Annexure B

INTEREST IN ASSOCIATED COMPANIES

for the year ended 30 September 2021

				Percentage holding
	Principal place of business	Currency	Year end	2021 %	2020 %		Nature of business	Listed/ unlisted
National Foods Holdings
Limited (note 1)	Zimbabwe	US dollar	June	37,4	37,4		Food processing	Listed
Empresas Carozzi	Chile	Chilean peso	December	24,4	24,4		Food processing	Unlisted
UAC Foods	Nigeria	Nigerian naira	December	–	49,0		Food processing	Unlisted

Detailed disclosure of Empresas Carozzi for 2021 is noted below, as per note 15.6.

(R’million)	September 2021	September 2020
Summarised statement of comprehensive income
Revenue	19 729,8	21 519,6
Profit after taxation	1 219,3	1 152,9
Attributable to outside shareholders	1 219,3	1,152,9
Other comprehensive loss, net of taxation	(163,3)	(173,7)
Total comprehensive income for the year	1 056,0	979,1
Attributable to outside shareholders	1 056,0	979,1
Dividends received from Empresas Carozzi	115,4	105,5

(R’million)	September 2021	September 2020
Summarised statement of financial position
Non-current assets	14 543,6	16 691,3
Current assets	7 700,5	8 796,4
Non-current liabilities	(7 079,5)	(8 469,0)
Current liabilities	(4 700,1)	(5 572,8)
Net asset value	10 464,5	11 445,9

(R’million)	September 2021	September 2020
Reconciliation of the summarised financial information presented to the carrying amount of Tiger Brands interest in Empresas Carozzi
Tiger Brands effective share of Empresas Carozzi’s NAV	2 553,3	2 792,8
Translation differences	(331,0)	(554,6)
Carrying value of Empresas Carozzi	2 222,3	2 238,2

Note 1 – National Foods Holdings Limited (NFH)

Accounting for investment in associate

The group has a 37,4% investment in National Foods Holdings Limited (NFH), an associate company incorporated in Zimbabwe and which operates throughout Zimbabwe.

The equity-accounted results of NFH included in these results have therefore been prepared in accordance with IAS 29, with the following key accounting principles and judgements applied by the group:

• Hyperinflation accounting requires transactions and balances of each reporting period presented to be stated in terms of the measuring unit current at the end of the reporting period in order to account for the loss of purchasing power during the period. The group has elected to use the Zimbabwe Consumer Price Index (CPI) as the measuring unit current (or general price index) to restate amounts as CPI provides an observable indication of the change in the price of goods and services
• The carrying amounts of non-monetary assets and liabilities carried at historical costs are restated to reflect the change in the general price index
• All items recognised in the statement of comprehensive income at historical costs are restated by applying the change in the general price index from the dates when these items were initially earned or incurred
• Gains or losses on the resulting net monetary position are recognised in the statement of comprehensive income and included in our share of associate's income
• Impairment losses are recorded in the statement of comprehensive income if the remeasured value of assets exceeds the estimated recoverable amount and included in our share of associate's income
• The application of IAS 29 on a retrospective basis within the statement of comprehensive income of NFH have resulted in the recognition of both a gain on the net monetary position and an impairment loss on the revalued assets in the current and prior periods.

As the group's presentation currency is not that of a hyperinflationary economy, the comparative information of the group's financial results relating to NFH is not restated. Any difference between our share of NFH adjusted equity balance after applying IAS 29 and the balance previously recorded by the group as at 30 September 2019 is recognised in other comprehensive income as part of foreign currency translations for the current period.

Exchange rates applied in translating the results of investment in associate

During the current and prior period under review, the following changes to the functional and presentation currencies of NFH occurred:

• Since the adoption of multiple currencies by the Zimbabwean government in 2009, entities in Zimbabwe were operating in a multi-currency regime. As a result, prior to 1 October 2018, the US dollar was designated as the functional and presentation currency of NFH
• On 1 October 2018, following the directive issued by the RBZ, the RTGS dollar was adopted as the functional and presentation currency of NFH. The application of the change in functional currency was applied prospectively. As disclosed in the accounting policies, judgement was applied in the estimation and application of exchange rates used when translating the results of NFH for the 2019 financial year. Inputs considered in this estimate include the official inflation rate and the premium at which Old Mutual shares trade on the Zimbabwe Stock Exchange versus on the JSE
• On 24 June 2019, the RBZ introduced statutory instrument 142 of 2019 resulting in the renaming of the RTGS dollar to the Zimbabwe dollar (ZWL$) and the ZWL$ being the only form of legal tender in the country. The ZWL$ was therefore adopted as the functional and presentation currency of NFH prospectively from this date
• In line with the judgements applied during the 2020 financial year, management assessed that the official interbank closing exchange rate of 0.17 ZWL$ to the South African rand and this was therefore used when translating the result of NFH.

The results and net asset value of NFH have been translated into the group's presentation currency at the closing exchange rate, in accordance with hyperinflationary provisions of IAS 21 The Effects of Changes in Foreign Exchange Rates.