TIGER BRANDS INTEGRA TED ANNUAL REPOR T 2014 Integrated Annual Report 2014

276 Pages·2014·18.88 MB·English

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Integrated Annual Report 2014
Contents

About this report 01 Sustainability 106
Business overview 04 Our approach 106
Key financial indicators 04
Stakeholder engagement 108
Our organisational structure 06
Our people 110
Our footprint 08
Transformation 117
Business operations 10
Our communities 119
Our history 12
Our vision and mission 14 Environmental impact 123
Our values 15 Annual financial statements 126
Corporate strategy 16 Responsibility for annual financial statements 128
Leadership 19 Report of the independent auditor 129
Performance review 24 Directors’ approval 130
Reports to stakeholders 24
Certificate by Company Secretary 130
Chairman’s letter to stakeholders 24
Preparation of annual financial statements 130
Chief Executive Officer’s report 28
Statutory information 131
Chief Financial Officer’s report 32
Effects of changing prices 133
Divisional review 36
Income statements 134
Grains 36
Consumer Brands – food businesses 38 Statements of comprehensive income 135
Home, Personal Care and Baby (HPCB) 42 Statements of financial position 136
Exports and International (excluding Nigeria) 43 Statements of cash flows 137
Nigeria 46 Notes to the cash flow statements 138
Associates 48
Statements of changes in equity 140
Key statistics 50
Notes to the financial statements 143
Definitions 50
Shareholder information 242
Five-year review 52
Application of King III 242
Segmental report 53
Administration 249
Value added statement 55
Summary of ratios and statistics 56 Analysis of shareholders 250
Governance and risk 58 Shareholders’ diary 257
Corporate governance 58 Declaration of final dividend number 140 257
Risk management 68 Notice of annual general meeting 258
Audit committee 74
Re-election of directors and election of
270
Social, ethics and transformation committee 78 audit committee
Remuneration report 80 Form of proxy 271
Group profile

Tiger Brands is the largest manufacturer of branded
food products in sub-Saharan Africa. It participates About this report
in a broad range of categories spanning food, home
and personal care products. In South Africa, it holds
leading market shares across most of the categories
in which it operates and, over the years, has grown through the
development of its leading brands, as well as through acquisitions.
In recent years, the group has expanded its which is used to obtain comprehensive
footprint into the rest of the African continent, consumer insights into the relevant categories
primarily through acquisitions, as well as and markets in which Tiger Brands operates.
through the export of its South African brands
into new markets. The group holds meaningful minority
shareholding interests in:
Tiger Brands prides itself on being a world-class ϢϢ JSE-listed fishing company Oceana Group
manufacturer and marketer. The continuous Limited;
renovation and innovation of its brands and ϢϢ Chilean-based FMCG company Empresas
the successful extension of these brands into Carozzí;
adjacent categories and new markets underpin ϢϢ Nigerian-based FMCG company UAC
its success. The group’s brand strategy is Foods Limited; and
supported by extensive investment in marketing, ϢϢ Zimbabwean-listed FMCG company
as well as consumer and shopper research, National Foods Holdings Limited.
Tiger Brands Limited Integrated Annual Report 2014 01
ABOUT THIS REPORT

Scope of this report The report is further based on principles and
In line with the requirements of King III, this guidance from the GRI and the relevant Sector
Integrated Annual Report provides a consolidated Supplement (collectively the GRI G3.1
view of the group’s financial, social, economic Guidelines) and is compiled based on a
and environmental performance for the year self-declared Application Level C.
ended 30 September 2014, and follows the
Supplementary information
prior year Integrated Annual Report published
in December 2013. This report represents one of two elements of
Tiger Brands’ communication strategy with
There was no change to the boundary or any stakeholders for the 2014 financial year. In
measurement techniques. Restatements during addition the sustainability report, which forms
the year are outlined within note 42 on part of this Integrated Annual Report, contains
page 238. additional non-financial disclosures referencing
GRI and the requirements of the JSE SRI Index.
There were no significant changes in size,
Forward looking statements
structure or ownership of the group during
the year. This Integrated Annual Report contains forward
looking statements that, unless otherwise
This Integrated Annual Report 2014 aims to indicated, reflect the company’s expectations
provide stakeholders with an understanding of the as at 30 September 2014. Actual results may
group’s business, prospects and strategy and an differ materially from the company’s expectations
appreciation of the overall environment in which if known and unknown risks or uncertainties
the group operates. The report covers the affect the business, or if estimates or assumptions
operations of Tiger Brands Limited and its prove to be inaccurate. The company cannot
subsidiary and associate companies for the guarantee that any forward looking statement
year ended 30 September 2014. will materialise and, accordingly, readers are
cautioned not to place undue reliance on these
Basis of preparation forward looking statements. The company
The annual financial statements have been disclaims any intention and assumes no
prepared in accordance with International obligation to update or revise any forward
Financial Reporting Standards (IFRS) and the looking statement even if new information
South African Companies Act. In reporting on becomes available as a result of future events or
the non-financial aspects of its performance, the for any other reason, save as required to do so
group has been guided by the King III report and by legislation and/or regulation.
the Listings Requirements of the JSE Limited. Tiger
Responsibility statement and review
Brands has also considered and applied many
of the recommendations contained in the The audit committee and the board acknowledge
International Integrated Reporting Framework their responsibility to ensure the integrity of this
issued in December 2013. Integrated Annual Report. The report has been
reviewed by the audit committee and the board.
In addition, the Integrated Annual Report 2014 The annual financial statements included in this
has been informed by various standards and Integrated Annual Report have been audited by
codes that govern specific areas, including the the external auditors.
Department of Trade and Industry’s Broad-Based
Black Economic Empowerment (B-BBEE) Codes of For further information, please contact the
Good Practice. group Company Secretary, Ian Isdale:
T: [phone]
The company has applied the key principles in E: [email protected]
the King III report. An explanation is provided
where any material non-adherence has occurred.
02 Tiger Brands Limited Integrated Annual Report 2014
Assurance
BTuhsein cesosm pbroinceedss assurancNaesa smuturoraedn oecefl of the gAprorsousvupird aiennr ciets currentI nftoergmraatte dis Asnent uoaul t Rbeeploorwt d:isclosure About this report
Annual financial Audit Ernst & Young The scope of their audit is limited to the
statements Inc. information set out in the annual financial
statements and does not extend to any
financial or operating indicators included
in the Integrated Annual Report.
Risk management Audit KPMG Services Please refer to risk management and the
and internal controls (Pty) Limited audit committee report on pages 68 and
74, respectively.
Environmental risk Audit Marsh (Pty) Please refer to pages 70 and 112.
assessments Limited
Social responsibility SRI Index JSE Limited Tiger Brands is part of the SRI Index.
and sustainability CDP National Tiger Brands is part of the Carbon
Business Disclosure Programme (CDP).
Initiative (NBI)
B-BBEE BEE scorecard EmpowerLogic Please refer to Transformation on
(Pty) Limited page 117.
Send us your feedback Corporate information
Your feedback has resulted in the improvements Tiger Brands’ Integrated Annual Report 2014
seen in this year’s report. is available in hard copy from the Company
Secretary on request, and is also posted on the
Please direct any questions or comments to: group’s website: http://www.tigerbrands.com.
Ian Isdale, Company Secretary at
[email protected] or The company’s contact details are disclosed on
[phone]. page 249.
Key data
Tiger Brands Limited
(Registration number: 1944/017881/06)
(Incorporated in the Republic of South Africa)
Share code: TBS
JSE Main Board sector: Food Processors
ISIN: ZAE000071080
Listing date: 1944
Number of shares in issue: 191 948 268
Tiger Brands Limited Integrated Annual Report 2014 03
BUSINESS OVERVIEW

Key financial indicators

CONTINUING OPERATIONS
Headline earnings
Group turnover
per share
R30,1 billion
1 804 cents
Up 11%
Up 15% Diluted headline
Operating income#
earnings per share
R3,6 billion
1 760 cents
Up 15%
Up 15%
TOTAL OPERATIONS
Headline earnings Earnings
per share per share
1 816 cents 1 262 cents
Up 11% Diluted headline Down 22% Dividend
earnings per share per share
1 771 cents 940 cents
Up 12% Up 9%
#Before abnormal items
04 Tiger Brands Limited Integrated Annual Report 2014
Group
  Nigeria
  Grains
  Consumer
 Brands
  Exports
 and
 Interna+onal

CONTRIBUTION
 TO
 TURNOVER

14

SEGMENTAL CONTRIBUTION
2014
  2013

NNigigeerriiaa

 NNiiggeerriaia

1100%%
  MMilliillningg

  1100%%
  Milling
IInnEEtteexxprpr1non5oar%aWtrstit
 o
 s&no a&
 n
 l
 a
 l anadn2 dB27
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 iinngg
  InI
 tEnexEtrpenxoaprrWntosoar
 &ntitas
 ol
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 Ma%Bikl2laiin8nki%ggn

 agn

 d

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 OPO1B
 %CHOV6V6

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 M5P%P
  GO1GrtO0arh1ta%ihe0inne%rssr

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 1HVV

 %BC5H
 6A

 A%6
 1B%M%M
 5
 P%
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  GO1rt
 G0ahO1r%iet0anh%irnse
 sr

  Business overview
B4B4%e%evv
 eerraaSggneeass
 ckSsn aA7cnk%sd
 A7 Tn%rd
 e
 Taretsats
  GrocGe1rro3ice%es1r3ie%s

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 s SnaTcrkesa
 tASsnnTardcek ast
 as
 n
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  Gro1c
 2Ge%rro1i2cee%sr
 ies

7% 7%

Group
  Nigeria
  Grains
  Consumer
 Brands
  Exports
 and
 Interna+onal

CO20N1T4
 RTuIBrnUoTvIeOr:N
 R3
 T0O.1

 ObilPliEoRn
 ATING
 INCOME
 2B0E1F3O
 TuRrEn
 oIvFeRrS:
 R22
 A7.N0
 Dbi
 llOioTnH
  ER

OPERATING
 CHARGES

16

2014
  2013

 NNigigeerirai
 a

 NigerNiai
 g
 eria

 ((88%%)
 ) Milling
 (12%()
 12%) Mi
 Mlliinllign g
 and

InI
 ntEeExtr
 pex1nop9rar1n%Wot9sao
 r

 %&ntitsa
 o l&
 na l and4 B3
 Ma%kBil
 ila4innk3gig%n
 ag

 n

 d
  In
 tEIexnrpEntoaexrWptrs1ono
 &n8ara%
 titls
 o &na l and4 B4a%B
 ka4ik4ni%ngg

 18%

 HHPPCCBB

  HPCB

 1111%%

 H1P4CB%

 14%

 OOOOH
 H
  OOH

 2%2

 %
 OOH2
 %

 VVAAMMP

 P V
 2A%M

 P

 44%%

  Ot
 Ohtehre rG
 Grraaiinnss

  4% Ot
 hOethre Gr
 Graraininss

Beverages 9
 %9%

  B
 VeAvMerPa

 ges 9
 %9%

 Bev
 3e%r3a
 g%
 es

  S
 nSnaTTacrrckeekassat
 taAss
 n
 ndd
  G
 Grroo9
 c9c%e%err
 i
 ieess

 4%3
 %

 Bev
 3eS%ran
 g
 aTecsrk
 e
 sa
  StAnsnacdk s
 andG
 ro9c%eri
 eGsro
 9c%er
 i
 es

 88%%

  9% Treats

 9%

2014
 OperaWng
 income:
 R3.7
 billion
  2013
 Opera+ng
 income:
 R3.2
 billion

#Before IFRS 2, abnormal items and other operating charges
Tiger Brands Limited Integrated Annual Report 2014 05
BUSINESS OVERVIEW

Our organisational structure

Grains
Consumer
Brands
d
e
t
i
m
i Exports and
L
International
s
d
n
a
r
B

r
e
g
i
T
Nigeria
Associates
06 Tiger Brands Limited Integrated Annual Report 2014
Grains division (100%)
– Maize milling – Rice
– Oats and Pulses
– Wheat milling
– Pasta
– Bakeries
– Sorghum beverages
and breakfast
CGSnoraonccskeusrmi e&es rT rBeraatnsds division (100%) Business overview
Beverages
Value Added Meat Products (VAMP)
Out of Home
Home, Personal Care and Baby (HPCB)
Exports and International division
(excluding Nigeria) (100%)
Tiger Brands International (Exports division)
Langeberg & Ashton Foods (South Africa)
Davita Trading (South Africa)
Haco Tiger Brands (Kenya) (51%)
East African Tiger Brands Industries (Ethiopia) (51%)
Chocolaterie Confiserie Camerounaise (Cameroon)
(74,7%)
Nigeria
Deli Foods (Nigeria) (100%)
Dangote Flour Mills (Nigeria) (65,7%)
Associates
Oceana Group (South Africa) (41,9%)
Empresas Carozzí (Chile) (24,4%)
National Foods Holdings (Zimbabwe) (37,4%)
UAC Foods (Nigeria) (49,0%)
Tiger Brands Limited Integrated Annual Report 2014 07
BUSINESS OVERVIEW

Our footprint

South Africa
• Corporate office in
Johannesburg South Africa
• 50 manufacturing sites
Our footprint
◗On-shore manufacturing: ◗Export territories:
Cameroon Angola Equatorial Guinea Mali Uganda
Ethiopia Botswana Ghana Mozambique Zambia
Kenya Burkina Faso Guinea Namibia Zimbabwe
Nigeria Chad Ivory Coast Malawi
South Africa Chile Liberia Sierra Leone
Zimbabwe DRC Madagascar Tanzania

08 Tiger Brands Limited Integrated Annual Report 2014