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Notes to the financial statements
continued
for the year ended 30 September 2015
186
Tiger Brands Limited integrated annual report
2015
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 futures 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 31.1 of
these annual financial statements.
There are no significant differences between carrying values and fair values of financial assets and liabilities, except for
inter-company loans at a company level, which are eliminated on consolidation. Given that the group is exploring
various alternatives regarding its investment in TBCG, the fair value will be reassessed throughout the process.
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 subsidiaries where the fair value is R2,1 billion
(2014: 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. For further fair value discussion on TBCG, refer to note 13.4.
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:
2015
2014
(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
102,2
2,5
4,4 109,1
292,7
2,3
8,1 303,1
Derivatives
–
18,9
–
18,9
–
13,4
–
13,4
Liabilities measured at
fair value
Derivatives
–
(9,2)
–
(9,2)
–
(8,4)
–
(8,4)
COMPANY
Assets measured at fair value
Available-for-sale financial assets
Other investments
–
0,3
4,4
4,7
–
0,4
8,1
8,5
Derivatives
–
–
–
–
–
–
–
–
Liabilities measured at fair value
Derivatives
–
–
–
–
–
–
–
–
* The value of the investment in Group Risk Holdings is based on Tiger Brand’s proportionate share of the net asset value of the
company. There are no significant inputs that are used in the valuation and any changes in these inputs would not result in a fair
value change.