Tiger Brands Integrated Annual Report 2014

ANNUAL FINANCIAL STATEMENTS

Notes to the financial statements

continued

for the year ended 30 September 2014

144

Tiger Brands Limited Integrated Annual Report

2014

Changes in accounting policies

When the adoption of the standard or interpretation

is deemed to have an impact on the financial

statements or performance of the group, its impact is

described in more detail under the heading “Further

information on changes to accounting policies” on

pages 160 to 164.

Foreign currencies

Foreign currency transactions

The consolidated financial statements are presented

in South African rand, which is the company’s

functional and presentation currency. Each foreign

entity in the group determines its own functional

currency. Transactions in foreign currencies are

initially recorded in the functional currency at the rate

of exchange ruling at the date of the transaction.

Translation of foreign currency transactions

Monetary assets and liabilities denominated in

foreign currencies are retranslated at the functional

currency rate of exchange ruling at the reporting

date. Exchange differences are taken to profit or

loss, except for differences arising on foreign

currency borrowings that provide a hedge against

a net investment in a foreign entity. These are taken

directly to other comprehensive income, in the

consolidated annual financial statements, until the

disposal of the net investment, at which time they are

recognised in profit or loss. Tax charges and credits

attributable to such exchange differences are also

accounted for in other comprehensive income.

If non-monetary items measured in a foreign currency

are carried at historical cost, the exchange rate used

is the rate applicable at the initial transaction date.

If they are carried at fair value, the rate used is the

rate at the date when the fair value was determined.

The gain or loss arising on retranslation of

non-monetary items is treated in line with the

recognition of gain or loss on change in fair value

of the item (ie translation differences on items which

fair value gain or loss is recognised in other

comprehensive income or profit or loss is also

recognised in other comprehensive income or profit

or loss, respectively).

Foreign operations

At the reporting date the assets and liabilities of the

foreign operations are translated into the presentation

currency of the group (rand) at the exchange rate

ruling at the reporting date. The income statement is

translated at the weighted average exchange rate for

the year. Exchange differences are taken directly to a

separate component of other comprehensive income.

On disposal of a foreign operation, the deferred

cumulative amount recognised in other comprehensive

income relating to that particular foreign operation is

recognised in the income statement.

Goodwill and fair value adjustments to the carrying

amounts of assets and liabilities arising on the

acquisition of a foreign operation are treated as

assets and liabilities of that foreign operation, and

are translated at the closing rate.

The functional currencies of the foreign operations

are as follows:

Chocolaterie Confiserie Camerounaise

(subsidiary) – Central African franc

Haco Industries Kenya Limited (subsidiary)

– Kenyan shilling

Deli Foods Nigeria Limited (subsidiary)

– Nigerian naira

Dangote Flour Mills (subsidiary) – Nigerian naira

East Africa Tiger Brands Industries (subsidiary)

– Ethiopian birr

Empresas Carozzí (associate) – Chilean peso

National Foods Holdings Limited (Zimbabwe)

(associate) – United States dollar

UAC Foods Limited (associate) – Nigerian naira.

Interest in group companies

Business combinations

Business combinations are accounted for using the

acquisition method. The value of an acquisition is

measured as the aggregate of the consideration

transferred, measured at acquisition date fair value

and the amount of any non-controlling interest in the

acquiree. For each business combination, the

acquirer measures the non-controlling interest in the

acquiree either at fair value or at the proportionate

share of the acquiree’s identifiable net assets.

Acquisition costs incurred are expensed.