We Nourish and Nurture More Lives Every

TIGER BRANDS INTEGRATED ANNUAL REPORT 2017

INTEGRATED ANNUAL REPORT 2017 WE NOURISH AND NURTURE MORE LIVES EVERY DAY CONTENTS BUSINESS OVERVIEW Managing ourbusiness environment Our marketsandoperating How wedid About thisreport Group profile 8 6 4 3 2

STRATEGIC REVIEW Chief financialofficer’s review and marketposition Our competitiveadvantages Our keyrelationships Our businessmodel Our materialissues Changing thewaywework Strategic review Risk management Chief executiveofficer’s review Chairman’s review 34 32 26 24 22 21 18 14 11 9

NON-FINANCIAL REVIEW OPERATIONAL REVIEW Environment Our customersandconsumers Our communities Transformation Health andsafety Our people Sustainability review Associates andInternational Exports Home, PersonalCareandBaby Consumer Brands–Food Grains 66 62 56 52 50 45 44 42 41 40 39 38 WE NOURISH AND NURTURE MORE LIVES EVERY DAY Tiger Brands is one of Africa’s largest, listed manufacturers of fast-moving consumer goods (FMCG). Our core business is manufacturing, marketing and distributing everyday branded food to middle-income consumers. We also distribute leading brands in the home, personal care and baby sectors.

In South Africa, Tiger Brands has prominent market shares in a broad range of categories, growing for almost a century through acquisitions and developing its brands.

Corporate governance 70 Shareholders’ diary 103 Audit committee report 82 Declaration of dividend 104 Social, ethics and transformation Analysis of registered shareholders committee report 85 and company schemes 105 Remuneration report 88 Company information 107 GOVERNANCE REVIEW SHAREHOLDERS’ INFORMATION

FOR MORE INFORMATION SEE PAGES IN THIS REPORT

VISIT OUR WEBSITE FOR ADDITIONAL INFORMATION

Tiger Brands Limited Integrated annual report 2017 1 Group profile

Tiger Brands has strong, iconic brands such as Albany, KOO and All Gold, with market-leading positions in most categories. Our brands are well entrenched with consumers.

Division Category Annual Tiger Brands Key Tiger Brands Rank category value (Rm) value share %

Baked goods (bread) 6 285 32 1 Maize 3 712 13 2 GRAINS Rice 4 887 30 1 Pasta 1 581 1 Breakfast 1 082 40 1 Sugar lines 4 685 38 1 SNACKS

& TREAT

Camphor cream 298 27 PERSONAL and lotions 1 CARE

Beans 1 863 63 1 Mayonnaise 1 808 50 1 Peanut butter 1 456 40 1 Tomato sauce 928 70 1 GROCERIES Canned vegetables 742 59 1 Jam 740 33 1 Tomato products 555 22 1 Chakalaka 494 87 1

Canned processed 5 318 19 VALUE meat 1 ADDED MEAT PRODUCTS

Concentrates 2 632 23 1 BEVERAGES Sports drinks 1 151 35 2

Insecticides 1 392 49 1 HOME Sanitary cleaners 1 014 19 2 CARE

Homogenised food 813 86 1 BABY Baby care 872 15 2

Source: Nielsen. In addition to our core South African business, we have operations in Nigeria and Cameroon. In recent years, we have built a sizeable exports business for our products throughout Africa. Tiger Brands prides itself on being a world-class manufacturer and marketer of everyday branded goods. Our success is underpinned by the strength of these brands and continuous improvement initiatives. We support our core brands, backed by consumer and shopper research that provides comprehensive insights into our chosen categories and markets. We also hold meaningful minority interests in associate companies: •• South Africa: JSE-listed Oceana Group Limited (42,1%) (fishing) •• Chile: Empresas Carozzí (24,4%) (FMCG) •• Nigeria: UAC Foods Limited (49,0%) (FMCG) •• Zimbabwe: Listed National Foods Holdings Limited (37,4%) (FMCG).

2 Tiger Brands Limited Integrated annual report 2017 28 November2017 Board Chairman Khotso Mokhele accordance withtheIIRCframework. andweconcludethatitispresentedin Appropriate judgementandrigour havebeenappliedinpreparingthisreport The auditcommitteeandboard acknowledgetheirjointresponsibilityforensuringtheintegrity of theintegratedreport. Approval Our currentcombinedassurancemodelissetoutbelow: Assurance • • • • (ESG) aspects,weareguidedby: onenvironmental,socialandgovernance In reporting Standards (IFRS)andtheSouthAfricanCompaniesAct. FinancialReporting in accordance withInternational The annualfinancialstatementshavebeenprepared in the contextofouroperatingenvironment. understanding ofourbusiness,prospectsandstrategy givesstakeholdersafull thisreport performance, By integratingfinancial,socialandenvironmental principlesandapproach Reporting year to30September2016. forthe 30 September2017,andfollowsasimilarreport view ofTiger BrandsLimited’s fortheyearto performance providesaconsolidated This integratedannualreport About thisreport T: +27118404000E:[email protected] relations director, NikkiCatrakilis-Wagner pleasecontacttheinvestor information, For further • • • • BBBEE and sustainability Social responsibility assessments Environmental risk controls and internal Risk management statements Annual financial Business process in thisframework thesixcapitalsproposed appropriate, howtheseaffect againststrategicgoalsand,as Brands reports Committee(IIRC)framework(2013)–Tiger Reporting Integrated Guiding principlesoftheInternational codes ofgoodpractice (BBBEE) broad-based blackeconomicempowerment ofTradeincluding theDepartment andIndustry’s specificareas, Standards andcodesgoverning Listings RequirementsoftheJSELimited King IVreport External verification External audit External audit External audit Internal audit External Nature ofassurance Rob Nisbet Audit committee Chairman Proprietary Limited Proprietary EmpowerLogic FTSE Russell Limited Marsh Proprietary &YoungErnst Inc. Assurance provider • group andoutlineourresponse. (page 18),weidentifythemostmaterialissuesfor onour abilitytocreatevalue.Inourstrategicreview effect andoutcomeswithasignificantpotential opportunities threats, (page14),weidentifyexternal In theriskreport exiting non-corecategories. reflect therefinedapproachtoourAfricastrategyof disposal isnotexpectedtobematerial.Thesedisposals Authorities inKenya.Theestimatedprofitorlosson Brands (Haco)hasbeenapprovedbytheCompetition the transactionregardingdisposalofHacoTiger On 23November2017,Tiger Brandswasnotifiedthat interest inEthiopia(EastAfricanTiger BrandsIndustries). ownership duringtheyearwasdisposalofour51% The onlysignificantchangeinoursize,structureor measurement techniquesin2017. orany period. Therewerenochangestotheboundary limited disclosureonassociatecompanies,forthereview operations ofTiger Brandsanditssubsidiaries,with coversthe will interestallstakeholdergroups.Thereport capital, webelievefinancialandnon-financialdisclosure isaimedprimarilyatprovidersof While thisreport andscope Boundary the group. statements onourwebsiteforafullunderstandingof shouldbereadwiththeannualfinancial This report information Supplementary • appropriate. comprehensive KingIVismoreapplicableand discontinued inJuly2018.ForTiger Brands,the Initiative(GRIG4),whichwillbe the GlobalReporting We nolongerapplytheprinciplesandguidelinesof Transformation, page52. review ofoursocio-economicdevelopmentprojects. oninvestment(SROI) In future,wewillalsopublishasocialreturn global CDP. Refer towebsite. annuallyonitscarbonemissions underthe The groupreports exposureandpractice. social andgovernance FTSE4Good series),amulti-dimensionalmeasureofenvironmental, ofthe Tiger BrandsrankswellontheFTSEESGratings(part Pages 66to69. page82. Audit committeereport, Risk management,page14. operating indicatorsintheintegratedreport. or financial statementsanddoesnotextendtoany intheannual The scopeofthisauditislimitedtoinformation In thisreport Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

3 BUSINESS OVERVIEW How we did

Financial capital

Domestic business delivers a strong performance in a Group operating income** up 11% to tough trading environment with operating margins R4,6 billion up to 15,6% (2016: 14,1%) (2016: R4,2 billion)

Group operating** margin up 110 basis points to Cash from operations up 43% to

14,8% R6,1 billion benefiting from working capital improvements (2016: 13,7%) (2016: R4,2 billion)

HEPS* up 2% to 2 155 cents * From continuing operations. (2016: 2 119 cents) ** From continuing operations, before impairments and abnormal items.

Met Partially met Not met Our measures of success FY16 Key performance indicator Five-year target (2021) FY17 restated†# Progress Net sales (R billion) Category growth +1 – 2% pa 31,3 30,6 Gross margin +150 – 180bps* 33,4% 31,8% Marketing investment (% of net sales) +100 – 160bps 2,5% 2,5% Operating margin (before IFRS 2 charges) +100 – 160bps 14,8% 13,7% Return on net assets >35% 35,3% 30,4% * bps – basis points. † Restated for early adoption of IFRS 15 Revenue from Contracts with Customers. Refer note 6 in the condensed consolidated financial statements. # Restated as required by IFRS 5 for treatment of East Africa Tiger Brands Industries plc and Haco Tiger Brands Limited as discontinued operations. Human capital

Invested in our people R57 million (2016: R67 million)

4 Tiger Brands Limited Integrated annual report 2017 Social capital Social capital Social capital Intellectual Natural capital Natural Manufacturedcapital Innovation as % of revenue Water use intensity Beneficiaries reached Invested in communities Invested in facilities

2,12kℓ/ton R919 million 104 000 R35 million 4,3% (2016: 101 000) (2016: 4,5%) (2016: 2,32kℓ/ton) (2016: R23 million) (2016: R945 million) Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

5 BUSINESS OVERVIEW Our markets and operating environment

We summarise key issues and trends in our operating environment for further insight on our performance.

CAMEROON Chococam Global growth

•• Relatively steady growth as key global economies recover – reflecting rising employment Nigeria and benign inflation

Cameroon Ave % y/y 2015a 2016a 2017f 2018f US 2,6 1,6 2,0 2,0 Eurozone 2,0 1,6 1,9 1,7

South Africa Japan 1,2 1,0 1,5 1,0 China 6,9 6,7 6,5 6,3 South Africa 1,3 0,3 0,7 1,1

a Actual f Forecast SOUTH AFRICA Tiger Brands Limited South African economy

•• South Africa out of sync with global recovery, and briefly slipped into recession in 2017 (first time since 2009)

•• SA current business cycle downswing has lasted four years, marking the second longest downturn ON-SHORE in its history NIGERIA MANUFACTURING Deli Foods • Zimbabwe •• Fiscus under extreme pressure: lower tax • South Africa collections (estimate – R51 billion), higher contingent liabilities from treasury • Cameroon guarantees on borrowings by state-owned entities • Nigeria (R689 billion), sovereign credit rating downgrades (with further downgrades likely)

EXPORT TERRITORIES • Angola • Madagascar • Reunion • Burkina Faso • Malawi • Seychelles • DRC • Mali • Sierra Leone OUR DISTRIBUTION NETWORK • Equatorial • Mauritius • Sudan Guinea • Mozambique • Tanzania SPANS AFRICAN • Ethiopia • Namibia • Uganda • Ghana • Niger • Zambia 25 COUNTRIES • Kenya • Nigeria • Zimbabwe • Liberia • Rwanda

6 Tiger Brands Limited Integrated annual report 2017 Long-term trendsinrealincomeperpersonsince 2011 Long-term • • • Average R1 698001+ R787 001–R1698000 R382 001–R787000 R240 001–R382000 R111 001–R240000 R51 001–R111000 R12 701–R51000 R0 –R12700 Source: BMR,StandardBankResearch. • • • 12 000 15 000 Source: SARBbulletins — — Growth inhouseholdincomesremainsrelativelymodest USD/ZAR andEUR/USD — — consumers’ pockets),higherfuelprice(at2014peaks) rate, highertaxes+ fuellevies(someR25 billionfrom (weakerexchange remain weakoverthenearterm Overall consumerspendingenvironmentexpectedto extreme pressure income in2016keepinghouseholdexpenditureunder Inflation of6,3%vs0,2%realgrowthinpersonal and economicnews extremely vulnerabletonegativedomesticpolitical Despite broadlystrengtheningin2017,rand 3 000 6 000 9 000 0,5 1,0 1,5 2,0 (Rand) Disposable incomeofhouseholds(rhs) Compensation ofSouthAfricanemployees USD/ZAR EUR/USD

1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2011 –2016 2013 2014 2014 2015 2015 2016 2016 2017 (3) (2) (1) 0 1 2 3 4 5 6 7 8 (%) (30,6) (19,7) (15,4) 22,7 5 10 15 20 (6,8) (4,9) (1,9) 0,4 6,0 %

• Brent crude(US$/bb) • • Political climate Source: StatsSA,SARB,economicreports. Key commoditypricechanges • • • Retail sector US wheat(UScents/bu) SA whitemaize(R/t) SA yellowmaize(R/t) SA wheat(R/t) • • Unemployment (%) Unemployment reacheshighestlevelinoveradecade • • • • • • 2017 andrun-upto2019elections ahead ofANCelectiveconferenceinDecember Significant economicriskfrompoliticaldevelopments across economicsectors evident ofpoliticaluncertainty Knock-on effects Deflation inkeyrawmaterialprices Forecast of3,2%byearly2018 5,7% inAugustafteraveraging8,4%thefirsthalf. Year-on-year foodprice inflation attwo-yearlowof impact onJSE-listedconsumergoodscompanies Slowdown inconsumerspendinghassignificant century reduced the harvest toanine-yearlow reducedtheharvest century a yearearlier, whentheworstdroughtinovera metric tonnesinthe2017seasonmorethandouble Record maizecropestimatedatover16million 20 25 30

2010

2011

2012 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport 2013

2014

2015 September 461,5 1 830 1 953 4 063 2016 57,0 End- 2017

2018 (49,0) (35,4) 21,6 (3,5) (3,3) y/y %

7 BUSINESS OVERVIEW Managing our business

Tiger Brands is committed to the highest standards of corporate governance. The board sets the tone and standards, particularly in terms of ethical and moral business behaviour, which filter down to executive management and all employees.

Board

Social, ethics Risk and Audit Remuneration Nominations and Investment sustainability transformation

Directors and management understand their Managing our business sustainably responsibilities as custodians of the company and its Sustainability (encompassing social, environmental and assets, and manage these on behalf of shareholders, economic issues) is managed centrally by Tiger Brands’ who are the true owners of the company. corporate affairs team and embedded in the group’s strategy to create shared value for all our stakeholders Managing our business against global benchmarks through real benefits and constructive partnerships that Benchmarks were an important component of our strategic secure our social licence to operate. review (page 18). In 2017, Tiger Brands was again assessed on its environmental, social and governance After thorough review, we have crystallised the key (ESG) exposure and risk. This multi-dimensional measure, elements of Tiger Brands in society and what constitutes conducted on behalf of the FTSE for all companies good corporate citizenship in creating shared value as: included in the FTSE4Good index series, evaluates the •• Moving from compliance to leadership in social ESG risk and performance of companies worldwide to development give market participants a useful tool for portfolio design •• Tiger Brands as a force for good and management against related criteria, or as a •• From charitable giving to sustainable social impact framework for corporate engagement and stewardship. and shared value •• Constructive and strategic stakeholder engagement Our absolute score of 3,4 out of 5 positions Tiger Brands •• Employees as our ambassadors. in the upper quartile (77%), but indicates that more needs to be done. On the measured pillars, we scored Importantly, given the pace of change in our key markets 2,6 (â, primarily through inclusion of biodiversity from and our industry, our corporate affairs team is a central our associate Oceana) on environmental, 3,7 (á) on source of expertise in effective communication, social and 3,9 (á) on governance, with the full scorecard government relations, stakeholder engagement and on our website. Pleasingly, our scores improved for compliance in terms of BBBEE regulations to promote human rights and community, customer responsibility inclusive economic development. This team has the and anti-corruption. capacity to anticipate trends and changes in legislation, regulation and stakeholder needs, and the ability to plan and deliver appropriate responses.

8 Tiger Brands Limited Integrated annual report 2017 Chairman’s review

Towards a shared vision

Tiger Brands has produced commendable results in a year where the macro- environment has arguably been a greater impediment to corporate performance than in recent memory. STRATEGIC REVIEW STRATEGIC

Khotso Mokhele, Chairman

Introduction transparently. It is therefore crucial that compliance In South Africa, four years of anaemic GDP growth are with King IV is not approached bureaucratically, but rather mirrored in unprecedented unemployment levels, which used to inspire activism in driving the values espoused have led to deteriorating socio-economic conditions in the code, not just within a particular company or entity and heightened the risk of social upheaval. The policy but throughout society. certainty that is a prerequisite to turn national fortunes around is sadly eluding us, driven mainly by the mutually Governance reinforcing twin factors of discord within the governing There were several changes to the board of Tiger Brands political party and massive corruption in state and in the review period. My tenure as chairperson began on parastatal institutions. Levels of alleged corruption have 21 February 2017 on the retirement of my predecessor, become almost endemic in certain key entities of André Parker. Two long-serving directors, Bheki Sibiya governance, and attracted the attention of global and Santie Botha, also retired from the board in line with authorities. These factors have combined to place South its succession plan. Two dynamic and competent Africa on a slippery slope of negative business directors, Emma Mashilwane and Swazi Tshabalala, confidence and sovereign credit rating downgrades. were appointed to replace these experienced directors.

Recent scandals that have unmasked private sector Prior to his retirement, Mr Parker had commissioned collusion with state corruption could mark a tipping point an externally facilitated and far-reaching review of the that will energise the citizenry and civil society to arrest performance of the board. This yielded a number of and even reverse many of the negative trends that have recommendations which were implemented to strengthen challenged our young and immature democracy. board performance. Key among these was to strengthen the role of the board in setting the strategic direction It is thus serendipitous that the new and globally of the company. Greater focus was also placed on acclaimed benchmark in corporate governance, King IV, strengthening the role of the investment committee to takes effect at this time, highlighting the importance of enhance the vigour with which potential mergers and creating value for all stakeholders by managing public acquisitions (M&A) will be assessed. and private entities responsibly, ethically and

Tiger Brands Limited Integrated annual report 2017 9 Chairman’s review continued

The depth of expertise and experience on the board is summarised on pages 74 and 75; we believe this is a We are determined to unlock very solid base of knowledge and thinking to guide Tiger Brands towards its strategic goals. Changes during the the full potential of Tiger year are part of a rolling succession plan to capitalise on existing expertise while introducing fresh thinking, and Brands for the benefit of all. fully comply with the requirements of King IV. The proof of our determination Strategic progress A major strategic review of the group was completed in rests on our performance. the review period. Outlook The group strategy (page 18) for the next five years is built The CEO details the operational outlook for Tiger Brands. around a clear purpose: to nourish and nurture more lives As the only consumer goods company in the JSE’s top every day. Our vision sets out how we will achieve that 40, our group has an important societal role to play. To purpose. This illustrates the integrated thinking that our new honour the responsibilities inferred by this role, we are executive team, headed by CEO Lawrence Mac Dougall, working with stakeholders at every level to address has introduced. By considering the needs of all our immediate concerns such as water supply and food stakeholders, we can build a sustainable group that security and, longer term, towards creating a more consistently creates real value for all. To honour this purpose, equitable, sustainable economy that benefits all the we have set measurable targets. To reach these targets, we country’s citizens. have refined the organisational structure for a simpler way Given the political tipping point we have reached in of working, ensuring the correct skills are in place through South Africa, and the broader implications, it is pertinent internal development or external recruitment, and that for me to comment on this sphere. people are accountable for their targets. The CEO elaborates on this process (page 11) and the remuneration The elective conference of the governing party scheduled report details our reward philosophy (page 88). for December 2017 is likely to mark a critical milestone in the journey towards maturing our young democracy. We also conducted a stakeholder engagement survey For this journey to lead to a robust democracy, all (page 26). Key insights from this and similar future stakeholders, including the private sector, will have to play exercises will be incorporated into our ongoing strategic their constructive part to ensure the values enshrined in our development and remuneration processes. Equally, we globally respected and admired constitution are defended listened carefully to issues raised by shareholders when and allowed to flourish. they voted on our 2016 remuneration report, summarised by that committee’s chair (page 94). South Africa Inc can no longer operate with the mixed messages and signals from major stakeholder groupings. We are determined to unlock the full potential of Tiger Understanding that we are going to have to carry the cost Brands for the benefit of all. We understand that we will for government failures across a broad front, it is time for be measured and judged on every step we take towards business to fully commit to a sustainable democracy and our strategic vision. We have started that journey with display courage in ensuring that the political and public more balanced reporting and improved disclosure to give sectors live up to their constitutional obligations. stakeholders better insight into our ability to create value. Appreciation We also understand that the proof of our determination With the full support of the board, the new Tiger Brands is rests on our performance and that a focused, energised unfolding. Change on this scale, however, is seldom easy Tiger team will deliver. and we deeply appreciate the commitment evident at every level. I am also grateful for the counsel and insight Performance of my fellow directors, the dedication of the executive Our financial performance over the last two years has team and willing engagement from our key stakeholders. placed the group on a stronger footing to deliver on its Together, we are working towards a shared vision. strategic vision. Please see pages 34 to 43. We are sincerely grateful for the contributions of André Responsible citizenship Parker, Santie Botha and Bheki Sibiya during their tenure. Non-financial aspects of business have become As a board, we appreciated the wisdom they added to imperative for the long-term sustainability of companies, proceedings. and are integral to strong performance. Specific to Tiger Brands, climate change and its impact on food security have a direct impact on our ability to operate, as do socio-economic imbalances. As a natural scientist by profession, I consider these vital issues that will need the concentrated efforts of the public and private sectors, as Khotso Mokhele well as individuals, to effect any lasting improvements. Chairman

28 November 2017

10 Tiger Brands Limited Integrated annual report 2017 Chief executive officer’s review Achieving our true potential

Key strategic objectives • Achieving our true potential by growing the core and expanding into adjacent REVIEW STRATEGIC categories and geographies, while delivering top tier financial results • Deploy an operating model that provides the capabilities needed to deliver on our growth objectives • Build distinctive capabilities required to win with consumers, customers and business partners • Build a world-class integrated supply chain to leverage scale and create fuel for growth • Investing in our communities and sustainable supply.

Lawrence Mac Dougall, Chief executive officer

The head and the heart of our strategy In the review period, we completed the groundwork When I addressed the Tiger Brands team on the first day for the strategy that will guide us to 2022, detailed on of our new financial year, it was with a sense of pride for page 18. This required much work and, arguably, the organisation we are and excitement for the significant an unprecedented level of support, collaboration and opportunities ahead. commitment, all while delivering a strong operating result for the year. This was indeed an achievement and source of pride for the entire group.

Tiger Brands Limited Integrated annual report 2017 11 Chief executive officer’s review continued

Essentially, 1 October 2017 was the start of our new deteriorated. For the group, social unrest manifested in five-year strategy and the first step towards our 2022 strikes at two operating units (beverages, and snacks and ambition to achieve our true potential. When we started treats). While lost production clearly had a bottom-line this journey, almost a year ago, we agreed that our cost for the group, improving our relationship with historical performance had not met expectations. We organised labour is more important. We are focused on also had feedback from all levels of the organisation strengthening both lines and means of communication to that our ways of working were not entirely conducive to ensure we address concerns timeously and in a way that leveraging our scale as one Tiger team resulting in benefits all. an agile, lean organisation that responds quickly. Our response to material issues within our control and We therefore set about creating a new strategy and a those outside our control is detailed on page 22, but key new operating model that would unlock our true growth for the executive team is to correctly manage the scale of potential and deliver a sustainable, top-tier performance. change under way in our group needed to support our strategy. Essentially, this is a process that begins with We started by defining our higher purpose, our reason refreshed values that, in turn, elicit the behaviours that for being: to nourish and nurture more lives every day: support the key metrics or KPIs that mark our progress •• In the workplace, by creating meaningful opportunities towards our strategic goals. We keenly understand that for professional development and growth; committing to our people are fundamental to our strategy and as working safely; living our values; caring for each other important as our brands, and we use periodic employee and creating a great place to work surveys to track their satisfaction and ensure we anticipate •• Focusing on our communities and minimising our their changing needs. environmental footprint. While key factors in our market are summarised on We then agreed a clear and compelling vision that pages 6 and 7, the state of South Africa highlights the encapsulates the head (financial targets) and heart (our need for companies to honour their commitments as stakeholders, beginning with our people) of our strategy: responsible corporate citizens and deploy their resources •• Deliver top-tier financial results and be recognised by most effectively to assist their own people, communities all stakeholders as the best FMCG company in South and broader society. We take this responsibility very Africa as well as the most desirable growth company seriously, investing in our people and communities during on the continent. Fundamental to achieving our vision is the year (detailed on pages 45 to 61), and against clear attracting the best talent because we are recognised as strategies to deliver tangible and growing benefits for a great place to work. all in years to come.

With a clear purpose and vision, we were able to focus Overall, as detailed in the financial review on page 34, on the growth plans to reach these goals: Tiger Brands delivered strong operating results in FY17, •• Realise maximum growth from our core business and driven by our domestic business, particularly our flagship brands in South Africa – by harnessing existing Grains and Groceries divisions, under difficult conditions. capabilities while building skills for the longer term, and managing costs while capitalising on Importantly, these results reflect our focus on balancing organisational opportunities trade-offs, for example managing absolute growth in •• Expand our presence in developing markets, with the profitability against volume and market share movements, immediate priority of expanding the footprint of our while driving the efficiencies that will create the fuel for power brands into Africa. our future. Similar trade-offs are being made to better manage our environmental footprint, for example by While we prepared for a sustainable future, we clearly investing in the security of water supply through various still had to navigate the present by delivering against water stewardship initiatives. While this benefits specific our FY17 targets. The operating environment remained manufacturing units, it is vital for affected communities. intensely challenging, exacerbated by a highly These and other environmental initiatives are detailed competitive market. The level of political turmoil and on pages 68 and 69. social unrest escalated sharply as the economy

12 Tiger Brands Limited Integrated annual report 2017 New operating model Outlook Throughout this review process, we benchmarked We have a compelling strategy and clear targets that will ourselves against best-in-class, locally and internationally, allow us to win with consumers and grow the strength of and we learned from detailed talent mapping where the our brands sustainably. These results also underscore the capability gaps are, as well as where efficiency could be capability of our team in a period when much of our improved. This enabled us to craft an operating model focus was internal. In the year ahead, our focus will be that is truly specific to Tiger Brands, one that defines the more external as we concentrate on incorporating the capabilities we need to win and ensures the most insights from our broad stakeholder engagement. effective trade-offs. The economic outlook for 2018 is muted and we expect Implementing this new model is a complex project in a the operating environment to remain highly competitive. sizeable group with distinct operating units and a legacy The group is, however, well positioned to navigate this spanning decades. It is founded on integration and the environment and our focus will be on recovering volumes REVIEW STRATEGIC process has been facilitated by maximising available and market share while remaining committed to a resources, such as pockets of excellence in specific cost-conscious culture. disciplines or divisions, across the group. A good example of this approach is the progress made in scaling In addition, we will pay significant attention to growing up centralised procurement into a hub that covers our core portfolio, increasing market penetration through manufacturing, procurement itself and logistics or our customer strategy and unlocking much greater value distribution. Our aim is to channel 80% of all procurement through a world-class, integrated supply chain. We will through the central hub over the medium term, from 50% also drive far more focused innovation and marketing at present. The hub has been appropriately staffed and excellence through distinctive new marketing capabilities, targets set to maximise the scale of our group and simplify directing our capital expenditure and marketing investment processes. to our power brands to improve returns. These strategic aims will support our broader growth ambitions outside A vital component in the collaborative operating model South Africa. is corporate culture. This, in turn, is a function of ways of working, ways of rewarding and ways of governing. Appreciation We are simplifying our ways of working and reducing The commitment of Tiger teams across levels, divisions management levels while improving individual and geographies has been both humbling and inspiring. development and accountability. To attract the talent we In return, unleashing the power of our people and need and retain existing capabilities, and after feedback creating a great place to work remains our priority and from stakeholders, we have reviewed our remuneration strategic lever for success. structures (page 88) and strengthened the link to performance. Governance has been strengthened at Our board has been a source of great counsel and board and executive level, with clear rotation and support throughout the year. We are deeply grateful. succession plans for the optimum balance between fresh The contributions of our strategic partners and ongoing insight and continuity. The new executive team is working support from our service providers, suppliers and well, and the group is benefiting from the experience and customers is equally valued. We will continue to listen insight of external appointments to head grains, company to you, and work together towards mutual goals. secretariat and corporate affairs. We are also recruiting a new head of marketing as the incumbent retires in March 2018, a new head of human resources and a chief strategy officer, a new resource in the group. The executive team enters the new financial year well positioned to execute our strategy. Lawrence Mac Dougall Chief executive officer Transforming the corporate culture is a lengthy process, and one we have just begun. The progress and 28 November 2017 commitment to date are, however, deeply encouraging.

Tiger Brands Limited Integrated annual report 2017 13 Risk management

Effective risk management is fundamental to our business activities and supports our strategic goals (page 18). By identifying and proactively addressing risks and opportunities, we aim to generate sustained value for stakeholders while protecting our business operations, reputation and the well-being of our employees.

Tiger Brands recognises that risk in business is a complex Risk appetite and tolerance and diverse concept, and that many parts of the group Risk appetite – the level of risk management is prepared focus on managing risk exposures. Our intention is that to absorb before mitigating actions are implemented – these parts work together in a consistent and integrated has been determined by setting exposure limits at three manner to manage and reduce risk appropriately. tiers: Ultimately, the function of risk management is to help •• Tier 1: any calculated risk exposure that requires no Tiger Brands achieve its objectives and ensure a safer, further management mitigation, ie does not present healthier work environment for employees while a catastrophic threat to Tiger Brands preserving assets and earnings for the benefit of •• Tier 2: a threshold zone where any risk exposure that stakeholders. exceeds our risk appetite, but remains within the risk tolerance, may be acceptable but management must Approach make a conscious decision about risk tolerance versus Tiger Brands effectively identifies, manages and reports risk mitigation on risk across the organisation. Risk management •• Tier 3: All exposure above our risk tolerance will be activities are embedded in daily operations through considered a significant risk and must be supported processes, resources and structures. The group has by a comprehensive mitigation plan and timeline for adopted an enterprise-wide approach, meaning that implementation. every identified material risk is included in a structured and systematic process of risk management. Exposure limits are determined after assessing residual risk. The risk appetite, tolerance and velocity (time taken to feel the impact of a risk after it materialises) of the group is set by the risk and sustainability committee and approved by the board annually.

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Inform decisions and ensure Proactively managing risks the Tiger Brands risk profile considered unacceptably is adequately managed high and that require g in R additional treatment nn isk la re e p po ns rti po ng res Risk

14 Tiger Brands Limited Integrated annual report 2017 This process complements existing risk management the group’s operating territories. Senior management processes and aims to ensure Tiger Brands effectively in each division and business unit is responsible for identifies, manages and reports on risk across all managing risks in its area. Oversight of risk management operations and all territories. The underlying reporting at divisional level rests with the relevant executive structure starts at site level and rolls up into the relevant committees. Divisional and business unit risk registers business unit, followed by divisional consolidation to are updated quarterly and the risk and sustainability culminate in risk reporting at group level. committee meets three times a year.

Governance To prioritise risks, each risk is evaluated in terms of The board of directors is ultimately responsible for likelihood and impact on an inherent (actual impact) and Risk appetite and tolerance oversight of the group’s risk management processes. residual (after mitigating action) basis. The heat maps Risk appetite – the level of risk management is prepared The risk and sustainability committee assists the board by below reflect the significant inherent and residual risks to absorb before mitigating actions are implemented – ensuring that the risk management process complies with for Tiger Brands. has been determined by setting exposure limits at three the relevant standards and governance requirements in all tiers: •• Tier 1: any calculated risk exposure that requires no REVIEW STRATEGIC further management mitigation, ie does not present Inherent risk a catastrophic threat to Tiger Brands Impact •• Tier 2: a threshold zone where any risk exposure that 5 R1 R2 R3 exceeds our risk appetite, but remains within the risk 4 R6 R7 R8 R9 R5 R4 tolerance, may be acceptable but management must make a conscious decision about risk tolerance versus 3 risk mitigation 2 •• Tier 3: All exposure above our risk tolerance will be considered a significant risk and must be supported 1 by a comprehensive mitigation plan and timeline for 1 2 3 4 implementation.

Exposure limits are determined after assessing residual risk. The risk appetite, tolerance and velocity (time taken Residual risk to feel the impact of a risk after it materialises) of the 5 R1 group is set by the risk and sustainability committee and R3 R4 approved by the board annually. 4 R2 3 R5 R6 R7 R8 R9

1 1 2 3 4

Future risk state (1 – 3 years)

5 R1

4 R4 R2 R5 R6 3 R3 R9

2 R8 R7

1 1 2 3 4

Likelihood

R1 – Threats to employee safety R2 – Adverse macro-economic outlook R3 – Exposure to cyber threats R4 – Business continuity vulnerabilities R5 – Regulatory and statutory non-compliance R6 – Risk of earnings decline from associates R7 – Fraud, theft, crime and corruption R8 – Ageing infrastructure R9 – Product quality

Tiger Brands Limited Integrated annual report 2017 15 Risk management continued

The future state of group risks represents the executive have been identified in developing our new operating committee’s view based on information available at the model. These will enable us to channel scarce resources time of compiling this report. The group risk profile is to activities that drive the greatest impact. reviewed quarterly and may be revised after considering changes to the local and macro-economic environment, Exposure to cyber threats (Material issues: effectively crime, political developments, legislative and regulatory executing our strategy, people, innovation) changes, socio-economic challenges and technological While technology introduces greater variety and advancements. The Tiger Brands risk management convenience for consumers and more efficiency for process is therefore not a static view of risks facing businesses, it also opens more avenues for people to be the organisation. targeted by cyber criminals. The threat of cyber crime has been managed by establishing regular communication Significant risks across Tiger Brands to all staff. The latest anti-virus Significant exposures are determined by analysing software has been installed on all desktops and servers, business unit risks, divisional risks and group risks. The and appropriate network security controls are in place. score for each risk is determined by multiplying the likelihood of the risk occurring with its impact on Tiger Group IT will continue to monitor the cyber security Brands. A risk is regarded as significant when its score landscape with a view to implementing the latest security exceeds the risk tolerance set by the board. The link solutions and revising existing controls to safeguard the between risks and material issues is complex, but we group against cyber crime. have noted how key risks relate to material issues below. The following risks are regarded as significant to Tiger Regulatory and statutory compliance (Material issues: Brands: effectively executing our strategy, people, innovation) Tiger Brands is committed to complying with all legislative Safety (Material issue: people – training and and regulatory requirements. Ongoing training development, health and wellness) programmes and articles in our in-house publication raise At Tiger Brands, there is zero compromise on employee awareness about compliance and continuously provide safety. Safety procedures aligned to the global guidance to all staff. OHSAS 18001 standard are embedded across all our manufacturing facilities, with restricted access controls The governance forum, established to facilitate policy at all production facilities. implementation aligned to the legal and risk environment, is attended by senior management across the business as Ongoing risk assessments, facilitated by an external well as support functions. security specialist, are focused on developing a strategy to reduce the safety risk to employees in certain During the year, all levels of management, as well as businesses. A tailored risk response was developed from sales and procurement staff, were trained in competition detailed risk assessments across these businesses, leading law. A better understanding of competition law aids to a 90% year-on-year reduction in safety incidents. employees in their day-to-day decision making and professional conduct. In FY18, we will appoint a group safety manager and group security manager to coordinate and support these Online ethics, anti-bribery and corruption training began initiatives across the group. in the latter part of the review period, reinforcing the ethical behaviour expected from all employees. While rigorous security risk assessments will be completed to establish clear priorities for an overarching Business continuity (Material issues: effectively executing group safety and security programme, a key focus in our strategy, people, innovation) 2018 will be route to market security that poses a Loss of life, reputational damage and business significant risk to Albany bakeries. Our health and safety performance can all be compromised by a catastrophic performance for the review period is on page 50. event or unplanned disruption. Complete business- continuity plans are already in place for high-priority Adverse macro-economic outlook (Material issues: weak packaging and raw materials across the business. macro economy and job creation, effectively executing our strategy, people, innovation, food security) To manage this risk holistically, we are rolling out a As outlined on pages 6 and 7, our operating environment formal business-continuity management process for the remains intensely challenging. We are focusing on the group’s manufacturing facilities over the next two years, significant opportunities for efficiency improvements that ensuring a systematic and consistent approach to

16 Tiger Brands Limited Integrated annual report 2017 business continuity. This risk is managed with appropriate committee independently validates the effective group insurance cover, reviewed annually, and disaster- finalisation of all reports. recovery plans that include replicating core business applications and services, with maintenance and Access-control violations linked to fraud risks were support services agreements in place with key vendors. significantly remediated across the group during the year. We are also reviewing and investing in fire water systems at all plants to lower the dependency on Risk of earnings decline from associates (Material issues: municipal water supply. effectively executing our strategy) Oceana has significantly diversified its portfolio through Water restrictions imposed by municipalities in the the Daybrook acquisition in the US to reduce the level Western Cape have had a significant impact on our of reliance on fishing rights in South Africa and manufacturing processes. This spans the supply chain, neighbouring countries. In recent years, the risk of fishing from sourcing agricultural raw materials to water- licences being allocated on increasingly stringent

dependent manufacturing processes. Low water pressure empowerment credentials has risen materially. REVIEW STRATEGIC also poses a risk. Accordingly, all Western Cape manufacturing sites have implemented fit-for-purpose However, the strengthening of the rand against the dollar, solutions, including water-recovery and treatment, while slowdown in consumer demand and softer global markets water-storage facilities have been installed where viable. for fishmeal and fish oil have had a marked impact on As a strategic focus area, efficient use of water at all our Oceana’s earnings in the review period. Earnings from manufacturing operations has yielded results, although the Oceana represent over 40% of total earnings from protracted drought requires ongoing initiatives to optimise associates. The performance of our associate companies and reduce water use. are summarised on pages 42 and 43.

Risk, control and environmental audits are performed Ageing infrastructure (Material issues: effectively by an external specialist annually. Results are used to executing our strategy, people, innovation) improve business-continuity planning and disaster-recovery A new maintenance management system is being rolled processes. out across the group to ensure appropriate and consistent planning and scheduling. In support, manufacturing Comprehensive preventative maintenance plans are in optimisation studies will be conducted in FY18. place and regularly reviewed at all manufacturing sites to ensure supply meets demand requirements. Total productive maintenance (TPM) has been implemented. This is a system of maintaining and Exposure to the loss of power generation at all facilities is improving the integrity of production systems through regularly reviewed, both at site level and head office equipment, processes and employees. Significant capital from a centralised perspective. Although not an expenditure investments have been completed or are immediate or escalating risk, power-generating capacity currently under way across the group to align assets with is in place to cover key manufacturing processes where innovation and capacity demands. applicable. Our energy strategies are summarised on pages 66 to 69. Product quality (Material issues: effectively executing our strategy, innovation) Fraud, theft, corruption and crime (Material issues: Tiger Brands is committed to producing quality effectively executing our strategy, people, innovation) products that are aligned with our superior brand equity. Internal controls are continuously reviewed to guard To support this commitment, a central auditing body against fraud and crime through employee awareness has been appointed and introduced to all sites in campaigns, strict access control at all facilities, and South Africa. working with the local police in investigating syndicated crime. Good manufacturing practice (GMP) standards and the food safety system certification 22000 (FSSC 22000) Our people are annually required to acknowledge have also been revised and are being implemented compliance to key group policies on anti-bribery and across the group. Our manufacturing, group legal and corruption, ethics, and gifts and entertainment. The Tiger compliance functions collaborate effectively to ensure our Brands ethics line is available to all employees, suppliers products comply with all regulatory standards and meet and customers to confidentially report unethical business consumer preferences. practices without fear or victimisation. The ethics

Tiger Brands Limited Integrated annual report 2017 17 Strategic review

Achieving our true potential In the review period, Tiger Brands completed the groundwork for the strategy that will guide us to 2022 ( strategic review), detailed on page 20.

Developing a strategy for sustainable, profitable growth

Portfolio growth and strategy •• Rejuvenate domestic operations to profitable growth Growth •• International strategy accretive to domestic performance

Cost and investment strategy •• Build a capable and cost- = conscious culture with capacity to grow

Operating model and •• Winning through a high- organisational design performance culture Cost Capability

We are focused on driving sustainable growth by:

Growing the core and expanding into Adopting a category-based approach adjacent categories and geographies in the rest of Africa

Building sustainable capabilities Deploying an operating model that required to win with consumers, provides the right capabilities customers and business partners

Fuelling growth through indirect Building a world-class integrated spend excellence (zero-based spend) supply chain to leverage scale and zero-based budgeting

18 Tiger Brands Limited Integrated annual report 2017 Tiger Brands 2022 – achieving our true potential

PURPOSE We nourish and nurture more lives every day

VISION Deliver top-tier financial results and be recognised STRATEGIC REVIEW STRATEGIC by all stakeholders as the best FMCG company in South Africa and most desirable growth company on the continent. We attract the best talent and are recognised as a great place to work

FINANCIAL MEASURE Drive top-line growth ahead of category growth and improve operating margin in line with top-tier industry benchmark

OUR MISSION

Unleash the Accelerate Achieve selling Drive efficiency Create a As a good power of growth from and channel to fuel our world-class corporate our people our core ubiquity growth integrated citizen, build a supply chain renewable and sustainable future

NO COMPROMISE TO QUALITY, SAFETY AND INTERNAL CONTROLS

VALUES

Our consumers We act with We have passion We continue We value our are our business integrity in for excellence to reinvest in our people and treat everything we do society them with dignity

Tiger Brands Limited Integrated annual report 2017 19 Strategic review continued

We have defined Tiger Brands’ core as manufacturing, marketing and distributing everyday branded food to middle- income consumers (summarised below).

Everyday Branded FMCG LSM 5 – 8 •• Part of the basket of •• Goods that command •• Food consumer staples is •• Mass market, average goods bought for leading positions the core – part of key consumer everyday use (number one or two) eating and snacking •• Growing middle of •• Could be part of a in their segments occasions South Africa segment that makes up •• Not commodity items, •• Bulk of food shopping •• Metropolitan or urban something used every eg bulk, unbranded, basket •• Fairly homogenous day – chutney (through business-to-business •• Adjacencies to leverage •• Mostly employed condiments and categories and protect the core •• Brand loyal ingredients, rice and pasta (through carbohydrates) •• One of the eating occasions – breakfast, lunch, supper, snacks •• Luxury goods not part of every day •• Not cyclical goods

Our core already accounts for 70% of current sales. Middle-income consumers are a growing proportion of the South African market, are more brand loyal, have similar shopping destinations and use media in a similar way. Food is a large, attractive core with strong growth potential, allowing us to build on our established positions and good adjacencies.

Measures of success We plan to generate significant savings over the next five years, primarily from improving gross margin and driving efficiencies through zero-based spend. These savings will be reinvested in the core to capitalise on growth opportunities. The net impact is an anticipated increase in the operating margin (before IFRS 2 charges) of 100 to 160 basis points over the five-year period to 2022.

Strategy implementation We have made significant progress over the year, with the following key milestones already achieved: •• The new operating model was implemented from 1 October 2017. Capability gaps have been mapped and the recruitment process to fill these is well advanced •• Zero-based budgeting has been embedded in the 2018 budget process •• Good momentum on key capital projects that will help improve manufacturing efficiencies and provide additional capacity to achieve the required growth •• The supply chain transformation is well under way, with governance structures in place to enhance visibility of progress, issues and risks •• Ongoing work subsequent to the portfolio review to determine opportunities that will strengthen and refine the core portfolio and drive sustainable growth •• Work is also under way to identify and evaluate suitable M&A opportunities that will leverage our core capabilities.

We have put in place the foundations for a sustainable future, with a compelling strategy and clear targets that will allow us to win with consumers and grow the strength of our brands. This in turn will enable the group to create predictable value by delivering top-tier financial results and be recognised by all stakeholders as the best fast-moving consumer goods (FMCG) company in South Africa, as well as the most desirable growth company on the continent. Fundamental to achieving our vision is attracting the best talent, on the basis of being recognised as a great place to work.

20 Tiger Brands Limited Integrated annual report 2017 Changing the way we work

Our new operating model will refocus on the consumer, reignite innovation and leverage our scale as one Tiger Team – resulting in an agile, lean organisation that responds quickly and is aided by simple ways of working. A key enabler will be improved processes and enhanced systems.

Operating model vision STRATEGIC REVIEW STRATEGIC

Consumer obsessed Putting the consumer at the heart of every decision

Integrated Ambitious Having one face to Relentlessly innovating our customers and and growing in SA and suppliers and using our beyond scale to win

E M T T A E E R T T ER OG IG ETH E T Performance driven ER – TH Agile Uncompromising and Responding to the commercially savvy, market through fast with the best talent in decision making and the industry simple ways of working

Cost consciousness Rigorously challenging our bottom-line to unlock fuel for growth

Tiger Brands Limited Integrated annual report 2017 21 Our material issues

Our material issues are the culmination of a comprehensive process that begins with reviewing our risks, assessingE ffourectively executinoperatingg our strategy environment and engaging with our

People - critical skills to deliver our stakeholders – all as part of crystallisingstrategy our strategy.

Innovation - both to to address unmet MATERIAL ISSUE needs and emerging trends, and aSTRATEGIChead RESPONSE RELATED RISKS STRATEGIC OBJECTIVES KEY STAKEHOLDERS AFFECTED READ MORE of potential legislation/regulation A weak macro-economic environment* •• Optimising efficiencies while minimising costs •• Increased industrial action and • Adjusting our portfolio to address • All •• Chairman’s report, 9 Food security and security of suppl•y• •• Increased regulation Influencing mutually beneficial policy development social unrest affordability and increase market CEO review, 11 •• Increased regulation increases the share, supported by a cost- •• Strategic review, 18 Higher reliance on the private sector Jobto delivercreation national •• infrastructure and services cost and administrative burden of conscious culture and world-class Customer and consumer doing business integrated supply chain strategy, 62 * This material issue applies equally to the rest of the continent • Invest in and support our brands to maintain strong brand equity and grow market share

Job creation – consequence of low-growth •• Build an agile group to create employment through growth; work •• Business continuity vulnerabilities • Portfolio growth and strategy •• Employees •• Our people, 45 environment* with government to optimise vertical integration opportunities to •• Inadequate human resource • Operating model and •• Trade unions •• Preferential procurement, •• We will be measured on the effectiveness of our enterprise protect and create jobs in our supply chain management organisational design Government and regulatory enterprise development, 53 •• •• • •• and supplier development programmes, as well as our Meet our skills development targets as part of the BBBEE scorecard Non-compliance to revised BBBEE Unleashing the power of our bodies Our communities, 56 •• succession planning and skills development programme Maximise opportunities for extending our smallholder farmer codes people development initiatives • As a good corporate citizen, * This issue spans the value chain, lack of skills affects supplier build a renewable and delivery, which then impacts growth sustainable future

Effectively executing our strategy •• Aggressively manage variable vs fixed costs to maintain and •• Inability to react to growing • Portfolio growth and strategy •• Shareholders •• Chairman’s report, 9 • •• •• Understanding that we will be judged annually on how well improve affordability competition Creating a cost-conscious Analysts CEO’s review, 11 •• •• •• •• we execute this five-year strategy, we will focus on building Adopting a centralised procurement strategy to maximise scale and Failing to anticipate/respond to culture and world-class Media Risk report, 14 •• •• market confidence that we are incrementally delivering on drive efficiency of spend changing consumer preferences integrated supply chain Customers and consumers Strategic review, 18 •• •• • •• our strategy – key measures include innovation rates as Grow market share through brand building, relevant innovation and Inability to maintain cost Operating model and Governments and regulatory a percentage of revenue over a three-year period, cost value offerings competitiveness organisational design bodies •• targets, gross margin expansion, market share growth, Failing to successfully execute marketing investment, net working capital and employee business transformation engagement programmes •• Managing input cost inflation poorly People – critical skills to deliver our strategy •• Organisational structures redesigned to ensure a responsive •• Inadequate human resource • Creating cost-conscious, •• Employees •• Our people, 45 We will be judged by the speed and effectiveness of company, aided by simple and interdependent ways of working management high-performance culture and •• Trade unions •• Remuneration policy, 88 Effectively executing our strategy•• •• execution, preferred employer status and measuring Recruiting and resourcing essential roles to address identified gaps Employee health and wellness world-class integrated supply •• Revised remuneration philosophy linked to strategic plan •• Threats to employee safety chain employee feedback via our employeePeople pulse - criticasurveysl ski llsthat to de liver our •• • monitor satisfaction strategy Training and developing our people Operating model and Effectively executing our strategy organisational design Innovation – address unmetEff ectiveconsumerInnovationly executin - bothg ourneeds to strategto addressy unme•• Centralisedt R&D/innovation hub to create a sustainable pipeline •• Inability to react to intensifying • Portfolio growth and •• Customers and consumers •• Stakeholder engagement, 26 Peopleneeds and- critica emergingl skills totre dends,liver an oud ar head and emerging trends; aheadstrategof of pote potentialyntial legislatio n/regulation•• Improved procedures to enhance speed and success by better competition and changing contribution to net sales from •• Suppliers and service providers •• Preferential procurement, 53 EffectivePeoplely executin - criticag ourl strategskills toy deliver our legislation/regulation strategy understanding consumers competitive landscape innovation •• Government and regulatory •• Our customers and Food security and security of supply People - criticaInnovationl skills to de - lbothiver ou tor to address unme•• Ongoingt initiatives on product affordability through manufacturing •• Failure to respond to changing • Creating a cost-conscious bodies consumers, 62 Current regulatory issues includestrateg packagingy waste, and Innovationneeds and - both emerging to to address trends, unme andt aheaoptimisation/efficiencyd and alternative pack sizes consumer preferences culture and a world-class •• Regulatory issues, 64 pending sugar tax. In addition to legislativeneedsofJob poteand creatio emergingn tiacompliance,ln legislatio trends,n/regulatio an d aheand Innovationof pote - bothntia tol tole gaddressislatio nunme/regulatiot n •• Regulatory non-compliance integrated supply chain we will be measured by marketneeds share, and emerging brand tre nequityds, and a handead Food security and security of supply operating margin of potenFtiaoodl le gsecurityislation/regulatio and securityn of supply

Food security and security of supply Job Jobcreatio creation n

Food security and securityJob creatio ofn supply •• Establish an integrated, dynamic supply chain that can deliver the •• Business continuity vulnerabilities • Creating a cost-conscious •• Suppliers and service providers •• Supplier development •• •• We will be measured by the effectiveness of our climate- required growth while unlocking cash. Where necessary and Climate change – sustainably culture and a world-class Customers and consumers programme, 54 •• •• change and “green” initiatives, waste reduction (as a practical, this could include global sourcing securing quality raw materials is integrated supply chain Government and regulatory Our customers and •• • manufacturer), uninterrupted supply to our customers and Procurement processes regularly reviewed to ensure compliance to being affected by environmental As a good corporate citizen, bodies consumers, 62 consumers, quality of our products and broader impact best practice in ethical sourcing, and to identify and capture cost factors, eg protracted drought build a renewable and on society savings. We also review our pricing strategies and pack sizes to (Western Cape) and new pests sustainable future ensure consumers have affordable pack-size choices (army worm blighting maize crops) •• Failure to protect and preserve the reputation of Tiger Brands •• Product quality

22 Tiger Brands Limited Integrated annual report 2017 Effectively executing our strategy

People - critical skills to deliver our strategy

Food security and security of supply Job Jobcreatio creation n

Tiger Brands Limited Integrated annual report 2017 23 Our business model

We have adjusted the six capitals in the IIRC’s integrated reporting framework to better suit our business model. By understanding what each capital contributes to our business, we balance the necessary trade-offs by ensuring we replenish our capitals most appropriately.

Innovation Partnerships By focusing on fewer, bigger innovations We partner with stakeholders on common goals through a centralised facility, we will such as environmentally neutral agricultural processes. develop products that add value. Our increased investment in enterprise development is focused on small-scale farming (page 54). INTELLECTUAL CAPITAL Consistent investment behind key brands to SOCIAL AND drive profitable growth RELATIONSHIP CAPITAL Knowledge drives our ability to compete and, in FY17, we invested Adding real value R771 million (FY16: R765 million) for We add value to society through numerous initiatives deep insight into ensuring our brands – 53% of value created is distributed to meet the changing needs of our consumers. We use our R&D capability community stakeholders annually (FY16: 53%). and networks to deliver the innovation that supports the equity of our brands. Innovation accounted for 4,3% of revenue in FY17 Innovation Partnerships Procurement Manufacturing (FY16: 4,5%).

Tiger Brands aims for a virtuous circle of growth: This will allow us to invest further, growing free cash ow and We drive growth by investing in innovation and brands to deliver reinvesting in the business through innovation and marketing to products to millions of people every day. Leveraging our size, we sustain the strength of our brands. This drives growth and the are focused on spreading xed costs and improving pro tability. virtuous circle continues.

Consumer insights We invest in research and Consumer insights Sales Marketing Logistics consumer marketing for deep insight into the changing needs of our consumers such as value offerings (page 64). Sales We work closely with retailers to ensure that our brands are always available and properly displayed, in all channels from top-end grocers to informal traders. Five strategic growth drivers will ensure we reach full potential: availability and fair share; price; pack size/format; unmet needs and trends; brand strength. HUMAN CAPITAL People underpin our progress In FY17, we invested over R56 million in their well-being and skills, striving for a consumer-focused, high-performance culture based on our core values (FY16: R67 million).

24 Tiger Brands Limited Integrated annual report 2017 Procurement In FY17 we saved a further R220 million through customised sourcing strategies that ensure supply continuity, capacity for growth and rigorous compliance to food safety protocols. An expanded global sourcing programme has been instrumental in addressing domestic crop and ingredients shortages related to drought and disease. Key partnerships with suppliers continue to deliver value through joint cost savings plans and shared innovation objectives. We remain committed to supporting BBBEE and small business spending R12,1 billion and R1,9 billion in these categories. Our ambition to play a leading role in developing the agricultural sector remains a key priority with R73 million of fresh produce sourced from black emerging farmers in FY17. Through our partnership with government, we have spent R30 million on enterprise and supplier development, focused primarily on emerging farmers.

FINANCIAL CAPITAL MANUFACTURING CAPITAL Profitable growth Improved efficiency REVIEW STRATEGIC and flexibility We aim to deliver consistent value for stakeholders wherever we operate, firstly by remaining a profitable We continuously invest ahead of depreciation to company that rewards shareholders appropriately. maintain and enhance our manufacturing sites Total dividend increased by 1% to 1 080 cents across sub-Saharan Africa. We will continue to per share. (FY16: +12% to 1 065cps) invest in improving our facilities and enhancing flexibility.

Innovation Partnerships Procurement Manufacturing Manufacturing Tiger Brands operates 47 factories across Africa and has invested R2,7 billion over the last three years in equipment to increase capacity Tiger Brands aims for a virtuous circle of growth: and drive efficiencies across This will allow us to invest further, growing free cash ow and various sites. Notable highlights We drive growth by investing in innovation and brands to deliver reinvesting in the business through innovation and marketing to include increased capacity in products to millions of people every day. Leveraging our size, we sustain the strength of our brands. This drives growth and the Bakeries and significant savings in the consumer business. Other are focused on spreading xed costs and improving pro tability. virtuous circle continues. operations were modernised to increase capacity and efficiencies.

Consumer insights Sales Marketing Logistics

Logistics We continue to refine our logistics network with selected partners to achieve cost effciency and the highest standards of customer service. In FY17 our logistics improvement programme focused on leveraging our scale by introducing a logistics control tower and further integrating disparate networks to deliver cost savings of R79 million. Joint business planning with our customers and a relentless drive to expand our reach remain key thrusts to achieving our objective Marketing of having our iconic brands on the shelf at all times. We generate consumer-led growth through a marketing spend of R771 million in FY17, NATURAL CAPITAL which is a three-year cumulative Focused on responsible growth spend of R2,3 billion. While our supply chain draws on most of our capitals, its key impact is on natural capital. Our procurement strategies focus on ethical sourcing and the long-term sustainability of our processes. Over the past three years, we have focused on reducing this impact through specific initiatives (page 66).

Tiger Brands Limited Integrated annual report 2017 25 Our key relationships

We understand that sustainable relationships with key stakeholders are essential to our long-term growth. Shareholders, employees, consumers, customers and suppliers are all part of the chain that creates value.

We also understand that we depend on broader society Our aim is to maintain our social licence to operate and – not only stakeholders in our immediate value chain – protect the reputation of Tiger Brands as a trusted, to provide a conducive operating environment, and a strategic partner. consumer and talent base that we can reliably draw from in future. Stakeholder engagement survey In the review period, we concluded a survey to develop As such, stakeholders in our broader socio-economic a baseline understanding of how stakeholders perceive environment – law-makers, regulators, industry groups, the the group’s engagement with them. This aligns with our media and communities – all hold a stake in our licence strategic goal of increased stakeholder inclusivity, and to operate. meets the requirements of King IV.

We develop key insights to inform our strategic choices The survey was used as a listening exercise to generate for sustained growth through: valuable insights that will inform and strengthen •• A deep understanding of requirements for sustainable stakeholder engagement and ultimately relationships. socio-economic development Results will be used to refine our stakeholder engagement •• Considering the interests and expectations of material strategy and to inform and guide future planning, stakeholders and proactively manage stakeholder-related risks by •• Establishing relationships with stakeholders beyond our addressing their material issues and concerns. immediate value chain. Key results of the survey are summarised on the opposite Stakeholder relations at Tiger Brands is, therefore, page. a strategic function. It is focused on constructive engagement to build positive reputational capital for Key facts about the survey – conducted the group as the principal mechanism underpinning by external stakeholder management consultants our growth and sustainability (licence to trade). • Multiple methods of qualitative and quantitative data collection We do this by acknowledging and understanding the role • Target population included government (national we play in society through multiple stakeholder lenses (the and local)*, shop stewards, suppliers, shareholders, key issues and expectations our stakeholders have of us), pressure groups*, community members, media, using these expectations to inform our business strategy beneficiaries and decisions, and communicating these decisions back • Stakeholders around ten Tiger Brands operations to our stakeholders. In this way, we build long-term value across South Africa were surveyed by establishing trust, good reputation and legitimacy. • Final sample statistically significant at 70% of target population Key elements of our stakeholder relations strategy include: * Poor response, with provincial government citing insufficient direct •• Consistent approaches to engagement throughout the interaction with the group. Customers and employees are surveyed group in separate initiatives (page 46 and 63) •• Mechanism to anticipate risk and opportunities •• Coordinated framework for stakeholder management •• Leadership actively engaging with stakeholders •• Values-based engagement •• Stakeholder-focused as opposed to compliance-based engagement.

26 Tiger Brands Limited Integrated annual report 2017 Key results Based on these results, we are developing and training relationship owners across the group, and developing specific plans to address particular issues, which we will report on in FY18.

Performance metric Score Detail

Quality of 72% Government: national government 75%, local government 74% engagement Communities 74% International Suppliers 66% benchmark Shop stewards 65% Government 73% Media 61% Communities 65% Suppliers 75% 36% of stakeholders “know very little” about Tiger Brands as a Media 60% JSE-listed company. Their relationship (mainly local government and

community members) is with one of our operations REVIEW STRATEGIC

Relationship health 70% High: footprint communities 73%, beneficiaries of CSI projects and (relational capital) Tiger Brands Foundation 89% Reasonable: national government 66%, shareholders 68%, local government 68%, suppliers 69% Low: media 58%, shop stewards 60% Stakeholders who scored Tiger Brands low cited engagement with the group as being too sporadic

Responsiveness on 67% Local government cited its experience of the quality of our issues engagement as generally good, but asked for improved responsiveness on issues it regards as important

Plotting Tiger Brands’ stakeholders on the exchange-communal continuum •• In exchange relationships, the company gives benefits to stakeholders but expects to almost immediately receive benefits of comparable value “in exchange”. These relationships are conducive to commercial-type relationships. •• In communal relationships, the company’s motivation to provide a benefit is the welfare of the stakeholder, or long-term greater good of the collective. Communal relationships are important for sustainability, social relevance and shared value.

How we fared

National government Shop stewards Communities Exchange Communal relationship relationship 46% 61% 80%

33% 49% 71%

Suppliers Local government Beneficiaries

Tiger Brands Limited Integrated annual report 2017 27 Our key relationships continued

Key insights per stakeholder group

National government: Local government: Our footprint communities The media believes Tiger While engagement was Officials welcome the welcome their engagement Brands engages generally of high quality, regional economic with the group and are professionally and makes we will focus on improving opportunity our activities confident of our ability a positive contribution to access to Tiger Brands’ support. As part of our to make a positive food security, as do our information. As part of more structured, continuous contribution. We will peers. To build developing a track record engagement in future, we ensure we improve relationships based on of communal relationships, will consider the real accessibility at some satisfaction, trust and we will enhance the imperatives for sustainable operations, and respond considering their legitimate degree of stakeholder socio-economic more to real community interests, we are improving inclusivity. development and the needs, particularly in rural our rate of response and negative impacts of our areas. ensuring journalists have operations in certain access to our leadership instances, while ensuring as required. we follow through on our commitments.

Our shareholders appreciate the We agree with shop stewards that There is a high level of commitment high quality and transparency of their work is still needed to achieve and and trust between the group and its engagement with Tiger Brands. We maintain “preferred employer” status. suppliers. Given the scale of our are focused on improving this further Creating a great place to work is supplier base, we are considering by providing adequate disclosure a strategic target, given intense the different legitimate interests and on key issues while considering competition for specific skills in our engagement needs of different their feedback. market. In considering the legitimate groups. This will include more interests, priorities and realities of continuous engagement, for example organised labour, we are ensuring timely notification and effective that management communication handover when role players in Tiger across our sites is consistent and Brands change. Together, we are transparent. focused on developing sustainable and mutually beneficial solutions, with inclusive growth opportunities.

28 Tiger Brands Limited Integrated annual report 2017 What are we are doing with the information

Results were reviewed by the executive committee, social, A key facet of our strategy to drive better engagement, ethics and transformation committee and the board. We resolve issues and co-create solutions for matters of mutual have created a portfolio of dedicated managers to interest lies in developing relationship owners across the develop the strategy for stakeholder management, business. These are business leaders who have been supported by relationship owners. Guided by metrics for identified and will be trained to manage and report on each stakeholder group, we will develop an appropriate stakeholder health. This will bolster our relational value engagement plan for material stakeholders. and provide additional governance and insight on issues before they become risks.

Our response – by stakeholder REVIEW STRATEGIC

National Quarterly executive engagements with key government ministries government

Local Operating sites’ relationship owners will implement engagement plans at local government level

Footprint Socio-economic development champions at each site will be the points of contact communities and engagement

Media At least two media roundtable discussions with the executive team of Tiger Brands

Shareholders Shareholder and investor engagement planned for 2018 includes individual and group meetings

Shop stewards Regional engagements with union leadership planned for 2018

Suppliers Centralised management of key suppliers, with dedicated relationship owners

Tiger Brands Limited Integrated annual report 2017 29 Our key relationships continued

Stakeholder issues in 2017

While the stakeholder survey becomes our benchmark for improving our engagements, we still need to address issues as they arise. Issues raised during the year are summarised below.

Key issues in 2017 Our response Read more

Customers (retailers/wholesalers)

•• Increased competition amid •• Joint business planning initiatives and growth workshops with 62 muted consumer demand customers to stimulate shopper offtake and repeat purchase •• Driving in-store activation, on-shelf availability and general trade distribution to improve visibility and availability •• Increasing use of category management data to support innovation and new mobile platforms to develop insights and improve efficiencies at store level

Employees

•• New operating model and •• Regular, high-impact employee engagement sessions, one-on-one 21 organisational redesign consultations and the recruitment of an in-house change 45 •• Performance and rewards management specialist •• Talent and career •• The revised operating model and corresponding people strategy development has directly considered and addressed these issues. Monitoring •• Teamwork and collaboration of existing and new issues have been included in the updated •• Enhanced internal HR processes for example, pulse (satisfaction) survey and a communications dedicated employee relations centre of excellence •• Wage negotiations •• Wage negotiations were settled while regular regional leadership engagements will be introduced Consumers

•• Product affordability •• Mitigate inflationary pressures through cost-saving initiatives and 62 •• Value proposition operational efficiencies 64 •• Commitment and •• Evaluate need for smaller pack sizes and/or alternative, more compliance to issues affordable packaging formats regulated by government •• Ensure our product quality meets consumer expectations and the (eg labelling, salt and sugar) brand proposition represents value •• Proactive communication on complying to regulation Community

•• Food security and related •• Maintain strong partnerships with governments and 56 nutrition issues developmental agencies to support initiatives that promote 64 nutrition, health and education, and contribute to the development of local communities and eradication of poverty •• Conduct social return on investment (SROI) review to assess the impact of our development initiatives

30 Tiger Brands Limited Integrated annual report 2017 Key issues in 2017 Our response Read more

Investors

•• Lacklustre macro-economic •• Disclosed the outcome of the strategic review 18 outlook and its impact on •• Clearly defined core as manufacturing, marketing and 21 the consumer distributing everyday branded food to middle-income consumers •• Lack of volume growth •• Identified growth drivers and self-help strategies in terms of a •• Self-help initiatives cost-conscious culture REVIEW STRATEGIC •• Strategy execution •• Implemented optimal operating model to facilitate strategy and •• Earnings growth and return growth ambitions on capital •• Provided five-year targets for key performance indicators •• Improved communication plan Government

•• Regulations on sodium •• Complying with all relevant regulations; actively participating 54 reduction; proposed tax on in dialogue before legislation is promulgated 57 sugar-sweetened beverages •• Keeping abreast of emerging issues 60 •• Promoting awareness of •• Active partnerships to promote agri-sector development and 64 nutrition education greater inclusion of smallholder farmers •• Food security •• Nutrition education programme with the Department of Basic •• Growth and development of Education local agricultural sector •• In-school breakfast programme in partnership with Tiger Brands Foundation Media

•• Access to management and •• Specific website for media enquiries information •• Enhanced one-on-one media engagements •• Swift response to queries •• Respond to all enquiries within specified period •• Fair treatment of consumers •• Respond to media on all consumer-related enquiries •• Greater access to the CEO and CFO for editors and journalists •• Increased participation in industry-related issues •• Media management focus – we will appoint the relevant skills to deepen and broaden our engagement with the media Suppliers

•• Impact of currency volatility •• Leveraging Tiger Brands’ procurement scale to step change input 34 •• Industrial pollution costs (supplier production efficiencies and throughputs) 53 restrictions in China •• Augmenting supplies by identifying new global supply sources 54 impacting costs of and alternative ingredients for recipes chemicals/acids •• Actively researching and expanding sourcing programmes in •• Disease (avian flu, citrus SADC (Southern African Development Community) shortages, tomato leaf •• Focused savings programme expanded to all procurement miner, etc) overheads to dilute impact of currency-related cost increases •• Crop shortages amid •• Continued support to develop domestic farmers adverse local and global weather conditions

Tiger Brands Limited Integrated annual report 2017 31 Our competitive advantages and market position

The power of leading brands In line with our strategy to have the first or second-placed brand in our chosen categories, we have built a solid portfolio of leading brands over the years. This was again reinforced in the 2017 Sunday Times Top Brands Awards. In the prestigious Grand Prix category, All “We find that, despite the pressures that consumers Gold and KOO were among the top five favourite brands face in this economy, they tend to purchase brands in South Africa. Tastic was voted the number 1 essential and products that guarantee them consistency and food brand for the second consecutive year, followed by value for money. Albany is one of those brands that Albany (number 2) and Fatti’s & Moni’s (number 5). is trusted to deliver on its promises.” KOO was also voted number 1 in the Ask Afrika Icon Brands Survey 2016/2017 (page 33). Pieter Spies, head of Tiger Brands Grains division, Sunday Times Top Brands survey, September 2017.

The common thread they [All Gold Tomato Sauce, Crosse & Blackwell Mayonnaise and Mrs Ball’s Chutney – three Tiger Brands products in the top five in the condiments and Essential food brand: sauces category] all enjoy is how long families have Rice had them in their cupboards and on their tables. Tastic Sunday Times Top Brands survey, September 2017.

Our brands also feature prominently in their categories:

TINNED FOODS ESSENTIAL FOODS CONDIMENTS & FRUIT JUICES CEREALS CHILLED PERSONAL CARE SAUCES PROCESSED MEATS No 1 No 1 No 4 No 3 No 5 No 1 No 1 KOO Tastic Oros Jungle Oats Ingram’s All Gold Tomato Sauce Enterprise No 3 No 2 No 6 No 6 No 2 No 4 All Gold Albany Halls Morvite Crosse & Blackwell Renown No 5 No 4 Mayonnaise No 9 No 5 Enterprise Fatti’s & Moni’s No 4 Jungle Oatso Easy Mrs Ball’s Chutney Mielie-Kip

2017 Sunday Times Top Brands Awards. 32 Tiger Brands Limited Integrated annual report 2017 2017 awards and accolades

Ask Afrika Icon Brands 2016/2017 Category Winner This annual benchmark survey identifies the Bread Albany brands most loved and used by South African Cake/baking mixes Golden Cloud consumers. Tiger Brands again featured prominently, winning more categories while Cereal bars Jungle Energy Bar five of our brands were awarded prestigious Condiments: mayonnaise Crosse & Blackwell icon brand status. Condiments: tomato sauce All Gold Maize meal and samp Ace Meat products: bacon Enterprise Meat products: polony Enterprise Pasta Fatti’s & Moni’s STRATEGIC REVIEW STRATEGIC Prepared and cook-in sauces/ Condiments/sauces: All Gold tomato sauce pastes/gravies Condiments/sauces: Rice and couscous Tastic salad dressing category Cook-in/prepared sauces Sport drinks Energade and marinades Spreads: peanut butter Black Cat NUMBER ONE Spreads: marmalade Tinned fruit KOO Chilli/hot sauces Tinned vegetables KOO Tinned beans KOO 1 n Key icon brands

Spreads: Peanut butter Black Cat KOO

NUMBER ONE Tinned vegetables NUMBER ONE KOO Tinned fruit KOO 1 1 Tinned beans

Tiger Brands Limited Integrated annual report 2017 33 Chief financial officer’s review Successful margin improvement

Tiger Brands reported a relatively strong set of results driven by revenue growth of 2% to R31,3 billion and 11% operating income growth, before IFRS 2 charges, to R4,6 billion. Operating margins increased to 14,8%.

Noel Doyle, Chief financial officer

Cash generated from operations This improvement was due to improved pricing strategies enhanced by good procurement and better cost control. rose 43% to R6,1 billion, Intense competitor pricing activity and declining consumer benefiting from improved confidence resulted in volumes decreasing by 3%. Cash generated from operations rose 43% to R6,1 billion, working capital management. benefiting from improved working capital management. Headline earnings per share increased by 2% driven by the domestic performance and diluted by a disappointing performance from associates and the Deciduous Fruit business.

As previously reported, the disposal of East Africa Tiger Brands Industries (Ethiopia) was concluded, effective 4 April 2017 while all suspensive conditions have been fulfilled with regards to the disposal of Haco.

34 Tiger Brands Limited Integrated annual report 2017 Consequently, both have been treated as discontinued Income statement operations in these results, with the comparative Group revenue growth from continuing operations information restated accordingly. increased by 2%. The revenue performance in the second half is indicative of a significant slowdown in the rate of Analysis of financial performance price increases, due largely to declining commodity The following review of the group’s financial performance prices and a stronger rand. Gross margins benefited from should be read together with the annual financial improved pricing and procurement strategies, which statements (www.tigerbrands.com). helped offset other inflationary increases in raw material costs. Well-controlled conversion costs and efficiency enhancements contributed to further positive leverage in gross margins.

Group revenue growth REVIEW STRATEGIC

7% price/mix (3%) volume (2%) forex R31,3 billion R30,6 billion

Total Price/ Total growth mix volume Forex Domestic operations 4% 7% (3%) – International (including exports) (5%) 7% (3%) (9%) Total continuing operations 2% 7% (3%) (2%)

FY16 FY17

During the year, investments, goodwill and intangible Net financing costs of R207 million (2016: R162 million) assets totalling R560 million (2016: R335 million) were benefited from a reduction in interest charges of impaired. This related mainly to an impairment of the R117 million to R180 million, due to lower debt levels. goodwill in the Exports division of R300 million, and an A net foreign exchange loss of R30 million was realised impairment of R250 million against the investment in compared to a gain of R129 million in the prior year, of Nigerian associate, UAC Foods. These impairments which R153 million related to a gain on the settlement of reflect the continual assessment of risks associated with non-recurring debt in Nigeria. these businesses amid ongoing difficulties faced across our key markets in Africa. These are primarily the result Income from associates decreased 38% to R533 million of deteriorating macro-economic factors, largely linked to (2016: R861 million). The comparative period included falling commodity prices and exacerbated by currency capital profits of R117 million from asset disposals. After devaluations in Nigeria and Mozambique. In addition, adjusting for this, associate headline earnings decreased the lack of foreign exchange liquidity required trade by 29%. This reflects challenging operating conditions for credit to be managed tightly, inhibiting revenue growth. Oceana, in particular, as well as Carozzí and UAC Foods. The abnormal loss of R23 million (2016: abnormal gain of R11 million) comprises once-off costs for the recent A 2% improvement in the effective tax rate before strategic review and related restructuring provisions, abnormal items, impairments and associates, to 28,9% partially offset by the profit on disposal of property (2016: 30,9%) was largely due to investment allowances as well as income from insurance claim proceeds and received on qualifying major capital projects. certain warranty claims.

Tiger Brands Limited Integrated annual report 2017 35 Chief financial officer’s review continued

HEPS from continuing operations was up 2% to Earnings per share (EPS) from continuing operations 2 155 cents (2016: 2 119 cents). The deleverage decreased 7% to 1 848 cents (2016: 1 996 cents), between operating income growth of 11% and HEPS driven primarily by higher impairments in the current year. growth of 2% primarily reflects a significantly lower contribution from associates, costs associated with the EPS from total operations decreased by 6% to strategic review and related restructuring provisions as 1 915 cents (2016: 2 034 cents), while HEPS from well as the once-off forex gain in the prior year. total operations increased 2% to 2 161 cents.

HEPS growth impacted by associates and once-off forex gains in FY16 (cents)

70 42 2 500 271 2 393 (4) (13) (88) 2 300 (59) 44 5 2 155 2 119 (134) 2 100 (5) 13% (94) 1 900

1 700

1 500 Forex 2016 2017 Interest WANOS Tax effect Tax effect Associates adjustment Other headline Trading HEPS* IFRS 2 charges Tax rate change HEPS* September HEPS* September (included in HEPS) Once-off abnormals settlement of debt) Trading performance earnings adjustments

* From continuing operations. Once-off forex gain (TBCG

Segmental performance The domestic business delivered operating income growth of 15% while an improved performance from Exports and International was offset by Deciduous Fruit.

Consumer Exports and Grains Brands Food HPCB International Group* Volume ▲ 1% ▼ 9% ▲ 2% ▼ 3% ▼ 3% R13,3bn R11,1bn R2,7bn R4,2bn R31,3bn Turnover ▲ 5% ▲ 1% ▲ 9% ▼ 5% ▲ 2% R2,4bn R1,3bn R0,6bn R0,4bn R4,6bn Operating income** ▲ 18% ▲ 7% ▲ 17% ▼ 20% ▲ 11% Operating margin** ▲ 17,7% ▲ 11,5% ▲ 23,5% ▼ 9,5% ▲ 14,8% * From continuing operations. ** Before IFRS 2 charges, impairments and abnormal items.

Revenue in the domestic business increased 4% to The group’s overall operating performance was impacted R27,1 billion (2016: R26,2 billion), driven primarily by the underperformance of the Exports and International by Grains and Groceries. Operating income before division. Revenue for this division was down 5% to IFRS 2 charges grew 15% to R4,2 billion (2016: R4,2 billion while operating income declined 20% to R3,7 billion), while the operating margin increased R399 million, driven primarily by the Deciduous Fruit from 14,1% to 15,6%. The deteriorating economic business where performance was severely impacted by environment continued to put pressure on consumer the stronger rand. Although the Export business continued demand, resulting in volume contraction of 3%. to face a challenging environment, with no improvement in foreign currency liquidity, trading improved in the second half of the year and core markets benefited from improved distribution and product availability.

36 Tiger Brands Limited Integrated annual report 2017 Detailed segmental disclosures appear on pages 88 and Shareholders are referred to the accompanying dividend 89 of the annual financial statements and operational announcement for further details, see page 104. reviews on pages 38 to 43. Outlook Statement of financial position The economic outlook for 2018 is muted, with no current Improved cash generation resulted in a positive net cash signs of a recovery in consumer spending and growth position of R431 million at 30 September 2017. Cash levels likely to remain low. As such, there is little generated from operations increased by 43% to likelihood of volume uplift in the year ahead and R6,1 billion, benefiting primarily from working capital competition for market share is expected to intensify. improvements. Capital expenditure during the year totalled R919 million (2016: R945 million). Having largely been successful in enhancing margins, the group is well positioned to navigate this environment Balance sheet positioned for growth and pursue volume growth. This will be achieved by

FY17* FY16 improving our market shares through enhanced and REVIEW STRATEGIC focused brand support, a re-energised approach to Cash generated from operations (Rm) 6 056 4 233 innovation focused on the consumer, and by investing in Net cash/(debt) (Rm) 431 (2 028) and growing with our customers. We will continue to focus on driving efficiencies and cost savings to provide Net (cash) debt/ equity (%) (3) 13 the fuel for our growth. Net debt/EBITDA* n/a 0.4x Acknowledgements RONA (%)* 35 30 Thank you to our local and international shareholders for Net interest cover* 25x 14x your continued investment in our group and to members Working capital per of the broader investment community for their interest and R1 of turnover 21,8 23,6 engagement. I also thank my colleagues in the finance * From continuing operations. department who constantly strive to ensure the group achieves best practice standards in reporting and The strength of the balance sheet facilitates a significant disclosure. capital expenditure programme of some R5 billion over the next three to five years while maintaining a dividend cover ratio of 2,0 times, based on headline earnings per share. This programme is focused on enhancing the infrastructure behind our core brands, research and development, and the meaningful innovation that is a Noel Doyle key differentiator in our competitive industry. In addition, Chief financial officer our balance sheet enables us to build a pipeline of opportunities intended to support value-enhancing growth. 28 November 2017 Final dividend The company has declared an unchanged gross final cash dividend of 702 cents per share for the year ended 30 September 2017. This, together with the interim dividend of 378 cents per share, brings the total dividend for the year to 1 080 cents. This is 1% above last year’s total dividend of 1 065 cents.

Tiger Brands Limited Integrated annual report 2017 37 Operational review

Full results announcement on web. Grains

SALIENT FEATURES Operating margin improved 200 basis points to 17,7% benefiting from STRONG INCREASE IN OPERATING favourable procurement positions. MARGIN TO Performance The Grains division delivered 5% revenue growth, and a strong increase in operating income of 18% to 17,7% R2,4 billion. Revenue in Milling and Baking rose 4% benefiting from volume growth, partly diluted by price deflation in maize REVENUE GROWTH OF and sorghum in the second half. Operating income rose 16% to R1,9 billion. The wheat-to-bread value chain benefited from good volume growth and increased realisations in the first half. The balance between margin 5% and volumes in the second half required significant focus as competitor activity intensified.

Other Grains (Breakfast, Pasta and Rice) grew revenue OPERATING INCOME UP 18% TO 6% to R3,8 billion with strong operating income growth of 24% to R502 million. The stronger rand and improved R2,4 billion procurement strategies contributed to margin expansion.

Brands Milling and baking – Albany, Golden Cloud, Ace Sorghum beverages and breakfast – King Korn, Mabela, Morvite, Ace Instant, Jungle Oats, Taystee Wheat, Oatso Easy, Jungle Energy Crunch, Crunchalots Rice – Tastic, Aunt Caroline, Surprise, Cresta Pasta – Fatti’s & Moni’s

38 Tiger Brands Limited Integrated annual report 2017 11,5% 60 BASIS POINTS TO OPERATING MARGINIMPROVED CONSUMER BRANDS–FOOD’S 26% INCOME UP FROM GROCERIES, WITHOPERATING EXCEPTIONAL PERFORMANCE SALIENT FEATURES Consumer Brands–Food Mielie-Kip, Bokkie Value-added meatproducts–Enterprise,Renown, Rose’s, Monis,Game Damascus, Smoothies,Oros,Energade,Hall’s, Energy Bar, Wilsons,Toff-O-Luxe, XXX,Fizzpop, Jelly Tots,Beacon, Maynards,Allsorts, Jungle Snacks, treatsandbeverages–MMMallows, Black Cat,MrsBall’s, Hugo’s, Colmans Groceries –KOO,AllGold,Crosse&Blackwell, Brands to countersignificantrawmaterial inflation. while operatingincomedropped 34%despiteinitiatives competition. Revenuerosemarginally toR2,2billion, volumes reflecthighersellingprices andaggressive In ourValue-Added MeatProducts business,lowersales Oros ready-to-drink gainsmomentum. business is,however, encouragingasthelaunchof income by8%toR144million.Theoutlookforthis disruptions), full-yearrevenuedeclined9%andoperating action, drought-relatedwaterrestrictionsandelectricity half aftersignificantchallengesinthefirst(industrial Although theBeveragesbusinessrecoveredinsecond in theyearahead. R324 million.Thisbusinesswillfocusonvolumerecovery margins contributedtooperatingincomerising2% Revenue declined5%toR2,2billion,butimprovedgross competition andproductrationalisationinthefirsthalf. industrial action,acontractingmarketwithaggressive Sales volumesinSnacksandTreats by wereaffected improved pricingandcostreductions. Operating marginsimprovedto11,8%from9,9%on 7% while operatingincomerose26%toR589million. The Groceriesbusinessrecordedrevenuegrowthof 10,9% to11,5%. to R1,3 billionandtheoperatingmarginimprovedfrom marginally toR11,1billion,operatingincomegrew7% year, noted below. Asaresult,revenueincreased Brands –Foodfacedseveralchallengesduringthe With theexceptionofGroceriesbusiness,Consumer Performance from Groceries. the year, butstrongperformance reflect a numberofchallengesduring 7% increase inoperatingincome Marginal increaseinrevenueand Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

39 OPERATIONAL REVIEW Operational review continued

Home, Personal Care and Baby (HPCB)

SALIENT FEATURES Sustained demand and well-received innovation in pest category contributed to strong Home Care performance. STRONG PERFORMANCE FROM HOME CARE BUSINESS – OPERATING INCOME Performance Divisional performance was boosted by a strong UP 48% contribution from the Home Care category, with overall revenue increasing 9% to R2,7 billion. The strong focus on cost containment saw operating income rise 17% to GOOD CONTRIBUTION FROM R623 million. INNOVATION, FUELLING MARGIN Although volumes in the Personal Care category were affected by price increases and constrained consumer GROWTH OF 160BPS spending, revenue was unchanged at R683 million. Operating income increased by 3% to R139 million, benefiting from the strong focus on costs. Innovation, driven mainly by Ingram’s triple glycerine, tissue oil and Brands petroleum jelly, contributed 19% to revenue. Home, Personal Care and Baby (HPCB) – Purity, Revenue in Baby Care was up 3% to R888 million, Ingram’s Camphor Cream, Doom, Elizabeth Anne’s, reflecting growth in the pouches, medicinal and toiletries Jeyes, Perfect Touch, Dolly Varden, Status, Lemon categories, but a decline in jarred baby foods. Operating Lite, Kair, Protein Feed, Airoma, Peaceful Sleep, income was down 2% due to an unfavourable product Bio Classic mix and lower production volumes.

The Home Care category recorded revenue growth of 23% and a 48% improvement in operating income due to sustained demand in the pest category, effective in-store execution and optimal pricing. Innovation contributed 7% to revenue, driven by Doom automatic dispensers and the Peaceful Sleep family range.

40 Tiger Brands Limited Integrated annual report 2017 DEPRECIATING AFRICANCURRENCIES IMPACT OFSTRONGERRANDAND FRUIT BUSINESS UNDERPERFORMANCE OFDECIDUOUS INCOME LARGELY DUETO LOWER REVENUEANDOPERATING SALIENT FEATURES International Exports and Deli Foods(Nigeria)(100%)–Deli,Igloo,Nutribix West Africa Kola, Mambo,Matinal,Tartina, Tutoux, Chococroc Chococam (Cameroon)(74,7%)–Arina,BigGum, Central Africa Benny, Davita Davita Trading –JollyJus, (SouthAfrica)(Exports) branded productsintotherestofAfrica thegroup’sTiger exports BrandsInternational (South Africa)–GoldReef,Silverleaf Deciduous fruit(Langeberg&AshtonFoods(LAF)) Brands reduced operatingincomeby91%toR13million. customer mix,withrevenuedeclining4%.Thesefactors byrandstrengthening andanunfavourable was affected up 10%toR273million.TheDeciduousFruitbusiness Republic oftheCongo(DRC),andoperatingincomewas on highersalesintoMozambiqueandDemocratic business,revenuerose7% toR1,7billion In theExports the rand. bytheimpactofnairadevaluation against offset resulted inagreateroperatinglossconstantcurrency cost inflation. Together withhigher conversioncosts,this demand andpriceincreasestorecoversignificantinput Lower volumesatDeliFoodsreflectsubduedconsumer the stronger rand. management, butdropped2%ontranslationdueto rose 9%inconstantcurrency, assistedbytightcost reflecting thestrengthofthatcurrency. Operatingincome in volumes.Randrevenuedeclined7%toR821million, currency andnewproductscontributedtoa9%increase Chococam recorded3%revenuegrowthinconstant due totheDeciduousFruitbusiness. operating incomereduced20%toR399million,primarily Total divisionalrevenuedeclined 5%toR4,2billion,while Performance an unfavourablecustomermix. depreciating Africancurrencies,and A challengingyearamidrandstrength, Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

41 OPERATIONAL REVIEW Operational review continued

Associates

Chile: Empresas Carozzí Empresas Carozzí is a leading branded food business Associates in South America, based in Santiago, Chile. It also has Oceana Group (South Africa) (42,1% held) significant manufacturing operations in Lima, Peru and Empresas Carozzí (Chile) (24,4% held) an operation in Argentina. National Foods Holdings (Zimbabwe) (37,4% held) UAC Foods (Nigeria) (49,0% held) The company recorded a satisfactory consolidated performance for the review period, with profit similar to the prior year and a 3% increase in its operating margin.

The performance of the businesses in Chile and Peru improved year on year despite the weak economic situation in these countries. 15% Underlying performance was again affected by the CONTRIBUTION TO agro-industrial division, which faced lower global prices in tomato paste, fruit purees and apple juice concentrate, HEADLINE EARNINGS* and a revaluation of the Chilean peso against the (FY16: 25%) American dollar.

The populist policy changes implemented by the Chilean government continue to impact local consumer demand and business confidence. Similarly, political and economic challenges in Brazil and Venezuela are constraining regional export opportunities.

The hallmarks of Carozzí’s success include its exceptional innovation capability, strong number 1 or number 2 brands in the relevant categories, depth of market penetration and efficient manufacturing capability. The business is therefore well placed to continue competing effectively. Nigeria Nigeria: UAC Foods UAC Foods is a leading manufacturer and marketer of convenience foods in Nigeria. Its brands span a broad spectrum of the country’s food market, specifically snacks, Zimbabwe dairy products and beverages. South Africa * From continuing operations. Chile

42 Tiger Brands Limited Integrated annual report 2017 Gauteng. Prior-yearoperatingprofit alsobenefited Commercial ColdStorage(CCS) occupanciesin byreducedpilchardlandings,andlower offset havebeen due togroup-wideprocurement efficiencies fish business.Inaddition,improvements inthecostbase frozenfish fromthecanned to coverthecostofimported exchangecontracts offorward primarily duetotheeffects of R61millioninthecurrentyear. Thesemovementswere exchange, fromagainofR73millionin2016toloss exacerbated bytheadversemovementinnetforeign non-staple foods.Thedecreaseinoperatingprofitwas oil prices,andslowingSouthAfricanconsumerspendon andforeignrevenues,lower globalfishmealand export ofastronger rand on impacted bythenegativeeffect Oceana’s hasprimarilybeen financialperformance Oceana isaleadingfishingcompany, listedontheJSE. South Africa:Oceana business. persist intoFY18,resultinginamutedoutlookforthis Challenging macro-economicconditionsarelikelyto roll priceandpack-sizearchitecture. margins weremaintainedbyadjustingtheGalasausage recovered throughpriceincreases.Despitethis,gross been significant,andonlysomeofthesecouldbe Cost increasesfromaweakeningNigeriannairahave demand. throughputamidsuppressedconsumer volume andfactory continue touseaggressivepricingstrategiesmaintain Given theweakerNigerianeconomy, competitors includeSwannaturalspringwater.category range ofice-creamproducts.Brandsinthebeverage comprisestheSupreme category coconut chips.Thedairy leaderinNigeria,Funtimecupcakesand category comprisesGalasausageroll,the The snackscategory operating profit. 2017 decreasedby44%aftera42%reductionin fortheyearended30September Headline earnings and the CCSfruitbusiness. BayFoods from proceeds onthedisposalofLamberts even moredifficult. persist forsometimemakingtheoperatingenvironment challenging. Foreigncurrencyconstraintsareexpectedto The outlookfortheZimbabweaneconomyisincreasingly to focus ongrowingitscorelightmanufacturingactivities. fully fledgedwholesaleoutlets.Thiswillallowthegroup network toathirdparty, thesestoresto whichwill convert During theyear, NationalFoodsdisposedofitsdepot the groupgrewvolumesbyover7%. Excludingmaize, the disappointing2015/16harvest. following was providedtoconsumersbythegovernment declined by39%onlastyearaftermoresubsidisedmaize poorresultfromthemaizedivisionwherevolumes a very Volume by andprofitabilitywereaffected performance accorded priorityasaproducerofbasiccommodities. Bank,asitwas with theassistanceofReserve largely abletomanagethesechallengesduringtheyear insettlingforeigncreditors.NationalFoodswas importers thatcreatechallengesfor foreign currencyshortages impacted bymacro-economicweaknesses,particularly continuestobe company inZimbabwe.Thecountry National Foodsisaleadingbrandedfoodmanufacturing Zimbabwe: NationalFoodHoldingsLimited Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

43 OPERATIONAL REVIEW Sustainability review

Against national and global guidelines, we are steadily improving the way we manage and report the key elements of sustainability as an integrated aspect of our business strategy.

This section has been prepared against the requirements of the FTSE4Good index, IIRC framework and King IV, as well as governance guidelines in the JSE Listings Requirements. Tiger Brands fully supports the principles of the United Nations Global Compact which recognise the positive contribution business can make to a more sustainable planet.

In developing an integrated sustainability strategy, we are concentrating on the constituent pillars that will enable us to reach our goal of creating shared value for all stakeholders: Key pillars

Environmental stewardship Social responsibility Economic sustainability

Plan

•• Corporate communications – Build trust, reputation and legitimacy with all our stakeholders by leveraging internal and external opportunities to build relationship capital through: •• One source of truth for Tiger Brands’ messages •• Public relations •• Media (traditional and social) •• Consistent communication •• Portfolio communication

•• Government relations and Constructively engage with stakeholders to effectively manage reputational stakeholder engagement risk and build long-term value, using: •• Consistent approach to engagement throughout Tiger Brands •• Mechanism to anticipate risk and opportunities •• Coordinated framework for stakeholder management •• Leadership visibility in stakeholder engagement •• Value-based stakeholder engagement •• Stakeholder-focused not compliance-based engagement

•• Sustainable socio-economic Become an acknowledged leader in inclusive economic growth and social development impact through: •• Moving beyond compliance •• Programmes aligned to our operations •• Food security and nutrition •• Green economy •• Transformation of enterprise supplier development •• Tiger Brands Foundation •• Our employees as our ambassadors

•• Comply with BBBEE regulations in With compliance as a minimum target, entrench Tiger Brands as a promoting inclusive economic responsible corporate citizen that contributes meaningfully to society and development creates shared value

44 Tiger Brands Limited Integrated annual report 2017 engagement acrossalllevels,aimingtosustainstrong We andemployee shapeorganisationaleffectiveness engaging andinspiringrolemodelsforouremployees. themin becoming people agendaandtosupport and executethefunctionorbusinessarea’s specific We withtheleadersofourbusinessestocreate partner business performance. and recognitionmodelsthatenhanceindividual development ofouremployeesanddeliverthereward We focusontheacquisition,managementand day.high qualitytoourcustomersevery who arefullyengagedtoactonourstrategyanddeliver that Tiger Brandshasappropriatepeopleintherightroles The roleofthehumanresources(HR)functionistoensure value ourpeopleandtreatthemwithdignity). (unleash thepowerofourpeople)andvalues(we a great placetowork)thefirstpillarofourmission ofourvision(recognisedas strategy –frombeingpart ofourpeopleisevidentthroughout The importance collectively) hasadirectimpactonourbusinessperformance. the talentwehaveandhowengageleadthem(individually inourmarkets – The peopleinourorganisationareakeycompetitivedifferentiator Our people Challenge Invested R57millionor2,08%oftotalpayrollontraining 227 leadersattendeddevelopmentprogrammes Highlights place towork. capabilities, enabledbyinspiringleadersinagreat attracting andretainingtherightpeoplewith Strengthen Tiger Brands’competitivepositionby People strategy Protracted labourdisruptionsattwosites • • • comprises threecoreareas: andnow function hasbeencompletelytransformed people nowandinthefuture.Accordingly, theHR fundamental enablerstounleashingthepowerofour theHRfunctionare Our operatingmodeland,inturn, facts. andanalyticstoensuredecision-makingbasedon reports way andprovidebusinessleadershipwithpeople-related We inthemostefficient administeremployeeinformation day. morelivesevery our purposetonourishandnurture that webelievewilldeliverourstrategyandcontributeto We championtheorganisationalvaluesandbehaviours company. improve employeehealthandwellnessacrossthe relationships withbargainingcouncils/unionsand • • • sole intentofdrivingtheTiger Brandspeoplestrategy. encounteredbyour businesses,withthe opportunities benchmarked andrelevanttorespondchallengesor and designtools,processessolutionsthatare The centresofexcellence(CoE)analysethebusiness people-related activitiesacrossthegroup andconsistencyinhow wetransacton efficiency activities thatcanbedeliveredremotely, creating centreexecutesalltransactional The HRsharedservice a way thatisrelevantandpracticaltobusiness and areaccountableforexecutingtheHRagendain in eachbusinessareawholeadallrelatedactivities network:strategicHRpartners The HRbusinesspartner Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

45 NON-FINANCIAL REVIEW Our people continued

We are committed to ensuring we are able to attract and retain the best talent – people who are engaged and committed to sustainably delivering impressive business performance and ensuring Tiger Brands is recognised internally and externally as a great place to work.

Our metrics: how we measure our success To achieve our strategic objectives, we must track and monitor our performance, summarised below:

Metric Why?

Top employer rating Ensuring we position ourselves as a desirable employer to attract and retain the best talent

% of employee pulse score Ensuring our employees are engaged and the environment is conducive to delivering exceptional performance

BBBEE level (management/skills Ensuring processes are in place to meet agreed target levels for a diverse development/employment equity) workforce while removing all forms of discrimination and providing employment opportunities for disadvantaged individuals

Attrition Ensuring that we retain our best people and reducing business continuity risk related to high turnover

Time to fill positions Ensuring our company has the critical skills and sufficient capacity available when needed

Promotions vs external hires Ensuring we provide growth and development opportunities for our employees while allowing sufficient external talent inflow to facilitate innovation and growth

Overall performance rating Ensuring organisational practices, HR activities and leadership guide our people improvement to improved individual performance that will strengthen our business

HR effectiveness Ensuring HR activities address corporate priorities and lead to the desired results

Workforce Workforce profile

Outside of South Africa African Indian Coloured White Disabled Permanent Temporary Total Permanent Temporary Total staff 2017 8 485 701 1 083 780 37 11 049 5 246 16 295 1 426 364 18 085 2016 8 437 720 1 120 831 72 11 109 3 689 14 798 2 012 4 664 21 474 2015 7 648 698 1 189 844 53 10 379 4 222 14 601 3 841 2 149 20 591 2014 6 536 726 1 153 838 69 9 253 4 537 13 790 3 673 1 671 19 134 2013 6 178 739 1 192 881 68 8 990 1 500 10 490 3 770 788 15 048

Our businesses use seasonal and casual workers for expected increases in production, such as processing ripe crops. We also encounter unanticipated spikes in demand from large orders or other less predictable events. To meet these customer requirements, we hire temporary staff. In 2017, our temporary workforce represented 31% of our staff complement (2016: 39%).

While no formal commitment to local hiring is in place, in practice the vast majority of our workers are drawn from areas around our operations.

46 Tiger Brands Limited Integrated annual report 2017 talent (target80%) Retention rateofkey Overall staff turnover rate turnover Overall staff payroll Total trainingas%of Skills development(Rm) Learnership participants Learnership Female employees Employee headcount* • • is a guidelineforallmanagersandemployeesto: code Ourdisciplinary with appropriatelybyallparties. helps ensuredisputesareresolvedandgrievancesdealt andmanagement Clear communicationbetweenstaff issues requiringmanagement’s attention. monitor employmentequity, skillsdevelopmentandother At eachsite,unionsarerepresentedonforumsthat meet monthly. unions).Sitemanagementandshopstewards industry over 55% belongingtounions(includingthreemajor Our employeeshavefullfreedomofassociation,with byclearandtimelycommunication. possible, supported relationships andaddressingtheissuesraisedwhere through lostproduction,ourfocusisonrestoringthese resultsfortheyear and treats).Althoughthisaffected labour disruptionsattwounits(beverages,andsnacks Regrettably, duringtheyearwerecordedprotracted themdaily.voice inmattersthataffect hasa employee bargainingunitstoensureeveryone environment forallourpeople,weworkcloselywith To ensureaconstructive,safeandfairworking Labour relations * Key indicators • • casual workers. operations butexcludesseasonaland Includes international behaviour or conduct is unsatisfactory orunacceptable. behaviour orconductisunsatisfactory Encourage timelycorrectiveactionifanemployee’s misconduct Create afairandequitablestructurefordealingwith 18 085 3 532 2017 2,08 56,7 91% 417 9,1 21 474 3 910 2016 2,05 66,8 91% 324 7,1 20 591 3 696 2015 1,00 57,3 87% 264 7,9 compliance withlabourstandards. in Africa.In2017,therewerenoinstancesofnon- conventions, andrelevantregulationsinoperatingareas LabourOrganisation employment, theInternational covering LabourRelationsActandbasicconditionsof Tiger BrandscomplieswithSouthAfricanlegislation Talent management right capabilitieswithinthegroup. of demand,preferablybyfindingtherightpeoplewith Our aimistodeliverqualifiedtalentthebusinessahead disciplines. graduates joinedTiger Brandsastraineesinvarious and leadership developmentprogramme.InFY17,seven Key initiativesincludeafocusedmanagementtrainee commensurately rewarded. against agreedtargetsistracked.Theseemployeesare identified, developmentplansareagreed,andprogress talent reviewsensurehigh-potentialindividualsare capability andstrengthenthetalentpipeline.Regular our investmentintraininganddevelopmenttobuild appointmentsandpromotionswhileincreasing internal We arebuildingtalentsustainablybyconcentratingon External hiresvsinternalpromotions ■ 10% 12% 14% 0% 2% 4% 6% 8% Averageexternalhires 2015 ■ Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport Averageinternalpromotions 2016 2017

47 NON-FINANCIAL REVIEW Our people continued

Leadership development In 2017, we invested R56,7 million (2016: R66,8 million) Our aim is to have leaders with the right capabilities to or 2,08% of total payroll on in-house training in South inspire people to deliver exceptional performance. Africa, through the Tiger Brands Academy, as well as learnerships. To ensure we have leaders who can drive our strategy, we introduced a new leadership competency model two Tiger Brands Academy years ago aimed at developing great leaders who are This internal facility has separate academies for the committed to creating a great place to work while leading disciplines of supply chain, leadership, finance, customer, our people through challenges. The new operating model human resources and marketing. It also offers learnerships will require a significant change in behaviour that will, in in manufacturing, logistics, supply chain and management. turn, require high levels of collaboration, influencing both the capability and ability to lead through ambiguity. To ensure we develop the right strategic skills, we recently revised the course content of two key disciplines: Leaders are assessed against this framework to ensure we •• Supply chain: In 2016, the required skills were profiled set the correct parameters for development programmes. and harmonised across the group and new learning Four flagship leadership programmes were launched in plans and development programmes rolled out. 2016 and, in total, 14 flagship programmes were run in 2016 and 2017, attended by 227 leaders. We are Following the success of the manufacturing excellence confident the benefit of these programmes and other programme for unit managers in 2016, a similar initiatives will soon be evident. programme for production managers was launched and 41 production managers will complete this High-performance and engaging culture 12-month programme in early 2018. This pillar of our strategy aims for high performance through careful performance management, paired with In 2016 we launched programmes for employees to strong reward and recognition structures. We believe this be certified in planning and procurement. To date, six will drive an engaged and committed workforce and employees have been certified and 75 enrolled. contribute to our success. Similar to our leadership development initiatives, it is too early to comment on •• Shopfloor development project: the first learnerships measurable outcomes. were completed in 2017 and 41 learners graduated (33 with an NQF 3 certificate in food and beverage Developing skills and capability packaging and eight with an NQF 3 certificate in Developing the full potential of all employees is a stores and warehousing). Another seven sites launched prerequisite to creating a competitive advantage. Our formal learnerships in 2017, with these learners due to people have the opportunity to continually develop complete in 2018. Three sites completed assessments themselves through workplace qualifications and shorter, in 2017, and will launch learnerships in early FY18. function-specific programmes. Related objectives and At other targeted sites, assessments are under way targets are detailed in our statutory workplace skills plan before implementing the next phase of learning plans. and annual training report. •• Customer: After the final year of our School of Mastery programme in 2016, 27 learners were awarded national qualifications in FY17.

48 Tiger Brands Limited Integrated annual report 2017 is helping ourpeopleadjust. a carefullyconsideredchange-managementprogramme organisational structuremeansnewwaysofworking, successfully implementingboththemodeland required toexecutethemodel.Understandingthat the newoperatingmodelandorganisationalstructure The keyfocusovertheyearhasbeenondesigning employees tocontributethegroup’s success. motivating environment thatenablesperformance, Tiger Brandsisstrivingtocreateanorganisational Organisational developmentandeffectiveness in the managementtraineeprogramme. talent pool.Thisyear, our first graduatesjoin Tiger Brands students. Aftergraduating,theyareincorporatedintoour We providedbursariesforseven(2016:seven)engineering 264 graduatedin2016. institutionssince2007withthetrust’stertiary and support, respectively). Atotalof343studentshavegraduatedfrom for 198students(2016:R3,5millionand291 employees. In2017,wespentR4,7milliononbursaries We providebursariesforthechildrenofqualifyingblack programmes External been employedbythebusiness. completed theprogrammesince2008and125have appointments:469peoplehave and other entry-level become afeederpoolforthegraduateprogramme marketing, productionandoperations.Thesestudents for selectedcandidatesinfoodtechnology, engineering, byprovidingworkplaceexperience creates opportunities amongthecountry’sparticularly youth.Tiger Brands Unemployment isasignificantchallengeinSouthAfrica, Workplace experienceproject Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

49 NON-FINANCIAL REVIEW Health and safety

The safety of our workers, visitors and the public is key to our long-term success. We strive to achieve our goal of zero harm by managing our activities to eliminate incidents, minimise risk and promote excellent performance.

Highlight

90% year-on-year reduction in safety incidents

Challenge

Route to market security

We believe a safe and healthy workplace is both the Our group health and safety policy stipulates our fundamental right of every person and a business responsibility for maintaining productive workplaces imperative. by minimising the risk of accidents, injury and exposure to health hazards for our own people, Over three years, there has been a significant and associates and contractors. This responsibility is sustained improvement in the safety performance of defined in operating standards throughout the group. contractors undertaking civil and construction work at Our manufacturing facilities follow the requirements Tiger Brands’ sites after implementing our enhanced and principles of the internationally recognised contract management guidelines. Clear communication Occupational Health and Safety Assessment Series upfront ensures service providers and their leadership (OHSAS) 18001 standard as the framework of an effective system. teams are fully aligned with our safety policy and guidelines. Instead of acting as enforcers, we facilitate by providing assistance and support to service providers, The group chief executive officer is ultimately responsible and creating the space for effective safety collaboration for the safety of employees. He reports to the risk and and learning. This engagement takes place at both sustainability committee as well as the audit committee relationship and contractual levels. on these matters. Dedicated committees, led by supply chain executives and site management, are responsible Analysing lost-time injuries at our manufacturing units for implementing health and safety measures at highlights that behaviour-based incidents are our key manufacturing sites. challenge. We are focused on strengthening the organisational safety culture to change mindsets and Rigorous operational controls manage known risks and habits, and eliminate risky behaviours. align with international best practice. An accredited independent risk management company assesses implementation and adherence, and provides third-party verification. Any identified non-conformance is assessed and risk mitigation implemented. In addition, compliance audits are conducted annually – spanning applicable laws and regulations as well as the group’s occupational health and safety guidelines – at each manufacturing operation.

50 Tiger Brands Limited Integrated annual report 2017 understand howtoavoidcollisionsorincidents. aware ofidentifiableriskstheymayencounterand defensive drivertraining.Thisensuresourdriversare emphasise routeriskassessmentsandcomprehensive solutions forrouteriskmanagement.We continueto authorities, wesharebestpracticeandbuildsustainable collaboration withothercompaniesandprovincial in FY17, werecordedzerofatalities(FY16:four).In This remainsafocusareaforourindustry. Pleasingly, Route tomarketsecurity the group. improvesinlinewiththerestof their safetyperformance sitestoensure Focus inFY18willbeonunderperforming beat theirtargets(FY16:31%and42%respectively). our manufacturingsitesachievedzeroLTIFR, while43% The groupLTIFR targetis0,25forFY18.InFY17,29% of declined from135to123. FY13 tozeroinFY17.Similarly, lost-timeinjurieshave 0,30 inFY17whilefatalitieshavedeclinedfromtwo improving safety. LTIFR hasdeclinedfrom0,67inFY13to Over theyearsgrouphasmadesignificantprogressin period. issues inthereporting recorded anunplannedshutdownforhealthandsafety frequency rate(LTIFR) againdeclinedandnooperation With arenewedfocusonsafety, thelost-timeinjury Safety performance programme. and peer-auditing processestoadvanceoursafety To training,wehaveself-auditing supplementformal auditteams. management andinternal SHEcoordinators, agreed foremployees,supervisors, development inthisfield.Suitableprogrammeshavebeen (SHE) specialistsarefocusedonbuildingcapability safety, orexternal run byinternal healthandenvironment Programmes build therequiredlevelsofsafetyexpertise. Key employeesaretrainedandcoachedonthejobto Training cost-effective comprehensivehealthcover.cost-effective membership toourin-housemedicalschemethatoffers We allSouthAfricanemployeesvoluntary alsooffer employees. andtemporary forallpermanent counselling service and management programmeandafreeadvisory the community. includeanHIV/Aids Contractedservices in Ashton(Western Cape,SouthAfrica)isalsoopento employeesonsite.Ourclinic andtemporary permanent healthcare,free toall andlimitedprimary support, includeoccupationalhealth Our on-siteclinicservices legal advisers. social workers,dieticians,biokineticists,andfinancial professional counselling.Userscanaccesspsychologists, andface-to-face 24-hour telephoniccounsellingservice, a programmeoffers Our employeewellnesssupport Employee wellness • • • • • include: andillness.KeyinitiativesinFY17 in preventinginjury inachievingsustainableimprovements make adifference Management commitmentandleadershipcontinueto Activities toimprovehealthandsafety • • • • • competence matrixeslaunchedforourbusinessunits. Safety skillsdevelopmentprogrammesandrole-based manufacturing excellencecustomsandpracticesjourney Relaunching theSHEpillarinlinewithour safety awarenesscampaigns onauditteamsand and facilitatingtheirparticipation Including lineemployeesinsafetyincidentinvestigations line managementheldpersonallyresponsibleforsafety integratingsafetyintobusinessprocesses,with Further disciplined process Identifying therootcauseofsafetyincidentsina Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

51 NON-FINANCIAL REVIEW Transformation

In South Africa, we promote social transformation in the interest of nation building, most notably by advancing broad-based black economic empowerment (BBBEE) initiatives.

Highlight

Significant progress with smallholder producer programme (case study, page 54)

Challenge

Managing the impact of new sector-specific BEE codes

The revised agri-BEE codes against which Tiger Brands will be assessed in future were passed by parliament on 1 November 2017. These codes will have to be gazetted before they are officially legislated. The current Tiger Brands BBBEE certificate is valid until December 2018.

As the revised codes are still to be legislated, the company was assessed against the old codes and retained its level 3 rating for the year as shown below.

We will begin work to migrate the group’s verification to the new agri-BEE codes in preparation for impending legislation. Our internal assessment indicates that the group will temporarily drop to level 7 (discounted to level 8) given the new minimum requirements for priority elements (ownership, skills development, enterprise and supplier development).

Tiger Brands BBBEE scorecard Available points 2017* 2017 2016 2015 Ownership 20 19,7 17,6 20,3 Management control 10 5,8 5,0 7,6 Employment equity 10 5,8 5,8 5,6 Skills development 20 17,0 15,7 12,9 Preferential procurement 20 16,6 18,7 19,2 Enterprise development 10 2,3 3,4 7,0 Socio-economic development 10 10,0 10,0 10,0 Total 100 77,0 76,1 82,6 Level 3 3 3 * Tiger Brands is measured against agriculture sector codes gazetted on 28 December 2012.

52 Tiger Brands Limited Integrated annual report 2017

be legislated in2018. against thenewagri-BBBEEcodeswhicharelikelyto OurBBBEEstrategyroadmapisbeingreviewed term. competitive supplylandscapeinSouthAfricathelonger business imperativethatwillcontributetoavibrantand these categoriesduringtheyear. W businesses, spendingR4,3billionandR1,9in We black-ownedandsmall remainfocusedonsupporting sourcing strategies. our understand theirscorecardtrajectoriesandinform procurement teamisworkingcloselywithsuppliersto required stepstoimprovetheirscorecardlevels.Our processassuppliersimplementthe to bealonger-term Compliance undertherevisedBBBEEcodesisexpected focused primarilyonemergingfarmers. R30 millionforenterpriseandsupplierdevelopment, andFisheries,wehaveearmarked Agriculture, Forestry of withtheDepartment FY17. Throughourpartnership in of freshproducesourcedfromblackemergingfarmers agriculture sectorremainsakeypriority, withR73million Our ambitiontoplayaleadingroleindevelopingthe updated inlinewiththenewBBBEEcodes. our preferentialprocurementpolicywillbereviewedand ofourexecutionstrategyforFY18, commitments. Aspart policy nowincludespreferentialprocurement safety, healthandenvironmentteams.Ourprocurement are collaborativelyreviewedbytheprocurementand distributed annuallytoourhighest-risksuppliers.Theresults throughaquestionnaire performance and governance In oursupplychain,wemonitorenvironmental,social Preferential procurement Total blackwomen blackownership(usingtheexclusionandmodifiedflow-throughprinciple) Effective Thusani trusts(beneficiariesarechildrenofblackemployees) trust General staff Employees BlackManagersTrusts (BMTIandBMTII) Tiger BrandsFoundation investmentcompany) Brimstone (ablackempowerment BBBEE ownership e regardthisasa extended thistoothercommoditiessuchaswheat. the group inLimpopo(casestudy, page54)andhave producingtomatoesfor example, wementorfarmers exceeding plannedexpenditurefortheperiod.As R15,0 million onenterpriseandsupplierdevelopment, InFY17,wespent overthelongerterm. support focusing ongrowingsmallbusinessesthatwecan We haveprojectsinplaceacrossourvaluechain, Enterprise andsupplierdevelopment build ontheseearlysuccessesto expandtheprogramme. We havealreadymadesignificant progressandwill with Tiger Brands(case study, page54). agreements suppliers backedbythesecurityofofftake are beingcreatedandsustainedbyouremerging from localsmallholderproducers.Asaresult,newjobs chain andincreasethevolumeofproducepurchased We oursupply haveinitiatedaprogramme totransform not previously participated. whohave isopeneduptofarmers sustainable portion our procurementandsupplyvaluechaintoensurea 1% ofproducesourced.We havefocusedonredesigning orjust produce wasprocuredfromsmallholderfarmers, locally. Inthepast,only23000tonsofagricultural – some2milliontonsperannum,with65%bought Tiger Brandsisalargeconsumerofagriculturalproducts needs. sustainable economicvaluewhileaddressingsociety’s create sharedvalueforallstakeholdersbygenerating for ourcommunitiesandtheplanetillustrateshowwe day. How webringthispurposetolifeforouremployees, morelivesevery Our purposeistonourishandnurture Creating sharedvalue Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport 35,3 6,3 2,0 0,1 2,2 5,0 1,0 %

53 NON-FINANCIAL REVIEW Transformation continued

The intensive support programme in Limpopo for tomato farmers is proving successful under the mentorship of Technoserve, supported by our Groceries business. This will provide a platform for Tiger Brands to extend similar programmes to other provinces and crops in future, using a combination of own and external funding.

CASE STUDY Smallholder producer programme

Limpopo (Tiger Brands 2017 investment 25 000 tons, R9,3m; total R14,6m) • Tomatoes – 70 farmers producing 20 000 tons 92 farmers (revenue R23m) • 37 farmers, now stable producers, managed directly by Tiger Brands • Special programme for 30 farmers including training, mentoring and agricultural support in place with Technoserve • On track to increase production by 5 000 tons in 2017 North West • Documentary being produced (2018) to track the progress from land Limpopo preparation to planting, • Sorghum harvesting, pulping and (Potchefstroom) final product on shelf • Maize (Gauteng) North West Gauteng • Beans – 14 farmers; Mpumalanga 600 tons contracted for 2018 (new Free State KwaZulu-Natal farmers introduced through mentorship Northern Cape programme) • Wheat – 600 tons contracted for winter Eastern Cape production with offtake agreements Western Cape Western Cape from Tiger Brands • Butternuts and figs – 4 farmers, 500 tons • Pears, apricots and peaches – 22 farmers, 3 000 tons • Tomatoes – 5 farmers, 660 tons

Background to the programme Technoserve completed an in-depth study of our manufacturing footprint, crop requirements and the availability of emerging farmers who could meet these requirements. Key criteria included quality specifications, farmer ability and economical radius to the factory. Farmers who met these requirements were then formally evaluated.

The programme spans vegetables over three 18-month phases, focusing on Limpopo, Highveld/Gauteng and North West provinces. As a parallel track, grain crops (maize, sorghum and soya) are being explored, but timing will depend on specific requirements.

Through this programme, our vision is to increase smallholder production from 23 000 tons to 35 000 tons by 2021. Revenue paid to these producers is expected to increase from about R23 million in FY18 to R100 million by 2021.

54 Tiger Brands Limited Integrated annual report 2017 • • Looking forward The tomatovaluechainexplained • • • • • 35). Salientfeaturestodateinclude: women, andfiveareclassifiedasyouth(under areequallysplitbetweenmenand farmers focuses ontomatoes.The30participating programme Phase 1ofthesmallholderfarmer Key highlights • • • • • • • with anexpectedyieldof1250 tonsandrevenueofR14million. 2018.Seedshavealreadybeen boughtandarebeingstored.Some500hectaresofbeans willbeplanted in January Beans (MarbleHall/Burgersfort/Veeplaas): inDecemberandseedlingswillbe planted Productionpreparationswillstart agreementswithoursupply chain). offtake season. We anticipateplanting 300hectareswhichwillyield18000tonswithavalueofR30million(dependingon by thethird sothattheyareabletomanagewithreducedtechnicalandinputsupport althoughthiswilltaperoff support, willcontinuetoreceivetechnical increase volumesfromthissourceifgroupqualitystandardsare met.Thefarmers Tomatoes: willcontinuenextseason, anticipatingthatoursupplychainwill TheprojectwiththeNwanedifarmers jobs created. jobsand500seasonal 191 newpermanent R1 millionforthefarmers Selling toothermarketsgeneratedafurther recovered) 86% ofinputloansarecurrentlybeing input costsprefundedbyTiger Brands.Some afterdeducting R3 millionaccruingtofarmers sales revenueofoverR9million,withalmost 5 800tonsdeliveredtoTiger Brands(total 100 hectaresunderproduction,withover enterprise andsupplierdevelopment ofourcommitmentto aspart technical support Tiger BrandsallocatedR9,3milliontofundthis doubled to58tonsperhectare disease control.Asaresult,yieldsalmost irrigation,pestand practices, fertilisation, economics, landpreparationandplanting agronomy practicemodelcoveringbusiness trainedinTechnoserveAll farmers best agreement Offtake Offtake signed 1 Farmer Farmer goods plants 2 harvested Crops 3 Crops delivered to localTiger depot 4 Tiger usestomatoes • • December. Salientfeaturesinclude: in prepare landforbeanproductionwhichwillstart wascompletedinNovembertimeto harvesting crop on73hectares.Productionistrackand encouraged toexperimentwithawinterwheat To engaged,theywere keepthefarmers 2018. programme toJanuary the plantingseasonforbeansandpostponedthis Due tochallengeswithinputfunding,wemissed wastoproducebeanson500hectares. farmers The initialplanwiththeMarbleHall/Burgersfort Winter wheatcluster to producepuree • • Technoserve trainingmodules. Five keymembersineachenterprisecompleted (14 menandfourwomen) Five businesseswithatotalof18members (Musina) 5 transported to transported Boksburg Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport Puree 6 products produce used to Puree Tiger 7

55 NON-FINANCIAL REVIEW Our communities

Our success and our sustainability are directly linked to the well-being of our communities. They are the source of our most valuable asset – our employees – and support our businesses by buying our products.

Highlights

Committed R35 million (up from R23 million in FY16) to socio-economic development (SED) initiatives

First annual Tiger Brands SED partner workshop, hosting all our NGO partners across South Africa

Launch of the Tiger Brands household and community food garden initiative

Challenge

Gaps in the existing SED monitoring and evaluation framework

Key indicators 2017 2016 2015 2014 Rm Rm Rm Rm Total SED spend 35,0 23,0 24,2 24,0 Tiger Brands Foundation spend 23,9* 19,0* 15,3 22,4 Beneficiaries reached 104 215 100 977 118 443 107 000 * For the foundation’s financial year to end-February.

Our approach We honour our responsibility to contribute to the welfare of our communities through our socio-economic development (SED) strategy.

To ensure this strategy is integrated into our business objectives and focused on real – and changing – community needs, we critically reviewed our past approach to corporate social investment (CSI) to determine our future actions, illustrated on the next page. We also incorporated insights from the 2017 stakeholder survey (page 26).

56 Tiger Brands Limited Integrated annual report 2017 development strategy: 2017 and beyond and 2017 strategy: development socio-economic Brands Tiger ig IV King • • • • • • • no poverty, nohunger, good jobs andeconomicgrowth UN SustainableDevelopmentGoals(SDGs)–particularly National DevelopmentPlan(NDP) development BBBEE codesofgoodpracticeforsocio-economic Food donations Distributing foodparcels Over tenyearsofCSI What hasguidedus Where we’vecomefrom development Community enterprise garden initiative community food Household and building capacity Bene ciary volunteering Employee stakeholder and brand CSI Customer programme support nutrition Food and • • • • programme Food andnutritionsupport Sustainable DevelopmentGoals. Africa’s nationaldevelopmentplan(NDP)andUN core SEDprogrammesaddressthekeygoalsofSouth While foodsecurityremainsouroverarchinggoal, Our approachinaction CASE STUDY CASE maintain foodgardensatallcampuses. University. We toestablishand arealsoprovidingsupport UWC, Wits, NelsonMandelaUniversityandNorth-West studentfoodhamperstohundredsofstudentsat fortified Tiger Brandshascommittedtoprovidingnutrient-denseand augment ourfoodparcelswithstudent-ledgardens. of the studentrepresentativecouncil(SRC),whoplanto centre,andwillbedrivenbytheleaders student support The Tiger ofUWC’s part Brandsprogrammeforms new housing ortravellingindailyfromsurroundingcommunities. students maybelivingoncampus,innearbycommunity unsure aboutwheretheirdailymealswillcomefrom.These financial assistance,andanestimated1 500studentsare of Almost 80%ofstudentsatUWCdependonsomeform of the Western partner. Cape(UWC)becameourfourth tostrugglingstudents.InJune2017,theUniversity support institutionstoprovidemuch-needednutritional with tertiary programmein2017,partnering university nutritionsupport a daily challenge.Inresponse,Tiger Brandslaunchedthe For thousandsofstudentsacrossSouthAfrica,mealsare programme support nutrition University • • • • University oftheWestern Cape. Mandela University, Universityand Wits,Northwest includefouruniversities:Nelson partners Supported Braamfontein (Gauteng) (Western Cape),Nwmitwa(Limpopo)and (KwaZulu-Natal), Mohlakeng(Gauteng),CapeTown West),Cape), Potchefstroom(North Claremont West),Cape), Ikageng(North Elizabeth (Eastern Port Plettenberg Bay(Western Cape),Stellenbosch(Western Katlehong (Gauteng),Delmas(Mpumalanga), communitiesincludeSoweto(Gauteng), Supported members arereachedmonthly over30000community Through thesepartners, withfood-focusedNGOsanduniversities partnerships most in-needbeneficiariesacrossSouthAfricathrough We providenutritionallybalancedfoodparcelstothe Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

57 NON-FINANCIAL REVIEW Our communities continued

Customer, stakeholder and brand initiatives

Tiger Brands implements customer and brand-aligned initiatives with a meaningful social impact, including ad hoc stakeholder support during crises:

• Initiatives included support to fire victims in Hout Bay and the Western Cape disasters, as well as support for the patients of Life Esidimeni Hospitals during their relocation • The Department of Agriculture, Forestry and Fisheries (DAFF) remains a supported government entity, as does the Nelson Mandela Children’s Hospital (we contributed R5 million to the hospital’s capital campaign) • The successful roll out of the Spar “Home-cooked Happiness” campaign, through which 1 000 Wonderbags (non-electric portable slow cookers) were distributed to communities and schools across South Africa • Collaborations with Albany and Status reached over 1 000 children through the “Sarmies for Smiles” campaign; and two entrepreneurs were trained and mentored in the Status “Hustle Den” promotion • We continue to support the Shoprite Soup Kitchen initiative across the country.

Beneficiary capacity building

We focus on targeted community-based training in nutrition, food handling, health, food security and sustainability. Key initiatives during the year included:

• In February 2017, we hosted all our NGO partners from across South Africa at the first annual Tiger Brands socio-economic development partner workshop. We shared our strategy for the next few years and, along with experts from different fields, engaged our partners in discussions and workshops on enterprise development, nutrition education, eco-friendly cooking, sustainable food gardening, and NGO sustainability and financial management • We partnered with the Department of Basic Education and the Tiger Brands Foundation to advance nutrition education in selected schools. Through this partnership, nutrition education placemats were rolled out to 25 000 learners in schools across the country. In August 2017, this programme was expanded to include accredited food-handler training for in-school kitchen staff. In partnership with the Tiger Brands Foundation, 36 food handlers, four programme coordinators, three school officials and four district monitors completed accredited training.

Community and household food-garden initiative

Through partnerships with Food and Trees for Africa and Wits Siyakhana initiative, we provide training, support and mentorship to establish sustainable community and household food gardens

• 8 communities across South Africa participating in the Trees for Homes and Food for Homes programme • 4 universities starting campus food gardens linked to their facilities • 174 community members trained in permaculture food gardening • 20 community educators trained about tree planting and climate change • 500 fruit trees and 500 indigenous trees planted in Mohlakeng, with 80 shade and fruit trees planted across the eight community food gardens.

58 Tiger Brands Limited Integrated annual report 2017 • • • • • several milestones: In thereviewperiod,wecommitted1,5%ofnetprofitaftertax,orR35million,tocommunitydevelopment,achieving FY17 snapshot volunteers Employee development enterprise Community • • • • • communities inwhichtheyliveandwork.Inthereviewperiod,these included: We andinthe insocialcausesthatareclosetotheirhearts forourpeopletoparticipate provideopportunities Total Site-specific communitysupport garden initiative household andcommunityfood capacitybuilding, Beneficiary Employee volunteerism Customer, stakeholderand brandCSI programme Food andnutritionsupport 2017 investments • • • • 194 communitymemberstrainedinfoodgardeningandeducation. receivednutritioneducationmaterial 25 000learners throughourCSIandemployeevolunteerismprogrammes Over 10000beneficiariesincrisissupported programme(FY16:41000) 38 000beneficiariesreachedmonthlyviathe Tiger Brandsfoodandnutritionsupport Over 78000high-quality, foodpackagesdistributed(FY16:13200) nutrientdenseandfortified Country-wide MandelaDayinitiatives. Country-wide Clothing andblanketcollectionsforWestern Capedisastervictims Donating toiletriestoLifeEsidimeniforthementalhealthpatientrelocationprogramme Santa’s ShoeboxCampaign Western Cape All provinces All provinces All provinces WestCape, North Cape, KZN,Limpopo,Eastern Gauteng, Mpumalanga,Western Provinces monthly foodparcels. for thefostermothersofchildrenwhorelyonTiger Brands’ Mosaic’ssupporting communitybakery, whichcreatesjobs Mosaic CommunityDevelopmentinIkagengfocuseson inenterprisedevelopmentwiththeNGO Our partnership enterprises forfoodsecurityandagreeneconomy. mentorship toidentifyandestablishviablecommunity and This pillarofourstrategyprovidestraining,support Training andsupplies supplies garden infrastructureand Capacity building,training, Food andsupplies Food andsupplies Food donations Nature ofsupport Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport 25 543 35 514 1 760 1 400 6 726 R000 85

59 NON-FINANCIAL REVIEW Our communities continued

Commitments for FY18 •• Tracking the impact of initiatives by implementing a In the year ahead, we plan to accelerate the move from robust monitoring and evaluation system, supported philanthropy to sustainable community investment. While by appropriate NGO partner training. we will continue to provide food packages, nutrition support is now backed by greater focus on creating Tiger Brands Foundation food-secure communities with better health through: The Tiger Brands Foundation was established in 2010 •• Nutrition education, food-handling training, health to enhance our community impact and assist a broader training and food security range of underprivileged people in South Africa. It is •• Training and mentorship on establishing and managed by an independent board of trustees which maintaining household and community food gardens establishes the criteria and procedures governing •• Training, support and mentorship in identifying and resource allocation. establishing viable community enterprises concentrating on food security and the green economy Through the foundation, we develop partnerships with •• Establishing a Tigers For Good network of champions disadvantaged communities with whom we interact most. across sites and operations

Our operating model

• Central planning • Operational oversight and control TBF national office • Real-time monitoring and evaluation • Leverages mobile technologies

Food manufacturing Warehousing Logistics Serving Trained and coached food Leveraging strategic Leveraging existing Risk managed enterprise handlers and monitors food manufacturing national warehousing and SME development placed in schools to ensure partners’ existing capacity structures for cost effective model utilised to feeding occurs as defined in to gain benefits of storage of products, prior further enhance local the foundation’s standards, economies of scale to delivery at schools benefits processes and procedures

The foundation implemented the first in-school breakfast The programme is funded by a “trickle dividend” equal feeding programme in 2011 in partnership with the to 30% of dividends received from the foundation’s Department of Basic Education’s national school nutrition 5% shareholding in Tiger Brands. programme (NSNP). From six primary schools in Alexandra, this has expanded to over 90 schools in all Practically, the foundation will build the capabilities to provinces, providing the essential breakfast meal to over support its objectives. These include effective monitoring 63 600 learners. To date, over 51 million breakfasts and evaluation (primarily by formally assessing social have been served to our country’s most vulnerable return on investment, and disclosing results in FY18), learners. developing packaged and replicable solutions, and enhancing the capacity of key staff.

60 Tiger Brands Limited Integrated annual report 2017 • • • and aimsto: oftheprovincialeducation department, with thesupport Basic Education.ItwaspilotedintheFreeStateprovince of Authority (SAQA)andwelcomedbytheDepartment programme accreditedbytheSouthAfricanQualifications The foundationintroducedafood-handlersskillstraining Enhancing capacity * Approximately2011–2017 WE’VE COMEALONGWAY SINCE2011 Flagship: Breakfastprogramme • • • • • • • • • withmultiplestakeholders: The foundationpartners programme todate and hygienestandards. food-preparationsafety programme toensureuniform Incorporate componentsofthenationalschoolsnutrition completing thenutritionprogramme forentrepreneurship after employability oropportunities volunteer foodhandlersskillsthatwillenhancetheir Extend thescopeofSAQA-accreditedtrainingtogive about foodpreparation,safetyandhygiene Empower foodhandlerswithappropriateknowledge Tiger Brandsgroup,publicandshareholders. school-nutrition programmes Funders/donors investinginfood-securityand partners) Community-based agencies(fooddelivery schools,parentsandcommunityleaders Beneficiary Development inAfrica) University ofJohannesburg–CentreforSocial Academic andresearchinstitutions(suchas provincial andlocallevel ofBasicEducationatnational, The Department R145m spent onthe every schoolmorning every nutritious breakfast * learners receivea learners 63 699 no-fee schoolsacross all nineprovinces included inthe programme 91 breakfasts served breakfasts served warm nutritious warm since 2011 45,2m running atprovincial project coordinators oversee smooth level 9 • • • • Commitments forFY18 foundation. of BasicEducation,theyarepaidastipendbythe Although foodhandlersareemployedbytheDepartment jobs sustainedforthe • • • • community asfood partnership withacorporatefunder.partnership inFY18.Twodepartment) ofthese willbebuiltin school kitchens(forschoolsidentifiedbythe The foundationwillalsodonateatleastfourmore Provide astipendofR550permonthforfoodhandlers the NSNP office district willreceiveR80000towardsequipmentfor programme foraminimumofthreeyears.Thebest adoption ontoourin-schoolbreakfastfeeding this means R450000towardsaschoolkitchenand for bestschoolanddistrict.Fortheschool, ofBasicEducation’sDepartment annualNSNPawards We willcontinuetosponsorthefirstprizein more schoolsinSouthAfrica model forin-schoolnutrition,wewillexpandthisto Given positiveresultsfromourpublic-privatepartnership handlers, monitors and provincial coordinators 360+ kitchens constructed/ by February 2018) by February (five tobebuilt upgraded 33 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

61 NON-FINANCIAL REVIEW Our customers and consumers

Given that satisfied customers and consumers ensure our sustained and profitable growth, we take our engagement with both groups of stakeholders seriously. In particular, consumers shape our business strategy and underpin our brand innovation and marketing strategy.

Highlights

Maintained strength of core brands Consumer complaints declined by 10% ALL CONSUMERS IN On-shelf availability increased from 96% to 97% SOUTH AFRICA USE OUR Challenges PRODUCTS DAILY AND

No evidence of a recovery in consumer spending OUR PRODUCTS ARE SOLD IN Competition for market share to intensify 25 COUNTRIES ACROSS AFRICA, AS WELL AS ASIA Our approach Our customers are the retailers and wholesalers we AND EUROPE THROUGH OUR distribute to in South Africa. We segment our major customers by: DECIDUOUS FRUIT BUSINESS •• Channel (modern trade, general trade and pharmacy) •• Chain (major retailers, cash-and-carry shops) •• Format (including hypermarkets, supermarkets and CONSUMERS SPEND 10% OF spazas – informal stores mostly in townships). THEIR ANNUAL TOTAL ON To sustain strong relationships and a growth mindset, TIGER PRODUCTS dedicated customer executives and shopper managers work in functional teams to serve each customer and their Source: Nielsen, company data. shoppers directly.

Our consumer-focused approach adds value to our In our international strategy, we aim to nurture and grow company by offering a positive consumer experience that the businesses we currently own in the rest of Africa, and builds brand loyalty, the key to our continued success. strengthen our exports from South Africa by evolving the distributor model, determining optimal coverage and Consumer strategy improving in-market visibility. Our marketing strategy is driven by our focus on consumers – and how to satisfy their needs better in our Customer strategy specific areas of the FMCG market. Key features include: Our operating landscape is undergoing significant and •• Maintaining the number 1 or 2 position in our ongoing changes that affect the way consumers are categories by investing to support our power brands shopping and, therefore, the way we go to market and •• Investing in marketing support and innovation to drive meet in-store execution demands. Key elements of the our organic and new business growth plans retail landscape include: •• •• Continually evaluating new or adjacent category A crowded trading arena •• opportunities, either through acquisition or innovation Shifting route to market, including the growth of – particularly where we are able to drive expansion independent channels, while hybrid stores blur the based on our leading brands lines between retail and cash-and-carry formats •• •• Keeping abreast of key consumer trends and adapting Continued rise of private label •• our marketing strategies to better satisfy their needs Resilient independent trade •• •• Continually striving to encourage healthier eating by The increasing role of data and technology •• our consumers Retailers seeking margin and growth opportunities •• •• In prevailing economic conditions, providing greater Targeted collaboration/joint business planning •• value for money through a portfolio strategy based on Modern trade expanding into the rest of Africa. affordability.

62 Tiger Brands Limited Integrated annual report 2017 email, Facebook andWhatsApp. contact centre,assistingconsumers viatelephone,SMS, employees, thecallcentrehasnow transitionedintoa byTiger Brands enquiries andcomplaints.Staffed interaction, includingcompliments, suggestions,product divisionmanages allconsumer Our consumerservices is tracked throughtheindependentadvantagesurvey. requested bytradecustomers.Ourongoingprogress standardandas regular callcyclesaspertheindustry promotional activities.Theseengagementstakeplaceon as wellpricingand tradingterms, chain efficiencies, We strategy, talktoourcustomersabout category value our otheroperatingcountriesusinganumberofchannels. Tiger Brandsengages with customersinSouthAfricaand Customer andconsumerengagement 2017 overview in FY16 onabasketofstrategicproducts. exceeded the50basispointimprovementtargetset We continuetofocusonin-storeexecutionandhave withinthisrange. with customersandconsistentlyperform activity. We leveltargets, whichareagreed setservice including on-shelfavailability, promotionalandpricing levels, customer growth,marketshareandservice istrackedagainstthreekeymetrics: Our performance and insightgeneration capitalise onshoppermarketingdata talent tomeetretailerneedsand Building capabilitybyattractingtop TO WORK GREAT PLACE customers andmarketshare measured bytop-linegrowthwith and through tailor-madeofferings channels, customersandformats Continued focusongrowing CUSTOMERS GROWING WITH five priorities: Given thesefactorsandbuildingonourprogress todate,ourstrategyisbasedon • Continuetofocusongrowingchannels,chainsandoutlets Underpinned bykeyenablers: • Jointbusinessplanningandcollaboration as stokvel drives retailers withspecificactivationsuch marketing activityforgeneraltrade continues togrowinAfrica trade General traderemainsacriticalsuccessfactorandmodern management andtradechanneldevelopment Continue toleverageTiger Brands’basketthroughstrongerdistributor PENETRATION INAFRICA TRADE AND REACHINGENERAL GROWING DISTRIBUTION Delivering relevantcustomer Protection Act and Protection of Personal Information Act. Protection Actandof PersonalInformation ombudsman, Consumer consumer goodsandservices consumer insights.Ourprocesses arealignedtothe recalls, whennecessary. We arealsoabletoassistwith with consumersandcustomersas wellasfacilitateproduct operating procedure,whichincludesprocessestoengage standard byaninternal The contactcentreisgoverned also availableforconsumers. vouchers issuedviaSMS.Anadditionalclaimsprocessis defective product(s)–thisismanagedcasebywith Consumers arealsocompensatedforthevalueoftheir independent analysis,whennecessary. company feedbackisgivenafteraninvestigationand management teams.Forallconsumercomplaints, channelled totheappropriatequalityandsenior These interactionsareclassified,prioritisedand allows ustocaptureandstoreallconsumerengagement. Our customerrelationshipmanagement(CRM)system decrease, yearonyear. calls, whileconsumercomplaintsshoweda10% time of25secondsandmanaged73056consumer In FY17,thecontactcentrehadanaveragecallanswer • Optimiseretailerdataminingandinsightgeneration Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport purchase exposure atpointof andbrand effectiveness availability, promotional to improveon-shelf Actively engagingretailers Growing in-store

63 NON-FINANCIAL REVIEW Our customers and consumers continued

Consumer insights guideline daily amount (GDA) table on all Tiger Brands’ We value consumer insights and invest in ongoing products. The GDA notes the five nutrients that have an research surveys such as the brand health tracker and impact on non-communicable and lifestyle diseases, such Nielsen market share research: as heart disease, type 2 diabetes, obesity and some •• Brand health gauges the degree of brand recognition, cancers. The GDA table allows the consumer to balance consumers’ likelihood of choosing our products and high-risk nutrients for the day, and make better food how well we satisfy the needs of the market. We track choices. The Eat Well, Live Well system has its own icon brands across 21 categories and, in most of these, the – only featured on products that constitute better food health of our brand is far above our nearest competitor choices for overall health – and website, where •• Nielsen research tracks product market share by value consumers can learn about incorporating healthy eating and volume, distribution, pricing and product movement into their lifestyle (www.ewlw.co.za). Consumers also (see page 2). have access to our nutritionist for further information or assistance. We use these insights to improve category understanding, pinpoint consumer needs, develop productive market Eat Well, Live Well is also active on social media such as segmentation models and identify potential market Facebook, where consumers can interact with others on opportunities. They are vital in enabling us to the site and with the nutritionist. To date, we have over continually refresh our brands, position our pricing, 118 000 followers. We continue to evaluate and innovate and develop our marketing strategies. In 2017, develop products to meet the “better for you” option, key trends from our research included the role of foreign in line with the Eat Well, Live Well programme. traders in the independent trade, the importance of growing in-store, the need for strong category In 2017, we launched the Be Nutrient Wise system on management tools and the ability to track promotional the front of each pack. The Be Nutrient Wise logo alerts investments. These trends have been incorporated into consumers to be mindful of guideline daily amounts our customer strategy, on page 62. (available in the GDA table) and thus monitor nutrients in their diet that increase the risk of a lifestyle or non- Consumer nutrition and food safety communicable disease. As a leading manufacturer, we are aware of the significant impact Tiger Brands has on the nutrition and Fortification: In line with South African regulations, we thus health of its consumers. We monitor advances in fortify staple foods such as wheat flour (for bread) and nutrition and broader health issues, including World maize meal with key vitamins and minerals. These include Health Organisation (WHO) and South African vitamins A, B1, B2, B3, B6, B9 (folic acid), iron and Department of Health public health concerns. zinc. Under pending changes to these regulations, cake flour will also need to be fortified for the benefit of With malnutrition affecting a significant proportion of consumers. Our Golden Cloud product range has already the populations we serve, we understand the important been reformulated. responsibility that comes with manufacturing staple foods like bread and maize meal, particularly to people in In addition, we voluntarily enrich other products including lower-income categories. breakfast cereals such as Morvite, certain Jungle cereals and Ace Instant with micronutrients. Products are Guideline daily amounts and Eat Well, Live Well: We specifically developed to target certain requirements, for are dedicated to helping consumers make better food example Jungle Energy bars are enriched with B vitamins choices so that healthy living becomes easier. In 2009, that assist in releasing energy, while Morvite has been we were the first South African company to voluntarily specifically developed with micronutrients to assist the initiate the Eat Well, Live Well system that includes the immune system.

64 Tiger Brands Limited Integrated annual report 2017 Disinfectants Actandotherlawsthatensureconsumer Cosmetics and Consumer ProtectionAct,Foodstuffs, consumer legislationandcodes.We comply withthe Tiger Brandsensuresa highstandardofcomplianceto participation complianceandindustry Consumer regulatory April 2018. the implementationdatehasmovedfromApril2017to outcomes ofthisprocessbutnotetreasury’s indicationthat specifically joblossesandlabourimpact. We awaitthe toagainreviewrelatedissues, in a requestfortreasury product. Thelatestdeliberationsinparliamentresulted promotion levy”,basedontheamountofsugarin remains totaxsugar-sweetenedbeveragesasa“health to changes inthetaxmodelandrateoftax,intention hearingshaveled While commentsandparliamentary continue. should ofHealthandindustry between theDepartment toaddressobesity and existingcollaborativeefforts in reducingobesity. Assuch,thetaxshouldbewithdrawn socio-economic repercussionswithoutasubstantialeffect body,our industry thatataxwouldhavefar-reaching National Treasury. Tiger BrandsconcurswithBevSA, Comments onthepolicypaperweresubmittedto bodies, BevSAandtheConsumerGoodsCouncil. Brands. We havealsointeractedthroughourindustry parliament’s standingcommitteeonfinanceby Tiger comprehensive writtensubmissionsandpresentationsto been manyinteractionswithNationalTreasury, including a tax onsugar-sweetenedbeverages.Therehavesince 2016, theSouthAfricanministeroffinanceannounced Taxation ofsugar-sweetenedbeverages:InFebruary deadline. work towardsevenlowersodiumlevelsforthe2019 improve thehealthofSouthAfricans,andwillcontinueto to regulations. We ofgovernment theefforts support and stockconcentrates,tocomplywithSouthAfrican snacks,instantnoodles cereals, processedmeats,savoury foodcategories:bread,breakfast in 2016 inaffected Sodium/salt reduction:Tiger Brandsreducedsaltlevels the board of this industry body.the boardofthisindustry isactiveon South Africaandourchiefmarketingofficer Tiger BrandsisamemberoftheMarketingAssociation and labellingofpersonalcareproducts. (CTFA) codeonthecomposition compendium,anindustry to the Cosmetics,Toiletries andFragrances Association toconsumers.Weresponsible advertising alsoadhere StandardsAuthoritycodeon adhere totheAdvertising code,enforcedbythatombud,and industry services In addition,wesubscribetotheconsumergoodsand complaints. managingconsumer also beentrainedoneffectively unit,whichaddressesconsumercomplaints,have services attheconsumer business toensurecompliance.Ourstaff the requiredchangesandconductedtrainingacrossour oftheConsumerProtectionAct,wehavemade In terms conditions andpromotionalcompetitions. safety, and policies,marketing,standardterms returns product labelling,pricingpolicies,liabilityand protection. Areasofcompliancerefertoaspects quickly by creating a forward-looking innovationportfolio. quickly bycreatingaforward-looking a renewedfocusonR&D,wewillbeabletorespond our consumers,betterengagementwithcustomersand integrated supplychain.Withadeeperunderstandingof become easierthroughaunifiedsalesteamandan capabilities whileengagementwithTiger Brandswill reignite innovationbyintroducingconcentrated The newoperatingmodelwillrefocusontheconsumer, model. processes andsystemsaswellanintegratedoperating is underway. byenhanced Theseskillswillbesupported our brandsanddigitalmarketing.Therecruitmentprocess ofunderstandingthepriceelasticity identified interms the case ofconsumers,specificcapabilitygapswere aneedforupskilling,andin The processdetermined capabilities toenableourstrategyandgrowthambitions. the strategic reviewprocess,weidentifiedtherequired of In designingtheoptimaloperatingmodelaspart Looking ahead Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

65 NON-FINANCIAL REVIEW Environment

Our environmental policy commits to identifying environmental and climate change risks, taking action to address weaknesses, forging strong relationships with relevant stakeholders, developing and implementing a sustainability strategy, striving for continuous improvement, and reporting to the board through relevant committees.

Highlight

ISO 14001 certifications retained

Challenges

Significant capital expenditure to improve efficiency and flexibility of manufacturing architecture

Water scarcity and drought have a direct impact on the agriculture industry on which our business depends and on our manufacturing processes

Environmental sustainability focus areas Manufacturing Packaging and finished Supply Environmental operations goods chain sustainability culture Reduce the impact of Reduce the environmental Collaborate with our Continually engage our our manufacturing impact of our products and logistics and manufacturing employees, consumers and operations by improving packaging through design, vendors to assist in communities to promote a energy efficiency and sustainable sourcing and reducing the environmental culture of environmental water conservation, responsible disposal initiatives impact of our supply chain sustainability reducing GHG emissions, and minimising waste

Since FY12, we have exceeded most of our key targets of a 5% reduction per annum. •• Excellent reduction in energy performance and waste •• Water intensity has been kept largely flat – this is an area of focus going forward •• The CO2 emissions reflect an increased scope measurement over this period •• We have sustained our performance in the last two years

Performance – steady progress over the last five years (FY12 to FY17) Metric FY12 FY17 Change Energy (kWh)/ton) 0,43 0,128 70% ê Packaging (ton/ton) 0,94 0,31 67% ê Waste (ton/ton) 0,04 0,005 88% ê Water (kℓ/ton) 1,88 2,12 (13%) é é Carbon emission (CO2 emission/ton) 0,1571 0,2363 (50%)

66 Tiger Brands Limited Integrated annual report 2017 emissions. focusedonwaterconsumptionandcarbon New targetshavebeensetinlinewithourstrategy(page18),particularly Looking aheadFY17toFY22(baseline(FY16) Disclosure programme, a result of B- performance wasachieved. Disclosure programme,aresultofB-performance in2017giventhestringentscoringnewlyintroducedforclimatechange responses.FortheWatera C-performance CDP strengthened their scoring criteria this year which has an impact on comparabilityover time. Tiger Brands maintained intheresponse. issues, managementmethodsandprogresstowardsactiontakenonclimatechangeasreported The scoreassessesthelevelofdetailandcomprehensivenesscontent,aswellawarenessclimatechange bytheCDPresponse. CDP providesasinglescorethatassessesprogresstowardsenvironmentalstewardshipasreported intheCDPprogrammeforClimateChangeDisclosureandWaterTiger Brandsparticipates Disclosureprogrammes. Energy access policiesanddocuments. site’s inductionprogramme,highlightingrequirementsandresponsibilities,ensuring employeesknowhowto After changestothepolicyandprocedures,relatedtrainingtakes place sitebysite.Training ofeach isalsopart • • • • • Reporting • • Our environmentalcontrolsystemcovers: stakeholders. wewillgenerateeconomicbenefits for By improving ourenvironmentalandsocialsustainabilityperformance, environment. theframeworkforaddressingidentifiedprioritiesinourcurrent organisationalandexternal forms in keyareas,shownbelow,Our environmentalstrategyisfocusedonimprovingperformance and for all relevantemployees. torelevantstakeholderforums.Ourmanufacturinganddistribution operationsconductpolicytraining internally indicators.ThepolicyisavailableontheTiger Brands intranet andwebsite,communicated performance We alsocommittosettargets,andmonitor, onourenvironmentalscorecardagainstkey measureandreport strategy andmanagingtheenvironmentalsystemrestswithgroup manufacturingexcellencedepartment. and environmentalissuesoverseestheimplementationrevision oftheenvironmentalpolicy. Executingthe At boardlevel,theriskandsustainabilitycommitteeprovidesstrategic guidanceandleadershiponclimatechange Environmental governance efficiency by15% efficiency Improve energy Monitoring and performance measurementofsystems. Monitoring andperformance Continuous improvement Waste, water, energy, pollution,recycling,climatechangemanagement Environmental legalcompliance Responsibilities andaccountabilitiesforenvironmentalmanagement Policies andprocedures Waste disposal by12% Reduce wastefor Water 15% product producedby discharges pertonof consumption and Reduce water Packaging use by9% Reduce packaging Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport Carbon emission possible as farpractically emissions andGHG Eliminate carbon

67 NON-FINANCIAL REVIEW Environment continued

Our initiatives that drive strategic outcomes Priorities Strategic outcomes Initiatives Resource RECP programmes implemented through •• RECP and selective Energy Systems Optimisation efficiency the National Cleaner Production Centre (ESO) assessments have been completed at our and cleaner (NCPC) – CSIR and Tiger Brands manufacturing facilities production partnership. RECP accelerates •• These sites received a detailed technical report (RECP) application of preventative environmental with process gaps. Recommendations are being strategies to processes, products and implemented services, leading to increased operational efficiency and performance excellence Reducing Implementing energy management system •• UNIDO and CSIR energy experts conducted EnMS carbon (EnMS) in line with ISO 50001. We audits at pilot sites emissions have prioritised our top seven heavy •• EnMS will be implemented progressively across all energy-user sites our sites ISO 14001 ISO 140001 standard assists Tiger •• All South African manufacturing sites certification Brands in protecting the environment and are ISO 140001 certified responding changing environmental •• Surveillance audits conducted annually conditions •• ISO 14001 certification will be rolled out to distribution centres and offices Lifecycle The LCA is a technique to assess •• LCAs have been completed for major products such assessments environmental impacts associated with all as KOO baked beans, Albany bread and Beacon (LCAs) – cradle stages of a product's life from cradle to chocolate to grave grave (from raw material extraction •• Corrective actions are being implemented across through materials processing, the supply chain manufacture, distribution, use, repair and maintenance, disposal or recycling) Promote We plan to reduce our waste impact •• Site waste segregation intensified, realising better resource through the following initiatives: recycling opportunities and waste •• Reduce solid, hazardous and •• Designing consumer-preferred, resource-efficient management electronic waste packaging and sustainably sourced raw material •• Reduce amount of non-recyclable for our products packaging on site •• Using materials that can be recycled, used as •• Decrease total volume of waste waste-to-energy, or for composting removed from site •• Delivering more value with less virgin material in •• Achieve a closed on-site compost loop the packaging from our organic waste to reduce •• Reducing volatile organic compounds in packaging spending on fertilizers for maintaining with R&D vegetable gardens (head office) and other gardening activities Logistics impact We intend to reduce carbon emissions We have reduced logistics-related carbon emissions from transporting raw and packaging over 20% in the last two years by: materials and distributing finished goods •• Continually consolidating our fragmented distribution network •• Increased transport back-hauling: raw and packaging materials on one trip, and finished goods on the return trip •• Increased direct loads from 55% to 75% Procurement In addition to driving ethical and We monitor our suppliers’ plans using a balanced management sustainable sourcing, we have engaged scorecard: our suppliers on their environmental •• All suppliers we have engaged with have sustainability plans environmental sustainability plans •• Most of our suppliers have reduced their carbon emissions •• We share best practices

68 Tiger Brands Limited Integrated annual report 2017 reports againstsubmittedplans. reports will alsorequireTiger Brands tosubmitannualprogress submission totheminister. Theselegislativeamendments three-month windowbetweenpromulgationand are proactivelydevelopingdraftplansgiventheproposed While theseregulationshavenotyetbeenlegislated,we • • • legislative changesinSouthAfrica: In thereviewperiod,webeganpreparingforexpected Legislative developments • • • consumption Curb energy stewardship Drive water Priorities plans or being part ofasubmission plans orbeingpart wastemanagement industry orvoluntary mandatory requestfor ofEnvironmentalAffairs: Department prevention planforapprovalbytheminister companies willneedtosubmitafive-yearpollution notificationthat ofEnvironmentalAffairs: Department five-year companyenergy-reductionplans ofMineralsandEnergy:submission Department facilities sourcesofenergyforour alternative energy consumptionandinvestigate Our aimistoreducetheintensityof wateruser efficient Stewardship goesbeyondbeingan sustainably asashared,publicresource. action toensurewaterismanaged istaking and pollution.Equallyimportant understand therisksofwaterscarcity As abusiness,itiscrucialto Strategic outcomes their operationsandreduceGHGemissions. of encouraging supplierstoimprovethefuelefficiency In additiontoaddressingourownemissions,weare • • considering: To ensureweareadequately prepared,weare how toreduceourcarbonemissions. solutionson to establishholistic,practicalandaffordable We parties continuetoengageextensivelywithexternal Carbon tax • • the carbontaxandseektopassonthesecosts. on suppliersthat may bedirectly liable topay The effect proposed tax-freethresholds The extentofourpotentialliability, takingintoaccount • • • • • • • • • • • • Initiatives • • • • • • • • • • • • for manufacturingfacilities–solarandbiomass sourcesofenergy foralternative Studies undertaken users –boilers,compressors,equipment Optimising energysystemsforsignificant motors, fansandcompressors Ongoing installationofvariable-speeddrivesfor intensive lightswithLEDbulbs replacement method,iereplacingoldenergy- Retrofitting energy-savingLEDlightsusingthe boilers Refurbished andupgradedmostofthegroup’s practices enabling toolstoadvanceourwater-stewardship strategic frameworks,good-practiceguidanceand Member oftheCEOWater Mandateforaccessto frombestpractices and tolearn againstglobalpeers benchmark ourperformance programme. Thisglobalstandardallowsusto intheCDPwaterdisclosure Participating for sites inareaswithahighwatertable Borehole waterapplicationsarebeingexplored of municipal waterusedeachyear Water-saving schemeshavereducedthevolume where viable while water-storagefacilitieshavebeeninstalled Using recycledandgreywateratsomefacilities reuse Treating forappropriate wastewaterandeffluent including suppliersandproductuse waste-water discharge)throughoutourvaluechain, Measuring ourwaterfootprint(ieuseand Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

69 NON-FINANCIAL REVIEW Corporate governance

Sound corporate governance is an integral part of the group’s success in achieving its strategic objective to create sustainable value, as per the strategy on page 18.

OUR BOARD SETS THE ETHICAL LEADERSHIP TONE WHICH IS EMBODIED IN TIGER BRANDS’ VALUES. THESE IN TURN DIRECT OUR DAILY ACTIVITIES. During the year, the board was guided by the principles in the King IV Code on Corporate Governance, JSE Listings Requirements, Companies Act 2008 and other relevant laws and regulations.

OUR GOVERNANCE STRUCTURES, POLICIES AND STANDARD OPERATING PROCEDURES WERE REVIEWED AND ALIGNED TO KING IV PRINCIPLES TO SUPPORT OUR NEW OPERATING MODEL AND STRATEGY. THE BOARD OF DIRECTORS The Tiger Brands board comprises directors who Met six times in 2017 bring a diverse range of industry knowledge and experience to the board and exercise their judgement freely and independently. The board sets strategic objectives, monitors and reviews management’s performance, and embeds a culture of ethical leadership in the group.

The board has delegated certain functions to committees to assist in meeting its oversight responsibilities in line with the board charter. Every committee has terms of reference and a work plan that are reviewed annually, and the directors confirm that all committees functioned in line with these terms of reference during the year. Committee members have the required skills to execute each mandate and all board committees are chaired by independent non-executive directors.

70 Tiger Brands Limited Integrated annual report 2017 PW Spies AG Kirk CFH Vaux NP Doyle Invitees BS Tshabalala (appointed19September2017) 2017) KDK Mokhele(resigned21February (resigned 19September2017) 2017) MJ Bowman(appointed21February RD Nisbet MO Ajukwu 2017) 21 February (appointedaschairman YGH Suleman(chairman) Members Met threetimesin2017 COMMITTEE RISK ANDSUSTAINABILITY CFH Vaux NP Doyle LC MacDougall Invitees 2017) EM Mashilwane(appointed21February 2017) KDK Mokhele(resigned21February YGH Suleman RD Nisbet(chairman) Members Met threetimesin2017 COMMITTEE AUDIT » » The committeechairman’s issetoutonpage82. report • • • • • • • • • other things: The auditcommitteehas,ontheboard’s behalf,among The risk management report issetouton page14. The riskmanagementreport • • • • behalf: The riskandsustainabilitycommitteehas,ontheboard’s • • • • • • • • • • • • • of theCompaniesAct. dutiesas setoutinsection97(4) itsstatutory Performed Monitored elementsofthecombinedassuranceplan policy Monitored allmattersrelatingtothefinancialassistance and recommendedtheinterimfinaldividend Monitored thesolvencyandliquidityofcompany functions reporting treasury oftheaudit,finance,taxand Monitored performance andfeesforbothsetsofservices services auditors,thequantumofnon-audit Proposed theexternal audit function’s andeffectiveness support empowerment, financialcontrolsandtheinternal Reviewed internal information Reviewed theprovisionalresultsandfinancial statements andannualfinancial Reviewed theintegratedreport and internal auditreport. and internal Monitored elementsofthecombinedassuranceplan totheauditcommittee andreported IT governance, ofriskandcompliance Monitored thegovernance managed up andtop-downprocesscontinuetobeeffectively have beenidentifiedthroughacomprehensivebottom- risk managementframeworkandensuredthatallrisks Monitored materialgrouprisksthroughtheenterprise approved theITstrategy and technology(IT)governance Monitored information Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

71 GOVERNANCE REVIEW Corporate governance continued

INVESTMENT COMMITTEE The investment committee has, on the board’s behalf: Met four times in 2017 •• Assessed investment opportunities as set out in the group’s strategic objectives Members •• Recommended acquisition, investment and divestment KDK Mokhele (chairman) (appointed opportunities 21 February 2017) •• Monitored post-investment reviews of historical strategic RD Nisbet » investments. YGH Suleman MJ Bowman (appointed 21 February 2017) In 2017, this committee was aligned to the strategy and AC Parker (resigned 21 February 2017) value-creation intent of the board and recommended: •• The disposal of the company’s interests in Kenya Invitees and Ethiopia LC Mac Dougall •• Approved further investment in Deli Foods. NP Doyle CFH Vaux

REMUNERATION COMMITTEE The remuneration committee is responsible for assisting the Met four times in 2017 board to ensure the group’s reward and remuneration policies are aligned to its objective of value creation and Members benchmarked to ensure fairness and competitiveness. SL Botha (chairman) (stepped down as chairman 19 September 2017) The committee has, on the board’s behalf: •• MJ Bowman (appointed chairman Approved remuneration strategies and policies designed 19 September 2017) to attract, motivate and retain employees, senior M Makanjee (appointed 21 February 2017) » management and directors in achieving the group KDK Mokhele (appointed 21 February 2017) strategy to create value •• MP Nyama Recommended the remuneration policy and AC Parker (resigned 21 February 2017) implementation reports to shareholders •• YGH Suleman (resigned 21 February 2017) Recommended non-executive directors’ fees for approval by shareholders. Invitees LC Mac Dougall Refer to the report by the chairman of the remuneration CFH Vaux committee on page 88. TE Kodisang

72 Tiger Brands Limited Integrated annual report 2017 See pages79and80 COMMITTEE EXECUTIVE PD Sithole T Naidoo MJ Morifi TE Kodisang Invitees LC MacDougall BL Sibiya(resigned30June2017) MP Nyama 2017) KDK Mokhele(appointed21February M Makanjee(chairman) Members Met threetimesin2017 AND TRANSFORMATION COMMITTEE SOCIAL, ETHICS TE Kodisang LC MacDougall Invitees 2017) AC Parker(resigned21February MP Nyama M Makanjee MJ Bowman(appointed19September2017) SL Botha 2017) (appointed 21February KDK Mokhele(chairman) Members Met threetimesin2017 COMMITTEE NOMINATIONS » » » • • • • • • • • The nominationscommitteehas,ontheboard’s behalf: discussions onhisownremuneration. in attends meetingsbyinvitation.He doesnotparticipate of theremuneration,auditornominations committees,but ofthegroup.TheCEOisnotamember day-to-day affairs comprises 11memberswhoassist himinmanagingthe Brands. Hechairsthegroupexecutivecommitteewhich approved strategicdirectionandobjectivesofTiger He isresponsibleforoverseeingexecutionoftheboard- to the board. The CEO,LawrenceMacDougall,reports Group chiefexecutiveofficer The committee’s isonpage85. report • • • • • • • the board’s behalf: committeehas,on The social,ethicsandtransformation • • • • • • • • • • • • • • • in deliveringthegroupstrategy. Monitored executionofthetalentmanagementpipeline for alldirectors directors andongoingboarddevelopmentprogramme inductionprogrammefornew Monitored aformal executive management place forappointingnewdirectors,CEO,CFOand processesarein Ensured asuccessionplanandformal review performance satisfactory Proposed there-electionofretiringdirectorsaftera CEO ofthe Completed theevaluationofperformance retiring directors forlongerthannineyears,andevaluated those serving evaluated theindependenceofalldirectorsincluding Completed anevaluationoftheboardchairman, Monitored executionofthediversitypolicy their mandates toexecute appropriately structured,skilledandstaffed Ensured theboardanditscommitteeswere and complianceframework. Monitored adherencebythegrouptogovernance with groupstrategy Monitored engagementwithkeystakeholdersinline compliance toconsumerprotectionlaws Monitored consumerexperienceswithproductand development ofemployeesandrelevantstakeholders ofsocialandeconomic Monitored theperformance andsustainability Reviewed policiesfortransformation citizen Ensured thatthegroupremainedagoodcorporate culture ofethicalleadershipinthegroup Monitored developmentofthecodeethicsanda Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

73 GOVERNANCE REVIEW Corporate governance continued

BOARD PROFILE

Khotso Michael Santie Mark Maya Rob Makhup Yunus Emma Swazi Mokhele Ajukwu Botha Bowman Makanjee Nisbet Nyama Suleman Mashilwane Tshabalala

External African Oxygen, Intafact Beverages Telkom, Liberty Dis-Chem, Distell, Mpact, AIG South Xon Holdings, Liberty Holdings and Nkonki SAA, Standard Bank directorships Mapitso Consortium, (subsidiary of Holdings, Famous Mr Price Group Africa and AIG Life BDO Inc, Makhup Group, Albaraka Incorporated, Group, Kupanua Hans Merensky SABMiller in Brands (chair), South Africa, trustee Properties, Kapela Bank, Gold Fields, Murray & Roberts Investments and Holdings, Kenosi Nigeria), Novotel: Curro Holdings of Nelson Mandela Holdings Enctus South Africa Barbican Advisory Investment Holdings. Port Harcourt, (chair), chancellor Foundation (chair), Sulfam Group Special adviser to Nigeria (member of of Nelson Mandela Holdings (chair) minister of science Accor Hotels group) Metropolitan and technology, University chancellor of University of the Free State EXPERIENCE ✓ ✓ ✓ Auditing and ✓ accounting Business ✓ ✓ ✓ intelligence Corporate ✓ ✓ ✓ ✓ ✓ finance Finance ✓ ✓ ✓ FMCG ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ General ✓ management Governance ✓ ✓ ✓ ✓ ✓ Human ✓ ✓ ✓ resources ICT ✓ Marketing ✓ ✓ Mergers and ✓ ✓ acquisitions Regional West Africa Africa Africa Africa telecoms Remuneration ✓ ✓ Risk ✓ ✓ ✓ ✓ ✓ Sales ✓ ✓ Stakeholder ✓ ✓ relations Strategy ✓ ✓ ✓ ✓ ✓

74 Tiger Brands Limited Integrated annual report 2017 Strategy relations Stakeholder directorships External Sales Risk Remuneration Regional acquisitions Mergers and Marketing ICT resources Human Governance management General FMCG Finance finance Corporate intelligence Business accounting Auditing and EXPERIENCE Mapitso Consortium, Mapitso Consortium, University oftheFree Investment Holdings. minister ofscience Special adviserto Holdings, Kenosi African Oxygen, and technology, Hans Merensky chancellor of Mokhele Khotso State ✓ ✓ ✓ ✓ ✓ Accor Hotelsgroup) Nigeria (memberof Nigeria), Novotel: Intafact Beverages Port Harcourt, Harcourt, Port (subsidiary of (subsidiary SABMiller in West Africa Ajukwu Michael ✓ ✓ ✓ ✓ of NelsonMandela Holdings, Famous (chair), chancellor Curro Holdings Telkom, Liberty Brands (chair), Metropolitan University Santie Botha ✓ ✓ ✓ ✓ ✓ ✓ ✓ Dis-Chem, Distell, Mr PriceGroup Bowman Africa Mark ✓ ✓ ✓ ✓ ✓ South Africa,trustee of NelsonMandela Africa andAIGLife Mpact, AIGSouth Foundation Makanjee Africa Maya ✓ ✓ ✓ ✓ ✓ ✓ ✓ Nisbet Rob ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ BDO Inc,Makhup Properties, Kapela Properties, Xon Holdings, Holdings Makhup Nyama ✓ ✓ ✓ ✓ ✓ Liberty Holdingsand Liberty Enctus SouthAfrica Bank, GoldFields, Group, Albaraka Holdings (chair) Africa telecoms (chair), Sulfam Suleman Yunus ✓ ✓ ✓ ✓ Murray &Roberts Incorporated, Mashilwane Nkonki Emma ✓ ✓ ✓ ✓ ✓ Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport SAA, StandardBank Barbican Advisory Barbican Advisory Group, Kupanua Investments and Tshabalala Group Swazi ✓ ✓ ✓ ✓

75 GOVERNANCE REVIEW Corporate governance continued

Independent non-executive directors Member attendance:

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 6/6 1/1 1/1 4/4 2/2 1/1 1/1 DR KHOTSO 1 August Resigned from Resigned from Joined Joined Joined MOKHELE 2007 committee on committee on committee on committee committee on 21 February 21 February 21 February on 21 February (62) 2017 and 2017 and 2017 and 21 February 2017 and Chairman of the board attended 1/1 attended 1/1 attended 2/2 2017 and attended BSc (agriculture), meetings meetings meetings attended 1/1 meetings MSc (food science), during his during his during his 1/1 during his PhD (microbiology) tenure tenure tenure meetings tenure during his tenure

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 6/6 3/3 MICHAEL 31 March AJUKWU 2015 (61) BSc (finance), MBA

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 6/6 4/4 3/3 SANTIE 18 August BOTHA (53) 2004 BEcon (hons)

76 Tiger Brands Limited Integrated annual report 2017 EMMA MBL (cumlaude) BCom, BA (finearts), (55) MAKANJEE MAYA BCom, MBA (51) BOWMAN MARK (hons), CA(SA) BCompt, BCom MASHILWANE (42)

2010 1 August Appointed: 2012 1 June Appointed: 2016 1 December Appointed: 1 December 2016 and during her Joined the board on meetings attended Board Board Board tenure 6/6 6/6 5/5 5/5 attended 2/2 committee on 21 February 21 February Independent non-executivedirectors 2017 and during her meetings Joined tenure Audit Audit Audit 2/2 Member attendance: attended 2/2 committee on sustainability sustainability sustainability 21 February 21 February 2017 and during his meetings Risk and Risk and Risk and Joined tenure 2/2 Investment Investment Investment committee during his meetings attended February February on 21 Joined 2017 tenure 2/2 2/2 and attended 2/2 Remuneration Remuneration Remuneration committee on 21 February 21 February 2017 and during her meetings Joined tenure 2/2 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport Nominations Nominations Nominations 3/3 transformation transformation transformation Social, ethics Social, ethics Social, ethics 3/3 and and and

77 GOVERNANCE REVIEW Corporate governance continued

Independent non-executive directors Member attendance:

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 6/6 3/3 3/3 4/4 ROB 1 August NISBET 2010 (62) BCom, BAcc, CA(SA)

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 6/6 3/4 2/3 2/3 MAKHUP 1 August NYAMA 2010 (60) BCom, MBA, diploma in marketing management

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 6/6 3/3 1/2 4/4 2/2 YUNUS 13 July Joined Resigned from SULEMAN 2015 committee on committee on 21 February 21 February (60) 2017 and 2017 and CA(SA), BCom, attended 1/2 attended 1/2 BCompt (hons), meetings meetings leadership during his during his programmes tenure tenure

Social, ethics Risk and and Board Audit sustainability Investment Remuneration Nominations transformation Appointed: 1/2 SWAZI 26 May Appointed TSHABALALA 2017 to board on (51) 26 May BA (economics), 2017 MBA) and attended 1/2 meetings during her tenure

78 Tiger Brands Limited Integrated annual report 2017 officer Chief executive (60) MAC DOUGALL LAWRENCE FCA, CA(SA) officer Chief financial (51) DOYLE NOEL BProc, EDP adviser andlegal secretary Group company (44) NAIDOO THIROSHNEE * CA(SA) finance director Corporate (66) VAUX CLIVE transformation committee(SET). transformation Executive directorsattendboardcommitteemeetingsbyinvitation.However, LawrenceMacDougallisamemberofthesocial,ethicsand

Limited Oceana Group appointment: External developing markets goods, Africa, fast-moving consumer strategy execution, General management, contribution: and Area ofexpertise 10 May2016 Appointed: Limited Oceana Group appointment: External acquisitions finance, mergersand goods, corporate fast-moving consumer auditing, governance, Accounting and contribution: and Area ofexpertise Brands inJuly2012 2015, joinedTiger To theboardinJuly Appointed: acquisitions finance, mergersand auditing, corporate Accounting and contribution: and Area ofexpertise 2000 16 February Appointed: operations inAfrican particularly and FMCG industry counsel, mostlyin experience ascorporate over 16years’ with Admitted attorney Experience: 15 May2015 Appointed: Board Board Board 6/6 6/6 6/6 further details. further of audit committeeonpage82for function forwhichshehasbeenappointed. Seereport remainsempowered tofulfilthe responsibility oftheboardtoensurethat thecompanysecretary ofTiger iscriticaltothepropergovernance Brands.Itisthe The companysecretary Audit Audit Audit 3/3 3/3 3/3 Member attendance*: Executive directors Company secretary sustainability sustainability sustainability Risk and Risk and Risk and 3/3 3/3 Investment Investment Investment 4/4 4/4 4/4 Remuneration Remuneration Remuneration 4/4 4/4 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport Nominations Nominations Nominations 3/3 transformation transformation transformation Social, ethics Social, ethics Social, ethics 3/3 and and and

79 GOVERNANCE REVIEW Corporate governance continued

Executive committee

MARC EYRES (58) Appointed: April 2015 Group executive: Customer Experience: Senior FMCG sales and customer marketing roles across and Tiger Brands International portfolio Africa, South Asia and Australia, including customer vice-president for BSocSci Unilever South Africa and India.

GRATTAN KIRK (53) Appointed: July 2013 Business executive: Consumer Experience: Seventeen years in retail and 13 years at Deloitte, former Brands – Foods and HPCB CEO of JD Group Limited and Connection Group Holdings. He is a board FCA, CA(SA) member of Consumer Goods Council of South Africa and consumer goods and services ombud.

TSWELO KODISANG (44) Appointed: May 2014 Chief HR officer Experience: Twenty-five years in FMCG, including as global HR BCom, postgraduate diploma in vice-president at Unilever. labour law, HR management

BRENDA KOORNNEEF (65) Appointed: January 2011 Group executive: marketing Experience: Thirty-two years in FMCG, including 17 years at Unilever, and corporate strategy marketing and business across Africa, general management at SABC, BCom Moribo Limited and Tiger Brands.

MARY-JANE MORIFI (56) Appointed: December 2016 Group executive: Corporate affairs Experience: Twenty-one years in extractive industries (SA and UK) in and sustainability various roles, including six years as executive for corporate affairs at BSocSci, Honours in Sociology Anglo American Platinum.

PATRICK SITHOLE (50) Appointed: August 2012 Group executive: Supply chain Experience: Over 25 years in FMCG, including as supply chain BSc (chem eng) vice-president for Unilever South Africa.

PIETER SPIES (52) Appointed: February 2017 Business executive: Grains division Experience: Over 25 years in FMCG and agriculture, former CEO of BCom, IMM, diploma in logistics GWK Group and executive roles at Cadbury, Diageo, Telkom. Board member of National Foods Zimbabwe.

80 Tiger Brands Limited Integrated annual report 2017 Assessment development continuous and programme induction Directors’ planning Succession Diversity tenure Board of theboard Rotation to theboard Changes of theboard Composition ● Male(9) ● Female(4) Gender

— — — — — — — —

and blackrepresentationrespectively, by30September2022. atargetof50%of women targets.Theboarddetermined monitor itsprogressinachievingvoluntary perspectivesandideas,continuesto acknowledges thatdiversitybringsthebenefitofdifferent diversity atboardlevel.Atpresent,31%ofthearewomenand54%black.The During theyear, theboardadoptedagrouppolicy ongenderdiversity, whichaimstopromotegender from24November2017. with effect SantieBotharetiredfromtheboard exercised objectivejudgementnotbiasedbytheirlengthofservice. ontheboardforlongerthannineyears, concluded thatKDKMokheleandSLBotha,whohaveserved assessments bytheboard.Inreviewperiod,board after independenceandperformance ontheboardforlongerthannineyearsmaycontinueinoffice Non-executive directorswhohaveserved 2018. 20 February available forre-electionashewillberetiringattheconclusionofannualgeneralmeetingscheduled and page10ofthenoticeAGM.CliveVauxintegrated report wasdueforrotation;however, heisnot at the firstAGMaftertheirappointment.Briefprofilesofdirectorsretiringbyrotationareonpage76the reviewbytheboard.Newdirectorsarealsosubjecttoelectionshareholders subject toaperformance themselvesforre-election, rotation ateachAGM.Theretiringdirectors,ifeligibleandavailable,mayoffer In linewiththecompany’s memorandumofincorporation, one-thirdofdirectorsarerequiredtoretireby on30June2017. 2012. BhekiSibiyaresignedfromtheboardandasdeputychairman fromAugust asboardchairman resigned fromtheboard.HewasappointedinAugust2007andserved 2017,AndréParker 2017.On21February resignedfromthe boardon14February Kevin Hedderwick appointmentstotheboardofdirectors. policy governing andtransparentprocess,assetoutintheTiger Brands These appointmentswereconductedthroughaformal finance, investmentsandgeneralmanagement. independent non-executivedirector. Shehasover20years ofprofessionalexperienceinriskmanagement, On26May2017,SwaziTshabalalaleadership, risk,strategyandgovernance. wasappointed non-executive directorofTiger BrandssinceAugust2007.Hebringsextensiveknowledgeinbusiness asanindependent 2017,afterserving on21February KhotsoMokhelebecameboardchairman expertise. auditingandfinancialmanagement non-executive directors.Emmabringsriskmanagement,governance, joinedtheboardasindependent On 1December2016,EmmaMashilwaneandKevinHedderwick separated. (CEO)havebeenclearlydefinedandare andchiefexecutiveofficer The positionsofboardchairman considered themtrulyindependent. criteria inKingIVandtheJSEListingsRequirements,takingintoaccountallrelevantfactors, three executivedirectors.Theboardassessedtheindependenceofnon-executivedirectorsagainst At 30September2017,theboardcomprised13directors:10independentnon-executivedirectorsand chairman’s issatisfactory. performance assessed thisfinancialyear. andthe Theresultsindicatedthatboardprocessesareworking effectively wasinternally oftheboard,individualdirectorsandchairman andperformance The effectiveness understanding relevantbusinessand legislativetrendsinthecontextofcompanypolicies. contextual understandingoftheindustry, manufacturing capabilityandcompetitivesetwhilealso tradetogivedirectorsabusinessand traditionalorinformal tradehubsinmodern, visits tocertain business contextupdatethatincludesvisitstomanufacturingsites,meeting seniorleadershipaswell executivemanagement team;anda a businessupdatecomprisingmeetingswiththeboardchairman, andcorporatesponsors; update,ledbythegroupcompanysecretary comprises acorporateandstatutory A comprehensivedirectors’inductionprogrammewassuccessfullyimplemented inthereviewperiod.This and processes. directors andexecutivemanagementpositionsapprovedthecompany’s talentmanagementpractices nominations committee,reviewedthegroup’s successionplansfornon-executivedirectors,executive ofsuccessionplans.In 2017, theboard,throughits The boardkeenlyunderstandstheimportance ● White(6) ● Black(7) Race

● 3–6years(1) ● 0–3years(6) Tenure

● 9 ● 6–9years(3) + years(3)

Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport ● Independentnon-executivedirectors(10) ● Executivedirectors(3) Board independence

81 GOVERNANCE REVIEW Audit committee report

Rob Nisbet, Chairman

This report is provided by the audit committee appointed for FY17 in compliance with the Companies Act No 71 of 2008, as amended. The committee’s activities are guided by a detailed charter informed by the Companies Act and King IV, and approved by the board.

The committee has executed its duties and responsibilities The review period for the group’s accounting, internal control, external External audit auditing and financial reporting practices for the review The committee, among other matters: period in line with its terms of reference. •• Nominated Ernst & Young Inc to shareholders for appointment as the external auditor, with Warren Structure Kinnear as the designated auditor, for the financial The committee comprises three independent non-executive year ended 30 September 2017. It ensured that the directors, and its chairman is not the chairman of the appointment complied with all applicable legal and board. Members and attendance are on pages 71 and regulatory requirements, and that the auditor and 76 to 78. designated auditor are accredited by the JSE Limited •• Approved the external audit engagement letter, plan Biographical details of members are on pages 74 and and budgeted audit fees. Fees paid to the auditor are 75, while fees are noted in the remuneration report on detailed in note 3 of the group annual financial pages 100 and 101. statements •• Reviewed the audit, evaluated the effectiveness of the auditor and its independence, and evaluated the external auditor’s internal quality control procedures

82 Tiger Brands Limited Integrated annual report 2017 • • • • In respectofthefinancialstatements,committee: Financial statements • • • • • following factors: is independentofthegroupafterconsidering & The auditcommitteeissatisfiedthatErnst Young Inc auditor Independence oftheexternal • • • • • • • • • • • • • • • • • • • • • determined tobeagoingconcern determined basis onwhichthecompanyandgroupwere and cashflowsforthatperiod,consideredthe end ofthefinancialyearandresultsoperations the financialpositionofcompanyandgroupat Ensured theannualfinancialstatementsfairlypresent approval bytheboard disclosed tothepublicbeforesubmissionand financial statements,aswellallinformation Examined andreviewedtheinterimannual debt facilitiesofthegroupareadequate thatthecapitaland loan covenantsanddetermined Reviewed compliancewiththefinancialconditionsof of preparinginterimandannualfinancialstatements requirementasthebasis thegoingconcern Confirmed bodies. regulatory BoardforAuditorsandinternational Regulatory Criteria specifiedforindependencebytheIndependent any previousappointmentasauditor The auditor’s independence wasnotprejudicedby consultancy, orotherworkundertaken advisory The auditor’s independence wasnotimpairedbyany remuneration orotherbenefitfromthecompany receiveany non-auditservices, rendering permitted auditororin The auditordoesnot,exceptasexternal &YoungRepresentations byErnst Inctothecommittee independent auditorforthecompany. auditoranddesignated Nominated theexternal thattherewerenone determined of theAuditingProfessionActNo262005,and auditorinterms bytheexternal identified andreported irregularitieswere Considered whetheranyreportable adequate accountingrecordswerebeingmaintained auditorthat Obtained assurancesfromtheexternal pre-approved allnon-auditservices auditorand providedbytheexternal services thenatureandextentofallnon-audit Determined controls group’s control,includingfinancial systemsofinternal auditoronthe oftheexternal Considered thereports that itsindependencewasnotimpaired Obtained anannualwrittenstatementfromtheauditor • • • • • • • • • relevant toitsfunctions,thecommittee: technology ofriskmanagementandinformation In terms • • • • • • audit, thecommittee: audit,includingforensic controlsandinternal For internal audit controlsandinternal Internal • • • • • • • • • • • • • • • auditors. fromtheinternal Received andconsideredreports to reviewanddiscusstheannualfinancialstatements audit Met separatelywithmanagementandexternal a materialimpactonthefinancialstatements any significantlegalandtaxmattersthatcouldhave Considered anyproblemsidentifiedandreviewed financial statementssignedbymanagement Reviewed therepresentationletterongroup auditor’sReviewed theexternal auditreport adopted andanychanges Considered theappropriatenessofaccountingpolicies transactions andaccountingjudgements Considered accountingtreatments,significantunusual committee. recommendations oftheriskandsustainability Considered andreviewedthefindings assessment,andfoundthemsound the goingconcern and technology risksastheyrelatetofinancialreporting management, includingfraudrisksandinformation Reviewed thegroup’s policiesonriskassessmentand being addressedbymanagement. the periodthathavenotbeenaddressedorare financialcontrolsin ofinternal operating effectiveness were anymaterialbreakdownsinthedesignand ithasnoreasontobelievethere The committeeconfirms and founditsatisfactory auditfunction oftheinternal Assessed theperformance action forensic auditprocessesandtheadequacyofcorrective and Reviewed significantissuesraisedbyinternal disposal safeguarded assetsagainstunauthoriseduseor accounting recordsweremaintainedandthatsystems Received assurancethatproperandadequate controlsystems internal business riskmanagementandmaintainingeffective controlincludingfinancialcontrols, systems ofinternal auditoronthegroup’s oftheinternal Considered reports function andcompliancewithitscharter audit oftheinternal andperformance effectiveness annual auditplan,andevaluatedtheindependence, and auditcharter Reviewed andapprovedtheinternal Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

83 GOVERNANCE REVIEW Audit committee report continued

For sustainability issues, the committee: After year end, the board announced the appointment •• Considered the findings and recommendations of the of Advocate Kgosi Monaisa as group company secretary risk and sustainability committee from 1 November 2017. The board is satisfied that •• Met with senior management to consider findings on Kgosi has the necessary skills and experience for this assurance, and made appropriate enquiries from position. Biographical details appear on the website. management. Through this process, it has received the necessary assurances that material disclosures are All directors have unlimited access to the services of the reliable and do not conflict with financial information. company secretary, who is responsible to the board for ensuring proper corporate governance principles are For legal and regulatory requirements, to the extent that applied. these may impact the financial statements, the committee: •• Reviewed, with management, legal matters that could The company secretary also ensures the proper have a material impact on the group administration of proceedings and matters relating to •• Reviewed, with the company’s internal counsel, the the board, the company and shareholders in line with adequacy and effectiveness of the group’s procedures applicable legislation and procedures. He is responsible to ensure compliance with legal and regulatory for director training and induction, as well as the annual responsibilities board evaluation. •• Monitored concerns on accounting matters, internal audit, internal accounting controls, contents of the The committee confirms that the company secretary financial statements, potential violations of the law maintains an arm’s length relationship with the board and questionable accounting or auditing matters and directors, taking into account that the company •• Considered reports provided by management, internal secretary is not a director of the company nor related auditor and external auditor on compliance with legal to any of the directors. and regulatory requirements. Annual financial statements In terms of coordinating assurance activities, the Following its review of the annual financial statements committee reviewed the plans and work outputs of the of Tiger Brands Limited for the year ended external and internal auditors and concluded these 30 September 2017, the committee believes that, in were adequate to address all significant risks facing all material respects, these comply with the relevant the business. provisions of the Companies Act and IFRS and fairly present the consolidated and separate financial position There is an enterprise-wide system of internal control and of the company at that date and the results of its risk management in all key operations to manage and operations and cash flows for that year. The committee mitigate risks. The combined assurance approach is has also satisfied itself on the integrity of the remainder integrated with the risk management process to assess of this integrated annual report 2017. assurance activities across the various lines of defence. While the committee is satisfied with the level of Having achieved its objectives, the audit committee assurance provision for significant group risks, the recommended the annual financial statements and combined assurance approach will be enhanced in integrated annual report for approval by the board. The FY18 to include the efficient delivery of assurance board has since approved the annual financial statements activities aligned to the revised operating model. and integrated annual report 2017, which will be open for discussion at the upcoming annual general meeting. Chief financial officer expertise and experience The committee considered the expertise, resources and On behalf of the committee experience of the chief financial officer, Noel Doyle, and concluded these were appropriate. Biographical details appear on page 79.

Company secretary The board assessed group company secretary Thiroshnee Rob Nisbet Naidoo’s competency, skills, experience and whether Chairman – Audit Committee she maintains an arm’s length relationship with the board. For the review period, the board is satisfied that 28 November 2017 Thiroshnee is suitably qualified. Biographical details are on page 79.

84 Tiger Brands Limited Integrated annual report 2017 of allmaterialstakeholdersasweplanforthecomingyear. viewonperceptions,needsandexpectations foraninformed engagement survey point, wecommissionedourbaselinestakeholder stakeholders. Asastarting Tiger Brandsonitssocietalcapitalandthesharedvaluewecreate forour During thereviewperiod,thiscommitteemadesignificantprogressinrefocusing Social, ethicsandtransformationcommitteereport from what is fast becoming an international flagship from whatisfastbecominganinternational from Tiger Brands,continuestodeliverexcellentresults throughdividends The Tiger BrandsFoundation, supported potential forcreatingviableandflourishingcommunities. becoming self-sustaining.Theyalsoprovideasolid beneficiaries closertoreachingfoodsecurityand gardens. We believethese programmeswilltake development andcommunityhouseholdfood through capacitybuilding,communityenterprise communities, tosustainablydevelopingourbeneficiaries approach, mainlyprovidingfoodhamperstoneedy fromourhistoricalcharitable to move Tiger Brandsfurther Our socio-economicdevelopmentstrategywasrevised to this in FY18. continuous interaction.We attention willpayparticular like toseemorestructured,responsive,purposefuland are satisfiedwiththequalityofourengagementbutwould engagement strategy andplans.Ingeneral,stakeholders stakeholder ourlonger-term and which willinform focusinthenextyear areas thatwillneedconcerted This study, detailedonpage26,hashighlightedsome potential. continue totrainanddevelopouremployeestheirfullest recommendations fromthegendercommissionand including diversityandinclusion.We will implement that willcontributetocreatingagreatplacework, In thenewyear, wewillfocusonembeddingprogrammes system toreducethenumberofincidents. investigate possiblesolutionsforacashlessbreaddelivery existing driversafetyinitiativesandwewillcontinueto of havereviewedthe effectiveness drivers.Experts bakery forthecommitteeissafetyofour An ongoingconcern place withneighbouringcountries. the restofcontinent.Engagementsarecurrentlytaking with theseentitiestoseehowbestsharethismodel school nutritionprogrammes.We willcontinuetowork ofBasicEducationasthebestmodelfor Department recognised bytheGlobalChildNutritionForumand project –thein-schoolbreakfastprogramme.Thisis Maya Makanjee,Chairman Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

85 GOVERNANCE REVIEW Social, ethics and transformation committee report continued

As a statutory committee of the board, the social, ethics Outline of activities and transformation committee fulfils its duties against the For the review period, the committee: requirements of sections 72(4) and (5) of the Companies •• Conducted a stakeholder engagement survey to Act 2008 and regulation 43 of the Companies measure the health of the company’s engagement with Regulations 2011. In addition to ensuring legislative its material stakeholders (page 26) compliance, the committee applies the principles of good •• Reviewed and monitored implementation of initiatives corporate governance as per King IV in fulfilling its to comply with the Broad-Based Black Economic functions. King IV asks companies to adopt a mindset of Empowerment Act self-regulation rooted in broader socio-economic –– We expanded the inclusion of small-scale farmers consciousness. Accordingly, the committee oversees the into our supply chain and made progress on our company’s performance in terms of mindful adoption of smallholder farmer programme, implemented with the good corporate citizenship as the mechanism to create Department of Agriculture, Forestry and Fisheries in value for all stakeholders, while generating growth for the 2016 (see page 54) business. The committee oversees the company’s social •• Monitored the adoption of good governance practices and ethical performance through its monitoring and and policies to ensure the elimination of corruption in reporting function to the board, and provides guidance to line with Organisation of Economic Cooperation and the CEO and directors on improving performance in these Development (OECD) anti-corruption principles domains. –– Provided oversight on the roll out of compulsory competition law, as well as anti-bribery and Particular areas of oversight include: corruption, training for employees. The latter two •• Social and economic development activities topics will extend to board members •• Organisational ethics •• Reviewed relevant policies to support and respect •• Transformation internationally proclaimed human rights laws and ensure •• Responsible corporate citizenship the group is not complicit in human rights abuses (United •• Environment, health and safety Nations Global Compact (UNGC) principles 1 and 2) •• Labour and employee relations •• Monitored the group’s activities to promote equality and •• Consumer relations. eliminate unfair discrimination in its business dealings: –– The diversity and inclusion programme monitors In the review period, the committee comprehensively progress on gender representation and inclusion reviewed its terms of reference to align with King IV. of people with disabilities Key revisions included: –– Management hosted disability sensitisation and •• Roles, duties and authority of the committee voluntary disclosure workshops, attended by •• Management of meetings and resolutions 359 employees, with 32 voluntarily disclosing •• Reporting procedures disabilities •• Evaluating performance. •• Reviewed and monitored the group’s contribution to developing communities: These amendments ensure the committee’s optimal –– Promoting sustainable community development performance in discharging its duties appropriately, and through the socio-economic development strategy eliminate duplication between its oversight role relative to –– Food and nutrition security programmes and their the responsibilities of the operational ethics committee and reach and impact risk and audit committees. –– Monitoring the impact of the Tiger Brands Foundation through the in-school breakfast feeding programme Membership and attendance •• Monitored the record of sponsorships, donations and See pages 73 and 77 to 79. charitable giving •• Monitored the company’s initiatives in reducing carbon emissions •• Reviewed and monitored the group’s standing in terms of the International Labour Organisation’s protocol on decent work •• Monitored the adequacy of group mechanisms in eliminating forced and compulsory labour as well as child labour (UNGC principles 4 and 5)

86 Tiger Brands Limited Integrated annual report 2017 • • • • • • • • • • • • • • • • – – – monitored bythatcommitteeonitsbehalf Engaged withtheriskcommitteeonmatters relevant toitsareasofresponsibility andcomplianceuniverse Reviewed theregulatory detecting andrespondingtofraudcorruption Reviewed thecompany’s approach topreventing, Monitored compliancewithconsumerprotectionlaws of employees Reviewed andmonitoredtrainingdevelopment Employment EquityAct Reviewed andmonitoredcompliancewiththe principle 6) discrimination inemploymentandoccupation(UNGC Reviewed andmonitoredeliminationofunfair – – – – climate andunionengagement(UNGCprinciple3) Reviewed andmonitoredthegroup’s industrialrelations – – – – – – – of greenhouse gasemissions consumption, wasteminimisationandreduction impact of ouroperationsonenergyefficiency, water onprogrammestoreducethe received reports oftheenvironmentalsustainabilityoversight, As part manufacturing sites programme designedtoreduceLTIFR atour onthebehaviour-basedsafety Received reports vehicles initiatives toremovecashfrombreaddelivery driversbyexploring incidents involvingourbakery Safety andhealthfocusedonthereductionofsafety were unharmed orequipment,andemployees damage toproperty action wasunderway. Therewerenoincidentsof place tosafeguardemployeesatsiteswherestrike Ensured comprehensivemanagementplanswerein negotiations. Thesehavebeenconcludedsuccessfully Received updatesontheprogressofwage representation ateachsite related risksbyunderstandingthelevelsofunion environment atallsitestoidentifyandmanage Received updatesontheindustrialrelations capacity inindustrialrelationsnegotiations updatesonworkshopstobuild Received satisfactory On behalfofthecommittee Act. ofreference,KingIVandtheCompanies with itsterms discharged itsresponsibilitiesforthefinancialyearinline to ensurecompliance.Itissatisfiedithasconsideredand committee willcontinuetomonitorprocessesandpolicies on ethics areimplementedacrossthecompany. The Tiger Brandsiscommittedtoensuringthatitsprinciples • • • 28 November2017 committee –Social,ethicsandtransformation Chairman Maya Makanjee • • • – – – – – Considered andapprovedupdatedpolicies: amended toincludemembersoftheTiger Brandsboard Reviewed thegroup’s codeofethics,whichhasbeen sweetened beverages National Treasury onproposedtaxationofsugar- oftheTigerapproach interms Brandssubmissionto Reviewed thecompany’s positionandengagement – – – – – Group stakeholdersmanagement. Declaration ofinterests andhospitality Gifts, entertainment andanti-corruption Anti-bribery Group codeofethics Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

87 GOVERNANCE REVIEW Remuneration report

Strategic remuneration decisions to attract, motivate and retain talent have become critical to support the delivery of our business strategy.

Mark Bowman, Chairman – Remuneration Committee

PART 1: BACKGROUND STATEMENT non-binding advisory shareholder vote on our 2016 In recent years, the challenging socio-political landscape remuneration policy. Key concerns from shareholders and fluctuating rand have significantly influenced the internal included the removal of strategic objectives from the and external environment in which Tiger Brands operates. short-term incentive scheme, the rationale for additional cash In response, we have focused on reorganising the group to payments to the group CEO and CFO, the perceived create greater efficiencies and reduce operating costs, relaxation of performance conditions/targets in various providing the necessary fuel for growth. In addition, we instruments under the long-term incentive (LTI) scheme, have refocused our strategic and financial targets to ensure and the use of a single measure of headline earnings per long-term sustainable growth (page 18). share (HEPS) in the short-term incentive (STI) scheme for executive directors. In this context, strategic remuneration decisions to attract, motivate and retain talent have become critical to support Meeting objectives the delivery of our business strategy. We also drew on key We trust that our various engagements with shareholders elements of our human resources development initiatives to to address these issues and our concerted effort to improve further this aim. disclosure in this year’s report will demonstrate that we have Focus areas considered shareholder feedback. We continued to consolidate and simplify remuneration Future focus areas structures in 2017. This included creating one recognition We have commenced our journey to comply with King IV programme under the umbrella of Tiger Stripes. and will be fully compliant in our next report. Underpinning these focus areas, we sought to ensure that To ensure that our remuneration offering is competitive, fair, our key financial performance measures were clearly defined ethical and transparent, we periodically enlist the services of so that, if met, we would achieve our business strategy and PwC South Africa to assess specific aspects of this offering. employees would be rewarded for the value created. The committee is satisfied that PwC is independent. In addition, specifically for key black managers in critical positions, and with no further shares being available for allocation in terms of the two black managers schemes, the current policy of granting restricted shares has been adjusted to also allow for the use of restricted shares as an attract-and- retain mechanism. Mark Bowman Shareholder feedback Chairman – Remuneration Committee In addition to internal imperatives, remuneration decisions in the review period were influenced by the outcome of the 28 November 2017

PART 2: OVERVIEW OF REMUNERATION POLICY policy and its implementation is fair and responsible, The purpose of our remuneration policy is to: we set and deliver sustainable business goals and results •• Attract, engage and retain high-performing employees that are relevant to the socio-economic environment in •• Inspire and motivate people to outperform against the which we operate. business strategy, goals and targets Our approach to remuneration is simple; we adopt a •• Drive, reward and recognise performance excellence holistic remuneration philosophy. We have implemented and innovation by significantly differentiating reward a balanced design with monetary and non-monetary for top performers, ie pay for performance. components as shown below. This allows us to integrate Page 18 of the integrated report details how the our remuneration offering with other benefits outlined in company drives growth and hence sustainable value our human resources development policies to create a creation. In addition to ensuring that our remuneration compelling, well-rounded offering to our employees.

88 Tiger Brands Limited Integrated annual report 2017 • • • management andabove) incentives(foremployeesin Short-term • • • • • • • unit employees) Guaranteed package(GP)(excludingbargaining incentiveschemes. andlong-term short-term of package, andvariableremunerationintheform ofaguaranteed comprise fixedremunerationintheform componentsofourremunerationoffering The monetary ofourremunerationelements Summary • • • • • • • • • • – – theSTI: By incorporatingpersonalperformance, for sustainable valuecreation objectives (KPIsbasedonabalancedscorecard) strategic, functionalandpersonalperformance attentiononkey financial, by focusing participants’ intention–improvebusinessperformance Primary Paid annuallyincash and scarce/key skills. highpotential Premium paidforhighperformance, Anchor pointformarketcompetitiveness companies market capitalisationandsector-appropriatepeer South AfricancompanieslistedontheJSE,based ofpublicdata of –bespokesurvey prescribed officers Market benchmarkforexecutivemanagementand sector benchmarks) (budget) andmarketcompetitiveness(national and non-financialmetrics),businessperformance based onbalancedscorecardwhichincludesfinancial (KPIs GP:personalperformance Factors determining Reviewed annuallyasperthefactorsbelow cover andtravelallowances(whereapplicable) cover, healthinsurance,death-in-service permanent Benefits includeretirementfundcontributions,funeral Comprises basepayandbenefits – – performers inrewardinghigh Allows fordifferentiation strategic goals andlong-term Drives achievementofourshort-term development growth and Employee environment Engaging work management Performance Performance OUR APPROACHTO REMUNERATION Guaranteed package • • • • Management andabove incentive Long-term (Tiger Stripes) • • • • Recognition – Changes forFY18 employee’s STI multiplier cansignificantlyimpactthequantumofan sincethepersonalperformance goals, particularly to sustainably achievingthebusiness’s long-term on the non-financialandstrategicdriversthatarekey 0% to 175%.Thisfacilitatestheappropriatefocus multiplier, percentagerangingfrom adiscretionary is incorporatedthroughthepersonalperformance objectives.Personalperformance personal performance Non-financial strategicmeasuresareincludedinthe noted earlier STI payment isbasedonachievingtheobjectives andthe market practice.Itisbasedonaffordability South Africanmarkettoensurewearealignedwith The on-targetpercentageisbenchmarkedagainstthe – – elements oftheLTIP aresummarisedbelow: oftheSTI tobedeferred.Key aportion permitting ownership inthecompany’s sharesisencouragedby Brands Limited2013SharePlan(LTIP). Inaddition, (SARs) andbonusmatchingsharesundertheTiger granting annualallocationsofshareappreciationrights isenabledby sustainableperformance Long-term – – – management (15%). volume growth(15%)andworkingcapital before interest andtaxation(EBIT)(35%),sales have beenrevisedtoincludeHEPS(35%),earnings review, financialKPIsforexecutivedirectors primary Based onshareholderfeedbackandaninternal bonus sharesare notawarded (STI) inthepriorfinancialyear. Ifnobonusisearned, incentivebonus directly toachievingtheshort-term Annual awardsofbonusmatching sharesarelinked sliding scale the annualgrowthinGDP. Vesting isona capital. Targeted HEPSgrowthisequaltoCPIand capital mustexceeditsweightedaveragecostof overarching conditionthatthecompany’s on return condition ofrealHEPSgrowth,combinedwithan vesting Annual awardsofSARs,withaperformance incentive (STI) Short-term Short-term incentive (LTI) Long-term Long-term Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

89 GOVERNANCE REVIEW Remuneration report continued

–– A performance differentiation tool (PDT) is used to •• Thusani Trust modify the standard quantum of SARs and bonus- –– Established in 2005 as part of the company’s BEE matching shares, based on an individual’s personal phase I empowerment initiative. The trust’s resources performance, leadership and ability. This is a were enhanced in 2009 in terms of the company’s discretionary percentage ranging from 0% to 200% BEE phase II transaction –– Executive management and other senior management –– As part of our social investment initiatives, the trust may voluntarily defer a portion (25%, 33% or 50%) provides bursaries for tertiary education to of STI into company shares (deferred bonus shares), dependants of permanently employed black which are then matched 1:1 by the company employees who might not otherwise be able to (company matching shares) afford this cost •• Vesting periods •• Changes for FY18 –– Bonus matching, deferred bonus shares and –– Given the success of the two black manager schemes company matching shares: these are subject to in attracting and retaining key talent, and with no continued tenure for three years after being granted further shares available for allocation, the current –– SARs: these will be available to be settled in equal policy of granting restricted shares has been adjusted thirds on the third, fourth and fifth anniversaries of the to allow for the use of restricted shares as an date of allocation, but need not be exercised until attract-and-retain mechanism. the sixth anniversary, when they must be exercised or lapse. Vesting will depend on the company’s Historical LTI information performance relative to specified conditions, as set The last award of performance shares was made in out above, measured over a three, four and five-year May 2016. period, respectively Vesting of performance shares is determined by the BEE schemes company’s comparative total shareholder return (TSR) Two schemes were previously established as part of the relative to the TSR of the constituent members of the FINDI company’s empowerment initiatives: 30 index over the three-year vesting period as follows: •• Tiger Brands Black Managers Trust (BMT I) •• Position 15 out of 30: the targeted number (one-third of –– Established in 2005 to attract and retain talent maximum number) of performance shares awarded will –– Rights allocated – Tiger Brands shares. Rights are vest settled after making the required capital contributions •• Position 7 or better: the maximum number (three times to BMT I at any time after the specified lock-in period, targeted number) of performance shares awarded will ie from 1 January 2015. For all rights allocated after vest 31 July 2010, the lock-in date varies depending on •• Position 23 or worse: all performance shares awarded the date of allocation will be forfeited •• Tiger Brands Black Managers Trust II (BMT II) •• Between position 7 and 15, or between 15 and 23: a –– Established in 2009 pro-rated number of performance shares will vest. –– As a mechanism to attract and retain talent, black Any performance shares that do not vest at the end of the managers received a once-off allocation of shares three-year period will be forfeited. which vest on termination of the scheme on 31 December 2017 (after Tiger Brands has Performance conditions for SARs allocated before exercised its right to repurchase a certain number December 2016 of shares from BMT II under an agreed formula). For outstanding SARs allocated before December 2016, Periodically, new allocations were made to new the performance vesting conditions are based on a joiners and top-up allocations were made to existing targeted rate of 3% per annum real growth in HEPS over participants promoted to higher grades as shares three, four and five-year periods. became available after forfeitures Percentage threshold levels for real HEPS growth and –– As part of the company’s plans to retain black talent, corresponding percentage of allocation to vest: the remuneration committee has approved a specific •• >0% and <0,5% 5% retention allocation at 30 September 2017 to a •• ≥0,5% and <1,0% 10% select group of black managers (37), including two •• ≥1,0% and <1,5% 16% executive committee members. The lock-in period will •• ≥1,5% and <2,0% 27% run from 1 October 2017 to 30 September 2020. •• ≥2,0% and <2,5% 44% Participants defined as bad leavers during this period •• ≥2,5% and <3,0% 75% (eg resignation) will forfeit their allocation of shares. •• ≥3,0% 100% For those who remain employed until 1 October 2020, the shares will vest fully

•• Dilution –– Under the rules of the Tiger Brands Phantom Cash Option scheme (which has been replaced by the LTIP), at any point the aggregate number of unexercised phantom options is limited to 10% of the total issued share capital of the company. As at 30 September 2017, aggregate outstanding options under the scheme represented 0,06% (2016: 0,18%) of the company’s issued share capital –– The maximum aggregate number of shares that may be acquired by participants under the LTIP and any other share plan may not exceed 5,5 million shares; and for any one participant 550 000 shares. In determining these limits, shares acquired through the JSE and transferred to participants are not considered. As at 30 September 2017, the aggregate number of shares that may be acquired by participants under the various schemes was 1 742 012 (2016: 1 515 298).

90 Tiger Brands Limited Integrated annual report 2017 remuneration offering forFY17: remuneration offering ofthecompany’sThe tablesbelowsummariseourremunerationelementsandshowhowtheyareintegratedaspart total # Remuneration framework Performance differentiation tool(PDT). differentiation Performance multiplier Share price conditions performance SARs Vesting PDT Calculation mechanism Award Instruments STI Productivity/cost savings #

Top Tier FinancialResults = Top tierfinancialresults GP Gross margin Revenue STI outcomeinfluencesbonusmatching,deferredsharesandcompanymatching X 3 2 1 year 3–1/3,451/3 ofallocation Five-year vestingbasedonanniversary leadership andability rating, multiplierbasedonpersonalperformance Discretionary (GP*SARs multiple/shareprice)PDT CEO –151%,CFO145%,prescribedofficers110% Multiple ofGP: Share appreciationrights(SARs) prior tothedateofallocation. (VWAP) calculatedfor the10-dayperiodendingimmediately Based onthecompany’s volumeweightedaverageprice on anannualcompoundbasisovertheapplicableperiod) Full vesting:HEPS= company’s weightedaveragecostofcapital(WACC) periodmustexceed capital overtherelevantperformance vestingcondition:AverageFurther on annualreturn CPI +GDPrate,proratavestingon alinearscale Pro ratavesting:HEPSgrowth On-target % to 27,5% 50% 50% X Executive directors Executive committee Level Key performance indicatorslinkedtogroupstrategyinclude: Key performance Performance ratinginfluencesannualincreaseandSTI Performance > CPI + Brand healthmeasure On-shelf availability Market performance Market Performance Innovation rate Market share rate of growth in GDP (measured rate ofgrowthinGDP(measured below threshold – 0%, threshold – 50%, Based on:belowthreshold–0%,50%, > CPI butbelow Outcome = Performance rating Outcome =Performance # Short-term incentive (STI) Long-term incentive (LTI) Guaranteed package (GP) multiplier on-target –100%,stretch150% HEPS (100%) (70%) EBIT Measure 1 Business multiplier

Measure 2 growth (10%) Sales volume BBBEE implementation price) *PDTmultiplier (Actual STI*50%/share Vesting ofallocation onthirdanniversary 50% ofactualSTI Bonus matchingshares (full valueshares) Compliance Compliance Quality Safety Measure 3 (20%) Management Capital Working Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

X Employee development share price) (Actual STIdeferred*2/ 25%, 33%or50% actual STIdeferred: Based onpercentageof company matchingshares Deferred bonussharesand (full valueshares) Performance Performance Improved employee

rating Personal performance Personal performance plans inplace engagement 4 2 1 3 5 People People multiplier 120% to 130% 120% to130% 150% to175% 85% to115% 15% to50% Range 0%

91 GOVERNANCE REVIEW Remuneration report continued

Total remuneration potential for members of executive management for the year ended 30 September 2017 CEO R000 GP STI LTI Total Minimum 8 547 2 153 4 841 15 541 Chief executive officer On-target 8 547 4 305 5 809 18 661 Stretch 8 547 6 458 6 778 21 783

Stretch

On-target

Minimum

5 000 10 000 15 000 20 000 25 000 0 ■ GP ■ STI ■ LTI CFO R000 GP STI LTI Total Minimum 6 156 1 538 3 370 11 064 Chief financial officer On-target 6 156 3 075 4 062 13 293 Stretch 6 156 4 613 4 754 15 523

Stretch

On-target

Minimum

5 000 10 000 15 000 20 000 0 ■ GP ■ STI ■ LTI Other executives (average) R000 GP STI LTI Total Minimum 3 785 937 1 659 6 381 Other executives (average) On-target 3 785 1 875 2 081 7 741 Stretch 3 785 2 812 2 502 9 099

Stretch

On-target

Minimum

2 000 4 000 6 000 8 000 10 000 0 ■ GP ■ STI ■ LTI

Minimum shareholding policy We have introduced a minimum shareholding policy, where senior executives are expected to build up their personal shareholding in the company to a minimum level of 150% of GP (for the CEO) and 100% of GP for other executive committee members. Executives have six years to build up these holdings and may use a portion of their STI, any vesting LTIs or their own resources, to acquire these shares. Years remaining Name GP* Value** % of GP Target % to meet target LC Mac Dougall 8 610 000 245 278 3% 150% 5 NP Doyle 6 150 000 3 282 190 53% 100% 5 CFH Vaux 4 963 351 – – – – PW Spies 4 600 000 – – 100% 6 AG Kirk 4 590 107 929 790 20% 100% 5 * GP as at 30 September 2017. ** Value calculated with reference to the closing price of a Tiger Brands share as at 29 September 2017, ie R377,35.

92 Tiger Brands Limited Integrated annual report 2017 boards ofassociate companiesappearonpage 79. onthe Details ofexecutivecommitteemembers serving companies. directors onthemainboardsof external asnon-executive has noexecutivemembersserving Other thanassociatecompanies, Tiger Brandscurrently fees underthispolicymayberetained bytheindividual. based onarecommendationfrom theCEO.Directors’ committee arerequiredtoauthorisetheseappointments oftheremuneration committee, andthechairman Tiger Brands ofthenominations board,the chairman ofthe substantive outsidedirectorship.Thechairman policy,Under aformal anexecutiveislimitedtoone and experience. encourages ourexecutivestobroadentheirskillsbase companies.Weor committees ofexternal believethis asnon-executivedirectorsonthemainboard to serve committee toconsideracceptingappropriateopportunities Tiger Brandsencourages membersoftheexecutive boardappointments External deferred bonusshares)willbeforfeited. allunvestedunits(otherthancertain a fault termination, circumstances.Inthecaseof units mayapplyincertain thereof. Acceleratedvestingandsettlementofretained mayretainallunitsoraprorataportion a participant company matchingshares)andreasonsfortermination, bonus matchingshares,deferredsharesor depending onthenatureofunit(iewhetheritisSARs, individual’s onanofaultbasis, employmentisterminated Brands Limited2013SharePlanspecifythat,ifan rulesforawardsmadeundertheTigerThe termination who leaveforotherreasons,egresignationordismissal. date ofexit).Noproratabonusispaidtoemployees agreementbeinginplaceatthe a personalperformance specified financialandstrategictargetsfortheperiod incentive payment(basedontheextentofachieving contractual entitlementsincludeaproratashort-term duetoretirementorretrenchment, For terminations package) ontermination. as athree-monthlumpsum(basedonguaranteed month noticeperiodandthreemonths’specialleave(paid they joinacompetitor. Therestraint comprisesathree- property, Tiger Brandswillenforcetheagreementshould businessinsightsandintellectual access toproprietary trade agreement.To theextentthatexecutiveshave We strivetobindallseniorexecutivesbyarestraint-of- of 65 appliestotwomembers. current retirementageis63,althougha agreements withanoticeperiodofthreemonths.The Senior executivesareemployedfull-timeunderstandard contracts Executive service a significant taskorforsustainedhighachievement. insuccessfullycompletingaspecificproject, their efforts employees immediatelyviacashawards(giftcards)for recognition mechanismtoenablelinemanagersreward The newprogrammealsoincludesanon-the-spot leadership principles. and toreinforcethebehavioursalignedourvalues individuals andbusinessteamsinmeetinggoals of consolidated tofocusonacknowledgingtheefforts The Tiger Stripesprogrammehasbeenrefreshedand Recognition period appear in part 3onpages100 and101. period appearinpart Details ofnon-executivedirectors’feespaidinthereview 2018. shareholders tobeheldon20February appear onpage102aswellinthenoticeofAGM additional work.Detailsofproposedincreasesfor2018 paid forattendingspecialboardmeetingsand increasing non-executivedirectors’fees,includingfees remuneration. Shareholderapprovalwillbesoughtfor dutiesmayreceiveadditional scope oftheirordinary outsidethe services Non-executive directorswhoperform incommitteesoftheboard. remuneration forparticipating doesnotreceiveanyadditional The chairman total assets andnumberofemployees. industries. Themeasurementcriteriaincludeturnover, companies ofsimilarsizeandoperatingin against aglobal/localcomparatorgroupcomprising isconductedtobenchmarkthesefees A bespokesurvey implemented inMarchafterapprovalattheAGM. Fees arereviewedannuallyandincreases meetings. and notjustforattendanceatboardcommittee reflects theiroverallcontributionandinputtothecompany, Non-executive directorsarepaidanannualretainerthat Fees andapprovalprocess incentive plan. inanylong-term incentivesorparticipate receive short-term Non-executivedirectorsdonot due tolossofoffice. There arenocontractualarrangementsforcompensation annual generalmeetingfollowingtheappointment. during theyearmustbesubjecttore-electionatfirst non-executive directorappointedtofillavacantposition memorandum ofincorporation.Anyexecutiveand the boardbyrotationinlinewithcompany’s conditions ofemploymentandarerequiredtoretirefrom and Executive directorsaresubjecttostandardterms ontheboardbyshareholders. serve their reappointmentiscontingentonbeingre-electedto directors arerequiredtoretirebyrotationateachAGM; company’s memorandumofincorporation,one-third ofthe and includesreappointmentbyrotation.Interms andconditionsforthetenureofthisappointment the terms nominations committee.Theletterofappointmentconfirms as awhole,basedonrecommendationbythe transparentandamatterfortheboard These areformal, Tiger Brandsinlinewithrelatedpolicyandprocedures. Non-executive directorsareappointedtotheboardof Appointment andcontractualarrangements Non-executive directors • • against theremunerationpolicyorimplementationreport: exercised byshareholdersattheupcomingAGMare will takethefollowingstepsif25%ormoreoftotalvotes committee iscommittedtoshareholderengagementand keep thelinesofcommunicationopen.Theremuneration We takeourshareholderfeedback seriouslyandaimto Shareholder engagement • • taken, initsnextintegratedreport. on theoutcomeofthisengagement, andmeasures andreport The companywillconsiderthese concerns and toengagewiththecompany, and dissenting shareholderstonote their specificconcerns The companywillissueaSENSannouncementinviting www.tigerbrands.com For ourfullremunerationpolicy, please see Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

93 GOVERNANCE REVIEW Remuneration report continued

PART 3: REMUNERATION IMPLEMENTATION REPORT The implementation report addresses the following: •• Feedback received from shareholders on the previous remuneration report and our response •• How the remuneration policy was implemented for the financial year under review

Summary of feedback from shareholders and responses The following common themes of concern were noted by shareholders:

Shareholder feedback Response by Tiger Brands

Vesting criteria for performance From December 2016, performance shares no longer form part of annual shares were perceived as being allocations. overly generous. In addition, All regular annual LTI awards are subject to performance conditions, either in the restricted shares are not subject form of “performance on the way in” (bonus matching shares/deferred bonus to performance conditions shares and company matching shares), which are linked to the achievement of a short-term incentive bonus or during the vesting period (SARs).

The absence of a return metric For SARs (from December 2016), a further condition for vesting to occur is that the across incentive schemes average of Tiger Brands’ annual returns on capital over the relevant performance period must exceed its weighted average cost of capital (WACC) for the same period. From FY18, KPI targets for executive management will include a targeted return on net assets (RONA).

The vesting criteria of 3% HEPS Performance conditions for SARs are usually viewed as an underpin, with the growth for share appreciation embedded condition of share price growth being the primary objective. Market rights (SARs) being perceived benchmarks for SARs targets are usually more moderate than those for full-value as low share awards (CPI or CPI +2% pa compared to vesting targets for full-value shares which are CPI +5% to 10% pa).

Additional cash payments made Sign-on bonuses are considered only in exceptional circumstances and may be to the CEO and CFO without required to compensate a prospective executive for unvested LTIs granted by specific substantiation his/her current employer. The company will only consider retention awards in exceptional circumstances, which was the case in 2016 after restructuring the executive committee and appointing a new CEO.

Executive directors’ STI targets This has been changed. From FY18, primary financial STI targets for executive being reduced to a single directors will comprise HEPS (35%), earnings before interest and taxation (EBIT) measure of targeted group (35%), sales volume growth (15%) and working capital management (15%). (HEPS)

The removal of strategic We have enhanced disclosure on the STI scheme and executive management’s objectives, as a primary metric, KPIs, which include financial and non-financial measures. from the short-term incentive The STI scheme is a multiplier scheme, aligned with global best practice, using scheme a “business multiplier” which primarily focuses on financial metrics to ensure alignment with shareholder outcomes, as well as a personal performance multiplier, which differentiates based on the achievement of an individual’s KPIs. This ensures that there is personal accountability for both the financial and strategic aspects of our business.

94 Tiger Brands Limited Integrated annual report 2017 NG Brimacombe LC MacDougall AG Kirk achievement isreflectedforeachKPI: For thereviewperiod,inadditiontoHEPSfinancialKPI,followingKPIsappliedCEOandCFO.Thelevelof Other: sign-onbonusforLCMacDougallandretentionpaymentsNPDoyle AGKirk. *** Name Total forthefinancialyearendedSeptember2016 remunerationofexecutive directorsandprescribedofficers Name Total forthefinancialyearendedSeptember2017 remunerationofexecutive directorsandprescribedofficers in linewithguidancefromtheInstituteofDirectorsandSouthAfricanRewardAssociationisshownbelow. onasingle-figurebasis,asrequiredbyKingIVand The totalremunerationofexecutivedirectorsandprescribedofficers Total remunerationofexecutivedirectorsandprescribedofficers Other: sign-onbonusforPWSpies. NP Doyle CFH Vaux LC MacDougall** NP Doyle** CFH Vaux** AG Kirk** PW Spies*** *** ** ** Top tierfinancialresults Revenue Productivity/cost savings Gross margin * * Met

Expected LTI valuebasedonaward24May2016atR341,68pershare 2016 at R291,71pershare. Expected LTI valuebasedonawardasat9February Value ofSTIexcludesthevaluebonusdeferrals,ifany. Expected LTI value basedonawardasat7December2016R395,97pershare. Value ofSTIincludesthevaluebonusdeferrals,ifany, giventheLTI wasallocatedon11December2017. Expected LTI value basedonawardasat5September2017R403,56pershare. met Partially *** 3 624 920 3 582 427 3 053 378 4 716 246 4 118 660 8 058 719 5 211 772 4 531 406 3 955 010 2 343 743 Salary Market performance Brand health Innovation On-shelf availability Market share Salary Notmet 940 083 731 803 215 745 923 254 622 064 Benefits 488 424 943 704 398 030 593 883 490 568 Benefits 4 565003 4 314230 3 269123 5 639500 4 740724 KPIs scorecard 8 547 143 6 155 476 4 929 436 4 548 893 2 834 311 BBBEE implementation Safety Quality GP Compliance GP 20 000 000 10 000 000 4 028 000 1 740 154 Other Other – – – – – – 2 320 310 1 782 738 433 151 709 050 256 250 417 993 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport STI* STI* – – – – plans inplace Employee development engagement Improved employee 1 015 413 2 212 504 7 119518 4 402 954 4 596 025 5 334 903 2 192 882 1 586 233 People LTI** LTI – – 10 987885 30 644891 20 460447 13 143 168 11 490 379 5 580416 5 449774 4 929 436 9 062 085 7 943 436 2016 2017 total total

95 GOVERNANCE REVIEW Remuneration report continued

2017 short-term incentive outcomes The graphics below show the outcomes of the business multiplier component as well as the personal performance multiplier component relative to the targets for the respective executive directors and prescribed officers’ schemes. Executive directors Actual multiplier Weighted Measure achieved Weight multiplier % HEPS 0% 100% 0% Actual business multiplier for executive directors 0%

HEPS

0% 50% 100% 150%

Below Threshold Target Stretch threshold

The individual outcomes for the executive directors are shown below. Actual Actual personal On- business performance target multiplier multiplier 2017 2016 Name GP* % % % STI STI** LC Mac Dougall 8 610 000 50% 0% 100% 0 512 500 NP Doyle 6 150 000 50% 0% 130% 0 835 985 CFH Vaux 4 963 351 50% 0% 100% 0 709 050 * Annual GP as at 30 September 2017. ** Includes the value of bonus deferrals. Prescribed officers Actual multiplier Weighted Measure achieved Weight multiplier % EBIT 130% 70% 91,1% Working capital management 50% 20% 10,0% Sales volume growth 0% 10% 0,0% Actual business modifier for prescribed officers 101,1%

Sales volume growth

Working capital management

EBIT

0% 50% 100% 150%

Below Threshold Target Stretch threshold

The individual outcomes for prescribed officers are shown below. Actual Actual personal On- business performance target multiplier multiplier 2017 2016 Name GP* % % % STI** STI** AG Kirk 4 590 107 50% 101,1% 100% 2 320 310 646 494 PW Spies*** 4 600 000 50% 101,1% 115% 1 782 738 N/A * Annual GP as at 30 September 2017. ** Includes the value of bonus deferrals. *** STI prorated as the start date was 1 February 2017.

96 Tiger Brands Limited Integrated annual report 2017 AG Kirk* CFH Vaux* PW Spies** AG Kirk* PW Spies** CFH Vaux NP Doyle* LC MacDougall* NP Doyle* Share appreciationrightsgranted in2014–secondtranche Share appreciationrightsgranted in2013–thirdtranche Share appreciationrightsgranted in2015–firsttranche Vested 2017 inFebruary 2014. vestingshares granted inFebruary Performance Phantom cashoptionsgrantedin2013–thirdtranche* *** *Only 50% of which were subject to performance conditions. *Only 50%ofwhichweresubjecttoperformance LTI allocation shown below: conditionsendby30September2017,are The outcomeforawardsduetovestinFY17,andwhoseperformance Vesting Name LC MacDougall* Name R403,56 asat5September2017. The 10-day volumeweightedaveragepriceatawarddatewasR395,97pershare,on7December2016and aresetoutbelow. incentiveawardsmadeduringtheyeartoexecutivedirectorsandprescribedofficers The long-term Awards incentives Long-term *** PW Spies*** AG Kirk CFH Vaux NP Doyle LC MacDougall Name incentivesforFY17 Short-term ** ** * Met *

STI inrespectoftheyearended30September2016. Allocated on5September2017ataVWAP ofR403,56. Allocated on7December2016ataVWAP ofR395,97. STI prorated as the start datewas STI proratedasthestart 2017. 1 February Includes thevalueofbonusdeferrals. Annual GPasat30September2017. met Partially multiplier 100% 100% 150% 100% PDT – 4 590 107 4 963 351 4 600 000 6 150 000 8 610 000 GP Notmet Award 110% 110% 145% 151% % – 13 375 867 13 003 655 5 052 577 5 287 443 SARs value Face – Number 12 760 13 102 33 780 32 840 – 646 494 709 050 835 985 512 500 STI*** – shareholder Bonus matchingshares 1 515 773 1 586233 4 012 760 3 901 097 A 4 600 000 4 590 107 4 963 351 6 150 000 8 610 000 ward 50% 50% 50% 50% SARS return – % Total n/a n/a n/a n/a LTI measures – 324 695 629 592 257 381 Expected value(basedonfairvalue) GP* value Face – – Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport matching 292 226 566 633 231 643 Number Real HEPS shares 1 590 1 782 738 2 320 310 Bonus 820 650 2017 STI** growth – – – – n/a Match 100% 100% 100% 100% 100% Deferred bonussharesand companymatchingshares Deferred bonussharesand – – – companymatchingshares % condition result 427 648 839 456 514 761 Performance Performance value Face (% vesting) – – 384 883 755 510 463 285 100% 300% Number of GP 27% 39% 51% 1 080 2 120 1 300 % – – – – – – – – –

97 GOVERNANCE REVIEW Remuneration report continued

Schedule of LTI awards Unvested awards and cash flow from settling LTI awards for the CEO and CFO are tabulated below. Value of Closing Granted Performance Cash shares fair value Vesting Opening during Grant price Forfeited condition Settled during Closing received acquired vesting Name and awards Award date date number the year ZAR during year achieved the year number ZAR ZAR ZAR LC Mac Dougall 2016 deferred bonus shares 07/12/2016 07/12/2019 – 650 – – – – 650 – – 230 874 2016 company matching shares 07/12/2016 07/12/2019 – 650 – – – – 650 – – 230 874 2016 bonus matching shares 07/12/2016 07/12/2019 – 650 – – – – 650 – – 230 874 2016 performance shares 26/05/2016 24/05/2019 8 160 – – – – – 8 160 – – 5 209 752 2016 SARs 24/05/2016 24/05/2019 12 000 – 341,68 – – – 12 000 – – 1 175 280 24/05/2020 12 000 – 341,68 – – – 12 000 – – 1 270 080 24/05/2021 12 000 – 341,68 – – – 12 000 – – 1 334 760 2016 SARs 07/12/2016 07/12/2019 – 10 946 395,97 – – – 10 946 – – 894 945 07/12/2020 – 10 947 395,97 – – – 10 947 – – 966 182 07/12/2021 – 10 947 395,97 – – – 10 947 – – 1 051 131 Total 44 160 34 790 – – – 78 950 – – 12 594 752 NP Doyle 2015 company matching shares 03/12/2015 03/12/2018 2 688 – – – – – 2 688 – – 981 846 2015 deferred bonus shares 03/12/2015 03/12/2018 2 688 – – – – – 2 688 – – 981 846 2016 company matching shares 07/12/2016 07/12/2019 – 1 060 – – – – 1 060 – – 376 501 2016 deferred bonus shares 07/12/2016 07/12/2019 – 1 060 – – – – 1 060 – – 376 501 2015 bonus matching shares 04/02/2015 04/02/2018 2 320 – – – – – 2 320 – – 867 054 2016 bonus matching shares 09/02/2016 09/02/2019 1 330 – – – – – 1 330 – – 483 309 2016 bonus matching shares 07/12/2016 07/12/2019 – 1 590 – – – – 1 590 – – 564 752 2014 performance shares 28/02/2014 28/02/2017 2 790 – – – 5 580 (8 370) – 1 440 384 2 058 276 – 2015 performance shares 04/02/2015 04/02/2018 2 490 – – – – – 2 490 – – 567 820 2016 performance shares 09/02/2016 09/02/2019 5 720 – – – – – 5 720 – – 3 807 518 2012 Phantom Cash Share Options 07/02/2012 07/02/2015 5 000 – 252,01 – – – 5 000 – – 640 250 07/02/2016 5 000 – 252,01 – – – 5 000 – – 640 250 07/02/2017 10 000 – 252,01 (5 000) – – 5 000 – – 640 250 2013 Phantom Cash Share Options 13/02/2013 13/02/2016 5 000 – 299,83 – – – 5 000 – – 432 000 13/02/2017 10 000 – 299,83 (5 000) – – 5 000 – – 432 000 13/02/2018 10 000 – 299,83 – – – 10 000 – – 864 000 2014 SARs 28/02/2014 28/02/2017 6 067 – 254,45 – – – 6 067 – – 799 570 28/02/2018 6 067 – 254,45 – – – 6 067 – – 808 852 28/02/2019 6 066 – 254,45 – – – 6 066 – – 849 786 2015 SARs 04/02/2015 04/02/2018 3 846 – 385,33 – – – 3 846 – – 203 415 04/02/2019 3 847 – 385,33 – – – 3 847 – – 257 672 04/02/2020 3 847 – 385,33 – – – 3 847 – – 295 603 2016 SARs 09/02/2016 09/02/2019 7 623 – 291,71 – – – 7 623 – – 934 504 09/02/2020 7 623 – 291,71 – – – 7 623 – – 984 053 09/02/2021 7 624 – 291,71 – – – 7 624 – – 1 021 331 2016 SARs 07/12/2016 07/12/2019 – 11 260 395,97 – – – 11 260 – – 920 618 07/12/2020 – 11 260 395,97 – – – 11 260 – – 993 808 07/12/2021 – 11 260 395,97 – – – 11 260 – – 1 081 185 Total 117 636 37 490 (10 000) 5 580 (8 370) 142 336 1 440 384 2 058 276 21 806 294

A full analysis of the annual movement in phantom cash-settled options, performance shares, bonus matching, deferred bonus shares, company matching shares and share appreciation rights held by executive directors, prescribed officers and other members of the executive committee is set out on pages 68 to 74 of Annexure C to the annual financial statements.

98 Tiger Brands Limited Integrated annual report 2017 statements. and othermembersoftheexecutive committeeissetoutonpages68to74ofAnnexureC theannualfinancial bonus shares,companymatching sharesandshareappreciationrightsheldbyexecutivedirectors, prescribedofficers shares,bonusmatching,deferred A fullanalysisoftheannualmovement inphantomcash-settledoptions,performance Total 2016 SARs 2016 SARs 2015 SARs 2014 SARs 2013 PhantomCashShareOptions 2012 PhantomCashShareOptions shares 2016 performance shares 2015 performance shares 2014 performance 2016 bonusmatchingshares 2016 bonusmatchingshares 2015 bonusmatchingshares 2016 deferredbonusshares 2016 companymatchingshares 2015 deferredbonusshares 2015 companymatchingshares NP Doyle Total 2016 SARs 2016 SARs shares 2016 performance 2016 bonusmatching 2016 companymatchingshares 2016 LC MacDougall Name andawards Unvested awardsandcashflowfromsettling LTI awardsfortheCEOandCFOaretabulatedbelow. Schedule ofLTI awards deferred bonus shares shares 07/12/2016 09/02/2016 04/02/2015 28/02/2014 13/02/2013 07/02/2012 09/02/2016 04/02/2015 28/02/2014 07/12/2016 09/02/2016 04/02/2015 07/12/2016 07/12/2016 03/12/2015 03/12/2015 07/12/2016 24/05/2016 26/05/2016 07/12/2016 07/12/2016 07/12/2016 Award date 07/12/2021 07/12/2020 07/12/2019 09/02/2021 09/02/2020 09/02/2019 04/02/2020 04/02/2019 04/02/2018 28/02/2019 28/02/2018 28/02/2017 13/02/2018 13/02/2017 13/02/2016 07/02/2017 07/02/2016 07/02/2015 09/02/2019 04/02/2018 28/02/2017 07/12/2019 09/02/2019 04/02/2018 07/12/2019 07/12/2019 03/12/2018 03/12/2018 07/12/2021 07/12/2020 07/12/2019 24/05/2021 24/05/2020 24/05/2019 24/05/2019 07/12/2019 07/12/2019 07/12/2019 Vesting date 117 636 Opening number 10 000 10 000 10 000 44 160 12 000 12 000 12 000 7 624 7 623 7 623 3 847 3 847 3 846 6 066 6 067 6 067 5 000 5 000 5 000 5 720 2 490 2 790 1 330 2 320 2 688 2 688 8 160 – – – – – – – – – – – – theyear Granted 37 490 11 260 11 260 11 260 34 790 10 947 10 947 10 946 during 1 590 1 060 1 060 650 650 650 – – – – – – – – – – – – – – – – – – – – – – – – – – Grant price 395,97 395,97 291,71 291,71 291,71 385,33 385,33 385,33 254,45 254,45 254,45 395,97 395,97 341,68 341,68 341,68 395,97 299,83 299,83 299,83 252,01 252,01 252,01 395,97 ZAR – – – – – – – – – – – – – – during year Forfeited Forfeited (10 000) (5 000) (5 000) – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Performance Performance achieved condition 5 580 5 580 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Settled during the year (8 370) (8 370) – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 142 336 number 10 000 11 260 11 260 11 260 78 950 10 947 10 947 10 946 12 000 12 000 12 000 Closing 5 000 5 000 5 000 5 000 5 000 7 624 7 623 7 623 3 847 3 847 3 846 6 066 6 067 6 067 5 720 2 490 1 590 1 330 2 320 1 060 1 060 2 688 2 688 8 160 650 650 650 – 1 440 384 1 440 384 received Cash ZAR – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 2 058276 2 058276 acquired Value of shares ZAR Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 12 594 752 21 806294 1 081 185 1 051 131 1 334 760 1 270 080 1 175 280 1 021 331 3 807 518 5 209 752 fair value 864 000 432 000 432 000 640 250 640 250 640 250 993 808 920 618 966 182 894 945 230 874 230 874 230 874 984 053 934 504 295 603 257 672 203 415 849 786 808 852 799 570 567 820 564 752 483 309 867 054 376 501 376 501 981 846 981 846 Closing vesting ZAR –

99 GOVERNANCE REVIEW Remuneration report continued

Interests of directors and prescribed officers in BEE schemes No executive directors or prescribed officers qualify to participate in either of the company’s BEE schemes.

Non-executive directors’ fees Total emoluments to non-executive directors for the year ended 30 September 2017, inclusive of VAT from 1 June 2017, were: MO Ajukwu SL Botha MJ Bowman K Hedderwick1 M Makanjee E Mashilwane2 Dr KD Mokhele6 BL Sibiya3 RD Nisbet MP Nyama AC Parker4 YGH Suleman BS Tshabalala5 Board fees 612 707 368 491 368 491 90 316 368 491 278 175 1 053 045 658 948 368 491 368 491 838 858 368 491 93 929 Carozzi board meeting – – – – – – – – – – 218 010 – – Audit committee fees – – – – – 81 988 71 823 – 280 052 – – 153 811 – Investment committee fees – – 41 805 – – – 11 340 – 58 815 – – 41 805 – Remuneration committee fees – 201 729 – – 47 096 – – – – 95 621 – 48 526 – Nominations committee fees – 7 560 – – 7 560 – – – – 7 560 – – – Social, ethics and transformation committee fees – – – – 164 046 – – – – 82 022 – – – Risk committee fees 199 680 – 67 172 – – – 96 617 – 112 357 – – 132 369 – Extraordinary fees – – – – – – – – – – – – – Ad hoc work/meetings – – – – 25 200 – 47 880 – – – 22 680 – – 812 387 577 780 477 468 90 316 612 393 360 163 1 280 705 658 948 819 715 553 694 1 079 548 745 002 93 929 1 Appointed on 1 December 2016 and resigned on 14 February 2017. 2 Appointed on 1 December 2016. 3 Resigned on 30 June 2017. 4 Resigned as chairman on 21 February 2017. 5 Appointed on 26 May 2017. 6 Appointed as chairman on 21 February 2017.

Annual fees payable to non-executive directors for the period beginning 1 March 2017 were approved by shareholders on 21 February 2017.

Total emoluments to non-executive directors for the year ended 30 September 2016 were: MO Ajukwu SL Botha MJ Bowman K Hedderwick M Makanjee E Mashilwane Dr KD Mokhele BL Sibiya RD Nisbet MP Nyama AC Parker YGH Suleman BS Tshabalala Directors’ fees 352 664 352 664 352 664 – 352 664 – 352 664 846 393 352 664 352 664 1 637 770 352 664 – Carozzi board meeting – – – – – – – – – – 76 020 – – Audit committee fees – – – – – – 138 947 – 268 024 – – 138 947 – Investment committee fees – – – – – – 3 780 – 3 780 – – 3 780 – Remuneration committee fees – 194 995 – – – – – – – 97 052 – 97 052 – Nominations committee fees – 12 413 – – 12 413 – – – – 12 413 – – – Social, ethics and transformation committee fees – – – – 152 351 – – – – 76 175 – – – Risk committee fees 86 641 – – – – – 186 077 – 86 641 – – – – Extraordinary fees – – – – – – – – – – 36 200 – – Ad hoc work/meetings 36 200 68 600 36 200 – 79 400 – 139 100 36 200 139 100 57 800 32 400 171 500 – 475 505 628 672 388 864 # 596 828 # 820 569 882 593 850 209 596 103 1 782 390 763 943 # # Appointed during the 2017 financial year, thus not applicable for the year ended 30 September 2016.

100 Tiger Brands Limited Integrated annual report 2017 Carozzi boardmeeting Board fees 1 June2017, were: Total emolumentstonon-executivedirectorsfortheyearended30September2017,inclusiveofVAT from Non-executive directors’fees ineitherofthecompany’s qualifytoparticipate No executivedirectorsorprescribedofficers BEEschemes. inBEEschemes Interests ofdirectorsandprescribedofficers # Ad hocwork/meetings fees Extraordinary Risk committeefees committee fees Social, ethicsandtransformation Nominations committeefees Remuneration committeefees Investment committeefees Audit committeefees Carozzi boardmeeting Directors’ fees Total emolumentstonon-executive directorsfortheyearended30September2016were: 2017. by shareholderson21February Annual feespayabletonon-executivedirectorsfortheperiodbeginning1March2017wereapproved 6 5 4 3 2 1 Ad hocwork/meetings fees Extraordinary Risk committeefees committee fees Social, ethicsandtransformation Nominations committeefees Remuneration committeefees Investment committeefees Audit committeefees

Appointed duringthe2017financialyear, thusnotapplicablefortheyearended30September2016. Appointed as chairman on 21 February 2017. on21February Appointed aschairman Appointed on26May2017. 2017. on21February Resigned aschairman Resigned on30June2017. Appointed on1December2016. 2017. Appointed on1December2016andresigned14February MO Ajukwu MO Ajukwu MO 612 707 352 664 199 680 812 387 475 505 36 200 86 641 – – – – – – – – – – – – – – – 368 491 194 995 201 729 352 664 577 780 628 672 Botha SL SL Botha SL 12 413 68 600 7 560 – – – – – – – – – – – – – Bowman MJ MJ Bowman MJ 368 491 352 664 477 468 388 864 67 172 41 805 36 200 – – – – – – – – – – – – – – – KHedderwick KHedderwick 90 316 90 316 – – – – – – – – – – – – – – – – – – # – 1 MMakanjee M Makanjee M 368 491 164 046 612 393 596 828 152 351 352 664 47 096 25 200 12 413 79 400 7 560 – – – – – – – – – – – E Mashilwane E Mashilwane 278 175 360 163 81 988 – – – – – – – – – – # – – – – – – –

– 2

DrKDMokhele Dr KDMokhele 1 053 045 1 280 705 820 569 139 100 186 077 138 947 352 664 47 880 96 617 11 340 71 823 3 780 – – – – – – – – – – 6 882 593 846 393 658 948 658 948 BL Sibiya BL Sibiya 36 200 – – – – – – – – – – – – – – – – – 3 RDNisbet RD Nisbet 112 357 280 052 850 209 268 024 352 664 139 100 368 491 819 715 58 815 86 641 3 780 – – – – – – – – – – – Nyama MP MP Nyama MP 596 103 352 664 368 491 553 694 76 175 12 413 97 052 82 022 95 621 57 800 7 560 – – – – – – – – – – – 1 782 390 1 637 770 1 079 548 AC Parker AC Parker 218 010 838 858 36 200 76 020 22 680 32 400 – – – – – – – – – – – – – 4 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport YGH Suleman YGH YGH Suleman 763 943 352 664 171 500 368 491 745 002 132 369 153 811 138 947 97 052 48 526 41 805 3 780 – – – – – – – – – – BS Tshabalala BS Tshabalala 93 929 93 929 – – – – – – – – – – – – – – – – – – – # 5

101 GOVERNANCE REVIEW Remuneration report continued

Proposed non-executive directors’ fees for 2018 The proposed fees from 1 March 2018, excluding VAT, to be approved at the AGM on 20 February 2018.

Proposed rate Proposed fees resident board for non-resident Current rate members – board members – effective effective effective Forum Capacity March 2017 March 2018 March 2018 Main board Chairman 1 744 825 1 849 515 * Deputy chairman 901 719 * * Member 375 717 398 260 915 998 Audit Chairman 285 543 302 676 * Member 163 976 173 815 * Remuneration and Chairman 208 463 220 971 * nominations Member 94 191 99 842 * Risk Chairman 264 737 280 621 * Member 134 343 142 404 327 528 Social, ethics and Chairman 172 025 182 347 * transformation Member 86 012 91 173 * Hourly fees 3 931 4 167 9 584 Extraordinary meetings 19 765 20 951 48 187

* Not applicable

Non-binding advisory vote Shareholders are requested to cast an advisory vote on the remuneration policy and implementation report in parts 2 and 3 of this report.

102 Tiger Brands Limited Integrated annual report 2017 Final dividend Interim dividend shares Ordinary Dividends 2018 Integrated annualreport 30 September2018 Announcement ofannualresultsandfinaldividendfortheyearending 31 March2018 Announcement ofinterimresultsanddividendforthesixmonthsending andaccounts Reports Annual generalmeeting Financial yearend Shareholders’ diary November 2018 Declaration May 2018 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport 20 February 2018 20 February November 2018 December 2018 30 September January 2019 January May 2018 July 2018 Payment

103 SHAREHOLDERS’ INFORMATION Declaration of final dividend number 146

The board has approved and declared a final cash dividend of 702 cents per ordinary share (gross) in respect of the year ended 30 September 2017.

The dividend will be subject to the dividends tax that was introduced with effect from 1 April 2012. In accordance with paragraphs 11.17(a)(i) to (x) and 11.17(c) of the JSE Listings Requirements, the following additional information is disclosed: •• The dividend has been declared out of income reserves •• The local dividend tax rate is 20% (twenty percent) effective 22 February 2017 •• The gross local dividend amount is 702 cents per ordinary share for shareholders exempt from the dividends tax •• The net local dividend amount is 561,60 cents per ordinary share for shareholders liable to pay the dividends tax •• Tiger Brands has 192 069 868 ordinary shares in issue (which includes 10 326 758 treasury shares) •• Tiger Brands Limited’s income tax reference number is 9325/110/71/7.

Shareholders are advised of the following dates in respect of the final dividend: Last day to trade cum the final dividend Tuesday, 9 January 2018 Shares commence trading ex the final dividend Wednesday, 10 January 2018 Record date to determine those shareholders entitled to the final dividend Friday, 12 January 2018 Payment in respect of the final dividend Monday, 15 January 2018

Share certificates may not be dematerialised or rematerialised between Wednesday, 10 January 2018, and Friday, 12 January 2018, both days inclusive.

By order of the board

JK Monaisa Company secretary

24 November 2017

104 Tiger Brands Limited Integrated annual report 2017 Total 1 000001sharesandabove 100 001–1000shares 10 001–100000shares Public shareholders 1 001–10000shares 1 –000shares Non-public shareholders Shareholder spread andaccountsdated29September2017: detailed intheannualreport thespreadofregisteredshareholdersas In accordancewiththeJSEListingsRequirements,followingtableconfirms Registered shareholderspread and companyschemes Analysis ofregisteredshareholders Shareholder type related schemesasbeing: thesplitbetweenpublicshareholdingsanddirectors/company- Within theshareholderbase,weareabletoconfirm Public andnon-publicshareholdings Directors andassociates Share trusts Own holding holdings Empowerment of holders of holders Number Number 20 530 16 885 20 541 2 840 149 632 35 11 2 2 1 6 shareholders shareholders % oftotal % oftotal 100,00 99,95 13,82 82,20 0,17 0,73 3,08 0,01 0,04 0,05 – – Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport 162 799243 113 883208 192 069868 46 053296 19 469329 10 326758 18 711115 29 270625 8 675034 3 989001 226 581 of shares of shares Number Number 6 171 issued capital issued capital % ofshare % ofshare 100,00 84,76 59,29 23,97 10,14 15,24 4,52 2,08 0,12 5,38 9,74 –

105 SHAREHOLDERS’ INFORMATION Analysis of registered shareholders and company schemes continued

Substantial investment management and beneficial interests above 3% Through regular analysis of STRATE registered holdings, and pursuant to the provisions of section 56 of the Companies Act, the following shareholders held directly and indirectly equal to or in excess of 3% of the issued share capital as at 29 September 2017:

Investment management shareholdings Total Investment manager shareholding % PIC 21 816 247 11,35 Colonial First State Global Asset Management 8 892 849 4,63 BlackRock Inc 6 954 447 3,62 Coronation Asset Management Proprietary Limited 6 814 354 3,55 Janus Henderson Investors 6 601 012 3,44 The Vanguard Group Inc 6 146 961 3,20 Total 57 225 870 29,79

Total Beneficial shareholdings shareholding % Government Employees Pension Fund (PIC) 25 583 368 13,32 Tiger Consumer Brands Limited 10 326 758 5,38 Tiger Brands Foundation SPV 9 668 067 5,03 Total 45 578 193 23,73

106 Tiger Brands Limited Integrated annual report 2017 JP Morgan Equities South Africa Proprietary Limited JP MorganEquitiesSouthAfricaProprietary Sponsor Nedbank Limited Principal banker &YoungErnst Inc Auditors Facsimile: Telephone: PO Box78056,Sandton,2146 Postal address Sandton Bryanston 3010 WilliamNicolDrive Registered office JK Monaisa(appointed1November2017) Company secretary Registration number:1944/017881/06 Tiger BrandsLimited Company information +27 115140477 +27 118404000 Consumer helpline:0860005342 [email protected] [email protected] [email protected] Contact details www.tigerbrands.com Website address Telephone: Nikki Catrakilis-Wagner Investor relations The BankofNewYork Mellon ADR Administrator Receipt(ADR)facility American Depository 2196 Rosebank Rosebank Towers, Avenue 15Biermann Limited Proprietary Computershare InvestorServices South Africansharetransfersecretaries +27 118404000 Limited Integrated annual report 2017 Tiger Brands LimitedIntegrated annualreport

107 SHAREHOLDERS’ INFORMATION Forward-looking information This integrated annual report contains forward-looking statements that, unless otherwise indicated, reflect the company’s expectations at the time of finalising the report. Actual results may differ materially from these expectations if known and unknown risks or uncertainties affect the business, or if estimates or assumptions prove inaccurate. The company cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these statements. The company assumes no obligation to update or revise any forward-looking statements, even if new information becomes available as a result of future events or for any other reason, save as required by legislation or regulation.

108 Tiger Brands Limited Integrated annual report 2017

TIGER BRANDS INTEGRATED ANNUAL REPORT 2017

HEAD OFFICE: SOUTH AFRICA PHYSICAL ADDRESS Tiger Brands Limited, 3010 William Nicol Drive, Bryanston POSTAL ADDRESS PO Box 78056, Sandton, 2146, South Africa