Tiger Brands | Annual Financial Statements 2025 - Financial management and instruments

Financial management and instruments

Financial instruments are recognised on the group's balance sheet when the group becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus any directly attributable transaction costs when the group becomes a party to the contractual arrangements. Subsequent to initial recognition, these instruments are measured in accordance with their classification.

The group's objective in using financial instruments is to reduce the uncertainty over future cash flows arising principally as a result of commodity price, currency and interest rate fluctuations.

The foreign exchange contracts outstanding at year end are marked-to-market at the prevailing closing spot rate. The group finances its operations through a combination of retained surpluses, bank borrowings and long-term loans. The group borrows short-term funds with fixed or floating rates of interest directly through Tiger Consumer Brands Limited.

The main risks arising from the group's financial instruments are, in order of priority, procurement risk, foreign currency risk, interest rate risk, liquidity risk and credit risk as detailed in the following notes.

6.1 Categorisation of assets and liabilities

(R'million)	Financial assets at amortised cost	Financial assets at fair value through OCI	Financial liabilities at amortised cost	Financial instruments at fair value through profit or loss	Total financial instruments	Non- financial instruments	Total per statement of financial position
2025
Non-current assets
Property, plant and equipment	–	–	–	–	–	5 946	5 946
Right-use-assets	–	–	–	–	–	315	315
Goodwill	–	–	–	–	–	1 612	1 612
Intangible assets	–	–	–	–	–	1 245	1 245
Investments in associated companies	–	–	–	–	–	313	313
Other investments	203	218	–	17	438	16	454
Loans	11	–	–	–	11	–	11
Current assets
Inventories	–	–	–	–	–	6 042	6 042
Trade and other receivables	3 774	–	–	18	3 792	378	4 170
Taxation receivable	–	–	–	–	–	26	26
Short-term investments	–	–	–	1 781	1 781	–	1 781
Cash and cash equivalents	3 069	–	–	–	3 069	–	3 069
Assets classified as held for sale	484	–	–	–	484	1 487	1 971
Total	7 541	218	–	1 816	9 575	17 380	26 955
2025
Total equity	–	–	–	–	–	(17 239)	(17 239)
Non-current liabilities
Deferred taxation liability	–	–	–	–	–	(257)	(257)
Post-retirement medical aid obligations – long term	–	–	–	–	–	(245)	(245)
Long-term borrowings	–	–	(241)	–	(241)	–	(241)
Current liabilities
Trade and other payables	–	–	(6 120)	(21)	(6 141)	(152)	(6 293)
Rebates and incentives accruals	–	–	(1 040)	–	(1 040)	–	(1 040)
Employee-related accruals	–	–	–	–	–	(564)	(564)
Post-retirement medical aid obligations – short term	–	–	–	–	–	(25)	(25)
Taxation	–	–	–	–	–	(588)	(588)
Short-term borrowings	–	–	(116)	–	(116)	–	(116)
Liabilities directly associated with assets classified as held for sale	–	–	(325)	–	(325)	(22)	(347)
Total	–	–	(7 842)	(21)	(7 863)	(19 092)	(26 955)

(R'million)	Financial assets at amortised cost	Financial assets at fair value through OCI	Financial liabilities at amortised cost	Financial instruments at fair value through profit or loss	Total financial instruments	Non- financial instruments	Total per statement of financial position
2024 restated^#
Non-current assets
Property, plant and equipment	–	–	–	–	–	5 782	5 782
Right-use-asset	–	–	–	–	–	414	414
Goodwill	–	–	–	–	–	1 652	1 652
Intangible assets	–	–	–	–	–	1 369	1 369
Investments in associated companies	–	–	–	–	–	3 347	3 347
Other investments	201	319	–	16	536	10	546
Loans	13	–	–	–	13	–	13
Deferred taxation asset	–	–	–	–	–	36	36
Current assets
Inventories	–	–	–	–	–	7 423	7 423
Trade and other receivables	3 945	–	–	45	3 990	287	4 277
Taxation receivable	–	–	–	–	–	67	67
Short-term investments	31	–	–	–	31	–	31
Cash and cash equivalents	1 625	–	–	–	1 625	–	1 625
Assets classified as held for sale	–	–	–	–	–	41	41
Total	5 815	319	–	61	6 195	20 428	26 623
2024 restated^#
Total equity					–	(18 427)	(18 427)
Non-current liabilities
Deferred taxation liability	–	–	–	–	–	(360)	(360)
Post-retirement medical aid obligations – long term	–	–	–	–	–	(228)	(228)
Long-term borrowings	–	–	(303)	–	(303)	–	(303)
Current liabilities
Trade and other payables			(4 702)	(14)	(4 716)	(164)	(4 880)
Rebates and incentives	–	–	(929)	–	(929)	–	(929)
Employee-related accruals	–	–	–	–	–	(465)	(465)
Post-retirement medical aid obligations – short term						(23)	(23)
Taxation	–	–	–	–	–	(69)	(69)
Short-term borrowings	–	–	(939)	–	(939)	–	(939)
Total	–	–	(6 873)	(14)	(6 887)	(19 736)	(26 623)

^# Refer to note 12 for prior period restatements

Refer to the accounting policies for further details on the above classifications.

6.2 Procurement risk (commodity price risk)

Commodity price risk arises from the group being subject to raw material price fluctuations caused by supply conditions, weather, economic conditions and other factors. The strategic raw materials acquired by the group include wheat, maize, rice, oats and sorghum.

The group uses commodity futures and options contracts or other derivative instruments to reduce the volatility of commodity input prices of strategic raw materials. These derivative contracts are only taken out to match an underlying physical requirement for the raw material. The group does not write naked derivative contracts.

The group has developed a comprehensive risk management process to facilitate, control and to monitor these risks. The procurement of raw materials takes place in terms of specific mandates given by the executive management. Position statements are prepared on a monthly basis and these are monitored by management and compared to the mandates.

The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterparty limits, controlling and reporting structures.

6.3 Foreign currency risk

As the group operates in various countries and undertakes transactions denominated in foreign currencies, exposures to foreign currency fluctuations arise. The group does not hold foreign exchange contracts in respect of foreign borrowings, as its intention is to repay these from its foreign income stream or subsequent divestment of its interest in the operation. Foreign exchange differences relating to investments, net of their related borrowings, are reported as translation differences in the group's net other comprehensive income until the disposal of the net investment, at which time exchange differences are recycled through profit or loss.

Exchange rate exposures and associated foreign exchange risks are managed within approved policy and strategy parameters. The portfolio approach includes a combination of forward contracts, derivative structures and spot hedges with varying hedge ratios which are influenced by the duration and market outlook. Foreign exchange risk is managed dynamically by group treasury with the assistance of external consultants who provide financial services and execution capacity.

The exposure and concentration of foreign currency risk is included in the table below:

(R'million)	South African rand	US dollar	Pound sterling	Central African franc	Other*	Total
2025
Financial assets
Other investments	438	–	–	–	–	438
Loans	11	–	–	–	–	11
Trade and other receivables	3 625	118	9	–	40	3 792
Short-term investments	85	1 606	90	–	–	1 781
Cash and cash equivalents	2 730	285	17	–	37	3 069
Assets classified as held for sale	–	–	–	484	–	484
Financial liabilities
Borrowings	(357)	–	–	–	–	(357)
Trade and other payables and rebates and incentives accruals	(5 770)	(1 255)	(79)	–	(77)	(7 181)
Liabilities directly associated with assets classified as held for sale	–	–	–	(325)	–	(325)
2024^#
Financial assets
Other investments	536	–	–	–	–	536
Loans	13	–	–	–	–	13
Trade and other receivables and rebates and incentives accruals	3 721	124	–	114	31	3 990
Short-term investments	31	–	–	–	–	31
Cash and cash equivalents	1 340	190	–	83	12	1 625
Financial liabilities
Borrowings	(1 242)	–	–	–	–	(1 242)
Trade and other payables and rebates and incentives accruals	(5 137)	(416)	–	(57)	(35)	(5 645)

*	Other includes the Australian dollar, Canadian dollar, Japanese yen, Swiss franc, New Zealand dollar and Euro
^#	Refer to note 12 for prior period restatements

The following spot rates were used to translate financial instruments denominated in foreign currency:

		2025		2024
(R'million) Group	Assets	Liabilities	Average closing rate	Assets	Liabilities	Average closing rate
US dollar	17.25	17.28	17.27	17.22	17.23	17.22
Pound sterling	23.19	23.24	23.22	23.05	23.06	23.05
Euro	20.25	20.28	20.26	19.23	19.24	19.24

Forward exchange contracts outstanding at the reporting date all fall due within 7 to 12 months. A summary of forward exchange contract positions bought to settle group foreign liabilities and sold to settle group foreign assets is shown below.

		2025		2024
(R’million) Group	Foreign currency (in millions)	Average rate	Rands (in millions)	Foreign currency (in millions)	Average rate	Rands (in millions)
Foreign currency purchased
US dollar	200	17.81	3 563	129	17.95	2 310
Pound sterling	21	24.19	518	1	24.53	14
Euro	7	20.94	153	1	20.26	26
Japanese yen	–	–	–	6	0.12	1
Foreign currency sold
US dollar	288	18.08	5 210	46	18.45	840
Pound sterling	9	24.54	227	3	24.62	64
Euro	8	21.17	163	11	21.27	229
Canadian dollar	–	–	–	1	13.46	18
Australian dollar	–	–	–	1	12.53	17

The terms of the forward currency contracts have been negotiated to match the terms of the commitments within regulatory constraints.

Timing of cash flows relating to foreign currency is as follows:

Foreign currency purchased (in millions)	1 to 6 months	7 to 12 months
US dollar	200	–
Pound sterling	10	11
Euro	6	1

These are expected to affect the income statement in the following year.

Foreign currency purchased (in millions)	1 to 6 months	7 to 12 months
US dollar	288	–
Pound sterling	5	4
Euro	6	2

These are expected to affect the income statement in the following year.

During the year, Rnil (2024: R1 million) was released from other comprehensive income and included in the carrying amount of the non-financial asset or liability (highly probable forecast transactions).

Foreign currency sensitivity

The following table details the group’s sensitivity to a 10% change in the rand rates against the respective foreign currencies where the strengthening is reflected as +10% and weakening reflected as -10%.

The sensitivity analysis includes only material outstanding foreign currency denominated monetary items as detailed in the table below and adjusts their translation at the reporting date for a 10% change in foreign currency exchange rates. A positive number indicates an increase in profit or loss and other comprehensive income where the rand weakens against the relevant currency.

	Profit or loss
(R’million)	2025	2024
US dollar + 10%	(115)	(148)
US dollar - 10%	115	148
Pound sterling + 10%	(24)	(4)
Pound sterling - 10%	24	4
Central African franc + 10%	(18)	(6)
Central African franc – 10%	18	6
Total + 10%	(157)	(158)
Total – 10%	157	158

Forex currency sensitivity on associates

The following table details the group’s sensitivity to a 5% weakening/strengthening in the rand against the US dollar. Note that the prior year includes sensitivity against the Chilean peso prior to the disposal of Carozzi (refer to note 5.2.5).

	Profit or loss
(R’million)	2025	2024
Chilean peso + 5%	–	(144)
Chilean peso - 5%	–	144
US dollar + 5%	16	17
US dollar - 5%	(16)	(17)
Total + 5%	16	(127)
Total - 5%	(16)	127

6.4 Interest rate risk management

Interest rate risk results from the cash flow and financial performance uncertainty arising from interest rate fluctuations.

Financial assets and liabilities affected by interest rate fluctuations include bank and cash deposits, as well as bank borrowings. At the reporting date, the group cash deposits were accessible immediately or had maturity dates up to six months. The interest rates earned on these deposits closely approximate the market rates prevailing.

Interest rate sensitivity

The sensitivity analysis addresses only the floating interest rate exposure emanating from the net cash position. The interest rate exposure has been calculated with the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period.

If interest rates had increased/(decreased) by 1% and all other variables were held constant, the profit for the year end would decrease/(increase) as detailed in the table below due to the use of the variable interest rates applicable to the long and short-term borrowings. The fixed interest rate on the borrowings would not affect the financial performance. Any gain or loss would be unrealised and consequently the notional impact is not presented.

(R’million)	2025	2024
Profit or (loss) before tax
Rand borrowings/deposits
(+ 1%)/- 1%	12	(34)
Profit or (loss) before tax
Rand borrowings/deposits
(+ 1%)/- 1%	9	(25)

6.5 Liquidity risk management

Liquidity risk arises from the seasonal fluctuations in short-term borrowing positions. A material and sustained shortfall in cash flows could undermine investor confidence and restrict the group's ability to raise funds.

The group manages its liquidity risk by monitoring weekly cash flows and ensuring that adequate cash is available or borrowing facilities maintained. In terms of the memorandum of incorporation, the group's borrowing powers are unlimited.

The group has available borrowing facilities of R4.6 billion at the reporting date (2024: R4.6 billion), including R2.44 billion (2024: R3.44 billion) of committed facilities, provided by four South African banks.

The group's liquidity exposure is represented by the aggregate balance of financial liabilities as indicated in the categorisation table in note 6.1.

Contractual maturity for non-derivative financial liabilities

The following tables detail the group's remaining contractual maturity for non-derivative financial liabilities.

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the group will be required to pay. The table includes both interest and principal cash flows. The "finance charge" column represents the possible future cash flows attributable to the instrument included in the maturity analysis, which are not included in the carrying amount of the financial liability.

(R’million)	Carrying amount	Finance charges	A 0 to 1 months¹	B 2 to 6 months¹	A+B 0 to 6 months	7 to 12 months	1 to 5 years	> 5 years
2025
Trade and other payables	6 120	–	4 355	1 765	6 120	–	–	–
Rebates and incentives	1 040	–	221	819	1 040	–	–	–
Lease liabilities	346	(60)	12	57	69	63	273	1
Short-term borrowings	11	–	11	–	11	–	–	–
Liabilities directly associated with assets classified as held for sale	325	–	–	325	325	–	–	–
Guarantees not on the statement of financial position	38	–	38	–	38	–	–	–
Total	7 880	(60)	4 637	2 966	7 603	63	273	1
2024 restated^#
Trade and other payables	4 702	–	2 438	2 264	4 702	–	–	–
Rebates and incentives	929	–	261	668	929	–	–	–
Lease liabilities	453	(98)	16	80	96	92	334	29
Short-term borrowings	789	–	789	–	789	–	–	–
Guarantees not on the statement of financial position	61	–	61	–	61	–	–	–
Total	6 934	(98)	3 565	3 012	6 577	92	334	29

¹	These categories have been included to enhance liquidity risk disclosure
^#	Refer to note 12 for prior period restatements

6.6 Credit risk management

Credit risk arises from the risk that a counterparty may default or not meet its obligations timeously. The group limits its counterparty exposure arising from financial instruments by only dealing with well-established institutions of high credit standing. The group does not expect any counterparties to fail to meet their obligations given their high credit ratings.

Credit risk in respect of the group's customer base is controlled by the application of credit limits and credit monitoring procedures. Certain significant receivables are monitored on a daily basis. Where appropriate, credit guarantee insurance is obtained.

The group's credit exposure, in respect of its customer base, is represented by the net aggregate balance of amounts receivable. Concentrations of credit risk are disclosed in note 4.7.

6.7 Capital management

The primary objective of capital management is to ensure that the group maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The group manages its capital structure, calculated as equity plus net debt, and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the group may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares or increase or decrease levels of debt. During the current year, the group's dividend policy was amended to 1.25x cover (2024: 1.75x cover) (based on HEPS).

No other changes were made in the objectives, policies or processes during the years ended 30 September 2025 and 30 September 2024.

		Restated^#
(R’million)	2025	2024
Cash and cash equivalents	3 069	1 625
Short-term investments	1 781	31
Long-term borrowings	(241)	(303)
Short-term borrowings	(116)	(939)
Net cash	4 493	414

^# Refer to note 12 for prior period restatements

No debt/equity % is included as the group was in a net cash position.

6.8 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, dual currency deposits and JSE-listed investments, approximate their carrying values. The maturity profile of these financial instruments fall due within 12 months.

There are no significant differences between carrying values and fair values of financial assets and liabilities.

Trade and other receivables, amounts owed by subsidiaries, investments and loans and trade and other payables carried on the statement of financial position approximate the fair values.

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 prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices that are observable for the asset or liability (directly or indirectly)
Level 3: Inputs for the asset or liability that are unobservable

As at 30 September, the group held the following financial instruments measured at fair value:

Financial instrument	Fair value hierarchy	Valuation technique and key inputs
Assets measured at fair value
Financial assets
Other investments	Level 1 to 3	Level 1: Quoted market prices for the same instrument Level 2: Quoted exchange rates Level 3: Discounted cash flow risk-free rand interest rate
Short-term investments	Level 2	Level 2: Quoted exchange rates
Derivatives	Level 2	Quoted exchange rates
Liabilities
Derivatives	Level 2	Quoted exchange rates

					Restated^#
	2025				2024
(R’million)	Level 1	Level 1	Level 3*	Total	Level 1	Level 1	Level 3*	Total
Assets measured at fair value
Financial assets
Other investments¹	218	–	17	235	319	–	16	335
Short-term investments	85	1 696	–	1 781	–	–	–	–
Derivatives	–	18	–	18	–	45	–	45
Liabilities
Derivatives	–	(21)	–	(21)	–	(14)	–	(14)

^#	Refer to note 12 for prior period restatements
*	The value of the investment in Group Risk Holdings and Group Risk Mutual Limited are based on Tiger Brand's proportionate share of the net asset value of the company. There are no other significant inputs that are used in the valuation and any changes in these inputs would not result in a significant fair value change. There were no transfers between fair value levels
¹	Included in level 1 other investments are 642 394 shares in Adcock Ingram Limited with a market value of R72.00 per share (2024: 712 632 shares with a market value of R70.18 per share), 3 469 425 shares in Oceana Limited with a market value of R49.52 per share (2024: 3 482 750 shares with a market value of R69.00 per share). During the current year, 100 000 shares in Spar Group Limited and 120 000 shares in JSE Limited were disposed of in full (2024: 100 000 shares with a market value R135.54 per share in Spar Group Limited and 120 000 shares with a market value of R128.27 per share in JSE Limited)

Reconciliation of level 3 fair value measurements

(R’million)		Other investments
Balance at 30 September 2024		16
Fair value adjustment through profit or loss		1
Balance at 30 September 2025		17