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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
218
Tiger Brands Limited Integrated Annual Report
2014
37 Financial instruments
continued
37.2
Foreign currency risk
The group enters into various types of foreign exchange contracts as part of the management of its
foreign exchange exposures arising from its current and anticipated business activities.
As the group operates in various countries and undertakes transactions denominated in foreign currencies,
exposures to foreign currency fluctuations arise. Exchange rate exposures on transactions are managed
within approved policy parameters utilising forward exchange contracts or other derivative financial
instruments in conjunction with external consultants who provide financial services to group companies,
as well as contributing to the management of the financial risks relating to the group’s operations.
The group does not hold foreign exchange contracts in respect of foreign borrowings, as its intention is
to repay these from its foreign income stream or subsequent divestment of its interest in the operation.
Foreign exchange differences relating to investments, net of their related borrowings, are reported as
translation differences in the group’s net other comprehensive income until the disposal of the net
investment, at which time exchange differences are recognised as an income or expense.
Forward exchange contracts are mainly entered into to cover net import exposures, after setting off
anticipated export proceeds on an individual currency basis. The fair value is determined using the
applicable foreign exchange spot rates at 30 September 2014.
The exposure and concentration of foreign currency risk is included in the table below:
(R’million)
South
African
rand
United
States
dollar
Pound
sterling
Euro
Nigerian
naira Other**
Total
GROUP
2014
Financial assets
Accounts receivable
2 227,1
841,3
249,1
305,8
747,8 496,3
4 867,4
Cash and cash
equivalents
309,7
266,7
8,5
110,2
233,7 231,5
1 160,3
Financial liabilities
Borrowings***
(2 942,9)
(23,3)
–
– (1 383,8) (299,5) (4 649,5)
Accounts payable
(3 614,6)
(93,7)
(92,0)
(64,5) (937,7) (303,7) (5 106,2)
2013 (restated)*
Financial assets
Accounts receivable 2 990,3
247,2
17,7
32,7
522,3
389,7 4 199,9
Cash and cash
equivalents
230,0
81,8
6,0
41,3
107,6
166,2
632,9
Financial liabilities
Borrowings***
(3 099,8)
(21,8)
–
– (1 679,1)
(302,2) (5 102,9)
Accounts payable (3 237,5)
(64,6)
(12,1)
(61,7)
(812,0)
(355,9) (4 543,8)
*
The amounts have been restated due to the adoption of IAS 19R.
** Other includes the Australian dollar, Canadian dollar, Japanese yen, Swiss franc, New Zealand dollar, Cameroon franc and
Kenyan shilling.
*** In 2014 R169,3 million (2013: R193,6 million) is held by the company.