32 Related-party disclosures
 

The board of directors of Tiger Brands Limited has given general declarations in terms of section 75 of the Companies Act on directors’ personal financial interests. These declarations indicate that certain directors hold positions of influence in other entities which are suppliers, service providers, customers and/or competitors of Tiger Brands Limited. Transactions conducted with these director-related customers and suppliers were on an arm’s length basis.

The sales to and purchases from related parties are made at normal market prices. Outstanding balances at the year end are unsecured and settlement occurs in cash. This assessment is undertaken at each financial year through examining the financial position of the related party and the market in which they operate. Given the ongoing liquidity and forex shortages experienced within Nigeria and Zimbabwe, the expected timing of receipt of the amounts owing from these related parties has been assessed. As a result, a further provision of R28,9 million (2018: R30,0 million) has been provided against these outstanding balances, being the impact of the discounting factor applied and expected liquidity premiums payable.

Details of material transactions with related parties not disclosed elsewhere in the financial statements are as follows:

Group
(R’million)		 Management
fees		     Directors’
fees		     Amounts
owed by
related parties		  
2019                
Related party – associates                
Empresas Carozzí (Chile) –     3,8     –  
National Foods Holdings Limited 3,5     –     13,9  
2018                
Related party – associates                
Oceana Group Limited –     0,8     0,2  
Empresas Carozzí (Chile) –     3,3     –  
National Foods Holdings Limited 3,3     –     36,8  
    GROUP  
(R’million)   2019     2018  
Other related parties            
Key management personnel*            
Short-term employee benefits   94,2     78,3  
Post-employment and medical benefits   8,2     7,2  
Share-based payments   10,2     35,2  
Total compensation paid to key management personnel   112,6     120,7  

* Key management personnel comprises the top tier of the organisation and the managing executives of the individual businesses.

    2019     2018  
Company
(R’million)		   Amounts  
owed by/(to)
related parties 		   Dividends
received		     Amounts 
owed by/(to)
related parties 		   Dividends
received		  
Related party – intergroup                               
Subsidiaries1                               
Durban Confectionery Works Proprietary Limited     33,0     –        33,0     –    
Tiger Consumer Brands Limited     1,8     350,0        (120,1)    1 500,0    
Tiger Brands International Holdings Limited     249,6     –        343,0     –    
Enterprise Foods Proprietary Limited     0,4     –        0,4     –    
Langeberg Holdings Limited     500,8     –        500,8     –    
Langeberg & Ashton Foods Proprietary Limited     499,5     –        499,5     –    
Tiger Food Brands Intellectual Property Holding                               
Company Proprietary Limited     293,9     550,0        271,0     –    
Pharma I Holdings Proprietary Limited     1 211,2     –        1 211,2     –    
Chocolaterie Confiserie Camerounaise     64,0     74,5        –     58,1    
Davita Trading Proprietary Limited     –     150,0        –     150,0    
Investment and dormant companies     99,6     –        165,5     –    
Empowerment entities                               
Tiger Brands Foundation     567,0     200,5        719,5     188,3    
Thusani II     113,1     38,6        130,7     36,6    
Associate                               
Oceana Group Limited     –     173,6        0,2     64,0    
National Foods Holdings Limited     13,9     9,6        36,8     16,6    
UAC Foods     –     14,5        –     12,5    

1 Interest-free with no fixed repayment terms. These balances are not expected to be called upon within the next 12 months.

In assessing the credit risk of intercompany transactions, the company considers the liquidity position, available cash resources and the industry. These factors are considered to give rise to a low credit risk and, therefore, no further disclosure is required.