet, of some US$140 million, after taking account of the related deferred taxation. This compares to the prior year deficit of US$194 million. The group has no other significant exposures to pension and post-retirement liabilities as measured in accordance with FRS 17.
In the determination and disclosure of reported sales volumes, the group aggregates the volumes of all consolidated subsidiaries and its equity accounted associates, other than associates where primary responsibility for day-to-day management rests with others (such as Castel and Distell). In these latter cases, the financial results of operations are equity accounted in terms of UK GAAP but volumes are excluded. Contract brewing volumes are excluded from total volumes; however, turnover from contract brewing is included within group turnover. The group has made some disclosures of its results on an organic, constant currency basis, to analyse the effects of acquisitions net of disposals and changes in exchange rates on the group’s results. Organic results exclude the first 12 months’ results of acquisitions and the last 12 months’ results of disposals. Constant currency results have been determined by translating the local currency denominated results for the year ended 31 March 2004 at the exchange rates for the comparable period in the prior year.
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