The preparation of these results has been supervised by Deepa Sita, chief financial officer of Tiger Brands Limited.

The summarised consolidated preliminary financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports and the requirements of the Companies Act of South Africa. The Listings Requirements require preliminary financial statements to be prepared in accordance with the conceptual framework, the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and also, as a minimum, to contain the information required by IAS 34 Interim Financial Reporting.

The directors take full responsibility for the preparation of the preliminary report and that the summarised consolidated financial statements have been correctly extracted from the underlying annual financial statements. The accounting policies applied in the preparation of these financial statements are consistent with those applied in the previous financial statements.

The accounting policies applied in the preparation of the summarised consolidated financial statements from which the summary financial statements were derived are in terms of International Financial Reporting Standards and are consistent with those accounting policies applied in the preparation of the previous consolidated financial statements. The majority of the group’s financial instruments that are measured at fair value in terms of IFRS 13 Fair Value Measurements, are noted as level 1 hierarchy, which are valued based on quoted market prices.

Ernst & Young Inc., Tiger Brands Limited’s independent auditors, have audited the consolidated financial statements of Tiger Brands Limited from which the summarised consolidated financial results have been derived. The auditors have expressed an unmodified audit opinion on the consolidated annual financial statements. Any reference to future financial performance included in this announcement has not been audited or reported on by the group’s external auditors. The auditors’ audit report does not necessarily report on all the information contained in this announcement or financial results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditors’ engagement they should obtain a copy of the auditors’ audit report together with the accompanying financial information from the issuer’s registered office.

The Covid-19 pandemic has placed strain on global economies, has influenced customer trends and has influenced trading activities of the group. Many of Tiger Brands’ manufacturing and distribution sites were classified as essential services and continued to operate during the lockdown periods. To ensure the health and safety of our employees, a number of measures were implemented and continue to be in place. At period end, uncertainty remains on the longevity of the virus and its impact on future trading activities. This uncertainty has been considered in the key assumptions, estimates and judgements made by management when assessing provisions and impairment considerations.

During the second half of the 2021 financial year, a product recall was initiated on selected canned vegetable products within the Groceries business over safety concerns linked to defective cans. The defect was due to a deficient side-seam weld that could cause cans to leak. This defect was discovered in May 2021 and impacted products manufactured between 1 May 2019 and 5 May 2021. Approximately 64,6 million cans were identified as defective inventory that has been marked for destruction, of which 22,7 million cans were recalled from the trade.

For clarity, total impact of the product recall has been accounted for on the income statement as follows:

The civil unrest in KwaZulu-Natal (KZN) particularly impacted the Rice and Snacks & Treats businesses. This resulted in inventory write-offs of R85,2 million across the two businesses, which has been included in cost of sales. In addition to the inventory loss, there was physical damage and loss to property, plant and equipment. The unrest also resulted in lost sales across the business up to 31 August 2021. The group has adequate South African Special Risks Insurance Association (SASRIA) and general insurance cover for material damage to assets, inventory and business interruption. The total impact of the civil unrest has been accounted for on the income statement as follows:

Operating income has been determined after charging/(crediting)

Goodwill and indefinite useful life intangible assets are tested for impairment annually (as at 30 September) and when circumstances that indicate the carrying value may be impaired. The group’s impairment tests for goodwill and intangible assets with indefinite useful lives are based on the value-in-use calculations. The key assumptions used to determine the recoverable amount for the different cash-generating units were disclosed in the consolidated financial statements for the year ended 30 September 2021. Property, plant and equipment in the Deciduous Fruit business (LAF) was fully impaired by R139,1 million (2020: R196,5 million). The downturn in LAF, which is predominantly an export sales business, continued from the previous reporting period which resulted in an impairment down to zero.

Profit/(loss) for the period from discontinued operations (attributable to owners of the company)

The results of discontinued operations Deli Foods Nigeria Limited (Deli Foods) and Value Added Meat Products (VAMP), a division of Tiger Consumer Brands Limited are stated below. The closure process for Deli Foods has been concluded.

On 17 August 2020, the company announced that it has entered into two separate sale-of-business agreements (SBAs) for the disposal of its VAMP business as going concerns. The two SBAs comprised an agreement with Molare Proprietary Limited for a total cash contribution of R100 million received on 30 September 2020. The second comprised an agreement with Silver Blade Abattoir Proprietary Limited for a cash contribution of R153 million received on 2 November 2020. A profit of R42,5 million (pre-tax) had resulted from the conclusion of the first SBA and a profit of R20,5 million (pre-tax) had resulted from the conclusion of the second SBA.

Included in the profit from discontinued operations for the current year is the release of foreign currency translation reserves on the closure of Deli Foods and profits relating to the sale of trademarks and property, plant and equipment.

As part of the group’s continued IFRS 15 Revenue from Contracts with Customers compliance assessment it was noted that the company has historically presented certain rebate payable balances to customers as part of the trade and other payables balance as opposed to offsetting these against the trade and other receivables line as required by the accounting standard. This error has been corrected in the current year with rebate receivable balances of R416,8 million relating to the 2020 financial year and R398,5 million relating to the 2019 financial year being reclassified from the trade and other payables line to the trade and other receivables line. This affects the statement of financial position and statement of cash flow lines as follows:

As part of the JSE’s proactive monitoring of financial statements review, and the group’s continued IFRS compliance assessment it is noted that the group has historically presented abnormal items on the income statement. As previously defined in the group’s accounting policies, abnormal items included items of income and expenditure which are not directly attributable to normal operations or where their size or nature are such that additional disclosure is considered appropriate. Management has re-evaluated what is included as abnormal items based on the size, growth and evolving complexity of the group, and subsequently re-labelled this function to non-operational items which is detailed in the accounting policies of the group’s annual financial statements. As a result of this, it was deemed appropriate to restate the comparatives as it would be incorrect to classify certain costs as non-operational under the new function name.

The below costs are not deemed non-operational in nature and thus reclassified into other operating expenses:

The cash operating profit for the prior year has been restated for the non-cash movement of the above.

A new subtotal referred to as operating income after impairments has been introduced.

As disclosed in the 30 September 2021 financial statements, the equity-accounted results of National Foods Holdings Limited (NFH) included in these results have been prepared in accordance with the provisions of IAS 29 Financial Reporting in Hyperinflationary Economies (IAS 29), with key accounting principles and judgements applied by the group. 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.

On 19 October 2021, Tiger Brands was approved for a secondary listing on A2X Markets. This will provide shareholders with a choice to transact Tiger Brands shares on an additional platform and capture the benefits it offers.

There are no other material events that occurred during the period subsequent to 30 September 2021 and prior to these financial results being authorised for issue.