Contents

Page Auditing Audit risk and audit approach 10 Threats and safeguards to independence 15 Business risk and ways to reduce/Eliminate risks 15 Compliance with The King III Report 16 Planning materiality 14 Principle of the Triple Bottom Line and integrated sustainability reporting 22 Environmental reporting 25

Accounting Discussion on the most useful information 2 Various reports issued by Tiger Brands, their benefits and those required by law 4 Compliance and non-compliance with IAS1 6 Financial risks and impact on assessment of Tiger Brands 8 Concept of subsidiary, holding companies and reasons for separate disclosure 10

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Taxation Difference between the corporate and actual tax rate 29 Applicable tax incentives or allowances to Tiger brands 30 Impact of February 2012 budget speech on tiger brands 30

Management and financial accounting Liquidity, profitability and cash flow of Tiger brands 26 Interpretation of ratio trends, risk impact and comparison across the industry 26 Limitations of the financial statements 27 Earning per share performance and usefulness of disclosures 27 Share price movements 28

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TIGER BRANDS LTD.

Tiger Brands Limited is a large scale, high margin company , incorporated and domiciled in South Africa. The shares are publicly traded on the Johannesburg Securities Exchange. Tiger Brands, is required, by the Companies Act and JSE listing requirements, to be audited. Tiger Brands is a branded Fast Moving Consumer Goods (FMCG) company with a broad selection of prominent food, beverage, personal care and home care brands that add value to consumers, shoppers and customers lives and to the broader communities in which Tiger Brands operate within. The successful performance of the business also enhances the lives of their stakeholders. Tiger Brands Limited penetrates mainly in emerging markets and provides investors with the opportunity to participate in a balanced spread of African and selected international operations. AUDITED VS. UNAUDITED SECTIONS An audit is conducted to obtain reasonable assurance that the financial statements are free from material misstatement. This makes the information in the financial statements useful to users. Shareholders must be adequately informed with useful information in order to exercise their right to vote and to protect their interests. They are entitled to information about the financial condition of the company and its management of their invested funds. Favourable financial performance is indicative of a higher return and increased possibility of actually receiving that return on investment. This information will help them decide to hold, sell or buy more shares. The independent external auditors, Ernst and Young, have issued an unqualified opinion that the financial statements present fairly in all material aspects. The auditors report refers to pages that are audited in arriving at the audit opinion, namely;

Consolidated and separate statements of financial position, comprehensive income, changes in equity and cash flow, Summary of ratio and logistics [pg. 14], significant accounting policies and other explanatory information

Value added statement [pg.15] and Statutory information [Pg.105,106] Tiger Brands share option scheme and Phantom cash option scheme [Pg. 87 to 91 ]

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Table of directors emoluments for the year ended 30 September 2011 and Table of directors emoluments for the year ended 30 September 2010 [Pg.96 to 99]

The audited pages contain the financial information on the companys net worth, growth potential and any limitations thereof, enabling shareholders to determine if they can sell their purchased shares for a higher price in future. The statement of comprehensive income allows shareholders to see the amount of revenue received and assess the companys financial performance eg. Is revenue too low? Is there a chance of it increasing in the future? In this way, the shareholders can evaluate whether the company has lost revenue due to loss in market share and if the business has no growth potential, they may decide to sell shares immediately to invest in companies that can generate a substantial return. Shareholders need to know how solvent and liquid Tiger Brands is and if they are continuing operations as a going concern. They also need to have an idea of the credit rating eg. Is the company excessively indebted and unable to pay debts as they fall due? If so, shareholders will be at risk of loss of returns on investment due to a cash flow problem highlighted in the cash flow statement. This statement is also useful in predicting future cash flow which will affect the growth rate of the company. Information on directors emoluments allow shareholders to view directors remuneration and hold them accountable for excess and unexplained amounts paid, especially if there was no special resolution by shareholders. The other audited information helps shareholders identify key areas where shareholders can make suggestions for improvement. The usefulness of the unaudited parts of the financial statements are discussed below: Responsibility for annual financial statements, Report of the independent auditor, Directors approval and Certificate by company secretary allows the shareholder to see how directors discharged their responsibility for overseeing the preparation, integrity and objectivity of financial statements that fairly present the state of the affairs. Shareholders are assured that a compliance framework was enforced to safeguard the companys integrity and promote high standards of ethical behavior.

Effects of changing prices displays the effect of inflation inherent in operating results, budgets, plans and new projects. The emphasis is concentrated towards the objective of the creation of shareholder wealth in real terms.
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Analysis of ordinary shareholders shows categories and geographic distribution of shareholders. Prospective shareholders would want to know which category they belong to and which countries have the shareholder majority for voting purposes.

Shareholders diary- allows the shareholders to know when dividends are declared and paid and the Administration section provides company contact details, website address for further queries and information on the share transfer secretaries.

Based on the above, the audited sections provide more reliable (acceptable level of risk of material misstatement) and relevant information to the shareholders for informed decision making. Although the unaudited sections are useful, it better serves as additional information that is secondary to the more useful audited sections. ANNUAL REPORT SECTIONS DIRECTORS REPORT (Statutory requirement - Companies Act 2008 S29 (3) (b)) This gives the company's directors opinion on the state of the company and supports and elaborates on the information contained in the financial statements upon which stakeholder decisions and assessments are based. Decisions such as whether to invest, grant loans, seek employment etc. Authorised and issued share capital is useful to stakeholders, in need of gaining securities in the company, because it shows them if shares are readily available. They can use this information to establish if their voting rights can be upset due to large amounts of shares not yet issued. Share option schemes (remuneration) are issued to mainly high level management. The stakeholders will use this to conclude if the directors behaviour and judgement is objective. Stakeholders need knowledge of Special resolutions to see what decisions were approved and if they were in the companys best interest. Events subsequent to the year-end is useful because it may contain material information that could affect user decisions. The report contains part of the segment report which is financial information by line of business and geographical area. CHAIRMAN REPORT (not a statutory requirement) - This report focuses on the environment and context in which the group operates and their strategy on delivery to all stakeholders. It shows the effect of macroeconomic conditions. This is where stakeholders can assess how the business copes in the changing environment. Financial performance, competitive landscape and strategic
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expansion information allow stakeholders to assess the growth potential, ability to penetrate new markets and generate a significant market share compared to competitors. The Transformation and Corporate Social Investment aspect shows the way in which the company discharges its social responsibilities that will influence stakeholders attitude towards the company. The Directorate aspect elaborates on qualifications and occupational background of directors, influencing stakeholders assessment of directors competency and independence. CHIEF EXECUTIVE OFFICER REPORT (not a statutory requirement) - Contained here is the Outlook towards the following year, which enables stakeholders in understanding the companys growth potential, prospects, performance and expectation. The Export and International operations: aspect allows the stakeholder to evaluate specific world events which affected the companys performance and international market share. South African operations aspect allows the stakeholder to assess how local occurrences have affected profits, productivity and property; the efficiency, control of company and compare to other companies in the sector. The Strategy component shows stakeholders how Tiger Brands plans to achieve its objective (DELIVERING GROWTH AHEAD OF THE SOUTH AFRICAN GDP) and assessing the realism of the objectives. People and Communities aspect divulges the ways in which the company aids the communities in which it operates. It would affect stakeholders through the consumption and support of the company CHIEF FINANCIAL OFFICER REPORT (this report is not required by law) The CFO gives a summary of the movements of figures in the financial statements and highlights key financial factors. Movements are shown, to allow comparison between current and prior years, so potential investors can assess if the company can generate a substantial return on his investment. The Earnings per share is included for shareholders who want to see a year on year improvement on their earnings. Potential investors can formulate a comparison of earnings from investment in other companies to Tiger Brands and consider potential investment in this company. AUDIT COMMITTEE REPORT (this report is required by law- King III) - The audit committee report includes the identity of the members and allows the stakeholders to assess whether they are fully independent and if the company is compliant with King III. It includes information on the review of internal and financial controls and business risks, which allow the stakeholder to see how the company copes with the range of risks it faces. Risk and Sustainability Committee information
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is encased here which is beneficial to stakeholders in terms of knowledge of risk management. If potential investors can assess that risks are properly managed they will want to invest in the company. REPORT OF THE INDEPENDENT AUDITORS (not required by law)- The auditors report details the components of the financials that have been audited. This benefits the stakeholders because they are assured that the information in the financial statements is free from material misstatement, credible and reliable, by independent external auditors. IAS 1 COMPLIANCE- The Standard prescribes the basis for the presentation of general purpose financial statements to ensure comparability, with previous periods and other entities. Fair presentation and compliance with IFRSs An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. An entity shall not describe financial statements as complying with IFRS unless they comply with all the requirement of IFRSs. The group has adopted a new and amended IFRS and IFRIC interpretations during the year which is IAS 1 Current/Non-current Classification of convertible. Tiger Brands is compliant with IAS 1 in the ffg. aspects: It has an annual complete set of financial statements that comprises a statement of:
a) financial position as at the end of the period which has separate line items for

Property, plant and Equipment; Intangible Assets; Inventories; Trade and other receivables; Cash and cash equivalents; Trade and other payables: Deferred tax liability and Provisions
b) profit or loss and other comprehensive income for the period

A statement of profit and loss comprises profit and loss attributable the noncontrolling interest and the parent and is separate from the statement of comprehensive income that has comprehensive income attributable the noncontrolling interest and the parent.

It is prepared under the function method.

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It has separate line items for revenue, finance costs and tax expense.

c) changes in equity for the period which has total comprehensive income for the

period
d) cash flows for the period prepared in compliance with IAS 7 e) Notes to the financial statements

It presents information on the basis of financial statements preparation and specific accounting policies used in accordance with Para. 117-184

It discloses the information required by IFRS and other information that is relevant to understanding financial statements that is not presented elsewhere in the financial statements.

It has a statement of compliance and is prepared under going concern conditions and the accrual basis of accounting (cash flow information not on accrual basis). There is no offsetting of assets and liabilities or income and expenses. It has comparative information in respect of the previous period for all amounts reported in the current periods financial statements.[2010 and 2011] Financial statements are clearly identified and distinguished from other information in the same published document. Sources of estimation uncertainty - IAS 1 Para. 125 states An entity shall disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Tiger Brands has complied with IAS 1 as they have disclosed the nature and carrying amount of the following assets and liabilities as required: Carrying value of goodwill, tangible and intangible assets Residual values and useful lives of tangible and intangible assets

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Fair value of BEE share allocations Share based payments Deferred tax assets Pension and other post-employment benefits Provisions

Capital commitments - IAS 1 Para. 134- An entity shall disclose information that enables users of its financial statements to evaluate the entitys objectives, policies and processes for managing capital.No changes were made in the objectives, policies or processes during the years ended 30 September 2011 and 30 September 2010. The primary objective of the companys and groups capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The company and group manage their capital structure and make adjustments in response to changes in economic conditions. To maintain or adjust the capital structure, the company may: Adjust the dividend payment to shareholders Return capital to shareholders, Issue new shares or increase or decrease levels of debt.

The company monitors capital using a gearing ratio [net debt divided by total equity]. The company targets a long-term gearing ratio of 30% to 40%, except when major investments are made. In this situation the target may be exceeded. Redrafting in terms of IAS 1 There is full compliance with IAS 1 except the company has not expressly defined its level of rounding. FINANCIAL RISKS

MARKET RISKS COMMODITY PRICE RISKRaw materials for production are obtained from the African continent that is exposed to adverse

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weather conditions, as well as political and economic instability, that hinder their supply and increase their prices. Manufacturing processes depend on electricity and water that have exorbitant prices in Africa, due to shortages. This causes an increase of the final product price which decreases demand for the final product in this highly competitive market. Wherever possible, Tiger Brands sources raw materials locally and assists small black-owned businesses. Given the heightened competition in the consumer brand categories and the declining competitiveness of South African agriculture and manufacturing sectors, they are being required to consider global sourcing for raw materials and finished products. CURRENCY TRANSLATION RISK The balance sheet carrying values of foreign currency denominated assets and liabilities, owned by Tiger Brands are adjusted at the end of each accounting period to reflect the latest exchange rate conditions. Exchange differences are taken to profit or loss as a gain or loss, exposing the statement of comprehensive income to this risk. The groups 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. Foreign currency risk is managed by taking out forward exchange contracts, accounted for by Fair value hedges that cover the exposure to changes in the fair value of a recognised asset or liability. Foreign currency risk of an unrecognised firm commitment is accounted for as a cash flow hedge. CURRENCY TRANSACTION RISK - the company has transactions denominated in a foreign currency and these transactions must be restated into rand equivalents before they can be recorded. Gains or losses are recognised when at the balance sheet date. Foreign operations occur in developing countries such as Nigeria, Ethiopia, and Kenya that are exposed to civil unrest and political instability. The possibility of sporadic fluctuations in currency exchange rate is high. INTEREST RATE RISK- Current low interest rates were set to increase investments in RSA after the effects of 2008 recession. Bank, cash deposits and bank borrowings of Tiger Brands, are financial assets and liabilities affected by interest rate fluctuations. When the reserve banks sees fit this rate can be increased, to maintain price stability. A 1 % change in interest rate affects the cash flows and profits by 18, 6 million.
LIQUIDITY RISK- Exists if the company is unable to pay its debts (total amount R 26 676 000)

as they fall due. The company manages this risk by monitoring weekly cash flows to ensure

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adequate cash is available and borrowing facilities are maintained. According to the articles of association, borrowing powers are unlimited. The company has managed this risk well and is liquid. Recent expansions across Africa need large amounts of financing by borrowing. Liquidity must be more carefully managed as most new consumers have less disposable income than South Africans, affecting income & cash flows adversely.
CREDIT RISK- This is the risk that the counterparty may default in

their obligations. Most retailers (debtors of Tiger Brands) purchase their goods from Tiger Brands on credit. Tiger Brands limits counterparty risk exposure from financial instruments by dealing solely with wellestablished institutions of high credit standing and do not expect counterparties to fail to meet their obligations. However, there is a risk of even high credit rated counterparties not meeting obligations due to unforeseen circumstances but this existent risk is insignificant. SUBSIDIARY AND HOLDING COMPANIES In order to maximize profits, a business entity that wishes to expand may acquire the controlling shares of another entity. IFRS 3 defines a Business Combination as a transaction, or other event, in which an acquirer obtains control of one or more businesses. A holding company has complete or partial (owns more than half of the stock) controlling interest, in another company , the subsidiary. The holding company can make major decisions in the subsidiary, due to its ability to directly or indirectly exercise, or control the exercise of, a majority of the general voting rights at a general meeting. They also control the appointment or election of directors, who would control a majority of the votes at a board meeting. International Financial Reporting Standards defines control as the authority to govern the financial and operating policies of an entity, so as to obtain benefits from its activities. Separate financial statements for the group are necessary because this is compliant with IAS 27 and Companies Act 2008. It enables the comparison of the overall performance of the group of companies and one company's stand-alone position. For the groups potential investors, the consolidated makes it easier to assess performance and potential returns of the group, as opposed to assessing each set of subsidiaries results. AUDIT RISK Two areas containing a high degree of audit risk for 2011 financial year are:

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Property, Plant and Equipment- Tiger Brands Ltd. has made many strategic acquisitions of subsidiaries, inevitably resulting in additions and upgrades of tangible assets (property, plant and equipment PPE) (Tiger Brands Ltd Africa Expansion report 22/03/11) amounting to R650,1 million in the 2011 financial year (quantitatively material). The number of additions is greater than usual hence internal control procedures put in place for PPE may have become inadequate in light of the changing environment. The PPE balance consists of estimated amounts prone, to human error due to mistakes in judgement. As a result, the PPE balance poses a potential for a high degree of material misstatement. The assertions affected are:

Existence- A limitation of internal control is abuse of responsibility by a person

responsible to carry out or oversee an internal control procedure. This is one reason for the misappropriation of assets by employees or management. Items of PPE purchased may have been physically stolen after delivery to business premises or delivered to the perpetrator with the amount settled by the business funds. Due to the large scale geographic profile of Tiger Brands Ltd it is more difficult to uncover asset misappropriation.

Completeness- Due to the increased frequency of PPE purchase transactions, it is highly

probable that some of the assets newly owned by the company were not recorded as recording internal control procedures were inadequate. Non-compliance may occur due to circumvention of internal controls by management with the objective of showing a lower amount of assets employed. This is done in order to show a favourable return on net assets employed so financial targets are shown to be reached, resulting in increased receipt of incentives (remuneration policy 2011). Certain leased assets under finance leases may have been purposefully, incorrectly recorded under operating leases.

Valuation and Allocation- Tiger Brands Ltd. holds PPE under the Revaluation model in

IAS 16 at fair value, excluding day-to-day servicing, less accumulated depreciation and accumulated impairment losses. Depreciation (R341.1 million) is based on estimated residual values and useful lives, while impairment losses (R2,6 million) are based on estimated carrying amounts and recoverable amounts, with the latter amount only being calculated whenever objective evidence of impairment is available at year end impairment assessments. Estimates are based on historical experience and expectations of the manner in which assets are to be used.

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They are subjective by nature therefore prone to error and inaccuracy hence the balances of PPE are inherently at risk of being inaccurate or in some cases incorrect. Inventory-In a manufacturing company the inventory is the largest income-producing asset on the balance sheet. For the 2011 financial year total inventory comprising of raw material, partlyprocessed goods, finished goods, consumables and spare parts amounted to R 3037,3 million which is quantitatively material. The composition of inventory is perishable in nature and will expire if it is not turning at an adequate rate, representing loss not only in monetary terms, but also inventory write down expenses. The company adopts an accounting policy in line with IAS 2 where inventory is recorded at the lower of cost and net realisable value (estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. By virtue of the subjective nature of estimates, the inventory balance is inherently prone to inaccuracy or error. In 2011 the write down of inventory amounted to R 36,2 million which is approximately a 72% increase from R21 million in the 2010 financial year. Inventory control risk will still be existent in an effective control environment as it is affected by levels of accuracy of inventory accounting controls and physical safeguarding procedures. These are subject to limitations such as collusion, abuse of responsibility and human error due to mistakes in judgement. The following assertions are affected:
Existence- Within a diverse and changing environment, the limitations of internal control

procedures render misappropriation of inventory assets highly probable eg. the plant in Ethiopia will need stricter controls concerning delivery and transport of inventory than those present in RSA because most Ethiopians live below the subsistence line and theft of food inventory will be greater than in South Africa. Misappropriation can be effectively covered up by management and employees through collusion making the risk of material misstatement greater as assets can exist in the records but be stolen and not used by the company.
Rights & Obligations- Due to the vast amount of inventory held at Tiger Brands

premises, it is easy to mistake, goods held on consignment for another company, for inventory owned. The company has no rights to goods on consignment and they are not to be included in inventory. Certain inputs in transit from suppliers may be incorrectly included in the total balance sheet figure when significant rights have not been transferred to the company. Physical inventory count control procedures seem to be sound, so although the above
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mentioned situation is possible, it is not highly probable, hence this is unlikely a dominant assertion.

Completeness- The large scale geographic diversity of Tiger Brands Ltd lends itself to the

probability of omission of transactions involving the purchase and disposal of inventory. Tiger Brands has a large quantity of raw material delivered to its premises. It is probable that employees, who have access to delivered goods, can misappropriate inventory, in geographic areas, where internal control procedures are inadequate or not complied with. This can be done by altering various records so not all inventory may have been completely accounted for.

Valuation & allocation- The cost of inventories should comprise all costs of purchase,

conversion and costs that are directly attributable to bringing the inventories to their present location and condition. Costs of conversion involve the systematic allocation of manufacturing overheads such as depreciation which is an estimated amount subject to inaccuracy and error. The perishable nature of this inventory leads to partial or total obsolescence and the write-down of cost to a net realisable value (2011: R 70,5 million 2010: R134,1 million). Estimates of net realisable value (NRV) are based on the most reliable evidence available at that time. However reliable the evidence may be, a possibility of inaccuracy will persist with an estimate. NRV requires the estimated selling price in various geographic areas. These are subject to fluctuations in the currency exchange rate and so will result in further inaccuracy. Most foreign operations exist in Africa that is exposed to an increasing amount of civil unrest and political in stability seen in recent times. The sporadic currency exchange rate fluctuations increase the inaccuracy of estimates. There is a high risk of material misstatement in the inventory balance. AUDIT APPROACH- Tiger Brands Ltd. possesses an effective and efficient internal control system, where management is committed to a strong control environment (code of ethics 2011). Internal controls are subject to limitations, so can never be considered absolutely effective. Tests of control (determine whether the accounting system and related control procedures are functioning as designed) must still be performed, although not as extensively as substantive tests (provide evidence to support financial statement assertions). An audit plan has the nature, extent and timing of the audit procedures performed to reduce the audit risks mentioned above to an acceptable level.

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Nature- A basic test of controls for each balance would be required for the reasons highlighted above but there is a need for more tests of detail and analytical procedures to be performed to verify if the designed system is working effectively throughout the period. For PPE- Analytical procedures must be performed to verify the existence of assets, gain evidence for possibilities of misappropriation and test the accuracy of estimates used. For Inventory- The inventory account balance needs to be verified by extensive substantive procedures and observation of the physical stock count at year end. All this is done in order to ascertain whether stock records are accurate, the cost formulas have been correctly applied and the write down for obsolete stock to a net realisable value is reasonable. Due to time constraints and operations occurring in different geographic areas it would be feasible to use the work of internal auditors (ISA 610) and other auditors. This is so especially in terms of being present at the local and foreign plants to check the existence of PPE items and to be present at the physical stock count at year end. For PPE, auditors may enlist the expertise of an auditors expert like a mechanical engineer for complicated machinery, to verify that impairments and revaluations recorded are accurate enough and valid (ISA 620). The agricultural nature of some of the inventory especially raw materials result in difficulty in quantifying inventory during stock counts and so the use of an agricultural expert would be needed (ISA 620). The use of computer-assisted audit techniques may enable more extensive testing of increased electronic transactions of PPE and Inventory. Timing- This depends on non-negotiable dates set by Tiger Brands Ltd. and may include the need for interim audits and roll forward tests supplemented by extensive substantive testing at year end, if the audit time span is short. Also preparatory work on third party confirmations for PPE and inventory items held on behalf of third parties, asset schedules and inventory supporting schedules can be done if the availability of information is conducive to this. Timeous preparation of the auditors expert will also have an effect on the timing of the audit. Extent- Extensive testing needs to be done because of the high level of assessed risk in the balances. When audit risk is high, planning and performance materiality levels are low (inverse relationship between audit risk and materiality) and the extent of testing increases. For both balances, prior year experience will provide a guideline as to the extent at which testing needs to be conducted. For PPE- Due to the geographical location and quantity of PPE Tiger Brands owns,

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it is imperative that the existence assertion of all PPE items is greatly tested. All aspects of PPE transactions should be tested, from purchase or construction, to depreciation, repairs and maintenance, replacement, scrapping, revaluation and disposal. For Inventory- Due to the geographical location, variety and quantity of stock that Tiger Brands possesses and its various production processes, it is important that all areas of inventory, from purchase, conversion and sale transactions to recording to physical stock counts, are subjected to rigorous testing. Extensive yearend cut off tests should be performed to identify instances of fictitious inventory in account records. MATERIALITY- Profit before tax will not be a stable indicator, as the executive management incentive plan for is dependent on financial performance. There is a high risk of manipulation of profit before tax, by understating expenses and overstating income. Although the company is capital intensive, large amounts of acquisitions makes the total assets prone to misstatement. 1% - 2% 2% - 5% 5% - 8% Turnover: Total assets: Profit before tax: 38.502 - 77.004 167.028 - 417.57 175.375 - 208.6

Turnover is used for calculating materiality. With the high audit risk assumption, 1% of turnover is used (inverse relationship between materiality and audit risk).

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INDEPENDENCE Non-executive directors: King III stipulates specific criteria that classify directors as independent. The Tiger Brands annual report indicates a few areas of compliance with the requirements set out in King III in terms of their remuneration set by the shareholders and and not on the performance of the company; no director holds 1% (<5% set in King III) or more of the ordinary shares of the company, hence there is no self-interest threat .Regular rotation of the directors means no familiarity threat exists. Despite there being no evidence of any material threats to independence in the Tiger Brands group, safeguards should be put in place to prevent the potential threats to independence from becoming significant, such as: rigorously evaluating the independence of the directors if they are on the board for more than nine years(as prescribed in King III) and to rotate at least one third of the directors every year; evaluating and disclosing the directors performance annually; evaluating and disclosing directors compliance or non-compliance of the code of ethics. External auditors: Ernst & Young Inc. indicated in their independent report that they were independent from Tiger Brands. Also, the audit committee is satisfied of this after taking the following factors into account: representations made by Ernst & Young Inc. to the audit committee; the auditor does not receive any non-permitted remuneration or benefit from the company; independence was not impaired by any consultancy, advisory or other work undertaken; independence was not prejudiced as a result of any previous appointment; and the criteria specified for independence by the independent regulatory board for Auditors and international regulatory bodies. The most vital safeguard will be to rotate the auditors every 5years as prescribed in the Companies Act. BUSINESS RISK- is the term for conditions, actions or inactions that threaten the companys achievement of objectives it has set (Jackson & Stent). The Tiger Brands Mission statement/ Objective is to continue its growth trajectory & deliver enhanced value to all stakeholders: To deliver revenue growth 3% greater than SAs GDP + inflation, & achieve an operating margin of 15%, generating real earnings growth and a return on investment which exceeds the companys cost of capital. Risks include making credit sales to low credit rated foreign customers in order to penetrate global markets, producing low quality products in order to lower costs and achieve cost
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leadership in the industry. The main risk to a manufacturer of perishable goods is overproduction of goods or production of goods for which no market yet exists. The company is expected to deliver the freshest, highest quality products on a consistent basis to a global customer base. The products may sit on the production floor for a long time causing them to expire, resulting in losses to the company. Ways to reduce or eliminate risks is to: conduct extensive background credit checks on all credit customers and have a strict policy for approving credit sales; have effective production management processes and do not compromise quality of products in order to lower costs; setting quality standards and have a good plan to achieve those standards; and to not produce above market demand so products do not expire. CORPORATE GOVERNANCE Effective Ethical Leadership and Corporate Citizenship
I.

The board has provided effective leadership based on an ethical foundation by the provision of a working environment with mutual trust and respect, where all employees are accountable for the performance and reputation of the company.

II.

The board ensures Tiger Brands is seen to be a good corporate citizen with regard to social & environmental objectives (see discussion-integrated sustainability reporting). The board ensures the companys ethics are managed effectively by creation and strict implementation of a code of ethics that applies to all full and part-time employees and organisations that act for or on behalf of Tiger Brands. An acceptance of employment with the company is deemed to be an acceptance of the principles set out in this code and any breach of this code will give rise to disciplinary action. Boards & directors

III.

I.

Composition: The board comprises a majority of independent non-executive directors (9 /12 members). The chairman is a non-executive, independent director. Four members have 1 outside directorship each, which is line with the companys formal policy encouraging this. The chairman conducted an internal board performance evaluation and considered the board to be balanced and effective overall but sub-optimum in respect of gender (only 3

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females) and international diversity. Directors ages range from 39 to 68 years with qualifications in agriculture, law, commerce, food science, microbiology, marketing, economics &administration.
II.

Function: The board is governed by a charter laying out their responsibilities in accordance with King III. The board must approve and be accountable for the development, approval and execution of the companys strategy and implementation budgets. They are the guardians of the values and ethics of the group and are committed to the highest standards of governance, ethical & moral business behaviour and leadership. An improvement of King III requires the board to commence business rescue proceedings as soon as the company is financially distressed. This impacts the board and subcommittees to dedicate time and resources to continuously monitor company solvency and liquidity. They appoint the chief executive officer, who is not the chairman or member of board sub-committees and does not chair other companies. They retain full and effective control of the company by meeting regularly, at least 6 times a year (more than the King III required 4 times a year) to discuss strategy, budget and business plans. Non-executive directors are encouraged to regularly meet officially and unofficially with senior executive management. This facilitates proper leadership, integrity and judgement to achieve prosperity and sustainability (King III). Non-executive directors also meet twice a year, without executive management, to informally discuss company matters. The board monitors the relationship between management and stakeholders, by monitoring executive management performance and openly communicating with shareholders timeously.

III: Director Development- Board education and training takes place on an ad hoc basis but the chairmans evaluation found this area in need of improvement .IV: Company Secretary- is the central source of independent professional advice and not a director of the company. Consequently all directors have access to this source. V: Performance assessment-Company not fully compliant. See non-compliance discussion. VI: Remuneration of directors & senior management: The remuneration committee recommends the remuneration policy for directors and senior management and consists of 4 members who are all independent, non-executive directors. SL Botha is the Chairman (not

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chairman of the board). The remuneration committee issues a remuneration report with full disclosure of all directors remuneration including the 3 highest paid non-director employees, incentive schemes and material ex-gratia payments. Remuneration policies have to be approved by shareholders vote which is an improvement of King III. The policy is line with King III because it aims to attract and retain competent people required to attain business objectives and achieve goals. It has a direct correlation with the growth plans and financial performance of the business and supports the groups strategy. It is consistent with the organisations culture of fairness and equity and requires executive remuneration to be reviewed & benchmarked annually in October against details of the company, market and individual performance. The policy requires remuneration to be a mix of fixed and variable pay, in cash, shares or otherwise. Executive directors annual incentive bonus plan, involves achievement of short-term performance targets (mix of financial and strategic components) but nonexecutive directors remuneration did not fully adhere to King III (see discussion on non-compliance). VII : Board appointment- nominations for appointment of directors are given by the Nominations committee. The Chairman is the chairman of the board (L. Vught) and all members are independent non-executive (King III only requires a majority). The procedure for appointment is formal and transparent. VIII: Board committees- The board has delegated responsibility to board subcommittees but management remains the responsibility of the executive directors and senior management. Including the remuneration and nomination committees already discussed, the board has appointed a risk & sustainability committee, audit committee and a social and ethics committee that exist under a charter or terms of reference which are regularly reviewed.

Board of Directors

Remuneration & Nomination

Audit Committee

Risk & Sustainability

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 Independent Non-Executive Executive Audit committee: Tiger Brands Ltd appointed this committee that is guided by a charter

made in terms of the Companies Act & King III and is approved by the board. The chairman (not the chairman of the board) and all other members (more than the minimum 3) are independent nonexecutive directors who engaged in 3 meetings (King III requires at least 2). They monitor the integrity & completeness of financial reporting, and the relationship between internal and external assurance providers. The committee nominated Ernst & Young as the external auditors and is satisfied of their independence. They also monitored the risk management process and the internal audit. All required disclosure was made in the audit committee report.
Governance of Risk and Information Technology:

A Risk and sustainability committee (subcommittee of audit committee), chaired by the audit committee chairman, assists the board in carrying out its responsibilities for risk management. This is done in terms of identification, assessment, response, monitoring, assurance and disclosure (in integrated report) of the most significant commercial, financial and sustainability risks (including compliance risk) quarterly, on an on-going basis. All risks are considered to be adequately covered, except for political risks where as much cover as reasonably available has been arranged. The 6 members are a mixture of executive and non-executive directors representing the sustainability, financial, legal/secretarial, operational management and supply chain functions. Internal and external auditors attend all meetings but specialists do so only by invitation, to provide advice on risk and sustainability issues. Implementation of IT Governance frameworks is an improvement to King III where IT performance must be measured and reported to the board to protect data and optimise value delivery. This impacts the risk committee that

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must consider IT risks and policies like continuity of operations and disaster recovery plans.
Compliance with Laws, Codes, Rules and Standards:

The company requires its code of conduct to be strictly adhered to. It states that Tiger Brands stakeholders should be knowledgeable of, and observe, all relevant national and international laws (eg. competition, health and safety and environmental laws). Group policies and procedures are drafted to ensure compliance with laws and theft, bribery, corruption or other dishonest activities should be reported immediately. Effect of noncompliance: Due to recent corporate scandals, non-adherence to laws and regulations may cause losses of company reputation (Fombrun CJ 2006), finance, sustainability and stakeholder relationships (banks no longer want to provide finance and shareholder no longer want to invest). This may inflict downward pressure on the share price hampering the companys ability to raise finance on the stock market and hindering the firms ability to expand. Areas of Noncompliance: The company evaluates the board and its committee once every two years as opposed to annually as required by King III report. The public will question the competence and independence of the members of the board and committee during the financial year that the individuals are not evaluated (reputation loss). Although, the extended period between evaluations allows for a more reasonable assessment of performance, evaluation must be done annually for Tiger Brands, that was fined for R 98,8 million for engaging in bread price-fixing in 2007 (prior loss of reputation). King III requires an overview of the directors appraisal process, results and action plans, reviewed by the nomination committee, should be disclosed in the integrated report. Tiger Brands does not disclose this. This is due to the evaluation containing potentially sensitive information. Due to recent loss of reputation it may be in the best interest of the company to include the overview results to show transparency and reassure the shareholders of the directors integrity and independence. King III recommends that non-executive fees should comprise a base fee as well as an attendance fee per meeting. Tiger Brands does not comply with this unless it is in respect of unscheduled meetings because the non-executive directors of the board and the committees are required to provide services and add value in terms of their functions and roles throughout the year. All non-executive members have attended all scheduled meetings with exception of KDK

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Mokhele on 15/02/2011,but apologies were tendered (attendance has not decreased). The noncompliance facilitates an atmosphere for commitment and responsibility. This may have a positive effect on the companys reputation causing a slight upward pressure on the share price.
Internal audit The audit committee reviewed, approved and evaluated the internal audit

charter & annual audit risk-based plan in terms of independence, effectiveness (A written assessment in integrated report) and performance.
Governing Stakeholder Relationships: The company pro-actively manages its

stakeholder relationships and achieve the correct balance between its best interests and that of stakeholders. Employees have to strictly follow particular guidelines for making ethical decisions and consider the impact on all stakeholders before decisions are made. The company believes that whilst there may be legal and competitive constraints, communication to stakeholders should be truthful, open, transparent and accurately reported to all stakeholders in a timely manner. An improvement to King III, called Alternative Dispute Resolution allows for mediation or arbitration, to resolve disputes according to parties needs, rather than just their legal rights and obligations. This allows for a quicker, confidential, mutually beneficial resolution that becomes a precedent for similar disputes. Business relationships are maintained for sustainability.
Integrated reporting and disclosure- This is an improvement of King III. Sustainability

is emphasised in King III and the company must dedicate time and resources to the preparation of the annual integrated report. The report consists of sustainability & financial reporting and disclosure that is independently assured by the audit committee. Their responsibility has been extended beyond financial reporting and impresses the need for a more diverse skill set. Tiger Brands has complied with this in all material aspects. The report is relevant and transparent (both positive and negative aspects are reported on) but confidential information is still retained. The company engages in triple bottom line reporting.

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TRIPLE BOTTOM LINE

Tiger Brands has attempted to report in terms of triple bottom line principles based on economic, social and environmental performance. This encompasses governance and sustainability requirements to be a good corporate citizen. From an economic perspective, vast amounts of financial and non-financial information were included, contributing to the understanding of company operations, performance and strategy for growth and expansion. With regards to the social aspect, Tiger Brands has incorporated how it attempts to uphold ethical standards and implement a rigid value system to ensure that its conduct of responsibility, accountability, fairness and transparency is enforced throughout the business. This is evident in the code of ethics. The company has taken a serious stance regarding its impact on society by performing in a manner that protects and provides investment to improve the well being of society. Although environmental impacts are presented with some understanding of how the company plans to operate in a more sustainable manner, the report lacked clear views and proper strategies for long and short term impacts of performance on the natural environment. It does not adequately address general concerns of stakeholders. Overall the company has taken a responsible approach to strategic direction and control, participation in innovation, fairness and social transformation. It has shown strong governance of the company. Integrated sustainability reporting - clearly and concisely informs the organizations stakeholders about the companys strategy and risks, linking its financial and sustainability
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performance in a way that gives stakeholders a holistic view of the organization and its future prospects. This includes forward-looking information to allow stakeholders to make a more informed assessment of the future of a company, as well as how the organization is dealing with its sustainability risks and opportunities. It involves developing a long term, realistic plan to strengthen society. Providing transparency and accountability through effective stakeholder communication and comprehensive sustainability reporting will build a solid foundation of trust and confidence of the stakeholder in the company.
Role of Tiger Brands in pursuing objectives- The company has established strategies

to meet needs, legitimate interests and expectation of each stakeholder category (social objectives). Consumers: Tiger Brands is committed to supplying safe, high-quality products (produced with best manufacturing practices) that comply with all applicable legislation. It also enlists external bodies such as SA Food Safety Inspection Services to audit food safety. The company has marketed products responsibly by appealing to consumers to improve their well-being, in a healthy way, through the Eat Well, Live Well Campaign. The company is compliant with the new Labeling and Advertising of Foodstuffs Regulation and Consumer Protection Act (CPA). Tiger Brands obey the standards outlined in the World Health Organization and communicates product information and breakdown of ingredients that is in no way harmful to the consumers health. Investment in research surveys are undertaken to refresh their brands and develop new strategies regarding consumer preferences because they treat the consumer as king. In-house consumer service centers address complaints and queries, investigates and performs follow-up actions to sustain consumer relationships. Customers: Tiger Brands establishes and maintains good relationships locally and internationally in the pursuit of better cooperation and mutually beneficial relationships, that encourage parties to improve their BBBEE performance. In order to achieve this, strategies were put in place to deliver goods timeously to customers (retailers) and aid in their growth potential while simultaneously penetrating the new markets. In this way they promote cost efficiencies through the value chain. Employees: The company is compliant with relevant legislation and human rights to create a fair, ethical, and safe working environment. There are forums that monitor employment equity, skills development and management issues. Employees have freedom of association (60% membership

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of 14 unions at 44 sites) and an equity ownership mechanism eg. General Staff Trust with dividend payments so all employees can benefit from company improvement. Production sites have health and safety committees that address key occupational health issues and are exposed to an annual audit, to provide a healthy working environment. There are on-site clinics and an HIV/Aids policy providing voluntary counseling, testing and programmes to all employees, irrespective of medical aid. Employees have opportunities to develop their potential with a web based learner-manager portal to enable employees to manage their development on their agreed personal development plans. This sets out career plans and development objectives by individual performance agreement and the International assignment policy enables qualifying employees to have cross-category growth opportunities. The employee recognition programme is a way for the company to award deserving employees and encourage a high level of competence. Implementation of workplace culture programmes facilitates improved relationships and is reinforced by a group-wide code of conduct. Broad-based black economic empowerment is important to the company in their drive towards transformation and is measured against set targets of employment equity, skills and enterprise development. The company invests in skills, training and educational programmes internally (eg. Tiger Brands Academy) and externally (eg. Thusani Trust: offering bursaries to qualifying black employees children). Society: Tiger Brands engages in enterprise development, providing business opportunities, finance and support for black owned businesses. Tiger Brands Foundation invests in education & health areas in society eg. Awarding engineering bursaries; Ikusasa Lami Project, where learners of non-fee paying high schools, visit tiger brands for exposure to the business operations and career counseling; Unite Against Hunger. The corporate social investment policy focuses on security and goodwill building through staff volunteer work and informal humanitarian support. Several projects were conducted by the corporate social investment committee. The company has pursued effective environmental practices to adjust the impact of its operations on the environment. They have incorporated a sustainability framework in an environment strategy supported by energy and water management policy. It has complied with international standards and has ISO 9000 as a basic standard across all facilities, moving towards the direction of ISO 22000. Tiger brands have been involved in the carbon

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disclosure project with the rating of C, overall identifying high environmental impacts and further strategy. The company makes environmentally efficient, technological choices that reduce energy usage and carbon emission with an energy management policy. Due to water shortages the company regularly evaluates and vigorously monitors water availability, consumption, quality and reliability, to avoid wastage. Internal management policies are formulated for this and are properly implemented. Each segment of organic, packaged and other non- hazardous waste is externally collected and monitored in accordance with disposal standards. These external contractors are reviewed for compliance. Tiger Brands is in the process of developing a recycling initiative for multilayer packaging which is effectively monitored, measured and compared to global standards. There is increased usage of, other less environmentally detrimental, materials for packaging to achieve compliance with the Waste Management Act of 2008. ENVIRONMENTAL REPORTING- The company has cost effective methods to use resources but this is potentially not sustainable. Improvement is needed as the company lacks clarity with regard to how their environmental impact will be effected through their new cost strategies. A separate environmental report should be part of the annual report because stakeholders can review decisions made by management and over time, assess its environmental impacts. This will aid in decision making and add confidence in the companys resource management, the continuity of operations and its compliance with national and international law for consumers, customers and international organizations. Areas to be covered in an environmental report, in general and specific to Tiger brands are the cumulative impacts of past, present and future planned activity on:

Air and noise emissions during facility construction and operations Local and DOE-wide waste management capabilities. Emissions into surface water, ground water and soil during construction &operations land requirements, disturbances, ecological resources and environmental justice issues local, regional, national or international resources needed for materials and utilities Pollution prevention, waste minimization, energy and water use reduction technologies

Guidelines on environmental impact are available in the advice notes published by the EPA (environmental protection agency) and Environmental Impact Assessment EIA Regulations 2010 of South Africa. For industries to operate, environmental damage is inevitable but environmental
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reporting allows for exposure of the impacts of actual environmental damage. This may not lead to damage reversal or limitation but can lead to better decision making, accountability for actions and some movement towards preservation and conservation of resources.

Current ratio (2010) =

6695

Current Assets

/ Current Liabilities

/ 3505

1,910 : 1 Current ratio (2011) =

6693 Current Assets

/ Current Liabilities

/ 4736

1,413 : 1 Decrease in the current ratio of 26,02% from 2010 to 2011. A reason for the change may be the vast increase in current liabilities whilst the asset value remained fairly constant in the year 2011. This represents an unfavourable change as it shows a decrease in liquidity. The ratios remain higher than other firms in the industry (Unilever).

Quick ratio (2010) =

Current Assets Inventory 6695 2899

/ Current Liabilities

/ 3505

1,083 : 1 Quick ratio (2011) =

Current Assets Inventory 6693 3037

/ Current Liabilities

/ 4736

0,772 : 1 Decrease in the quick ratio of 28,72% from 2010 to 2011. A reason for the change may be the retention of more inventories at year end and a vast increase in current liabilities. This represents an unfavourable change as it shows a decrease in liquidity. The ratios remain higher than other firms in the industry (Unilever).

Net profit margin (2010) =

Net profit after interest & taxes 2175

/ Sales x 100

/ 19316 x 100

11,26%
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Net profit margin (2011) =

Net profit after interest & taxes 2578

/ Sales x 100

/ 20430 x 100

12,62% Increase in the net profit margin of 12,88% from 2010 to 2011. A reason for the change may be increase in net profit after interest and taxes being greater than the increase in sales. This represents a favourable change as it shows an increase in profitability. The ratios remain higher than other firms in the industry (Unilever).

Cash flow to total debt (2010) =

Cash flow from operations 3380

/ Total Debt x 100

/ 4383 x 100

77,12% Cash flow to total debt (2011) =

Cash flow from operations 3604

/ Total Debt x 100

/ 5950 x 100

60,57% Decrease in the cash flow to total debt ratio of 21,46% from 2010 to 2011. A reason for the change may be the increase in total debt being significantly greater than the increase in the cash flow from operations. This represents an unfavourable change as it shows a decrease in the ability to repay debt with the cash flows generated from the operations. The ratios remain higher than other firms in the industry (Unilever).

Limitations of financial statements: Multi-industry firms: This makes it difficult to develop a meaningful set of industry averages for comparative purposes. Use of industry averages: Most firms want to be better than average so merely attaining performance is not necessarily good. To achieve high-level performance, it is better to target the industry leaders ratios. Inflation: Inflation may badly distort firms balance sheets, since it affects both depreciation charges and inventory costs, profits are also affected. Conflicting results: A firm may have some ratios which look good and others which look bad, making it difficult on balance to tell whether the company is in a strong or weak position Earnings per share:

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Basic earnings per share: The amount of money the company actually earns for each share of stock that is outstanding. Basic Earnings per share Increase of: 17.53% 2011 1629 2010 1386

Headline earnings per share: Separates the basic earnings into earnings that relate to the operating or trading activities (included in headline earnings per share), and earnings that relate to the capital platform of the business (excluded from headline earnings per share). Headline Earnings per share Increase of: 13.06% 2011 1575 2010 1393

Diluted earnings per share: Shows users the maximum potential dilution of their earnings in the future assuming the potential shares currently in existence are converted into ordinary shares in the future. It logically follows that diluted earnings per share can never be higher than basic earnings per share. Diluted earnings per share is calculated for both basic and headline earnings per share. Diluted Basic Earnings per share Diluted Headline Earnings Per Share 2011 1598 1545 2010 1364 1371

Increase of (EPS):

17.16%

Increase of (HEPS): 12.69%

Over the year, we see the share price fluctuating. The movement in the share price is divided into 5 periods in the year. During the 1st period, the share price remains fairly constant throughout. During the 2nd period, we see a decrease in the share price. During the 3rd period, the price of the share initially decreases but then begins to increase. During the 4th period, the price of the share increases. During the 5th
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period, we notice a sharp decline in the price of the share, however the overall effect during the period is that of an increase in the share price. Generally, share prices are affected by the following economic factors: Supply and demand: Share price is directly affected by stock market trends in trading. When more consumers purchase a particular type of stock, its price will automatically increase. And when more traders sell that stock, its price will decrease. Inflation and interest rates: The perception of the investors and traders on what is likely to happen with interest rates and inflation will also impact the share prices is various ways. People's interest in investing in a particular economy (and thus in the companies within that economy) is based in part on beliefs about whether the countrys currency prices will increase or decrease. Trade flows, political and macroeconomic events and activities: Political instability or crisis can influence negative effects in the economy. However if such events occur in a country which successfully survives the political crisis, it can actually help improve the economy as it allows other countries to regain confidence. I would therefore recommend the shares of Tiger Brands, as the overall share movement resulted in an increase in the share price. A risk-averse investor may also find the shares of Tiger Brands appealing as the shares have a beta of 0.42, making it less susceptible to systematic risk.

CORPORATE TAX RATE The current company tax rate is 28%. The normal tax consists of current t, deferred and secondary tax. Deferred tax is calculated using the difference between the carrying amounts and tax bases of assets and liabilities. This is used in the computation of taxable profit based on the liability method and is a temporary difference between the accounting accrual basis and the taxation legislation. It excludes items of income or expense that are taxable or deductible in other years. The normal current tax is based on taxable profit for

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the year. Taxable profit varies from accounting profit, because of the temporary difference (discussed above) and permanent differences (exclusion items that are never taxable or deductible). Normal tax may include under or overprovisions relating to prior year taxation. The reconciliation between the company tax rate and the effective rate: Company tax rate 28% - Dividend income (29.8%) + Nondeductible expenses 2.3% +Secondary tax 2.4% =The effective rate 2.9% TAX INCENTIVES APPLICABLE - S11D(1) Revenue expenditure- This incentive is to encourage research. At Tiger Brands research is undertaken with the prospect of gaining new knowledge, to be used in the production of new or substantially improved materials (production of income). Tiger Brands will receive a 150% deduction of the amount expensed. TAX ALLOWANCES APPLICABLE- S11D(2) Capital expenditure all new and unused assets used in the creation of research will be allowed a 3 year write off. 50%,30%,20%. S11(gc) Acquisition of intellectual property- The expenditure must be incurred to acquire a patent, design, copyright, knowledge. The allowance is 5% in case of patent or copyright 10% in case of design or knowledge in the year it is brought into use. Tiger Brands acquired the Status range of deodorants from the Unilever group for a total purchase consideration of R214,1 million on 1 November 2011 but this allowance will be allowed 2012 year end. S11(i) Bad debt allowance- At Tiger Brands Bad debts are written off when identified. SARS will only allow an bad debt allowance if, amounts due to the tax payer, have become bad during the year of assessment .They must be in respect of amounts that have been included in the tax payers income in the current year or any previous years of assessment. S11(j) Doubtful debts; given to the extent the commissioner considers represents as doubtful S11(e) Wear and Tear- Tiger Brands is a manufacturer. They can write of all new or unused plant or machinery brought into use on or after 1 March 2002 over 4 years (40%,20%,20%,20%) Learnership allowance S12H- Tiger Brands has a 12 month graduate programme registered with the Skills Development Act. Tiger brands will receive a R30000 allowance for each of the 12 months completed and R50000 allowance for disabled graduates. The allowance will be apportioned if the graduate had to leave the programme.before 12 months. BUDGET SPEECH EFFECTS -The secondary tax on companies was replaced by the dividend withholding tax of 15% (effective 1st of April 2012), imposed on the shareholder for dividends. A

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company may utilize its remaining Secondary Tax on Companies credits to reduce the liability for Dividends Tax for the shares that the company owns. Tiger Brands can be exempt (provided the required declaration and undertaking are submitted to the commissioner or withholding agent in time) as it is a South African resident company. The inclusion rate for companies will increase for capital gains tax from 50% to 66.6%. The effect of this will raise the effective rate on companies from 14% to 18.65 %( 66.6 *28%). The Draft Carbon Tax policy will be effective from 2013. Tiger Brands external costs will be increased by the costs of their carbon emissions.

REFERENCES :

Gompers P, Ishii L and Metrick A. 2003. Corporate governance and equity prices. Quarterly Journal of Economics, 118(1): 107-155. Pettinger T. 2011. Does the stock market effect the economy?

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http://www.economicshelp.org/blog/221/stock-market/how-does-the-stock-market-effectthe-economy/

KPMG 2009 Corporate Governance and King III Advisory Tiger Brands Limited Interim Financial Results Investor Presentation 2011 Kawaller G.I 2012. Foreign exchange, hedging currency risk against assets and Tiger Brands Notice of Annual General Meeting 2011 Tiger Brands Group Code of Ethics Service C.L. Gripping Gaap 2011 edition published by Lexix Nexis Tiger Brands Annual Report 2011 Media information by the department of environmental affairs

liabilities

http://www.environment.co.za/legislation-law/eia-environment-impact-assessmentregulations-law-south-africa.html Guidelines on the information to be contained in EIS, environmental protection act http://www.epa.ie/downloads/advice/ea/guidelines/ chapter 4; national budget speech 2012 pravin gordhan http://www.treasury.gov.za/document/national%20budget/2012/review/default.aspx

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