TATA UGANDA LIMITED FINANCIAL STATEMENTS FOR THE …FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017. TATA UGANDA LIMITED ... the preparation and fair presentation of these financial

TATA UGANDA LIMITED

eloitte.

ANNUAL REPORT ANDFINANCIAL STATEMENTS

FOR THE YEAR ENDED31 MARCH 2017

TATA UGANDA LIMITED

ANNUAL REPORT ANDFINANCIAL STATEMENTS

FOR THE YEAR ENDED31 MARCH 2017

Statement of Directors' responsibilities 2

TATA UGANDA LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2017

Contents Pages

Report of Directors 3-4

Independent Auditors' Report 5 - 7

Financial statements

Statement of financial position 8

Statement of profit or loss and other comprehensive income 9

Statement of changes in equity 10

Statement of cash flows 11

Notes to the company financial statements 12 - 40

TATA UGANDA LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTSSTATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors of the company are responsible for the preparation and fair presentation of the annual financialstatements of Tata Uganda Limited, comprising the statement of financial position as at 31 March 2017, thestatement of profit or loss and other comprehensive income, the statement of changes in equity andstatement of cash flows for the year then ended, and the notes to the financial statements, which include asummary of significant accounting policies and other explanatory notes, and the Directors' report, inaccordance with International Financial Reporting Standards and in the manner required by the UgandanCompanies Act, 2012.

The Directors' responsibility includes: designing, implementing and maintaining internal controls relevant tothe preparation and fair presentation of these financial statements that are free from material misstatementwhether due to fraud or error; selecting and applying appropriate accounting policies; and making accountingestimates that are reasonable in the circumstances.

The Directors' responsibility also includes maintaining adequate accounting records and an effective system ofrisk management as well as the preparation of the supplementary schedules included in these financialstatements.

The Directors have made an assessment of the company's ability to continue as a going concern and there isno reason to believe the business will not be a going concern in the year ahead.

The annual financial statements of Tata Uganda Limited, as set out on pages 3 to 40, were approved by theboa'd~" on ...9.:..1I1"'{ ..2017 and siqned on its behalf by:

-:

vIDire~~v\'~/

2

Review of operations

TATA UGANDA LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTSREPORT OF DIRECTORS

The Directors have pleasure in presenting their report for the year ended 31 March 2017.

Business activities

The main business of the company is the importation, sale and servicing of Tata vehicles, infrastructure andconstruction equipment and related spare parts; importation and sale of pharmaceuticals, industrial chemicals,agro business, Information Technology and general trading.

The annual financial statements set out on pages 3 to 40 adequately reflect the state of affairs and the resultsof the business operations of the company for the year ended 31 March 2017.

Share Capital

There has been no change in the share capital during the year.

Dividends

A dividend of Ushs 492 per share (2016: Ushs 488 per share) has been proposed by the Directors subsequentto the year end, subject to the approval of the members of the company at the annual general meeting.

Directors

The Directors in office during the year and at the date of this report are:

Shalendra KundraRolf Mathia RamakersBehram Sabawala

****

- Appointed on 24 January 2017- Resigned on 5 December 2016

* Indian** South African

Secretary

Shalendra KundraP.O. Box 7153, Kampala

Auditors

Deloitte & Touche are the Company's auditors.

Business AddressDeloitte & ToucheCertified Public Accountants (Uganda)1, Lumumba Avenue,Kampala.

Postal AddressPOBox 10314,Kampala.

3

4

TATA UGANDA LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTSREPORT OF DIRECTORS

Holding company

The holding company is Tata Africa Holdings (SA) Proprietary Limited, incorporated in South Africa which holds100% of the Company's ordinary shares.

Going Concern

The Directors have reviewed the going concern considerations of the company and have no reason to believethat the business will not be a going concern in the year ahead.

Subsequent events

There have been no material circumstances or events between the year end and the date of this report.

Company details

Registered addressPlot 52, Lugogo By Pass,Kampala.

Postal addressP.O. Box 7153,Kampala.

Deloit e. Deloitte & ToucheCertified Public Accountants (Uganda)3rd Floor, Rwenzori House1 Lumumba AvenueP.O. Box 10314KampalaUganda

Tel: +256 (417) 701 000+256 (414) 343 850+256 (312) 230 300

Fax: +256 (414) 343 887+256 (414) 259 355

E-mail: [email protected]

INDEPENDENT AUDITORS' REPORTTO THE SHAREHOLDERS OF TATA UGANDA LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Tata Uganda limited (the Company), as set out on page 8 to 40which comprise the statement of financial position as at 31 March 2017, and the statement of comprehensiveincome, statement of changes in equity and statement of cash flows for the year then ended, and notes to thefinancial statements, including a summary of significant accounting policies.

In our opinion the accompanying financial statements give a true and fair view of the state of the financialaffairs of the Company as at 31 March 2017 and of its financial performance and cash flows for the year thenended in accordance with International Financial Reporting Standards, the Ugandan Companies Act, 2012.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilityunder those standards are further described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the company in accordance with the Institute ofCertified Public Accountants of Uganda Code of ethics (ICPAU Code of Ethics), and other ethical requirementsthat are relevant to our audit of the financial statements in Uganda. The ICPAU code is consistent with theInternational Ethics Standards Board for Accountants Code for Ethics for Professional Accountants (Part A andB).

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Other Information

The Directors are responsible for the other information. The other information comprises the report of theDirectors. We do not express an audit opinion or any form of assurance conclusion thereon. If, based on thework we have performed on the other information obtained prior to the date of this auditor's report, weconclude that there is a material misstatement of this other information, we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Directors for the Financial Statements

The Directors are responsible for the preparation of financial statements that give a true and fair view inaccordance with International Financial Reporting Standards, and in the manner required by the UgandanCompanies Act 2012 and for such internal control as the Directors determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Directors are responsible for assessing the Company's ability to continueas a going concern, disclosing, as applicable, matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to cease operations, or hasno realistic alternative but to do so.

The Directors are responsible for for overseeing the entity's financial reporting process.

5

Partners: G. Opiyo·· H. Gadhoke" N 1(,;90'0 so.UKenyan ·British

INDEPENDENT AUDITORS' REPORTTO THE SHAREHOLDERS OF TAT A UGANDA LIMITED (CONTINUED)

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatementscan arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professionalscepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraudor error, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The· risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by the Directors.

• Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or, if such disclosures are inadequate, to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

We communicate with the Directors regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identifyduring our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirementsregarding independence, and to communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and where applicable, related safeguards.

6

INDEPENDENT AUDITORS' REPORTTO THE SHAREHOLDERS OF TATA UGANDA LIMITED (COUNTINUED)

Report on Other Legal and Regulatory Requirements

The Ugandan Companies Act, 2012 requires that in carrying out our audit we consider and report to youon the following matters. We confirm that:

We have obtained all the information and explanations which, to the best of our knowledge andbelief, were necessary for the purposes of our audit;

In our opinion proper books of account have been kept by the Company, so far as appears fromour examination of those books; and

The Company's statement of financial position (balance sheet) and statement of profit or loss andother comprehensive income (profit and loss) are in agreement with the books of account.

The engagement partner responsible for the audit resulting in this independent auditor's report isGeorge Opiyo Practicing no. P0061.

~"r~~Certified Public Accountants (Uganda)

2017

Kampala

7

The f~ancial statements on page 8 to 40 were authorised and approved fon M.~2017 and signed on its behalf by:

~~"'

TATA UGANDA LIMITED

STATEMENT OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 MARCH 2017

Assets

Non-current assetsProperty and equipmentLeasehold landIntangible assetDeferred tax asset

Total non-current assets

Current assetsRelated partiesInventoriesTrade receivablesOther receivablesCash and cash equivalents

Total current assets

Total assets

Equity and liabilities

EquityShare capitalRetained earnings

Total equity

Liabilities

Non-current liabilitiesAmounts owing to related parties

Total non-current liabilities

Current liabilitiesAmounts owing to related partiesShort term liabilitiesTrade payablesOther payables and provisionsTaxationBank overdraft

Total current liabilities

Total liabilities

Total equity and liabilities

Notes

4

557

68910

11

6

612

132214

8

2017Ushs'OOO

2016Ushs '000

9982777 10 860 410777 200 79570597947278253 570445

11136177 12226560

739185 50700025485345 2846773142162749 35054061759260 6924752220337 402086

71366876 65 123353

82503053 77 349913

209000027646304

209000025233950

29736304 27323950

8753528 8 195 824

8753528 8 195 824

8969329 45735628712753 149206158198702 64898931820775 201674586671 96376

16224991 13 732 948

44013221 41830 139

52766749 50025963

82503053 77 349 913

issue by the board of Directors

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2017

TATA UGANDA LIMITED

Notes

Revenue 15

Cost of sales

Gross profit

Other operating incomeSelling, distribution and administrative expenses

Profit from operations 16

Finance expense 17

Profit before taxation

Taxation charge 18

Total comprehensive income for the year

9

2017 2016Ushs'OOO Ushs '000

105304906 102790028

(85972 468) (83465 861)

19332438 19324167

166791 103533(12350823) (11 744480)

7148406 7683220

(1835531) (1807725)

5312 875 5875495

(1880601) (2082 396)

3432274 3793099

TATA UGANDA LIMITED

STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 MARCH 2017

Share Retainedcapital earnings Total

Ushs'OOO Ushs'OOO Ushs'OOO

Balance at 1 April 2015 2090000 22 799 351 24889351

Total comprehensive income for the year 3793099 3793099Dividend paid (1 358 500) (1 358 500)

Balance at 31 March 2016 2090000 25233950 27323950

Balance at 1 April 2016 2090000 25233950 27323950

Total comprehensive income for the year 3432274 3432274Dividend paid (1019920) (1019920)

Balance at 31 March 2017 2090000 27646304 29736304

TATA UGANDA LIMITED

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 MARCH 2017

Notes 2017 2016Ushs'OOO Ushs'OOO

Operating activitiesI

Cash generated from/(utilised in) operations 22 10023325 (10 372 593)Interest paid (1835531) (1 807725)Taxation paid 22 (1598114) (2 266 420)Dividends paid 22 (1019920) (1 358 500)

Net cash generated from/(utilised in) operating activities 5569760 (15805238)

Investing activities

Acquisition of property and equipment 4 ( 22 104) ( 447 561)Acquisition of intangible asset 5 ( 64 387)Proceeds from disposal of property and equipment 50801 27800

Net cash utilised in investing activities ( 35 690) ( 419 761)

Financing activities

(Repayment)/issue of short-term liabilities (6207862) 6919717

Net cash (utilised in)/generated from financing activities (6207862) 6919717

Net decrease in cash and cash equivalents ( 673 792) (9 305 282)

Cash and cash equivalents at beginning of year (13330862) (4025 580)

Cash and cash equivalents at end of year 22 (14004654) (13 330 862)

TATA UGANDA LIMITED

NOTES TO THE .FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2017

1. REPORTINGENTITY

Tata Uganda Limited is a company incorporated in Uganda under the Ugandan Companies Act, 2012and is domiciled in Uganda. It is a wholly owned subsidiary of Tata Africa Holdings (SA) ProprietaryLimited, incorporated in South Africa.

2. APPLICATIONOF NEWAND REVISEDINTERNATIONALFINANCIALREPORTINGSTANDARDS(IFRS's)

2.1 Amendments to IFRSs that are mandatorily effective for the year ended 31 March 2017

In the current year, the company has applied a number of amendments to IFRSs and issued by theInternational Accounting Standards Board (IASB) that are mandatorily effective for an accounting periodthat begins on or after 1 January 2016.

Amendments to IAS 1Disclosure Initiative

The company has applied the amendments for the first time in the current year. The amendmentsclarify that an entity need not provide a specific disclosure required by an IFRS if the informationresulting from that disclosure is not material and give guidance on the basis of aggregating anddisaggregating information for disclose purposes. However the amendments reiterate that an entityshould consider providing additional disclosures when compliance with the specific requirements in IFRSis insufficient to enable users of financial statements to understand the impact of particular transactions,events and conditions on the entity's financial positon and financial performance.

As regards the structure of the financial statements, the amendments provide examples of systematicordering or grouping of the notes.

The application of these amendments has not resulted in any impact on the financial performance orfinancial positon of the company.

Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation

The amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for itemsof property and equipment. The amendments to IAS 38 introduce a rebuttable presumption thatrevenue is not an appropriate basis for amortisation of an intangible asset. This presumption can onlybe rebutted in the following two limited circumstances:

a) when the intangible asset is expressed as a measure of revenue; or

b) when it can be demonstrated that revenue and consumption of the economic benefits of the

intangible asset are highly correlated.

Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants

The amendments define a bearer plant and require biological assets that meet the definition of a bearerplant to be accounted for as property, plant and equipment in accordance with IAS 16, instead of IAS41. The produce growing on bearer plants continue to be accounted for in accordance with IAS 41

The application of these amendments has had no impact on the company financial statements as thecompany is not engaged in agricultural activities.

12

TATA UGANDA LIMITED

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2017 (CONTINUED)

2. APPLICATIONOF NEWAND REVISEDINTERNATIONALFINANCIALREPORTINGSTANDARDS(IFRS's) (CONTINUED)

2.1 Amendments to IFRSs that are mandatorily effective for the year ended 31 March 2017(continued)

Annual Improvements to IFRSs 2012-2014 Cycle

The company has applied these amendments for the first time in the current year. The annualimprovements to IFRSs 2012-2014 cycle include a number of amendments to various IFRSs which aresummarised below.

Amendments to IAS 1 Disclosure Initiative

The amendments of IFRS introduce specific guidance in IFRS 5 for when an entity reclassifies an asset (ordisposal group) from held for sale to held for distribution to owners (or vice versa). The amendmentsclarify that such a change should be considered as a continuation of the original plan of disposal andhence requirements set out in IFRS 5 regarding the change of sale plan do not apply. The amendmentsalso clarifies the guidance for when held-for-maturity distribution accounting is discounted.

The amendments for IFRS 7 provide additional guidance to clarify whether a servicing contract iscontinuing involvement in a transferred asset for the purpose of the disclosures required in relation totransferred assets.

The amendments to IAS 19 clarify that the rate used to discount post-employment benefit obligationsshould be determined by reference to market yields at the end of the reporting period on high qualitycorporate bonds. The assessment of the depth of a market for high quality corporate bonds should be atthe currency level (i.e. the same currency as the benefits are to be paid). For currencies for which thereis no deep market in such high quality corporate bonds, the market yield at the end of the reportingperiod on government bonds denominated in that currency should be used instead.

The application of these amendments has had no effect on the company financial statements.

2.2 New and revised IFRSs in issuebut not yet effective

The Company has not applied the following new and revised IFRSsthat have been issued but are not yeteffective:IFRS 9 Financial instruments Effective 1 January 2018, with earlier application

permitted

IFRS 15 Revenue from Contracts withCustomers and the relatedciarification

Effective 1 January 2018, with earlier applicationpermitted

IFRS 16 Leases Effective 1 January 2019, with earlier applicationpermitted

Amendments to Disclosure initiativeIFRS 7

Effective 1 January 2017

Amendments to IFRS 12 Recognition of Deferred Tax Assetsfor unrealised losses - Effective 1Jan 2017

13

TATA UGANDA LIMITED



2.2 New and revised IFRSs in issue but not yet effective (continued)

IFRS 9 Financial InstrumentsIFRS 9 issued in November 2009 introduced new requirements for the classification and measurement offinancial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for theclassification and measurement of financial liabilities and for derecognition, and in November 2013 toinclude the new requirements for general hedge accounting. Another revised version of IFRS 9 was issuedin July 2014 mainly to include a) impairment requirements for the financial assets and b) limitedamendments to the classification and measurement requirements by introducing a 'fair value through othercomprehensive income' (FVTCI) measurement category for certain simple debt instruments.

Key requirements of [FRS 9

• all recognised financial assets that are-within the scope of IAS 39 Financial Instruments: Recognition andMeasurement are required to be subsequently measured at amortised cost or fair value. Specifically,debt investments that are held within a business model whose objective is to collect the contractual cashflows, and that have contractual cash flows that are solely payments of principal and interest on theprincipal outstanding are generally measured at amortised cost at the end of subsequent accountingperiods. Debt instruments that are held within a business model whose objective is achieved both bycollecting contractual cash flows and selling financial assets, and that have contractual terms of thefinancial asset give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding, are measured at FVTOCI.All other debt investments andequity investments are measured at their fair value at the end of subsequent accounting periods. Inaddition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in thefair value of an equity investment (that is not held for trading) in other comprehensive income, with onlydividend income generally recognised in profit or loss.

• with regard to the measurement of financial liabilities designated as at fair value through profit or loss,IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable tochanges in the credit risk of that liability is presented in other comprehensive income, unless therecognition of the effects of changes in the liability's credit risk in other comprehensive income wouldcreate or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to afinancial liability's credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entireamount of the change in the fair value of the financial liability designated as fair value through profit orloss is presented in profit or loss.

• in relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, asopposed to an incurred credit loss model under IAS 39. The expected credit loss model requires anentity to account for expected credit losses and changes in those expected credit losses at eachreporting date to reflect changes in credit risk since initial recognition. In other words, it is no longernecessary for a credit event to have occurred before credit losses are recognised.

The amendments for IFRS 7 provide additional guidance to clarify whether a servicrnq contract iscontinuing involvement in a transferred asset for th~ purpose of the disclosures required in relation totransferred assets.

The amendments to IAS 19 clarify that the rate used to discount post-employment benefit obligationsshould be determined by reference to market yields at the end of the reporting period on high qualitycorporate bonds. The assessment of the depth of a market for high quality corporate bond_sshould be atthe currency level (i.e. the same currency as e benefits are to be paid). For currencies for which thereis no deep market in such high quality corporate bonds, the market yield at the end of the reportingperiod on government bonds denomina ed in at currency should be used instead.

The Directors are still in the process of assessing the full impact of the application of IFRS 9 on thecompany financial statements and - ~ practicable to provide a reasonable financial estimate of theeffect until the Directors complete review. As a result the above preliminary assessment issubject to Change. The Directors to early apply the standard and intend to use the fullretrospective method upon ado -

14

TATA UGANDA LIMITED




Impairment

Financial assets measured at amortised cost, listed redeemable notes that will be carried at FVTOCI underIFRS 9 finance lease receivables amounts due from customer under construction contracts, and financialguarantee contracts will be subject to the impairment provisions of IFRS 9.

The company expects to apply the simplified approach to recognise lifetime expected credit losses for itstrade receivables, finance lease receivables and amounts due from customer under construction contracts asrequired or permitted by IFRS 15. In relation to the loans to related parties and financial guaranteecontracts, whether lifetime or 12 month expected credit losses should be recognised would depend onwhether there has been a significant increase in credit risk of these items from initial recognition to the dateof initial application of IFRS9. The Directors are currently assessing the extent of this impact.

In general, the Directors anticipate that the application of the expected credit loss model of IFRS 9 will resultin earlier recognition of credit losses, for the respective items and are currently assessing the potentialimpact

IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising fromcontracts with customers.

IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11Construction Contracts and the related Interpretations when it becomes effective.

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promisedgoods or services to customers in an amount that reflects the consideration to which the entity expects to beentitled in exchange for those goods or services. Specifically, the Standard introduces a 5-stepapproach torevenue recognition:

STEP 1STEP 2STEP3STEP4STEP5

Identify the contract with the customerIdentify the performance obligation in the contractDetermine the transaction priceAllocate the transaction price to the performance obligations in the contractRecognise revenue when (or as) the entity satisfies the performance obligation

The amendments for IFRS 7 provide additional guidance to clarify whether a servicing contract iscontinuing involvement in a transferred asset for the purpose of the disclosures required in relation totransferred assets.

The amendments to IAS 19 clarify that the rate used to discount post-employment benefit obligationsshould be determined by reference to market yields at the end of the reporting period on high qualitycorporate bonds. The assessment of the depth of a market for high quality corporate bonds should be atthe currency level (i.e. the same currency as the benefits are to be paid). For currencies for which thereis no deep market in such high quality corpora e bonds, the market yield at the end of the reportingperiod on government bonds denominated in' a currency should be used instead.

The application of these amendments has - no effect on the company financial statements.

5

TATA UGANDA LIMITED




IFRS 15 Revenue from Contracts with Customers (continued)

Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when'control' of the goods or services underlying the particular performance obligation is transferred to thecustomer.

Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios. Furthermore,extensive disclosures are required by IFRS 15.

In April 2016, the IASB issued clarification to IFRS 15 in relation to the identification of performanceobligations, principal versus agent considerations, as well as licensing application guidance.

The Directors are stili in the process of assessing the full impact of the application of IFRS 15 on thecompany financial statements and it is not practicable to provide a reasonable financial estimate of theeffect until the Directors complete the detailed review. As a result the above preliminary assessment issubject to change. The Directors do not intend to early apply the standard and intend to use the fullretrospective method upon adoption.

IFRS 16 Leases

IFRS 16 introduces a comprehensive model for the identification of lease arrangements and accountingtreatments for both lessors and lessees IFRS 16 will supersede the current lease guidance including IAS17 leases and the related interpretations when it becomes effective.

IFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlledby a customer. Distinctions of operating leases (off balance sheet) and fiance leases (on balance sheet)are removed for lessee accounting, and is replaced by a model where a right-of-use asset and acorresponding liability have to be recognised for all leases by lessees (i.e. all on balance sheet) except forshort-term leases and leases of low value assets.

The right of use asset is initially measured at cost and subsequently measured at cost (subject to certainexceptions) less accumulated depreciation and impairment losses, adjusted for any measurement of thelease liability. The lease liability is initially measured at the present value of the lease payments that arenot paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as wellas the impact of lease modifications, amongst others. Furthermore the classification of cash flows will alsobe affected as operating lease payments under IAS 17 are presented as operating cash flows; whereasunder the IFRS 16 models the lease payments will be split into a principal and an interest portion whichwill be presented as financing and operating cash flows respectively.

In contrast to lessee accounting, IFRS 16 substantially carries forward the lessor accounting requirementsin IAS 17, and continues to require a lessor to classify a lease earlier as an operating lease or a financelease

Furthermore, extensive disclosures are required by IFRS 16.

The amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for items ofproperty and equipment. The amendments to !AS 38 introduce a rebuttable presumption that revenue is not anappropriate basis for amortisation of an intangible asse . This presumption can only be rebutted in the followingtwo limited circumstances:

a) when the intangible asset is expressed as a easure of revenue; or

b) when it can be demonstrated the

asset are highly correlated.

e and consumption of the economic benefits of the intangible

16

TATA UGANDA LIMITED

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2017



Amendments to [AS 16 and [AS 41 Agriculture: Bearer Plants

The company has not applied these amendments for the first time as they do not apply to the entity. Theamendments define a bearer plant and require biological assets that meet the definition of a bearer plant to beaccounted for as property, plant and equipment in accordance with IAS 16, instead of IAS 41.

The application of these amendments has had no impact on the company financial statements as amendmentsto IAS 16 and IAS 41 concerning bearer plants do not apply to the entity.

Amendments to [AS 7 Disclosure initiative

The amendments require an entity to provide discloses that enable users of financial statements to evaluatechanges in liabilities arising from financing activities.

Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios. Furthermore,extensive disclosures are required by IFRS 15.

The amendments apply prospectively for annual periods beginning on or after 1 January 2017 with earlierapplication permitted. The Directors of the company do not anticipate that the application of theseamendments will have a material impact on the company financial statements.

Amendments to [AS 12 Recognition of deferred tax assets for unrealised losses

The amendment clarifies the following:

1. Decrease below cost in the carrying amount of a fixed-rate debt instrument measured at fair value forwhich the tax base remains at cost give rise to a deductible temporary difference, irrespective of whetherthe debt instrument's holder expects to recover the carrying amount of the debt instrument by sale or byuse, or whether it is probable that the user will pay all the contractual cash flows;

2. When an entity assesses whether taxable profits will be available against which it can utilise a deductibletemporary difference, and the tax law restricts the utilisation of losses to deduction against income of aspecific type (e.g. capital losses can only be set off against capital gainsL an entity assesses a deductibletemporary difference in combination with other deductible temporary differences of that type, butseparately from other types of deductible temporary differences;

3. The estimate of probable future taxable profit may include the recovery of some of an entity's assets formore than their carrying amount if there is sufficient evidence that it is probable that the entity willachieve this and;

4. In evaluating whether sufficient future taxable profits are available, an entity should compare thedeductible temporary differences with future taxable profits excluding tax deductions resulting from thereversal of those deductible temporary differences.

The amendments apply retrospectively for annual periods beginning on or after 1 January 2017 with earlierapplication permitted. The Directors of the company do not anticipate that the application of theseamendments will have a material impact on the company's financial statements.

2.3 Early adaptation for statements

The Company did not early adopt an ed standards in 2017.

7

Hedge accounting is not appassets and liabilities denorrune:derivatives are recognised in nn..:r· nr

rt:>riu'::>""'e instruments that economically hedge monetary- n currencies. Changes in the fair value of suchpart of foreign currency gains and losses.

TATA UGANDA LIMITED


3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently by the company to all yearspresented in these financial statements.

(a) Basisof measurement

The financial statements are presented in Uganda Shillings (Ushs), which is the company'sfunctional currency. They are prepared on the historical cost basis except for derivative financialinstruments which are measured at fair value.

(b) Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to makejudgements, estimates and assumptions that affect the application of policies and reportedamounts of assets and liabilities, income and expenses. The estimates and associatedassumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis of making ·thejudgements about carrying values of assets and liabilities that are not readily apparent from othersources. Actual results may differ from these estimates. The estimates and underlyingassumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised if the revision affects only that period or in theperiod of the revision and future periods if the revision affects both current and future periods.

If there are indications that impairment may have occurred, estimates are prepared of expectedfuture cash flows for each of the assets. Expected future cash flows used to determine the value inuse are inherently uncertain and could materially change over time. They are significantly affectedby a number of factors including, sales estimates, together with economic factors such as spotand future prices, discount rates, foreign currency exchange rates, estimates of costs and futurecapital expenditure.

(c) Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date ofthe transaction. Monetary assets and liabilities denominated in foreign currencies at the statementof financial position date are translated at the foreign exchange rate ruling at that date. Gains andlosses arising on translation are credited to or charged against income.

(d) Financial instruments

(i) Derivative financial instruments

The company uses derivative financial instruments to hedge its exposure to foreign exchangerisks arising from operational, financing and investment activities. In accordance with its treasurypolicy, the company does not hold or issue derivative financial instruments for trading purposes.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised inprofit or loss when incurred. Subsequen to initial recognition, derivatives are measured at fairvalue, and changes therein are accoun ed for as described below. The fair value of forwardexchange contracts is their quoted ma et lee at the statement of financial position date, beingthe present value of the quoted fon rard price.

Economic hedges

TATA UGANDA LIMITED


3. SIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)

(d) Financial instruments (continued)

(ii) Non-derivative financial instrumentsNon-derivative financial instruments comprise trade and other receivables, cash and cashequivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value, for instruments not atfair value through profit or loss, any directly attributable transaction costs, except as describedbelow. Subsequent to initial recognition non-derivative financial instruments are measured asdescribed below:

A financial instrument is recognised if the company becomes a party to the contractual provisionsof the instrument. Financial assets are derecognised if the company's contractual rights to cashflows from the financial assets expire or if the company transfers the financial asset to anotherparty without retaining control or substantially all risks and rewards of the asset. Financialliabilities are derecognised if the company's obligations specified in the contract expire or aredischarged or cancelled.

Trade receivables are recognised and carried at the fair value of the original invoice using theeffective interest rate method. Gains or losses are recognised in the statement of comprehensiveincome when the receivables are derecognised or impaired.

Cash and cash equivalents comprise cash balances and call deposits.

Investments at fair value through profit or loss

An instrument is classified as at fair value through profit or loss if it is held for trading or isdesignated as such upon initial recognition. Financial instruments are designated at fair valuethrough profit or loss if the group and company manages such investments and makes purchaseand sale decisions based on their fair value. Upon initial recognition, attributable transaction costsare recognised in profit or loss when incurred. Financial instruments at fair value through profit orloss are measured at fair value, and changes therein are recognised in profit or loss.

Other

Other non-derivative financial instruments are measured at amortised cost using the effectiveinterest method, less any impairment losses.

(e) Property and equipment

(i) Owned assets

Items of property and equipment are stated at cost less accumulated depreciation (seeaccounting policy c (iii)) and impairment losses (see accounting policy f). Where parts of an itemof property, plant and equipment have different useful lives, they are accounted for as separateitems of property, plant and equipment.

(ii) Subsequent costs

The company recognises in the carrying amount of an item of property, plant and equipment thecost of replacing part of such an item en that cost is incurred if it is probable that the futureeconomic benefits embodied 'ith e ill flow to the company and the cost of the item canbe measured reliably. All other reooqntsed in the statement of comprehensive income asan expense as incurred.

TATA UGANDA LIMITED


3. SIGNIFICANT ACCOUNTINGPOLICIES(CONTINUED)

(e) Property and equipment (continued)

(iii) Depreciation

Depreciation is charged to the statement of comprehensive income on reducing balance basisover the estimated useful lives of each part of an item of property, plant and equipment. Land isnot depreciated.

Depreciation methods, useful lives and residual values, if not insignificant, are reassessedThe following rates of depreciation are used:

Commercial buildingsMotor vehiclesFurniture & fittingsPlant and EquipmentOffice equipmentComputer equipmentLeasehold improvements

Depreciation rate 0/0

5%35%20%20%40%40%

Lease period

An asset should be removed from the statement of financial position on disposal or when it iswithdrawn from use and no future economic benefits are expected from its disposal.

The gain or loss on disposal is the difference between the proceeds and the carrying amount andshould be recognised in profit and loss

Intangible assets

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost lessaccumulated amortisation and accumulated impairment losses. Amortisation is recognised on astraight-line basis over their estimated useful lives. The estimated useful life and amortisationmethod are reviewed at the end of each reporting period, with the effect of any changes inestimate being accounted for on a prospective basis. Intangible assets with indefinite useful livesthat are acquired separately are carried at cost less accumulated impairment losses.

Computer software relates in Note 5 relates to incadea and Navision accounting packages and areamortised at 24% (useful life 4 years).

Internally-generated intangible assets - research and development expenditure,

Expenditure on research activities is recognised as an expense in the period in which it isincurred.An internally-generated intangible asse arising from development (or from the developmentphase of an internal project) is recognised if, and only if, all of the following have beendemonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use orthe intention to complete the intangible asset and use or sell it;the ability to use or sell the in iliIe asset;

• how the intangible asset will genercle probable future economic benefits;• the availability of adequa e I - ancial and other resources to complete the• to use or sell the intangi e a5S5t ; end• the ability to measure iture attributable to the intangible asset during its

development.

20


TATA UGANDA LIMITED

3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Property and equipment (continued)

Intangible assets (continued)

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

Internally-generated intangible assets - research and development expenditure (continued)

An internally-generated intangible asset arising from development (or from the development phase of aninternal project) is recognised if, and only if, all of the following have been demonstrated:

the technical feasibility of completing the intangible asset so that it will be available for use or sale;the intention to complete the intangible asset and use or sell it;

• the ability to use or sell the intangible asset;• how the intangible asset will generate probable future economic benefits;

the availability of adequate technical, financial and other resources to complete the to use or sell theintangible asset; and

development and to use or sell the intangible asset; andthe ability to measure reliably the expenditure attributable to the intangible asset during its development

The amount initially recognised for internally-generated intangible assets is the sum of the expenditureincurred from the date when the intangible asset first meets the recognition criteria listed above. Where nointernally-generated intangible asset can be recognised, development expenditure is recognised in profit orloss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost lessaccumulated amortisation and accumulated impairment losses, on the same basis as intangible assets thatare acquired separately.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from goodwill are initiallyrecognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at costless accumulated amortisation and accumulated impairment losses, on the same basis as intangible assetsthat are acquired separately.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from useor disposal. Gains or losses arising from derecognition of an intangible asset, measured as the differencebetween the net disposal proceeds and the carrying amount of the asset, are recognised in profit or losswhen the asset is derecognised.

(f) Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of inventories comprises allcosts of purchase, conversion and other costs incurred in bringing the inventories to their present locationand condition. Net realisable value is the estimated selling price in the ordinary course of business, less theestimated costs of completion and selling expenses. Inventories are valued on a weighted average basisexcept for vehicles which are valued on e specific identification basis. Obsolete, redundant and slowmoving inventories are identified on a regula basis and are written down to their estimated net realisablevalue.

(g) Cash and cash equivalents

Cash and cash equivalents comprisedemand and form an integralcomponent of cash and cash equ-, -

nces and call deposits. Bank overdrafts that are repayable onroup and company's cash management are included as a

purpose of the statement of cash flows.

TATA UGANDA LIMITED



(h) Impairment

The carrying amounts of the company's assets are reviewed at each statement of financial position dateto determine whether there is any indication of impairment. If any such indication exists, the asset'srecoverable amount is estimated (see accounting policy g (i)). An impairment loss is recognised wheneverthe carrying amount of an asset or its cash generating unit exceeds its recoverable amount. A cashgenerating unit is the smallest identifiable asset group that generates cash flows that are largelyindependent from other assets and groups. Impairment losses are recognised in the statement ofcomprehensive income. Impairment losses recognised in respect of cash-generating units are allocatedfirst to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) andthen, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

(i) Calculation of recoverable amount

The recoverable amount of assets or cash generating unit is the greater of its value in use and its fairvalue less costs to sell. In assessing value in use, the estimated future cash flows are discounted totheir present value using a pre-tax discount rate that reflects current market assessments of the timevalue of money and the risks specific to the asset. For an asset that does not generate largelyindependent cash inflows, the recoverable amount is determined for the cash-generating unit towhich the asset belongs.

(ii) Reversal of impairment

In respect of other assets, impairment losses recognised in prior periods are assessed at eachreporting date for any indications that the loss has decreased or no longer exists. An impairment lossis reversed if there has been a change in the estimates used to determine the recoverable amount.An impairment loss is reversed only to the extent that the asset's carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised. Any impairment previously recorded against goodwill is notreversed.

(i) Revenue

(i) Goods sold and services rendered

Revenue from the sale of goods is measured at the fair value of the consideration received orreceivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognisedwhen the significant risks and rewards of ownership have been transferred to the buyer, recovery ofthe consideration is probable, the associated costs and possible return of goods can be estimatedreliably, and there is no continuing management involvement with the goods.

22

Dividend income is recognised in the statement of comprehensive income on the date the entity's rightto receive payments is established.

TATA UGANDA LIMITED



(i) Revenue (continued)

(i) Goods sold and services rendered (continued)

No revenue is recognised if there are significant uncertainties regarding recovery of the considerationdue, associated costs or the possible return of goods or continuing management involvement with thegoods.

Revenue from services rendered is recognised in profit and loss in proportion to the stage ofcompletion of the transaction at the reporting date.

(iii) Other income

(j) Expenses

Net financing costs

Net financing costs comprise interest payable on borrowings calculated using the effective interest ratemethod, interest receivable on funds invested, dividend income, and foreign exchange gains and losses.Interest income is recognised in the statement of comprehensive income as it accrues, using the effectiveinterest method.

(k) Taxation

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognisedin the statement of comprehensive income except to the extent that it relates to items recognised directlyin equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxableincome for the year, using tax rates enacted or substantially enacted at the statement of financial positiondate, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the statement of financial position liability method, providing for temporarydifferences between the carrying amounts of assets and liabilities for financial reporting purposes and theamounts used for taxation purposes. The following temporary differences are not provided for: goodwill notdeductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting ortaxable profit, and differences relating to investments in subsidiaries to the extent that they will probablynot reverse in the foreseeable future. The amount of deferred tax provided is based on the expectedmanner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enactedor substantively enacted at the statement of financial position date.

23

TATA UGANDA LIMITED



(k) Taxation (continued)

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will beavailable against which the asset can be utilised. Deferred tax assets are reduced to the extent that it isno longer probable that the related tax benefit will be realised.

(I) Employeebenefits

The cost of all short term employee benefits is recognised during the period in which the employeerenders the related service.

(m) Provisions

A provision is recognised if, as a result of a past event, the group or company has a present legal orconstructive obligation that can be estimated reliably, and it is probable that an outflow of economicbenefits will be required to settle the obligation. Provisions are determined by discounting the expectedfuture statement of cash flows at a pre-tax rate that reflects current market assessments of the timevalue of money and the risks specific to the liability.

(n) Key source of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimationuncertainty at the end of the reporting period, that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the next financial year.

(i) Deferred

Deferred taxation asset is recognised to the extent that it is probable that taxable profits will beavailable in future against which the deferred taxation assets can be utilised. The future availability oftaxable profits is based on management's judgements regarding future businessplans.

(ii) Asset lives and residual values

Property and equipment are depreciated to their residual values over their estimates useful lives.Methods of depreciation, residual values and estimated useful lives are reviewed annually, based onmanagement's judgement of relevant factors and conditions.,

(iii) Valuation of investments

Investments in subsidiaries, associates, joint ventures and other investments are valued bymanagement based on their considered view of the appropriate valuation methodology and valuationassumptions and factors as relevant to the nature of each investment. In broad principle,management adopts the following criteria in assessingthe valuation methodology to be undertaken:

Directors' valuation - valuation by Directors, utilising appropriate valuation methodology andprinciples.

24

TATA UGANDA LIMITED

NOTESTO THE FINANCIAL STATEMENTSFORTHE YEAR ENDED 31 MARCH 2017 (CONTINUED)

4. PROPERTYAND EQUIPMENTAccumulated Carrying

Cost depreciation amountUshs'OOO Ushs'OOO Ushs'OOO

2017

Commercial Land and buildings 11 771 677 2659391 9112286Motor vehicles 618804 463084 155720Furniture and fittings 207835 141482 66353Plant and equipment 1641948 1104132 537816Office equipment 565696 482778 82918Computer equipment 172 026 144342 27684Total 14977 986 4995209 9982777

2016

Commercial land and buildings 11 771 677 2 179798 9591879Motor vehicles 714706 430584 284 122Furniture and fittings 207835 124893 82942Plant and equipment 1 699 551 1026750 672 801Office equipment 593657 455242 138415Computer equipment 159985 135943 24042Capital work in progress 66209 66209Total 15 213 620 4353210 10860410

25

)

TATA UGANDA LIMITED


4. PROPER1Y AND EQUIPMENT (CONTINUED)

CarryingCarryingamount at Additions Transfers Depreciation Impairment Net disposals amount at endbeginning ofof yearyear

Ushs'OOO Ushs'OOO Ushs'OOO Ushs '000 Ushs'OOO Ushs'OOO Ushs'OOO2017

Commercial Land and buildings 9591879 ( 479 594) 9112285Motor vehicles 284122 (83825) (44576) 155721Furniture and fittings 82942 ( 16588) 66354Plant and equipment 672801 ( 134454) 531) 537816Office equipment 138415 ( 55279) 219) 82917Computer equipment 24042 22104 ( 18456) ( 6) 27684Capital work in progress 66209 ( 66 209)

10860410 22104 ( 66 209) ( 788 196) (45332) 9982777

2016

Commercial land and buildings 10 096 715 ( 504836) 9591879Motor vehicles 184677 257850 ( 152989) ( 5416) 284122Furniture and fittings 103677 ( 20 735) 82942Plant and equipment 841002 ( 168 201) 672 801Office equipment 113903 116788 ( 92 276) 138415Computer equipment 33356 6714 ( 16 028) 24042Capital work in progress 66209 66209

11 373 330 447561 ( 955 065) ( 5416) 10860410

26

TATA UGANDA LIMITED


2017Ushs'OOO

5. a) LEASEHOLD LAND

Balance at 1 AprilCharge to statement of comprehensive income

795705( 18 50S)

Balance at 31 March 777 200

2016Ushs '000

814 210( 18 505)

795705

The operating lease prepayment represents rentals by the company for property on Plot 52, Lugogo By-pass,Kampala. The lease is for 49 years with effect from 01 December 2015.

5 b) INTANGIBLE ASSET 2017Ushs'OOO

Balance at 1 April

Additions during the yearTransfer from Capital Work in Progress (Note 4)Charge to statement of comprehensive income

6438766209( 32 649)

Balance at 31 March 97947

2016Ushs '000

The intangible asset is in respect of computer software relating to Microsoft Dynamics - Navision for SpecialtyDistribution and Incadea for Auto Distribution which were implemented in September 2016.

RELATED PARTIES6. 2017

Ushs'OOOa} Owing by related parties

Current asset

Tata Zambia Limited, ZambiaTata Africa Services (Nigeria) Limited,Nigeria

71297526210

739185

2016

Ushs '000

507000

507000

b) Owing to related parties2017

Ushs'OOO

The amounts owing by related parties reflected as current in nature arise in the ordinary course of business,are unsecured and are interest free.

2016Ushs '000

Non-current liability

Tata Africa Holdings (SA) Proprietary Limited, SA 87535288753528

81958248 195824

The amount owing to Tata Africa Holdings (SA) Proprietary Limited is a loan denominated in US dollars andcarries interest at 5.50% per annum. The loan is repayable in 2 years.

27

TATA UGANDA LIMITED


2017Ushs'OOO

6. RELATEDPARTIES(CONTINUED)

c) Current liability

Tata Africa Holdings (SA) Proprietary Limited, South AfricaTata Motors Limited, IndiaTata Sons Limited, IndiaTata Internatioinal Limited, IndiaTata International Singapore Pte Limited, SingaporeTata South-East Asia Limited, Hong KongTata Africa Holdings (Kenya) Limited, KenyaTata Africa Holdings (Tanzania) Limited, TanzaniaTata Automobile Corporation (SA) Proprietary Limited, SAMotor-Hub East Africa Limited,Tanzania

36126499487826326236952

508071948603

385214516821831678969329

2016Ushs'OOO

78432380404

25697521 194

1688084111 851107211

4573562

The amounts owing to related parties reflected as current in nature arise in the ordinary course ofbusiness, are unsecured and are interest free.

2017 20167. DEFERREDTAX ASSET Ushs'OOO Ushs '000

Balance at the beginning of the year 570445 531 529Current credit ( 48819) 312 284Prior year charge ( 243 373) ( 273 368)Balance at the end of the year 278253 570445

Comprising -Accelerated capital allowances 13772 38062Provisions 268955 437733Unrealised foreign exchange difference ( 4474) 94650

278253 570445

8. INVENTORIES

Finished goods 21837429 26413 950Goods in transit 4144609 2358904Less: Provision for overaged stock ( 496 693) ( 305 123)

25485345 28467 731

9. TRADE RECEIVABLES

(a) Trade receivables

Gross trade receivables 42562574 35369152Less: Provision for doubtful trade receivables - Note 9(b) ( 399825) . ( 315 091)

42162749 35054061

28

TATA UGANDA LIMITED


9. TRADE RECEIVABLES(CONTINUED)

Trade receivables outstanding for a period exceeding six monthsfrom the date they were due for payment:Doubtful trade receivablesLess: Provision for doubtful trade receivables

Trade receivables outstanding for a period less than six monthsfrom the date they were due for payment and trade receivablesnot due:Unsecured receivablesDoubtful trade receivablesLess: Provision for doubtful trade receivables

Total

2017Ushs'OOO

1124293( 399825)724468

41438281

41438281

42162749

2016Ushs '000

273 403( 273 277)

126

34937867157882( 41814)

35053935

35054061

The Directors consider the carrying amount of trade receivables to represent a fair value of the tradereceivables. Amounts have been provided for as per entity's accounting policies and in line with IFRSrequirements

(b) Movement in provision for bad & doubtful debts

At 1 AprilProvision during the yearBad debts written offDebts recoveredAt 31 March

10. OTHERRECEIVABLES

UnsecuredAdvances to suppliersPrepaid expensesAdvances to employeesSecurity depositsValue Added Tax receivable

315091 111 472331997 218554( 247263)

( 14 935)399825 315091

2017Ushs'OOO

1465061459761765112212436915759260

2016Ushs'OOO

298642282435

6953104445

692475

Other receivables are all due within 180 days and based on the past experience the Company believesthat no impairment provision is necessary. The carrying values of other receivables approximates theirfair value.

29

TATA UGANDA LIMITED


2017Ushs'OOO

11. SHARECAPITAL

Authorised9,550,000 (2016 - 9,550,000) ordinary shares of Ushs 1,000 each 9550000

Issued2,090,000 (2016 - 2,090,000) ordinary shares of Ushs 1,000 each 2090000

2016Ushs '000

9550000

2090000

2017Ushs'OOO

The unissued share capital of the company remains under the control of the Directors until the next annualgeneral meeting.

2016Ushs '000

12. SHORTTERMLIABILITIES

Exim Bank line of creditTotal short-term liabilities

87127538712753

1492061514920615

The Exim Bank Line of Credit is a common facility extended by Export Import Bank of India, to Tata AfricaHoldings (SA) Proprietary Limited and its subsidiaries, secured by a letter of comfort from Tata InternationalLimited and carries interest at 6m LIBORplus 3.15% per annum.

13. OTHERPAYABLESAND PROVISIONS2017

Ushs'OOO

Other payablesAdvances from customersValue added tax payableExpensesaccrued and provisions

549379

1271 3961820775

14. BANKOVERDRAFT

Bank of Baroda (Uganda) LimitedBarclays Bank (Uganda) LimitedStandard Chartered Bank (Uganda) Limited

9708960473701008053216224991

2016Ushs '000

82648513109

1 177 1512016745

1372 560

12 360 38813732948

The bank overdraft facility held with Standard Chartered Bank (Uganda) Limited, as part of the overdraftfacility to the group. It is secured by a letter of comfort from Tata International Limited and dominated inUS Dollars, facility limit of USD4 Million to Tata Uganda Limited and carries interest rate of 6.5% per annum(2016: 7%).

The bank overdraft facility held with Bank of Baroda (Uganda) Limited is secured by a letter of comfort fromTata International Limited, is denominated in Uganda Shillings and carries interest rate of 24.25% perannum (2016: 24.25%).

The bank overdraft facility held with Barclays Bank (Uganda) Limited is secured by a letter of comfort fromTata International Limited, is denominated in US Dollars and carries interest rate of 5% per annum.

30

TATA UGANDA LIMITED


2017 2016Ushs'OOO Ushs'OOO

15. REVENUE

Sale of goodsMotor vehicles 46025257 46725831Spare parts 4810615 3784 161Tractors and farming equipment 33336Pharmaceuticals 25131480 29665860Agro business 4420907 11 145 156Chemicals 6679906 4 847 363Infrastructure and construction equipment 5659076 4 132810

92727241 100334517

Services renderedWorkshop 1502953 1526946Information technology 11 074 712 928565

12577665 2455511

Total revenue 105304906 102790028

16. PROFITFROMOPERATIONS

Profit from operations is arrived at after taking into account:

Other income

Profit on disposal of property and equipment 5469 22384Sundry receipts 161322 81 149

166791 103533

Expenses

Auditors' remuneration 83023 71 107- current year 81047 65910- prior year under-provision 1976 5197

31

TATA UGANDA LIMITED


16. PROFITFROMOPERATIONS(CONTINUED) 2017 2016Expenses Ushs'OOO Ushs '000

Depreciation of property and equipment 820844 955065- land and buildings 479594 504836- motor vehicles 83825 152989- furniture and fittings 16588 20735- plant and equipment 134454 168201- office equipment 55278 92276- computer software 32649- computer equipment 18456 16028

Directors' emoluments 694735 877 825- executive services 694735 877 825

Employment related expenses 4290677 4757902- salaries and wages 3372870 3938698- retirement contributions 435664 336 818- Medical expenses 28009 57612- Staff rent expenses 153302 260974- Staff training expenses 123266 45 199- staff welfare expenses 177566 118601

17. FINANCEEXPENSE

Interest expense- on borrowings 1835531 1 807725Finance expense 1835531 1807725

18. TAXATION

Current taxation- Current year 1588409 2 121 312Deferred taxation- Current year 48819 ( 312 284)- Prior year under provision 243373 273368

1880601 2082396

Reconciliation of effective tax rate % 0/0

Profit before taxation 5312875 5875495

Current year's charge as a percentage of income 1593863 30% 1 762649 30%Disallowable expenditure (leave travel expenses) 43365 1% 46379 1%Prior year under provision 243373 4% 273368 4%

1880601 35% 2082396 35%

32

TATA UGANDA LIMITED


19. GUARANTEES

Bank of Baroda (Uganda) Limited, Kampala has issued guarantees on behalf of the company for an amountof Ushs'OOO:7,062,060 (2016 - Ushs'OOO:3,317,783) in the ordinary course of business.

20. FINANCIAL INSTITUTIONS

The company has exposure to the following risks from its use of financial instruments:

• Credit risk• Liquidity risk• Market risk

The Board of Directors has overall responsibility for the establishment and oversight of the company's riskmanaqement framework, includinq implementation and monitorinq of these policies.

The company's risk management policies are established to identify and analyse the risks faced by thecompany, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Riskmanagement policies and systems are reviewed regularly to reflect changes in market conditions and thecompany's activities. The company, through its training and management standards and procedures, aimsto develop a disciplined and constructive control environment in which all employees understand their rolesand obligations.

(a) Credit risk

Credit risk is the risk of financial loss to the company if a customer fails to meet its contractualobligations and arises principally from the company's receivables from customers.

The company's principal exposure to credit risk is in its trade and other.receivables and loans to relatedparties. Trade receivables principally represent amounts owing to the company by their customers andcredit risk is managed at that level. Credit evaluations are performed on all customers requiring creditover a certain amount. The company has no significant concentration of credit risk, with exposurespread over a large number of customers.

Exposure to credit risk

The carrying value of the company's financial assets represents its maximum exposure to credit risk.The maximum exposure to credit risk at the reporting date was:

2017Ushs'OOO

2016Ushs '000

Trade receivablesOther receivablesTrade receivables due from related parties

42162749759260739185

35054061692475507 000

43661 194 36253536

33

TATA UGANDA LIMITED


20. FINANCIAL INSTITUTIONS (CONTINUED)

(a) Credit risk (continued)

The maximum exposure to credit risk for trade receivables at the reporting date by type of receivableswas:

Carrying amount2017

Ushs'OOO

Small Medium EnterprisesGovernment and parastatalsCorporatesForeign Companies

1028889511 01944618616137263809642562574

Impairment losses

The ageing of trade receivables at the reporting date was:

Impairment2017

Ushs'OOO

Gross2017

Ushs'OOO

Gross2016

Ushs '000

Not past duePast due 0-30 daysPast due 31-60 daysPast due 61-90 daysPast due 91-180 daysPast due over 180 days

3749814115793897290517524476279181375628

32 1980732057832

68427341247

104704283023

( 21829)( 377 996)( 399 825)42562574 35369 152

2016Ushs '000

13501 62813 417 97472759371 173613

35369 152

Impairment2016

Ushs '000

( 3 750)( 10497)( 27 567)

( 273 277)( 315 091)

Based on past experience, the company believes that no additional impairment provision is necessary inrespect of trade receivables as there is no deterioration in credit risk.

(b) Liquidity risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due.The company's approach to managing liquidity is to ensure, as far as possible, that it will always havesufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, withoutincurring unacceptable losses or risking damage to the company's reputation.

The company manages its cash position and future outflows on an ongoing daily basis. The companyensures that it has sufficient cash on demand to meet expected operational expenses and liabilities asthey fall due.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12months equal their carrying balances as the impact of discounting is not significant.

34

TATA UGANDA LIMITED


20. FINANCIAL INSTRUMENTS (CONTINUED)

(b) Liquidity risk (continued)

The following are the contractual maturities of financial liabilities:

Carrying 6 Monthsamount or less

Ushs'OOO Ushs'OOO2017Trade payables 8198702 7193226Other payables 1820775 1820775Amounts owing to related parties 8969399 8969399Bank overdraft 16224991 16224991Short-term liabilities 8712753 8712753

43926620 42921144

2016Trade payables 6489893 6489893Other payables 2003636 2003636Amounts owing to related parties 4573562 2885556Bank overdraft 13732948 13732948Short-term liabilities 14920615 14920615

41 720 654 40032648

(e) Market risk

6 - 12Months

Ushs'OOO

1005476

1005476

1688006

1 688006

More than1 Year

Ushs'OOO

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates willaffect the company's income or the value of its holdings of financial instruments. The objective of marketrisk management is to manage and control market risk exposures within acceptable parameters, whileoptimising the return on risk.

(i) Currency risk

The risk that the fair value or future statement of cash flows of a financial instrument will fluctuate dueto the changes in the foreign exchange rates.

The company's exposure to foreign currency risk is as follows based on notional amounts:

Trade receivablesReceivables due from related partiesForeign currency bank accountsTrade payablesPayables due to related partiesLoans and overdraftsGross statement of financial position exposure

Net statement of financial position exposure

35

2017

USD

8024994204760333137

(1779 281)(2077 848)(9322982)(4617221)

(4617221)

2016

USD

858703415000075010

(1 809 548)(1277 074)(8 071 303)(2345880)

(2 345 880)

TATA UGANDA LIMITED


20. FINANCIALINSTRUMENTS(CONTINUED)

(c) Market risk (continued)

(i) Currency risk (continued)

The following exchange rates were applied during the year:

Ugandan Shillings Average rate2017 2016

Reporting date spot rate2017 2016

USD 3460 3356 3610 3380

Sensitivity analysis

10 % is the sensitivity rate when reporting foreign currency risk internally to key managementpersonnel and represents management's assessment of the reasonably possible change in foreignexchange rates.

2017A 10% weakening / strengthening in the Shillings against the US Dollar would have decreased /increased equity and profit by Ushs'OOO:1,666,817. This analysis assumes that all other variables,in particular interest rates, remain constant.

2016A 10% weakening / strengthening in the Shillings against the US Dollar would have decreased /increased equity and profit by Ushs'OOO:792,908. This analysis assumes that all other variables, inparticular interest rates, remain constant.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate due to the changes in market interest rates.

At the reporting date the interest rate profile of the company's interest-bearing financial instrumentswas:

Carrying amount2017 2016

Ushs'OOO Ushs '000

Financial assets

Financial liabilities 36455087 36849292

Sensitivity analysis

A 1% increase / decrease represents the management's assessment of the reasonably possiblechanges in interest rates.

2017Based on the average interest bearing financial liabilities and effective interest rates applicable forthe year ended 31 March 2017, a 1% increase / decrease during the year would have decreased /increased profit by Ushs'OOO:364,551.

2016Based on the average interest bearing financial liabilities and effective interest rates applicable forthe year ended 31 March 2016, a 1% increase / decrease during the year would have decreased /increased profit by Ushs'OOO:368,493.

36

TATA UGANDA LIMITED


20. FINANCIAL INSTRUMENTS (CONTINUED)

(d) Fair values

In addition, for financial reporting purposes, fair value measurements are categorised into Levell, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

Levell - fair value is based on quoted prices in active markets for identical financial assets or liabilitiesthat the entity can access at the measurement dateLevel 2 - fair value is determined using either directly or indirectly observable inputs other than LevellinputsLevel 3 - fair value is determined on inputs not based on observable market dataAll financial assets and financial liabilities have been classified as level 3 financial instruments.

The fair value of financial assets and liabilities, together with the carrying amounts in the statement offinancial position, are as follows:

Loansand receivablesTrade receivablesOther receivablesCash and cash equivalentsAmounts owing by related parties

2017 2016Carrying Fair Carrying Fair

value Value value ValueUshs'OOO Ushs'OOO Ushs'OOO Ushs '000

42162749 42162749 35054061 35054061759260 759260 692475 692475

2220337 2220337 402086 402086739185 739185 507000 507000

Financial liabilities atamortised costLong-term liabilitiesShort-term liabilitiesTrade payablesOther payablesAmounts owing to related parties

87535288712753819870218207758969329

87535288712753819870218207758969329

8 195 82414920615

648989320036364573562

8 195 82414920615

648989320036364573562

21. RELATED PARTIES

(a) Identity of related parties

The holding company of Tata Uganda Limited is Tata Africa Holdings (SA) Proprietary Limited,incorporated in South Africa, which holds 100% (2016: 100%) of the company's ordinary shares.

The Directors are listed in the Directors' report.

(b) Directors' remuneration - refer note 16.

(c) Related party balances - Amounts owing byIto related parties (refer note 6).

37

TATA UGANDA LIMITED


21. RELATED PARTIES (CONTINUED)

(d) Materialrelated party transactions2017 2016

Ushs '000 Ushs 'ODD(i) Purchases from related parties

Tata Motors Limited, India 21941201 39821425Tata Africa Holdings (Tanzania) Limited, Tanzania 3862 191 360Tata Africa Holdings (Kenya) Limited, Kenya 3567268 2155552Tata South East Asia Limited, Hong Kong 111 212Tata Automobile Corporation (SA) Proprietary Limited, SA 2702745Motor-Hub East Africa Limited, Tanzania 853783

29068859 42279549

(ii) Sales to related partiesTata Africa Holdings (Tanzania) Limited, Tanzania 477120Tata Africa Holdings (Kenya) Limited, Kenya 1232459 2112312Tata International Singapore Pte Limited, Singapore 1468762Tata Zambia Limited, Zambia 673 508 522000Tata Zambia Limited, Malawi Branch 443730Tata Africa Services (Nigeria) Limited, Nigeria 26210

2853027 4103074

(iii) Corporate office charges recoveredTata Africa Holdings (Kenya) Limited. Kenya 25827Tata International Limited, India 18328Tata Motors Limited, India 311 472 286 162

311 472 330317

(iv) Interest paidTata Africa Holdings (SA) Proprietary Limited, South Africa 477929 473 898

(v) Reimbursement of expensesTata South East Asia Limited, Hong Kong 50737Tata Africa Holdings (Kenya) Limited, Kenya 11843 1421Tata International Limited, India 252421 197 853Motor-Hub East Africa Limited, Tanzania 20908Tata Africa Holdings (SA) Proprietary Limited, SA 138294 41000

474203 240274

(vi) Dividends paidTata Africa Holdings (SA) Proprietary Limited, South Africa 1019920 1 358500

1019920 1 358500

(vii) Brand equity expenses paidTata Sons Limited, India 263262 256975

(vii) Services rendered byTata International Singapore Pte Limited, Singapore 107116

38

,

TATA UGANDA LIMITED


22. NOTESTO THE STATEMENTOF CASHFLOWS2017 2016

Ushs'OOO Ushs'OOO

5312875 5875495

788196 95506518505 18505326495577041835531 1807725( 5469) ( 22 384)

8539991 86344062982386 (11 918756)(7175473) (12071 716)( 232 185) ( 507000)

1708809 1982832( 195970) 933643

4395767 2573998

10023325 (10372 593)

( 96376) ( 241 484)(1588409) (2 121 312)

86671 96376(1598114) (2266420)

(a) Cash generated from operationsProfit before income tax

Adjustments for -Depreciation of property and equipmentAmortization of land leaseAmortization of computer softwareExchange loss on related party loanInterest paidNet profit on disposal of property, plant and equipment

Operating income before working capital changes-Decrease/(increase) in inventoriesIncrease in trade and other receivablesIncrease in amounts owing by related parties

Increase in trade payables(Decrease)/increase in other payables and provisions

Increase in amounts owing to related parties

Cashgenerated from/(utilised in) operations

(b) Taxation paid

Amount outstanding at beginning of yearCurrent income tax expenseAmount outstanding at end of yearAmount paid

(c) Dividends paid

To equity holders of the companyTo non-controlling interest

(1019920) (1 358 500)

(d) Cashand cash equivalents

Cash and cash equivalents comprise cash on hand' and balances with banks, together with holdings inmoney market instruments. Cash and cash equivalents included in the statement of cash flowscomprise the following statement of financial position amounts:

(1019920) (1 358 500)

Cash and cash equivalentsBank overdraft

2220337(16224991)(14004654)

402086(13 732 948)(13 330 862)

39

!

TATA UGANDA LIMITED


23. COMMITMENTS

2017Ushs'OOO

2016Ushs'OOO

(a) Capital commitments

(b) Leasecommitments

Non-cancellable operating lease rentals payable as follows:Payable within one yearPayable within 2 and 5 years

431665107217

431 153179782

538882 610935

24. CONTINGENT LIABILITIES

There are no known cases against the company as at the reporting date.

25. EVENTS AFTER REPORTING DATE

The Directors are not aware of any events after the reporting date that require amendment or adjustmentto the financial statements as at the date of this report.

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Documents

TATA UGANDA LIMITED FINANCIAL STATEMENTS FOR THE …FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017. TATA UGANDA LIMITED ... the preparation and fair presentation of these financial