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Tiger Brands Limited integrated annual report
2015 177
37 Financial instruments
continued
37.2 Foreign currency risk
continued
Cash flow hedges
At 30 September 2015, the group had foreign exchange contracts outstanding designated as hedges of future
purchases from suppliers outside South Africa for which the group has firm commitments or highly likely forecast
transactions.
A summary of these contracts are:
(R’million)
Foreign
currency
(in million)
Average
rate
Rand
(in million)
GROUP
2015
Foreign currency bought
US dollar
10,7
13,97
150,1
Euro
5,8
16,07
93,6
Pound sterling
1,9
21,15
40,1
Other currencies*
–
–
6,2
2014
Foreign currency bought
US dollar
27,7
13,48
373,3
Euro
4,9
14,55
71,3
Pound sterling
3,9
18,62
72,6
Other currencies
–
–
2,0
The terms of the forward currency contracts have been negotiated to match the terms of the commitments.
The cash flow hedge of expected future purchases was assessed to be effective and an unrealised profit of
R13,8 million (2014: profit of R10,6 million) relating to the hedging instrument included in other comprehensive income.
GROUP
Foreign currency (in millions)
1 – 6
months
7 – 12
months
US dollar
10,7
–
Pound sterling
1,9
–
Euro
2,8
3,0
Japanese yen
53,6
–
These are expected to affect the income statement in the following year.
During the year, R13,1 million (2014: R22,9 million) was added to other comprehensive income and included in the
cost or carrying amount of the non-financial asset or liability (highly probable forecast transactions).
There are no forecast transactions for which hedge accounting was previously used but is no longer expected to occur.
There are no ineffective hedges to be recognised in profit or loss.