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Tiger Brands Limited Integrated Annual Report
2014
Annual financial statements
37 Financial instruments
continued
37.8 Fair value hierarchy
Financial instruments are normally held by the group until they close out in the normal course of business.
The fair values of the group’s financial instruments, which principally comprise put, call and future
positions with SAFEX, forward exchange contracts and listed investments, approximate their carrying
values. The maturity profile of these financial instruments fall due within 12 months. The maturity profile
of the group’s long-term liabilities is disclosed in note 31 of these annual financial statements.
There are no significant differences between carrying values and fair values of financial assets and
liabilities, except for intercompany loans at a company level, which are eliminated on consolidation.
Trade and other receivables, investments and loans and trade and other payables carried on the
statement of financial position approximate the fair values thereof except for amounts owed to/by
subsidiaries where the fair value is R1,8 billion calculated, using the effective interest rate method linked
to market related interest rates.
Long-term and short-term borrowings are measured at amortised cost using the effective interest rate
method and the carrying amounts approximate their fair value.
The group used the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1:
quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2:
other techniques for which all inputs which have a significant effect on the recorded fair value
are observable, either directly or indirectly.
Level 3:
techniques which use inputs which have a significant effect on the recorded fair value that are
not based on observable market data.
As at 30 September, the group held the following financial instruments measured at fair value:
2014
Restated*
2013
(R’million)
Level 1 Level 2 Level 3** Total
Level 1 Level 2 Level 3** Total
GROUP
Assets measured
at fair value
Available-for-sale
financial assets
Other investments
292,7
2,3 8,1 303,1
411,6
8,7
– 420,3
Derivatives
– 13,4
– 13,4
– 18,7
– 18,7
Liabilities measured
at fair value
Derivatives
–
8,4
–
8,4
– 4,7
–
4,7
*
The amounts have been restated due to the adoption of IAS 19R.
**
The value of the investment in group risk holdings is based on Tiger Brands‘ proportionate share of the net asset value of the
company. There are no significant unobservable inputs that are used in the valuation and any changes in these inputs would
not result in a fair value change.